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DNAPrint arranges $6 million issue of shares in private placement
By Susanna Moon
Chicago, July 31 - DNAPrint Genomics said it would issue up to 2 million shares of DNAPrint Pharmaceuticals, Inc. stock to Dutchess Private Equities Fund, Ltd. as payment for about $6 million in notes and incentive debentures.
As part of the payment agreement, the company also will issue warrants for 2 million shares exercisable at $0.01 per share until July 31, 2012. The issue of stock and warrants is related to a proposed spinoff of the subsidiary DNAPrint Pharmaceuticals.
If the balance on the incentives debentures at the time of the spinoff is less than $2 million, then DNAPrint will be deemed to have made a principal payment on the notes in the amount of the shortfall, the company said in a press release.
To complete the spinoff, Dutchess has agreed to release all the pharmaceutical, diagnostic and associated assets in exchange for the shares of Pharmaceuticals' common stock.
Until the notes and incentive debentures are paid in full, DNAPrint will pay Dutchess 80% of the royalty income generated by Pharmaceuticals within 45 days after the end of each calendar quarter and 4% of all other cash received from sales of goods or services during the preceding calendar quarter.
"We are genuinely pleased to reach this agreement with Dutchess, which could settle its DNAPrint Genomics debt in full with the planned spinoff of the DNAPrint Pharmaceuticals division and help to ensure the stability of the parent company's finances," president and chief executive officer Richard Gabriel said in a written statement.
DNAPrint develops genomics-based products and services and is based in Sarasota, Fla.
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