This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cell Therapeutics Announces Institutional Investor To Purchase $40 Million Of Convertible Preferred Stock And Warrants To Purchase Common Stock

Stocks in this article: CTIC









SEATTLE, May 29, 2012 /PRNewswire/ -- Cell Therapeutics, Inc. ("CTI") (Nasdaq and MTA: CTIC) today announced that it has entered into an agreement to sell, subject to customary closing conditions, $40 million of shares of its Series 15 Convertible Preferred Stock and warrants to purchase shares of its common stock (and the shares of common stock issuable from time to time upon conversion of the Series 15 Convertible Preferred Stock and exercise and exchange of the warrants) in a registered offering to an institutional accredited investor (the "Initial Purchaser") in two $20 million tranches (the "Offering"). 

CTI plans to use the net proceeds from the Offering to finance the purchase price and related fees and expenses of the acquisition of pacritinib from S*BIO Pte Ltd., for which Jefferies & Company, Inc. was the financial advisor to CTI.  CTI also plans to use the net proceeds from the Offering for activities related to preparing for the commercial launch of Pixuvriâ„¢ in the European Union and for general corporate purposes, which may include, among other things, funding research and development, preclinical and clinical trials, the preparation and filing of new drug applications, the acquisition of complementary businesses, technologies or products and general working capital.

CTI expects to initially issue 20,000 shares of Series 15 Convertible Preferred Stock (the "Series 15-1 Preferred Stock") (convertible into an aggregate of 20,000,000 shares of common stock issuable from time to time upon conversion at a conversion price of $1.00 per share) and warrants to purchase up to an aggregate of 13,333,333 shares of common stock with an exercise price per share of $1.092 on or around May 29, 2012 (the "Initial Closing") for gross proceeds of $20 million.

Subject to certain terms and conditions, the Initial Purchaser has also agreed to purchase and CTI has agreed to sell a second tranche of 20,000 shares of Series 15 Convertible Preferred Stock (the "Series 15-2 Preferred Stock," and together with the Series 15-1 Preferred Stock, the "Series 15 Preferred Stock"), and warrants to purchase shares of common stock on the 60th day after the Initial Closing for gross proceeds of $20 million (the "Second Closing").  The exercise price of the warrants issued in the Second Closing will equal a 20% premium to the closing bid price of CTI's common stock on The NASDAQ Capital Market calculated one trading day prior to the date of the Second Closing.  The conversion price of the Series 15-2 Preferred Stock shall equal the closing bid price of CTI's common stock on The NASDAQ Capital Market calculated one trading day prior to the date of the Second Closing, plus $0.08375

In the event that on the date of the Second Closing, the Initial Purchaser is unable to purchase the entire $20 million because it would cause the Initial Purchaser to own more than 9.9% of CTI's common stock or due to CTI restrictions on issuance, the Initial Purchaser has agreed to fund a minimum of $10 million and in any event the maximum amount of the $20 million the Initial Purchaser can fund under these restrictions. CTI will be subject to restrictions on the sale of securities through 30 days after the date of the Second Closing, subject to certain exceptions.  If the Initial Purchaser is unable to fund the entire remaining unfunded balance of the $20 million within 30 days from the Second Closing, CTI will not be subject to any restriction on the issuance of additional securities upon the expiration of such 30 day period.

The Series 15 Preferred Stock will automatically convert into shares of common stock in certain circumstances.  The Series 15 Preferred Stock will receive dividends in the same amount as any dividends declared and paid on shares of common stock and will have no voting rights on general corporate matters.  All of the warrants issued in the Offering are exercisable beginning on or after the date of issuance and expire five years after the date of issuance.  If the stock price is less than the exercise price, the warrants may also be exchanged for shares based on a specified Black-Scholes value formula subject to certain limitations.  CTI may instead elect to pay all or some of such value in cash.  If CTI elects not to pay in cash, is unable to issue sufficient shares without shareholder approval and has not obtained shareholder approval within 90 days after an exchange notice is received, CTI will issue a note for the unpaid portion of the value payable one year thereafter.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs