By Laura Lutz
Des Moines, Jan. 3 - RxElite, Inc. secured $10.5 million from a private placement of convertibles, stock and warrants, according to an 8-K filing with the Securities and Exchange Commission.
The company issued a senior secured convertible note with a principal amount of $10.5 million, 5,594,033 common shares, a series A warrant for 13,985,083 shares and a series B warrant for 4,661,694 shares.
The note matures on Dec. 31, 2009 and bears interest at 5% per year. It is convertible into common stock at $1.1262 per share. The conversion price will be lowered if RxElite fails to meet certain EBITDA benchmarks.
Holders may require redemption of up to half of the principal amount of the note at 120% of par, beginning on Sept. 30, 2008. At any time, RxElite may call the first half of the note for 120% of par and the rest of the note at par plus the amount of interest that that would have been paid through redemption.
In either case, the redemption amount will include accrued interest.
Both series of warrants have a strike price of $1.1262 and expire on the earlier of Dec. 31, 2014 and five years after the effectiveness of a registration statement for all of the shares underlying the notes and warrants.
The series A warrants are immediately exercisable. The series B warrants will become exercisable only if RxElite exercises its right to early redeem the second half of the note.
Up to $6.5 million of the proceeds will be used for mergers and acquisitions. RxElite may also use the proceeds to repay a note for $74,105.21 and to redeem 350,000 common shares a $4.00 apiece. Other than that, the proceeds may not be used to repay debt, redeem securities or settle claims against the company.
Based in Meridian, Idaho, RxElite produces generic prescription drugs.
| Issuer: | RxElite, Inc.
|
| Issue: | Senior secured convertible note and stock
|
| Amount: | $10.5 million
|
| Maturity: | Dec. 31, 2009
|
| Coupon: | 5%
|
| Price: | Par
|
| Yield: | 5%
|
| Conversion price: | $1.1262
|
| Warrants: | Series A for 13,985,083 shares; series B for 4,661,694 shares
|
| Warrant expiration: | Earlier of Dec. 31, 2014 and five years after effectiveness of registration statement for shares underlying notes and warrants
|
| Warrant strike price: | $1.1262
|
| Settlement date: | Dec. 31
|
| Stock symbol: | OTCBB: RXEI
|
| Stock price: | $0.88 at close Dec. 31
|
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