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ElectroOptical Sciences Inc Reports Operating Results (10-Q)

November 05, 2010 | About:
10qk

10qk

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ElectroOptical Sciences Inc (MELA) filed Quarterly Report for the period ended 2010-09-30.

Electrooptical Sciences Inc has a market cap of $175.2 million; its shares were traded at around $7.11 . MELA is in the portfolios of Chuck Royce of Royce& Associates.

Highlight of Business Operations:

On June 26, 2008, the Company filed a Form S-3 shelf registration statement for an indeterminate number of shares of common stock, warrants to purchase shares of common stock and units consisting of a combination thereof having an aggregate initial offering price not to exceed $40 million. Management utilized this shelf registration statement in August 2008 by completing a registered direct offering of 2,088,451 shares of the Companys common stock for aggregate gross proceeds of approximately $11.9 million ($11 million approximate net proceeds to the Company), and in July 2009 by completing a registered direct offering of 2,400,000 shares of the Companys common stock for aggregate gross proceeds of $15 million ($13.75 million approximate net proceeds to the Company). Approximately $13.1 million remains available under the Companys shelf registration statement as of September 30, 2010.

Under the CEFF, during 2009, the Company sold 1,824,941 shares of common stock to Kingsbridge Capital Limited (Kingsbridge), at an average per share price of approximately $9.24, for gross proceeds of approximately $16.9 million. Under the CEFF, during the nine month period ended September 30, 2010, the Company sold 406,744 shares of common stock to Kingsbridge Capital Limited, at an average per share price of approximately $9.22, for gross proceeds of approximately $3.75 million. A proportionate share of the CEFF originating expenses was allocated to these sales from deferred offering costs. Net of expenses, proceeds from these sales were approximately $16.8 million and $3.727 million for 2009 and 2010, respectively.

In May 2010, the Company filed a Form S-3 shelf registration statement for an indeterminate number of shares of common stock, warrants to purchase shares of common stock and units consisting of a combination thereof having an aggregate initial offering price not to exceed $75 million. The registration statement was declared effective by the SEC on June 1, 2010 (File No. 333-167113). On June 30, 2010, the Company entered into an underwriting agreement, relating to the public offering of 2,200,000 shares of the Companys common stock, at a price to the public of $7.50 per share less underwriting discounts and commissions. The common stock was offered and sold pursuant to the Companys Prospectus dated June 1, 2010 and the Companys Prospectus Supplement filed with the Securities and Exchange Commission (the SEC) on June 30, 2010, in connection with a takedown from the Companys effective shelf registration statement. The gross proceeds to the Company from the sale of the Common Stock totaled $16.5 million. After deducting the underwriters discounts and commissions and other estimated offering expenses payable by the Company, net proceeds were approximately $15.3 million. This offering closed on July 6, 2010. Approximately $58.5 million remains available under the Companys 2010 shelf registration statement as of September 30, 2010.

For the nine months ended September 30, 2010, net cash provided by financing activities was $20,717, representing net proceeds of $3,743 from the Committed Equity Financing Facility, $1,718 from the exercise of warrants and options, and net proceeds of $15,256 from the July 2010 public offering. For the nine months ended September 30, 2009, net cash provided by financing activities was $21,827. Cash received from the exercise of options and warrants was $289, net proceeds were $7,787 from the Committed Equity Financing Facility, and net proceeds were $13,750 from the July 2009 offering.

General and Administrative (G&A) expenses experienced an overall increase of $991 or 18% for the nine months ended September 30, 2010 above the comparable period a year earlier. Within G&A, marketing costs represented $269 of the total increase. Significant to the increase in marketing costs are the addition of sales management and administrative personnel of $175 and costs related to industry conferences of $110.

Other year-to-year increases in general and administrative costs for the nine months ended September 30, 2010 include increased depreciation and amortization of $166 associated with the new location build out and computer infrastructure acquisitions, professional fees of $208, office supplies of $86, and share based compensation of $82.

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