NEWTON, Mass.--(BUSINESS WIRE)--Jan. 17, 2006--Matritech (AMEX: MZT), a leading developer of protein-based diagnostic products for the early detection of cancer, today announced that it has closed a $7.0 million private placement of 15% Secured Convertible Promissory Notes maturing January 13, 2009 (the “Notes”). The financing was led by current investor SDS Capital Partners who was joined by H&Q Life Science Investors along with other current investors. The Notes are currently convertible into 10,766,092 shares of common stock and allow for payment of interest and principal in cash or, provided certain conditions are met, by issuing stock. Until stockholder approval of certain provisions in the Notes and Warrants is received by the Company, stock issuances may not be made at an effective conversion price below $0.61, the closing price of the Company’s common stock on January 12, 2006. Issued to the purchasers of the Notes were five-year warrants to purchase 6,459,655 shares of common stock at an exercise price of $0.67 per share and placement agents received warrants to purchase 1,036,609 shares of common stock at an exercise price of $0.65 per share (the “Warrants”). Certain anti-dilution provisions of both the Notes and the Warrants are also subject to stockholder approval. The Company intends to present these matters, including a request for an increase in authorized shares, to its stockholders for approval on or before June 15, 2006. Matritech has agreed to file a registration statement with the Securities and Exchange Commission covering the resale from time to time of the shares of the common stock into which the Notes are convertible and which may be issued upon exercise of the Warrants.
