By Sheri Kasprzak
New York, Oct. 28 - Bioniche Life Sciences Inc. has revealed the details of its previously announced $10 million private placement.
The company intends to raise $5 million in a convertible term note with an interest rate of Prime rate plus 200 basis points.
The three-year note is convertible into common shares at varying rates. A total of 65% of the note is convertible at the greater of 108% of the volume weighted average price on the closing date or 110% of the trading price on the business day before closing. The remainder is convertible at the greater of 125% of the volume weighted average price on the closing date or 130% of the trading price on the business day before closing. There is a C$0.88 ceiling on the conversion price.
The note is repayable at 20% for the first year, 20% in the second year and 60% in the third year in equal monthly installments.
Also, the company intends to sell a $5 million secured revolving credit facility with a borrowing base of 90% of eligible accounts receivable at 35% of North American inventory, capped at $2.5 million.
The credit facility is not convertible but the principal may be paid in cash or in shares at 85% of the 10-day volume weighted average price.
The revolver bears interest at the Prime rate flat.
In addition, Bioniche has negotiated a $7.5 million bridge facility. Under the terms of the bridge loan, Bioniche may draw upon the facility for 120 days in order to fund its sale of subsidiary Bioniche Pharma Group. The sale is expected to close at the end of the month.
If the sale of Bioniche Pharma is not completed within the 120-day term of the bridge facility, a portion of the facility will automatically convert into the convertible term note as part of the $10 million facility.
Based in Belleville, Ont., Bioniche is a biopharmaceutical company focused on developing therapies for cancer in both humans and animals.
Convertible term note
| Issuer: | Bioniche Life Sciences Inc.
|
| Issue: | Convertible term note
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| Amount: | $5 million
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| Maturity: | Three years
|
| Coupon: | Prime rate plus 200 basis points
|
| Conversion price: | 65% of the note at the greater of 108% of the VWAP on the closing date or 110% of the trading price on the business day before closing, C$0.88 ceiling
|
| Warrants: | No
|
| Pricing date: | Oct. 28
|
| Stock price: | $0.995 at close Oct. 27
|
|
|
| Revolver
|
| Issuer: | Bioniche Life Sciences Inc.
|
| Issue: | Secured revolving credit facility
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| Amount: | $5 million
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| Borrowing base: | 90% of eligible accounts receivable at 35% of North American inventory
|
| Cap: | $2.5 million
|
| Coupon: | Prime rate flat
|
| Call: | May be prepaid at 85% of the 10-day VWAP
|
| Warrants: | No
|
| Pricing date: | Oct. 28
|
| Stock price: | $0.995 at close Oct. 27
|
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