NEW YORK, Aug. 9, 2008 (PRIME NEWSWIRE) -- Attorney Advertising. The Rosen Law Firm today announced that it has commenced an investigation into the highly dilutive financing transaction entered into by Genta Incorporated (OTCBB:GNTA).
On June 5, 2008, Genta announced that it had entered into an agreement to sell up to $40.0 million of convertible securities to a group of investors, including its chairman and CEO Raymond P. Warrell, Jr.
Genta sold $20.0 million of senior secured notes convertible into two billion shares of its common stock at a price of $0.01 per share. The transaction effectively dilutes existing shareholders' interest in the company by more than 98% upon conversion of the notes. Under the terms of the financing, the purchasers of the notes, upon conversion, will own more than 98% of Genta's outstanding common stock for an aggregate purchase price of only $20 million.
In addition, the purchasers have the option to buy up to another $20 million of senior secured notes, also convertible into another two billion common shares at a price of $0.01 per share, giving the new investor group the potential to own more than 99% of Genta's common stock for a total purchase price of only $40 million.
The Rosen Law Firm has commenced an investigation into the fairness of this transaction to existing common shareholders. If you purchased Genta's common stock prior to June 5, 2008 and still hold those shares, you may have legal rights to challenge the proposed transaction or to reduce its dilutive effect on existing shareholders. If you purchased Genta stock before June 5, 2008 and still hold the shares and would like further information concerning your legal rights in regard to this dilutive financing transaction, please contact Laurence Rosen, Esq. or Phillip Kim, Esq. of The Rosen Law Firm toll free at 866-767-3653 or via e-mail at lrosen@rosenlegal.com or pkim@rosenlegal.com. The Rosen Law Firm has expertise in protecting the rights of investors and extensive experience in actions involving financial fraud. The Rosen Law Firm represents investors throughout the nation, concentrating its practice in securities and shareholder litigation.
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