Cell Therapeutics (NASDAQ:CTIC) is seeing shares trade with greater than usual volume today after it announced its agreement to sell $20 million in preferred stock shares and warrants to purchase shares of common stock in a registered offering to two institutional investors.
Each preferred stock shares is convertible at the option of the holder at any time, into about 870 shares of common stock at a conversion price of $1.15 per share, for a total of just under 17.4 million shares of common stock.
The investors received warrants to purchase up to about 6.95 million shares of common stock at an exercise price of $1.45 per warrant share, for potential additional proceeds to the company of about $10.1 million upon exercise of the warrants for cash.
Cell Therapeutics said it intends to use net proceeds from the offering for general corporate purposes, including paying interest on or retiring outstanding debt and funding research and development, preclinical and clinical trials, and the preparation and filing of new drug applications.
The biopharma company may also use the proceeds for possible investments in or acquisitions of complementary businesses or technologies.
Rodman & Renshaw (RODM) was the exclusive placement agent for the offering.
Cell Therapeutics shares are trading lower following the offering news.
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