A Diagnostics & Imaging Week

Alliance Imaging (Anaheim, California), a national provider of diagnostic imaging services, reported successfully completing the sale of $150 million in aggregate principal amount of its 7-1/4% senior subordinated notes, due 2012, in a private placement (Diagnostics & Imaging Week, Dec. 16, 2004).

Alliance said it used the net proceeds of the offering, together with proceeds of about $390 million from the issuance of Tranche C1 term loans under its senior secured credit facilities and cash on hand, to fund the purchase of $256.5 million in aggregate principal amount of its outstanding 10 3/8% senior subordinated notes, due 2011, representing around 98.6% of the outstanding notes, pursuant to a tender offer and consent solicitation, which expired Dec. 28.

The proceeds also went to repay $236 million in aggregate principal amount of term loans, plus accrued interest thereon, previously outstanding under its senior secured credit facilities, and payment of certain fees and expenses related to the issuance of the new notes, the incurrence of the new term loans, the credit facilities refinancing, and the tender offer and consent solicitation.

Ophthalmic Imaging Systems (OISI; Sacramento, California), a provider of ophthalmic digital imaging systems, reported receiving a commitment from Dutchess Private Equities Fund II (Boston) to purchase up to $9 million of OISI's common stock over a 30-month period.

OISI may request drawdowns by selling shares of its common stock to Dutchess Private Equities Fund II, and Dutchess Private Equities Fund II will be obligated to purchase the shares.

OISI has agreed to register 6 million shares with the Securities and Exchange Commission (SEC). This agreement becomes effective on the date the registration statement is declared effective by the SEC.

Gil Allon, OISI's CEO, said, "Having demonstrated consistent profitability over the past 12 quarters, we chose a financial partner that recognized our value, our growing traction and the long-term potential of our business. Dutchess was the perfect choice and we look forward to their ongoing support."

Allon added, "With the recent launch of our two new products, OIS WinStation 3200 imaging system and the OIS WebStation webserver, OISI is fostering its leadership position in the ophthalmic digital imaging space. This funding commitment will enable us to accelerate the rollout of these new products, build stronger sales channels and support our continued commitment to R&D and business expansion."

In other financing activity:

InSight Health Services (Lake Forest, California) reported commencement of its offer to exchange up to $25 million principal amount of its registered 9-7/8% senior subordinated notes, due 2011, for a like principal amount of its 9-7/8% senior subordinated notes, due 2011, initially issued on March 8, 2004.

InSight accepted for exchange any and all outstanding notes properly tendered in the exchange offer prior to 5 p.m., EST, Jan. 31. Bank Trust National Association served as exchange agent for the offer.

InSight provides diagnostic imaging and information, treatment and related management services. It serves managed care entities, hospitals and other contractual customers in 37 states, including six targeted regional markets: California, Arizona, New England, the Carolinas, Florida and the Mid-Atlantic states.

Genelabs Technologies (Redwood City, California) reported receiving $1.25 million from Affymetrix (Santa Clara, California) for an amendment to a non-exclusive license to Genelabs' Linker-Aided DNA Amplification technology (LADA), which Affymetrix licensed from Genelabs in 2002. The amendment converts the license to a fully paid-up non-exclusive license and eliminates royalties and fees that were payable under the original agreement.

The license covers U.S. patent Number 6,107,023, titled "DNA amplification and subtraction techniques," and corresponding international patents. The patent claims a method of amplifying nucleic acids by attaching DNA linkers of a known sequence to the ends of unknown DNA sequences which are targeted for amplification. By adding these linkers to targeted DNA molecules, users can design and construct primers complementary to the attached linkers and amplify the unknown, targeted DNA sequences.

James Smith, president and CEO, said, "We are seeking to realize additional value from our LADA intellectual property assets from other parties. At the same time, we are continuing our core focus on drug discovery and development."

The Sagemark Companies (New York) reported consummating a second closing in connection with a private placement of shares of its common stock and warrants to purchase shares of its common stock, with gross proceeds of $2.36 million. These proceeds are in addition to the $3,461,500 received by Sagemark from the November closing, for a total of $5,821,500 from the private placement through Dec. 29.

"This private placement will enable the company to aggressively expand its portfolio of state-of-the-art PET imaging centers," said President and CEO Ted Shapiro.

Sagemark owns, operates and administers outpatient medical diagnostic positron emission tomography (PET) imaging centers and has just opened its fifth PET imaging center.

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