GLEN ALLEN, Va., Dec. 31, 2013 /PRNewswire/ -- Star
Scientific, Inc., (NASDAQ: STSI) announced that today it has
entered into a Letter of Intent for a $15
million Credit Facility with Jonnie
R. Williams, Sr. the Company's founder and its former
CEO. The Credit Facility extends through April 15, 2015.
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Under the Credit Facility, the Company can borrow up to
$10 million without shareholder
approval. The remaining $5 million
under the Credit Facility may require shareholder approval under
the NASDAQ Rules.
Borrowings under the Credit Facility will be evidenced by an
unsecured, two-year corporate note ("Note") bearing interest at 5%
per annum. Notes under the Credit Facility will be
convertible into Common Stock at $1.25 per share, (the closing bid price for the
Company's common stock on December 30,
2013, the day prior to the execution of the Letter of
Intent), together with an equal number of warrants to purchase
Common Stock at the same price. As consideration for the
Credit Facility, the Company agreed to issue 6 million warrants
with a strike price of $1.25.
The closing and availability of the Credit Facility is subject
to NASDAQ approval in accordance with Rule 5250(e), execution of
definitive agreements and satisfaction of customary closing
conditions. The transaction is scheduled to close upon
completion of NASDAQ review, but no later than January 31, 2014.
Certain statements contained in this release constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to statements identified by words such as
"believes," "expects," "anticipates," "estimates," "intends,"
"plans," "targets," "projects" and similar expressions. The
statements in this release are based upon the current beliefs and
expectations of our company's management and are subject to
significant risks and uncertainties. Actual results may differ from
those set forth in the forward-looking statements. Numerous factors
could cause or contribute to such differences, including, but not
limited to, results of clinical trials and/or other studies, the
challenges inherent in new product development initiatives,
including the continued development and market acceptance of our
nutraceutical dietary supplements products, the effect of any
competitive products, our ability to license and protect our
intellectual property, our ability to raise additional capital in
the future that is necessary to maintain our business, changes in
government policy and/or regulation, potential litigation by or
against us, any governmental review of our products or practices
and the outcome of the ongoing investigations as well as other
risks discussed from time to time in our filings with the
Securities and Exchange Commission, including, without limitation,
our annual report on Form 10-K for the fiscal year ended
December 31, 2012 and our quarterly
reports on Form 10-Q for the quarters ended March 31, 2013, June 30,
2013, and September 30, 2013.
We undertake no duty to update any forward-looking statement or any
information contained in this press release or in other public
disclosures at any time.
Contact:
Talhia T. Tuck
Vice President, Communications and Investor Relations
Star Scientific, Inc.
(202)887-5100
ttuck@starscientific.com
SOURCE Star Scientific, Inc.