Avivagen Announces Proposed Private Placement of Debentures and Shares and Issuance of Shares in Lieu of Maintenance Fees

Posted: Mar 23, 2022

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OTTAWA, Ontario–(BUSINESS WIRE)–Avivagen Inc. (TSXV:VIV) (“Avivagen” or the “Company”), a life sciences corporation focused on developing and commercializing products for livestock, companion animal and human applications that safely enhances feed intake and supports immune function, thereby supporting general health and performance, is pleased to announce its intention to complete a private placement financing (the “Offering”) of secured debentures (the “Debentures”) for gross proceeds of up to $6.5 million. It is expected that the Offering will close on March 28, 2022, subject to satisfaction of closing conditions.

It is proposed that purchasers of Debentures will also receive common shares in the capital of the Company as bonus shares equal to 20% of the principal amount of the Debentures divided by the closing price of the common shares on the TSX Venture Exchange on the last trading day prior to the closing (the “Market Price”).

The proposed Debentures will bear interest at a rate of 9.0% per annum, payable semi annually on the last day of January and July in each year and maturing two years from the date of issue (the “Maturity Date”). On the first anniversary of the issuance, the Company shall also pay the Debenture holders a maintenance fee of 3% of the outstanding principal amount in cash. The Debentures will be secured by the assets of the Company and will not be convertible. The Company shall not be entitled to prepay the Debentures at any time prior to the first anniversary of closing, other than in the case of a change of control of Avivagen. If the Company repays the Debentures at any time prior to the first anniversary of closing it will pay a fee equal to 6% of the outstanding principal amount and if the Company prepays the Debentures at any time thereafter (including at the Maturity Date) it will pay a fee equal to 3% of the outstanding principal amount.

The Offering is proposed to be completed by Bloom Burton Securities Inc. as agent (the “Agent”). The Agent will receive a cash fee of 6% of the gross proceeds (excluding certain president’s list investors) and common share purchase warrants equal to up to 6% of the gross proceeds (excluding certain investors) divided by the Market Price, each entitling the holder thereof to purchase one common share at the Market Price per share for a period of 2 years (the “Broker Warrants”).

Approximately $5,460,000 of the proceeds from the Offering will be used by Avivagen to retire principal and interest outstanding pursuant to existing debentures issued by Avivagen in March and April 2019 (the “2019 Debentures”) and the balance will be used for working capital and general corporate purposes.

The Debentures, common shares and Broker Warrants issued, including the common shares issuable on exercise of the Broker Warrants, will be subject to restrictions on transfer, including a hold period ending four months and one day from their date of issuance under applicable Canadian securities laws.

Closing of the Offering will be subject to finalization and execution of definitive agreements and satisfaction of customary closing conditions including satisfaction of customary conditions imposed by the TSX Venture Exchange.

Avivagen also announces that it has opted to issue common shares to satisfy amounts owing to the holders of the 2019 Debentures on account of an annual maintenance fee owing to such holders. Pursuant to the terms of such debentures, Avivagen has the option of paying such maintenance fee in cash or in common shares. A total maintenance fee of $105,280 is due and payable as of March 23, 2022 to the holders of 2019 Debentures issued in March 2019 and the Company proposes to issue a total of 498,680 common shares at the rate of $0.2111 per share to satisfy such maintenance fee. The number of shares to be issued to satisfy the $2,280 maintenance fee that will be due and owing as of April 2, 2022 in respect of the 2019 Debentures issued in April 2019 will be determined on April 2, 2022 and will be announced by way of a subsequent press release. The issuance of shares is subject to the approval of the TSX Venture Exchange.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities, including in the United States, or for the account or benefit of U.S. persons (as such term is defined in Regulation S under the United States Securities Act of 1933, as amended (the “1933 Act”). The securities issued by Avivagen have not been and will not be registered under the 1933 Act or the securities laws of any state of the United States, and may not be offered or sold in the United States absent registration, or an applicable exemption therefrom, under the 1993 Act and the securities laws of all applicable states.

About Avivagen

Avivagen is a life sciences corporation focused on developing and commercializing products for livestock, companion animal and human applications that, by safely supporting immune function, promote general health and performance. It is a public corporation traded on the TSX Venture Exchange under the symbol VIV and is headquartered in Ottawa, Canada, based in partnership facilities of the National Research Council of Canada. For more information, visit www.avivagen.com. The contents of the website are expressly not incorporated by reference in this press release.

About OxC-beta™ Technology and OxC-beta™ Livestock

Avivagen’s OxC-beta™ technology is derived from Avivagen discoveries about β-carotene and other carotenoids, compounds that give certain fruits and vegetables their bright colours. Through support of immune function the technology provides a non-antibiotic means of promoting health and growth. OxC-beta™ Livestock is a proprietary product shown to be an effective and economic alternative to the antibiotics commonly added to livestock feeds. The product is currently available for sale in the United States, Philippines, Mexico, Taiwan, New Zealand, Thailand, Brazil, Australia, and Malaysia.

Avivagen’s OxC-beta™ Livestock product is safe, effective and could fulfill the global mandate to remove all in-feed antibiotics as growth promoters. Numerous international livestock trials with poultry and swine using OxC-beta™ Livestock have proven that the product performs as well as, and, sometimes, in some aspects, better than in-feed antibiotics.

Forward Looking Statements

This news release includes certain forward-looking statements that are based upon the current expectations of management. Forward-looking statements involve risks and uncertainties associated with the business of Avivagen and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions “aim”, “anticipate”, “appear”, “believe”, “consider”, “could”, “estimate”, “expect”, “if”, “intend”, “goal”, “hope”, “likely”, “may”, “plan”, “possibly”, “potentially”, “pursue”, “seem”, “should”, “whether”, “will”, “would” and similar expressions. Statements about OxC-beta’s ability to replace antibiotics commonly added to livestock feeds or to fulfill the global mandate to remove in-feed antibiotics as growth promoters, the possibility of closing the proposed Offering, the terms of the proposed Offering including the amount to be raised and the terms of the Debentures and the use of proceeds of the Offering set out in this news release are forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. For instance, Avivagen’s products may not gain market acceptance or regulatory approvals necessary to fulfill the global mandate to remove in-feed antibiotics as growth promoters, Avivagen may not be able to raise funds on the terms or amounts described, Avivagen may not be able to fulfill applicable closing conditions and circumstances may require that Avivagen apply the net proceeds of the Offering differently than anticipated. Readers are referred to the risk factors associated with the business of Avivagen set out in Avivagen’s most recent management’s discussion and analysis of financial condition available at www.SEDAR.com. Except as required by law, Avivagen assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Copyright © 2022 Avivagen Inc. OxC-beta™ is a trademark of Avivagen Inc.


For more information:
Avivagen Inc.

Drew Basek
Director of Investor Relations
100 Sussex Drive, Ottawa, Ontario, Canada K1A 0R6 Phone: 416-540-0733
E-mail: d.basek@avivagen.com

Kym Anthony
Chief Executive Officer
100 Sussex Drive, Ottawa, Ontario, Canada K1A 0R6 Head Office Phone: 613-949-8164
Website: www.avivagen.com

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