Expect to see Interleukin Genetics Inc. (NYSE:ILI) on the hunt for additional money in coming months, after it signaled plans Jan. 6 to sell up to $75 million in new securities.
The preliminary prospectus does not commit the Waltham, Mass.-based genetic test maker to a specific timetable for the proposed securities offerings and also does not indicate how company officials would spend proceeds from any of those sales.
Simply funding ongoing operations is a likely goal, however. Interleukin finished the three months ended Sept. 30, 2009, with only $1.4 million in cash and equivalents after posting a $2.5 million net loss during the quarter. The company borrowed another $2 million from Pyxis Innovations Inc., its largest shareholder, on Nov. 9, 2009, and has only until March 31, 2010, to access some or all of the $7.3 million still available under the credit facility with Pyxis.*
Overall, Pyxis — an affiliate of Alticor Inc., the Ada, Mich.-based parent company of direct seller Amway Corp. — owns roughly 20 percent of Interleukin’s common stock. It also owns 5 million shares of the company’s Series A convertible preferred stock, which would convert into 28.2 million additional shares, pushing Pyxis’ stake near 59 percent.
Alticor, meanwhile, has been responsible for the lion’s share of Interleukin’s revenues, generating all but $67,000 of the company’s $893,000 in revenues through the first nine months of 2009.
* Correction, Jan. 7, 2009: This article originally linked to a website for another entity, also called Pyxis Innovations. It is not the Pyxis Innovations mentioned here. Return to the corrected sentence.