SOURCE: Imaging3, Inc.

Imaging3, Inc.

October 05, 2010 09:00 ET

Imaging3 Executes Securities Purchase Agreement for Sale of Common Stock and Warrants for $1 Million

BURBANK, CA--(Marketwire - October 5, 2010) -  Imaging3™, Inc. (OTCBB: IMGG), developer of a breakthrough medical imaging device that produces 3D medical diagnostic images of virtually any part of the human body in real-time, announced today that the company entered into a Securities Purchase Agreement with two institutional investors for the sale of common stock and warrants for $1 million.

The terms of the securities purchase agreement include the sale of 4,587,157 shares of common stock at 20% discount to Friday's closing price ($0.218). The warrants include: (i) Series A Warrants, which are immediately exercisable for a period of 5 years into 4,587,157 shares at $0.2725 per share; (ii) Series B Warrants, which are immediately exercisable for a period of up to 18 months into 4,587,157 shares at $0.218 per share and (iii) Series C Warrants, which are immediately exercisable for a period of 5 years into 4,587,157 shares at $0.2725 per share but only to the extent that the Series B Warrants are exercised and only in the same percentage that the Series B Warrants are exercised. All of such warrants contain customary adjustments for corporate events such as reorganizations, splits, dividends, and the exercise prices of all such warrants are subject to full-ratchet anti-dilution adjustments in the event of additional issuances of common stock below the exercise price then in effect.

"This transaction will provide Imaging3 with sufficient working capital for the next year," stated the company's Chairman/CEO Dean Janes.

The completion of the offering is subject to the satisfaction of customary closing conditions and is expected to close on or before October 14, 2010. The net proceeds from this offering will be used solely for working capital purposes. In the securities purchase agreement, the company agreed not to use the proceeds to satisfy any debt, to redeem any of the company's outstanding securities or with respect to any litigation involving the company.

The company will also provide customary resale registration rights in connection with the offering.

Wharton Capital Partners, Ltd., a New York based investment banking firm, acted as the placement agent for the company in this offering.

The shares of common stock and warrants being sold in the placement have not been registered under the Securities Act and may not be offered or sold without registration with the Securities and Exchange Commission, or under an applicable exemption.

About Imaging3

Imaging3, Inc., founded in 1993, is a leading provider of advanced technology medical imaging devices. The Company has developed a breakthrough medical imaging device that produces 3D medical diagnostic images of virtually any part of the human body in real-time. Because these 3D images are instantly constructed in real-time, they can be used for any current or new medical procedures in which multiple frames of reference are required to perform medical procedures on or in the human body. Visit the company's website at for more information.

Safe Harbor Statement

Matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, technological obsolescence, competition from other medical instrument(s) and imaging companies, lack of capital, unexpected costs, failure or delay of FDA approval, absence of revenue, the impact on the national and local economies resulting from an economic recession or terrorist actions, and U.S. actions subsequently; unavailability of financing for the Company or its customers, product malfunction and potential product liability claims, and other factors detailed in reports filed by the Company.

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