Opexa Therapeutics (OPXA) to Prepay Convertible Notes Issued in 2009
OPXA to prepay the 10% Convertible Promissory Notes issued in April and May of 2009, which were originally issued as part of a bridge financing. The repayment of debt reduces interest payments and removes lien on assets. OPXA is delivering notice of this determination to the holders of the Notes, which is expected to result in a conversion to equity on the terms originally contemplated by the Notes, including at a conversion price of $0.50 per share.
OPXA is required to offer the note holders a minimum 15 day notice and potential conversion period. A total of $1.3 M was raised in 2 tranches in April and May 2009. Opexa is also making an offer to the note holders that it will pay the accrued interest due on the Notes in a combination of 50% cash and 50% shares of common stock (valued at the conversion price of $0.50 per share), subject to each holder’s agreement to immediately terminate and release the security interest associated with such holder’s note as well as OPXA’s obligations under the Unit Purchase Agreement, Registration Rights Agreement and Security Agreement that were executed in connection with issuance of the Notes. The prepayment date on the Notes is 6/23/10.
“Prepaying the Notes and thus in all likelihood converting the debt into equity 1 year in advance of the maturity date allows us to clean up the balance sheet and save one year of interest payments or approximately $125 K and it also enables us to remove the lien on certain Opexa assets including our growing intellectual property portfolio commented Neil K. Warma, President and CEO of Opexa.
