By Abigail W. Adams
Portland, Me., April 13 – Vermillion, Inc. priced $5 million, or 50,000 shares, in $100-par series B convertible preferred stock prior to the market open Friday, according to a company news release.
The series B convertible preferred stock was priced concurrently to an offering of $10 million, or 10 million shares, of common stock at a public offering price of $1.
Piper Jaffray & Co. is the sole underwriter for the offering. The common stock offering carries a greenshoe of $1.5 million, or 1.5 million shares.
The convertible preferred stock is convertible into 100 shares of common stock at an initial conversion price of $1.
The offering is not a traditional convertible preferred stock offering but rather the convertible portion is being including more for structuring purposes, a market source said.
Following the closing of the offering, Vermillion will hold a shareholder meeting to seek approval of the issuance of common shares upon conversion of the preferred stock.
The series B convertible preferred stock will automatically convert upon receipt of shareholder approval, according to a 424B5 filing with the Securities and Exchange Commission.
There is no guarantee that shareholder approval will be received and that the preferred stock will be convertible.
Investors that participated in a May 2013 private placement were given the right to participate in any future offerings of Vermillion’s equity securities.
Series B preferred stock is being offered to any May 2013 investors who would own more than 19.99% of outstanding common stock if they were to participate in the concurrent common stock offering.
Proceeds from the concurrent offerings are expected to be $15 million or $16.5 million if the greenshoe is exercised in full. Proceeds will be used for general corporate purposes.
Vermillion is an Austin, Texas-based bio-analytical company focused on gynecologic disease.
| Issuer: | Vermillion Inc.
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| Securities: | Series B convertible preferred stock
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| Amount: | $5 million or 50,000 shares
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| Bookrunner: | Piper Jaffray & Co.
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| Dividend: | 0%
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| Price: | Par of $100
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| Conversion premium: | 0% from concurrent stock offering
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| Conversion price: | $1
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| Conversion rate: | 100
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| Pricing date: | April 13
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| Settlement date: | April 17
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| Stock symbol: | Nasdaq: VRML
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| Stock price: | $1.30 at market close April 12
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| Market capitalization: | $55.5 million
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| Stock reference price: | $1.00 in concurrent stock offering
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| Concurrent offering: | $10 million, or 10 million shares common stock
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| Greenshoe: | $1.5 million, or 1.5 million shares of common stock
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