Deal includes 100% warrant coverage; proceeds fund corporate purposes
By Devika Patel
Knoxville, Tenn., Jan. 25 - Generex Biotechnology Corp. negotiated a $5.15 million sale of series A 9% convertible preferred stock on July 8, according to a prospectus supplement and 8-K filed Monday with the Securities and Exchange Commission.
The company will sell up to 5,150 preferreds at $1,000.00 apiece. The preferreds will be sold in units with 100% warrant coverage. The warrants are each exercisable at $0.25 for five years. The strike price is a 92.31% premium to the July 7 closing share price of $0.13.
The preferreds have an effective conversion price of $0.15 per share, which is a 15.39% premium to the July 7 closing price. The preferreds will accrue a 9% dividend until July 8, 2014 and, beginning on July 8, 2014 and on each one year anniversary after that date, the dividend rate will increase by an additional 3%.
If the preferreds are converted prior to July 8, 2014, the company will pay the holders a make-whole payment equal to $270 per $1,000 of preferreds, minus the amount of all prior dividends paid. Generex may also call the preferreds.
Settlement of the first tranche is expected July 11. Seahawk Capital Partners, Inc. will be paid a finder's fee.
Proceeds will be used for general corporate purposes, including research and development, preclinical and clinical trials, the preparation and filing of new drug applications and general working capital.
"This financing will permit Generex to proceed in a measured fashion with our previously announced strategic development initiatives, including the spinout of Antigen Express and the next stage of the Generex Oral-lyn clinical and regulatory development plan," president and chief executive officer Mark Fletcher said in a press release.
Toronto-based Generex develops oral drug-delivery systems and technologies.
| Issuer: | Generex Biotechnology Corp.
|
| Issue: | Series A convertible preferred stock
|
| Amount: | $5.15 million
|
| Preferreds: | 5,150
|
| Price: | $1,000.00
|
| Dividends: | 9%
|
| Conversion price: | $0.15
|
| Conversion premium: | 15.39%
|
| Call: | Yes
|
| Warrants: | 100% coverage
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.25
|
| Pricing date: | July 8
|
| Settlement date: | July 11
|
| Stock symbol: | OTCBB: GNBT
|
| Stock price: | $0.22 at close July 8
|
| Market capitalization: | $47.87 million
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
