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Transgenomic Shares Up 38 Percent After Firm Secures Loan Extension

NEW YORK, March 18 (GenomeWeb News) - Shares in Transgenomic were up 38 percent, or $.22, at $.80 in mid-afternoon trading after the company said it has extended by around one year a previously announced waiver to use the full amount of a $7.5 million revolving credit facility.

 

Transgenomic said today that Laurus Master Fund has agreed to extend until March 31, 2006, the $7.5 million facility, meaning that Transgenomic can use the full amount until through date. The company said this funding is "aimed at firming up its financing for ongoing operations."

 

The company also said that Laurus has decided to convert into equity roughly $1.8 million of the outstanding debt on that revolving facility . Mitchell Murphy, Transgenomic's interim-CFO, told GenomeWeb News that this amount translated into approximately 10 percent of the company's current market capitalization.

 

Murphy said that it was likely that Laurus sold those shares, which would explain the increase in share price and volume.

 

The transaction and waiver extension "help ensure that the company has the wherewithal to execute its business plan," Transgenomic said in a statement.

 

"These transactions with Laurus, combined with the cost savings and refocusing on our core BioSystems business that is a result of our recently-completed restructuring, position us to aggressively pursue our goal of positive cash flow and profitability," CEO Collin D'Silva said in a statement.

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