Advitech Announces Closure of US$970,000 Private Placement with AgeChem and New Payment Terms for its 2004 Convertible Debentures
29 August 2007
Advitech Inc. today announced that it has completed a US$970,000 private placement of units with AgeChem Venture Fund LP and has renegotiated the terms of the convertible debentures issued in 2004.
Advitech has issued 8,083,333 units at a price of US$0.12 per unit to AgeChem. Each unit consists of one common share of the Corporation and one common share purchase warrant. Each warrant will entitle the holder to purchase one additional common share at the price of US$0.17 per share during the first year from the closing date, then at US$0.19, US$0.21, US$0.23, US$0.253 for the second, third, fourth and fifth years, respectively, from the closing date.
Advitech has paid a US$58,200 commission to Northern Securities Inc. for its advisory role in this private placement transaction. The proceeds of the private placement will be used by the corporation for working capital and for development and commercialization of Advitech's Dermylex™, a natural, nutraceutical product with proven effectiveness to reduce mild to moderate psoriasis symptoms.
In accordance with the policies of the TSX Venture Exchange, the securities issued as part of this private placement will be subject to a four months hold period following the closing date. New terms for the June 2004 convertible debentures. In addition, the Corporation announced that it has completed, simultaneously with the closing of the private placement, an agreement to replace the convertible debentures issued in June 2004 for a total amount of $ 750,000 to Fonds de Solidarité des Travailleurs du Québec and a group of private investors due February 1st, 2008 (the 2004 Debentures) with new convertible debentures having the characteristics set forth below.
The new debentures bear interest at the rate of 12% and will be due on June 1st, 2011. From the date of issuance date until September 30th, 2007, interest will be capitalized and will become payable at the end of the term. Beginning October 1st, 2007, interest will be paid on a monthly basis. The debentures may be repaid by Advitech in advance under certain specific circumstances. The debentures are convertible into common shares, at the holder's option, at a conversion price of US$0.15 per common share until February 29, 2008, and at US$0.20 per common share until February 28, 2009. In accordance with the policies of the TSX Venture Exchange, the conversion price will then be increased by 10% for each subsequent year until the end of the term.
The convertible debentures and the common shares, which may be issued upon the conversion of the debentures, will be subject to a four months hold period following the replacement date. Advitech has obtained conditional approval from the TSX Venture Exchange in relation to this private placement.
These two transactions should provide us with sufficient latitude to meet our commercial and scientific targets in 2007 has indicated Renaud Beauchesne, president and Chief Executive Officer of the Corporation.
