BERKELEY HEIGHTS, N.J., June 5 Genta Incorporated(OTC Bulletin Board: GNTA) announced today that the Company has entered intodefinitive agreements with institutional and accredited investors to placeSenior Secured Convertible Notes due 2010 totaling in aggregate up to $40million in gross proceeds before fees and expenses. The closing of the first$20 million of Notes is expected to take place on or about June 6, 2008,subject to the satisfaction of customary closing conditions.
The Notes will bear interest at an annual rate of 15% payable at quarterlyintervals in stock or cash at the Company's option, and will be convertibleinto shares of Genta common stock at a conversion rate of 100,000 shares ofcommon stock for every $1,000.00 of principal. The first one-half of theNotes, or $20 million, will be issued upon initial closing of the transaction.Holders of the Notes shall have the right, but not the obligation, for thefollowing 12 months following the initial closing date to purchase in whole orin part up to an additional $20 million of the Notes. The Company shall havethe right to force conversion of the Notes in whole or in part if the closingbid price of the Company's common stock exceeds $0.50 for a period of 20consecutive trading days. Certain members of senior management of GentaIncorporated participated in this offering. The Notes are secured by a firstlien on all assets of Genta. The Notes include certain events of default,including a requirement that the Company obtain stockholder approval within aspecified period of time to amend its certificate of incorporation toauthorize additional shares of common stock.
Rodman & Renshaw, LLC, a wholly-owned subsidiary of Rodman & RenshawCapital Group, Inc. (Nasdaq: RODM) served as the exclusive placement agent forthe offering.
"We view this transaction as a transforming financial event for ourCompany that will enable us to achieve key programmatic milestones," said Dr.Raymond P. Warrell, Jr., Genta's Chairman and Chief Executive Officer. "Webelieve this financing will allow us to fully enroll the ongoing Phase 3AGENDA trial of Genasense in melanoma, to pursue regulatory actions related tothe use of Genasense in chronic lymphocytic leukemia, and to make substantialprogress in advancing our pipeline of clinical oncology products. We haverecently undertaken a number of steps to reduce costs, and we greatlyappreciate the votes of confidence in our Company by key biotech investors inthis offering."
This press release is not an offer to sell or the solicitation of an offerto buy, nor shall there be any sales of the securities in any jurisdiction inwhich such offer, solicitation, or sale would be unlawful prior to theregistration or qualification under the securities laws of any suchjurisdiction. The Notes were offered only to qualified institutional buyersunder Rule 144A, to persons outside the Unites States under Regulation S, andto Accredited Investors under Rule 501.
The Notes offered and the common stock issuable upon conversion have notbeen registered under the Securities Act of 1933, as amended, or any statesecurities laws, and may not be offered or sold in the United States absentregistration or an applicable exemption from registration requirements.
Genta Incorporated is a biopharmaceutical company with a diversifiedproduct portfolio that is focused on delivering innovative products for thetreatment of patients with cancer. Two major programs anchor the Company'sresearch platform: DNA/RNA-based Medicines and Small Molecules. Genasense(R)(oblimersen sodium) Injection is the Company's lead compound from its DNA/RNAMedicines program. Genta is currently recruiting patients to the AGENDATrial, a global Phase 3 trial of Genasense in patients with advanced melanoma.The leading drug in Genta's Small Molecule program is Ganite(R) (galliumnitrate inje