TearLab announced May 4, 2016, the pricing of a public offering of the company’s common stock, resulting in total gross proceeds of approximately $17.3 million. The offering is expected to close on or about May 9, 2016, subject to satisfaction of customary closing conditions, according to a company news release.
The offering was priced at $0.75 per share of common stock (or common stock equivalent), with each share of common stock coupled with a warrant to purchase one-half of one share of common stock. The warrants have an exercise price of $1.125 per share, are exercisable 12 months from the date of issuance, provided that the company has sufficient authorized capital to allow all of the warrants to be exercised in full by the holders, and will expire on the fifth anniversary of the date they become exercisable. The company plans to file a registration statement to cover the common stock underlying the warrants upon the 12-month anniversary, assuming the company has a sufficient number of authorized shares of its common stock to issue shares pursuant to any exercise of the warrants.
According to company officials, funding raised by the public offering will be used to serve as capital to drive greater market penetration of TearLab’s current portfolio offerings and provide investment for future commercialization efforts and other general corporate purposes. TearLab has already successfully commercialized its proprietary tear testing system, the only quantitative and objective measure of osmolarity available for use in eye care. The system has been validated in several independent and sponsored clinical trials to detect abnormal osmolarity, which is a feature of both the aqueous deficient and evaporative forms of dry eye disease.
“The dry eye market has rapidly expanded over the past decade, and several metrics suggest continued proliferation in this space in the near and long-term future. In addition to supporting our efforts to leverage reach with TearLab’s existing customer base, this working capital will provide a vehicle for the company to continue to innovate in the dry eye space,” Seph Jensen, CEO of TearLab, said in the news release. “We are proud to have been at the forefront of innovation in this space with the tear osmolarity testing system, and we look forward to continuing to develop our next generation point-of-care multiplex testing platform that provide clinicians the tools they need to elevate the care they provide for their patients.”
“From a business standpoint, this offering is an effort to raise working capital to propel TearLab into the future,” Mr. Jensen continued. “Our existing sales force provides us with significant reach into the eye care space, we already possess scale and reach based on our commercialization to date with the tear testing system, and we have in-house expertise in commercialization and partnerships with key stakeholders in the clinical eye care community. This funding effort is the final piece needed to continue the expansion of our business.”