Pharmos Corp. raised $11 million through a private financing with a group of investors, money earmarked for research and development activities.
Pharmos, of Iselin, N.J., issued $8 million in convertible debentures due Feb. 28, 2002, and $3 million in common equity, plus warrants exercisable into common stock. The debentures are convertible into common stock at a fixed price equal to 105 percent of the average market price before and after closing. The common stock is being issued at market price, subject to adjustment based on the price following registration. Those buying common stock also have the right for 12 months to purchase another $2 million in stock under certain conditions. Proceeds of $4 million are being held in escrow until the debentures are converted or repaid at maturity.
Landenberg, Thurman & Co. Inc. acted as private placement agent in the transaction.
Pharmos' stock (NASDAQ:PARS) closed unchanged Thursday at $3.78.
The company said proceeds would be used to complete development of dexanabinol for traumatic brain injury, to begin trials of that compound for stroke, and to accelerate development of its dexanabinol analogue program for central nervous system and other inflammation-related conditions.
Pharmos said it plans to begin an international pivotal trial of dexanabinol in several hundred traumatic brain injury patients this year. - Jim Shrine