Bioasis Technologies (BTI.V) entered into a convertible security financing earlier this week with New-York based investment management firm, Lind Global Macro Fund, a subsidiary of The Lind Partners, according to a press release.
The terms of the agreement give Bioasis the ability to issue convertible securities up to $10 million with proceeds going to general working capital.
“This significant financing will enable Bioasis to fully focus on the execution of its business strategy. Importantly, Bioasis now has the means to leverage its existing research in lysosomal dysfunction, neurodegeneration and neuroinflammation, and to generate robust licensing packages for potential partners. Whilst there have been challenges in completing certain studies this year, due to constraints at our contract research organizations, these have been overcome, and the company is well placed to accomplish its [research and development], and partnering objectives,” said Dr. Deborah Rathjen, executive chair of Bioasis.
Bioasis Technologies is a biopharmaceutical company involved in the development of a proprietary technology capable of delivering drugs beyond the blood-brain barrier, and in treating central nervous system disorders (CNS), including certain brain cancers and neurodegenerative diseases. The blood brain barrier is a problem for getting drugs to their appropriate place. It’s there specifically to keep toxins, pathogens and other contaminants in the body from being able to access the brain and cause serious infections. Unfortunately for us, though, it also impedes the ability of some medication, which is where Bioasis’ platform comes in.
“Lind has been impressed by Bioasis’s leading blood-brain barrier drug delivery technology, its deep pipeline and strategic partnerships. The technology and pipeline are capable of providing new treatment options for patients with serious brain conditions, and we are very pleased to be able to support further development of Bioasis’s therapeutic candidates,” said Phillip Valliere, managing director of the Lind Partners.
The agreement will have Lind making an initial investment of $3 million (minus a $90,000 commitment fee) in exchange for a convertible security worth $3.6 million, which includes a prepaid interest payment of $600,000. Six months after closing, Bioasis will start repayments in $125,000 instalments,with pre-paid interest at $20,000 a month and the option to convert into common shares of Bioasis at 90% of the market closing price.
Lind also won’t be able to sell any of their Bioasis shares from the first convertible security for four months and a day when they’re issued, and won’t be able to sell Bioasis’ shares short during the term of the agreement either. When the four month period is finished, Lind will be able to convert any portion of the principle into common shares at $0.31 per share.
Bioasis can also receive additional investments from Lind up to $7 million in exchange for another convertible security with similar terms as the first. Naturally, the company can buy back their securities in cash at any time with no penalty, and if they exercise their option, Lind will get the option to convert up to %33.3 of the principle at the conversion price, and 100% of the prepaid interest, into common shares.
The company also sweetened the deal with warrants.
“As part of the first convertible security financing, Bioasis will issue Lind 4,839,048 warrants exercisable for a term of 30 months at an exercise price of 41 cents per share. Bioasis will have the right to accelerate the expiry date of a certain number of warrants, subject to certain conditions, including that no event of default has occurred, as follows: (i) if Bioasis’s shares trade above $1.27 for 30 consecutive trading days, it can accelerate the expiry date of 50 per cent of the warrants; and (ii) if Bioasis’s shares trade above $1.80 for 30 consecutive trading days and the first convertible security then outstanding (along with all outstanding accrued prepaid interest) has been fully repaid or converted, then Bioasis can accelerate the expiry of all of Lind’s remaining warrants. Any warrant exercise proceeds will be applied to the outstanding principal amount of the first convertible security.”
The first convertible security is expected to close on June 25, 2021.
Bioasis Technologies’ shares are up $0.025 today and presently trading at $0.345.
Full disclosure: Bioasis Technologies is an equity guru marketing client.