Nanogen announces $20 million convertibles; Distributed Systems settles $15 million convertibles

By LLuvia Mares

New York, Aug. 27 - Nanogen, Inc. announced Monday it closed a $20 million direct placement of senior convertible notes and warrants.

The notes are convertible into 15,748,030 shares at a price of $1.27 each. Series A, B and C warrants exercisable for 11,023,621 shares were also issued in the deal.

"It made sense for us," said a company spokesperson. "We needed some cash and that's why we had to do it."

The notes have a three-year term and pay interest at 6.25%.

The series A and C warrants are exercisable at $1.14 for five years 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 from 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.

"We needed to complete this financing and we had a good solid group of investors to work with," the spokesperson told Prospect News. "The financing went very smoothly."

The company expects to use the proceeds for working capital and general corporate purposes. San Diego-based Nanogen specializes in developing advanced diagnostic products.

Distributed Systems settles $15 million

Distributed Energy Systems Corp. announced it completed a $15 million financing with an investment fund managed by Perseus, LLC.

The company received $15 million in cash at the Aug. 24 deal settlement and repaid all principal and accrued interest under the $12.5 million note issued by the company to Perseus in June.

"This funding is the next key step in the financial part of our turnaround strategy, and we welcome this latest proof of the support and guidance Perseus is providing," said Ambrose L. Schwallie, company chief executive officer, in a press release. "We are extremely pleased to have access to their capital and their expertise."

The company issued Perseus a 12.5% senior secured convertible promissory note, which matures Nov. 30, 2008. The new note is convertible at $0.57 per share.

A five-year warrant to purchase 34,989,629 shares of the company's stock at exercise prices ranging from $0.80 to $3.00 per share was also included.

Warrants from the June financing remain outstanding.

Two Perseus representatives were named to the board.

"Perseus believes Distributed Energy Systems can and will get through these tough times and emerge a viable and potentially profitable business in the foreseeable future," John C. Fox, senior managing director of Perseus, said in a news release. "Mike Miller and I recognize and respect our duties on behalf of all shareholders, and we are committed to doing what we can to help the company regain its footing, revive its business and create renewal of shareholder value as soon as possible."

The Wallingford, Conn.-based company specializes in creating, delivering products and solutions for the decentralized energy marketplace.

Far East Energy sells $15 million of stock

Far East Energy Corp. settled a $15 million private placement of stock.

The company sold 11,485,452 common shares to International Finance Corp. for $1.306 per share.

The investor also will receive warrants for 4,019,908 common shares. The warrants are exercisable at $2.61 for five years.

Far East is a Houston-based natural gas company focused on coal-bed methane projects.

Communication Intelligence issues $3 million in stock

Communication Intelligence Corp. announced Monday a $3 million securities purchase and registration rights agreement with Phoenix Venture Fund LLC.

The company sold 21.5 million shares at $0.14 each.

Communication Intelligence will use the proceeds to repay debt and for working capital.

"With increasing evidence that the eSignature market is approaching takeoff, it has become apparent that in order to optimize the company's objectives of leveraging its leadership position into sustained sales growth and increasing shareholder value the company needed to establish a source of strategic financing," Guido DiGregorio the company's chairman and chief executive officer, in a press release.

"This financing satisfies several objectives, including immediately strengthening CIC's balance sheet thereby enhancing credibility with top tier financial institutions."

"This investment reflects the confidence I have in CIC's future, and represents my continued support for the company," said Philip Sassower, Phoenix chairman and chief executive officer in a news release. "After our first highly successful investment in CIC when the company's main focus was on text entry natural input products, we look forward to once again joining forces with the management of CIC and to leveraging our respective strengths as we work together in pursuing a significant increase in shareholder value based on the strength of CIC's eSignature product offering."

The Redwood Shores, Calif.-based company specializes in supplying electronic signature solutions for business process automation in the financial industry and in biometric signature verification.

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