ChondroGene Announces $20 Million Bought Deal Private Placement Financing
TORONTO, CANADA (May 12, 2006): ChondroGene™ Limited (TSX Venture: CDG) is pleased to announce that it has entered into an agreement with Westwind Partners Inc. who have agreed to purchase through a syndicate, on a bought deal private placement basis, 12,500,000 common shares of the Company at a price of $1.60 per share, for aggregate gross proceeds of $20.0 million. The syndicate will have the option to purchase up to an additional 3,125,000 common shares at the issue price on the second business day prior to closing, for additional gross proceeds of up to $5.0 million.
The Company will pay a 5% cash commission on the funds raised and issue broker warrants for common shares equal to 5% of the common shares sold under the offering. The broker warrants will be exercisable at a price of $2.25 per share for a period of 24 months from the closing date. The securities issuable under the private placement are subject to a four month hold period from the closing date.
The offering is scheduled to close on or about May 25, 2006 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.
The Company plans to use the net proceeds of this offering to fund development and commercialization of its lead product, ColonSentry™, a blood test for the detection of precancerous polyps and colon cancer. The net proceeds will also be used to develop additional products in the Sentry line in other disease areas and for general corporate purposes.
About GeneNews
GeneNews is focused on the application of functional genomics to enable early diagnosis and personalized therapeutic intervention based on disease-specific biomarkers. The Company has developed a novel approach, the Sentinel Principle™, to detect and stage virtually any disease or medical condition from a simple blood sample. GeneNews is currently applying the Sentinel Principle™ in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. GeneNews' first product, ColonSentry™, is a convenient and patient-friendly blood-based test that can assess an individual's current risk for colorectal cancer. For more information on GeneNews, visit www.genenews.com.
This press release contains forward-looking statements, which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements.