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A SX/M ED IA RELEA SE Recapit al isat ion A greem en tsign ed w it h Corn erst on e Corporat e 28 N ovem ber 2013: B on e M ed ic al L t d (B N E: A SX), an in t ern at ion al bioph arm ac eut ic alc om pan y foc used on t h e d evel opm en tof im port an tn ew m ed ic in es for t he t reat m en t of m usc ul oskel et al d iseases in c l ud in g ost eoporosis an d art h rit is, is pl eased t o an n oun c e t h at it h as sign ed a proposalt o rec apit al ize t h e C om pan y w it h C orn erst on e C orporat e Pt y Lt d (“C orn erst on e” A FSL :332426), a P ert h -based in vest m en t an d c orporat e servic esc om pan y. Th e key t erm sof t h e Rec apit al isat ion A greem en tw it h C orn erst on e are:
In t ern ald ebtt o equit y rest ruc t ure by w ay of d ebtc on version agreem en t s w it h a m ajorit y of C om pan y’s c red it ors (“D ebtC on version A greem en t s”) ata d ebtc on version pric e of $ 0.001 perSh are, asw el las w rit e-off of t he un c on vert ed d ebtbal an c e;
Set t l em en t an d A greem en t ;
B rid ge Fun d in g of $ 200,000 via un sec ured c on vert in g l oan s provid ed by in vest ors in t rod uc ed by C orn erst on e (“C on vert in g L oan s”), aut om at ic al l y c on vert in g, subjec tt o Sh areh ol d er approval an d raisin g of atl east$ 3 m il l ion un d ert he Pl ac em en treferred t o bel ow , in t o 1,000,000,000 sh ares at$ 0.0002;
C apit al raisin g via t h e issue of 7,500,000,000 sh ares at$ 0.0004 per Sh are t o raise $ 3,000,000 (w it h t h e abil it y t o issue up t o a furt h er 1,250,000,000 Sh ares in oversubsc ript ion s t o raise a furt h er $ 500,000) (“P l ac em en t ”);
A ppoin t m en t of Robert Tow n er as N on -Exec ut ive C om pan y on c om pl et ion of t he Pl ac em en t ;
A 50:1 c on sol id at ion of t h e C om pan y’s sec urit ies on c om pl et ion of t he Pl ac em en t(“C on sol id at ion ”).
t erm in at ion
of L a
J ol l a
C ove
In vest ors Fun d in g
C h airm an
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C orn erst on e w il lac tas L ead M an ager t ot he Pl ac em en tt o raise $ 3 m il l ion (w it h up t o $ 0.5 m il l ion in oversubsc ript ion s) provid in g t h e C om pan y w it h suffic ien tc apit alt o ad van c e it sprod uc tpipel in e an d rebuil d m arketval ue.
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To fac il it at e t h is, t h e C om pan y’sexist in g d irec t ors, m an agem en t , an d c ert ain servic e provid ers h ave agreed t o rem ove over $ 1.8 m il l ion in un paid fees ow ed t o t h em for pastservic es off t h e C om pan y’s bal an c e sh eetvia d ebt c on version orw aivin g paym en t . Of t h is, approxim at el y $ 1 m il l ion is t o be w rit t en off. In ad d it ion , t h e C om pan y’s O c t ober 2010 Fun d in g A greem en tw it h La J ol l a C ove In vest ors w il l be t erm in at ed , an d approxim at el y $ 0.5 m il l ion in out st an d in g d ebtow ed t o La J ol l a w il lbe w aived in exc h an ge fort h e issue of Sh ares un d er a set t l em en tan d rel ease agreem en t(“L a J ol l a Set t l em en t A greem en t ”). M r P et er Youn g, B on e M ed ic al ’s C EO , said “Th e C orn erst on e A greem en t m arks a l on g-aw ait ed t urn in g poin tfort h e C om pan y.Itw il ln oton l y give us t h e c apabil it yt o gen erat e n ew d at a in supportof ourprod uc tpipel in e - w h ic h is t h e key c reat in g val ue in t he l ife sc ien c e in d ust ry – butc l earl y c om es ata c rit ic al jun c t ure in t erm s of provid in g t h e C om pan y w it h a c on t in uin g operat in g run w ay.” C orn erst on e’s M an agin g D irec t or, Rob Tow n er, c om m en t ed , “W e t h in k B on e M ed ic alprovid es in vest ors t h e opport un it yt o part ic ipat e in t ec h n ol ogy w h ic h h as h ad c on sid erabl e exist in g in vest m en t . It s prod uc tprogram s h ave great pot en t ial , an d if even juston e of t h em ac h ieves it s pl an n ed m il est on es over t h e n extsix t ot w el ve m on t h s, t h e grow t h opport un it y bec om essubst an t ial .” “W e bel ieve t h atC orn erst on e w il lbe a greatpart n er,” said RogerN ew , c ofoun d erof t h e C om pan y an d in ven t orof it st ec h n ol ogies.