"This transaction has the added benefit of reducing interest expense, fees and amortization expense by $12 million for the remainder of 2009 which greatly enhances Clarient's potential for net earnings by year end," Andrews concluded.
The purchase price of the Clarient Series A convertible preferred stock was $7.60 per share, which equates to an effective purchase price of $1.90 per share of underlying common stock or approximately market price at the date the financing was agreed upon. Under terms of the private placement, Oak may convert at any time one convertible preferred share into four shares of Clarient common stock. After one year, preferred shares, which do not accrue dividends, convert automatically into common shares if Clarient shares trade above $4.75 per share for 20 days of a 30 consecutive trading-day period. After four years, Clarient may redeem any unconverted preferred shares at $7.60 per share plus any undeclared but unpaid dividends.
Upon mutual agreement after the closing of the second tranche, Oak may purchase up to an additional $10 million of Clarient preferred shares, providing the company access to capital for strategic opportunities that would accelerate the company's growth.
The private placement gives Oak effective control of approximately 21% of Clarient's outstanding shares and reduces Safeguard's position to approximately 47% from nearly 62% at December 31, 2008. With certain exceptions, preferred shares will be voted with common shares on an as-converted basis. Safeguard first took an ownership stake in Clarient in 1996, increasing its position over time.
SOURCE Clarient, Inc.
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