By LLuvia Mares
New York, Sept. 11 - Nutrition 21, Inc. announced it intends to raise $17.75 million in a private placement of convertible preferred stock and warrants.
The company agreed to sell 17,750 shares of preferred stock and 6,715,218 warrants to a group of institutional investors.
Each share of preferred stock is convertible into common stock at the option of the holder at $1.2158 per share, subject to certain conditions.
The company can also force conversion of the stock if the volume weighted average price of the common stock is at least $3.6474 for 20 consecutive trading days.
The preferred stock pays cumulative dividends at 8%.
The warrants included in the transaction are exercisable for five years beginning six months after the closing at $1.2158 per share.
Both the preferred stock and warrants have anti-dilution provisions.
The investors included lead investor Midsummer Investment, Ltd., Life Science Group, Inc. as co-lead investor and Fort Mason Capital, LLC.
Collins Stewart, LLC was placement agent.
Proceeds will be used for marketing retail and advertising Chromax, Iceland Health Omega 3 and Iceland Health Joint Relief and for retail launches in the fall of its new Core4Life Advanced Memory Formula and Diabetes Essentials products.
Purchase, N.Y.-based Nutrition 21 specializes in developing and marketing chromium-based and omega-3 fish oil-based nutritional supplements.
Issuer: Nutrition 21, Inc.
| Issue: | Convertible preferred stock
|
| Amount: | $17.75 million
|
| Shares: | 17,750
|
| Price: | Par of $1,000
|
| Conversion price: | $1.2158
|
| Warrants: | For 6,715,218 shares
|
| Warrant strike price: | $1.2158
|
| Warrant term: | 5.5 years
|
| Placement agent: | Collins Stewart, LLC
|
| Announcement date: | Sept. 11
|
| Stock symbol: | Nasdaq: NXXI
|
| Stock price: | $1.08 at close Sept. 10
|
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