Pharmos Completes Private Placement - Raises $1...( ISELIN N.J. April 21 /- Pharmos Cor...),Health

ISELIN, N.J., April 21 /PRNewswire-FirstCall/ -- Pharmos Corporation (Pink Sheets: PARS) announced today that it has completed a private placement of common stock and warrants. At the closing, the Company issued 18,000,000 shares of common stock and warrants exercisable for an additional 18,000,000 shares of common stock for an aggregate purchase price of $1,800,000. The exercise price of the warrants, which have a five-year term, is $0.12 per share.

The three purchasers were two existing investors in the Company, Venrock Associates (which is affiliated with Anthony B. Evnin, a Director of the Company) and New Enterprise Associates (which is affiliated with Charles W. Newhall, III, a Director of the Company), and a trust affiliated with Robert F. Johnston (the Company's Executive Chairman of the Board of Directors). With respect to the private placement of the securities sold, the Company relied on the exemption from registration under the Securities Act of 1933, as amended (the "Act") provided by Rule 506 under the Act, given the number of, and nature of, the investors.

In addition, Venrock Associates, New Enterprise Associates and Mr. Johnston agreed to convert at the closing the Company's 10% Convertible Debentures due November 1, 2012 held by them, comprising an aggregate of $3,000,000 in principal amount, at a conversion price of $0.275 per share. Accrued but unpaid interest on their debentures, aggregating $80,403, was also converted at the closing, at a conversion price of $0.34 per share. An aggregate of 11,145,569 shares was issued at the closing upon conversion of the principal and accrued but unpaid interest on the debentures.

The proceeds from the private placement will be used to fund completion of the ongoing Dextofisopam Phase 2b trial and company operations through 2009. If the trial is successful, this financing would also support additional efforts to negotiate a strategic partn
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