Aeolus Pharmaceuticals, Inc. (OTC Bulletin Board:AOLS) announced today that it has completed a $1.65 million financing with several existing institutional shareholders, all of which are affiliates of Xmark Opportunity Partners, LLC. Under the terms of the financing, Aeolus received $1.65 million in gross proceeds in exchange for 5,892,857 Units (the “Units”), with each Unit comprised of one share of Aeolus Pharmaceuticals common stock, and a seven year warrant to purchase up to two additional shares of Aeolus Pharmaceuticals common stock at an initial exercise price of $0.28 per share, for a per Unit purchase price of $0.28. The proceeds from the transaction will be used to fund animal efficacy studies in Acute Radiation Syndrome, further development of AEOL 10150 and for general corporate purposes.
The Company also granted to the investors the option to acquire, collectively, up to an additional 5,892,857 Units at the $0.28 per Unit price (the “Call Option”). In addition, the investors granted to the Company the option to require the investors, severally and not jointly, to acquire up to an additional 5,892,857 Units, less any additional Units acquired under the Call Option, at the $0.28 per Unit price (the “Put Option”). The Call Option is exercisable at any time, and from time to time, on or prior to June 30, 2010. The Put Option is exercisable at any time from June 30, 2010 to July 30, 2010. However, the investors shall have the right to terminate the Put Option if the investors reasonably determine that a material adverse event, condition or circumstance has occurred with respect to the prospects of the Company’s AEOL 10150 drug candidate for acute radiation syndrome; provided that the Company’s failure to receive a grant or financing shall not, by itself, constitute a material adverse event, condition or circumstance with respect thereto.