Seaside purchases additional $2.5M of NanoViricides' Series B Convertible Preferred Stock

NanoViricides, Inc. (OTC BB: NNVC.OB) (the "Company"), announced today that it had consummated a closing with Seaside 88, LP ("Seaside"), a Florida limited partnership, on Seaside's purchase of 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 pleased that Seaside has consummated the second follow on investment”

Seaside purchased 250,000 shares of the Company's Series B Preferred Stock at the purchase price of $10.00 per share on December 21. The Company has received $2.5M upon closing, with a net of approximately $2.3M after deducting brokerage commission and expenses.

The first conversion of $400,000 of Series B Preferred stock to common stock will take place on January 3, 2011. Additional conversions will follow every fourteen days. The pricing will be based on the same terms and conditions as the first option previously exercised by Seaside.

"We are pleased that Seaside has consummated the second follow on investment," said Anil R. Diwan, PhD, President of the Company, adding, "This allows us to continue our drug development programs towards a FDA filing stage."

"We now have more than 24 months of cash in hand, based on current rate of expenditure. This additional investment further strengthens our financial position," said Eugene Seymour, MD, MPH, CEO of the Company.

On September 16, 2010, 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 said Letter Agreement, Seaside had 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.

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 beginning January 3, 2010. 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%.