Modular Medical announces $12M private placement

Published 26/03/2025, 22:16
Modular Medical announces $12M private placement

Modular Medical (TASE:BLWV), Inc. (NASDAQ:MODD), a company specializing in surgical and medical instruments with a market capitalization of $46.4 million, announced on Monday that it has entered into a private placement agreement resulting in approximately $12 million in gross proceeds. According to InvestingPro data, the company has been quickly burning through cash, making this capital raise crucial for its operations. The San Diego-based firm, incorporated in Nevada, stated that the private placement involved the sale of 6,247,656 units at $1.92 per unit.

Each unit consists of two shares of common stock and one warrant to purchase an additional share of common stock at an exercise price of $1.12. The warrants are immediately exercisable and will expire four years from the date of issuance. The private placement closed today, with certain affiliates, officers, and directors of the company purchasing 374,478 units.

The funds raised are earmarked for general corporate purposes, working capital, supply-chain optimization, and margin improvement for Modular Medical’s MODD1 product. The company also plans to prepare for the submission of a tubeless version of the MODD1 product to the FDA, anticipated in the third quarter of 2025, and to work towards obtaining the CE mark for overseas markets. InvestingPro analysis shows the company maintains a healthy current ratio of 5.3, with more cash than debt on its balance sheet, suggesting strong short-term financial stability despite recent operating losses.

In connection with the private placement, Modular Medical has entered into a 60-day lock-up agreement with its officers and directors. Additionally, the company has agreed not to engage in any Variable Rate Transactions for one year following the close of the private placement.

Newbridge Securities Corporation served as the placement agent, receiving a cash fee and reimbursement for certain expenses, including legal fees. They were also issued warrants to purchase up to 874,672 shares of common stock. Titan Partners Group acted as a financial advisor to Modular Medical and received a fee for their services.

The securities offered in the private placement have not been registered under the Securities Act of 1933 and were offered under exemptions from registration. Modular Medical has committed to filing a registration statement with the SEC for the resale of the shares and shares underlying the warrants within 30 days of the closing date. With the stock showing significant volatility and currently trading at $1.15, InvestingPro subscribers can access additional insights, including 8 more key tips about the company’s financial health and market performance. Get the full picture with InvestingPro’s comprehensive analysis tools and expert insights.

Concurrently with the private placement, Modular Medical completed a direct private placement of 260,417 units to a foreign investor, raising an additional $0.5 million under the same terms as the private placement. This information is based on a press release statement from the company.

In other recent news, Modular Medical has secured approximately $12 million in a private placement with institutional and accredited investors. This transaction involves selling units composed of common stock and warrants, with the proceeds aimed at enhancing the supply chain and improving margins for the MODD1 product. The company is also focusing on developing a tubeless version of MODD1, which is planned for FDA submission later in 2025. Concurrently, Modular Medical is conducting a direct private placement to potentially raise an additional $500,000. In another development, the company held its annual shareholder meeting where all seven director nominees were elected, and amendments to the equity incentive plan were approved. This amendment increases the shares reserved for issuance by 3,000,000, indicating a strategic move to attract and retain talent. The ratification of Farber Hass Hurley LLP as the independent registered public accounting firm for the fiscal year was also overwhelmingly approved. These developments reflect significant investor confidence in Modular Medical’s leadership and strategic direction.

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