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GeneNews Limited (“GeneNews” or the “Company”) (TSX:GEN) today announced a first tranche (the “First Tranche”) closing of its non-brokered private placement (the “Offering”), previously announced on March 14, 2016. The First Tranche closing consisted of the issuance of approximately 5.6 million common shares of the Company at a price of $0.10 per common, for gross …
GeneNews Limited (“GeneNews” or the “Company”) (TSX:GEN) today announced a first tranche (the “First Tranche”) closing of its non-brokered private placement (the “Offering”), previously announced on March 14, 2016. The First Tranche closing consisted of the issuance of approximately 5.6 million common shares of the Company at a price of $0.10 per common, for gross proceeds of approximately $560,000, which GeneNews will use for working capital purposes.
According to the news:
The Company also announced it has executed a term sheet with Alumina Partners LLC, an arms’ length party, for a second tranche (the “Second Tranche”) of the Offering, whereby the Company will draw down on US$10 million in structured, unsecured convertible notes (the “Notes”), at the Company’s option, in installments of US$200,000 over a 24 month period. The initial draws will be limited to US$1 million within the first 120 days after the execution of definitive documentation and will be accelerated after that. The Notes will have a term of one (1) year from date of issue, with interest accrued and payable at 12% per annum. Beginning 120 days after issue of each Note, the issuer may convert all or part of the Note into GeneNews common shares at a conversion price equal to a 25% discount to the five (5) day volume-weighted average price per common share on the date of conversion. The conversion will become mandatory if the common shares trade above a 25% premium to the intraday high trading price during the 10 days immediately preceding the day on which the Notes become eligible for conversion into common shares and remains above this price for 20 consecutive trading days provided however that the conversion shall not result in the holder of the Note owning more than 9.9% of the issued and outstanding common shares of GeneNews. In connection with the transaction, GeneNews has agreed to issue as a commitment fee, in aggregate, a total of US$845,000 in restricted common shares over the term of the agreement, to be paid US$200,000 upon the first draw and the remainder in 10 equal payments of US$64,500 to be paid upon each issuance of US$ 1 million in Notes. The restricted common shares will be issued at the market price at the time of issuance. The completion of the Second Tranche is subject to the negotiation and execution of definitive documentation.