Genta Incorporated (OTCBB: GNTA) announced today that the Company has closed a second tranche of a previously announced offering with institutional investors to place Units consisting of 30% of Common Stock and 70% of Unsecured Subordinate Convertible Notes totaling $7 million in gross proceeds before fees and expenses. In connection with the sale of the Units, the Company also issued to the investors two-year warrants to purchase Common Stock in an amount equal to 25% of the number of shares of Common Stock issuable upon conversion of the Notes purchased by each investor. Closing of the first tranche of $3 million of Units under this Offering occurred on July 7, 2009. In a separate transaction, the Company closed an additional $3 million Offering with institutional investors on the same terms and conditions as the $7 million tranche, for an aggregate total from both closings of $10 million.
In these Offerings, shares of Common Stock in the Units were sold at the price of $0.10 per share. The two-year Notes bear interest at an annual rate of 8% payable at semi-annual intervals in cash or in notes with similar terms at the Company’s option. The Notes will be convertible into shares of Genta common stock at a conversion rate of 10,000 shares of common stock for every $1,000.00 of principal. The Company shall have the right to force conversion of the new Notes, and all other outstanding senior secured notes, if the closing bid price of the Company’s common stock exceeds $0.50 for a period of 10 consecutive trading days and certain other conditions are met.
Dr. Raymond P. Warrell, Jr., Genta’s Chief Executive Officer, noted: “The proceeds of these Offerings provide funding of the Company into 2010 and ensure our ability to analyze and release the primary data from AGENDA, our randomized Phase 3 trial of Genasense® in patients with advanced melanoma. We continue to anticipate release of these results in the fourth quarter of this year.”