Perma-Fix (PESI) Announces Sale of $10M Perma-Fix Medical Corp. Preferred to Private Investor

October 14, 2016 10:51 AM EDT

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Perma-Fix Environmental Services, Inc. (Nasdaq: PESI) announced that it has entered into a letter of intent with a private investor, subject to certain closing and other conditions, for the purchase of $10 million of Preferred Shares in Perma-Fix Medical Corporation ("PF Corp."), a Delaware corporation and a wholly owned subsidiary of Perma-Fix Medical, S.A. (WAR: PFM), at a price of $8.00 per share. Upon closing, the Preferred Shares of PF Corp. would be voting securities and allow the investor to own approximately 48.6% of PF Corp.'s issued and outstanding voting securities as of the closing. PFM is a majority owned Polish subsidiary of PESI. The letter of intent also provides that at closing, subject to certain terms and conditions, the investor would also receive a 36-month warrant to purchase three quarters (.75) of one share of PF Corp. common stock for each share of Preferred Stock purchased by the investor at closing at an exercise price of $9.00 for each three quarters of one share. In addition, at closing, PESI would receive a 36 month warrant, subject to certain terms and conditions, to purchase up to 183,606 shares of PF Corp.'s common stock at an exercise price of $14.00 per share. Further, under the terms of the letter of intent PESI would be repaid the amounts owed to it by PFM and PF Corp. within a reasonable period of time.

The letter of intent is subject to certain terms and conditions, including, but not limited to, the negotiation and execution of definitive agreement.

Stephen Belcher, Chief Executive Officer of PFM stated, "We believe that this proposed financing to Perma-Fix Medical Corporation should provide us funding to execute our strategy through to commercialization of our Tc-99m technology that we have licensed from PESI, subject to certain FDA approvals."

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