NanoViricides enters agreement with Seaside to purchase Series B Convertible Preferred Stock

Sep 23 2010

NanoViricides, Inc. (OTC BB: NNVC.OB) (the "Company"), announced today that it had reached an agreement with Seaside 88, LP ("Seaside"), a Florida limited partnership, for the exercise of Seaside's option to purchase an additional $2.5M of the Company's Series B Convertible Preferred Stock. Seaside has financed several leading-edge bio-pharma companies, including Cytori Therapeutics, Inc., Generex Biotechnology Corporation, and NovaDel Pharma, Inc. among others.

“we are now well poised to continue our drug development programs towards a FDA filing stage.”

"We are pleased that Seaside has exercised its follow on investment option," said Anil R. Diwan, PhD, President of the Company, adding, "we are now well poised to continue our drug development programs towards a FDA filing stage."

"We now have more than 18 months of cash in hand. This investment puts us in a strong financial position," said Eugene Seymour, MD, MPH, CEO of the Company.

On September 21, 2010, Seaside purchased the Company's .001 par value Series B Convertible Preferred Stock for gross proceeds of $2.5M. The Company expects the net proceeds of that transaction to amount to approximately $2.295M after deducting placement agent fees and other offering expenses. NanoViricides entered into a Letter Agreement with Seaside for the purchase and sale of 250,000 shares of its Series B Preferred Stock at the purchase price of $10.00 per share. Pursuant to such Letter Agreement, Seaside has also agreed to purchase an additional $2.5M of the Company's Series B Convertible Preferred Stock within 90 days of the closing of the first follow on sale of the Company's Series B Preferred Stock.

The Series B Preferred Stock is convertible into a number of shares of the Company's common stock every two weeks. The converted shares are estimated to represent less than five percent of the 10-day trading volume of the Company's stock (NNVC: OTC-BB), based upon current data.

Of the shares purchased, 40,000 shares of the Series B Preferred Stock will be automatically converted into common stock every two weeks commencing the initial closing. The conversion factor shall equal the purchase price of $10 per share of the preferred stock, divided by the lesser of (i) the ten day daily volume weighted average of actual trading prices ("VWAP") of the common stock multiplied by 0.85; or (ii) the VWAP for the trading day immediately prior to a conversion date multiplied by 0.88. In addition, the unconverted shares of the Series B Preferred Stock will accrue a dividend at a 10% annualized rate. The accrued dividend shall be payable in common stock at the time of each conversion. The Company does not pay a dividend on the shares of its common stock or the shares of its Preferred Series A stock, and will not be able to pay any dividend on these securities while any shares of the Series B Preferred stock remain unconverted. The shares of Series B Preferred Stock and the shares of common stock underlying the Series B Preferred Stock and the dividend earned on it were offered pursuant to an effective shelf registration statement. The Series B Preferred Stock does not have any voting rights except as set forth in the Certificate of Designation, as amended, creating the stock.

Midtown Partners & Co., LLC, acted as the placement agent for this transaction. Midtown received a cash placement fee of 8%.

A shelf registration statement relating to the shares of common stock underlying the shares of preferred stock issued in the offering has been filed with the Securities and Exchange Commission (the "SEC") and has been declared effective. A prospectus supplement relating to the current transaction has been filed by NanoViricides with the SEC. Copies of the prospectus supplement and accompanying prospectus may be obtained directly from NanoViricides by contacting NanoViricides, Inc., 135 Wood Street, Suite 205, West Haven, Connecticut 06516. This announcement is neither an offer to sell nor a solicitation of an offer to buy any shares of preferred or common stock of NanoViricides. No offer, solicitation or sale will be made in any jurisdiction in which such offer, solicitation or sale is unlawful.

Source:  NanoViricides, Inc.