LAB Research Inc. ("LAB Research" or the "Company") (TSX: LRI), a Canadian-based global non-clinical contract research organization, today announced the successful closing of its previously announced rights offering (the "Rights Offering") for total gross proceeds of $14.2 million.
A total of 34.6 million common shares of the Company were issued as part of the transaction including 18.3 million common shares issued to the Solidarity Fund QFL (the "Fund"). Following the closing of the Rights Offering, the Fund's ownership position in LAB Research common shares has increased from 18% to 41%. Pursuant to an agreement between the Company and the Fund and subject to maintaining a predetermined ownership position, the Fund will be able to nominate two individuals on LAB Research's Board of Directors. The total issued and outstanding common shares of the Company now add up to 52.7 million.
The net proceeds of the Rights Offering will be used i) for the repayment of a bridge loan from the Fund for $0.5 million; ii) to complete the installation of inhalation toxicology equipment for our Canadian site for $2.4 million; and iii) to reduce the Company's long-term debt in Canada by $5 million. The remainder of the proceeds will be used for working capital purposes.