WALTHAM, Mass.--(BUSINESS WIRE)--
NeuroMetrix, Inc. (NASDAQ: NURO) announced today that it has entered
into a definitive securities purchase agreement with a healthcare
dedicated institutional investor in connection with a private placement
of 7,000 shares of Series F convertible preferred stock at a price
of $1,000 per share. The Company expects to receive gross proceeds from
the offering of $7.0 million, in an initial tranche of $3.5 million and
a second tranche, which is subject to shareholder approval and an
effective resale registration statement, of $3.5 million. The proceeds
of the offering will be used for commercialization of Quell®,
the Company's over-the-counter wearable device for relief of chronic
pain, in the United States, and for general working capital purposes.
The Series F convertible preferred stock will be convertible at any time
into an aggregate of approximately 2,661,597 shares of common stock at a
conversion price of $2.63, subject to certain ownership limitations. The
Series F convertible preferred stock is only entitled to dividends in
the event dividends are paid on the Company's common stock and will not
have any preferences over the Company's common stock, including
The Company is obligated to seek shareholder approval for the issuance
of the second tranche of the Series F convertible preferred stock, and
will schedule a meeting of its shareholders for that purpose. At that
meeting, shareholders will also be asked to approve amendments to 14,053
shares of Series D convertible preferred stock and 7,000 shares of
Series E convertible preferred stock held by the investor, which are
convertible into an aggregate of 3,759,451 shares of common
stock, to provide that the conversion price of such preferred shares
will be reset to $2.63 per share retroactively as of July 10, 2017.
The Company will issue no new warrants in connection with the offering.
The Company has agreed to issue an aggregate of 3,621 shares of Series F
convertible preferred stock at a conversion price of $2.63 per share in
exchange for warrants to purchase 4,184,483 shares of its common stock
currently held by the investor. These warrants have been determined by
an independent valuation firm to have an aggregate fair value of
$3,622,220. Following the closing and retirement of these warrants, the
Company will have remaining 660,702 outstanding warrants at a weighted
average exercise price of $32.13 per share.
The first tranche of the offering is expected to close on or about July
13, 2017, subject to satisfaction of customary closing conditions.
The shares of Series F convertible preferred stock described above have
not been registered under the Securities Act of 1933, as amended, and
may not be offered or sold in the United States absent registration with
the SEC or an applicable exemption from such registration requirements.
The securities were offered only to accredited investors. Pursuant to a
registration rights agreement with the investor, the Company has agreed
to file one or more registration statements with the SEC covering the
resale of the shares of common stock issuable upon conversion of or in
connection with the Series F convertible preferred stock.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any of the securities described herein,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any
such state or jurisdiction.
NeuroMetrix is a commercial stage, innovation driven healthcare company
combining neurostimulation and digital medicine to address chronic
health conditions including chronic pain, sleep disorders, and diabetes.
The company's lead product is Quell, an over-the-counter wearable
therapeutic device for chronic pain. Quell is integrated into a digital
health platform that helps patients optimize their therapy and decrease
the impact of chronic pain on their quality of life. The company also
markets DPNCheck®, a rapid point-of-care test for diabetic
neuropathy, which is the most common long-term complication of Type 2
diabetes. The company maintains an active research effort and has
several pipeline programs. The company is located in Waltham,
Massachusetts and was founded as a spinoff from the Harvard-MIT Division
of Health Sciences and Technology in 1996. For more information, please
View source version on businesswire.com: http://www.businesswire.com/news/home/20170710006476/en/
Thomas T. Higgins, 781-314-2761
Chief Financial Officer
Source: NeuroMetrix, Inc.
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