Mobile games company Glu Mobile has sold $13.5 million worth of stock and warrants in a private placement deal with 10 existing investors and 10 new investors, according to documents filed with the SEC.
The deal also includes warrants to sell an additional $10 million of stock to the 20 investors within five years of the financing's close.
Glu CEO Niccolo de Masi said in a statement the proceeds would "significantly improve" the company's capital structure and would allow Glu to move forward with the development of cross-platform mobile games.
The deal is contingent on shareholder approval. Shareholders owning 50.2 percent of Glu's shares cleared a path for the deal after signing agreements to vote in favor of the financing at a special shareholders meeting.
NASDAQ traders reacted negatively to the news, dropping Glu's stock price more than 10 percent in morning trading to $1.07 per share.
Glu Mobile's first-quarter sales fell to $17.3 million from $20.7 million last year but the company managed to narrow its losses to $3.65 million, or 12 cents per share, compared to losses of $5.7 million, or 19 cents per share, during the same period last year.