Deal with investor MidCap Financial also includes five-year warrants
By Devika Patel
Knoxville, Tenn., May 31 - EpiCept Corp. announced it has settled a three-year senior secured term loan facility. The investor, MidCap Financial LLC, committed $10.6 million. EpiCept drew $8.6 million of the facility at closing, and the facility's $2 million balance is available until Dec. 31.
The 11.5% loan will mature on May 27, 2014.
MidCap Financial will also receive five-year warrants, exercisable for about 1.1 million shares at $0.63, which is a 5.97% discount to the May 27 closing share price of $0.67.
Proceeds will be used for working capital purposes, including the development of the company's research and development pipeline and to prepay the full $500,000 balance of its 7.556% convertible notes due 2014.
"This loan is the first tangible result of our effort, announced several months ago, to obtain non-equity financing secured by the company's intellectual property or other assets, which we believe represents our most attractive source of incremental cash," president and chief executive officer Jack Tally said in a press release.
"We are continuing our efforts to obtain additional, non-dilutive financing, as we have outlined in earlier communications, with a view towards securing cash sufficient to fund our operations beyond 2012."
EpiCept, based in Tarrytown, N.Y., develops treatments for pain related to cancer as well as treatments for cancer.
| Issuer: | EpiCept Corp.
|
| Issue: | Senior secured term loan facility
|
| Amount: | $10.6 million
|
| Maturity: | May 27, 2014
|
| Coupon: | 11.5%
|
| Warrants: | For about 1.1 million shares
|
| Warrant expiration: | Five years
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| Warrant strike price: | $0.63
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| Investor: | MidCap Financial LLC
|
| Settlement date: | May 31 (for $8.6 million)
|
| Stock symbol: | Nasdaq: EPCT
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| Stock price: | $0.67 at close May 27
|
| Market capitalization: | $45.5 million
|
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