The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Monday Biotech Deal Review: August 8, 2011

Welcome to your Monday Biotech Deal Review for August 8, 2011.  The previous two weeks witnessed a flurry of investment activity, including the filing of final prospectuses by each of Lorus Therapeutics and Atrium Innovations in respect of equity and debt offerings, respectively.  Read on to learn more. 

Lorus Therapeutics Files Short Form Prospectus

Lorus Therapeutics Inc. (TSX: LOR) has filed a final short form prospectus with the securities regulatory authorities in the provinces of Ontario, British Columbia and Alberta in connection with a best efforts offering of a minimum of 5,000,000 units of the company at a price of $0.40 per unit for gross proceeds of $2,000,000 and a maximum of 10,000,000 Units for gross proceeds of $4,000,000. Each Unit will consist of one common share of the Corporation and one common share purchase warrant of the Corporation. Each warrant will entitle the holder to purchase one common share for five years after the closing of the offering at an exercise price of $0.45 per share. Holders of the warrant may be subject to an accelerated exercise date if the trading price of the common shares on the Toronto Stock Exchange equals or exceeds 200% of the exercise price.

Atrium Innovations Files Debt Offering Prospectus

Atrium Innovations Inc.  (TSX: ATB) has filed its final prospectus in relation to its previously announced public offering of $75,000,000 aggregate principal amount of 5.75% convertible unsecured subordinated debentures, due August 31, 2018. Atrium also has also entered into a subscription agreement with Fonds de solidarité FTQ, an insider of Atrium as it currently holds approximately 15.8% of the issued and outstanding common shares of Atrium, to acquire, on a private placement basis, $25,000,000 aggregate principal amount of debentures, on the same terms as the public offering.  The concurrent private placement is subject to certain conditions, including the concurrent closing of the offering.  Both the public offering and the concurrent private placement are expected to close concurrently on or about August 9, 2011, and are subject to the receipt of all necessary regulatory approvals. The net proceeds from both offerings are intended to be used to reduce Atrium’s outstanding indebtedness.

M&Eh

Bioniche Life Sciences Inc. (TSX: BNC) will not proceed with the proposed acquisition comprising the business and assets of Plasvacc Holdings Limited (Plasvacc) as previously announced on July 4, 2011. The parties have failed to reach agreement on definitive transaction documents and have terminated discussions under their letter of intent in connection with the transaction.

Investment

Microbix Biosystems Inc. (TSX:MBX) has closed on August 3, 2011 the second tranche of a private placement financing resulting in the issuance of a further 1,026,452 units at a price of $0.35 per unit for gross proceeds of $359,258. Each unit consists of one common share of Microbix and one-half common share purchase warrant. Each whole Warrant entitles the holder to purchase one additional common share at an exercise price of $0.45 for 24 months. A director and officer of the Company participated in the financing by purchasing 142,857 Units.  The financing was non-brokered. The Company intends to use the proceeds of the private placement for general corporate purposes.

Pivotal Therapeutics Inc. (CNSX:PVO) is extending the exercise period for the call on Pivotal Therapeutics outstanding share purchase warrants from August 5, 2011 up to and including 5:00 pm Eastern Standard Time, September 16, 2011. Pivotal Therapeutics originally issued the call on July 14, 2011. The warrants affected by the call relate to a non-brokered private placement, which closed on February 2, 2011. Pivotal expects to realize CDN$2,989,848 from the exercise of 11,959,392 common stock purchase warrants to purchase common stock for CDN$0.25 per share. The Warrant call resulted from Pivotal Therapeutics’ share price closing at $0.38 or greater on the Canadian National Stock Exchange for 10 consecutive trading days after March 31, 2011.

DelMar Pharma has been awarded a non-refundable financial contribution from the National Research Council of Canada Industrial Research Assistance Program (IRAP). IRAP funding will be used to partially support research related to the molecular mechanism of DelMar Pharma’s lead anti-cancer therapy, VAL-083. DelMar Pharma plans to conduct this work in collaboration with the University of British Columbia and the BC Cancer Agency.

