The debentures have a maturity date of January 26, 2013 and accrue interest at a rate of 10% per annum, payable semi-annually. An aggregate of $300,000 in principal amount of the debentures may be converted into Rosetta's ordinary shares at a conversion price of $0.0944 per share. The debentures are secured by a security interest in all current and future assets of Rosetta and any current or future subsidiary.
Pursuant to the terms of the transaction, Rosetta has also agreed to negotiate in good faith a definitive license agreement with a designee of the holders of the debentures. Under the terms of such a license agreement, the licensee would pay a one-time license fee of $1.25 million and receive a fully-paid, worldwide, exclusive license to all current and future issued patents, patent applications, patent filings, know how, data, other intellectual property, license and contract rights owned or controlled by Rosetta or any current or future subsidiary and all of Rosetta's rights under certain license agreements. The license would cover all predictive, diagnostic, prognostic and theranostic uses and applications relating to cancer with the use of any body fluid. The license would exclude Rosetta's current tests: miRview™ mets, miRview™ mets², miRview™ squamous, miRview™ meso and miRview™ lung. In the event that a definitive license agreement is not executed by February 29, 2012, or such later date as Rosetta and the licensee may agree upon, the interest rate on the debentures would increase to 18% per annum.
Aegis Capital Corp. acted as sole placement agent for the financing.
This announcement is neither an offer to sell nor a solicitation of an offer to buy any securities of Rosetta. The securities offered and sold in the private placement have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration, or an applicable exemption from registration under the Securities Act and applicable state securities laws.