Vyteris amends debt and preferreds held by Spencer Trask Specialty

By Devika Patel

Knoxville, Tenn., Oct. 5 - Vyteris, Inc. amended the terms of the debt it owes to Spencer Trask Specialty Group, LLC on Thursday, according to an 8-K filed Monday with the Securities and Exchange Commission.

The company also revised the series B convertible mandatorily redeemable preferred stock held by Spencer.

The principal amount of all the debt and unpaid interest in excess of $2 million and all the preferreds will be converted into common stock when the company completes a $1 million equity financing by Dec. 31. The conversion price will be 100% in excess of the price at which the equity is sold in the financing or, if the financing involves the sale of debt or equity-related securities, 100% in excess of the conversion price of the debt or securities.

The approximate amount of debt and accrued interest that would be converted is $9.4 million, and the approximate conversion value of the preferreds that would be converted is $10.5 million.

The $2 million of remaining debt will be evidenced by a three-year 6% promissory note. The note is secured by a lien on the company's assets. This debt will be prepaid with 50% of the net proceeds from the planned financing or any other sale of equity or equity-related securities that raises over $5 million.

Based in Fair Lawn, N.J., Vyteris makes a drug-delivery patch.

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