Genetic Technologies Receives Financing, to Sell Up to A$3M in Shares to Holders

Molecular diagnostics company Genetic Technologies Limited

today announced a private placement of ordinary shares to domestic and overseas institutional and sophisticated investors to raise AUD 2,200,000. The Company also plans to raise up to an additional AUD 3,000,000 via a share purchase plan ("SPP") to eligible shareholders, and has executed a term sheet providing for the issuance of Redeemable Convertible Notes ("Notes") to an institutional investor, Ironridge Global IV, Ltd. ("Ironridge"), which, when completed, is expected to raise a further USD 5,000,000. Lodge Corporate Pty. Ltd. acted as Lead Manager on the fund raising with Ladenburg Thalmann & Co. Inc. acting as placement agent on the Notes, which in aggregate will raise up to AUD 10,600,000 (excluding offer costs). Proceeds from the combined fund raising, together with existing cash, will be applied to: -- expansion of U.S. distribution for the Company's lead breast cancer test, BREVAGen(TM); -- completion of additional studies to add new ethnicities (Hispanic and African American) and to expand the addressable market for BREVAGen(TM); -- the increase of market awareness for BREVAGen(TM) through broader and more active key opinion leader and speaker programs; -- investment to further improve reimbursement performance ; and -- general working capital. The shares to be offered under the private placement ("Placement") and the SPP will be issued at a price of AUD 0.072 per share, representing a 15.3% discount to the last close price (AUD 0.085) prior to the trading halt on 29 July 2013 (AEST), and a 19.1% discount to the 30-day VWAP (AUD 0.089). The Notes to be issued to Ironridge will be convertible into new NASDAQ-traded American Depository Receipts ("ADRs") at a fixed issue price of USD 3.00 per ADR, representing a 26.1% premium to the last closing pricing of of the ADRs on NASDAQ (USD 2.38) prior to the trading halt. The combined fund raising will be conducted in three tranches, namely: 1. Private Placement - AUD 2,200,000 The placement of 30,555,556 new shares at an issue price of AUD 0.072 per share to raise AUD 2,200,000 will be conducted under the Company's current 15% placement capacity in accordance with ASX Listing Rule 7.1 and accordingly shareholder approval for the private placement is not required. The new shares will rank equally with existing shares and settlement under the Placement is expected to occur on 8 August 2013 (AEST). The Placement shares are expected to be allotted and quoted on the Australian Securities Exchange ("ASX") within one business day of settlement. 2. Share Purchase Plan - AUD 3,000,000 The Company intends to offer a Share Purchase Plan ("SPP" or "Plan") to eligible shareholders to raise up to a further AUD 3,000,000 on the same terms as the Placement, i.e. at an issue price of AUD 0.072 per share, subject to a waiver being received from the ASX which the Company expects to be granted shortly. The record date for eligible shareholders to participate in the proposed SPP will be 29 July 2013 (the "Record Date"). Eligible shareholders with a registered address in either Australia or New Zealand will be offered the right to take up to AUD 7,500 worth of fully paid ordinary shares in the Company ("SPP Shares"). Participation in the SPP is optional and available irrespective of the number of shares an Eligible Member currently holds in the Company. The SPP documents are expected to be despatched to shareholders within 14 days of the Record Date. The SPP offer to eligible shareholders will be non-renounceable and entitlements will not be tradable on the ASX or otherwise transferable. Further details concerning the SPP, including the proposed timetable for the SPP, will be the subject of further ASX announcements in due course. 3. Redeemable Convertible Notes Issue - USD 5,000,000 The Company has executed a term sheet dated 26 July 2013 setting the terms and conditions pursuant to which the Company will issue convertible notes to Ironridge to raise USD 5,000,000. The issue of the Notes will be subject to shareholder approval which the Company will seek at a General Meeting scheduled for September 2013 (details of which will be released to the ASX at the appropriate time). The issue is also subject to the completion of certain US regulatory requirements which the Company anticipates will be finalised before the end of October 2013. The proposed Notes will be convertible into new ADRs (as traded on NASDAQ under the ticker: GENE) at a fixed issue price of USD 3.00 per ADR. Ironridge will have an option to subscribe for an additional USD 5,000,000 of Notes on the same terms, but convertible into ADRs at a fixed issue price of USD 4.00 per ADR, at any time within a six-month period of the date of the definitive documents being executed (known as a "Greenshoe option"). The broad terms of the proposed Notes are as follows: (a) The Notes will be convertible into ADRs at a fixed issue price of USD 3.00 per ADR, and at USD 4.00 per ADR under the Greenshoe option; (b) Interest on the Notes will be calculated at an annual rate of 7.5% per annum, which is adjustable in accordance with certain share market price changes, and will accrue until either the conversion or redemption of the Notes; (c) The Notes do not have a fixed expiry date and may be redeemed for cash by the Company at any time, or converted into ADRs by the Purchaser or (subject to certain conditions) into ADRs by the Company; (d) The issue and subscription for the Notes is subject to various conditions precedent including the receipt of shareholder approval, registration of the ADRs and ensuring there are sufficient ADRs available for the conversion of the Notes, delivery of certain opinion letters and additional customary equity funding conditions; and (e) The Noteholder does not have any right to vote at shareholder meetings.