TORONTO, Nov. 29, 2012 /CNW/ - Biosign Technologies Inc. (TSXV: BIO) (the "Company") announced today the execution of a term sheet (the "Term Sheet") for a private placement of units of the Company ("Units") for gross proceeds of up to $550,000 (the "Offering") for which a total of 11,000,000 Units shall be issued at a price of $0.05 per Unit. Each Unit is comprised of one common share of the Company and one common share purchase warrant (a "Warrant"). Each Warrant shall be exercisable for a 2-year period from the date of issuance, at an exercise price of $0.05 per share during the first 12 months and $0.10 per share during the second 12 months. One major investor (the "Investor"), who is unrelated to the Company, has committed to subscribe for $500,000 worth of Units, subject to due diligence and customary closing conditions, including execution of definitive documentation and receipt of regulatory approvals, including the TSX Venture Exchange (the "TSX-V"). The Offering is anticipated to close on or before December 14, 2012.
In connection with the Offering, the Company has also agreed to retain the services of a management consulting group affiliated with the Investor for business advisory and management services, under a 3-year consulting agreement having the following terms: an annual consulting fee of $432,000/year for the services of four senior consultants (the "Consulting Fee"), a performance bonus (based on satisfaction of corporate objectives determined by the Board of Directors of the Company) equal to up to 100% of the Consulting Fee (the "Performance Fee"), and eligibility to participate in the Company's Stock Option Plan (the "Plan"). A total of $300,000 of the annual Consulting Fee shall be payable on a quarterly basis in the form of common shares of the Company, to be priced in the context of the market at the time of issuance, subject to TSX-V requirements. In addition, approximately 70% of the Performance Fee, if any, shall be payable annually by the Company in the form of common shares, to be priced in the context of the market at the time of issuance, subject to TSX-V requirements. Subject to the terms of the Plan and the availability of options thereunder, the Company will grant an aggregate of 6,000,000 stock options under the Company's Plan, exercisable for a period of five years at an exercise price of $0.10 per share or, if required, such increased price in the context of the market at the time of grant in accordance with the terms of the Plan and TSX-V requirements.
Within 15 days of the Closing Date, the Investor will have the right to appoint up to 2 nominees of the Board. Consistent with the other independent members of the Board, such members will each receive 600,000 stock options, exercisable for a period of five years at an exercise price of $0.10 per share.
The Offering and the entering into of the consulting arrangement are subject to all applicable TSX-V and regulatory approvals as well as the entering into of definitive documentation.
The proceeds from the Offering will be used for general working capital purposes, including expenditures for production, operations and administration.
Biosign CEO Robert Kaul stated: "This significant placement provides additional resources for Biosign to proceed with its revitalization plan. We are pleased to be able to retain the services of four senior business advisors who have expertise in accounting, business development, and international sales. The Company is now placed to focus on its primary corporate objectives for the coming year, which include generating sales activity in the United States, Canadian and European markets."
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Biosign Technologies Inc.
For further information:
Biosign Contact Information
Chief Executive Officer
Phone: (416) 218-9800 ext. 201
Email: [email protected]