Prana shareholders approve US capital raising

Prana (ASX: PBT; NASDAQ: PRAN) shareholders today gave their stamp of approval to the company's AUD$28 million capital raising, voting in favour of the sale to US institutional investors of 3 million ADRs at US$5 per ADR.

Shareholders also approved the acquisition by investors of five-year warrants to purchase an additional 3 million ADRs at an exercise price of US$8.00 per ADR. If exercised, these warrants will raise an additional US$24 million for the company.

Prana executive chairman Geoffrey Kempler said the placement would provide the company with enough capital for up to three years.

"These additional funds will allow us to independently fund further trials of our MPAC technology, which has shown early promise as a potential treatment for Alzheimer's disease in clinical trials," he said. "We intend to accelerate the development of PBT-2, our 'second-generation' product, into clinical trials planned for later this year."

ADRs -- American Depositary Receipts -- allow a company to list its share on a US exchange, whilst minimising difficulties with changing currency values and fluctuating share prices. A US bank purchases a bulk lot of shares from the company, bundling them into groups, and reissuing them on the US exchange.

Prana's placement -- to be issued on Nasdaq -- was led by OrbiMed Advisors and XMark with investment bank Rodman & Renshaw acting as agents.