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The new Notes would have a $32.65 million initial principal balance andfeature a make-whole provision entitling the holder, upon any conversion ofthe Notes, to receive the interest payable through scheduled maturity, lessany interest paid before conversion.
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The Company has also agreed to repurchase from the investor, forapproximately $29 million, approximately $30 million aggregate principalamount of outstanding 15% Convertible Senior Notes, Series B 18.33%Convertible Senior Notes and 9.66% Convertible Senior Notes (collectively, the"Repurchased Notes") that were issued in June, August and October 2008,respectively. For such repurchase, the Company will use approximately $16.4million of the proceeds from the offering of the new Notes, plus funds to bereleased to the Company from the escrow account that was established to paythe make-whole and interest payments on the Repurchased Notes. Warrants topurchase approximately 5.15 million shares of common stock which are held bythe investor are also being surrendered to the Company and will be cancelled.The Company expects to receive net proceeds of approximately $16.3 millionfrom the new Notes (before payment of fees and expenses), after the repurchaseof the Repurchased Notes and prior to depositing approximately $9.8 million inescrow for the new Notes' make-whole provision. The new Notes will rank equalin right of payment with all existing and future unsecured senior indebtednessof the Company.
In addition, the Company obtained a conditional put option to require theinvestor to purchase up to $6 million of its Series C 10% Convertible Notes(the "C Notes"), related to a tender offer for up to $124 million principalamount of the Company's outstanding convertible notes that the Company maycommence in the near future. If the Company receives tenders of at least $62million of its outstanding convertible notes, it has the option to require theinvestor to purchase $3 million principal amount of the C Notes, and if theCompany receives tenders of at least $93 million of its outstandingconvertible notes, it has the option to require the investor to purchase $6million principal amount of the C Notes. The C Notes would have substantiallythe same terms as the Notes.
Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group,Inc. (Nasdaq: RODM), acted as the exclusive placement agent for thetransaction.
A prospectus supplement relating to the new Convertible Senior Notes to beissued in the offering has been filed with the Securities and ExchangeCommission. Copies of the prospectus supplement and accompanying baseprospectus may be obtained directly from Cell Therapeutics, Inc., 501 ElliottAvenue West, Suite 400, Seattle, Washington 98119.
This announcement is neither an offer to sell nor a solicitation of anoffer to buy any of these securities and shall not constitute an offer,solicitation or sale in any jurisdiction in which such offer, solicitation orsale is unlawful.
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 Company continues to have a substantial amount of debt outstandingand the quarterly interest expense associated with the debt is significant;the Company's operating expenses continue to exceed its net revenues and theCompany will continue to need to raise capital to fund its operating expenses;as well as other risks listed or described from time to time in the Company'smost recent filings with the SEC on Forms 10-K, 8-K and 10-Q. Except asrequired by law, the Company does not intend to update any of the statementsin this press release upon further developments.Media Contact: Dan Eramian T: 206.272.4343 C: 206.854.1200 E: [email protected] http://www.CellTherapeutics.com/press_room Investors Contact: Ed Bell T: 206.272.4345 Lindsey Jesch Logan T : 206.272.4347 F : 206.272.4434 E: [email protected] http://www.CellTherapeutics.com/investors
SOURCE Cell Therapeutics, Inc.
