Shares of Aethlon Medical Inc. (OTCBB: AEMD) were up today on news from yesterday about its $8.4 million deal with Fusion Capital Fund II, LLC. Aethlon shares were up 8 cents to 80 cents on volume of about 110 thousand shares.
Aethlon announced yesterday that it entered into an $8.4 million common stock purchase agreement with Fusion Capital, a Chicago-based institutional investor. The company has agreed to sell Fusion Capital $400 thousand of its common stock on the date they file a registration statement – covering the shares of this deal – with the Securities and Exchange Commission (SEC).
Aethlon may then sell an additional $8 million of its common stock from time to time over a 25-month period after the SEC has declared the registration statement effective. Aethlon will use the proceeds to advance the commercialization of its Hemopurifier treatment technology. The Hemopurifier is a broad-spectrum treatment for drug and vaccine resistant bioweapons, naturally evolving pandemic threats, and chronic infectious disease targets including Hepatitis-C and the Human Immunodeficiency Virus.
These are the terms of the purchase agreement. Aethlon may sell common stock to Fusion Capital from time to time in amounts between $32 thousand and $1 million for up to $8 million. The purchase price will be based on market prices at the time of the transaction without any discount. Aethlon controls the timing and amount of shares to be issued to Fusion Capital. Also, Fusion Capital has agreed not to engage in any direct or indirect shorting or hedging of Aethlon common stock.
In a press release from yesterday, James A. Joyce, chairman and chief executive of Aethlon said “We are pleased to renew our long standing relationship with Fusion Capital. The agreement provides us with reasonable terms, the flexibility to execute other transactions, and the ability to sell our shares to Fusion Capital when we determine the share price is most advantageous for the Company.”
This type of financing is most commonly referred to as an equity line. This is a favorable financing vehicle for companies like Aethlon who are developing a new technology. It allows the company great flexibility and access to a large amount of capital on an as needed basis.
