Advanced Cell negotiates amendments to convertible debentures

By Laura Lutz

Des Moines, Jan. 3 - Advanced Cell Technology, Inc. announced that it expects to amend the terms of its convertible debentures and warrants issued on Sept. 15, 2005 and Aug. 30, 2006.

The amendments are subject to approval from holders of all of the debentures, which the company expects to receive in the next several days, according to an 8-K filing with the Securities and Exchange Commission.

The company issued $17.75 million principal amount of debentures and warrants for 4,836,462 shares in 2005 and $8.5 million principal amount of debentures in 2006.

The amendments would reset the conversion price of the 2005 debentures to $0.90 and the exercise price of the 2005 warrants to $0.95. The 2005 debentures would also be amended to give the company the right to pay mandatory monthly redemptions in registered shares.

Under the amendments, monthly redemptions of the 2006 debentures will be deferred to Sept. 7, 2007.

When the three-year debentures were issued, the conversion price was $2.30. If the average of the five closing prices immediately before conversion was less than $2.50, the conversion price was to be set at $2.50.

The exercise price of the 2005 warrants was originally $2.53. On Aug. 25, the company announced that it would lower the exercise price of its outstanding warrants to $0.95, provided that at least 85% of the holders exercised the warrants as re-priced.

Among other amendments, the company's common share registration requirements will be amended to be consistent with limits imposed by the Securities and Exchange Commission.

The company's monthly cash expenditures would be limited by the amendments to $1.3 million, subject to some exceptions.

Based in Worcester, Mass., Advanced Cell Technology is focused on stem cell research and regenerative medicine.

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