“Rob Tow n erisn ot on l y a h igh l y experien c ed an d suc c essfulc apit alm arket s exec ut ive, buth e h as d em on st rat ed t h e abil it y t o buil d a suc c essfull ife sc ien c e c om pan y.In M arc h 2004 Rob l ist ed , c apit al ized , an d ac t ed as an Exec ut ive D irec t or of bioM D , w h ic h h e m erged in 2011 w it h t h en -privat e Al l ied H eal t h C are t o c reat e w h atis n ow t h e A d m ed us L im it ed (A SX:A H Z, a $ 200m m arketc ap c om pan y)”. D r N ew w il l st ep d ow n as C h airm an on c om pl et ion of t he rec apit al isat ion butc on t in ue asa d irec t oran d C SO . Th e C om pan y pl an s t o seek n ec essary sh areh ol d er approval s for t he rec apit al izat ion pl an in earl yJ an uary.A N ot ic e of M eet in g is sc h ed ul ed t o be rel eased t o sh areh ol d ersan d t h e m arketin earl y D ec em ber. Th e C om pan y’sm ajorsh areh ol d ers, P roxim a C on c ept sL t d an d it ssubsid iary, P roxim a L aborat ory an d Researc h Servic es, w h o t oget h erh ol d 20.58% of t he C om pan y’sSh ares, h ave provid ed t h e C om pan y w it h al et t erad visin g of t h eir in t en t ion t o vot e t h eirSh aresin favourof t h e Rec apit al isat ion resol ut ion san d h ave c on sen t ed t ot h eirin t en t ion bein g d isc l osed t ot h e A SX. Registered Office: c/- Ledger Corporate, Level 3, 46 Ord Street, West Perth, WA, 6005 Ph: + 61 8 9468 0154 Fax: + 61 8 9322 4946
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D et ail sof Recapit al isat ion Recapitalisation Deed Th e C om pan y en t ered in t o a rec apit al isat ion d eed N ovem ber 2013 (“Recapit al isat ion D eed ”) rec apit al isat ion of t h e C om pan y, prim aril y t h rough L oan s, an d a P l ac em en tof atl east$ 3 m il l ion , from C orn erst on e.
w it h C orn erst on e on 27 t h at provid es for a $ 200,000 in C on vert in g in vest ors in t rod uc ed by
Converting Loans Th e C om pan y h as en t ered in t ot h e C on vert in g L oan s un d erw h ic h a t ot alof $ 200,000 in l oan sare t o be provid ed t ot h e C om pan y by 30 N ovem ber2013. Th e l oan am oun t s w il l , subjec tt o Sh areh ol d erapproval , c on vertin t o Sh ares, on t he Pl ac em en tc om pl et ion d at e, atan issue pric e of $ 0.0002 perSh are. Th isc on version m ustoc c urby 15 J an uary 2014 (orsuc h l at erd at e asagreed bet w een t h e C om pan y an d C orn erst on e), fail in g w h ic h t h e C om pan y m ust repay t he l oan sby 31 M arc h 2014. Debt Conversion Agreements Th e C om pan y h as exec ut ed D ebtC on version A greem en t s w it h a m ajorit y of it s c red it ors un d er w h ic h , subjec tt o n ec essary Sh areh ol d er approval s, t he C om pan y w il lissue t h ose c red it ors, on t he Pl ac em en tc om pl et ion d at e, w it h Sh ares atan issue pric e of $ 0.001 perSh are in respec tof a port ion of t he c red it ors’ out st an d in g d ebt s at30 Sept em ber 2013, t oget h er w it h on e free un l ist ed opt ion exerc isabl e at$ 0.0008 eac h , expirin g 31 D ec em ber 2016 (O pt ion s)foreac h Sh are issued in respec tof a port ion of t h e d ebt . A t ot alof approxim at el y 860 m il l ion Sh aresan d 340 m il l ion O pt ion sare t o be issued . Th is issue of Sh ares an d O pt ion s w il lbe d eem ed t o sat isfy t h e C om pan y’s obl igat ion t o repay al lt h ose c red it ors’ out st an d in g d ebt s at30 Sept em ber 2013 (bein g approxim at el y $ 1.88 m il l ion ). Th e P l ac em en tc om pl et ion d at e, an d t h e c on version of t h e d ebt , m ustoc c ur by 15 J an uary 2014, fail in g w h ic h t h e D ebtC on version A greem en t s m ay be t erm in at ed .
