As previously disclosed, on May 18, 2011, CAS Medical Systems, Inc. (the “Company”) received a written notice from the Nasdaq Stock Market (“Nasdaq”) advising that the Company was not in compliance with the Nasdaq Global Market listing requirement contained in Nasdaq Listing Rule 5450(b)(1)(A) because the Company’s stockholders’ equity at March 31, 2011 of $9,402,189 was less than $10,000,000. Under Nasdaq rules, the Company had 45 calendar days to submit a plan that defines how the Company will regain compliance.
On June 9, 2011, as previously announced, the Company completed a private placement of preferred stock (the “Private Placement Transaction”) with Thomas, McNerney & Partners, L.P., TMP Nominee II, LLC and TMP Associates II, L.P. (the “Purchasers”) pursuant to an Investment Agreement between the Company and the Purchasers, dated as of June 8, 2011, whereby the Company issued (i) 95,500 shares of a newly created series of preferred stock, designated “Series A Convertible Preferred Stock,” par value $0.001 per share (the “Series A Preferred Stock”), which shares of Series A Preferred Stock are convertible into authorized but unissued shares of the Company’s common stock, par value $0.004 per share, and (ii) 54,500 shares of a newly created series of preferred stock, designated “Series A Exchangeable Preferred Stock,” par value $0.001 per share (the “Series A Exchangeable Preferred Stock”), convertible, following stockholder approval, into authorized but unissued shares of the Company’s common stock, par value $0.004 per share. Upon approval by the stockholders of the Company, the Series A Exchangeable Preferred Stock will have substantially identical terms to the Series A Preferred Stock. The Private Placement Transaction resulted in gross proceeds of $15.0 million to the Company.
As of the date of this Current Report on Form 8-K and as a result of the Private Placement Transaction, the Company believes that it is in compliance with Nasdaq Listing Rule 5450(b)(1)(A) because the Company’s stockholders’ equity is greater than $10,000,000.
The Company has been informed that Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement of Nasdaq Listing Rule 5450(b)(1)(A) and, if at the time of the Company’s next quarterly report on Form 10-Q, the Company does not evidence such compliance, the Company may be subject to delisting from the Nasdaq Global Market.