A Medical Device Daily

Diomed Holding (Andeover, Massachusetts), specializing in developing products for the treatment of varicose veins, has received $10 million in venture debt from Hercules Technology Growth (Palo Alto, California), a specialty finance company providing venture debt and equity to technology and life science companies.

“Laser treatment is acknowledged by the market as the most validated and efficacious treatment for varicose veins,” said Bryan Jadot, principal at Hercules. “Diomed’s record of strong revenue growth and its leadership position in a competitive market makes the company an ideal candidate for Hercules’ funding.”

Diomed’s EndoVenous Laser Treatment (EVLT) is a minimally-invasive treatment for alleviating and eliminating varicose veins. The company says it was the first to introduce the diode laser for surgery and pioneered its use in EVLT.

Diomed also offers photoynamic therapy for cancer and pre-cancer treatments.

James Wylie, president/CEO of Diomed, said, “The venture debt provided by Hercules will help support our operations and prospects for continued revenue growth.”

Hercules has additional offices in the Boston, Boulder, Los Angeles and Chicago areas.

Certified Diabetic Services (Naples, Florida), a direct-to-consumer mail-order distributor of diabetic supplies and pharmaceutical services, has closed a $2.75 million private placement. It said that the funds will be used to repay outstanding bank debt and provide working capital to fund acquisitions.

The funding was structured as preferred shares convertible into common shares; the investor also received warrants in the deal.

Midtown Partners & Co. acted as placement agent in the transaction.

Certified Diabetic currently serves over 13,500 patients with Medicare, Medicaid, and private insurance who require diabetic supplies and pharmaceutical services.

In other financing activity:

• MDwerks (Deerfield Beach, Florida), a provider of web-based, electronic claims management and funding solutions, said it has raised $1.7 million through the sale of shares of preferred stock to an institutional investor.

MDwerks said it will use the proceeds for working capital and to service some of its existing debt, including repayment of the outstanding balance of $150,000 due under a promissory note.

The company issued 200 shares of Series B Convertible Preferred stock, having a value equal to $10,000 a share, a seven year Series F warrant to purchase 1.5 million shares of company common stock at $2.25 a share, and a seven-year Series G warrant to purchase 1 million shares of common stock at $2.50 a share. Each share of Series B Convertible Preferred Stock is redeemable at its stated value on Sept. 28, 2008.

MDwerks’ solutions comprise a web-based, HIPAA-compliant system of administrative and financial services designed for physician practices of all sizes and specialties.

• Laboratory Corporation of America (LabCorp; Burlington, North Carolina) reported that its zero coupon subordinated Liquid Yield Option Notes (LYONs), due 2021, and Zero Coupon Convertible Subordinated Notes (Zero Coupon Notes), due 2021, are convertible into common stock of LabCorp at the rate of 13.4108 per $1,000 principal amount at maturity of the LYONs, dated as of Sept. 11, 2001, between LabCorp and The Bank of New York, as trustee and conversion agent. The Zero Coupon Notes are convertible into cash and LabCorp common stock, if any, subject to the terms of the Zero Coupon Notes and the Indenture, dated as of Oct. 24, 2006, between LabCorp, the trustee and the conversion agent.

LabCorp offers clinical assays ranging from routine blood analyses to HIV and genomic testing.

• Mentor (Santa Barbara, California) reported that at its reconvened annual meeting of shareholders on Oct. 1, the shareholders approved an amendment to company Restated Articles of Incorporation to increase the number of shares of capital stock and to provide for the issuance of preferred stock in one or more series.

The effect is to increase the number of shares of the company’s capital stock to 17 million shares, consisting of 150 million shares of common stock, $0.10 par value per share, and 25 million shares of preferred stock, $0.01 par value per share.

Mentor is a supplier of products for the global aesthetic market.

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