EXHIBIT 99.1
CNS RESPONSE COMPLETES REVERSE MERGER INTO STRATIVATION
RAISES $7 MILLION IN PRIVATE PLACEMENT
COSTA MESA, CALIF., MARCH 9, 2007 -- CNS Response, Inc. ("CNSR") today announced
the completion of its reverse merger into publicly held Strativation, Inc. (OTC:
STVT.OB). The combined company will operate as CNS Response, Inc. under the
leadership of the CNSR management team and will trade on the Over-the-Counter
Stock Market under the symbol "CNSO."
The merger creates a publicly traded company uniquely focused on the first
proven neurophysiologic biomarker system for psychiatric treatment and CNS drug
development. CNSR's business is focused on the commercialization of a patented
statistical probability system that aids physicians in the identification of
effective medications for patients with certain behavioral (mental or addictive)
disorders. This methodology is called "REFERENCED-EEG" or "REEG".
CNSR also announced that it raised approximately $7 million in gross proceeds
through a private placement of 5.84 million units at $1.20 per unit. Each unit
consists of one share of common stock and a five-year non-callable warrant to
purchase three-tenths of a share at an exercise price of $1.80. As a result of
the private placement, CNS Response will have approximately 25 million basic
shares outstanding.
Leonard Brandt, Chief Executive Officer of CNS Response, said, "Our merger into
Strativation and simultaneous capital raise provides the public vehicle and
funds to continue to pursue the validation and commercialization of our core
Referenced-EEG (rEEG) technology. Reported open-label, retrospective and blinded
prospective studies have shown rEEG to have successfully guided physician
treatments of patients between 70% and 90% of the time. Most of the patients in
these studies were considered treatment-resistant based on failure to respond to
previous medication efforts. rEEG also affords numerous applications in CNS drug
discovery and development, a field which has been plagued by the same lack of
physiologic markers as clinical psychiatric care."
Under terms of the transaction, CNS Response has committed to use its best
efforts to register the privately placed shares by filing a Registration
Statement with the U.S. Securities & Exchange Commission (SEC) within the next
45 days.
Brean Murray, Carret & Co., LLC served as financial advisor to CNS Response on
the reverse merger and acted as sole placement agent in the $7 million capital
raise.
ABOUT CNS RESPONSE
CNS Response is the first company to commercialize an objective system for
matching mental and addiction patient physiology to treatment outcome (a
biomarker system) thereby fundamentally altering the treatment of
neuropsychiatric illness. Referenced-EEG (rEEG) is a
patented technology that utilizes common electroencephalography (EEG) in
conjunction with a normative database and a proprietary clinical (symptomatic)
database to identify abnormal patient physiology. Appropriate medications are
then selected specifically based upon proprietary treatment algorithms that
correlate treatment to identified abnormalities. CNS Response has developed this
technology to assess the presence of individual neurophysiologic abnormalities
and to guide subsequent psychiatric treatment. Retrospective and prospective
studies of treatment-resistant patients in managed care, outpatient psychiatric
and residential substance abuse clinical settings have reported treatment
success of 70% or greater. rEEG can also be used to stratify study populations
to improve the success of FDA clinical trials, to provide insight on effective
therapeutic dosing of investigational drugs, to identify additional indications
for psychiatric medications, to provide insight into effective drug
combinations, and to identify psychiatric indications for non-psychiatric
medications.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Except for the historical information contained herein, the matters discussed
are forward-looking statements made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995, as amended. These
statements involve risks and uncertainties as set forth in the Company's filings
with the Securities and Exchange Commission. These risks and uncertainties could
cause actual results to differ materially from any forward-looking statements
made herein.
CONTACTS:
THE RUTH GROUP
John Quirk / Sara Ephraim (investors)
(646) 536-7029 / 7002
jquirk@theruthgroup.com
sephraim@theruthgroup.com
Janine McCargo / Jason Rando (media)
(646) 536-7033 / 7025
jmccargo@theruthgroup.com
jrando@theruthgroup.com
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