Medicus Pharma (TSX-V:MDCX) has revealed plans for a private placement of its 100% unsecured convertible notes due in 2025.
The first closing of the private placement, expected around May 1, will see approximately US$5,172,500 aggregate principal amount of notes issued, a statement from the company noted.
Medicus may issue additional notes, with up to US$10 million aggregate principal amount of notes post-completion.
The biotech and life sciences company is focused on accelerating the clinical development programs of novel and disruptive therapeutics assets.
Net proceeds from the private placement will fund research and development programs and working capital needs, Medicus said.
Jointly managed by Medicus Pharma (TSX-V:MDCX) Ltd. and EF Hutton LLC, the notes will bear interest at 10% per annum, payable semi-annually in cash or common shares of the company at the holder's discretion.
Prior to January 1, 2025, the notes will automatically convert into common shares upon the completion of a US initial public offering or a change of control, at varying conversion prices. Post-January 1, 2025, the notes will be convertible at the holder's discretion at a fixed price of US$2 per common share.
Upon a change of control, the company will offer to repurchase the notes at a price equal to 101% of the principal amount plus accrued and unpaid interest.
The notes are set to mature on December 31, 2025, with redemption options available thereafter.