Amarantus Completes Tender Exchange of Convertible Securities
CEO attending CNBC's Healthy Returns conference in New York City
San Francisco, CA -- March 28, 2018 -- InvestorsHub NewsWire -- Amarantus Bioscience Holdings, Inc. (OTC Pink: AMBS) (the "Company" or AMBS), a US-based biotechnology holding company with wholly-owned subsidiaries developing first-in-class orphan neurologic, regenerative medicine and ophthalmic therapies, and a JLABS alumnus company, today announced that it has completed an exchange of outstanding securities with holders of approximately 96% of the outstanding convertible securities eligible to participate in such exchange (the "Tender Exchange") in accordance with the binding letter of intent that was previously executed with such holders on October 12, 2017. Concurrent with this announcement, the Company announced that its CEO is attending CNBC's Healthy Returns conference in New York City.
Pursuant to the terms of the letter of intent and exchange agreements, holders of an aggregate of approximately $8.43M in senior secured convertible debt ("Old Debt") received new secured convertible notes in the aggregate principal amount of approximately $6.74M ("New Secured Debt") and holders of an aggregate of approximately $13.91M in Series E and Series H Convertible Preferred Stock received new unsecured convertible note in the aggregate principal amount of approximately $10.43M ("New Unsecured Debt" and together with the New Secured Debt, the "New Debt"). The New Debt holders have agreed to a moratorium of conversion of the New Debt into equity securities for a period of nine months from the closing of the Tender Exchange.
Upon closing and settlement of capital equal to or greater than $5 million in Amarantus, there will be a release by holders of the New Secured Debt of all security interests in the Company's assets, and holders of New Debt will convert into a newly designated class of preferred stock (the "New Preferred Stock") (with such conversion being subject to the reduction of Company accounts payable balance to less than $2M with no single account payable exceeding $100,000), thereby improving the Company's equity balance sheet in preparation for the listing of the Company's common stock on a national exchange. Additionally, upon completion of a capital raise equal to or greater than $1 million at any subsidiary level to independently fund such subsidiaries' operations, the holders of the New Secured Debt shall release all of the security interests in such subsidiary's assets.
The holders of the New Debt and the New Preferred Stock become eligible to convert at the earlier of nine months from the closing date of the Tender Exchange ("Conversion Date"). The holders of the New Debt and New Preferred Stock will be eligible to convert approximately 25% of the principal amount of the related position (notes or preferred) starting on the Conversion Date for liquidation over a four month interval ("Liquidation Interval"), and subsequently for conversion of the next 25% and liquidation over the same intervals thereafter over the next three successive four month periods. The conversion price of the New Preferred will be the average price of the Company common stock for the immediately preceding twelve trading days, subject to an increase cap of 250% of the uplist price. The converted shares will be subject to a liquidation limit for each Liquidation Interval of each 25% of the position equal to the greater of (i) 5% of the average trading volume for the prior five days or (ii) 0.3125% of the daily average trading volume. Strict no shorting provisions have been included in the agreements.
All securities delivered in the Tender Exchange shall be assigned to a Special Purpose Vehicle to be formed by the Company (the "AMBS SPV"), for the benefit of each holder of the securities, and the AMBS SPV shall be solely responsible for the administration and liquidation of the Company securities (conversion shares) for remittance of proceeds. Holders of the New Secured Debt will receive an aggregate of 79,250,000 share of common stock of Avant Diagnostics, Inc. (OTC Pink: AVDX) that the Company currently owns, with such shares being deposited to an additional Special Purpose Vehicle to be formed (the "AVDX SPV") specifically to ensure the orderly liquidation of such AVDX shares to be held by the New Secured Debt holders, with the proceeds from such sales being used to redeem in part, or in whole, the then outstanding balance of New Secured Debt or New Preferred Stock held by the holders of Old Secured Debt. In the event the Company sells any shares of its subsidiaries, the Company has agreed to use 50% of the proceeds from such sales to redeem the balances in the AMBS SPV. The Company reserves the right to redeem all outstanding New Debt securities in the AMBS SPV for cash at any time.
"The consummation of the Tender Exchange marks a significant milestone for the Company and its subsidiaries," said Gerald E. Commissiong, President & CEO of Amarantus. He added "going forward, the Company will be focused on raising capital using newly created mechanisms under the JOBS ACT, as well as preparing its subsidiaries to raise independent capital and, as appropriate, consummating 'going public' transactions. Our initial 'go-public' effort will be focused on Elto Pharma to support its pending Phase 2b clinical trial of orphan drug designated Eltoprazine for the treatment of Parkinson's disease levodopa-induced dyskinesia (PD-LID). Amarantus is currently recruiting seasoned management to lead Elto Pharma's through this transition into a public company."
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