Sep 15 2010
K-V Pharmaceutical Company (NYSE: KVa/KVb) announced today that it has entered into an agreement with U.S. Healthcare I, L.L.C. and U.S. Healthcare II, L.L.C. for a $20 million loan secured by assets of the Company. K-V will utilize the proceeds of the loan for working capital and general operating purposes.
The Company, upon the request of U.S. Healthcare I, L.L.C. and U.S. Healthcare II, L.L.C., has entered into a period of exclusivity to negotiate an expanded, longer-term financial arrangement that will align with the Company's future strategic plans.
Under the terms of the loan agreement, which expires January 31, 2011, the Company will pay interest at an annual rate of 16.5%, of which 5% is Payment-in-Kind (PIK). The exclusivity period expires September 28, 2010.
Greg Divis, Interim President and Chief Executive Officer of K-V stated, "The entire Company, along with the Board of Directors have worked hard to secure this agreement which comes shortly after our receiving approval from the U.S. Food and Drug Administration ("FDA") to return our first product to the market. This financing is another important step in returning the Company to normalized operations."
The Company intends to raise additional capital beyond this $20 million loan to provide for ongoing operations beyond the fourth quarter of calendar 2010.
Source:
K-V Pharmaceutical Company
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