In April the Carlsbad, Calif.-based company, which makes a gas-filled balloon designed to treat obesity, revealed plans to lay off 50% of its employees, including all of its direct sales force, as it shifts its business model toward company-owned or managed retail centers. Obalon later tapped an advisory firm to explore “strategic alternatives” and last month registered a stock offering worth more than $17 million.
Today the company said it cut its debt to Pacific Western Bank from $20 million to $5 million, thereby lowering its annual interest expenses from about $1.4 million to $350,000.
Obalon also said it raised $8.8 million during the second quarter via an equity offering, stock sales through its equity line of credit with Lincoln Park Capital and an at-the-market offering.
“We are pleased to have been able to utilize our multi-pronged approach to raise capital and improve our balance sheet,” president & CEO William Plovanic said in prepared remarks. “We are now focused on driving new strategic initiatives that can more efficiently convert consumer interest in our novel FDA-approved treatment for obesity into patient treatments, including developing a network of company-owned or managed Obalon-branded retail centers. We expect to be able to provide more detail on our revised commercial strategy in the coming weeks.”
A.G.P./Alliance Global Partners was financial advisor on the equity offering; Canaccord Genuity was sales agent for the at-the-market offering, Obalon said.