Use of Proceeds We estimate that the net proceeds from our sale of shares of common stock in
this offering will be approximately $5.5 million, or approximately $6.4 million
if the underwriter exercises its over-allotment option in full. This estimate
is based upon the initial public offering price of $4.00 per share, less
estimated underwriting discounts and commissions and offering expenses payable
by us.
The principal reasons for the offering are to provide our shareholders
liquidity in the public equity market and to raise cash to support our growth
plan. We intend to use the proceeds from this offering to add employees to our
Reimbursement, Patient Services and Administrative Departments; add members to
our sales force and further develop our focus on institutional sales; continue
our research and development efforts; and for general corporate purposes,
including to finance equipment purchases and other capital expenditures in the
ordinary course of business and to satisfy working capital needs.
We may also use a portion of our net proceeds from this offering to reduce
existing indebtedness under our credit facility with U.S. Bank, National
Association (“U.S. Bank”), which we entered into in December 2009 for the
purpose of refinancing existing indebtedness and for general corporate
purposes. As of March 31, 2010, we had total outstanding debt of approximately
$3,666,000 under the U.S. Bank credit facility, consisting of the following:
approximately $1,268,000 principal balance under a revolving line of credit
that bears interest at a rate of LIBOR plus 2.75% and is scheduled to mature on
November 30, 2010, if not renewed; approximately $894,000 principal balance
under a term loan that bears interest at a rate of 4.28% and is scheduled to
mature on December 9, 2012; and approximately $1,504,000 principal balance
under a term loan that bears interest at a rate of 5.79% and is scheduled to
mature on December 9, 2014.
The expected use of net proceeds from this offering represents our current
intentions based upon our present plans and business conditions; however,
proceeds will be used in management’s discretion, and there may be
circumstances where a reallocation of funds is necessary. The amount and timing
of our actual expenditures depend on numerous contingencies, including the
progress of our research and development activities, regulatory or competitive
developments, and strategic opportunities. For example, in the event we
identify opportunities that we believe are in the best interest of our
shareholders, we may use a portion of the net proceeds from this offering to
reinforce or broaden our product line, which may occur through the strategic
acquisition of, or investment in, complementary businesses, technologies,
services, or products. We have no current plans, agreements or commitments with
respect to any such acquisition or investment, and we are not currently engaged
in any negotiations with respect to any such transaction. Pending the uses
described above, we intend to invest the net proceeds of this offering in
short- to medium-term, investment-grade, interest-bearing securities. |