WEST HAVEN, CONNECTICUT -- July 27, 2011 -- NanoViricides, Inc. (OTC BB: NNVC) (the "Company"), announced today that it had successfully consummated a closing with Seaside 88, LP, a Florida limited partnership (“Seaside”), on Seaside’s purchase of an additional $2.5M of the Company’s Series B Convertible Preferred Stock. With this most recent closing, Seaside has thus far funded the Company in the amount of $15,000,000.
In a subsequent offering to the April 19, 2011 closing, Seaside purchased 250,000 shares of the Company’s Series B Preferred Stock at the purchase price of $10.00 per share today. The Company received $2.5M upon closing, with net proceeds of approximately $2.3M after deducting brokerage commission and expenses. The first conversion of 40,000 shares of Series B Preferred Stock took place contemporaneously into 377,800 shares of common stock. Additional conversions will follow every fourteen days. The pricing will be based on the same terms and conditions as the prior closing by Seaside.
“We are pleased that Seaside has continued its investment in NanoViricides,” said Anil R. Diwan, PhD, President of the Company, adding, “this investment allows us to continue our progress towards an FDA filing for our first drug candidate.”
“We continue to have more than 24 months of cash in hand, based on current rate of expenditure. This additional investment further strengthens our financial position,” said Eugene Seymour, MD, MPH, CEO of the Company.
On April 19, 2011, NanoViricides entered into a Securities Purchase Agreement with Seaside for the purchase and sale of 250,000 shares of its Series B Preferred Stock at the purchase price of $10.00 per share. Pursuant to said Agreement, Seaside also agreed to purchase an additional $2.5M of the Company’s Series B Convertible Preferred Stock within 14 weeks of that closing date.
The Series B Preferred Stock is convertible into a number of shares of the Company’s common stock every two weeks. The converted shares are estimated to represent less than five percent of the 10-day trading volume of the Company’s stock (OTC BB: NNVC), based upon current data.
Of the shares purchased, 40,000 shares of the Series B Preferred Stock will be automatically converted into common stock every two weeks. The conversion factor shall equal the purchase price of $10 per share of the preferred stock, divided by 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. In addition, the unconverted shares of the Series B Preferred Stock will accrue a dividend at a 10% annualized rate. The accrued dividend shall be payable in common stock at the time of each conversion. 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 B Preferred stock remain unconverted. The shares of Series B Preferred Stock and the shares of common stock underlying the Series B Preferred Stock and the dividend earned on it were offered pursuant to an effective shelf registration statement. The Series B 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.