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Aeterna Zentaris Announces Amendment to Series B Warrants, Enters Definitive Agreement With ~90% Of Outstanding Series B Holders

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Aeterna Zentaris Inc. (NASDAQ: AEZS)(TSX: AEZ) (the "Company") announced today that it has entered into definitive agreements with the holders (the "Consenting Holders") of approximately 90% of its outstanding Series B Common Share Purchase Warrants (the "Series B Warrants") that are intended to reduce the dilutive effect of the exercise of the Series B Warrants by establishing a cap on the number of shares issuable upon alternate net cashless exercise ("Net Cashless Exercise") of the Series B Warrants until the close of business on November 17, 2015 and by limiting the number of shares that the Consenting Holders may sell until the close of business on October 9, 2015. The Company was advised by Maxim Group LLC ("Maxim") in its negotiations with the holders of the Series B Warrants. The effectiveness of the amendments to the Series B Warrants is subject to the approval of the Toronto Stock Exchange.

David A. Dodd, Chairman, President and Chief Executive Officer of the Company remarked regarding the agreements, "We believe that the agreements we reached with the Consenting Holders should temporarily reduce the selling pressure on our stock by limiting the additional dilution from the Net Cashless Exercise of Series B Warrants. We appreciate the willingness of our Series B Warrant holders to work with us on this important step toward a resolution of the issues confronting our capital structure. We also are grateful to Maxim for helping us to reach agreement with our Series B Warrant holders in an efficient manner."

Under the terms of the agreements, the number of Common Shares issuable per Series B Warrant with respect to Net Cashless Exercises prior to the close of business on November 17, 2015 may not exceed 33.23 based on a floor on the average volume weighted average prices of $0.0541. The number of Common Shares issuable per Series B Warrant may be less than such number, however, if the price of the Company's Common Shares recovers during the relevant period. In addition, during a trading-limitation period that expires at the close of business on October 9, 2015, the Consenting Holders have agreed to limit their market sales of our Common Shares to an aggregate of 100 million shares, which limitation shall not apply to any of the Company's Common Shares sold at or above $0.10 per share.

As of September 21, 2015, approximately 10.8 million Series B Warrants remained outstanding, representing approximately 36% of the number originally issued. In addition, the Company expects that, as of the close business on September 21, 2015, there will be approximately 363.5 million issued and outstanding Common Shares.

The Company will pay Maxim an advisory fee and a success fee for each Series B Warrant that was amended. The Consenting Holders were not compensated and did not receive any other consideration in connection with the amendments to be effected to the Series B Warrants.

 

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