Novelos exchanges all series E, series C preferreds for common stock

Company issues 340,935,801 common shares under exchange agreement

By Devika Patel

Knoxville, Tenn., Nov. 30 - Novelos Therapeutics, Inc. exchanged 340,935,801 common shares for all of its series E and series C preferred stock on Nov. 30, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Prior to the exchange, the preferred stock was convertible at a conversion price of $0.65 per common share. The price per common share at which the stock was issued in the exchange was about $0.08. The market price of the stock on the last trading day immediately preceding the exchange was $0.04, the company said in the filing.

The warrants held by the preferred investors, for 31,324,933 shares, were not affected by this exchange agreement.

As a result of the exchange, all of the preferreds' liquidation preference, approximately $27.3 million as of Nov. 30, has been eliminated. Also, the company will no longer have to pay the 9% dividends that accrued on the series E preferreds and the 20% dividends that accrued on the series C preferreds.

Novelos is a Newton, Mass.-based biotechnology company.

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