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Vermillion Enters in Agreement That Could Net it $43M, Ends November with $3.6M in Cash


This story originally ran on Dec. 28.

Vermillion this week said it has entered into a private-placement agreement that will net it $43.05 million in gross proceeds.

Under the terms of the agreement, made on Dec. 24 with a group of investors, Vermillion will receive the proceeds from the sale of about 2,328,000 shares of its common stock at a price of almost $18.50 per share, 90 percent of the company's average closing price for the five trading days ending Dec. 23.

Net proceeds will be used to pay in part the distributions to be made under Vermillion's Chapter 11 reorganization plan; to pay its obligations under its debtor-in-possession financing agreement with Quest Diagnostics; and for working capital and other general purposes.

The agreement is subject to approval of Vermillion's reorganization plan by US Bankruptcy Court in Delaware, and would take effect on or about Jan. 7, 2010 when a hearing on the reorganization plan is scheduled.

Also, last week Vermillion said in documents filed with the court that it ended November with almost $3.6 million in cash.

The company began November with more than $3.8 million and spent $306,000 for the month. It posted no revenues.

Under the terms of its Chapter 11 filing, Vermillion is required to file monthly income statements with the court . Since receiving 510(k) clearance from the US Food and Drug Administration for its OVA1 ovarian cancer test in September, the company has seen its cash position increase from $64,213 in August.

In its filing last week, the firm reported a net loss for the month of $612, 788. It said total assets were $13.3 million while total liabilities were $33.4 million at the end of November.

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