SoCal Biotech AtheroNova and its Subsidiary File for Chapter 11
March 3, 2015
By Alex Keown, BioSpace.com Breaking News Staff
IRVINE, Calif. -- AtheroNova Inc. announced Tuesday that the company and its subsidiary, AtheroNova Operations, Inc., filed Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court, Central District of California, Santa Ana division.
During the bankruptcy process Southern California-based AtheroNova executives said the company will evaluate all options, including a supervised asset sale process, for all or substantially all of its assets to a party who could potentially be interested in continuing the company's clinical programs.
Under a Chapter 11 plan of reorganization or liquidation or an asset sale may result in holders of the company's common stock receiving no distribution on account of their interests.
Throughout the bankruptcy process AtheroNova will continue to operate normally, which includes evaluation of its recently concluded Phase Ib clinical trial in Russia. In 2013 AtheroNova’s Russian partner CardioNova began human trials testing AHRO-001, a possible treatment for atherosclerosis, high cholesterol and other related conditions. The orally administered compound is designed to dissolve plaque within the walls of the arteries and remove it from the body through natural metabolic processes. In preclinical studies, AHRO-001 did not show adverse effects, including morbidity or mortality, the company said.
In addition to AHRO-001, AtheroNova has planned to develop multiple applications for its patents-pending therapies in market sectors that include cardiovascular disease, stroke, peripheral artery disease, dementia and Alzheimer’s and erectile dysfunction, all of which have been linked to atherosclerosis. Atherosclerosis and related pharmaceutical expenses cost consumers more than $41 billion annually in the United States alone.
The Chapter 11 filing has been on the horizon for some time as the company has struggled with finances. Last month the company received additional notices of debt acceleration from multiple holders of 2.5 percent debt notes. The outstanding principal amount under the AtheroNova’s 2.5 percent notes is $1,181,167. If all the outstanding debt under the 2.5 percent notes is accelerated, AtheroNova will be required to repay to the holders $1,417,400 plus accrued and unpaid interest and any other expenses.
Additionally holders of 6 percent and 8 percent debt notes also issued notices of acceleration. If all indebtedness under the 6 percent notes is accelerated, the company must pay at least $2,239,800 plus accrued and unpaid interest and expenses. If the 8 percent notes are accelerated, the company will be required to pay $600,000 plus interest and expenses.
Following this morning’s announcement of filing for Chapter 11, AtheroNova’s stock was trading at .0225 per share.
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