Company also sells warrants to investors led by Steven Newby
By Marisa Wong
Madison, Wis., Feb. 24 - Marina Biotech, Inc. announced it priced $6 million of convertible preferred stock. The company entered into a binding term sheet with some qualified investors led by Steven T. Newby on Sunday, according to an 8-K filing with the Securities and Exchange Commission.
The preferreds are convertible at $0.75 per common share.
The company will also issue warrants to purchase 6 million shares of common stock. The warrants are exercisable at $0.75 per share for a period of five years after the company regains compliance with its reporting obligations under the Securities Exchange Act. The strike price reflects a 40.94% discount to the Feb. 21 closing share price.
The offering is expected to close on March 7.
In addition, the company announced that the holders of its promissory note have agreed to convert the remaining principal and interest to common stock at a conversion price of $0.75 and release their lien on the company's intellectual property.
Proceeds from the financing will be used to restart certain day-to-day operations, repay outstanding obligations, regain compliance with Securities Exchange Act reporting obligations and advance preclinical and clinical rare disease programs, according to a press release.
"I believe this investment provides the catalyst which will significantly change the trajectory of the company," president and chief executive officer J. Michael French said in the release.
"This is the first equity financing we have closed in nearly two years and involves an extremely knowledgeable investor known for his long-term view in the biotechnology sector. With the conversion of the remaining principal and interest on the company's promissory note to common stock, we not only regain all rights to our intellectual property estate but we can apply the entire $6 million to our on-going operations."
Marina Biotech is an oligonucleotide therapeutics company based in Bothell, Wash.
| Issuer: | Marina Biotech, Inc.
|
| Issue: | Convertible preferred stock
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| Amount: | $6 million
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| Conversion price: | $0.75
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| Warrants: | For 6 million common shares
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| Warrant expiration: | Five years after company regains compliance with its reporting obligations under Securities Exchange Act
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| Warrant strike price: | $0.75
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| Investors: | Qualified investors led by Steven T. Newby
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| Pricing date: | Feb. 23
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| Settlement date: | March 7
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| Stock symbol: | OTCBB: MRNA
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| Stock price: | $1.27 at close Feb. 21
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| Market capitalization: | $23.89 million
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