TORONTO, April 23, 2019 /CNW/ - Thomvest Asset Management Ltd. ("Thomvest") today filed a report of its ownership of common shares ("Common Shares") and warrants ("Warrants") of Prometic Life Sciences Inc. (the "Corporation") pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues. The Common Shares and Warrants are held through Structured Alpha LP ("SALP"), a limited partnership of which Thomvest is the sole general partner.
On April 23, 2019, the Corporation completed transactions pursuant to a debt restructuring agreement entered into on April 15, 2019 with SALP, as lender, and the Corporation, as borrower, and certain subsidiaries of the Corporation (the "Restructuring Agreement"). In accordance with the Restructuring Agreement, (i) SALP acquired 15,050,312,371 Common Shares (the "New Common Shares") at a price per Common Share of $0.01521 (the "Transaction Price") for a total purchase price of $228,887,948, which was satisfied by the cancellation of outstanding indebtedness owed by the Corporation, and (ii) certain Warrants to purchase shares of the Corporation held by SALP were amended, with new warrants being issued (the "New Warrants") exercisable for 168,735,308 Common Shares at a per-share exercise price equal to the Transaction Price. Concurrently, SALP completed an acquisition of Common Shares pursuant to a subscription agreement dated April 15, 2019, purchasing 1,643,851,555 Common Shares on a private placement basis at a subscription price per Common Share equal to the Transaction Price for aggregate gross proceeds of $25,000,000 (the "SALP Subscription"). Additional details about these transactions are provided below.
The New Common Shares have been issued to SALP in connection with the Restructuring Agreement. Under the Restructuring Agreement, all but $10 million of the outstanding debt owing to SALP by the Corporation in the aggregate amount of $238,887,948 was converted into Common Shares. The New Common Shares were issued to SALP pursuant to the exemption contained in Section 2.14 of National Instrument 45-106 of the Canadian Securities Administrators ("NI 45-106").
The New Warrants have been issued to SALP in connection with the Restructuring Agreement. Prior to the closing of the transactions described above, SALP owned the following Warrants:
- 1,000,000 Warrants, each of which entitled SALP to acquire one Common Share upon the payment of an exercise price equal to $0.52 per Warrant ("Warrants 1");
- 20,276,595 Warrants, each of which entitled SALP to acquire one Common Share upon the payment of an exercise price equal to an aggregate of $15,653,138 or the satisfaction of the loan made by SALP to the Corporation on September 10, 2013 in the principal amount of $10 million (plus interest accrued thereon) ("Warrants 2");
- 128,056,881 Warrants, each of which entitled SALP to acquire one Common Share upon the payment of an exercise price equal to $1.00 per Warrant ("Warrants 8"); and
- 19,401,832 Warrants, each of which entitled SALP to acquire one series A preferred share in the capital of the Corporation (a "Series A Preferred Share") upon the payment of an exercise price equal to $0.15636 per Warrant ("Warrants 9").
Pursuant to the Restructuring Agreement, (i) the exercise price of Warrants 1, 2, 8 and 9 was amended to be the Transaction Price, and (ii) the terms of Warrant 9 were amended so that each Warrant 9 becomes exercisable for a Common Share instead of a Series A Preferred Share.
The New Warrants have been issued to SALP pursuant to the exemption contained in Section 2.3 of NI 45-106. The New Warrants may be exercised in whole or in part at SALP's option until April 23, 2027, at the Transaction Price per New Warrant.
The SALP Subscription was made in connection with a private placement completed by the Corporation that was led by a third party investor for aggregate gross proceeds of $75,000,000, inclusive of participation by SALP of the $25,000,000 SALP Subscription (the "Private Placement"). As part of the Private Placement, concurrent with the closing of the SALP Subscription, the Corporation issued an aggregate of 3,287,310,980 Common Shares at the Transaction Price per Common Share, to the third party investor, for gross proceeds of $50,000,000 (the "Concurrent Placement"). The Transaction Price was determined by the Corporation following negotiations between the Corporation and its financial advisors and the third party investor.
Concurrent with the announcement of the transactions described above, on April 15, 2019, the Corporation announced the launch of a rights offering to the registered holders of Common Shares (the "Rights Offering"). Under the Rights Offering, registered holders will be eligible to acquire, for each Common Share held by such registered holder, one right to purchase twenty (20) Common Shares at the Transaction Price. The maximum number of Common Shares issuable upon the exercise of rights will be the quotient of $75 million and the Transaction Price, with any exercise of rights in excess of this limit subject to proration across all exercising holders. It is not SALP's current expectation or intention to exercise its rights in the Rights Offering and purchase additional Common Shares, further enabling retail and existing shareholders of the Corporation to participate in the transactions at the same price as SALP and the third party investor that led the Private Placement.
SALP's Interest in the Securities of the Corporation
On December 1, 2017, SALP filed an early warning report disclosing its ownership, directly and indirectly, of Warrants to acquire an aggregate of 121,394,189 Common Shares, together with 24,071,775 Common Shares, representing approximately 17.49% of the then outstanding Common Shares after giving effect to the exercise of such Warrants. Prior to the completion of the transactions described above, (i) the Corporation had 739,130,546 Common Shares outstanding, and (ii) SALP beneficially owned, or exercised control or direction over, directly and indirectly, (a) Warrants to acquire an aggregate of 149,333,476 Common Shares, and (b) 24,071,775 Common Shares, which represented approximately 19.52% of the outstanding Common Shares after giving effect to the exercise of such Warrants to acquire Common Shares. SALP also beneficially owned Warrants to acquire an aggregate of 19,401,832 Series A Preferred Shares.
Immediately following the closing of the transactions described above and after giving effect to the Concurrent Placement, (i) the Corporation had 20,720,605,452 Common Shares outstanding, and (ii) SALP beneficially owns, or exercises control or direction over, Warrants to acquire an aggregate of 168,735,308 Common Shares, together with 16,718,235,701 Common Shares, representing approximately 80.68% of the outstanding Common Shares without giving effect to the exercise of such Warrants. SALP would beneficially own, or exercise control or direction over, directly and indirectly, an aggregate of 16,886,971,009 Common Shares, or approximately 80.84% of the outstanding Common Shares after giving effect to the exercise of such Warrants, representing an increase in its beneficial ownership or control of Common Shares of 61.32%.
SALP holds the Common Shares and Warrants for investment purposes. As the general partner of SALP, Thomvest continually reviews investment alternatives and may purchase or sell securities of the Corporation from time to time in accordance with applicable laws. It is not Thomvest's current expectation or intention to privatize the Corporation. Thomvest intends to be a long term supportive shareholder of the Corporation as its new management team executes its business plan and builds a world class biopharmaceutical company based in Canada.
On the closing of the transactions described above, the board of directors of the Corporation (the "Board") appointed Mr. Kenneth Galbraith as Chief Executive Officer of the Corporation, in replacement of Professor Simon Best, who was acting as Interim Chief Executive Officer of the Corporation. Mr. Stefan Clulow, who is currently Managing Director and Chief Investment Officer of Thomvest, has been appointed as Chairman of the Board in replacement of Professor Simon Best. Additionally, Professor Simon Best has been appointed Lead Independent Director of the Corporation.
Thomvest Asset Management Ltd.
Structured Alpha LP
65 Queen Street West
SOURCE Thomvest Asset Management Inc.
For further information: A copy of the early warning report may be obtained on request to Zack Newton of Thomvest Asset Management Ltd. at (416) 364-8700.