Opexa Therapeutics aims to prepay 10% convertible promissory notes

By Devika Patel

Knoxville, Tenn., June 3 - Opexa Therapeutics, Inc. said it will prepay its 10% convertible promissory notes, which were issued as part of a $1.3 million bridge financing in April and May 2009. The prepayment date is June 23.

Opexa expects the noteholders will elect to convert their securities into equity at the effective conversion price of $0.50 per share over the 15-day notice and potential conversion period. Company shares (Nasdaq: OPXA) closed at $1.68 Thursday.

The company also offered to pay the accrued interest due on the notes in a 50/50 combination of cash and common shares of common stock, which will be valued at the conversion price of $0.50 per share, if the holders agree to terminate immediately and release the notes' security interest.

"We believe that this is an appropriate step to be taking at this time and is in the best long-term interests of the company and its shareholders," president and chief executive officer Neil K. Warma said in a press release.

"Prepaying the notes and thus in all likelihood converting the debt into equity one year in advance of the maturity date allows us to clean up the balance sheet and save one year of interest payments or approximately $125,000. Importantly, it also enables us to remove the lien on certain Opexa assets, including our growing intellectual property portfolio."

The Woodlands, Texas-based Opexa develops and commercializes cell therapies to treat autoimmune diseases such as multiple sclerosis, rheumatoid arthritis and diabetes.

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