TORONTO, Nov. 23 /PRNewswire-FirstCall/ - Tm Bioscience Corporation , a leader in the commercial genetic testing market, today announced that it has closed the previously announced debt financing resulting in the issuance of a Secured Convertible Term Note (the “Note”) in the aggregate principal amount of US $9.0 million (CDN $10.7 million) to Laurus Master Fund, Ltd. (“Laurus”).
The Note is secured by a first general charge over the Company’s assets and carries a variable coupon interest rate of the greater of Wall Street Journal (WSJ) prime plus 2% and 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 interest rate of 0%. The Note is repayable in equal principal installments plus interest over 32 months commencing April 2006, with three payments of interest only commencing in January 2006. Under certain conditions, Laurus will convert current and future principal repayments into common shares at an aggregate average conversion premium of 20% to the Company’s 5 day weighted average share price at closing.
As additional consideration for the loan, Laurus has been issued a common stock purchase warrant exercisable for 738,723 common shares of the Company at a price of $2.61 per share and expiring 5 years from the date of closing. Canaccord Capital Corporation and Versant Partners acted as financial advisors on the transaction. The Note is subject to the customary approvals of regulatory authorities.
“This transaction permits us to retire our existing debt, ensuring that we have suitable working capital to maintain momentum as we grow our business,” said Jim Pelot, CFO of Tm Bioscience. “Through the financing instrument we have chosen, we will ultimately shift the debt Tm incurred as an earlier stage company into equity as the Company matures and gains further sales traction for its products.”
About Tag-It(TM) reagents and genetic tests
Tm Bioscience’s product menu is focused in the fields of human genetic disorders, pharmacogenetics and infectious disease. The Company has commercialized Analyte Specific Reagents(x) and a series of Tag-It(TM) tests(xx) for a variety of genetic disorders. The Company’s Tag-It(TM) Cystic Fibrosis (CF) Kit is the first multiplexed human disease genotyping test to be cleared by the U.S. Food and Drug Administration (FDA) as an in vitro device (IVD) for diagnostic use in the United States. All genetic tests from Tm Bioscience are based on the Tag-It(TM) Universal Array platform, which utilizes a proprietary universal tag system that allows for easy optimization, product development and expansion. Assays from Tm operate on the Luminex xMAP(R) system, a well-established bead based instrument. Combined, the Universal Array and Luminex instrument enable the rapid production of flexible, high-throughput, low-cost DNA-based tests.
(x) Analyte Specific Reagent. Analytical and performance characteristics are not established. (xx) For Investigational Use Only. The performance characteristics of these products have not been established About Tm Bioscience - Putting the Human Genome to Work(TM)
Tm Bioscience is a DNA-based diagnostics company developing a suite of genetic tests. Tm Bioscience’s product pipeline includes tests for genetic disorders, drug metabolism, and infectious diseases. Tm Bioscience is located in Toronto, Ontario. Additional information about Tm Bioscience can be found at www.tmbioscience.com.
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Tm Bioscience
CONTACT: INVESTOR RELATIONS CONTACTS: Tm Bioscience - Canada: James Smith,The Equicom Group, Tel.: (416) 815-0700, Email: jsmith@equicomgroup.com; TmBioscience - U.S.: Sharon Weinstein, Euro RSCG Life NRP, Tel.: (212)845-4271, Email: sharon.weinstein@eurorscg.com; To request a free copy ofthis organization’s annual report, please go to http://www.newswire.ca andclick on Tools for Investors.