Boston, MA November 14, 2008 Microfluidics International Corporation (OTCBB: MFLU) announced today that the Company has secured $5 million of financing via a convertible debenture from a strategic investor.
"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 million in additional financing to Microfluidics. The first tranche is exercisable in whole or in part at $2 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 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.
About Microfluidics International Corporation
Microfluidics International Corporation, through its Microfluidics Division, designs, manufactures and distributes patented and proprietary high performance Microfluidizer® materials processing and formulation equipment to the biotechnology, pharmaceutical, chemical, cosmetics and ink jet ink industries. Microfluidics International Corporation applies its 20 years of high pressure processing experience to produce the most uniform and smallest liquid and suspended solid particles available and has provided manufacturing systems for nanoparticle products for more than 15 years.
To learn more about Microfluidics, visit www.microfluidicscorp.com.
About Covington Associates LLC
Covington Associates is a specialty investment banking firm founded in 1991 serving business service, consumer, industrial, healthcare, and technology companies throughout the country. Focused on mergers and acquisitions, debt and equity capital raising, debt and equity restructuring, and strategic advisory assignments for middle market companies, Covington Associates has completed transactions ranging in value from $10 million to over $1billion for both private and publicly traded companies.
To learn more about Covington Associates, visit www.covingtonassociates.com.
Covington Associates LLC