Bioasis Technologies Inc (CVE:BTI) (OTCQB:BIOAF) (FRA:107) said that it has struck a convertible security funding agreement with Lind Global Macro Fund LP, an entity managed by the New York-based institutional investment management firm The Lind Partners.
Under the terms of the agreement, the Guilford, Connecticut-based biopharmaceutical company may issue to Lind convertible securities in the principal amount of up to C$10 million for general working capital.
“This significant financing will enable Bioasis to fully focus on the execution of its business strategy. Importantly, Bioasis now has the means to leverage its existing research in lysosomal dysfunction, neurodegeneration and neuroinflammation and to generate robust licensing packages for potential partners,” Bioasis Executive Chair Dr Deborah Rathjen said in a statement.
“Whilst there have been challenges in completing certain studies this year, due to constraints at our contract research organizations, these have been overcome and the company is well placed to accomplish its R&D and partnering objectives,” she added.
The firm’s proprietary xB3 platform aids in the delivery of molecules and therapeutics across the blood-brain barrier (BBB) for the treatment of central nervous system disorders, including brain cancers and neurodegenerative diseases.
“Lind has been impressed by Bioasis’ leading blood-brain barrier drug delivery technology, its deep pipeline and strategic partnerships,” said Phillip Valliere, Managing Director at The Lind Partners. “The technology and pipeline are capable of providing new treatment options for patients with serious brain conditions and we are very pleased to be able to support further development of Bioasis’ therapeutic candidates.”
Following the agreement, Lind will make an initial investment of C$3 million, less a commitment fee of C$90,000, in exchange for a convertible security with a face value of C$3.6 million, representing a principal amount of C$3 million and a pre-paid interest amount of C$600,000. Starting 180 days from closing, Bioasis will begin repaying in C$125,000 installments. Pre-paid interest will accrue monthly at C$20,000 per month, and once accrued Lind will have the option, once every 90 days, to convert accrued pre-paid interest into Bioasis shares at 90% of the market closing price on the day immediately prior to the conversion.
Meanwhile, Lind will be restricted from selling any Bioasis shares it receives in connection with the First Convertible Security for a period of four months and a day from the date of issuance, and is prohibited from short-selling Bioasis’ shares during the term of the agreement. After the initial four-month period, Lind will have the right to convert any portion of the principal amount into shares of Bioasis at C$0.31 per share.
The agreement also includes an option for Bioasis to receive additional investments from Lind of up to C$7,000,000, in exchange for a convertible security with similar terms to the First Convertible Security, subject to mutual agreement and regulatory approval.
Separately, Bioasis has the option to buy back the outstanding convertible securities in cash at any time with no penalty. If Bioasis exercises the buyback option, Lind will have the option to convert up to 33.3% of the outstanding principal amount at the conversion price, and up to 100% of the then-accrued pre-paid interest into shares.
As part of the financing, Bioasis will issue Lind 4,839,048 warrants exercisable for a term of 30 months at C$0.41 per share. Bioasis will have the right to accelerate the expiry date of a certain number of warrants, subject to certain conditions provided there’s been no default. If Bioasis’ shares trade above C$1.27 for 30 consecutive trading days, it can accelerate the expiry date of 50% of the warrants.
Similarly, if Bioasis shares trade above C$1.80 for 30 consecutive trading days and the First Convertible Security then outstanding along with all outstanding accrued pre-paid interest has been fully repaid, or converted, then Bioasis can speed up the expiry of all of Lind’s remaining warrants. Any warrant exercise proceeds will be applied to the outstanding principal amount of the First Convertible Security.
Contact the author Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive
Story by ProactiveInvestors
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