By Sheri Kasprzak
Atlanta, Jan. 31 - Chembio Diagnostics Inc. said it has wrapped a private placement for $5 million.
The company sold 100 shares of series B convertible preferred stock at $50,000 each to a group of investors led by Crestview Capital Funds and Millennium 3 Opportunity Fund LLC.
The preferreds pay dividends of 9% annually and are convertible into common shares at $0.61 each.
The preferreds may be redeemed if the company undergoes a consolidation, merger or business combination, or sells all or the majority of its assets or voting securities. The preferreds may be redeemed at the greater of $65,000 or the product of the daily volume weighted average price of the company's common stock and the quotient of $65,000 divided by the then-current conversion price, plus unpaid dividends and liquidated damages.
The investors also received warrants for 7,786,960 shares at $0.95 each for five years.
Midtown Partners & Co., LLC was the placement agent in the offering.
Based in Medford, N.Y., Chembio develops and manufactures test products for HIV, tuberculosis and Mad Cow Disease. The proceeds from the private placement will be used for general corporate purposes, including sales and marketing, research and development and the acquisition of intellectual property. The remainder will be used for working capital.
| Issuer: | Chembio Diagnostics Inc.
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| Issue: | Series B convertible preferred stock
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| Amount: | $5 million
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| Shares: | 100
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| Price: | $50,000
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| Dividend: | 9%
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| Conversion price: | $0.61
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| Call: | Redeemable at the greater of $65,000 or the daily volume weighted average price of stock multiplied by the quotient of $65,000 divided by the current conversion price, plus dividends
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| Warrants: | For 7,786,960 shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $0.95
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| Placement agent: | Midtown Partners & Co., LLC
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| Investors: | Crestview Capital Funds and Millennium 3 Opportunity Fund LLC (lead)
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| Settlement date: | Jan. 28
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| Stock price: | $0.62 at close Jan. 28
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