NanoViricides Inc : NanoViricides Raises $5 Million in Shelf Offering - The Company Reports Having More than 24 Months of Cash in Hand
06/29/2012| 07:05am US/Eastern
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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.
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™
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.
About
NanoViricides:
NanoViricides,
Inc. (www.nanoviricides.com)
is a development stage company that is creating special purpose
nanomaterials for antiviral therapy. The Company's novel nanoviricide®
class of drug candidates are designed to specifically attack enveloped
virus particles and to dismantle them. The Company is developing drugs
against a number of viral diseases including H1N1 swine flu, H5N1 bird
flu, seasonal Influenza, HIV, oral and genital Herpes (HSV), viral
diseases of the eye including EKC and herpes keratitis, Hepatitis C,
Rabies, Dengue fever, and Ebola virus, among others.
This press release contains forward-looking statements that reflect the
Company's current expectation regarding future events. Actual events
could differ materially and substantially from those projected herein
and depend on a number of factors. Certain statements in this release,
and other written or oral statements made by NanoViricides, Inc. are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. You should not place undue reliance on forward-looking statements
since they involve known and unknown risks, uncertainties and other
factors which are, in some cases, beyond the Company's control and which
could, and likely will, materially affect actual results, levels of
activity, performance or achievements. The Company assumes no obligation
to publicly update or revise these forward-looking statements for any
reason, or to update the reasons actual results could differ materially
from those anticipated in these forward-looking statements, even if new
information becomes available in the future. Important factors that
could cause actual results to differ materially from the company's
expectations include, but are not limited to, those factors that are
disclosed under the heading "Risk Factors" and elsewhere in documents
filed by the company from time to time with the United States Securities
and Exchange Commission and other regulatory authorities. Although it is
not possible to predict or identify all such factors, they may include
the following: demonstration and proof of principle in pre-clinical
trials that a nanoviricide is safe and effective; successful development
of our product candidates; our ability to seek and obtain regulatory
approvals, including with respect to the indications we are seeking; the
successful commercialization of our product candidates; and market
acceptance of our products.
NanoViricides, Inc.
Amanda Schuon, 310-550-7200
info@nanoviricides.com
© Business Wire 2012
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