Hemagen Diagnostics gets $1.935 million financing for new headquarters

By Jennifer Chiou

New York, June 28 - Hemagen said it obtained $1.935 million loan due June 30, 2006, according to an 8-K filing with the Securities and Exchange Commission.

Hemagen, which plans to pay for an $800,000 new corporate headquarters facility, has commitments from Bay National Bank and Mid-Atlantic Business Finance Co.

The company will contribute at least $215,000 in equity for the estimated $2.150 million project, which also includes improvements and installation of equipment.

During construction, Hemagen will pay interest only on the borrowings outstanding at a rate equal to the prime rate - at closing 8% per year - plus 2%.

After completion of the project, Bay National Bank will finance up to $1.135 million in costs over 10 years, amortized over a 20-year period, at a rate equal to the Federal Home Loan Bank of Atlanta five-year rate index - currently 8.31% - plus 375 basis points.

This rate is adjustable five years after the anniversary of the conversion to long-term financing. Hemagen has a commitment from the SBA for financing of up to 40% or $886,000 of the project costs over 20 years.

Hemagen, which also agreed to reduce its existing line of credit facility with Bay National Bank to $500,000 from $1 million of availability, had $290,000 outstanding on its line of credit facility June 24.

The Columbia, Md.-based biotechnology company develops and markets diagnostic medical test kits.

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