Sontra delists, then gets $600k cash injection
A week after abruptly announcing it would close its doors and lay-off its employees, beleaguered Sontra Medical Corp. received a late Christmas gift: A $600,000 injection of cash that should allow the company to continue operating through most of 2007.
On Dec 27, Franklin-based Sontra said it would close its doors. The move came amidst a threat from Nasdaq to delist the company’s stock, the third time it had threatened so since Nov 2005. But on January 3, Sontra sent out a press release saying it had struck a last minute deal over the New Year’s weekend that would keep the company operating, although it will still voluntarily delist from the exchange this month.
Under the plan, Sherbrooke Partners LLC, along with some of the company’s board and management team, will acquire 6 million shares – or about two thirds – of the company for $0.10 a share. They will also acquire two-year warrants to buy an additional 1.5 million shares at $0.21 per share price, Sontra’s closing price on Dec. 29, 2006. About $120,000 of the $600,00 will come from the coalition of manager and directors.
According to SEC documents, Sherbrooke Partners is a Manhattan-based LLC whose sole member is Matthew Balk, an investment banker with Burnham Hill Partners.
As part of the shake-up at Sontra, which makes glucose monitoring patches, Thomas Davison, will step down as CEO and director. CFO Harry Mitchell will becomes interim CEO. Additionally, Walter Witoshkin, CEO of Quantrx Biomedical Corp. in Ambler, PA, will join the board of directors at Sontra. Sherbrooke Partners is a significant investor in Quantrx.
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