SUNNYVALE, Calif., June 1 /PRNewswire-FirstCall/ -- Pharmacyclics, Inc. (Nasdaq: PCYC) today announced that it filed a registration statement on Form S-3 with the Securities and Exchange Commission (the "SEC") for a rights offering to its existing stockholders. The rights offering will be made through the distribution of non-transferable subscription rights to purchase shares of the Company's common stock, par value $0.0001 per share, at a subscription price to be determined. Assuming the rights offering is fully subscribed, the Company will receive gross proceeds of approximately $24 million, less expenses of the rights offering. The Company filed this rights offering to raise equity capital in a cost-effective manner that gives all of Pharmacyclics' stockholders the opportunity to participate. The net proceeds will be used for general working capital purposes, including the repayment of certain indebtedness of Pharmacyclics under an existing promissory note in favor of Robert W. Duggan, our Chairman of the Board and Chief Executive Officer, and the beneficial owner of approximately 27% of Pharmacyclics' outstanding common stock.
The reason the company decided to raise up to $24 million in this offering was to ensure that in the event other shareholders chose not to exercise their rights, Mr. Duggan would still be able to participate up to his proportionate 27% interest and provide Pharmacyclics with sufficient capital to satisfy the $6.4 million note payable to Mr. Duggan. Accordingly, the proceeds from the rights offering will fully repay all existing indebtedness of the company.
The rights offering includes an oversubscription privilege which permits each rights holder that exercises its rights in full to purchase additional shares of common stock that remain unsubscribed at the expiration of the offering. This oversubs
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