YONKERS, N.Y., Feb. 25 /PRNewswire-FirstCall/ -- Advanced Viral Research
Corp. (OTC Bulletin Board: ADVR) today said that it would pursue all available
options, including appealing, and/or seeking reconsideration of certain
aspects of an order that was recently entered by the United States District
Court for the Southern District of New York regarding litigation related to a
September 2002 financing agreement. The Company said that the New York
District Court's opinion does not affect the ability to proceed with the
Florida lawsuit, which alleges a market manipulation scheme violative of
Florida securities laws related to the financing. The Company said it
believes it has a meritorious case and hopes to ultimately prevail in the New
York and Florida litigation. The Company is currently engaging in settlement
discussions with certain of the participants in both the New York and Florida
litigation.
In December, ADVR announced that it had filed suit in the Circuit Court of
the 11th Judicial Circuit of Florida charging that certain investors
"misrepresented their intentions in investing in the Company" and "engaged in
a series of manipulative activities to depress the price of Advanced Viral
stock." The Company alleged that the defendants sought to "guarantee they
would be issued significantly more shares of ADVR common stock" as a result of
warrant repricing provisions of a September 2002 financing agreement. The
Company is seeking a judgment for damages, interest and costs.
Following that initiation of ADVR's lawsuit in Florida, three of the
purchasers in the September financing (Alpha Capital, A.G., Bristol Investment
Fund, Ltd. and Stonestreet Limited Partnership [the "Plaintiffs"]) filed
separate lawsuits in the U.S. District Court for the Southern District of New
York. The suits sought a preliminary injunction and other relief for breach
of contract. The District Court recently entered an order, upon a motion of
the Plaintiffs, that required that (i) the Company deliver to the Plaintiffs
the shares of Company common stock issuable upon exercise of the Warrants;
(ii) the Plaintiffs post a bond of either $100,000 or the market value of the
Warrant Shares, whichever is higher; and (iii) all the proceeds from the sale
of the Warrant Shares be placed in escrow pending final resolution of the
litigation.
As previously announced on September 10, 2002, the Company entered into a
Securities Purchase Agreement with certain purchasers pursuant to which the
Company issued and sold to certain purchasers 21,500,000 of shares of its
common stock, par value $.00001 per share for total gross proceeds of
$3,010,000, or $.14 per share, and issued to the purchasers warrants to
purchase an aggregate of 16,125,000 shares of the Company's common stock
(the "Warrants"), which are exercisable for five years from the date of
issuance at an exercise price equal to $.25, subject to adjustment as provided
in the Warrants.
An adjustment provision in the Warrants provided that 60 trading days
following the original issue date of the Warrants (the "First Determination
Date"), a certain number of Warrants would become exercisable at $.001. The
number of shares for which the Warrants would be exercisable at $.001 per
share is equal to the positive difference, if any, between (i) $3,010,000
divided by the volume weighted average price ("VWAP") of the Registrant's
common stock for the 60 trading days preceding the First Determination Date
and (ii) 21,500,000. Upon 120 trading days following the original issue date
of the Warrants (the "Second Determination Date"), a certain number of
remaining Warrants shall become exercisable at $.001. The number of shares for
which the Warrants are exercisable at $.001 per share is equal to the positive
difference, if any, between (i) $3,010,000 divided by the VWAP of our common
stock for the 60 trading days preceding the Second Determination Date and (ii)
21,500,000. No adjustment will be made in the event that the VWAP for the 60
trading day period preceding the applicable determination date is $.14 or
greater.
For further information regarding Advanced Viral Research Corp., please
visit our website at http://www.adviral.com
Note: This news release contains forward-looking statements that involve
risks associated with clinical development, regulatory approvals, including
application to the FDA, product commercialization and other risks described
from time to time in the SEC reports filed by the Company. Product R is not
approved by the U.S. Food and Drug Administration or any comparable agencies
of any other countries. There is no assurance that the Company will be able to
secure the financing necessary to continue and/or complete the clinical trials
of Product R or satisfy certain other conditions relating to clinical trials
including obtaining adequate insurance on terms acceptable to the Company. The
Company undertakes no obligation to update or revise the information contained
in this announcement whether as a result of new information, future events or
circumstances or otherwise.
Mayr Communications Inc.
Contact: Charles Mayr
Tel: 877.777.6010
mayrcomm@att.net
SOURCE Advanced Viral Research Corp.
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Related links:
http://www.adviral.com
Company News On-Call:
http://www.prnewswire.com/comp/907700.html
CONTACT:
Charles Mayr of Mayr Communications Inc.,
+1-877-777-6010, mayrcomm@att.net, for Advanced Viral Research
Corp.
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