Seaside purchases NanoViricides' Series B Convertible Preferred Stock for gross proceeds of $5M

NanoViricides, Inc. (OTC BB: NNVC.OB) (the "Company"), announced today that it has raised $5,000,000, drawing down on its previously announced universal registered shelf "Form S-3" offering. The registered shelf offering became effective on April 29, 2010.

“Seaside has established a strong reputation of successful investments in bio-pharma companies such as ours.”

The Company received this financing from a single investor, Seaside 88, LP ("Seaside"), a Florida limited partnership. Seaside has financed several leading-edge bio-pharma companies, including Cytori Therapeutics, Inc., Generex Biotechnology Corporation, and NovaDel Pharma, Inc. among others.

"We are very pleased to receive financing from Seaside," said Anil R. Diwan, PhD, President of the Company, "Seaside has established a strong reputation of successful investments in bio-pharma companies such as ours."

"This financing positions us for meeting the listing standards of major exchanges," said Eugene Seymour, MD, MPH, CEO of the Company, adding, "We now have sufficient cash in hand to meet our operating needs for the next eighteen months at the current rate of expenditure."

Seaside purchased the Company's Series B Convertible Preferred Stock for gross proceeds of $5M. The Company expects the net proceeds of this transaction to amount to approximately $4.51M after deducting placement agent fees and other offering expenses. NanoViricides has entered into a securities purchase agreement with Seaside for the purchase and sale of 500,000 shares of its Series B Preferred Stock at the purchase price of $10.00 per share. Seaside also received an option to purchase an additional $5M of the Company's Series B Convertible Preferred Stock within six months of the final conversion of the Series B Preferred Stock into the Company's common stock (described below).

The Series B Preferred Stock will convert into a number of shares of the Company's common stock every two weeks. The converted shares are estimated to represent less than five percent of the 10-day trading volume of the Company's stock (NNVC: OTC-BB), based upon current data.

Of the shares purchased, 60,000 shares of the Series B Preferred Stock will be automatically converted into common stock every two weeks commencing the initial closing. The conversion factor shall equal the purchase price of $10 per share of the preferred stock, divided by the lesser of (i) the ten day daily volume weighted average of actual trading prices ("VWAP") of the common stock multiplied by 0.85; or (ii) the VWAP for the trading day immediately prior to a conversion date multiplied by 0.88. In addition, the unconverted shares of the Series B Preferred Stock will accrue a dividend at a 10% annualized rate. The accrued dividend shall be payable in common stock at the time of each conversion. The Company does not pay a dividend on the shares of its common stock or the shares of its Preferred Series A stock, and will not be able to pay any dividend on these securities while any shares of the Series B Preferred stock remain unconverted. The shares of Series B Preferred Stock and the shares of common stock underlying the Series B Preferred Stock and the dividend earned on it were offered pursuant to an effective shelf registration statement as noted above. The Series B Preferred Stock does not have any voting rights except as set forth in the Certificate of Designation creating the stock.

Midtown Partners & Co., LLC, acted as the placement agent for this transaction. Midtown received a cash placement fee of 8%.