Prometic Life Sciences Inc. (TSX: PLI; OTCQX: PFSCF) has entered into a binding letter of intent to secure a US $80 million or CDN $100 million line of credit (Credit Facility) from Structured Alpha LP (SALP), an affiliate of Peter J. Thomson’s investment firm, Thomvest Asset Management Inc.
The entering into of the Credit Facility is subject to Prometic obtaining TSX approval and finalizing the definitive documentation, which the parties expect to achieve on or about November 30, 2017.
Structured Alpha LP and affiliate currently holds over $72 million loan in Prometic. Stefan Clulow, Managing Director and Chief Investment Officer of Thomvest Asset Management Inc., served as SALP nominee on Prometic board pursuant to the loan agreement.
The first two tranches can be drawn within fifteen days of closing, with each additional tranche becoming available on a monthly basis thereafter. Any amount drawn from the Credit Facility will bear interest of 8.5% per annum and will be repayable within two years from the entering into the Credit Facility.
As partial consideration for establishing the Credit Facility, Prometic will grant Structured Alpha LP an initial 10 million warrants with an exercise price of CDN $1.70 per common share with a term expiring June 30, 2026, alongside an additional 44 million warrants at the same exercise price and term, which will vest in tranches each time Prometic draws an additional amount of US $10 million (CDN $12.5 million) under the Credit Facility. Drawing on the first 4 tranches of US $10 million (CDN $12.5 million) would each cause 5 million warrants to vest, whereas the drawing on the second set of 4 tranches of US $10 million (CDN $12.5 million) would each cause 6 million warrants to vest.
Stefan Clulow said, “We are pleased to extend this Credit Facility to the company, at what is clearly a pivotal time. Prometic is on the cusp of delivering against several key milestones, and this drawdown facility is designed to provide a flexible bridge to those events.”
“The scale and structure of this facility provides us with significant operational and financial flexibility to continue with our ongoing negotiations to monetize certain corporate assets. Furthermore, the existing strong relationship with Thomvest allows us to leverage our current security package to its full effect,” said Pierre Laurin, Prometic’s President and Chief Executive Officer. “The flexibility provided by this Credit Facility also means the company can draw only when required which allows our team to focus on closing value-enhancing initiatives and create significant enterprise value for Prometic and its stakeholders.”
Commenting on the transaction, Bruce Pritchard, Prometic’s Chief Operating Officer and Chief Financial Officer added, “We are confident that by securing this credit facility, the company now has the means to fund itself, with limited dilution to existing shareholders, to the point where it will see revenues flowing from its sales of plasminogen (RyplazimTM), as well as from asset monetization events.”
photo credit: Prometic Life Sciences