BELLUS Health reports results for first half of f...(60 preferred shares were issued to note ...),Health

Date:8/11/2009

60 preferred shares were issued to note holders who elected to receive preferred shares. Such preferred shares are convertible into Common Shares on a one-to-one basis, subject to adjustment, entitle the holder to 6% cumulative dividends, payable in cash or Common Shares at the then market price at the option of the Company, and shall be automatically converted into Common Shares five years from the date of issuance. The amendment and immediate conversion of Original Notes into preferred shares triggered a gain on extinguishment of debt in the amount of $10,777,000 during the current quarter. Assuming that each of the preferred shares remain outstanding until maturity, is converted in full at the Preferred Share Conversion Price and that all dividends payable in respect of the preferred shares are paid by the issuance of Common Shares at an assumed market price of CDN$0.24, the maximum number of Common Shares issuable on conversion of the preferred shares would be 147,778,326, representing a potential dilution factor of 283%, based on the number of Common Shares issued and outstanding as at June 30, 2009. The holders of Original Notes that chose not to convert their amended notes immediately into preferred shares retained Original Notes, amended as set out below.

Holders of $13,000,000 principal amount of 2006 Notes and the one remaining holder of 2007 Notes (aggregate principal amount of $500,000) agreed to amend the terms of their notes (Amended Notes), without immediate conversion into preferred shares. The amendments include providing for a 6% annual interest rate, payable semi-annually in cash or Common Shares at the option of BELLUS Health at the then market price of the Common Shares, replacing the existing conversion rate adjustment period of October 2009 - November 2009 with a period from October 2012 - November 2012 for conversion of the Amended Notes at the then applicable market price of the Common Shares based on a twenty (20) day volume weighte
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SOURCE BELLUS HEALTH INC. Copyright©2009 PR Newswire. All rights reserved

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