SAN DIEGO, April 5, 2013 /PRNewswire/ -- Cardium Therapeutics (NYSE MKT: CXM) today announced that it has entered into a definitive agreement with a single institutional healthcare fund managed by Sabby Management LLC ("Sabby"), the Company's largest shareholder, for a financing of up to $4.0 million in gross proceeds. Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc., served as the exclusive placement agent on the transaction.
"We are pleased by Sabby's additional investment in the Company, and with this financing we look forward to further building Cardium's medical opportunities portfolio, including our FDA-cleared Excellagen product which is now being introduced into targeted wound care markets," stated Christopher J. Reinhard, Cardium's Chairman and CEO.
Under the terms of the agreement, Cardium will issue up to 4,012 shares of zero coupon Series A Convertible Preferred Stock, which are non-voting. Each share of Series A Preferred Stock has a purchase price and liquidation preference of $1,000 per share while held as preferred stock, or they may be converted into 10,989 shares of voting common stock, subject to certain conversion adjustments and conditions as set forth in the certificate of designation, including a limitation which provides that the investor's ownership position in common stock cannot exceed 9.99% of Cardium's current outstanding shares of common stock.The company also reported that in view of the proposed financing, the NYSE MKT, which is the Company's current listing exchange has granted an additional quarterly extension of the Company's listing exchange compliance plan from March 30, 2013 to June 30, 2013, although as is normal course the Company's exchange compliance would continue to be evaluated on an ongoing basis. The initial closing covering the sale of 2,356 shares of Series A preferred stock, of approximately $2.35 million in gross proceeds, which is subject to the satisfaction of customary closing conditions, is expected to be completed on or about April 9, 2013. The second closing, covering the sale of 1,656 shares of Series A preferred stock, for an additional amount of approximately $1.65 million in gross proceeds, is contingent upon stockholder approval. In connection with the Securities Purchase Agreement, and in furtherance of the Company's NYSE MKT exchange listing compliance, Cardium has also agreed to seek stockholder approval for the company to effect a reverse stock split of its issued and outstanding common stock. The Company plans to submit proposals to approve the sale of the second tranche of 1,656 shares of Series A Preferred Stock and authorization for the proposed reverse stock split of its issued and outstanding common stock at Cardium's upcoming annual meeting of stockholders. A more complete description of the terms and conditions of the financing will be available in the Form 8-K to be filed by the Company with the Securities and Exchange Commission. The net proceeds from this transaction will be used for general working capital purposes. The preferred stock described above is being offered by the Company pursuant to a shelf registration statement that was filed by Cardium Therapeutics with the Securities and Exchange Commission (the "SEC") and declared effective by the SEC on August 27, 2010. A prospectus supplement related to the offering was filed with the SEC on April 5, 2013. Copies of the prospectus and accompanying prospectus supplement relating to the offering may be obtained from the SEC's website at http://www.sec.gov, or by request from Ladenburg Thalmann & Co., Inc., 4400 Biscayne Blvd., 14th Floor, Miami, Florida 33137. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the Company's securities. No offer, solicitation, or sale will be made in any jurisdiction in which such offer, solicitation, or sale is unlawful. The terms and conditions of the transactions described in this press release are qualified in their entirety by reference to the transaction documents, which will be filed with the SEC on Form 8-K.