NeoStem, Inc. (NYSE Amex: NBS) raised $5 million in a private placement with new investors. The offering placed 2.3 million units, each priced at $2.15, consisting of one common share and a warrant to buy an additional 0.25 share at $2.75 in the next two years. If exercised, the warrants would bring in another $1.6 million to the company.
NeoStem’s stock closed at $2.07 on Friday, though it fell 23 cents (13%) to $1.84 in early trading today.
NeoStem recorded $11.4 million of cash on hand at the end of its most recent quarter, March 31. The 2.3 million shares in the most recent transaction take NeoStem’s count of outstanding shares up to 56.6 million shares, not including the effect of the warrants.
Traditionally an adult stem cell storage company, NeoStem has operations in the US and China. It said it would use the proceeds to build a lab in China, conduct stem cell R&D, license new products in China, and perhaps fund acquisitions.
In 2009, NeoStem completed its purchase of Suzhou Eyre Pharma, a China generic antibiotics company. The acquisition gave NeoStem a dependable income stream for the first time. The company has also licensed the VSEL™ Technology, which involves very small embryonic-like stem cells that mimic embryonic stem cells.
Disclosure: No positions