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La Jolla Settlement Agreement Un d er t h e La J ol l a Set t l em en tA greem en t ,t h e C om pan y’s exist in g d ebt st o La J ol l a w il lbe red uc ed t o US$ 219,000 an d sat isfied , subjec tt o n ec essary Sh areh ol d er approval , by t h e issue of Sh ares on t he Pl ac em en tc om pl et ion d at e atan issue pric e of $ 0.001 eac h (un l ess issued aft er25 J an uary 2014, in w h ic h c ase a 5 d ay VW A P issue pric e w il lappl y) an d t h e La J ol l a 2010 Fun d in g A greem en tw il lbe t erm in at ed w it h m ut ualrel eases. La J ol l a h as al so agreed t o provid e t h e C om pan y w it h US$ 80,000 in brid ge fin an c in g, w it h an y am oun t d raw n d ow n repayabl e from t h e firstfun d s rec eived un d ert he Pl ac em en t ,t oget h erw it h a paym en tequalt o 25% of t he am oun td raw d ow n . Placement Th e c om pl et ion of t he Pl ac em en tis subjec tt o t h e rec eiptof n ec essary Sh areh ol d erapproval s, t h e La J ol l a Set t l em en tA greem en t , C on vert in g L oan s an d D ebt C on version A greem en t s c on t in uin g t o be in effec t an d un c on d it ion al , an d $ 3 m il l ion bein g raised un d er t he Pl ac em en t . If t h ese c on d it ion s are n otsat isfied (or w aived ) by 15 J an uary 2014 (or suc h l at er d at e asagreed ), t h e Rec apit al isat ion D eed m ay be t erm in at ed . Itis in t en d ed t h at , on t he Pl ac em en tc om pl et ion d at e, Sh ares an d O pt ion s w il lal so be issued t o c om pl et e c on version sun d ert h e C on vert in g L oan s, D ebt C on version A greem en t san d L a J ol l a Set t l em en tA greem en t . Capital Raising Fees Un d er t h e Rec apit al isat ion D eed , t h e C om pan y h as agreed , subjec t t o n ec essary Sh areh ol d erapproval ,t o issue C orn erst on e (orit s n om in ees) w it h a t ot al of 800 m il l ion opt ion s (“P ropon en t O pt ion s”) on t he Pl ac em en t c om pl et ion d at e, c on sist in g of 300 m il l ion opt ion sexerc isabl e at$ 0.0006 an d expirin g 31 D ec em ber 2016 (“B rid ge O pt ion s”) an d 500 m il l ion O pt ion s exerc isabl e at $ 0.0008 an d expirin g 31 D ec em ber 2016 (“P l ac em en t O pt ion s”). Th e C om pan y h as al so agreed t o pay C orn erst on e (or it s n om in ees) a m an agem en tfee of 1% , an d a c apit alraisin g fee of 5% , of am oun t s raised un d ert he Pl ac em en t .
