Accentia Biovest debtor granted final approval of $8 million DIP loan

By Lisa Kerner

Charlotte, N.C., Oct. 25 - Accentia Biopharmaceuticals, Inc. debtor Biovest International, Inc. received final court approval to obtain $8 million in debtor-in-possession financing from Empery Asset Master Ltd., Hartz Capital Investments, LLC and other lenders, according to a Monday filing with the U.S. Bankruptcy Court for the Middle District of Florida.

All DIP loan obligations will become due and payable upon the earlier of Nov. 15 and a termination event, the filing said.

As previously reported, Biovest plans to issue warrants to the DIP loan lenders to purchase shares of its common stock at par value of $0.01 per share, as well as to execute DIP secured convertible notes to be issued to the DIP lenders and series A and series B warrants to purchase common stock.

The DIP notes will mature two years from the effective date of Biovest's plan and bear interest at 7%.

The seven-year series A warrants will be mandatorily exchangeable for a new warrant to purchase shares of common stock on the plan effective date, with an initial exercise price of 120% of the last closing bid price on the trading day immediately before the subscription date.

Meanwhile, the term of the series B warrants will expire on Dec. 23. These warrants will be mandatorily exchangeable into warrants to purchase common stock at an exercise price of $0.01.

Accentia, a biopharmaceutical company based in Tampa, Fla., filed for bankruptcy on Nov. 10, 2008. Its Chapter 11 case number is 08-17795.

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