Company also amends deal terms to extend share registration deadline
By Susanna Moon
Chicago, Feb. 4 - Tengion, Inc. said it again amended its $15 million private placement of senior secured convertible notes to extend the interest payment, this time to Feb. 15 from Feb. 1.
The total amount of the interest payments is $500,576.76, and that amount will continue to accrue interest at the rate 10% per year, according to a company press release.
The second amendment also revises the registration rights agreement between the company and the investors, extending the deadline to register the shares underlying the convertible notes and warrants issued in October to March 1 from Jan. 30. The date is 150 days following the issuance of the convertible notes and warrants.
Recent changes
Tengion said on Jan. 7 that it amended the private placement of convertibles to extend the Jan. 1 interest payment date to Feb. 1.
The company amended the private placement on Dec. 31. The deal was announced Sept. 10, priced on Oct. 2 and was conducted through agent ROTH Capital Partners, LLC.
As of Dec. 31, the total amount of interest payments was $369,992.
Placement details
As previously reported, the notes' principal included the exchange of about $1 million of debt issued in the company's bridge financing. The notes mature on Oct. 2, 2015.
The notes are convertible into stock at a conversion rate of 1,333 shares per $1,000 of notes, which is equal to an initial conversion price of $0.75, a 49.66% discount to the Oct. 1 closing share price of $1.49.
The investors also received warrants for about 51.1 million shares, with each one exercisable at $0.75.
Investors included Celgene Corp., RA Capital Management LLC, Deerfield Management Co., LP, Bay City Capital and HealthCap.
Proceeds will be used for research and development activities.
The company also previously said that as a result of the private placement, it made an exchange offer on Dec. 31 to exchange warrants that were issued in a March 1, 2011 private placement to Deerfield Special Situations International Master Fund LP and Deerfield Special Situations Fund, LP. The company will exchange the 2011 warrants for new warrants with an exercise price of $1.10, decreased from the original $28.80 per-share strike price. The exchange will also provide for a proportionate adjustment in the number of shares underlying the warrants, the filing noted.
Located in Winston-Salem, N.C., Tengion develops neo-organs and tissues, such as bladders, that are derived from the patient's own cells.
| Issuer: | Tengion, Inc.
|
| Issue: | Senior secured convertible notes
|
| Amount: | $15 million
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| Maturity: | Oct. 2, 2015
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| Conversion price: | $0.75
|
| Conversion rate: | 1,333 shares per $1,000 of notes
|
| Warrants: | For about 51.1 million shares
|
| Warrant strike price: | $0.75
|
| Agent: | ROTH Capital Partners, LLC
|
| Investors: | Celgene Corp., RA Capital Management LLC, Deerfield Management Co., LP, Bay City Capital and HealthCap
|
| Announcement date: | Sept. 10
|
| Pricing date: | Oct. 2
|
| Amended: | Jan. 7, Jan. 30
|
| Stock symbol: | OTCBB: TNGN
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| Stock price: | $1.49 at close Oct. 1
|
| Market capitalization: | $2.66 million
|
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