Orlando, Florida-based Galaxy Nutritional Foods, a major producer of nutritious plant-based dairy alternatives for the retail and foodservice markets, announced the completion of private placements of its common stock for an aggregate amount of US$808,211 and the exercise of stock purchase warrants for an aggregate amount of US$1,270,800.
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In transactions which closed 17 January, four investors purchased 158,059 shares of common stock at a purchase price of US$4.74 and received warrants to purchase an additional 39,524 shares of the Company’s common stock at a purchase price of US$5.74 per share.
Parallel transactions saw Galaxy’s President and CEO, Angelo S. Morini, COO Christopher New, CFO LeAnn Hitchcock, and VP of Technical Services, Dr. Kulbir Sabharwal, purchased a total of 12,270 shares of common stock at a purchase price of US$4.74 and received warrants to purchase a total of 3,068 shares of common stock which are exercisable at US$5.74 per share.
Warrants in both transactions were priced US$1.00 higher than 95% of the average closing sale price of the Company’s common stock for the five days prior to the closing.
The Company is required to file a registration statement with the Securities and Exchange Commission within 30 days of the transaction closing date to register the shares issued in both private placements, as well as the shares underlying the warrants. The proceeds from both transactions will be used for working capital and general corporate purposes.
In consideration of the exercise of certain common stock warrants, the Company reduced the exercise price of the warrants issued to the John Hancock Small Cap Value Fund and the Company’s Series A Convertible Preferred Stockholders. Aggregate proceeds from both warrant exercises were US$1,270,800. These proceeds will also be used for working capital and general corporate purposes. The shares purchased by John Hancock are currently registered under an effective registration statement as are half of the shares purchased by the Series A investors. The balance of Series A investors’ shares will be registered with the Securities and Exchange Commission under a registration statement to be filed by the Company on or before February 1, 2002. With the exercise of these warrants, John Hancock Small Cap Value Fund has increased its stake in the Company to 1,812,138 shares of common stock representing approximately 15% of the total number of shares outstanding.
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By GlobalDataGalaxy Chairman, Angelo S. Morini, stated: “Galaxy has significantly increased efficiencies of new production equipment, is now realizing significant savings from manufacturing and corporate restructuring initiatives and has strengthened internal fiscal and management controls.
“We believe these major changes and improvements, combined with the equity financing reported today, will enhance our turn-around efforts and help fuel future growth. I thank the John Hancock Small Cap Value Fund, our Series A investors, and the members of Galaxy management who increased their stake in the Company for their unwavering support and welcome our new investors and thank them as well for their belief in our Company.”
