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GeneNews Inks $10M Financing Agreement With Milost Global

NEW YORK (GenomeWeb) – Canadian diagnostic developer GeneNews said today that it has signed a binding agreement with multinational private equity firm Milost Global for up to $10 million in equity and debt financing.

Under the agreement, Milost will initially purchase up to $3 million in unsecured convertible notes from GeneNews. The notes will be convertible at a price equal to the five-day volume-weighted average price of common shares of GeneNews on the Toronto Stock Exchange on the day of the draw-down notice, plus a 200 percent premium.

The notes will also have a five-year term from date of issue and bear interest at 5 percent annually, with interest payable quarterly in cash.

The initial $3 million draw-down is expected to be completed in the next 20 business days, and forms part of an equity and debt subscription agreement between GeneNews and Milost for up to $10 million in total proceeds.

The agreement also includes an investment from Milost of up to an additional $3 million in unsecured convertible notes to be drawn down at GeneNews' option, and up to $4 million to be drawn down, also at the company's option, in maximum installments of $1 million.

GeneNews said it will use proceeds from the agreement for working capital and corporate growth purposes, including the continued execution of its growth strategy for its Virginia-based clinical reference lab business, Innovative Diagnostic Laboratory.

In March, GeneNews reached a settlement agreement with the liquidating trust for its former partner Health Diagnostics Laboratory, which had formed the IDL venture along with GeneNews and Cobalt Healthcare Consultants.

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