The massive snowfall that shut down Washington, D.C., for more than a week earlier this month also nearly threw a heavy wet blanket over the latest fund-raising efforts at NMT Medical Inc. (NSDQ:NMTI).
The Boston-based device company wrapped up a $5.8 million private placement of its stock, selling 2.7 million shares to a group of individual and institutional investors for $2.15 a share.
Proceeds will fund NMT‘s ongoing clinical trial of its StarFlex implant, intended to demonstrate whether the catheter-based procedure to patch small holes between chambers of the heart is more effective than standard drug treatments in preventing the re-occurrence of stroke. Data analysis from the two-year study is expected to begin in about two months, followed by regulatory applications “provided the data is good,” said COO Rick Davis.
Completing the stock sale, however, required some additional paperwork and footwork by the company. Regulatory documents delivered to U.S. Securities and Exchange Commission sat idle at the agency for much of last week after the federal government largely shut down after nearly three feet of snow buried the nation’s capitol beginning Feb. 5.
By the time the SEC was back functioning at full speed again this week — with an extra day off for the Presidents’ Day holiday — financial information provided with the original filings was “going stale,” according to a Feb. 16 filing. But rather than starting over from scratch, NMT instead opted to restructure the deal as a private placement and quickly wrapped up the offering on its original terms.
“It’s never easy raising money,” said Davis, who had $25,000 of his own money in the deal. Despite the meteorological and logistical obstacles, however, the task ultimately was made easier by most of the participating investors having more than passing knowledge of the company and its operations.
“They understood what NMT is all about, understood the data and the risk profile,” Davis said. “In the end, that helped get this done.”
Two of NMT’s largest stockholders added to their stakes in the private placement, according to a preliminary prospectus. White Plains, N.Y.-based FreshFord Capital Management paid nearly $2.4 million to acquire over 1.1 million shares, boosting its overall stake to 1.54 million shares. Affiliates of New York City-based Glenhill Capital Advisors, which owned 1.72 million shares heading into the deal, bought another 761,000 shares worth $1.6 million. Glenhill and FreshFord now own 18.6 percent and 11.6 percent of the company, respectively.
The private placement also attracted several new institutional investor groups, who spent a combined $1.5 million to buy about 700,00 shares. NMT also issued over 2.1 million warrants to purchase additional stock for $2.90 each, which if fully exercised would generate an additional $6.2 million for the company.
NMT was expecting to have finished 2009 with about $8.9 million in cash and equivalents.