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CytRx to sell shares in direct offering

CytRx Corp. agreed to sell common shares to existing institutional investors for 42 cents per share in a registered direct offering.

Under the agreement, if beneficial ownership exceeds 4.99% because of the transaction, investors have an option to acquire series B convertible preferred stock instead of common stock. The preferred stocks have a conversion price of 42 cents and no dividend rights.

Additionally, warrants purchased in July will have an amended exercise price of 50.55 cents per share, exercisable within an extended 12 months.

The offering is expected to generate net proceeds of about $7.4 million, which CytRx plans to use for working capital and general corporate purposes.

The transaction is expected to close Dec. 16, subject to customary closing conditions.

Rodman & Renshaw, a unit of H.C. Wainwright & Co., is the offering's exclusive placement agent.