By Jennifer Chiou
New York, July 8 - Advanced BioPhotonics Inc. announced a rights offering for series B preferred stock that will raise up to $3.5 million, according to a 424B3 filing with the Securities and Exchange Commission.
The company will distribute at no charge up to 7 million transferable subscription rights to holders of its common stock at a rate of one right per 4.33 shares.
Shareholders of record as of the close of business on July 1 may use each subscription right to buy series B preferred stock at $0.50 per share. They must do so during the 30 days beginning July 11 and expiring 5 p.m. ET on Aug. 10.
Those who purchase the preferreds will automatically receive five-year warrants to purchase common stock. The warrants will be for 50% of the number of shares of preferred stock, exercisable at $0.75 per share. If all warrants are exercised, assuming all subscription rights are put into effect, proceeds will amount to $2.625 million.
Warrants cannot be purchased separately.
The preferreds will pay a 7% cumulative dividend, either in cash or additional shares. It is convertible into common stock on a one-for-one basis at any time and will automatically convert on the 20th consecutive trading day on which Advanced BioPhotonics stock closes at $2.20 per share.
Advanced BioPhotonics is a Bohemia, N.Y., company engaged in the development of medical imaging technology for diagnosing various diseases.
| Issuer: | Advanced BioPhotonics Inc.
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| Issue: | Subscription rights for series B preferred stock and warrants
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| Amount: | Up to $3.5 million
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| Maturity: | Aug. 10
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| Ratio: | 1 right per 4.33 common shares owned
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| Exercise price: | $0.50
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| Announcement date: | July 8
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| Settlement date: | July 11
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| Stock price: | $0.65 at close July 1
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| Stock price: | $0.61 at close July 8
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| Preferred stock
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| Issue: | Series B convertible preferred stock
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| Amount: | Up to $3.5 million
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| Price: | $0.50
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| Dividend: | 7%, in cash or kind
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| Conversion ratio: | 1 common share per preferred share
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| Automatic conversion: | On the 20th consecutive trading day on which Advanced BioPhotonics stock closes at $2.20
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| Warrants: | For up to 50% of preferred shares owned
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| Warrant expiration: | Five years
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| Warrant strike price: | $0.75
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