Warnex repays debentures and sells analytical services division
For the financially-strapped Canadian CRO Warnex, another lucky break came in the form of Accord Financial that opened and closed a credit facility with Warnex, giving it enough money to repay its $975,947 debt to investor Persistence Capital Partners (PCP). With the repayment out of the way, Warnex has joined the TSX Venture Exchange.
Luck has blessed Warnex not once but twice. Last month, after defaulting on a loan, it nearly missed a deadline to repay PCP, until the two worked out an agreement for Warnex to make a repayment at a later time, while giving PCP more than 46 million Warnex common shares, thereby becoming a major shareholder.
"This credit facility allows Warnex to replace its convertible debentures with new non-dilutive financing and serves to demonstrate a continued commitment towards restructuring the company's balance sheet and providing the company with access to capital in order to pursue its objectives," remarked Michael Singer, the newly appointed chairman of the Board of Directors of Warnex.
And the good news didn't stop there: On the same day it joined the Toronto Stock Exchange Ventures Exchange (TSXV), Warnex announced that it completed another objective in its quest to absolve itself of mounting debt, by selling its analytical services division to Neopharm Laboratories. Proceeds from the sale will go toward absolving Warnex's debt.
For Warnex to stay on TSXV and meet its listing requirements, PCP will agree to modify the common share purchase warrants, by increasing its exercise price by 10 cents. Warnex will also need to seek shareholder approval for a one-for-four consolidation of its outstanding common shares. Further details on the consolidation is set to be released on a later date, according to the Warnex release.
Also, Warnex will need to face two new priorities: finding successors to replace Richard Laferrière and Michel Lassonde as board directors following their departures, and maximizing the value and success of its remaining bioanalytical services division.