Brokered offering conducted by H.C. Wainwright; deal includes warrants
By Devika Patel
Knoxville, Tenn., July 22 – Mela Sciences, Inc. said it will raise about $27.3 million in a private placement of series B convertible preferred stock and senior secured convertible debentures. H.C. Wainwright & Co., LLC is the agent.
The company will offer about $15 million of 4% five-year debentures. The convertibles will convert into about 5.8 million common shares at an initial conversion price of $2.565 per share. The conversion price is an 8.72% discount to the July 21 closing share price of $2.81.
The company will sell 12,300 preferreds at $1,000.00 apiece. The preferreds are convertible into about 4.8 million common shares at an initial conversion price of $2.565 per share, which is also an 8.72% discount to the July 21 closing share price.
Investors will also receive warrants for about 11.2 million shares. The warrants are each exercisable at $2.45, which is a 12.81% discount to the July 21 closing share price. Of the warrants, 5 million will expire in 18 months and 6.1 million will expire in five years.
Sabby Management, Broadfin Capital LLC and Great Point Partners, LLC are the lead investors.
Proceeds will be used to redeem all of the company's series A convertible preferred shares and for general working capital purposes.
“We are extremely excited to have raised the capital resources that will allow us to continue our progress towards obtaining CMS reimbursement and completing the MelaFind Real-World clinical study,” president and chief executive officer Rose Crane said in a press release.
“We look forward to running additional reader studies and to releasing the preliminary results of the real-world study.”
Mela is a Irvington, N.Y., medical device company.
| Issuer: | Mela Sciences, Inc.
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| Issue: | Series B convertible preferred stock, senior secured convertible debentures
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| Amount: | $27.3 million (approximate)
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| Warrants: | For about 11.2 million shares
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| Warrant expiration: | Five years (for 6.1 million warrants), 18 months (for 5 million warrants)
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| Warrant strike price: | $2.45
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| Agent: | H.C. Wainwright & Co., LLC
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| Investors: | Sabby Management, Broadfin Capital LLC and Great Point Partners, LLC (leads)
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| Pricing date: | July 22
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| Settlement date: | July 24
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| Stock symbol: | Nasdaq: MELA
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| Stock price: | $2.81 at close July 21
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| Market capitalization: | $12.92 million
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| Preferreds
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| Amount: | $12.3 million
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| Preferreds: | 12,300
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| Price: | $1,000
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| Conversion price: | $2.565
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| Conversion ratio: | Into about 4.8 million common shares
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| Convertibles
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| Amount: | $15 million (approximate)
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| Maturity: | Five years
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| Coupon: | 4%
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| Conversion price: | $2.565
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| Conversion ratio: | Into about 5.8 million common shares
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