By Sheri Kasprzak
New York, Sept. 15 - Viragen, Inc. said it has completed a private placement of $2 million in convertible amortizing debentures for proceeds of $1.43 million.
The debentures, sold to four institutional investors, are priced at 71, bear interest at 7% annually and mature on Sept. 15, 2008.
The debentures are convertible into common shares at $1.05 each.
The debentures also provide for amortization in 32 monthly installments of principal beginning Jan. 1, 2006. The monthly amortization payments may be made either in cash or stock at a 5% discount to the volume weighted average price of Viragen's stock five trading days before the amortization due date.
The conversion of the debentures may be forced if Viragen's stock exceeds $2.00 for more than 30 consecutive trading days.
The investors to the offering also received warrants for 952,381 shares, exercisable at $1.25 each for three years. The warrants may be called if the company's stock exceeds 250% of the exercise price for more than 20 consecutive trading days.
As a condition of the debenture offering, Viragen entered into a series of agreements with eight holders of a $20 million convertible promissory note due in 2006. Among those agreements include the extension of the maturity of the notes to Aug. 31, 2008 from March 31, 2006 and the inclusion of a provision for mandatory conversion if Viragen's volume weighted average stock price exceeds $2.00 for more than 30 consecutive trading days.
The company is also awaiting approval from its shareholders to increase the number of authorized shares to 250 million from 100 million to provide for the conversion of the debentures and the exercise of the warrants.
HPC Capital Management was the placement agent.
Based in Plantation, Fla., Viragen is a biotechnology company focused on treatments for cancer, hepatitis A and B and multiple sclerosis.
| Issuer: | Viragen, Inc.
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| Issue: | Convertible debentures
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| Amount: | $2 million
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| Proceeds: | $1.43 million
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| Maturity: | Sept. 15, 2008
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| Coupon: | 7%
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| Price: | 71
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| Conversion price: | $1.05
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| Call: | May force conversion if stock exceeds $2.00 for more than 30 consecutive trading days
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| Warrants: | For 952,381 shares
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| Warrant expiration: | Three years
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| Warrant strike price: | $1.25
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| Placement agent: | HPC Capital Management
|
| Settlement date: | Sept. 15
|
| Stock price: | $0.63 at close Sept. 15
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