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Finder’s Fees and CEO Options Un d er t h e Rec apit al isat ion D eed , t h e C om pan y h as agreed , subjec t t o n ec essary Sh areh ol d er approval s, t o issue, on t he Pl ac em en tc om pl et ion d at e, 150 m il l ion Sh ares as a fin d er’s fee t o an un rel at ed t h ird part y, an d a t ot alof 450 m il l ion opt ion sexerc isabl e at$ 0.0008 an d expirin g 31 D ec em ber 2016 (“C EO O pt ion s”) t o M rP et erYoun g as in c en t ive rem un erat ion provid ed t h at :
150 m il l ion C EO O pt ion s w il lon l y veston t h e 10 d ay VW A P for Sh ares bein g $ 0.0012;
150 m il l ion C EO O pt ion s w il lon l y veston t h e 10 d ay VW A P for Sh ares bein g $ 0.0016;an d
150 m il l ion C EO O pt ion s w il lon l y veston t h e 10 d ay VW A P for Sh ares bein g $ 0.0024.
Effecton Capit alSt ruct ure If t h e Rec apit al isat ion D eed is ful l y effec t ed , t h e C om pan y’s issued sec urit ies w il lc h an ge as fol l ow s (subjec tt o fin alad just m en t s forroun d in g an d foreign exc h an ge c on version s an d assum in g t he Pl ac em en tis c om pl et ed before 15 J an uary 2014): Capit alSt ruct ure Sh ares Sh ares an d O pt ion s c urren t l y on 1,076,663,823 issue Issue of C on vert in g L oan Sh ares 1,000,000,000 Issue of D ebt C on version Sh ares 859,310,671 an d O pt ion s Issue of Sh arest o La J ol l a1 238,043,478 2 Issue of P l ac em en tSh ares 7,500,000,000 Issue of P ropon en tO pt ion s Issue of Fin d er’sFee Sh ares 150,000,000 Issue of C EO O pt ion s Tot al(pre-Con sol id at ion ) 10,824,017,972 Tot al(post -Con sol id at ion ) 216,480,359
O pt ion s 12,781,368 340,169,461 800,000,000 450,000,000 1,602,950,829 32,059,017
N ot es: 1. A ssum in g A UD :US$ exc h an ge rat e of 0.92. 2. A ssum in g $ 3 m il l ion subsc ript ion . O versubsc ript ion s of up t o a furt h er 1,250,000,000 Sh aresm ay be ac c ept ed t o raise an ad d it ion al$ 500,000.
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En quiries: D rRogerN ew C h airm an O ffic e: + 44 207 794 1512
P et erYoun g C EO M obil e: + 1 201 841 9681
L eon Ivory D irec t or M obil e: + 61 419 428 264
RobertTow n er M an agin g D irec t or C orn erst on e C orporat ion + 61 (0)8 9286 2828
orvisit : w w w .bon em ed ic al .c om A boutB on e M ed icalLim it ed
B on e M ed ic alL im it ed is an in t ern at ion albioph arm ac eut ic alc om pan y foc used on d evel opin g sign ific an t n ew prod uc t s for t h e grow in g m arket in t he t reat m en t of bon e d iseases l ike ost eoart h rit is, rh eum at oid art h rit is, an d ost eoporosis. Th e C om pan y l ic en c es it st ec h n ol ogies an d obt ain s it s R&D supportfrom P roxim a C on c ept s Lt d an d it s subsid iary P roxim a L aborat ory an d Researc h Servic es. Th e C om pan y’sprod uc tpipel in e in c l ud es:
Cl in ic al -st age program s for t h e oral d el ivery of t w o w el l -est abl ish ed pept id es w h ic h h ave h ist oric al l y been l im it ed t o n asal or in jec t abl e d el ivery o C aP TH ym on e™ (oralparat h yroid h orm on e)forost eoporosis o C apsit on in ™ (oralc al c it on in )forost eoart h rit ispain
N ovel , pot en t ialbreakt h rough prec l in ic al -st age c om poun d s o B N 006 – sel ec t ive, pot en t ialoralTN F-al ph a d ow n -regul at or for rh eum at oid art h rit is(RA ) o B N 007 – c ol l agen t ol eran c e & join tprot ec t ion agen tforRA o B N 005 & B N 008 – bon e c el lregul at ion forost eoporosis
Registered Office: c/- Ledger Corporate, Level 3, 46 Ord Street, West Perth, WA, 6005 Ph: + 61 8 9468 0154 Fax: + 61 8 9322 4946
