BG Medicine, Inc. (NasdaqCM:BGDM) announced that it has entered into a securities purchase agreement to issue secured convertible promissory notes for gross proceeds of $500,000 on May 12, 2015. The notes will be convertible into shares of series A preferred stock. The notes will also carry a fixed interest rate of 8% per annum. The company will issue securities pursuant to exemption provided under Regulation D. The round will include participation from existing investors, AGTC Fund L.P. and Flagship Ventures Fund 2007, L.P., funds managed by Flagship Ventures.

On the same date, the company received $500,000 as tranche funding.

The company will also issue series A preferred stock for gross proceeds of $2,000,000 subject to shareholders' approval at the second closing to be held following the annual meeting. The series A preferred shares will be issued at a price which will be the lesser of 85% of the arithmetic average of the volume-weighted average price of the its common stock, on each of the ten trading days immediately preceding the date of the second closing or $0.67 per share. The holders of series A will be entitled to receive a fixed dividend of 8% per annum, compounded and payable quarterly in cash or in additional shares of series A preferred stock at the election of each holder. The series A preferred stock have a par value of $0.001 per share. The shares of series A will be convertible into shares of common stock. The holders of series A will elect to nominate one director to the board.

The company may terminate the agreement, if, at any time prior to its stockholders' approval of the issuance of the series A preferred stock, and the board changes its recommendation to the stockholders'.

The second closing the notes will be automatically converted pursuant to their terms into that number of shares of series A preferred stock equal to the principal amount of the notes plus all accrued but unpaid interest thereon divided by the purchase price of the series A preferred stock.