PharmaPrint Gets $1.5-Million Infusion
Struggling PharmaPrint Inc., the Irvine herbal supplements maker that lost its only major customer last year, has raised $1.5 million by selling shares to an investment company.
PharmaPrint announced Wednesday that Capital Alert Investments Ltd., a subsidiary of Kingsway International Holdings Ltd., had bought 3.75 million shares of common stock at 40 cents each. Capital also acquired an option to buy up to 2.5 million additional shares over the next five years.
If it exercised the option, Capital Alert would hold a 36% stake in PharmaPrint.
PharmaPrint and Capital Alert also are forming a joint venture to manufacture and distribute products in the Asia-Pacific region. PharmaPrint said it has invested $500,000 of the proceeds from the stock sale in the venture.
The company did not disclose how it would spend the remaining $1 million, although some of that money will go toward funding current operations, a company spokeswoman said.
PharmaPrint reported in its recent quarterly report that it is seeking to sell its technology or merge with another company.
The company posted a net loss of nearly $525,000 on sales of $420 for the three months ended June 30. In May, PharmaPrint secured a $1-million line of credit from Montecito Leasing Group LLC that comes due in late November.
PharmaPrint has experienced several difficulties. In May the company was delisted from the Nasdaq market for failing to meet net asset requirements and other standards. A month earlier, C. Richard Piazza, who had been brought in to turn the firm around, resigned as chairman and chief executive after only seven months on the job. Consultant Steven A. Bowman took over as chief executive.
The company also lost its only major customer, American Home Products Corp. Under a contract, PharmaPrint had made herbal supplements that American Home sold under its Centrum label. Its sales, which hit $22.3 million in fiscal 1999, have plummeted.
PharmaPrint shares closed Wednesday at 30 cents, up 1 cent in over-the-counter trading.
