Ceragenix Pharmaceuticals reduces conversion price on notes

By Laura Lutz

Des Moines, Aug. 17 - Ceragenix Pharmaceuticals, Inc. cut the conversion price on $3.2 million of promissory notes and $5 million of debentures after the company failed to meet a milestone requirement for the quarter ended June 30, according to an 8-K filing with the Securities and Exchange Commission.

The conversion price is now $1.57, the five-day volume-weighted average price of the company's stock as of Aug. 10.

The original conversion price was $2.05. It was reduced to $1.92 in May for similar reasons.

According to the terms of the notes, the company was required to adjust the conversion price downward if it did not meet the milestone requirement - which counted as a default event, according to the 8-K.

The company needed to have revenues of at least $7.177 million and EBITDA of at least negative $1.225 million.

"Because the company is still in its development stage, the revenue milestone was not met," the company said in the 8-K.

The company sold the 9% debentures in a private placement in December 2006, and the 10% promissory notes were issued in a private placement in November 2005.

The debentures are due Dec. 5, 2009, and the notes are due on Nov. 28, 2007.

Based in Denver, Ceragenix develops treatments for cancer, skin disorders and infectious diseases.

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