Boston Life Sciences Enters Into $15 Million Convertible Promissory Note Purchase Agreement and Amends Existing Promissory Notes
March 26 2007 - 3:55PM
PR Newswire (US)
HOPKINTON, Mass., March 26 /PRNewswire-FirstCall/ -- Boston Life
Sciences, Inc. (NASDAQ:BLSI) today announced that on March 22,
2007, it entered a into Convertible Promissory Note Purchase
Agreement (the "Purchase Agreement"), with Robert L. Gipson, Thomas
Gipson and Arthur Koenig, existing stockholders of the Company
(collectively, the "Lenders"), pursuant to which the Company may
borrow at any time prior to December 31, 2007, up to an aggregate
principal amount of $15,000,000. Borrowings under the Purchase
Agreement will be made pursuant to the issuance of unsecured
promissory notes bearing interest at the rate of 5% per annum. The
outstanding principal amount borrowed under the notes including any
accrued interest thereon shall be due and payable upon the earliest
to occur of: (i) December 31, 2010; and (ii) the date on which a
Lender declares an event of default (as defined in the Purchase
Agreement), the first of these events to occur referred to as the
"Maturity Date". After December 31, 2007, and subject to applicable
law, each Lender may elect to convert all or a portion of the
outstanding principal and accrued interest under any outstanding
notes (the "Total Converted Balance") held by such Lender into (i)
shares of the Company's common stock at a conversion price of $2.50
per share or (ii) into the right to receive from the Company the
following payments related to the Company's molecular imaging
products: for each $1,000,000 of Total Converted Balance, (A) 2% of
Pre- Commercial Income; plus (B) a royalty at a rate of 0.5% of Net
Sales of Molecular Imaging Products (each as defined in the
Purchase Agreement). Also, on March 22, 2007, the Company amended
and restated its outstanding second amended and restated unsecured
promissory note in favor of Robert L. Gipson and its collectively,
the "Amended Notes"). The Amended Notes (i) eliminate all
outstanding and accrued interest due and payable under the Amended
Notes, (ii) do not bear interest and (iii) are mandatorily
convertible into shares of the Company's common stock. On or after
June 15, 2007, each of Messrs. Gipson and Gipson (collectively, the
"Original Lenders") are required, subject to stockholder approval,
to effect the conversion of all of the outstanding principal and
accrued interest under the Amended Notes into shares of the
Company's common stock at a conversion price of $2.50 per share.
The Original Lender's will be prohibited from effecting a
conversion pursuant to the Amended Notes if at the time of such
conversion (i) the common stock issuable to such Original Lender,
when taken together with all shares of common stock then held or
otherwise beneficially owned by such Original Lender exceeds 19.9%
of the total number of issued and outstanding shares of the
Company's common stock immediately prior to such conversion, or
(ii) the common stock issuable to such Original Lender, exceeds
19.9% of the total number of issued and outstanding shares of the
Company's common stock immediately prior to such conversion, in
each case unless and until the stockholders of the Company approve
the conversion of all of the shares of common stock issuable
thereunder. As of the date hereof, stockholder approval will be
required prior to the conversion of the Amended Notes into shares
of the Company's common stock. Kenneth Rice, the Company's
Executive Vice President & Chief Financial Officer commented,
"We are pleased to obtain this new financing. The $15 million loan
will enable us to satisfy our obligations to BioAxone regarding our
Cethrin(R) program in the near term and to continue to support our
operations well into this year as we pursue our other fundraising
activities. The conversion of our existing $10 million debt, if
approved by our shareholders, will eliminate this debt from our
balance sheet which otherwise becomes due and payable on June 30,
2007. We are grateful to the Gipsons and Mr. Koenig for their
continued support of our mission and programs". According to a
Schedule 13G/A filed with the Securities and Exchange Commission
(the "SEC") on February 12, 2007, Robert L. Gipson beneficially
owned approximately 18.7% of the outstanding common stock of the
Company on December 31, 2006. Robert L. Gipson, who serves as a
Senior Director of Ingalls & Snyder LLC and a General Partner
of Ingalls and Snyder Value Partners, L.P., served as a director of
the Company from June 15, 2004 until October 28, 2004. According to
a Schedule 13G/A filed with the SEC on February 12, 2007, Thomas L.
Gipson beneficially owned approximately 19.2% of the outstanding
common stock of the Company on December 31, 2006. According to a
Schedule 13G/A filed with the SEC on February 17, 2007, Arthur
Koeing beneficially owned approximately 5.6% of the outstanding
common stock of the Company on December 31, 2006. About Boston Life
Sciences, Inc. Boston Life Sciences, Inc. (BLSI) is engaged in the
research and clinical development of diagnostic and therapeutic
products for central nervous system (CNS) disorders. ALTROPANE(R)
molecular imaging agent is in Phase III clinical trials for the
diagnosis of Parkinson's Disease (PD) and Phase II clinical trials
for the diagnosis of Attention Deficit Hyperactivity Disorder
(ADHD). Cethrin(R), a recombinant-protein-based drug designed to
promote nerve repair after acute spinal cord injury, has reported
positive interim results in a North American Phase I/IIa clinical
trial. The company's research and pre- clinical CNS programs
include Inosine for the treatment of spinal cord injury and stroke,
a DAT blocker for the treatment of Parkinson's disease, and a
second generation technetium-based molecular imaging agent for PD
and ADHD. BLSI's current research collaborations include Harvard
Medical School and Children's Hospital Boston. Safe Harbor The
foregoing release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward- looking statements include statements regarding
Boston Life Sciences' future expectations, beliefs, intentions,
goals, strategies, plans or prospects regarding the future,
including the development and commercialization of ALTROPANE and
Cethrin, the prospects of the Company's CNS therapeutics program,
the Company's strategies to develop and commercialize axon
regeneration technologies and the breadth of the Company's
technologies and intellectual property portfolio. Forward-looking
statements can be identified by terminology such as "anticipate,"
"believe," "could," "could increase the likelihood," "estimate,"
"expect," "intend," "is planned," "may," "should," "will," "will
enable," "would be expected," "look forward," "may provide,"
"would" or similar terms, variations of such terms or the negative
of those terms. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors including those
risks, uncertainties and factors referred to in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
2006 filed with the Securities and Exchange Commission under the
section "Risk Factors," as well as other documents that may be
filed by Boston Life Sciences from time to time with the Securities
and Exchange Commission. As a result of such risks, uncertainties
and factors, the Company's actual results may differ materially
from any future results, performance or achievements discussed in
or implied by the forward-looking statements contained herein.
Boston Life Sciences is providing the information in this press
release as of this date and assumes no obligations to update the
information in this press release. Contact: Meredith Patin --
508-497-2360 ext 239 Boston Life Sciences, Inc. DATASOURCE: Boston
Life Sciences, Inc. CONTACT: Meredith Patin of Boston Life
Sciences, Inc., +1-508-497-2360 ext 239, Web site:
http://www.bostonlifesciences.com/
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