Melanoma Diagnostic Provider, MELA Sciences Provides Details of Recent $12.45 Million Private Placement

  Melanoma Diagnostic Provider, MELA Sciences Provides Details of Recent
  $12.45 Million Private Placement

Business Wire

IRVINGTON, N.Y. -- February 3, 2014

MELA Sciences, Inc. (NASDAQ:MELA), (the Company) developer of MelaFind^®, an
FDA approved optical diagnostic device that assists dermatologists in melanoma
diagnosis, today filed a Form 8-K providing full details from its recent
Private Placement. Following is the text of the details relating to the
private placement that were provided in the Form 8-K.

The Form 8-K can also be seen at http://www.sec.gov.

Item 1.01 — Entry into a Material Definitive Agreement

On January 31, 2014, MELA Sciences, Inc., a Delaware corporation (the
“Company”), entered into a securities purchase agreement (the “Securities
Purchase Agreement”) with certain funds managed by Sabby Management, LLC, the
Company’s largest beneficial shareholder, and Broadfin Capital, LLC
(collectively, the “Investors”), pursuant to which the Company agreed to sell
(i) an aggregate of 12,300 shares of the Company’s Series A convertible
preferred stock, par value $0.10 per share, with a stated value of $1,000 per
share (the “Preferred Stock”), initially convertible into 14,642,857 shares of
the Company’s common stock, par value $0.001 per share (the “Common Stock”),
at a conversion price of $0.84, and (ii) Common Stock purchase warrants (the
“Warrants”) to purchase up to 13,297,297 shares of Common Stock for aggregate
gross proceeds of $12.3 million. The Warrants have an exercise price of $0.74
per share, are immediately exercisable and have a term of five years. The
number of shares issuable upon conversion of the Preferred Stock and exercise
of the Warrants are adjustable in the event of stock splits, stock dividends,
combinations of shares and similar transactions. In connection with the
financing, Broadfin Capital, LLC has been granted the right to designate one
director to the Company’s Board of Directors, so as long as it retains 30% of
its investment in the Preferred Stock or holds any Warrants, and the Investors
have been granted rights of participation in future offerings of the Company’s
securities for one year. As a condition of the financing, the Company’s
directors have entered into subscription agreements pursuant to which the
directors will purchase an aggregate of 202,703 shares of Common Stock, at a
price of $0.74 per share, for aggregate gross proceeds of $150,000.

The Company has also agreed to grant the Investors resale registration rights
with respect to the shares of Common Stock underlying the Preferred Stock and
the Warrants pursuant to the terms of a Registration Rights Agreement (the
“Registration Rights Agreement”). In addition to the registration rights, the
Investors are entitled to receive liquidated damages upon the occurrence of a
number of events relating to filing, getting effective and maintaining an
effective registration statement covering the shares underlying the Preferred
Stock and the Warrants, including the failure of the Company to file a resale
registration statement within 20 days of the closing date of the transaction
and the failure of the Company to have such resale registration statement
declared effective by the Securities and Exchange Commission (the “SEC”)
within 30 days of January 31, 2014. The liquated damages will be triggered by
the occurrence of each of those events and each monthly anniversary thereof
until cured. The amount of liquated damages payable is equal to 10% of the
aggregate purchase price paid by each Investor for the first two events
(and/or the monthly anniversary of an event), 7.5% of the aggregate purchase
price paid by each Investor for the third event (and/or the monthly
anniversary of an event), 2.5% of the aggregate purchase price paid by each
Investor for the fourth event (and/or the monthly anniversary of an event),
and 1% of the aggregate purchase price paid by each Investor for the next two
events (and/or the monthly anniversary of an event), in all up to a total of
32% of the aggregate purchase price paid by each Investor.

The Company has agreed to pay placement fees of $778,000 and reimbursable
expenses of up to $80,000 in respect of this transaction.

The Company intends to use the net proceeds for general corporate purposes,
including working capital, and to pay any liquidated damages, which may be
incurred. The offering is expected to close on or about February 5, 2014,
subject to the satisfaction of customary closing conditions.

The securities to be sold in this private placement have not been registered
under the Securities Act of 1933, as amended (the “Act”), pursuant to an
exemption under Section 4(a)(2) of the Act for transactions of an issuer not
involving a public offering, and may not be offered or sold in the United
States absent registration with the SEC or an exemption from such registration
requirements.

About MELA Sciences, Inc. www.melasciences.com

MELA Sciences is a medical device company developing dermatology diagnostics
utilizing state-of-the-art optical imaging. The flagship product is
MelaFind^®, an FDA, PMA and CE Mark approved, non-invasive diagnostic tool to
aid dermatologists in melanoma evaluation and diagnosis. MelaFind^® uses a
variety of visible to near-infrared light waves to evaluate skin lesions from
the surface to 2.5 mm beneath the skin. It provides images and data on the
relative disorganization of a lesion's cell structure that provides
substantial additional perspective to aid melanoma diagnosis. MELA is also
exploring new potential uses for its core imaging technology and algorithms.

Twitter: MELASciencesIR or MelaFind
Facebook: MelaFind
StockTwits: MELASciencesIR

Safe Harbor

This press release includes "forward-looking statements" within the meaning of
the Securities Litigation Reform Act of 1995. These statements include but are
not limited to our plans, objectives, expectations and intentions and may
contain words such as “seeks,” “look forward,” and “there seems” that suggest
future events or trends. These statements are based on our current
expectations and are inherently subject to significant uncertainties and
changes in circumstances. Actual results may differ materially from our
expectations due to financial, economic, business, competitive, market,
regulatory and political factors or conditions affecting the company and the
medical device industry in general, as well as more specific risks and
uncertainties set forth in the company’s SEC reports on Forms 10-Q and 10-K.
Given such uncertainties, any or all of these forward-looking statements may
prove to be incorrect or unreliable. MELA Sciences assumes no duty to update
its forward-looking statements and urges investors to carefully review its SEC
disclosures available at www.sec.gov and www.melasciences.com.

Contact:

Media
MELA Sciences, Inc.
Diana Garcia Redruello, 212-518-4226
dgarcia@melasciences.com
or
Investors
Catalyst Global
Toni Trigiani, David Collins
212-924-9800
mela@catalyst-ir.com
 
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