BEVERLY, MA–(Oct 28, 2013) -Cellceutix Corporation (OTCQB: CTIX) (the “Company”), a clinical stage biopharmaceutical company focused on discovering, developing and commercializing drugs to treat unmet medical conditions, today announced that it has entered into a new $20 million common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”), an Illinois limited liability company. Under the new agreement, Aspire Capital has committed to purchase up to $20 million of Cellceutix’s common stock over the next three years at prices based on the market price at the time of each sale. Cellceutix intends to use the net proceeds from the Purchase Agreement primarily for ongoing clinical trials and initiation of new clinical trials, as well as general working capital.
On December 6, 2012, the Company had entered into a similar $10 million common stock purchase agreement with Aspire Capital. Pursuant to that agreement, the Company sold the full $10 million of its shares to Aspire Capital and it has been terminated in accordance with its terms. The combination of cash on hand from a prior $10 million agreement with Aspire Capital and this new $20 million Purchase Agreement, significantly enhance the financial strength and flexibility for Cellceutix to meet its goals in conducting clinical trials in 2014 and beyond for its anti-cancer drug Kevetrin, anti-psoriasis drug Prurisol, and antibiotic Brilacidin.
“We are extremely pleased with the favorable financing terms from Aspire Capital and the long-term, committed interest that they have taken in our Company,” says Leo Ehrlich, Chief Executive Officer at Cellceutix. “As with the first agreement, we are in control as to when shares are purchased by Aspire, providing us with a valuable tool for accessing capital as we further develop our pipeline. This gives our Company solid financial footing heading into 2014, a year which we are optimistic that we will be exploring partnering opportunities.”
“Cellceutix has continued to impress us with the strength of its pipeline and the savvy business sense of the management team,” commented Steven G. Martin, Managing Member of Aspire Capital. “Cellceutix’s acquisition of the assets of PolyMedix in September came at what we consider an incredibly low purchase price, one that we feel has yet to be fully factored into the Company’s valuation. The timing was right for us to increase our commitment to and investment in Cellceutix as we believe 2014 will represent a transformational year for the Company.”
Key aspects of Purchase Agreement include:
1. The Company controls the timing and amount of any sales of common stock to Aspire Capital at a known price; Aspire Capital cannot require the Company to make sales, but is obligated to make purchases as the Company directs in accordance with the terms of the agreement; and No limitations on use of proceeds, financial covenants, restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages.
2. A more complete and detailed description of the transaction is set forth in the Company’s Current Report on Form 8-K, filed today with the U.S. Securities and Exchange Commission.