A Diagnostics & Imaging Week
DOBI Medical (Mahwah, New Jersey) said it has secured a securities purchase agreement with institutional investors for the private placement of $6 million in principle amount, of secured convertible debentures maturing on Aug. 28, 2007, and convertible initially into 75 million shares of the company's common stock.
In addition to the convertible debentures, discounted to $5.25 million, the company issued eight-month warrants at a price of 8 cents a share to purchase up to 75 million shares of common stock and three-year warrants at an exercise price of 15 cents a share to purchase up to 75 million shares of common stock, both callable by the company if certain conditions are met.
The company also issued three-year warrants to purchase up to 37.5 million shares of common stock at an exercise price of 50 cents per share.
The transaction will result in aggregate gross cash proceeds of about $5.25 million in two equal installments. The first installment is on May 1 and the second will be immediately after the effectiveness of the first registration statement. Net cash proceeds will be about $4.75 million.
The company said it intends to use the proceeds of the private placement for working capital and general corporate purposes with an emphasis on completion of its clinical trial research study and premarket approval application to the FDA, and international sales and marketing efforts.
Concurrent with this financing, DOBI closed a warrant reset offered to all accredited warrant holders. Participating warrant holders were allowed to exercise their warrants at an exercise price of 8 cents per share. In that connection, the company issued 10.37 million shares of registered common stock, and issued three-year warrants to purchase 10.37 million shares of common stock at an exercise price 15 cents per share, as well as three-year warrants to purchase 5.18 million shares of common stock at an exercise price 50 cents per share.
The company realized net cash proceeds of about $839,000 in the transaction. No placement agent fees were associated with this warrant reset.
The company also reduced the conversion price of its Series A preferred stock from $1.31 per share to 37 cents per share.
DOBI is a developmental stage, medical imaging company working to create a new means for improving the diagnosis of breast disease through the identification of abnormal vascularization associated with tumors.
In other financing activity:
• DexCom (San Diego) reported that the underwriters of its follow-on offering of common stock, which priced on April 26 have exercised their option to purchase an additional 717,375 shares of common stock from DexCom to cover over-allotments.
DexCom granted the underwriters a 30-day over-allotment option to purchase up to 717,375 shares of common stock, giving it net proceeds of about $16.2 million.
DexCom is developing continuous glucose monitoring systems. The company recently won FDA approval for its STS continuous glucose monitoring system, a device that is inserted beneath the skin to give continuous monitoring of glucose levels over a 72-hour period.
• Neogen (Lansing, Michigan) has filed a registration statement with the SEC for the offering from time to time of up to 1,000,000 of its common shares.
Neogen develops products and services dedicated to food and animal safety. The company's Food Safety Division markets dehydrated culture media and diagnostic test kits to detect foodborne bacteria, natural toxins, genetic modifications, food allergens, unique proteins, drug residues, plant diseases and sanitation concerns. Neogen's Animal Safety Division markets diagnostics, veterinary instruments, veterinary pharmaceuticals, nutritional supplements, disinfectants and rodenticides.