EXCLUSIVE: Alzamend Neuro To Raise Up To $25M Via Private Placement Of Preferred Shares

On Thursday, Alzamend Neuro Inc ALZN entered into a Securities Purchase Agreement with an institutional investor for the purchase and sale of 50 shares of its Series A Convertible Preferred Stock, the stated value of $10,000 per share in a registered direct offering, for $500,000.

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Additionally, the Investor agreed to purchase up to an additional 2,450 Preferred Shares, of which 50 shares will be purchased at the initial closing and the remaining Preferred Shares over some time, as outlined in the Agreement, for an aggregate purchase of up to $25 million of Preferred Shares.  

Each Preferred Share shall be convertible at a conversion price equal to the greater of (i) $0.25 per share (the "Floor Price") which Floor Price shall, except for voting rights purposes, be adjusted for stock dividends, stock splits, stock combinations and other similar transactions, and (ii) the lesser of (A) $1.50 and (B) 80% of the lowest closing price of the Common Stock during the three trading days immediately before the date of conversion.

The Preferred Shares shall pay a dividend at an annual rate of 15%.

Further, the Investor will receive unregistered warrants to purchase up to 20 million shares, presuming that the full amount of the Preferred Shares is sold, be immediately exercisable for five years at $1.25 per share.

The proceeds from the Financing will be used to initiate additional clinical trials by Alzamend for its two product candidates and general working capital purposes.

Tuesday, Alzamend Neuro terminated its "at-the-market" equity offering program to limit uncertainty and unfavorable dilution for its stockholders.

Price Action: ALZN shares closed at $0.53 on Wednesday.