Cambridge Heart completes $1.8 million Series D preferred stock financing

Dec 28 2009

Cambridge Heart, Inc. (OTCBB: CAMH), 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.

“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.”

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.”