NeuroMetrix (NSDQ:NURO) said today that it entered into a definitive securities purchase agreement with an undisclosed investor for a private offering of 7,000 shares of Series E convertible preferred stock at $1,000 apiece, as well as warrants to purchase 10 million shares of common stock at an exercise price of ¢70 per share. The warrants will expire 5 years after the initial exercise date.
The Waltham, Mass-based company said it expects to receive $7 million in gross proceeds from the offering and that it will use the money to commercialize its over-the-counter wearable device for chronic pain relief.
NeuroMetrix also said it will not complete the public offering of units it made earlier in December, due to feedback from the Nasdaq stock market.
The company had previously expected to raise $26.5 million and planned to spend nearly $20 million from the offering to redeem 19,450 shares of Series D convertible preferred stock. NeuroMetrix also anticipated that it would retire 25 million warrants to purchase outstanding common stock.
In November, the company won CE Mark approval in the European Union for its Quell wearable pain relief device. NeuroMetrix pointed to recent studies that claimed 20-40% of adult Europeans suffer from chronic pain, costing the region $250 billion each year.
The company launched a pilot study of its device in September to evaluate Quell as a treatment for patients with fibromyalgia. NeuroMetrix is partnering with the Synovation medical group to conduct the study, according to the company.