By Sheri Kasprzak
New York, Nov. 7 - Tm Bioscience Corp. said it has entered into a non-binding term sheet for the private placement of an $8 million convertible note.
The three-year note will be issued to a U.S.-based investment fund.
The variable-rate note bears interest at the greater of Prime rate plus 200 basis points or 8.5%. The coupon rate will decrease in relation to increases in the company's share price over the term of the note to a minimum of 0%.
The note will be repaid in equal installments over 33 months.
The investor must convert the notes into common shares if the company's stock price exceeds 127%, 138% and 150% of the price of the shares at the closing of the transaction for each one-third repayment of the note.
The fixed conversion price for each third will be 110%, 120% and 130%, respectively.
The investor will also receive warrants equal to 15% of the shares issuable upon conversion. The warrants are exercisable at a 120% premium to the five-day volume weighted average price of the company's stock the day before closing.
Canaccord Capital Corp. and Versant Partners were the placement agents for the offering, which is expected to close Nov. 30.
Toronto-based Tm Bioscience is a diagnostics company focused on a suite of genetic tests, including tests for genetic disorders, drug metabolism and infectious diseases.
| Issuer: | Tm Bioscience Corp.
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| Issue: | Convertible note
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| Amount: | $8 million
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| Maturity: | Three years
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| Coupon: | The greater of Prime rate plus 200 basis points or 8.5%
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| Conversion price: | 110%, 120% and 130% of the price per share on the day the one-third payment of principal and interest is due, respectively
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| Warrants: | Equal to 15% of the shares issuable upon conversion
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| Warrant strike price: | 120% premium to the five-day volume weighted average price of the company's stock the day before closing
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| Placement agents: | Canaccord Capital Corp., Versant Partners
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| Announcement date: | Nov. 7
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| Settlement date: | Nov. 30
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| Stock price: | C$2.22 at close Nov. 4
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