Spectral Diagnostics Inc. (TSX: SDI; OTCQX: DIAGF) has entered into a private placement agreement with Toray Industries, Inc.(TSE: 3402), pursuant to which Toray will invest $5 million in Spectral Diagnostics.
Under the terms of the private placement, Spectral Diagnostics will issue 16,666,667 common shares to Toray at a price of $0.30 per share for gross proceeds of $5 million.
Following the closing of the private placement, Toray’s investment will represent approximately 12.8% of the issued and outstanding common shares, calculated on a non-diluted basis. Toray will be entitled to nominate one director to the Spectral Diagnostics board for as long as it holds 10% or more of the issued and outstanding common shares (calculated on a non-diluted basis).
The private placement is currently expected to close at the beginning of April, 2013.
Spectral Diagnostics intends to use net proceeds to continue to support its EUPHRATES clinical trial and for general corporate purposes.
“This strategic investment not only provides additional funds for our clinical trial, but also strengthens the existing collaborative relationship we have with Toray,” said Anthony Businskas, EVP & CFO of Spectral Diagnostics. “We will work with Toray to complete clinical research for U.S. FDA market approval of Toraymyxin, and we will seek to further expand acceptance of the EAATM/ Toraymyxin theranostic in jurisdictions outside of Japan.”
Toray Industries, Inc. is a Japanese-based manufacturer of fibers, textiles, plastics, chemicals, IT related products, carbon fiber composite materials, environmental and engineering equipment, and pharmaceutical and medical products.
Following the closing of proposed the private placement, Birch Hill Equity Partners Management Inc., directly through Birch Hill Equity Partners IV, LP, Birch Hill Equity Partners (US) IV, LP, Birch Hill Equity Partners (Entrepreneurs) IV, LP, and indirectly through Medwell Capital Corp. (TSX-V: MWC) remains as the largest shareholder of Spectral Diagnostics on non-diluted basis.
Medwell Capital, 45% owned by Birch Hill Equity Partners, currently owns 15.2 million Spectral shares and 15.2 warrants exercisable at $0.60 per warrant share.