LexaGene Holdings Inc (TSX-V:LXG, OTCQB:LXXGF) said that Meridian LGH Holdings LLC has agreed to make an investment in LexaGene for a total of C$6,475,000 (approximately US$4,995,000).
In a statement, Dr Jack Regan, LexaGene’s CEO and founder, said: “I’m thrilled to have Meridian LGH Holdings supporting LexaGene’s mission to change the way animals are diagnosed and treated.”
The company said it intends to use the proceeds of the private placement towards purchasing inventory for manufacturing more MiQLab Systems, supporting sales, marketing, and continued R&D.
The company and the investor - a Dallas, Texas-based subsidiary of Meridian Veterinary Capital LLC - intend that the investment will occur by way of non-brokered private placement anticipated to close in two tranches.
READ: LexaGene Holdings kicks off the year with additional sales of its flagship MiQLab Systems
The first tranche of the private placement, which closed today, is comprised of 13,115,725 units of the company at the price of C$0.35 per unit (approximately US$0.27 per unit) for gross proceeds of C$4,590,503.75 (approximately US$3,541,245.75).
The second tranche will be comprised of 5,384,275 units issued at the same issue price per unit for gross proceeds of C$1,884,496.25 (approximately US$1,453,754.25).
The second tranche is expected to close upon clearance by the TSX Venture Exchange of a personal information form filed in connection with the investment by the Investor. Upon closing of both tranches, the investor will hold approximately 13.41% of the issued and outstanding common shares of the company.
Each unit in the private placement is comprised of one common share of the company and one common share purchase warrant, with each whole warrant entitling the holder to purchase one common share of the company for a period of 36 months at a price of C$0.45 (approximately US$0.35).
Curt Boisfontaine, the manager of Meridian LGH Holdings and Meridian Veterinary Capital, commented: “Meridian has sponsored many investments in the veterinary field. As a life-long pet owner, I’ve owned pets that have suffered from improper diagnosis on drug-resistant infections and I’m convinced LexaGene’s technology can significantly improve the speed and quality of care veterinarians are able to provide at the point of care. This should have a meaningful impact on this aspect of veterinary care.”
In connection with the private placement, LexaGene and the investor have entered into an investor rights agreement under which the investor will be granted certain information and notice rights, and the right to participate in future financings of the company in order to maintain its then-current percentage interest up to 19.99% for so long as the investor maintains a minimum 10% equity interest in the company.
The securities issued under the private placement will be subject to a statutory four-month hold period from the date of issuance in accordance with applicable Canadian securities laws.
Closing of the private placement is subject to final TSX Venture Exchange approval.
LexaGene is a molecular diagnostics company that develops molecular diagnostic systems for pathogen detection and genetic testing for other molecular markers for on-site rapid testing in veterinary diagnostics, food safety and for use in open-access markets such as clinical research, agricultural testing, and biodefense.
End-users simply need to collect a sample, load it onto the instrument with a sample preparation cartridge, enter sample ID and press ‘go’. The MiQLab system delivers excellent sensitivity, specificity, and breadth of detection and can return results in approximately two hours. The unique open-access feature is designed for custom testing so that end-users can load their own real-time PCR assays onto the instrument to target any genetic target of interest.
Contact the author at jon.hopkins@proactiveinvestors.com