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SEC Filings

10-Q
OREXIGEN THERAPEUTICS, INC. filed this Form 10-Q on 05/12/2017
Entire Document
 

 

2017, the Company exchanged approximately $49.6 million in aggregate principal amount of the 2013 Notes for an equal principal amount of Exchange Notes.

A summary of the liability and equity components of the 2013 Notes is as follows at March 31, 2017 and December 31, 2016 (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2017

 

 

2016

 

Principal amount of senior convertible notes outstanding

 

$

30,303

 

 

$

79,903

 

Unamortized discount of liability component

 

 

(5,549

)

 

 

(15,477

)

Unamortized debt issuance costs

 

 

(53

)

 

 

(147

)

Long term convertible debt

 

$

24,701

 

 

$

64,279

 

Carrying value of equity component, net of issuance costs

 

$

31,178

 

 

$

31,178

 

Remaining amortization period of discount on the liability

   component

 

3.8 years

 

 

4.0 years

 

 

 

2.75% Convertible Exchange Senior Notes due 2020  - Exchange Notes

In February 2017, the Company entered into an indenture, dated as of February 23, 2017 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee, governing the Company’s new 2.75% Convertible Exchange Senior Notes due 2020 (the “Exchange Notes”). Approximately $49.6 million in aggregate principal amount of the 2013 Notes were exchanged for an equal principal amount of Exchange Notes.

The Exchange Notes will be the Company’s senior, unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Exchange Notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated, including the 2013 Notes; effectively junior in right of payment to any of the Company’s secured indebtedness (including the Company’s existing 0% Convertible Senior Secured Notes due 2020, or the Secured Notes) to the extent of the value of the assets securing such indebtedness; and will be structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.

The Exchange Notes bear interest at a fixed rate of 2.75% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning June 1, 2017. Interest on the Exchange Notes accrues from December 1, 2016. The Exchange Notes will mature on December 1, 2020, unless earlier repurchased, redeemed or converted.

The Exchange Notes are convertible at any time prior to the close of business on the business day immediately preceding the maturity date, at the option of the holders, into (i) shares of the Company’s common stock, or the Common Stock, plus (ii) a cash payment equal to $150 for each $1,000 principal amount of Exchange Notes converted (the “Additional Conversion Payment”), subject to certain adjustments. For conversions prior to September 1, 2018 and prior to the Company’s election to exercise its Mandatory Conversion Right (as hereinafter defined), the Company will make an interest make-whole payment to a converting holder for each $1,000 principal amount of Exchange Notes being converted, or the Interest Make-Whole Payment. The Company may pay any Interest Make-Whole Payment either in cash or in shares of Common Stock, at the Company’s election. If the Company elects to pay any Interest Make-Whole Payment in cash it will pay cash in an amount equal to the Interest Make-Whole Payment. If Company elects, or is deemed to have elected, to pay any Interest Make-Whole Payment by delivering shares of Common Stock, the number of shares of Common Stock a converting holder of Exchange Notes will receive for each $1,000 principal amount of Exchange Notes will be the number of shares equal to the amount of the Interest Make-Whole Payment to be paid to such holder, divided by the product of (x) 98% and (y) the simple average of the daily volume-weighted average price of the Common Stock for the five trading days ending on and including the trading day immediately preceding the conversion date. Subject to compliance with certain conditions, the Company has the right, or the Mandatory Conversion Right, to, at its option, mandatorily convert all of the Exchange Notes if the daily volume-weighted average price of the Common Stock is equal to or greater than 60.0% of the applicable conversion price of the Exchange Notes for at least 20 Daily VWAP Trading Days (as defined in the indenture governing the Exchange Notes) (whether or not consecutive) during any 30 consecutive Daily VWAP Trading Day period (including the last trading day of such period).

The conversion rate for the Exchange Note is initially approximately 66.6667 shares of Common Stock per $1,000 principal amount of Exchange Notes (equivalent to an initial conversion price of $15.00 per share of Common Stock), and will be subject to adjustment upon the occurrence of certain events.

The Company may redeem for cash all or any portion of the Exchange Notes, at its option, on or after December 1, 2019 at a

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