NanoViricides Raises $5 Million in Shelf Offering - The Company Reports Having
More than 24 Months of Cash in Hand
WEST HAVEN, Conn., Jun 29, 2012 (BUSINESS WIRE) -- NanoViricides, Inc. (NNVC)
(the "Company"), announced today that it has raised $5,000,000, drawing down on
its previously announced universal registered shelf "Form S-3" offering. The
registered shelf offering became effective on April 29, 2010 and continues to
remain effective.
This new investment enables the Company to retain more than 24 months of current
operating expenses as cash in hand. This strengthened financial position will
allow the Company to defray certain additional testing costs for its
anti-influenza drug candidate leading to an IND application, and to support the
budgeted costs of certain additional equipment needed for production of the
future clinical batches of its drug candidates.
The Company received this financing from a single investor, Seaside 88, LP
("Seaside"), a Florida limited partnership. Seaside has previously financed
NanoViricides with a total of approximately $20 million under somewhat different
terms.
On June 28, 2012, the Company received $2.5M upon closing, with a net of
approximately $2.32M after deducting brokerage commission and expenses.
NanoViricides has entered into a securities purchase agreement with Seaside for
the purchase and sale of up to 5,000 shares of its newly created Series C
Preferred Stock at the purchase price of $1,000 per share. Seaside purchased an
initial 2,500 shares of the Company's Series C Preferred Stock at the purchase
price of $1,000 per share for an aggregate purchase price of $2,500,000. A
certain number of the preferred C shares will convert to common stock
automatically every 14 days. The amount of common stock issued at each conversion
will be equal to 15% of the average volume of common stock traded in the previous
two weeks, plus common stock resulting from conversion of accrued dividend (see
below).
"Conversion based on trading volume provides a substantial amount of stability to
the trading market," said Eugene Seymour, MD, MPH, CEO and CFO of the Company,
adding, "It takes away the adverse price impact that could happen when a fixed
dollar amount is converted every two weeks, which was the case with our Series B
Preferred Stock."
The first conversion of Series C Preferred shares to common stock took place on
Thursday, June 28, 2012. Additional conversions will follow every fourteen days.
"We are pleased that Seaside has agreed to finance the Company on terms that are
substantially more favorable to the interests of our shareholders than in the
past," said Anil R. Diwan, PhD, President of the Company, adding, "This financing
is very important for the Company as we advance our influenza drug candidate
towards IND stage and future human clinical trials. It will also help us to
continue to move forward with all of the drug programs in our broad pipeline."
The Company has conducted a pre-IND meeting with the US FDA for its clinical
candidate for influenza, namely NV-INF-1, under its FluCide(TM) anti-influenza
nanoviricides program in March, 2012. The Company is currently working on the
studies needed for an IND submission for this drug candidate. In addition, the
Company has also announced that it is working on enabling cGMP manufacture of its
drug candidates for the future human clinical studies.
The Series C Preferred Stock is convertible into a number of shares of the
Company's common stock every two weeks. Of the shares purchased, a certain number
of shares of the Series C Preferred Stock will be automatically converted into a
certain amount of common stock every two weeks beginning June 28, 2012. The
amount of common stock to be issued is calculated as 15% of the average trading
volume of the Company's shares in the previous 10 days of trading. The conversion
price of the common stock at the conversion is calculated as the lesser of (i)
the ten-day daily volume weighted average of actual trading prices ("VWAP") of
the common stock multiplied by 0.85; or (ii) the VWAP for the trading day
immediately prior to a conversion date multiplied by 0.88. The total dollar
amount of common stock converted is divided by the $1,000 purchase price of the
Preferred Series C shares to arrive at the number of series C shares converted.
In addition, the unconverted shares of the Series C Preferred Stock will accrue a
dividend at a 10% annualized rate. The accrued dividend is payable in common
stock at each conversion at the same price of conversion as above. The Company
does not pay a dividend on the shares of its common stock or the shares of its
Preferred Series A stock, and will not be able to pay any dividend on these
securities while any shares of the Series C Preferred stock remain unconverted.
The shares of Series C Preferred Stock and the shares of common stock underlying
the Series C Preferred Stock and the dividend earned on it were offered pursuant
to an effective shelf registration statement. The Series C Preferred Stock does
not have any voting rights except as set forth in the Certificate of Designation,
as amended, creating the stock.
Midtown Partners & Co., LLC, acted as the placement agent for this transaction.
Midtown received a cash placement fee of 6%.
A shelf registration statement relating to the shares of common stock underlying
the shares of preferred stock issued in the offering has been filed with the
Securities and Exchange Commission (the "SEC") and has been declared effective. A
prospectus supplement relating to the current transaction has been filed by
NanoViricides with the SEC. Copies of the prospectus supplement and accompanying
prospectus may be obtained directly from NanoViricides by contacting
NanoViricides, Inc., 135 Wood Street, Suite 205, West Haven, Connecticut 06516.
This announcement is neither an offer to sell nor a solicitation of an offer to
buy any shares of preferred or common stock of NanoViricides. No offer,
solicitation or sale will be made in any jurisdiction in which such offer,
solicitation or sale is unlawful. |
