Radient Pharma Defaults on Loan

TUSTIN, Calif. (TheStreet) --Radient Pharmaceuticals'(RPC) creditors are demanding repayment of a loan after a cash crunch forced the company to miss a scheduled payment.

Radient, makers of a colon cancer monitoring test, also disclosed Wednesday in a regulatory filing that it was trying to negotiate a settlement with creditors in an effort to preserve its cash for operations rather than repayment of debt.

Radient shares fell 34% to 26 cents a share in Wednesday's after-hours trading session. The stock closed regular trading flat at 39 cents a share.

At issue is $8.4 million in convertible debt issued to five investors in a private-equity financing that closed in January. Terms of the loan agreement call for Radient to make regularly scheduled repayments on the first of every month and maintain an unrestricted case reserve balance greater than $2.25 million.

Radient did not make the May installment of $843,750, however, because doing so would have dropped the company's cash reserve below the $2.25 million threshold, the company disclosed.

As a result, Radient's five creditors consider the loan to be in default and are demanding repayment in cash totaling $8.62 million, which includes principal, interest and late charges.

The loan default not only adds to Radient's financial woes but also threatens to force the company into bankruptcy if creditors stick to their repayment demands. The true extent of Radient's financial problems is not entirely known because the company has yet to file its year-end 2010 financial and its 10-K annual report.

Onko-Sure sales for the first nine months of 2010 totaled $116,000, a 15% decrease from sales in the first nine months of 2009.

Radient has disclosed in a regulatory filing, however, that it expects to report a net loss in the range of $68 million to $74 million in 2010 compared with a net loss of $17 million in 2009.

--Written by Adam Feuerstein in Boston.

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