Emisphere Technologies to raise $6.5 million from two private placement deals

Aug 26 2010

Emisphere Technologies, Inc. (OTCBB:EMIS) today announced that on August 25, 2010, Emisphere Technologies, Inc. (the "Company") entered into a securities purchase agreement with certain institutional investors pursuant to which the Company has agreed to sell an aggregate of 3,497,528 shares of its common stock and warrants to purchase a total of 2,623,146 additional shares of its common stock for total gross proceeds of $3,532,503.28. Each unit, consisting of one share of common stock and a warrant to purchase 0.75 shares of common stock, will be sold at a purchase price of $1.01.

The warrants to purchase additional shares will be exercisable at an exercise price of $1.26 per share beginning immediately after issuance and will expire 5 years from the date they are first exercisable. The Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, to the investors identified above in connection with their purchased securities. The Company will be required to file a registration statement within 20 days of the closing date and will use its reasonable best efforts to have such registration statement declared effective as soon as practicable, but in no event later than 50 days of the closing date (90 days in the event the SEC reviews the registration statement).

The Company also announced today that, in connection with the above private placement, it has entered into a separate securities purchase agreement with MHR Fund Management LLC (together with its affiliates, "MHR") pursuant to which the Company has agreed to sell an aggregate of 3,497,528 shares of its common stock and warrants to purchase a total of 2,623,146 additional shares of its common stock for total gross proceeds of $3,532,503.28. Each unit, consisting of one share of common stock and a warrant to purchase 0.75 shares of common stock, will be sold at a purchase price of $1.01.

The warrants to purchase additional shares will be exercisable at an exercise price of $1.26 per share beginning immediately after issuance and will expire 5 years from the date they are first exercisable. 

The Company expects to receive total net proceeds from both transactions of approximately $6.5 million after deducting fees and expenses and excluding the proceeds, if any, from the exercise of the warrants that will be issued in the transactions. Proceeds from these transactions will be used to fund the Company's operations, (including investments in new product development and commercialization), to satisfy certain debts of the Company, to settle certain outstanding litigation and to meet the Company's obligations as they may arise. 

In connection with the transactions described above, the Company entered into a Waiver Agreement with MHR, pursuant to which MHR waived certain anti-dilution adjustment rights under its 11% senior secured notes and warrants issued by the Company to MHR in September 2006 that would otherwise have been triggered by the private placement described above. As consideration for such waiver, the Company will issue to MHR a warrant to purchase 975,000 shares of common stock and agreed to reimburse MHR for 50% of its legal fees up to a maximum reimbursement of $50,000. The terms of such warrant are identical to the warrants issued to MHR in the transaction described above.

The Company was advised in these transactions by an independent committee of the Board of Directors. Roth Capital Partners served as the placement agent for the offering.