Generex Biotechnology Corp. is selling 115,000 of the company's preferred stock to partially fund the acquisition of a controlling interest in Emmaus Life Sciences Inc.
An institutional investor has agreed to buy 109,000 series H and 6,000 series I preferred stock for a total investment of $115 million. The stocks convert into common shares at $2.50 apiece.
The series H shares are to be sold in four tranches.
The first tranche comprising 3,000 H shares closed March 28. It generated gross proceeds of $3 million, which were used to pay a deposit to Emmaus Life Sciences in accordance with a Jan. 16 letter of intent.
Proceeds from the remaining three Series H share tranches will be used for general working capital needs, acquisitions, and research and development of the Canada-based biotechnology company's buccal drug delivery and immunotherapeutic platform technologies.
From the series I shares placement, which is to close April 17, Generex is expected to receive $6 million. This will be used to partly finance the Emmaus acquisition.
Generex amended its deal terms with Emmaus after it missed a payment deadline.
Proceeds from the remaining three series H share tranches will be used for general capital needs, acquisitions, and research and development of the Canada-based biotechnology company's buccal drug delivery and immunotherapeutic platform technologies.
Generex COO and board member Andrew Greene has an affiliation with the investor and has recused himself from the consideration and approval of the placement.