Labopharm in $25-million standby equity pact

Labopharm (TSX:DDS ;NASDAQ: DDSS) has arranged a standby equity distribution agreement with YA Global Master SPV, a fund managed by Yorkville Advisors, whereby YA would purchase up to $25-million of newly issued Labopharm common stock during the next three years, at Labopharm’s discretion.

“With a number of potential cash-generating milestones on the horizon, a standby equity facility is well suited to our company at this time,” Labopharm CEO James Howard-Tripp said in a statement.

“Should we choose to access it, the facility provides a flexible, low-cost source of capital in an amount and at the time of our choosing, with a built-in minimum price,” he added.

Among other things, drawdown notices to YA are subject to a maximum amount of $2-million, as well as a minimum price, below which Labopharm will not issue shares to YA.

The maximum number of shares that Labopharm can issue to YA is limited to the lower of 11,426,533 common shares and 19.9% of the common shares outstanding at any given time.