GeneNews arranges warrant exercise incentive program
2017-05-30 17:49 ET - News Release
Mr. James Howard-Tripp reports
GENENEWS EARLY WARRANT EXERCISE INCENTIVE PROGRAM
GeneNews Ltd. has arranged a warrant exercise incentive program designed to encourage the early exercise of its 12,466,238 outstanding and unlisted warrants.
"This is an opportunity for warrantholders to exercise their warrants early and receive an incentive to do so," said James R. Howard-Tripp, chairman and chief executive officer of GeneNews. "The early exercise of warrants will provide additional capital to continue the expansion and growth currently underway with respect to test adoption. We will also ask for shareholders to approve insider participation in the warrant incentive program as part of our AGM process."
Innovative Diagnostic Laboratory (IDL) 2017 highlights:
- Signed an agreement with a large, multispecialty physician group in the American Midwest for use of GeneNews' early cancer diagnostic tests;
- Signed a collection partnership agreement with Any Lab Test Now (ALTN) pursuant to which IDL will offer all of its early cancer tests to physicians and patients via ALTN's 165 locations spread across the United States;
- Announced the launch of BreastSentry for the early detection of breast cancer.
There are currently nine tranches of exercisable warrants outstanding, which are shown in the attached table.
Issue date Warrants issued Aug. 19, 2015 3,956,249 Aug. 11, 2016 338,702 Sept. 1, 2016 2,448,549 Sept. 30, 2016 1,647,677 Nov. 4, 2016 1,000,000 Dec. 23, 2016 61,440 Dec. 30, 2016 1,300,000 Feb. 17, 2017 1,610,000 May 9, 2017 103,621
Pursuant to the program, the corporation is offering an inducement of a reduction in exercise price from 50 cents to 23 cents, which represents the five-day volume-weighted average price of the common shares as at the close of business on May 26, 2017, to each warrantholder exercising warrants during a 30-calendar-day early exercise period. The early exercise period will commence 10 business days after the date hereof on June 13, 2017, at 9 a.m. EST, and will expire on July 14, 2017, at 4:30 p.m. EST. The gross proceeds to GeneNews if all warrants are exercised is approximately $2.8-million.
Any warrants that are not exercised prior to the early exercise period expiry date will remain outstanding and continue to be exercisable for the common shares of the corporation on their current terms. The terms and conditions of the program, including the method of exercising warrants, shall be set forth in a letter which will be delivered to the registered address of each eligible warrantholder prior to commencement of the early exercise period.
The program is subject to receipt of the approval of the Toronto Stock Exchange.
The corporation will seek disinterested shareholder approval to amend the terms of the warrants held directly or indirectly by insiders of the corporation (as such term is defined by the TSX) at the upcoming annual general and special meeting (AGM) of shareholders of the corporation currently scheduled for June 29, 2017. A warrant disinterested shareholder means a shareholder of the corporation who does not, and whose associates and affiliates do not, have beneficial ownership of, or control or direction over, warrants held directly or indirectly by insiders of the corporation. As a result, 6,162,774 common shares held by insiders of the corporation, representing 6.70 per cent of the currently issued and outstanding common shares, will be excluded from voting on the warrant amendment at the meeting.
Of the total warrants, 10,042,738 warrants are held by arm's-length parties, while 2,423,500 warrants are held directly or indirectly by insiders, reflecting dilution of 10.93 per cent and 2.64 per cent, respectively, of the currently issued and outstanding common shares. This transaction will not materially affect control of the corporation.
The proposed warrant amendment will not be effective until 10 business days after the date hereof (in respect of holders of warrants that are not insiders) and until receipt of shareholder approval (in respect of the holders of warrants that are insiders).
The corporation has determined that while the warrant amendment may be a related party transaction pursuant to Multilateral Instrument 61-101, special transactions, the corporation is not required to obtain a formal valuation under Subsection 5.4(1) of MI 61-101 for the warrant amendment. In addition, the exemption from the minority approval requirement provided for under Subsection 5.7(1)(a) of MI 61-101 can be relied on, as neither the fair market value of the warrants nor the fair market value of the consideration paid for such warrants exceeds 25 per cent of the corporation's market capitalization.
About GeneNews Ltd.
GeneNews, an innovator in the liquid biopsy space, is committed to becoming a leader in advanced diagnostics and personalized medicine, serving as a strong commercialization outlet for early detection of cancer and other chronic diseases. Its mission is to identify, assess and make commercially available a comprehensive menu of diagnostics that provide physicians and patients with personalized clinical intelligence and actionable information to improve health outcomes through the early diagnosis of disease. Its Innovative Diagnostic Laboratory clinical reference lab specializes in traditional and advanced clinical-evidence-based blood testing that helps find, understand and address cancer risk in patient populations.
We seek Safe Harbor.