Will not complete previously announced registered offering
WALTHAM, Mass.--(BUSINESS WIRE)--
NeuroMetrix, Inc. (NASDAQ: NURO, NUROW) 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 E convertible preferred stock at a
price of $1,000 per share, and warrants to purchase an aggregate of
approximately 10.0 million shares of common stock at an exercise price
of $0.70 per share. The Company expects to receive gross proceeds from
the offering of $7.0 million, in an initial tranche of $4.0 million and
a second tranche, which is subject to shareholder approval and an
effective resale registration statement, of $3.0 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 Company will not complete the public offering of units, and the
associated repurchase of Series D convertible preferred stock, as
announced on December 20, 2016, due to feedback from the Nasdaq Stock
Market, Inc.
The Series E convertible preferred stock will be convertible at any time
into an aggregate of approximately 10.0 million shares of common stock
at a conversion ratio of 1,429, subject to certain ownership
limitations. The Series E 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 liquidation rights. The warrants will be exercisable six
months from their date of issuance and will expire five years from the
initial exercise date.
The Company is obligated to seek shareholder approval for the issuance
of the second tranche of the Series E convertible preferred stock and
warrants, and will schedule a meeting of its shareholders for that
purpose. At that meeting, shareholders will also be asked to approve
amendments to 23,486,286 existing warrants and 19,459 shares of Series D
convertible preferred stock held by the investor, which are convertible
into 10,780,554 shares of common stock, to provide that the
exercise price of such warrants, and the conversion price of such
preferred shares, will be reset to $0.70 per share retroactively as of
December 19, 2016. Additionally, until shareholder approval is obtained,
the Series E convertible preferred stock issued in the initial tranche
will be subject to a conversion limitation of approximately 1.2 million
shares of common stock. Finally, in connection with the Offering, (i)
the exercise prices of an aggregate of 11,685,732 of the Existing
Warrants will be immediately reset to $0.92 and will not be exercisable
for six months and one day from December 28, 2016 and the expiration
date of such warrants will also be extended for six months and (ii) the
expiration date of 5,411,764 of the Existing Warrants will be extended
by five years to June 28, 2022.
Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC, is acting as the
exclusive placement agent for the transaction.
The first tranche of the offering is expected to close on or
about December 30, 2016, subject to satisfaction of customary closing
conditions.
The shares of Series E convertible preferred stock and warrants
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 E
convertible preferred stock and upon exercise of the warrants.
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.
About NeuroMetrix
NeuroMetrix is a commercial stage, innovation driven healthcare company
combining bioelectrical 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, including a therapeutic device for restless
leg syndrome. 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 visit www.NeuroMetrix.com.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161228005411/en/
NeuroMetrix, Inc.
Thomas T. Higgins, 781-314-2761
SVP and
Chief Financial Officer
neurometrix.ir@neurometrix.com
Source: NeuroMetrix, Inc.
News Provided by Acquire Media
