Oxygen Biotherapeutics Strengthens Balance Sheet Through $4.6 Million Debt Conversion
Oxygen Biotherapeutics Strengthens Balance Sheet Through $4.6 Million Debt Conversion
Debt reduced from $4.9 million to $300,000
MORRISVILLE, N.C.--(BUSINESS WIRE)-- Oxygen Biotherapeutics, Inc., (NAS: OXBT) a developer of oxygen-carrying therapeutics, today announced the Company has converted $4.6 million in outstanding principal amount of a convertible promissory note. The note, which was scheduled to mature on July 1, 2014, carried an interest rate of 15% per annum. This move reduces the Company's debt from $4.9 million to $300,000. The Company estimates that this will improve its net shareholder equity by approximately $3.5 million.
The $4.6 million debt was retired on August 24, 2013 in consideration for a private placement by the Company of an aggregate of $4.6 million worth of shares of the Company's Series D 8% convertible preferred stock, which are convertible into a combined total of 2,358,974 shares of common stock. The conversion price is $1.95 per share. In connection with the purchase of shares of preferred stock the investor will receive a warrant to purchase a number of shares of common stock equal to 100% of the number of conversion shares at an exercise price equal to $2.60 per share.
"This debt conversation transaction was concluded with an investment fund managed by one of our Company's directors. We are pleased to have the strong support of our directors and long-term shareholders. This transaction further improves our operating capital position by reducing interest payments and eliminating a significant short-term liability, while also enhancing our net equity position," stated Michael Jebsen, Interim CEO, President and Chief Financial Officer.
About Oxygen Biotherapeutics, Inc.
Oxygen Biotherapeutics, Inc. is developing medical products that efficiently deliver oxygen to tissues in the body. The company has developed a proprietary perfluorocarbon (PFC) therapeutic oxygen carrier called Oxycyte® that is currently in clinical and preclinical studies for intravenous delivery for indications such as traumatic brain injury, decompression sickness and stroke. The company is also developing PFC-based creams and gels for topical delivery to the skin for dermatologic conditions and potentially wound care. In addition, the Company has commercialized its Dermacyte® line of skin care cosmetics for the anti-aging market. Dermacyte is now out-licensed to Valor Cosmetics of Switzerland.
Caution Regarding Forward-Looking Statements
This news release contains certain forward-looking statements by the company that involve risks and uncertainties and reflect the company's judgment as of the date of this release. The forward-looking statements are subject to a number of risks and uncertainties delays in new product introductions and customer acceptance of these new products, and other risks and uncertainties as described in our filings with the Securities and Exchange Commission, including in the current Form 10-Q filed on September 17, 2013, and our annual report on Form 10-K filed on June 26, 2013, as well as other filings with the SEC. The company disclaims any intent or obligation to update these forward-looking statements beyond the date of this release. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
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