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Gold/Mining/Energy : Nuvo Research Inc -- Ignore unavailable to you. Want to Upgrade?

To: axial who wrote (8216)	12/12/2001 7:06:42 AM
From: Mark Bartlett	Read Replies (2) \| Respond to of 14101

Jim, I think the best way to answer the question is just to post the DMX NR that describes the financing arrangement. TORONTO, Jan. 19 /CNW/ - Dimethaid Research Inc. (TSE: DMX) announced today that it has entered into a private placement agreement with Acqua Wellington North American Equities Fund, Ltd. for equity financing covering the sale of up to $50 million of the company's common shares. The agreement provides that Dimethaid may, at its sole discretion during the next 13 months, present up to ten draw-down notices to Acqua Wellington, requiring them to purchase Dimethaid common shares. Each draw-down notice will specify (i) the dollar amount Acqua Wellington is required to pay, subject to the following, and (ii) the minimum market price selected by Dimethaid (before the applicable discount described hereafter), below which Dimethaid will not be required to sell, and Acqua Wellington will not be required to buy. Dimethaid will issue and sell the shares pursuant to each draw-down notice at a per share price equal to the volume weighted average price of Dimethaid common stock over a draw-down period of 20 trading days following the draw-down notice, less a specified discount of not more than 8%. The maximum dollar amount of each draw-down notice depends on the minimum market price selected by Dimethaid. The size of the discount depends upon the market capitalization of Dimethaid at the start of each draw-down period. If, on any trading day during a draw-down period, Dimethaid common shares have a volume weighted average price below the minimum market price set by Dimethaid in its draw-down notice, the dollar amount of common shares required to be purchased by Acqua Wellington will be reduced by 1/20th. However, Acqua Wellington has the option to purchase shares having a value equal to that 1/20th amount at the minimum market price set by Dimethaid on such day, less the applicable discount. In conjunction with any draw-down notice, Dimethaid may also at its sole discretion by presenting an option notice, grant Acqua Wellington call options to purchase up to the same dollar amount of Dimethaid common shares as is set out in the draw-down notice. The call options can be exercised on any day or days during a draw-down period provided the aggregate maximum dollar value of shares subscribed for does not exceed the dollar amount set out in the option notice. The price at which common shares are purchased under a call option will be determined based on the volume weighted average price on the day Acqua Wellington exercises the option, less the applicable discount. Shares may not be purchased under a call option at a price below the minimum market price set by Dimethaid, less the applicable discount. A maximum of Cdn$50,000,000 of Dimethaid common shares may be issued to Acqua Wellington pursuant to all draw-down notices and call options under the agreement. The dollar amount received and the number of shares issued will be disclosed at the end of each draw-down period. The lowest price at which Dimethaid may set the minimum market price is $6.50 per share and the highest price is $25 per share. In no event will the common shares issued under the agreement exceed, 8,393,172 being 19.99% of the common shares of Dimethaid outstanding on today's date. Acqua Wellington will be subject to a hold period of at least 120 days in respect of each purchase. The transaction has been conditionally approved by The Toronto Stock Exchange. Dimethaid will use the net proceeds from the sale of any common shares under the agreement for general corporate purposes. "We are very pleased to have the flexibility to raise capital when warranted by market conditions. Although this form of financing has been used by a number of biotech companies in the United States, this is the first equity financing by Acqua Wellington with a Canadian company. Proceeds from this financing will allow us to implement our business plan and expand our product pipeline as we commercialize our first product, PENNSAID(R) Topical Solution for the treatment of the symptoms of osteoarthritis", said Rebecca Keeler, President and CEO. Acqua Wellington Asset Management, LLC acts as an advisor to Acqua Wellington and the Acqua Wellington Family of Funds. The Funds are targeted at investment opportunities among mid-cap and small-cap publicly traded companies in domestic and global markets. Their primary focus is in the life sciences and technology sectors. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ As far as the source of shares is concerned, they would just come from DMX's treasury -- when they filed as a listed company, they would indicate and get approved for a maximum number of shares they could issue. The generally accepted theory is that AW is shorting the stock through 3 brokerage houses and making the 8% discount. With the call options they can cover themselves at any time should there be news that moves the stock against them quickly -- at least that is my take. There may be nuances with this financing that still have not tweaked my brain yet. I know that Joe follows the trading like a CSIS agent -- I'm sure he can add more detail. MB