VistaGen investor agrees to convert $4.1 million of convertible notes

Company must complete a private or public equity financing by Aug. 31

By Devika Patel

Knoxville, Tenn., July 22– VistaGen Therapeutics, Inc. reached a note conversion agreement with Platinum Long Term Growth VII, LLC on July 18, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

The investor has agreed to convert all of its senior secured convertible promissory notes, amounting to about $4.1 million, including unpaid interest, if the company completes a private equity sale of at least $36 million or a $10 million registered equity financing by Aug. 31.

If the company completes the $36 million private sale, the notes will convert to common stock at $0.50 per share. If it conducts the $10 million public sale, the notes will convert into series B convertible preferred shares.

In addition, all warrants held by the investor will now be exercisable at the lower of a fixed price of $0.50 per share or the purchase price of common stock sold in the financing.

The company is a South San Francisco, Calif.-based biotechnology company focused on stem cells.

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