Monday April 6, 9:54 am Eastern Time
biz.yahoo.com
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CardioTech International, Inc. Completes Private Placement With Dresdner Kleinwort Benson Private Equity Partners LP
WOBURN, Mass., April 6 -- CardioTech International, Inc. (Amex: CTE - news) announced today that it has received financing of up to $2.5 million from Dresdner Kleinwort Benson Private Equity Partners LP. The financing is in the form of 7% Senior Convertible Notes, with a term of five years.
The initial round of financing was in the amount of $1,660,000. Subsequent rounds of financing of up to an aggregate additional $840,000 may take place if the Company meets certain strategic and/or research and development milestones prior to September 30, 1998.
The Notes will accrue interest at a rate of 7.0% per annum, payable quarterly in cash and/or additional Notes, at the option of Dresdner Kleinwort Benson Private Equity Partners LP. The Notes will rank senior to all other securities of the Company upon liquidation. At any time prior to maturity, Dresdner Kleinwort Benson Private Equity Partners LP may convert the Notes, in whole or in part, plus accrued interest, into shares of Common Stock at a conversion price of $1.995. The conversion price is subject to a weighted average anti-dilution adjustment.
Prior to maturity, the Notes are redeemable at a premium in cash, in whole or in part, at the Company's option. Upon the occurrence of a change of control, Dresdner Kleinwort Benson Private Equity Partners LP may require that the Company repurchase the Notes at a premium. At maturity and under certain conditions, the Company may repay the Notes, plus accrued interest, by converting them, in whole, into shares of Common Stock at the conversion price. Up to 854,582 shares of Common Stock may be issued to Dresdner Kleinwort Benson Private Equity Partners LP pursuant to the conversion, redemption or repayment of the Notes. The balance of any amounts due will be paid in cash, based upon the market price of the shares of Common Stock not issued.
Dr. Michael Szycher, CEO of CardioTech stated, ''We are pleased with the confidence that Dresdner Kleinwort Benson has placed in the research and technology of CardioTech. We believe that this round of financing will enable us to complete our European clinical trial on the Vasculinky Vascular Access Graft and the filing of a complete application for CE Marking in Europe. Additionally, it provides funds for further manufacturing development and clinical research for CardioTech's second product in development, the MyoLinky Peripheral Arterial Bypass Graft.''
Dr. Szycher also stated ''In connection with the Dresdner Kleinwort Benson Private Equity Partners LP investment, we have expanded our Board of Directors to five members and appointed Jonathan S. Walker, Executive Vice President of Dresdner Kleinwort Benson North America LLC, to fill the vacancy. I regard Mr. Walker's long experience in both domestic and international banking as a compliment to the experienced and talented members currently on the Board of Directors.''
Dresdner Kleinwort Benson Private Equity Partners LP, a Small Business Investment Company (SBIC), was formed to invest the Dresdner Bank Group's capital in private equity transactions in the United States. Dresdner Kleinwort Benson, the global investment banking arm of the Dresdner Bank Group, presently manages approximately $2.0 billion in private equity investments worldwide, of which $550 million is invested throughout the United States.
CardioTech International, Inc., with operations in Woburn, MA and Tarvin, Cheshire, U.K., designs and manufactures polyurethane-based vascular graft devices for the treatment of late-stage cardiovascular disease. Additionally, the Company synthesizes and manufactures medical grade polyurethanes for use in the development of implantable medical devices.
The Company believes that this release may contain forward-looking statements that are subject to risks and uncertainties. Such statements are based on management's current expectations and are subject to a number of factors that could cause actual results to differ materially from the forward- looking statements. The Company cautions investors that there can be no assurance that the actual results will not differ materially from those projected or suggested in such forward-looking statements, as a result of various factors, including but not limited to the following: the timely development of products by the Company, the Company's ability to obtain financing to support its working capital needs, intense competition related to the development of synthetic grafts and difficulties inherent in developing synthetic grafts. As a result, the Company's further development involves a high degree of risk. |
