OxySure investor sues regarding $3 million preferreds and convertibles

Investor claims breach of contract for series B convertible preferreds

By Devika Patel

Knoxville, Tenn., July 17 – OxySure Systems Inc. is accused of a breach of contract in a lawsuit filed July 14, according to an 8-K filed Friday with the Securities and Exchange Commission. The holder of the company’s series B convertible preferred stock, Alpha Capital Anstalt, filed the complaint regarding a $3 million private placement of convertible preferred stock and convertible notes that settled on June 30.

The investor claims that the company violated the preferreds’ contract by issuing the July securities without allowing the investor to participate and that conversions of the new securities could constitute a breach of contract under the preferred purchase agreements.

Alpha Capital Anstalt is seeking preliminary and permanent injunctive relief and monetary damages.

On July16, the court denied the plaintiff preliminary injunctive relief. The company said in the filing that it believes it has meritorious defenses against the remaining claims in the lawsuit and that it plans to contest the suit vigorously.

The financing in question will raise $2.7 million through the preferreds and $300,000 through the notes. In the first tranche of the offering, the company sold 385,000 of 6% series C preferreds.

Based in Frisco, Texas, OxySure has developed a technology that creates medically pure oxygen from two dry, inert proprietary powders. With this technology, oxygen is generated on demand.

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