Kane Biotech Announces Closing of Over-Sold Private Placement Offering

Posted in: Press Releases

Kane Biotech Announces Closing of Over-Sold Private Placement Offering

WINNIPEG, Manitoba – July 17, 2017 – Kane Biotech Inc. (TSX-V:KNE) (the “Company” or “Kane Biotech”) today announced that it has closed its previously announced private placement offering (the “Offering”) of up to 33,333,333 units (“Units”) at a price of $0.12 per Unit for aggregate gross proceeds of $4,000,000. At the closing, the Company issued 33,404,997 Units for aggregate gross proceeds of $4,008,599.64. Each Unit is comprised of one common share of the Company (a “Share”) and one Share purchase warrant (a “Warrant”). Each Warrant will expire 18 months from the date the Warrant is issued (the “Expiry Date”) and will entitle the holder to purchase one Share at a price of $0.18 up to the Expiry Date.

Mark Ahrens-Townsend, President and CEO of Kane Biotech, commented, “We are very pleased with the results of our private placement. Since the announcement of the offering, the response from interested investors in Canada, the United States and Europe to the Kane Biotech story, including its recent commercial business transactions and their corresponding financial results, has been excellent.  The Company is now well positioned to execute on its business plan with focus on driving revenue, profit and shareholder value.”

The Company reserves the right to call the Warrants, at their exercise price of $0.18 per Warrant, in the event that the Shares have traded for ten (10) consecutive trading days at a closing price at or exceeding $0.25 per Share. If the Company wishes to call the Warrants, the Company must provide written notice to the holders of the Warrants that it is calling the Warrants. Holders of Warrants will have thirty (30) days from the date of such notice to exercise the Warrants and, in the event that any Warrants are not exercised, such Warrants shall be cancelled.

The insiders of the Corporation that participated in the Offering were Philip Renaud, the Chairman, a director and a controlling shareholder of the Company, and Mark Ahrens-Townsend, the President and Chief Executive Officer and a director of the Company. Mr. Renaud purchased 12,500,000 Units for an aggregate price of $1,500,000 and Mr. Ahrens-Townsend purchased 250,000 Units for an aggregate price of $30,000. As Mr. Renaud and Mr. Ahrens-Townsend are insiders of the Company, the issuance of the participation by such persons in the Offering is considered to be a “related party transaction” for the purposes of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). In accordance with MI 61-101, the Company is not required to obtain a formal valuation or minority shareholder approval of the Offering due to the fact that it may rely on an exemption to those requirements contained in MI 61-101, namely that the Company, without the Offering, would be in serious financial difficulty and the Offering, including the sales of Units to Mr. Renaud and Mr. Ahrens-Townsend, is designed to improve the financial position of the Company. The Offering and the sale of the Units to Mr. Renaud and Mr. Ahrens-Townsend was approved by all of the directors of the Company, including the independent directors of the Company.

Due to greater than expected demand for the Offering, management of the Company has determined to hold a second closing of the Offering and to increase the total number of Units offered pursuant to the Offering from 33,333,333 ($4,000,000) to 37,500,000 ($4,500,000). Accordingly, 4,095,003 Units remain available for sale at the second closing of the Offering, which the Company anticipates holding sometime in the next 30 days. All other terms of the Offering remain the same.

The net proceeds of the Offering will be used for business development, technology and product commercialization, patent and trademark filings, regulatory expenses, clinical trials and general working capital.

The Shares and Warrants will be restricted from transfer for a period of four months and a day from the date hereof in accordance with applicable securities laws and the policies of the TSX Venture Exchange.

The closing of the Offering is subject to the final approval of the TSX Venture Exchange.