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AMDL, Inc. Closes Private Placement of Convertible Notes

Wednesday, September 17, 2008 General News J E 4
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TUSTIN, Calif., Sept. 16 (http://www.amdl.com)AMDL, Inc. (Amex: ADL), a vertically integrated pharmaceutical company withmajor operations in China and the US, announced today the successful closingand terms of a $2,510,000 private placement offering of 10% convertible notes.The placement agents for the offering were Jesup & Lamont SecuritiesCorporation and Dawson James Securities, Inc.

Mr. Gary Dreher, President and CEO of AMDL, Inc., said, "This financingstrengthens our cash position and allows us to accelerate key businessinitiatives. We appreciate the financial support from our investors and theirvote of confidence in AMDL's China and US-led operations."

AMDL sold $2,510,000 of 10% convertible notes at par value. The notesmature at the earlier of 12 months from the completion of a registeredfollow-on public offering or 24 months after issuance. The notes will berepaid either at maturity in cash equal to 150% of the principal amount of thenotes plus an amount equivalent to 10% per annum interest, or upon forcedmandatory conversion into shares of the Company's common stock in the event ofa public offering of at least $25 million in gross proceeds to AMDL. At anytime after February 15, 2009, the holders of the notes have the right toconvert the entire principal and interest due thereon into common stock of theCompany. The conversion price will be at a discount of fifty percent (50%) tothe: (i) price of the Company's common stock on the closing of the publicoffering; or (ii) common stock on February 15, 2009; provided, however, in noevent shall the conversion price be less than $1.20 per share. In the eventof a voluntary conversion, the shares issued will not be registered. Theshares issuable on conversion carry "piggy-back" registration rights shouldthe Company file a registration statement subsequent to conversion.

In the event of a forced conversion into common shares in the publicoffering, note holders will be subject to a lock-up on any remaining sharesnot sold in the offering for 90 days after the public offering. Upon anyconversion of the notes into common stock of the Company, the Company shallalso issue warrants to purchase common stock to the converting investors inthe amount equal to 50% of the number of shares of common stock into whichtheir notes were converted. Warrants shall have a term of five years from thedate of issuance and shall be exercisable at a price equal to 120% of theclosing price of the Company's common stock on the date of conversion;provided however, in no event shall the exercise price of the warrants be lessthan 120% of the five day volume average weighted price (VWAP) of theCompany's common stock the on closing date of the debt offering.

The placement agents received cash commissions of $251,000, representing10% of the principal amount of the notes purchased, $62,750 in non-accountableexpenses and due diligence fees (21/2% of the principal amount of the notespurchased), and five year warrants to purchase a maximum of 209,167 shares ofthe Company's common stock (which number will be adjusted and reduced when theinitial conversion price of the notes is determined) exercisable at $2.69 pershare, representing a price equal to 115% of the five day VWAP of the commonstock of the Company up to the closing.

AMDL structured the debt financing so the conversion price will bedetermined at or about the same time as an anticipated 1st quarter 2009 "atmarket" public offering. Prior to this event, the Company expects to meetcertain milestones that it believes will positively impact the conversionprice. Specifically, AMDL intends to a secure new comprehensive creditfacility in China. The credit facility is anticipated to includecollateralized mortgage financing, construction financing, as well as lines ofcredit for accounts payable and research and development. AMDL intends to useproceeds from these
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