Eupraxia Pharmaceuticals Inc. has secured up to C$12 million through a Convertible Debt Facility, allowing lenders to convert the loan into company shares at $4.84375 per share instead of cash repayment. This financing will support Eupraxia’s research and development projects, including treatments for eosinophilic esophagitis and osteoarthritis. The deal requires approval from the Toronto Stock Exchange.
Additionally, It is settling a previous $12 million loan from Silicon Valley Bank, which matured in June 2024. They have paid off half and are working to finalize the remaining balance by the third quarter of 2024. With the new funding, Eupraxia has enough resources to support its operations until at least the second quarter of 2025.
Here’s a detailed explanation with key points:
- Financing Details:
- The company has the opportunity to borrow up to $12 million.
- They can use this loan for a period of 120 days after the agreement is finalized.
- However, they can only use the loan after resolving an earlier agreement with Silicon Valley Bank (SVB).
- Conversion to Shares:
- The borrowed amount, along with any accumulated interest, can be turned into company shares.
- The price for each share is set at $4.84375.
- There are restrictions on how many shares each lender can convert their loan into, to prevent them from owning too much of the company.
- Purpose of Funding:
- This loan will help Eupraxia fund their ongoing projects, particularly in developing treatments for diseases like eosinophilic esophagitis (a condition affecting the esophagus) and osteoarthritis (a joint disease).
- The CEO, Dr. James Helliwell, emphasized that this funding will provide the company with stability as they work on these important medical advancements.
- Approval Needed:
- Before the loan can be finalized, it must be approved by the Toronto Stock Exchange, which is a regulatory requirement.
Update on Previous Loan
Eupraxia Pharmaceuticals Inc. provided an update regarding a previous loan they had taken from Silicon Valley Bank, which was worth $12 million. This loan was set to mature, or come due, on June 21, 2024. By the due date, Eupraxia had successfully repaid half of this loan amount. The remaining balance is still outstanding.
Currently, Eupraxia is working with a liquidator appointed by the bank to finalize the payment of the remaining debt. A liquidator is a person or entity assigned to manage and settle financial matters, especially when a company or financial institution is closing down or restructuring its debts. Eupraxia and the liquidator are in discussions to resolve the details of the remaining payment. They anticipate that this settlement process will be completed by the end of the third quarter of 2024, which means they expect to have fully paid off the remaining debt within that time frame.
Financial Status
With the recent acquisition of a new C$12 million loan, Eupraxia Pharmaceuticals Inc. has ensured that it has adequate financial resources to sustain its operations through at least the second quarter of 2025. This substantial loan provides the company with critical funding to support its ongoing and future projects, particularly its drug development programs.
The availability of these funds means that Eupraxia can continue its research, clinical trials, and other development activities without facing financial constraints. This stability is crucial for maintaining progress in their work, which includes developing innovative drug delivery methods and treatments for various medical conditions. By securing this financing, Eupraxia has effectively removed concerns about running out of money in the near future, allowing the company to focus on advancing its projects and achieving its strategic goals.
In Summary, Eupraxia Pharmaceuticals Inc. has secured up to C$12 million through a Convertible Debt Facility, allowing conversion of the loan into company shares at C$4.84375 per share. This funding, pending Toronto Stock Exchange approval, will support research and development projects, including treatments for eosinophilic esophagitis and osteoarthritis. Concurrently, Eupraxia is settling a previous C$12 million loan from Silicon Valley Bank, aiming to finalize repayment by the third quarter of 2024. The new financing ensures sufficient resources for operations through at least the second quarter of 2025, providing stability for ongoing medical advancements.
About Eupraxia Pharmaceuticals
Eupraxia Pharmaceuticals is committed to enhancing patient care and upholding the highest ethical standards. Their focus is on making a meaningful impact in areas where they can significantly benefit patients and healthcare providers.
- Patient-Centric Approach: Eupraxia targets the most critical needs to achieve the best outcomes for patients and their providers.
- Ethics and Responsibility: The company emphasizes ethical practices, diversity, inclusion, and sustainability in all aspects of their business.
- Creative Environment: They cultivate a corporate culture that fosters creativity and passion, demonstrating that innovation thrives in a supportive setting.
- Leadership Excellence: Eupraxia’s leaders set high standards, inspiring excellence and guiding the organization to achieve its goals with integrity.
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