PharmaGap Inc. (TSX-V:GAP) has completed a private offering of 5,515,610 equity units for a net aggregate amount of $496,405. On July 13, 2011 the company completed an initial close of 884,500 units. Today’s final closing of 4,631,110 units brings the total number of units issued to 5,515,610 and total gross proceeds at $0.09 per unit to $496,405. Each unit consists of one common share and one warrant to purchase one common share at an exercise price of $0.14 per common share with a two year warrant term.

Noveko International Inc. (TSX: EKO) has closed an interim financing in the amount of $670,000 obtained mainly from company directors, management and insiders. This interim financing is in the form of convertible debentures and will be used for working capital purposes until closing of the $6 million financing announced earlier this week. The debentures bear interest at an annual rate of 12% and mature on September 25, 2011. Holders shall have the right, at their sole discretion and at any time during the term, to convert, in whole or in part, the principal of the debentures into Class A shares of the Company, at a conversion price of $0.50 per share. However, the Company shall have the right, subject to a 48-hour prior notice to holders, to redeem the debentures in advance, at par value plus accrued and unpaid interest. Holders of the debentures may then choose to exercise their conversion privilege within this 48-hour delay.

 Biosign Technologies Inc. (TSXV: BIO) has closed a brokered private placement for gross proceeds of approximately $1,900,000.  A total of 2,384,551 units were issued at a price of $0.80 each. Each unit is comprised of one common share of the Company and one common share purchase warrant. Each warrant will entitle the holder to purchase one common share of the Company at a price of $1.00 for a period of 12 months from closing date, subject to an acceleration of the expiry date, upon requisite board notice, in the event the price of the common shares on the TSX Venture Exchange closes in excess of $1.50 for five consecutive trading days. Saratoga Finance Inc. acted as placement agent in connection with the offering, and received a cash commission of 6% of the gross proceeds. Additionally, the Biosign issued compensation warrants to the agent to acquire common shares of the Company equal to 8% of the number of Units sold under the Offering. Each Broker Warrant is exercisable at $0.80 per common share for a period of 12 months from the closing date. The net proceeds from the Offering are intended to be used for general working capital purposes.

 Cytochroma today announced that it has closed an equity investment of $1 million from the Investment Accelerator Fund, a fund of the Province of Ontario that invests in emerging Ontario technology companies.  The investment is designed to advance and accelerate the company’s development of CTAP101 Capsules, a product currently in a Phase 2b study for the treatment of secondary hyperparathyroidism associated with vitamin D insufficiency in patients with non-dialysis chronic kidney disease.

 Shares for Debt

CardioComm Solutions, Inc. (TSX-V:EKG) has closed its previously announced debt settlement under which it has issued 1,183,960 common shares in recognition of $59,198.00 worth of services provided to the Company. The shares issued are subject to a four month hold period expiring November 30, 2011.

Stock Option Grants

Miraculins Inc. (TSX-V: MOM) has granted an aggregate of 300,000 stock options at an exercise price of $0.10 per common share, to the three directors who were newly appointed to the Board at the Company’s most recent shareholders meeting. The options are set to expire five years from the date of grant and are subject to the approval of the TSX Venture Exchange and the terms of Miraculins’ stock option plan.

Warnex Debt Agreement

Warnex Inc. (TSX:WNX) has provided additional information regarding the agreement in principle reached with the holders of all of its outstanding debentures to extend the maturity date and modify various other terms of their debentures that was previously announced in its press release of July 6, 2011.  The outstanding debentures, which are held by four different lenders and bear interest at the rate of 12% per annum, are as follows:

  • US$2,873,008 non-secured convertible debenture maturing on July 5, 2011.
  • US$1,000,000 non-secured convertible debenture maturing on July 5, 2011.
  • US$333,333 non-secured non-convertible debenture maturing on July 5, 2011.
  • CDN$500,000 non-secured non-convertible debenture maturing on July 5, 2011.
  • CDN$1,500,000 non-secured convertible debenture maturing on July 9, 2011.

For further detail on the agreement, please click here

Special thanks again to Steven Zuccarelli for his help with this week’s Monday Biotech Deal Review!

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