By Devika Patel
Knoxville, Tenn., March 27 - Modigene Inc. announced it has negotiated a $10 million line of credit with Frost Group LLC and an equity financing with a group of investors for $2 million.
In the equity financing, Modigene sold 800,000 convertible series A preferred shares at $2.50 per share.
The preferreds will convert automatically into unregistered common stock after four years at a conversion price to be determined according to the company's market capitalization at that time.
The one-year line of credit carries a 10% coupon. If Modigene draws down cash from the line of credit during the one-year period, Frost will receive 1.5 million five-year warrants, which are exercisable at $0.99 per share. The line of credit matures on March 25, 2009, but the company may choose to extend the maturity to March 25, 2013.
The equity investors consist of a group led by Phillip Frost, who is also Modigene's board chairman.
Located in Vienna, Va., Modigene develops long-acting versions of approved therapeutic proteins.
| Issuer: | Modigene Inc.
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| Issue: | Equity line of credit, convertible series A preferred shares
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| Pricing date: | March 27
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| Stock symbol: | OTCBB: MODG
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| Stock price: | $0.96 at close March 26
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|
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| Preferred shares
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| Amount: | $2 million
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| Shares: | 800,000
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| Price: | $2.50
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| Warrants: | No
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| Investor: | Phillip Frost (lead)
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|
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| Line of credit
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| Amount: | $10 million
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| Tenor: | March 25, 2009
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| Coupon: | 10%
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| Warrants: | For 1.5 million shares
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| Warrant expiration: | Five years
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| Warrant strike price: | $0.99
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| Investor: | Frost Group LLC
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