TORONTO, ONTARIO--(Marketwire - Nov. 10, 2010) - GeneNews Limited (TSX:GEN) (the "Company") today announced that it has accepted subscription agreements with a number of investors with respect to two concurrent private placement offerings, one offering of units ("Units") of the Company (the "Unit Offering") and another offering of five-year senior 15% redeemable convertible secured debentures (the "2010 Debentures") of the Company (the "2010 Debenture Offering") (the Unit Offering and the 2010 Debenture Offering, collectively, "the Offering"). The Company has accepted subscription agreements for total gross proceeds of $2,125,452.
Insiders subscribed for approximately 49% of the Offering.
Pursuant to the Unit Offering, the Company has accepted subscription agreements for total gross proceeds of $1,180,046. Each Unit consists of one common share of the Company ("Common Share"), one-half of one Series A Warrant and one-half of one Series B Warrant. Each whole Series A Warrant entitles the holder to acquire one Common Share during a period of eight months from the Closing Date at an exercise price of $0.20. Each whole Series B Warrant entitles the holder to acquire one Common Share during a period of 24 months from the Closing Date at an exercise price of $0.25.
Pursuant to the 2010 Debenture Offering, the Company has accepted subscription agreements for 2010 Debentures in the aggregate principal amount of $945,406. Each 2010 Debenture will be issued at par with no discount or premium to the principal amount. The 15% per annum simple interest that is payable on the 2010 Debentures is to be accrued and paid only upon the earlier of maturity, conversion or redemption of the 2010 Debentures. In consideration for purchasing a 2010 Debenture, each initial purchaser of a 2010 Debenture received two Series A Warrants and two Series B Warrants for every $1.00 of principal amount of their 2010 Debenture. Each Series A Warrant entitles the holder to acquire one Common Share during a period of eight months from the Closing Date at an exercise price of $0.20. Each whole Series B Warrant entitles the holder to acquire one Common Share during a period of 24 months from the Closing Date at an exercise price of $0.25.
During the term of the 2010 Debenture, the principal amount of a 2010 Debenture and any accrued and unpaid interest thereon (the "Conversion Amount") shall be convertible at the election of the holder into Common Shares at any time the Company completes a private placement or prospectus offering of Common Shares (or units consisting of a combination of Common Shares and warrants to acquire Common Shares) at a price that is equal to a 10% discount from the offering price, subject to any upward adjustment that may be required to this discount in order to comply with the maximum allowable discount permitted by the TSX and any other TSX requirements. The 2010 Debentures shall rank pari passu with one another and each of the previously distributed five-year 15% redeemable convertible secured debentures of Company, which closed on December 31, 2008, January 16, 2009 and February 11, 2009 (the "Existing Debentures"). Each 2010 Debenture shall be secured by a general security agreement in favour of the holder and the 2010 Debentures and any accrued and unpaid interest shall rank senior to any debt of the Corporation (other than the Existing Debentures).
Each 2010 Debenture is also redeemable at the option of the Company. In order to redeem a 2010 Debenture, the Company must provide the holder with written notice on a date that is at least 30 calendar days prior to the day when the 2010 Debenture is to be redeemed (the "Redemption Date"). On the Redemption Date, the Company shall pay the holder the principal amount of the 2010 Debenture together with any accrued and unpaid interest thereon, unless the holder of the 2010 Debenture provides prior notice that it has elected to convert the principal amount of the 2010 Debenture along with any accrued and unpaid interest into Common Shares.
No commission or finder's fee is payable in regard to the Unit Offering or the 2010 Debenture Offering. The net proceeds from the Offerings will be used for general working capital purposes, the continued marketing of the ColonSentry™ test in Canada and the pre-launch preparation for the commercial launch of the ColonSentry™ test into the United States and Asia.
The securities offered in either private placement will not be registered under the United States Securities Act of 1933 (the "Act") and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act.
About GeneNews Limited
GeneNews is an emerging molecular diagnostics company focused on the application of functional genomics to enable early diagnosis and personalized health management based on disease-specific biomarkers. The Company has a patented core platform technology, the Sentinel Principle®, which has the power to detect and stage virtually any disease or medical condition from a simple blood sample. GeneNews is currently applying the Sentinel Principle® in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. GeneNews launched its first commercial product, ColonSentry™, a blood-based test to pre-screen and assess an individual's risk for colorectal cancer, in Canada in 2008. The Company's marketing partners, GeneDiagnostics and Enzo Clinical Labs, are expected to launch the ColonSentry™ test in China and the United States in the fourth quarter of 2010 and the first half of 2011, respectively. For more information on GeneNews and ColonSentry™, www.genenews.com or www.ColonSentry.com.
This press release contains forward-looking statements, which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements.