Hythiam Inc. said it has entered into definitive agreements to sell more than 9.3 million shares of its common stock, with gross proceeds of approximately $7 million.

In an announcement late Thursday, the Los Angeles provider of substance abuse treatment services said it priced the offering at 75 cents per share. Shares closed at 70 cents on Wednesday, but were trading at 77 cents by Thursday's close.

Investors also will receive warrants to purchase more than 2.3 million shares of the company's common stock. The warrants have an exercise price of.85 cents per share, and are exercisable at any time after the closing of the transaction and before the third anniversary of the initial issuance. The offering is expected to close by Sept. 21.

Hythiam said it plans to use net proceeds for working capital and general corporate purposes. The company has a market cap of $36.8 million.

Shares were down 7 cents, or 9 percent, to 70 cents in midday trading on the Nasdaq.

For reprint and licensing requests for this article, CLICK HERE.