Socius Capital News
Cell Therapeutics Raises $25 million in deal with Socius Capital Group
Cell Therapeutics, Inc. (Nasdaq: CTIC) has made a deal to sell $25.0 million of shares of its Series 8 Non-Convertible Preferred Stock (the "Series 8 Preferred Stock"), warrants to purchase up to 22,563,177 shares of common stock (the "Warrants") and an additional investment right (the "Additional Investment Right") to purchase up to $25.0 million of shares of its Series 9 Convertible Preferred Stock (the "Series 9 Preferred Stock"), in a registered offering to passive investor, Socius Capital Group.
Socius Capital Group specializes in transactions from $5 million to $50 million, and sports an impressive track record in the life sciences and healthcare field. Companies often choose to do additional follow-on financings with Socius, giving them reliable access to Capital without onerous terms and conditions attached.
The shares of Series 8 Preferred Stock will accrue annual dividends at the rate of 10% from the date of issuance, payable in additional shares of Series 8 Preferred Stock. The shares of Series 8 Preferred Stock are redeemable at the option of Cell Therapeutics at any time after issuance, in whole or in part, either in cash or by offset against recourse notes fully secured with marketable securities, which may be issued by Socius to Cell Therapeutics in connection with the exercise of the Warrants and the Additional Investment Right.
The Warrants have an exercise price of $0.3878 per share of common stock. The Warrants are exercisable immediately and expire two years from the date of the Purchase Agreement. The exercise price of the Warrants may be paid in cash or by the issuance of Notes. The Warrants are subject to cancellation and mandatory exercise under certain conditions, in whole or in part. The total potential additional proceeds to Cell Therapeutics upon exercise of the Warrants for cash are $8.75 million.
The Additional Investment Right has an exercise price of $1,000 per share of Series 9 Preferred Stock. The Additional Investment Right is exercisable immediately and must be exercised no later than February 11, 2011. The exercise price of the Additional Investment Right may be paid in cash or through the issuance of Notes. The Additional Investment Right is subject to cancellation under certain conditions, in whole or in part. The total potential additional proceeds to Cell Therapeutics upon exercise of the Additional Investment Right for cash are $25.0 million.
Each share of Series 9 Preferred Stock is convertible at the option of the holder, at any time during its existence, into approximately 2,579 shares of common stock at a conversion price of $0.3878 per share of common stock, for a total of approximately 64,466,219 shares of common stock.
Cell Therapeutics intends to use the net proceeds from the offering for general corporate purposes, which may include, among other things, paying interest on and/or retiring portions of its outstanding debt, funding research and development, preclinical and clinical trials, the preparation and filing of new drug applications and general working capital. Cell Therapeutics may also use a portion of the net proceeds to fund possible investments in, or acquisitions of, complementary businesses, technologies or products. Cell Therapeutics has recently engaged in limited discussions with third parties regarding such investments or acquisitions, but has no current agreements or commitments with respect to any investment or acquisition.
The closing of the issuance and sale of the Series 8 Preferred Stock is expected to occur on the 10th trading day following the date of the Purchase Agreement, subject to certain closing conditions. Additional details regarding the offering can be found in the prospectus supplement relating to the offering to be filed with the Securities and Exchange Commission (the "SEC") on January 13, 2011.
Socius Capital Group specializes in transactions from $5 million to $50 million, and sports an impressive track record in the life sciences and healthcare field. Companies often choose to do additional follow-on financings with Socius, giving them reliable access to Capital without onerous terms and conditions attached.
The shares of Series 8 Preferred Stock will accrue annual dividends at the rate of 10% from the date of issuance, payable in additional shares of Series 8 Preferred Stock. The shares of Series 8 Preferred Stock are redeemable at the option of Cell Therapeutics at any time after issuance, in whole or in part, either in cash or by offset against recourse notes fully secured with marketable securities, which may be issued by Socius to Cell Therapeutics in connection with the exercise of the Warrants and the Additional Investment Right.
The Warrants have an exercise price of $0.3878 per share of common stock. The Warrants are exercisable immediately and expire two years from the date of the Purchase Agreement. The exercise price of the Warrants may be paid in cash or by the issuance of Notes. The Warrants are subject to cancellation and mandatory exercise under certain conditions, in whole or in part. The total potential additional proceeds to Cell Therapeutics upon exercise of the Warrants for cash are $8.75 million.
The Additional Investment Right has an exercise price of $1,000 per share of Series 9 Preferred Stock. The Additional Investment Right is exercisable immediately and must be exercised no later than February 11, 2011. The exercise price of the Additional Investment Right may be paid in cash or through the issuance of Notes. The Additional Investment Right is subject to cancellation under certain conditions, in whole or in part. The total potential additional proceeds to Cell Therapeutics upon exercise of the Additional Investment Right for cash are $25.0 million.
Each share of Series 9 Preferred Stock is convertible at the option of the holder, at any time during its existence, into approximately 2,579 shares of common stock at a conversion price of $0.3878 per share of common stock, for a total of approximately 64,466,219 shares of common stock.
Cell Therapeutics intends to use the net proceeds from the offering for general corporate purposes, which may include, among other things, paying interest on and/or retiring portions of its outstanding debt, funding research and development, preclinical and clinical trials, the preparation and filing of new drug applications and general working capital. Cell Therapeutics may also use a portion of the net proceeds to fund possible investments in, or acquisitions of, complementary businesses, technologies or products. Cell Therapeutics has recently engaged in limited discussions with third parties regarding such investments or acquisitions, but has no current agreements or commitments with respect to any investment or acquisition.
The closing of the issuance and sale of the Series 8 Preferred Stock is expected to occur on the 10th trading day following the date of the Purchase Agreement, subject to certain closing conditions. Additional details regarding the offering can be found in the prospectus supplement relating to the offering to be filed with the Securities and Exchange Commission (the "SEC") on January 13, 2011.
