Zomedica Announces Private Placement of Preferred Shares

Source:  Zomedica Pharmaceuticals, Inc. 5/10/19

Zomedica Pharmaceuticals Corp. (NYSE American: ZOM) (TSX-V: ZOM) (“Zomedica” or “Company”), a veterinary diagnostic and pharmaceutical company, today announced that it has entered into subscription agreements to sell $12,000,000 of its newly created Series 1 Preferred Shares to an accredited investor under a private placement at a purchase price of $1,000,000 per Series 1 Preferred Share. $5,000,000 of the purchase price was paid on May 9, 2019 and 5 Series 1 Preferred Shares have been issued to the subscriber. The remaining $7,000,000 is expected to be paid on or prior to June 7, 2019, at which time a further 7 Series 1 Preferred Shares will be issuable to the subscriber. The Company may conduct one or more additional closings of the offering at any time on or prior to June 7, 2019 for total aggregate proceeds of up to $20,000,000.

Zomedica intends to use the net proceeds from this offering for the continued development of its diagnostic platforms and therapeutic candidates, including the payment of milestone payments under the Company’s existing license and collaboration agreements, and other general corporate and working capital purposes

The Company is authorized to issue up to 20 Series 1 Preferred Shares. Each Series 1 Preferred Share has a stated value of $1,000,000. The Series 1 Preferred Shares do not have voting rights except to the extent required by applicable law and are not convertible into the Company’s common shares. Holders of the Series 1 Preferred Shares will not be entitled to dividends but, in lieu thereof, will receive annual payments (the “Net Sales Payments”) equal to nine percent of the net sales (as defined in the Series 1 Preferred Shares Terms and Conditions), if any, of the Company and its affiliates until such time as the holders have received total payments equal to nine times the aggregate stated value of the Series 1 Preferred Shares. The Company has the right to redeem the outstanding Series 1 Preferred Shares at any time at a redemption price equal to nine times the aggregate stated value of the Series 1 Preferred Shares outstanding less the aggregate amount of the Net Sales Payments paid (the “Redemption Amount”). In the event of a fundamental transaction (as defined in the Series 1 Preferred Shares Terms and Conditions) the holders of the Series 1 Preferred Shares will be entitled to receive consideration for their Series 1 Preferred Shares equal to a multiple of the stated value of the Series 1 Preferred Shares ranging from 5.0 to 9.0 depending on the timing of the fundamental transaction, subject to a cap equal to the Redemption Amount.

The description of the Series 1 Preferred Shares above is a summary only, it is not intended to be complete, and is qualified in its entirety by reference to the Articles of Amendment to the Company’s Article of Incorporation containing the Terms and Conditions of the Series 1 Preferred Shares, a copy of which will be filed under the Company's corporate profile on SEDAR and will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, which is to be filed with the Securities and Exchange Commission. The Series 1 Preferred Shares being sold in the offering have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are being sold pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder. Such securities are therefore restricted in accordance with Rule 144 under the Securities Act.

This Press Release does not constitute an offer to sell or the solicitation of an offer to buy any security. The securities described herein have not been registered under the Securities Act or applicable state securities laws and may not be offered or solid in the United States or any state thereof absent registration under the Securities Act and applicable state securities laws or an applicable exemption from registration requirements.

About Zomedica
Based in Ann Arbor, Michigan, Zomedica (NYSE American: ZOM) (TSX-V: ZOM) is a veterinary diagnostic and pharmaceutical company creating products for companion animals (canine, feline and equine) by focusing on the unmet needs of clinical veterinarians. Zomedica’s product portfolio will include novel diagnostics and innovative therapeutics that emphasize patient health and practice health. With a team that includes clinical veterinary professionals, it is Zomedica’s mission to give veterinarians the opportunity to lower costs, increase productivity, and grow revenue while better serving the animals in their care. For more information, visit www.ZOMEDICA.com.