Nutrition 21 Inc. of Purchase said it has a dispute with an investor in its preferred stock and warrant offering that raised $17.8 million for the nutritional supplement company last fall.
In a filing with the Securities and Exchange Commission, the company said that the investor claimed that certain breaches of covenants in the offering had occurred that would require the company to buy back the preferred stock, at an estimated cost of $23.4 million.
The investor was not identified. In the filing, the company denied that any such breaches had occurred. Nutrition 21 also said the investor had asserted that option grants to the companyâ€™s co-chief executive officers, Gerard Butler and Michael Fink, had triggered anti-dilution adjustments in the conversion price of the preferred stock. The company said no adjustment is required.
Nutrition 21 stock closed yesterday at 45 cents a share, down 6.8 cents.