NeuroMetrix to purchase $18.68 million of its common stock

Sep 9 2009

NeuroMetrix, Inc. (Nasdaq:NURO), a healthcare company transforming patient care through neurotechnology, today announced that it has obtained commitments from institutional investors to purchase approximately $18.68 million of its common stock in a private placement. NeuroMetrix has entered into securities purchase agreements pursuant to which it will sell an aggregate of 8,816,521 shares and warrants to purchase up to 8,375,695 additional shares of common stock. Each unit, consisting of one share of common stock and a warrant to purchase 0.95 of a share of common stock, will be sold for a purchase price of $2.12. The offering is expected to close later this week.

According to the Company, proceeds from the transaction are expected to be used to expand its direct US sales force, increase its international presence, fund certain clinical outcome studies, advance its lead potassium channel blocker compound to a Phase I milestone, as well as for other general working capital purposes.

The warrants will be exercisable at an exercise price equal to $2.20, which represents a 10% premium over the consolidated closing bid price of the common stock as reported on the Nasdaq Stock Market on September 4, 2009. The warrants are exercisable commencing on the six-month anniversary of the closing and will expire five years from the date of issuance.

In connection with the financing, NeuroMetrix has agreed, subject to certain terms and conditions, to file a registration statement under the Securities Act covering the registration of the common stock and warrants acquired at closing within 45 days after closing.

The Company also amended its Rights Plan as of September 8, 2009 to specify that the sale of the common stock and issuance and subsequent exercise of the warrant by Deerfield Management do not trigger the change of control provisions of the Rights Plan.