MiddleBrook changes leadership; Consumer Portfolio improves liquidity; Pure Energy to sell units

By Kenneth Lim

Boston, July 2 - MiddleBrook Pharmaceuticals, Inc. plans to raise $100 million from a stock placement and get a leadership change as a key product heads toward commercialization.

Consumer Portfolio Services, Inc. said its recently announced capital raise was a key infusion of liquidity that should last for at least a year.

Neovasc Inc. sold C$8.3 million worth of stock to fund the commercialization of a product, while Pure Energy Visions Corp. is offering C$6 million worth of stock-and-warrant units.

MiddleBrook raises $100 million

MiddleBrook Pharmaceuticals said it is placing $100 million of stock to Equity Group Investments, LLC.

The company is selling about 30.3 million common shares at $3.30 apiece to the Chicago-based private investment firm. Equity Group will also receive a five-year warrant for about 12.1 million shares with a strike price of $3.90.

MiddleBrook common stock (Nasdaq: MBRK) lost more than half its value, or $1.55, on Wednesday to close at $1.52.

MiddleBrook, a Germantown, Md.-based pharmaceutical company, said it will use the proceeds to support the commercial launch of infection drug Moxatag, to restart clinical development of its skin infection treatment Keflex as well as a pediatric version of throat infection treatment Amoxicillin. Proceeds will also be used for working capital and general purposes.

As part of the financing deal, MiddleBrook will replace a number of its key officers. John Thievon will replace Edward M. Rudnic as president and chief executive, while David Becker will replace Robert C. Low as chief financial officer. Joining the board of directors will be Equity Group managing directors William C. Pate and Mark Sotir as well as Thievon.

"We are very pleased to have completed this agreement with Equity Group, and believe it provides MiddleBrook with both the financial resources and the operational management expertise to make our FDA-approved Moxatag product a commercial success," MiddleBrook chairman R. Gordon Douglas said in a statement. "With our strategic review now concluded, we look forward to focusing the company's initiatives on successfully executing its operating plan."

Consumer Portfolio raises for year

Consumer Portfolio's recent sale of stock and warrants provides valuable liquidity and will likely sustain the company's needs for at least a year, the company's chief investment officer told Prospect News.

The company said it sold $10 million worth of stock to boost its liquidity amid a challenging market environment.

The company sold 3 million common shares and warrants to an affiliate of Levine Leichtman Capital Partners. It may take a further $15 million in financing from Levine if certain terms and conditions are met.

Consumer Portfolio common stock (Nasdaq: CPSS) closed at $1.53 on Wednesday, lower by 4.38%, or $0.07.

Consumer Portfolio, an Irvine, Calif.-based specialty finance company that buys and services retail auto contracts, said it will use the proceeds to improve liquidity.

"This is a $25 million financing," Consumer Portfolio's Robert Riedl said, "$10 million that was funded on Monday, another $15 million if certain conditions are met, and they're likely to be met. The $25 million financing provides liquidity given the liquidity crunch that's out there."

Given Consumer Portfolio's business, the credit crunch has affected the company.

"There's a very clear lack of liquidity in the financial company space from the big banks all the way down, and we are a smaller player, we have a $2 billion portfolio of auto loans," Riedl said. "Our business is holding up well, but there's still a lack of funding in the securitization market that we've historically relied upon."

The latest capital raise should meet the company's requirements for at least a year, Riedl said.

"With our current game plan, this financing should take us a year-plus in," he said. "A lot depends on the securitization market. It could take us longer. ... We're in a pretty unprecedented time in the credit market."

Neovasc raises C$8.3 million

Neovasc announced an C$8.3 million private stock placement to help fund the commercialization of new products.

The placement involved about 3 million common shares and warrants. Neovasc common stock (TSX: NVC) gained 31.74%, or C$0.73, to close at C$3.03 on Wednesday.

Neovasc, which was formerly Medical Ventures Corp., is a Richmond, B.C.-based medical device company.

"Our existing suite of innovative vascular products is now enhanced with a number of late-stage and longer-term development products that we believe have significant commercial potential, further positioning our newly expanded company for growth," Neovasc chief executive Alexei Marko said in a statement. "The new funds from our successful financing will enable us to further strengthen our sales and marketing efforts and to accelerate the commercialization of our new products."

New investors in the financing included the Frost Group and Peregrine Ventures. Existing investors who took part included Gagnon Securities and Neovasc chairman Paul Geyer. As part of the investment, Jane Hsiao and Steven Rubin of Frost Group and Boaz Lifschitz of Peregrine Ventures will join Neovasc's board of directors.

Christopher Clark, chief financial officer of Neovasc, also stated, "As we focus on bringing our new products to market and growing our revenues, we will continue to assess the optimal time for Neovasc to apply for a listing on the American Stock Exchange."

Pure Energy to offer units

Pure Energy said it will offer C$6 million of stock-and-warrant units in a private placement.

The company is offering units of one common share and one half-share of an 18-month warrant on a best-efforts basis. Pricing has not been set.

The agents, led by Blackmont Capital Inc., have an over-allotment option for a further 15%, or about C$900,000.

Proceeds will be used for general corporate purposes.

Based in Toronto, Pure Energy is an international consumer and commercial products company focusing on cost-effective, environmentally responsible products. The corporation is a supplier of rechargeable alkaline batteries products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.