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http://www.democratandchronicle.com/article/20080925/BUSINESS/809250335

BIPH - Pittsford's Biophan sheds its debts, improves deal prospects


Investors are suddenly more bullish about Biophan Technologies Inc., a struggling Pittsford biomedical device firm, as the company said Wednesday that it has shed a sizable amount of debt.

Biophan shares closed at 3 cents, up nearly 2 cents for the day.

The company has spent most every day this year trading at under 10 cents and has been trading at a penny since Sept. 3.

Wednesday's small jump in share price came as Biophan announced it had paid off $2.3 million in debt held by a variety of hedge funds. The company used a combination of 18 million shares and $2.15 million in cash.

Biophan had been required to pay off its debt in shares of stock, so that $2.3 million would have required issuing 230 million shares at a penny per share, Chief Executive John Lanzafame said. "This is a far less dilutive alternative."

The debt was due in October 2009.

The agreement also cancels a subscription warrant that let the hedge funds purchase another 17 million shares, according to Biophan.

Biophan said the deal leaves it with enough money on hand for 12 months of operation, but Lanzafame said the company intends to find bridge financing or develop the business to begin taking in revenues.

Biophan had been required to issue stock monthly to the hedge funds, and that monthly sale was depressing the share price, Lanzafame said.

Being out of the debt arrangement also gets the company out from under some control provisions and "really frees us up to do different types of deals with our technology," he said.

Biophan is working on a variety of cardiac technology, such as stents that do not interfere with MRIs and a pump that would supplement the heart in treatment of acute heart failure.

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