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LED Medical Diagnostics Announces Preferred Share Financing and Exchange of Debentures

  • August 31, 2018
  • News Releases

Vancouver, British Columbia, August 31, 2018 — LED Medical Diagnostics Inc. (“LED” or the “Company”) (TSXV: LMD) announced that it is proposing a series of transactions to significantly improve its balance sheet and provide additional working capital for a new phase of growth.

Highlights of the transactions announced today

  • Will Immediately reduce LED’s senior secured debt obligations by almost CDN$3.7 million
  • Will allow LED to retire an additional CDN$2.25 million of senior debt over the next six months
  • Will strengthen the balance sheet and provide additional working capital for growth

The Company today announced a proposed brokered private placement and a concurrent non-brokered direct private placement financing (the “Financing”) for combined gross proceeds of up to approximately CDN$5,500,000 through the issuance of up to 12,222,223 convertible preferred shares of the Company (the “Preferred Shares”) at an issue price of CDN$0.45 per share.  Each Preferred Share is entitled to receive a cumulative annual dividend equal to CDN$0.0225 per share (5%), payable in arrears quarterly in cash, which may be increased to an annual dividend of CDN$0.054 per year under certain circumstances.  Each Preferred Share is convertible into common shares of LED (“Common Shares”) at the holder’s option on a one-for-one basis, and at the Company’s option in certain circumstances. The Preferred Shares will mature five years from the closing at which time each Preferred Share will be redeemed by LED for CDN$0.45 plus any unpaid dividends.

In addition to the Financing, LED proposes to issue 8,147,071 Preferred Shares on the same terms in exchange for approximately CDN$3.67 million of LED’s outstanding senior secured debentures, including interest accrued thereon, on a dollar-for-dollar basis (the “Debenture Exchange”).

“The Company has significantly improved its financial performance since its strategic acquisition of Apteryx Inc. in February 2017, with a greater contribution from recurring revenues,” stated Dr. David Gane, Chief Executive Officer of LED. “The Financing and Debenture Exchange will strengthen our balance sheet, reduce our debt servicing costs, and will enable LED to invest in its future growth.”

A syndicate led by Bloom Burton Securities Inc. are acting as agents (the “Agents”) to LED for the financing. In connection with the offering, the Agents are entitled to receive a cash commission of 6% of the gross proceeds of the Financing, 3% of the gross proceeds of the Debenture Exchange and non-transferable broker warrants (the “Broker Warrants”) equal to 3% of the aggregate number of Preferred Shares issued in connection with the Financing and Debenture Exchange.  Each Broker Warrant will entitle the holder to acquire one common share in the capital of LED for a period of 24 months from the closing date at an exercise price of $0.45 per share.

Certain insiders of LED (director and officer) may acquire up to 170,000 Preferred Shares in the concurrent non-brokered direct private placement.

The proceeds will be used by LED to repay indebtedness of CDN$2.25 million, satisfy its deferred purchase consideration pertaining to the acquisition of Apteryx Software Inc. and for general working capital purposes.

All securities issued in connection with the transaction are subject to a hold period expiring four months and one day after the Closing Date, which is expected to be on or about September 4, 2018.

The issuance of the securities is subject to TSXV acceptance.

About LED Medical Diagnostics Inc.

LED Medical Diagnostics Inc. is a dental imaging technology provider focused on delivering state-of-the-art imaging software and systems. Through its wholly-owned subsidiaries LED Dental Inc., LED Dental Ltd., and Apteryx, Inc., LED Medical has provided dentists and oral health specialists with advanced diagnostic imaging products and software for over 20 years. LED’s proprietary technologies include the VELscope Vx Enhanced Oral Assessment and TUXEDO Intraoral Sensors, in addition to Apteryx’s XrayVision, XVWeb and XrayVision DCV imaging software solutions. Backed by an experienced leadership team and dedicated to a higher level of service and support, LED is committed to providing dental practitioners with the best technology available by identifying and adding leading products to its growing portfolio.  The Company is currently listed on the TSXV under the symbol LMD, the OTCQB under the symbol LEDIF, as well as the Frankfurt Stock Exchange under the symbol LME.