A Diagnostics & Imaging Week
Transgenomic (Omaha, Nebraska) said that it has received commitments from a group of institutional investors led by Lehman Brothers to purchase 15 million shares of the company’s common stock through a private placement priced at $1.01 a share. Additionally, the company will issue to these investors warrants to purchase 6 million shares.
The transaction is subject to shareholder approval and certain customary conditions. The transaction is expected to close by Oct. 31.
Transgenomic said that the proceeds would be used to repay the company’s current indebtedness with Laurus Master Fund of about $9 million and for general working capital needs.
CEO Collin D’Silva said, “This private placement strengthens our balance sheet and better positions us to pursue the opportunities we’ve identified within our BioSystems business.”
Transgenomic provides research tools and related consumable products. Its BioSystems segment offers its WAVE Systems and associated consumables, designed for use in genetic variation detection and single- and double-strand DNA/RNA analysis and purification and with broad applicability to genetic research and molecular diagnostics. To date there have been about 1,000 systems installed in more than 30 countries.
In addition, the BioSystems segment offers WAVE-based biomarker discovery and validation services in support of translational research, preclinical and clinical studies.
Through its Nucleic Acids business segment, Transgenomic provides specialty chemicals, including advanced nucleic acid building blocks and associated reagents used in the manufacture of synthetic oligonucleotides.
In other financing activity:
• VeraLight (Albuquerque, New Mexico), which says it is developing a new diabetes-screening device, has closed $5 million in Series A funding from an investor syndicate headed by vSpring Capital.
vSpring was joined by Wasatch Venture Fund, Dow Chemical and the Southern Ute Growth Fund.
The company was established in October 2004 in Albuquerque as an independent spinout of InLight Solutions (also Albuquerque) and has been funded to date by a grant from the National Institutes of Health (Bethesda, Maryland) and seed funding from InLight.
VeraLight has developed Scout, a non-invasive screening device it says will detect diabetes and pre-diabetes more accurately and conveniently than current methods. Scout can be performed anywhere, any time and is simpler than taking blood pressure. Results are available in less than 60 seconds, and there are no fasting or blood draw requirements, according to the company.
• Avitar (Canton, Massachusetts) reported securing a financing commitment with accredited investors for the sale of up to $3 million of secured convertible notes and 6 million five-year warrants. The company said the funds would be used for sales and marketing of ORALscreen products and services and general corporate purposes.
It received the first installment of gross proceeds of $1 million on Sept. 23. The notes mature three years from the date of issuance, bear interest at 8% and are secured by substantially all of the assets of the company.
The notes are convertible into shares of common stock of Avitar at the option of the investors at 65% of the average of the three lowest intraday trading prices of the common stock as quoted on the OTC Bulletin Board for the 20 trading days preceding the date that the investors elect to convert.
The company has the right to prepay the notes under certain circumstances at premiums ranging from 20% to 35% depending on the timing of such prepayment. The exercise price of the warrants is 25 cents per share.
Avitar is required to file a registration statement with the Securities and Exchange Commission within 45 days of closing. Upon filing of the registration statement, the company is eligible to receive an additional $1 million. The final installment of $1 million will be made available to the company upon the effectiveness of the registration statement.
ORALscreen is a non-invasive, rapid, onsite oral fluid test for drugs of abuse.
• Wellstar (Holland, Ohio) reported that its Trillennium Medical Imaging (TMI) subsidiary, acquired in June, has obtained initial funding for the launch of its medical division, which will open wholly owned and joint-ventured medical imaging facilities.
In addition to the human imaging in both hospitals and stand-alone facilities, TMI is focused on using new thermal imaging technologies in the equine market
“Trillennium has been working diligently to have contracts immediately ready to sign upon their funding being in place,” Wellstar said in a statement.
John Antonio, president of Trillennium and Wellstar, said, “We have worked very hard for the past year to be in this position as a company. It is an exciting time for the company, and we look to execute substantial contracts over the next few weeks or sooner.”
TMI said it would participate in a quarter-horse show in Kentucky in late September to introduce its imaging services to that community. TMI’s camera/software system, it said, provides information, via both mobile and stationary units, about a horse’s “response to training as well as the effects of injury, disease or prescribed treatment.” With regard to early inflammation of a stressed tendon, the camera will detect the problem up to two weeks earlier than by clinical exams, allowing the trainer to rest or treat the horse before an injury.
• InSight Health Services (Lake Forest, California), a national provider of diagnostic imaging services, reported completing the sale of $300 million of its senior secured floating rate notes, due 2011, in a private placement.
The company said it used the proceeds, together with cash on hand, to repay all outstanding indebtedness under its existing credit facility, purchase a portion of its outstanding 9-7/8% unsecured senior subordinated notes, and pay related fees and expenses.