Lifestream Technologies Inc., of Post Falls, completed a $3.5 million private placement that will allow the company to proceed with a major advertising campaigna tool it long has said is necessary to ignite sales of its home cholesterol monitors.


Separately, Lifestream announced that it would withdraw its shares from the American Stock Exchange because of a disagreement over a previous private placement, as well as the expense and time required to maintain that listing. Lifestreams common stock will be traded on the Nasdaq OTC market as soon as its removed from Amex, which could take four to six weeks, says Chief Financial Officer Brett Sweezy. The change should be seamless for current shareholders, he says.


Amex notified Lifestream in June that a private equity placement the Post Falls manufacturer had conducted at that time didnt comply with its rules. Amex officials believed Lifestream sold shares too cheaply in that transaction, at 10 cents a share, although Sweezy notes that the private placement complied fully with U.S. Securities and Exchange Commission requirements. Currently, Lifestreams shares are trading at about 16 cents a share.


As a young company thats trying to raise money to stay afloat, Lifestream currently needs more flexibility than Amex can offer, Sweezy says.


This was a very difficult decision for our company, since we have enjoyed our relationship with the Amex and consider the Amex as the best exchange for the companys common shares given our phase of operations, Lifestream CEO Christopher Maus said in a statement. The company will reconsider listing with the Amex at such time as the companys marketing program accelerates our revenue growth, and a new listing would be cost effective for Lifestream.


The company could save about $100,000 a year in maintenance and professional costs associated with retaining its Amex listing, Sweezy says. Add in the cost of executives time spent dealing with Amex requirements, and the potential savings likely approaches about $250,000 a year, he says.


Regarding its most recent private placement, Lifestream says it sold $3.35 million worth of convertible debentures to a group of investors that includes some of its current stockholders. A convertible debenture is a debt instrument that can be converted to company shares in the future.


Half of the money raised was placed in escrow pending shareholder approval of the debenture sale, and a special shareholders meeting tentatively is scheduled on Oct. 17, Sweezy says.


The other half of the money has been released to Lifestream, which will use the funds to stockpile inventory for the holiday season, as well as to pay for an advertising campaign that includes television, radio, and print ads, and public-relations activities.


The campaign, which launches this month, is designed to create more than 800 million impressions on the public, Sweezy says.


The ad campaign is important to make consumers aware of Lifestreams cholesterol monitor, which now is sold in 15,000 drug stores and pharmacies nationwide, the company says.


Sweezy says national advertising would become critical when Lifestream enters the mass-merchandiser market, such as Wal-Mart and Fred Meyer stores, which the company anticipates happening in the spring.


You need to drive people in there to buy the products, Sweezy says.