SEATTLE, June 12 /PRNewswire-FirstCall/ -- Cell Therapeutics, Inc. (Nasdaq and MTA: CTIC) today announced that a single institutional investor has agreed to purchase, for $23 million, newly issued 15% Convertible Senior Notes due 2011, with an initial conversion price of $0.79 per share, and a warrant to purchase approximately 14.6 million shares of common stock with an exercise price of $0.95 per share.
This transaction constitutes a partial exercise of a previously granted warrant right for the investor to purchase up to $67.5 million of such unit securities, leaving the investor with the right to purchase up to $44.5 million of additional securities in the future. The Company and the investor have amended their original April 30, 2008 agreements to change from 12.5% to 15% the interest rate on the Notes within these units, but the purchase price for the securities, the conversion price of the notes and the exercise price for the warrants remain unchanged.
The new Notes have a $23 million initial principal balance and feature a make-whole provision entitling the holder, upon any conversion of the Notes, to receive the interest payable through scheduled maturity, less any interest paid before conversion. The Company expects to receive net proceeds of approximately $12.65 million from this transaction. The Notes will rank equal in right of payment with all existing and future unsecured senior indebtedness of CTI.
The Company intends to use approximately $11.0 million of the net proceeds from this transaction to retire upon maturity the remaining balance of its 2008 convertible notes due June 15, 2008, together with accrued interest.
This press-release contains forward-looking statements that involve a
number of risks and uncertainties, the outcome of which could materially
and/or adversely affect future results. The risks and uncertainties include
that the investor may choose not to exercise any of the remaining warrants
issued in the April 2008 transaction or any of the common stock warrants
issued in this June 2008 transaction, and the Company may not achieve the
milestones which would enable it to compel further exercise; the April 2008
transaction and this June 2008 transaction will be dilutive to current
stockholders; the Company continues to have negative cash flow and a
significant amount of debt outstanding and will need to raise additional
capital to fund its operations; as well as other risks listed or described
from time to time in the Company's most recent filings with the SEC on
Forms 10-K, 8-K and 10-Q. Except as required by law, the Company does not
intend to update any of the statements in this press release upon further
Cell Therapeutics, Inc.
T : 206.272.4347
F : 206.272.4434
Cell Therapeutics, Inc.
|SOURCE Cell Therapeutics, Inc.|
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