MEDITE Cancer Diagnostics, Inc. (OTCQB:MDIT) (the “Company”), specializing in the development, manufacturing and marketing of molecular biomarkers and premium medical devices for detection, risk assessment and diagnosis of cancer and precancerous conditions, today announced the closing of a $5.4 million private financing with GPB Debt Holdings, resulting in gross proceeds net of discount of $4.9 million.
“We are pleased to have completed this important financing that we believe will position MEDITE to execute on its growth strategy that is focused on bringing new innovative cancer diagnostic products built upon a foundation of manufacturing excellence to the global marketplace,” commented David Patterson, CEO of MEDITE. “We are confident that strengthening our balance sheet, including the infusion of working capital to drive execution of the Company’s business plan, should enable MEDITE to meet internal production targets. We believe the Company is now well positioned to meet product demand for the fourth quarter, which is typically our strongest quarter of the year.”
“We are particularly pleased with the robust market interest in our new C1 SureCyte(TM) fluorogenic stain, which exceeded our expectations when we introduced the product at leading industry trade shows in Amsterdam and Barcelona over the past month. The revolutionary C1 stain provides clinicians with an accelerated, efficient staining process with unrivaled digital imaging capabilities. We anticipate the working capital infusion from this financing to enable the fulfillment of orders and the booking of initial revenues from this product in the fourth quarter of 2017. Looking ahead to 2018, MEDITE plans to continue to bring new products to market including at-home specimen collection kits and cell preservation solutions that will support MEDITE’s goal to become a one stop supplier, covering the complete laboratory process,” concluded Mr. Patterson.
The financing consisted of MEDITE issuing to GPB a secured promissory note in the aggregate principal amount of $5,356,400, at a purchase price equal to 97.5% of the Face Value of the original $5 million Note and an additional discount of 300,000 Euro ($356,400 at September 26, 2017) attributed to the purchase and settlement of the 750,000 Euro ($890,325 at September 26, 2017) note with VR Equity Partners GmbH by the Purchaser and considered an additional purchase discount and a warrant to purchase up to an aggregate amount of 4,120,308 shares of the common stock. The Note is convertible at $0.65, into 8,240,616 shares of common stock and matures on the 36th month anniversary date following the Closing Date.
The Company agreed to use the proceeds of $4.9 million of this offering to pay (i) the outstanding balance of various credit facilities due to Hannoveresche Volksbank in the amount of $2.3 million, (ii) the outstanding balance of a settlement with VR Equity in the amount of $0.5 million and (iii) the outstanding balance on secured promissory notes in the amount of $301,000, with the remaining balance for working capital of $1.4 million and $125,000 of broker fees and $171,000 of Purchasers legal fees.
For more information about this transaction, please refer to the Company’s 8-K that has been filed with the U.S. Securities and Exchange Commission (SEC).
About MEDITE Cancer Diagnostics, Inc.
MEDITE Cancer Diagnostics, Inc. is a global company that specializes in the development, engineering, manufacturing and marketing of premium medical devices and consumables for detection, risk assessment and diagnosis of cancer and related diseases. The Company is developing a suite of innovative products, both Histo-Pathology (tissue biopsy) and Cyto-Pathology (liquid cell) based, that target large markets and cover the complete laboratory process from biopsy to finished slide, and through diagnosis. MEDITE’s current and future products assist in the early diagnoses of cancer, with a target result of contributing to more lives saved at lower costs. MEDITE’s products are currently being distributed in over 80 countries worldwide.
Forward Looking Statement
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding future operating performance, events, trends and plans. All statements other than statements of historical fact contained herein, including, without limitation, statements regarding our future financial position, business strategy, implementation of the strategic initiatives relative to the refinancing transaction referenced above, budgets, projected revenues and costs, and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “projects,” “estimates,” “anticipates,” or “believes” or the negative thereof or any variation thereon or similar terminology or expressions. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.
Important factors that could cause our actual results to be materially different than those expressed in our forward-looking statements include: our ability to raise capital; our ability to retain key employees; our ability to engage third party distributors to sell our products; economic conditions; technological advances in the medical field; demand and market acceptance risks for new and existing products, technologies, and healthcare services; the impact of competitive products and pricing; US and international regulatory, trade, and tax policies; product development risks, including technological difficulties; ability to enforce patents; and foreseeable and unforeseeable foreign regulatory and commercialization factors, our ability to develop new products and respond to technological changes in the markets in which we compete, our ability to obtain government approvals of our products, our ability to market our products, and changes in third-party reimbursement procedures.
Readers are cautioned not to place undue reliance on our forward-looking statements, as they speak only as of the date made. Such statements are not guarantees of future performance or events and we undertake no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances occurring after the date hereof.