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This transaction constitutes a partial exercise of a previously grantedwarrant right for the investor to purchase up to $67.5 million of such unitsecurities, leaving the investor with the right to purchase up to $44.5million of additional securities in the future. The Company and the investorhave amended their original April 30, 2008 agreements to change from 12.5% to15% the interest rate on the Notes within these units, but the purchase pricefor the securities, the conversion price of the notes and the exercise pricefor the warrants remain unchanged.
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The new Notes have a $23 million initial principal balance and feature amake-whole provision entitling the holder, upon any conversion of the Notes,to receive the interest payable through scheduled maturity, less any interestpaid before conversion. The Company expects to receive net proceeds ofapproximately $12.65 million from this transaction. The Notes will rank equalin right of payment with all existing and future unsecured senior indebtednessof CTI.
The Company intends to use approximately $11.0 million of the net proceedsfrom this transaction to retire upon maturity the remaining balance of its2008 convertible notes due June 15, 2008, together with accrued interest.
This press-release contains forward-looking statements that involve anumber of risks and uncertainties, the outcome of which could materiallyand/or adversely affect future results. The risks and uncertainties includethat the investor may choose not to exercise any of the remaining warrantsissued in the April 2008 transaction or any of the common stock warrantsissued in this June 2008 transaction, and the Company may not achieve themilestones which would enable it to compel further exercise; the April 2008transaction and this June 2008 transaction will be dilutive to currentstockholders; the Company continues to have negative cash flow and asignificant amount of debt outstanding and will need to raise additionalcapital to fund its operations; as well as other risks listed or describedfrom time to time in the Company's most recent filings with the SEC on Forms10-K, 8-K and 10-Q. Except as required by law, the Company does not intend toupdate any of the statements in this press release upon further developments.Media Contact: Cell Therapeutics, Inc. Dan Eramian T: 206.272.4343 C: 206.854.1200 Lindsey Jesch T : 206.272.4347 F : 206.272.4434 E: [email protected] http://www.CellTherapeutics.com/media.htm Investors Contact: Cell Therapeutics, Inc. Ed Bell T: 206.272.4345 F: 206.272.4434 E: [email protected] http://www.CellTherapeutics.com/investors.htm
SOURCE Cell Therapeutics, Inc.
