RALEIGH, N.C., Jan. 4, 2011 (GLOBE NEWSWIRE) -- On December 28, 2010, DARA BioSciences, Inc. (the "Company") (Nasdaq:DARA) announced that it planned to raise up to $4 million through a registered public offering of units comprised of shares of Series A convertible preferred stock and warrants to purchase shares of common stock. Due to strong demand for the offered securities, the Company increased the size of the offering to up to $4.8 million.

The closing of the sale of units took place on December 30, 2010. Richard A. Franco Sr., the Company's President and CEO, purchased 200 of the units, for a purchase price of $200,000.

Estimated net proceeds after payment of placement agent fees and other offering expenses are approximately $4.3 million. The net proceeds received by the Company from the offering will be used for the ongoing development of its lead candidates and for working capital and general corporate purposes. With cash on hand plus these proceeds the Company believes it has sufficient capital to operate effectively over the next 12 months.

At the closing the Company issued to investors 4,800 shares of Series A convertible preferred stock (which are convertible into a total of 1,920,000 shares of common stock), Class A Warrants to purchase 960,000 shares of common stock and Class B Warrants to purchase a total of 960,000 shares of common stock.

Shares of Series A preferred stock have a liquidation preference equal to $1000 per share and, subject to certain ownership limitations, are convertible at any time at the option of the holder into shares of Company common stock at a conversion price of $2.50 per share.

Class A Warrants are exercisable immediately after the date of issuance and expire five years after the date of issuance. Class A Warrants will entitle the holder to purchase shares of common stock for an exercise price equal to $2.50.