According to the U.S. Bankruptcy Court docket, KaloBios Pharmaceuticals filed a First Amended Chapter 11 Plan of Reorganization and related Disclosure Statement, which notes, “A central feature of the Plan is the conversion of the approximately $3 million DIP Facility and $11 million Exit Facility into shares of common stock of KaloBios – referred to in the Plan as the Primary Plan Sponsor New Common Stock.”
The Disclosure Statement continues, “Subject to higher and better offers, the Reorganized Debtor’s entry into the Exit Facility with the Stalking Horse Entities on the Effective Date, consisting of the $11 million in equity financing that is expected to provide the Reorganized Debtor with the funding necessary to satisfy the Plan’s cash payment obligations and the expenses associated with closing the Exit Facility, certain milestone payments to Savant in connection with the Savant Transaction, and initial working capital to finance the Reorganized Debtor’s ongoing operations and capital needs following the emergence from Chapter 11. Subject to higher and better offers, the Stalking Horse Entities will receive 5,885,000 shares of Primary Plan Sponsor New Common Stock in the Reorganized Debtor based upon current outstanding shares of 4,451,000 on a fully anti-dilution basis. If the Stalking Horse Entities fund the Exit Facility, conversion of the DIP Facility in the principal amount of approximately $3 million into 1,960,571 shares of Primary Plan Sponsor New Common Stock; or if the Stalking Horse Entities do not fund the Exit Facility, repayment of the DIP Facility in Cash or in shares of Primary Plan Sponsor New Common Stock at the Stalking Horse Entities’ election.”
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