Mela Sciences plans reboot with $12M financing

Mela Sciences plans reboot wit $12M financing

New York medical devices maker Mela Sciences (NSDQ:MELA) is looking to re-invent itself around a new strategy to get its optical diagnostics into clinics, using the proceeds from a new financing round to fund the "re-launch" of its flagship MelaFind device.

Mela said it plans to use its newly raised $12.4 million to "re-launch MelaFind focusing on the key dermatologists who treat many of the patients at high risk for melanoma," as well as to fund clinical trials, expand applications for MelaFind and support general corporate activities.

The funding was raised through a private placement of convertible preferred stock, common stock warrants and common stock to institutional investors, the net proceeds from with total about $11.5 million. In conjunction with the offering Mela directors also purchased about $150,000 in restricted common stock, according to a company statement.

Mela Sciences, whose main product is the mobile MelaFind optical diagnostic system for identifying and diagnosing potential melanoma, has been in a transitional phase since the resignation in June 2013 of long-time CEO Joseph Gulfo, followed by the August termination of 25% of the company’s staff following disappointing quarterly results. Mela in September got a de-listing warning from the NASDAQ Stock Market, which warned that the company must get its share’s above $1 to remain listed on the exchange.

Mela in November put a new face in the corner office, with former Johnson & Johnson (NYSE:JNJ) OTC/nutritionals group chairman Rose Crane taking the title of president & CEO and joining the board of directors.

Alongside the new CEO announcement, Mela also posted deepening losses amid an impressive spike in revenue for its 3rd quarter. Losses grew to $7.4 million, or 17¢ per share, on sales of $107,700 during the 3 months ended September 30. That compared with losses of $5.4 million, or 17¢ per share, on sales of $69,100 during the same period last year. Per-share losses were 7¢ deeper than analysts had projected.

MELA shares gained a few points following yesterday’s private placement announcement, with shares up 1.2% today, trading at 70¢ as of about 1 p.m. Mela’s stock has gained about 11.8% since the start of the year.

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