Troubled RNAi drug developer Marina Biotech this week disclosed that it has defaulted in making repayments of outstanding secured indebtedness, putting further pressure on the company as it skirts bankruptcy.
Struggling under a cash shortage, Marina halted virtually all of its operations in mid-2012 (GSN 6/7/2012). Later that year, it released its long-delayed 2011 financial results, reporting that its funds were expected to run out before the end of that year.
Marina has managed to squeak by after selling off all of its equipment and terminating almost all of its employees. In a filing with the US Securities and Exchange Commission this week, the company said it now expects its cash to last through the end of February.
However, this assumes successful negotiations with its lenders, Marina said in the filing.
In February 2012, the company issued 15 percent secured promissory notes in the aggregate principal amount of $1.5 million to two investors, it said. The notes were due and payable by the end of 2012.
“We are currently in default in the repayment of these notes,” Marina noted in the filing. “As a result, the secured lenders may foreclose on substantially all of our assets under the notes and the related security agreements.
“Renegotiations of the debt agreements to address the default are ongoing,” it added.