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MELA Sciences to Raise Millions in Private Placement to Institutional Investors and MELA Sciences Directors

February 5, 2014

MELA Sciences, Inc. , developer of MelaFind, an FDA approved optical diagnostic device that assists dermatologists in melanoma diagnosis, announced it has entered into definitive agreements with institutional investors and management for the private placement of $12.45 million of the Company's convertible preferred stock, common stock warrants and common stock. According to the Company, the investors in the transaction were funds managed by Sabby Management, which comprise the Company's largest existing beneficial shareholder, and Broadfin Capital . In conjunction with the financing, MELA Sciences' directors have agreed to purchase $150,000 in restricted common stock priced at $0.74 per share, yesterday's closing bid price for MELA's common stock. Pursuant to the terms of the private placement, the Company will issue non-redeemable preferred stock convertible at any time into common stock at a conversion price of $0.84 , amounting to 14,642,857 shares of the Company's common stock. Additionally, the Company will issue to the investors warrants to purchase up to 11,714,286 shares of common stock at an exercise price of $0.74 . The warrants are immediately exercisable and will have a term of exercise of five years. Broadfin has been granted the right to designate one director to the Company's Board of Directors. The Company will also issue 202,703 shares of restricted common stock to Directors for their agreed investment of $150,000 . The investors have been granted resale registration rights with respect to the shares underlying the preferred stock and warrants, as well as rights of participation in future offerings of the Company's securities. MELA Sciences intends to use the net proceeds from this offering to re-launch MelaFind focusing on the key dermatologists who treat many of the patients at high risk for melanoma. Funds will also be used to support new clinical trials and the expanded application of the technology and for general corporate purposes, including working capital. Rose Crane , MELA's CEO and President, said "This offering provides us the capital we need to turn our full attention to the business and the introduction of MelaFind to key dermatologists. We are extremely encouraged by the interest and support we are receiving for MelaFind within the dermatology community and the reception we have had at dermatology conferences and events over the last six months. It confirms our belief that this device has the potential to become a standard of care for melanoma diagnosis, and that our strategy to build awareness and usage within opinion leading physicians is proving successful in its early stages." "We are delighted to have two great healthcare investors participate in this funding as well as announce our management has personally invested. We look forward to reporting our progress in the coming quarters." Craig-Hallum Capital Group acted as the exclusive placement agent in connection to the offering. MELA Sciences is a medical device company developing dermatology diagnostics utilizing optical imaging. More Information: ((Comments on this story may be sent to ))

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Source: Health & Beauty Close - Up

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