Investing.com -- Kala Pharmaceuticals Inc (NASDAQ:KALA) stock surged 14% in after-hours trading Monday following the company’s announcement that it has successfully settled its debt obligations with Oxford Finance, LLC.
The biopharmaceutical company completed a $2 million payment to Oxford, effectively discharging approximately $10.6 million in debt obligations as of December 26. The settlement resolves events of default under a Loan and Security Agreement dated May 4, 2021, and removes what the company described as a "substantial overhang" that had been limiting its strategic flexibility.
"The successful completion of the Oxford settlement represents a watershed moment for KALA BIO," said David E. Lazar, Chief Executive Officer and Chairman of the Board. "By settling the Company’s debt obligations and increasing stockholders’ equity, we have removed a substantial overhang that was constraining the Company’s strategic flexibility."
The debt settlement marks what the company called a "transformational milestone" that resolves critical financial obligations and potentially strengthens its balance sheet by eliminating the $10.6 million liability.
In a separate matter, Kala also disclosed that its Compensation Committee approved common stock awards to four newly hired employees on December 30, with these inducement grants totaling 400,000 shares of common stock.
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