WALTHAM, Mass.--(BUSINESS WIRE)--
NeuroMetrix, Inc. (NASDAQ: NURO, NUROW) announced that it has closed its
previously announced private placement to a healthcare dedicated
institutional investor 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 has received gross
proceeds from the first tranche of the offering of $4.0 million, and
expects to receive gross proceeds from 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 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 existing warrants have
been reset to $0.92 per share; such warrants 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 existing warrants will be extended by five
years to July 4, 2022.
Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC, acted as the
exclusive placement agent for the transaction.
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/20170105005975/en/
NeuroMetrix, Inc.
Thomas T. Higgins, 781-314-2761
SVP and
Chief Financial Officer
neurometrix.ir@neurometrix.com
Source: NeuroMetrix, Inc.
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