NanoViricides, Inc. (OTC BB: 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.
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 $10 million under a similar arrangement. Seaside has also financed several leading-edge bio-pharma companies, including Cytori Therapeutics, Inc., Generex Biotechnology Corporation, and NovaDel Pharma, Inc. among others.
NanoViricides has entered into a securities purchase agreement with Seaside for the purchase and sale of up to 500,000 shares of its Series B Preferred Stock at the purchase price of $10.00 per share. On April 19, 2011 Seaside purchased an initial 250,000 shares of the Company’s Series B Preferred Stock at the purchase price of $10.00 per share for an aggregate purchase price of $2,500,000. The Company received $2.5M upon closing, with a net of approximately $2.30M after deducting brokerage commission and expenses. The first conversion of $400,000 of Series B Preferred stock to common stock took place on April 19, 2011. Additional conversions will follow every fourteen days. The conversion price will be based on the same terms and conditions as the previous financing the Company concluded with Seaside (described below).
“We continue to have more than 24 months of cash in hand, based on current rate of expenditure. This additional investment will enable us to engage into expanding our pre-clinical studies towards filing an IND application to the FDA,” said Eugene Seymour, MD, MPH, CEO of the Company.
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 (NNVC : OTC-BB), 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 beginning April 19, 2011. 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.