Cambridge Heart, Inc. Raises $1.8 Million in Private Placement
TEWKSBURY, Mass.--(BUSINESS WIRE)--Cambridge Heart, Inc., today announced that it has completed a private placement of Series D convertible preferred stock, raising proceeds of approximately $1.8 million. No finder’s fees or commissions were paid in connection with the financing. Under the terms of the financing, the Company issued and sold 1,852 shares of Series D convertible preferred stock, which have a senior liquidation preference, at a purchase price of $1,000 per share.
Each share of Series D convertible preferred stock is convertible into shares of the Company’s common stock at a conversion price of $0.082 per common share, representing a 15% premium to the 20-day trailing average of the Company’s closing common stock price as of December 21, 2009 (the “Closing Price”). The total number of shares of common stock initially issuable upon conversion of the Series D convertible preferred stock issued in the financing is 22,585,366.
In addition to the Series D convertible preferred stock, the Company issued two types of warrants to each investor:
* A “short-term warrant” that entitles the investor, for a period of one year, to purchase a number of shares of common stock equal to 50 percent of the number of shares of common stock into which the Series D convertible preferred stock purchased by each investor is convertible. The exercise price of this short-term warrant is $0.107 per share, or a 50% premium to the Closing Price. If these short-term warrants are exercised, an additional $1.2 million in capital would be raised in 2010. * A “long-term warrant” that entitles the investor, for a period of up to five years, to purchase a number of shares of common stock equal to 30 percent of the number of shares of common stock into which the Series D convertible preferred stock purchased by each investor is convertible. The exercise price of this long-term warrant is $0.142 per share, or a 100% premium to the Closing Price. If at anytime during the five-year term, the Company’s common stock trades at $0.284 per share or higher for a period of 20 consecutive trading days, the Company can require the investors to exercise all remaining warrants, which would generate additional capital of approximately $900,000.
The Series D financing was provided by institutional and individual investors, including existing shareholders. Three members of the Company’s Board of Directors also participated in the financing and provided approximately 20 percent of the total capital raised.
“In addition to the participation of a new institutional investor, we are pleased that a significant portion of this financing was provided by existing shareholders and directors, which we believe demonstrates confidence in our technology and fundamental strategy,” said Roderick de Greef, Chairman of the Cambridge Heart Board of Directors. “The warrants issued as part of this financing were structured so that if the Company is successful in executing its strategy, additional working capital can be generated within 12 months.”
"This financing provides working capital to continue our efforts to accelerate the adoption and utilization of our MTWA technology,” said Dr. Haghighi-Mood, President and Chief Executive Officer of Cambridge Heart, Inc. “We recognize that the completion of this financing represents support for our OEM MTWA module strategy, and we look forward to continuing to execute on that strategy and achieving additional milestones in 2010.”
About Cambridge Heart, Inc.
Cambridge Heart develops and commercializes non-invasive diagnostic tests for cardiac disease, with a focus on identifying those at risk for sudden cardiac arrest (SCA). The Company’s products incorporate proprietary Microvolt T-Wave Alternans™ measurement technologies, including the patented Analytic Spectral Method® and ultrasensitive disposable electrode sensors. The Company’s MTWA test, originally based on research conducted at the Massachusetts Institute of Technology, is reimbursed by Medicare under its National Coverage Policy.
Cambridge Heart, founded in 1990, is based in Tewksbury, MA. It is traded on the Over-The-Counter Bulletin Board (OTCBB) under the symbol CAMH.OB.
http://www.cambridgeheart.com.
Statements contained in this press release that are not purely historical are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. In some cases, we use words such as “believes”, “expects”, “anticipates”, “plans”, “estimates”, “could”, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements. Factors that may cause or contribute to such differences include failure to achieve broad market acceptance of the Company’s MTWA technology, failure of our sales and marketing organization to market our products effectively, inability to hire and retain qualified clinical applications specialists in the Company's target markets, failure to obtain or maintain adequate levels of first-party reimbursement for use of the Company's MTWA test, customer delays in making final buying decisions, decreased demand for the Company's products, failure to obtain funding necessary to develop or enhance our technology, adverse results in future clinical studies of our technology, failure to obtain or maintain patent protection for our technology and other factors identified in our most recent Annual Report on Form 10-K under “Risk Factors”, which is on file with the SEC and available at www.EDGAR.com. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so except as may be legally necessary, even if our estimates should change.
Contact:
At Cambridge Heart: Vincenzo LiCausi, 978-654-7600 x 6645 Chief Financial Officer vincenzol@cambridgeheart.com or Media: KOGS Communication Edna Kaplan, 781-639-1910 kaplan@kogspr.com or Investor Relations: Allen & Caron Matt H. Clawson, 949-474-4300 matt@allencaron.com