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"This is a new chapter for MiddleBrook," stated John Thievon, presidentand CEO. "We will be commercializing the business to bring MOXATAG to market.The product has tremendous market potential, as do our proprietary PULSYSpipeline products."
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At today's special meeting of stockholders, MiddleBrook shareholdersoverwhelmingly approved:
-- the issuance to EGI of 30,303,030 shares of MiddleBrook common stockand a five-year warrant to purchase an aggregate of 12,121,212 shares ofcommon stock at an exercise price of $3.90 per share, for an aggregatepurchase price of $100 million; and
-- an amendment to the MiddleBrook Pharmaceuticals, Inc. Stock IncentivePlan to increase the number of shares of common stock reserved for issuancethereunder by 7,000,000 shares, from 9,348,182 shares to 16,348,182 shares,and to increase the maximum number of shares of common stock that may begranted as awards under the plan during any one fiscal year to any oneindividual from 1,000,000 shares to 3,000,000 shares.
Of the approximately $100 million of gross proceeds received from EGI,MiddleBrook has used (i) approximately $11 million to repurchase its Keflexassets previously sold to certain funds affiliated with Deerfield Management,and to terminate its ongoing royalty obligations to certain Deerfieldentities, and (ii) approximately $8.8 million to redeem warrants to purchasean aggregate of 3.0 million shares of common stock from certain Deerfieldentities. The Company intends to use the balance of the proceeds to supportthe creation of a sales and marketing infrastructure supporting the commerciallaunch of MOXATAG(TM), for restarting the clinical development of its once-daily PULSYS(R) version of Keflex(R) and the pediatric version of itsAmoxicillin PULSYS product which were previously on-hold, and for workingcapital and general corporate purposes.
As part of the agreement with EGI, John Thievon will replace Edward M.Rudnic, Ph.D. as MiddleBrook's President and CEO and will also assume his seaton the Company's Board of Directors. In addition, David Becker has beenappointed as MiddleBrook's Executive Vice President, Finance and CFO,replacing Robert C. Low as MiddleBrook's principal financial officer. Dr.Rudnic and Mr. Low will continue to serve as consultants to the Company.MiddleBrook has also expanded the size of its Board of Directors from seven tonine members, adding new directors William C. Pate and Mark Sotir, bothManaging Directors at Equity Group Investments, L.L.C.
The shares of common stock proposed to be issued to EGI and the sharesissuable upon the exercise of the related warrant will not be registered underthe Securities Act of 1933, as amended, or state securities laws, and may notbe offered or sold in the United States without being registered with theSecurities and Exchange Commission ("SEC") or through an applicable exemptionfrom SEC registration requirements. The shares and warrants were offered andsold only to EGI. MiddleBrook has agreed to file a registration statement withthe SEC covering the resale of the shares, the shares underlying the warrantand any additional shares of common stock that may be issued to or purchasedby EGI or its permitted transferees after the date of the closing.
ABOUT EQUITY GROUP INVESTMENTS, L.L.C.:
Equity Group Investments, L.L.C. is a Chicago-based privat
