By LLuvia Mares
New York, Aug. 27 - Nanogen, Inc. announced Monday it closed a $20 million registered direct offering in senior convertible notes and warrants.
The notes are convertible into 15,748, 030 common shares at a conversion price of $1.27 each. Series A, B and C warrants exercisable for 11,023,621 shares were also issued in the deal.
The notes have a three-year term and pay interest at 6.25%.
The series A and C warrants are exercisable at $1.14 at any time during a five-year period following the date of issuance.
If the closing price of the stock is at least 135% of the exercise price of the series A warrants the company can require the stockholders to exercise the warrant.
Series C warrants can be exercised after six months of the issuance date. The company can force conversion 30 days after the series A warrants have been exercised, 30 days after the termination of a letter of credit and if the stock closing price is at least 125% of the exercise price for 20 out of 30 trading days.
The series B warrants are only exercisable if a series A warrant has been exercised. The exercise price will equal to 110% of the closing sales price of the stock on the last trading day of the calendar quarter, not less than $1.13 per share. Each B warrant has a three-year term from the day it becomes exercisable.
Seven Hills Partners LLC was placement agent.
Nanogen will also be placing $7.3 million of the funds in a cash collateral account to secure the company's reimbursement obligations for the letter of credit.
The letter of credit will terminate if the company meets certain conditions including closing sales price of stock on Nasdaq equal to or exceeding $1.524 per share for 20 out of 30 consecutive trading days, there is no event of default under the indenture or if the stock has not been suspended for trading on Nasdaq.
The company expects to use the proceeds for working capital and general corporate purposes. San Diego-based Nanogen specializes in developing advanced diagnostic products.
Issuer: Nanogen, Inc.
Issue: Convertible notes
Amount: $20 million
Maturity: Three years
| Coupon: | 6.25%
|
| Conversion price: | $1.27
|
| Conversion ratio: | Into 15,748,030 common shares
|
| Warrants: | For 11,023,621 in series A, B and C warrants
|
| Warrant expiration: | Series A and C: five years; Series B: three years
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| Warrant strike price: | $1.14 and $1.13 respectively
|
| Agent: | Seven Hills Partners LLC
|
| Settlement date: | Aug. 27
|
| Stock symbol: | Nasdaq: NGEN
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| Stock price: | $1.13 at close on Aug. 24
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