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DARA BioSciences To Raise $2.8 Million Pursuant To Securities Purchase Agreement

Stocks in this article: DARA

DARA BioSciences, Inc. (Nasdaq:DARA) (the "Company" or "DARA") announced that it entered into a definitive securities purchase agreement with certain investors providing for the issuance of $2,800,000 of shares of Series B-3 and Series B-4 convertible preferred stock (convertible into a combined total of 3,684,210 shares of common stock), two and one half year warrants to purchase up to 1,842,105 shares of common stock at an exercise price of $1.05 and five and one half year warrants to purchase up to 1,842,105 shares of common stock at an exercise price of $1.05. None of the warrants are exercisable for six months from the initial issuance date. The Series B-3 and Series B-4 convertible preferred stock is convertible at any time into shares of common stock at an initial conversion price of $0.76 per share.

David J. Drutz, M.D., Chief Executive Officer, commented, "We are pleased to have consummated this financing, which will provide additional capital for the commercial activities related to Soltamox®, our FDA-approved treatment for breast cancer, and for Gelclair, our FDA-cleared product for the treatment of oral mucositis, which we expect to launch in the first quarter of 2013. Funds will also be used for general corporate purposes. We expect that with this additional funding we will have enough cash to effectively execute our commercial plan and believe that this raise will alleviate our needs for additional financing in 2013."

Ladenburg Thalmann & Co., Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSE AMEX:LTS), acted as the exclusive placement agent for this transaction.

The closing of the sale of the securities is expected to take place on or about December 31, 2012, subject to satisfaction of customary closing conditions.

The shares of Series B-3 preferred stock described above were offered pursuant to a shelf registration statement (File No. 333-173098), which was declared effective by the United States Securities and Exchange Commission ("SEC") on April 19, 2011. The shares of Series B-4 preferred stock and warrants described above have not been registered under the Securities Act of 1933 (the “Act”), and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements. The Company has agreed to file one or more registration statements with the SEC covering the resale of the shares of common stock issuable upon conversion of or in connection with the Series B-4 preferred stock and upon exercise of the warrants. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. When filed with the SEC, copies of the prospectus supplement and the accompanying base prospectus relating to this offering may be obtained at the SEC's website at http://www.sec.gov or by request at Ladenburg Thalmann & Co., Inc, 4400 Biscayne Blvd., 14th Floor, Miami, Florida 33137.

About DARA BioSciences, Inc.

DARA is a specialty pharmaceutical company focused on the development and commercialization of oncology treatment and supportive care products. DARA has comprehensive commercial coverage across the national oncology market through a series of agreements with a number of specialty pharmacy providers, leading group purchasing organizations (GPOs), retail partners, reimbursement experts, and an industry-leading third-party logistics provider. As part of an integrated national network with annual sales of over $1 billion in cancer therapeutics, DARA has significant commercial scale and capabilities. Its distribution network consists of more than 45,000 retail pharmacies, mail order pharmacies, and long-term care facilities. This provides DARA with established reimbursement and logistics expertise, as well as partnering opportunities with more than 300 sales and marketing personnel uniquely focused on oncology and oncology support products. This comprehensive network of partners is rare if not unique among companies in the oncology supportive care area and provides DARA a strong foundation for product introductions into this underserved market.

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