aibioPDS Biotechnology sells convertible debentures for $20,000,000 to retire Horizon loan
Tickers PDSB
PDS Biotechnology sold $22,222,222 of senior secured convertible debentures for $20,000,000 on April 30, 2025, and used about $19 million to repay its Horizon Technology loan. The filing names no placement agent, underwriter, financial adviser or counsel.
Key facts
- Company
- PDS Biotechnology Corporation (NASDAQ: PDSB)
- News type
- Debt Financing
- Primary source
- PDS Biotechnology Corporation 8-K (2025-05-02)
PDS Biotechnology Corporation (Nasdaq Capital Market: PDSB) entered into a securities purchase agreement on April 30, 2025 with a group of buyers and JGB Collateral LLC, which acts as collateral agent. The transaction closed the same day. The company sold senior secured convertible debentures with an aggregate face value of $22,222,222 and warrants to purchase up to 1,000,000 shares, for a total purchase price of $20,000,000. It disclosed the deal in an 8-K filed May 2, 2025, under Items 1.01, 1.02, 2.03 and 3.02.
The 8-K does not name the buyers, a placement agent, an underwriter, a financial adviser or any law firm for the deal. It identifies only JGB Collateral LLC, in its role as collateral agent.
The debt and its cost
The debentures were issued with an original issue discount of $2,222,222, so the $20,000,000 purchase price is below the face value. They mature on April 20, 2028 and carry interest at the prime rate in The Wall Street Journal plus 5%, with a minimum prime rate of 6%, payable monthly.
Starting August 28, 2025, a holder may require PDS to redeem up to $500,000 of its debenture each calendar month. The company may redeem the debentures on or after the first anniversary of issue, but only in full, not in part. The redemption premium is 103% of principal before the second anniversary and 102% after it.
The debentures are convertible at $2.52 per share at the holder's option, though a holder cannot convert to the extent its stake would exceed 4.99% of outstanding common stock, or 9.99% if the holder elects that cap. The company also issued warrants for 1,000,000 shares at $2.52, which the 8-K says is a 100% premium to the average of the five daily volume weighted average prices before closing. The warrants are exercisable for ten years from April 30, 2025.
The company must keep a cash balance equal to the lesser of $15.0 million and the outstanding principal plus $3.0 million, in a controlled account. While the debentures are outstanding, PDS may not take on other indebtedness, grant liens, repurchase securities, pay dividends, or sell or license assets outside the ordinary course. It also may not enter a variable rate transaction, which is a convertible financing priced off the trading price of the stock. At-the-market offerings are excluded from that restriction.
Repaying the Horizon loan
About $19 million of the proceeds retired in full the Venture Loan and Security Agreement with Horizon Technology Finance Corporation, Powerscourt Investments XXV, LP and PDS Operating Corporation, dated August 24, 2022. The 8-K reports the termination of that loan under Item 1.02. The filing says the remaining proceeds will go to general corporate purposes and transaction expenses, but it does not give that remaining amount.
The new debt is secured by first priority liens on certain company assets. PDS Operating Corporation and the company guaranteed the obligations. The company also agreed to register the shares underlying the debentures and warrants within 30 days after closing, and to pay liquidated damages if it misses that deadline.
The business behind the borrowing
The 2024 annual report, filed in March 2025, describes PDS as a clinical-stage immunotherapy company. Its approach combines Versamune HPV with PDS01ADC in ICI-resistant cancers. In a Phase 2 trial led by the National Cancer Institute, the company reports a median overall survival of approximately 20 months. It sets that figure against historical medians of 3-4 months in ICI-resistant HPV-positive cancers and 8.2 months as the best reported median with systemic therapy in ICI-resistant head and neck cancer.
Those comparisons are the company's own, and they are drawn against historical figures rather than a concurrent control group. The report says the company completed a Type B meeting with the FDA in February 2023 on a registrational trial, but it does not say when that trial would start.
The 8-K gives no cash balance, net loss or runway estimate. The debt terms show that the company is paying prime plus 5% with a 6% floor, and that it must hold cash against the principal. The filing does not say how long that cash will last, or how much remains after the Horizon repayment.