BERKELEY HEIGHTS, N.J.
Authentidate Holding Corp.
(Nasdaq: ADAT), a worldwide provider of secure health information exchange, workflow management services and telehealth solutions, today announced that it has entered into definitive agreements for the purchase of
of units of its securities in a private placement financing with a select group of institutional and accredited investors. In the aggregate, the company will sell 1,250,000 units consisting of a total of 7,500,000 shares of common stock, 1,250,000 shares of Series C 15% Convertible Redeemable Preferred Stock, and warrants to purchase an additional 6,250,000 shares of common stock at a price of
per unit. Each unit consists of six shares of common stock, one share of Preferred Stock and five warrants.
The shares of Preferred Stock have a cumulative dividend of 15% and will automatically convert into approximately 5,000,000 shares of common stock at the initial rate of
per share immediately upon the company's stockholders' approval of such conversion under applicable NASDAQ Listing Rules. If the shares of Preferred Stock are not converted into common stock on or prior to the 18 month anniversary of the closing date, the company is required to redeem all of the shares of Preferred Stock for an aggregate amount of
, plus accrued but unpaid dividends. The warrants will be exercisable for a period of 54 months following the six month anniversary date of the closing at an initial exercise price of
"Concerns over access to capital have impacted the implementation of our business strategy during the last fiscal year so the importance of this financing cannot be underestimated," said
, President of Authentidate. "We believe that this transaction provides the company with sufficient capital to continue our business plans for at least the next 12 months."
The company expects net proceeds at closing of approximately
after the deduction of offering expenses. Funding from the financing will be used for general corporate purposes and working capital, including the rollout of its telehealth products and services. The transaction is expected to close on or about
October 13, 2010
, subject to the satisfaction of certain customary closing conditions.
& Company acted as the sole placement agent for this transaction.
The securities sold in this private placement have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or applicable state securities laws, and accordingly may not be offered or sold in
the United States
except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. The company has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock issued in this private placement and the shares of common stock issuable upon the exercise of the warrants and conversion of the Preferred Stock issued in the private placement.
This release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state. Any offering of the securities under the resale registration statement will only be by means of a prospectus.