NeuroMetrix Inc. (NURO) entered into a private placement transaction with institutional investors for $18.68 million worth of its common stock. Per the agreement, the company will sell 8,816,521 shares and warrants to purchase up to 8,375,695 additional shares of common stock. Each unit, comprising a common stock and a warrant to buy 0.95 share, will carry a purchase price of $2.12. NeuroMetrix expects to close the offer later this week. The warrants will expire five years from their date of issuance.
NeuroMetrix designs, develops and sells proprietary medical devices to diagnose neuropathies, which are disturbances of the nervous system. Principally, the company offers physicians an in-office diagnostic system named the NC-stat System. The NC-stat System enables physicians to make rapid and accurate diagnoses of peripheral neuropathies, including carpal tunnel syndrome, low back and leg pain, and diabetic peripheral neuropathy.
NeuroMetrix expects to utilize the funds for a number of activities like expansion of its direct sales force in the U.S., expansion of its international operations, funding of certain clinical outcome studies, transition of its lead potassium channel blocker compound to the next Phase I milestone, and other general working capital requirements.
NeuroMetrix suffered erosion in its top-line due to reimbursement uncertainty for the NC-stat System and a decline in its direct sales force in the U.S. Net sales declined roughly 16% year over year to $6.8 million in the second quarter. The company has a negligible presence in international markets, which account for less than 1% of total revenues.
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