PlanetRx Gets Financing

Online drug store PlanetRx.com said that it signed an agreement to get as much as $50 million in equity financing, sending its stock soaring more than 100%. The beleaguered San Francisco-based company said it will get as much as $50 million in the form of an equity line from Alpha Venture Capital Inc., a member of the Alpha Group of Funds, that can be used based on a formula related to trading volume and the price of PlanetRx.com’s common stock. Under the terms of the financing, the company will issue its common shares at a discount not to exceed 9% off the average closing market price as the equity line is used. PlanetRx.com has one year to use the financing, with an automatic one-year extension, if at least 20%, or $10 million, is drawn down in the first year. Last month, the company cut 15% of its work force in an effort to cut costs. Shares of PlanetRx, which hit a 52-week low of 78 cents on July 13, shot up 84 cents to close at $1.75 on Nasdaq.