Investors will also receive five-year warrants for 1,689,192 shares
By Devika Patel
Knoxville, Tenn., Dec. 9 - Oxygen Biotherapeutics, Inc. said it arranged a $7.5 million private placement of its 7% series A convertible preferred stock. The deal will settle in two tranches of $3.5 million and $4 million.
The preferreds convert at $2.22 per common share. They are redeemable in six monthly installments.
Investors also will receive 50% warrant coverage for 1,689,192 common shares. Each warrant is exercisable at $2.22 for five years.
The strike price and conversion price are identical to the Dec. 8 closing share price.
William Blair & Co. is the agent.
Settlement of the first tranche is expected Dec. 12. The second tranche is expected to settle six months later.
Proceeds will be used for Oxycyte PFC development, clinical and preclinical trials, product development and general working capital.
"This significant commitment from two new U.S. institutional investors is structured to enable the company to repay the convertible preferred stock in shares of common stock or cash at the company's option, thereby providing us significant, permanent equity capital," chief financial officer, president and interim chief executive officer Michael B. Jebsen said in a press release. "The proceeds, along with our recent initiatives to reduce our cash burn rate, should serve to support our initiatives through the end of calendar year 2012."
The Durham, N.C., company develops biotechnology products with a focus on oxygen delivery to tissue.
| Issuer: | Oxygen Biotherapeutics, Inc.
|
| Issue: | Series A convertible preferred stock
|
| Amount: | $7.5 million
|
| Dividends: | 7%
|
| Conversion price: | $2.22
|
| Redemption: | In six monthly installments
|
| Warrants: | 50% coverage (warrants for 1,689,192 shares)
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $2.22
|
| Agent: | William Blair & Co.
|
| Pricing date: | Dec. 9
|
| Settlement date: | Dec. 12 (for $3.5 million)
|
| Stock symbol: | Nasdaq: OXBT
|
| Stock price: | $2.22 at close Dec. 8
|
| Market capitalization: | $51.55 million
|
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