Just as it’s putting the finishing touches on a private options offering that should net some $3 million in cash, Cambridge Heart Inc. (OTC:CAMH) is warning investors that it will need more money to stay afloat past the end of 2011.
“While the proceeds from our December 2010 private placement of common stock and the exercise of common stock warrants provides us with financing to fund our operations for a period of time, we anticipate that we will need to raise additional capital to fund operations beyond 2011,” the company wrote in a regulatory filing filed with the federal Securities & Exchange Commission. “If we encounter material deviations from our plans including, but not limited to, any lower than expected level of sales to Cardiac Science, or if we continue to experience lower than expected sales of our HearTwave II Systems, our ability to fund our operations will be negatively impacted.”
The Tewksbury, Mass.-based company sold 14.5 million units to select investors at 20 cents each in December 2010. Each unit includes a warrant to buy one share of common stock for 25 cents over the next five years; the options could add $3.6 million to the round. Dawson James Securities Inc. is the selling agent for the offering.
Cambridge Heart is commercializing its microvolt T-wave alternans measurement technology, a non-invasive cardiac test used to assess risk of cardiac arrhythmia for patients who have had heart attacks. The new financing will keep the company operating through this process and as it conducts clinical research on how MTWA can identify patients with ischemia, CEO Ali Haghighi-Mood said in prepared remarks last year.
As of December 31, 2010, the company had about $4.2 million in cash and current assets. In 2010, the company reported net losses in excess of $5.1 million.
Cambridge Heart won a much-needed nod from the Food & Drug Administration when the federal watchdog agency cleared an OEM version of its MTWA module a year ago.
And in September, CAMH officials said that it had begun shipping its integrated OEM MTWA module with a non-invasive diagnostic cardiac test designed to detect the risk of sudden heart attack, made by Bothell, Wash.-based Cardiac Science.