Mar. 24--Cleveland BioLabs has raised another $2.9 million, before fees, by selling convertible preferred stock to investors, the Buffalo-based biotechnology company said Monday.

The private placement stock sale is in addition to the $1.25 million the company raised last month in a similar offering, bringing the total proceeds raised by the company to $3.8 million after deducting fees and expenses associated with the offering.

Cleveland BioLabs said it plans to use the proceeds from the offering, which will continue through Friday, to increase its working capital as it continues with testing on the drug it is developing to protect humans against radiation sickness, as well as other new drugs.

The latest convertible preferred stock includes warrants to acquire additional shares of Cleveland BioLabs common stock, potentially adding more than 2.1 million new shares to the company's outstanding shares.

The conversion price of all of the preferred shares issued in both portions of the offering were reduced to $1.40 per share from the original $1.85 per share. The exercise price of the warrants linked to the shares also was cut to $1.60 per share from the original $2.60.

In all, the two segments of the offering could add 3.3 million new shares of common stock if the preferred shares are converted, while those investors also will hold warrants to acquire another 3.6 million shares, the company said in a filing with the Securities and Exchange Commission.

The company also is seeking shareholder approval later this spring to increase the number of shares authorized to 60 million from the current 40 million. Cleveland BioLabs executives and directors who control more than 34 percent of the company's shares have agreed to vote in favor of the increase.

drobinson@buffnews.com

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