A Medical Device Daily
Synvista Therapeutics (Montvale, New Jersey) reported that it has entered into agreements with the current holders of its Series B preferred stock, $0.01 par value per share, under which $2,875,000 in accrued dividend obligations relating to the Series B preferred stock as of Dec. 31, 2008, has been converted into senior secured promissory notes, due three years from the date of issuance.
Interest at the rate of 1.25% per year shall be payable on the notes at maturity. The notes are secured by all of the company's diagnostic assets, including the company's Haptochek clinical diagnostic test for Hp2-2 diabetes, and its test to measure CML (carboxy-methyllysine), another potential cardiovascular risk marker.
The holders of the Series B preferred stock have waived their rights to receive accruing dividends in cash during the term of the notes, provided there is no event of default under the notes and the notes remain outstanding.
Synvista also reported its intent to voluntarily delist its common stock from trading on the NYSE Alternext. Following the delisting, the company intends to voluntarily terminate the registration of its common stock under the Securities Exchange Act of 1934, as amended, and thereafter to cease filing reports with the Securities and Exchange Commission.
In other financings news:
• Cord Blood America (Santa Monica, California) reported an agreement with Shelter Island Opportunity Fund to restructure its current outstanding debt.
"With the signing of the agreement, Cord Blood America projects it will become cash flow positive for the first time in its history," said Matthew Schissler, founder and CEO. "We anticipate formally being able to announce this when we file our quarterly numbers for period ending June 30, 2009."
• Syndication (Damascus, Maryland) said that that on Feb. 25, the CEO was authorized to take the necessary steps to rescind 300 million issued and outstanding shares of the company's common stock to the treasury. The company maintains that the action taken by the board is one of many that embrace a comprehensive capitalization policy designed to increase equity valuation, enhance the potential for equity investment, discourage short trading activity and, most importantly foster a longer term investor attitude.
• Hercules Technology Growth Capital (Palo Alto, California) reported that the recently enacted American Recovery and Reinvestment Act of 2009 contains provisions to increase the borrowing capacity of participants in the Small Business Investment Company (SBIC) program.
The stimulus bill will benefit SBIC entities, such as Hercules Technology's wholly owned SBIC subsidiary, Hercules Technology II, by providing an estimated additional $23 million of leverage for future investment activities. These provisions increase the maximum amount of SBIC leverage capacity to $150 million from the prior maximum amount of about $137 million (as adjusted annually based upon changes in the Consumer Price Index), of which Hercules has only drawn down $127 million.
Also included in the new stimulus bill is another key provision, which allows for existing SBIC entities to obtain a second license and gain access to additional leverage of $75 million, for a maximum of $225 million combined SBIC leverage.
"We are very pleased and encouraged to see the recent passage of the stimulus bill which expands the very successful SBIC program and increases our access to long term strategic capital. The SBIC program has been an integral partner for Hercules especially during these extremely challenging times by affording us access to liquidity which is important for our technology and life sciences portfolio companies," said Manuel Henriquez, co-founder, chairman/CEO of Hercules. "This provision in the stimulus bill should help restart our economy by instilling confidence in small businesses which are a major source of employment in the United States."