9/30/2008 8:51:37 AM
SAN DIEGO--(BUSINESS WIRE)--Akesis Pharmaceuticals, Inc. (OTCBB: AKES), an emerging diabetes drug-development company, today announced that, on September 29, 2008, it entered into a Note and Warrant Purchase Agreement with Avalon Ventures VII, L.P. Pursuant to the Note and Warrant Purchase Agreement, the Company has the ability to sell to Avalon Ventures one or more convertible promissory notes maturing February 1, 2009 in an aggregate principal amount of up to $2.0 million. Each note will automatically convert into shares of the Company’s preferred stock in the event of the closing, prior to February 1, 2009, of a preferred stock financing resulting in aggregate gross proceeds to the Company of at least $2.0 million (including amounts received in connection with the conversion of the notes) and will be issued together with a five-year warrant to purchase additional shares of such preferred stock. An initial closing of the sale of notes and warrants was held on the Effective Date of the Note and Warrant Purchase Agreement and involved the sale to Avalon Ventures of a note (and a corresponding warrant) representing an initial principal amount of $1.0 million.
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