Microfluidics Intl (fka MFLU)

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Microfluidics International Corporation Announces $5.0 Million Convertible Debt Financing
Friday November 14, 4:02 pm ET


NEWTON, Mass.--(BUSINESS WIRE)--Microfluidics International Corporation (OTCBB: MFLU - News) announced today that the Company has secured $5.0 million of financing via a convertible debenture from a strategic investor.
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“This financing provides significant working capital to support the Company’s strategic plan for growth, including research and development initiatives to bring new products and services to the market for our customers,” said Michael C. Ferrara, President and Chief Executive Officer of Microfluidics.

The convertible debenture has a seven-year term with an annual interest rate of 9%. The holder of the debenture, at its option, may elect to convert the debt into Microfluidics common stock at a price per share of $1.25. In addition to the debt, warrants were issued to the holder to purchase additional common stock of the Company. The warrants are in two tranches which, if exercised, could provide approximately $20.0 million in additional financing to Microfluidics. The first tranche is exercisable in whole or in part at $2.00 per share for up to a 40% equity stake in the Company and the second tranche is exercisable in whole or in part at $3.00 per share for up to a 50% equity stake in the Company, assuming full conversion of the convertible debenture. As part of the agreement, the holder is entitled to a seat on the Microfluidics Board of Directors.

“In these economic times, we believe securing our financial future is a required step on behalf of all our stakeholders,” said Brian E. LeClair, Executive Vice President and Chief Financial Officer of Microfluidics. “Obtaining additional financing through this convertible debenture was the next step in building our capital structure and meets our working capital requirements to finance the growth of the Company.”

Microfluidics was advised by Covington Associates, a specialty investment banking firm serving consumer, business service, industrial, healthcare and technology companies throughout the country.