Adds $12.3 M in Non-Dilutive Cash to and Removes Over $30 M of Debt from its Balance Sheet …
NBS has completed the divestiture of its 51% ownership interest in Suzhou Erye Pharmaceutical Co. Ltd. ("Erye"), a China-based generic pharmaceutical company.
The divestiture provides NeoStem with $12.28 M in cash and removes from NBS' balance sheet over $30 M in short and long-term debt obligations. Erye also returns 1.04 M shares representing approximately 0.7% of NBS' outstanding common stock, 1.17 M stock options representing approximately 5.1% of the outstanding options and 640 K warrants to purchase common stock held by Erye representing approximately 1.1% of the outstanding warrants.
The Bottom Line: Another significant milestone. The Erye divestiture brings non-dilutive capital that bolsters <NBS"> cash position, reduces legal and financial reporting expenditures, simplifies financial statements and focuses efforts exclusively on the rapidly growing cell therapy industry. The divestiture also paves the way for NBS … to qualify for new funding through the NIH's Small Business Innovation Research (SBIR) program which could support pre-clinical development of VSEL Technology.
NBS closed at $0.62 on Monday, 11/12 which has been flat through the past few days of seesawing markets. With the cash position expanding as well as the capital structure decreasing - NBS is steadier on the road to appreciation. I believe , NBS should return to it's $0.72 - $0.75 range and the support levels will move up - again a "BUY" as I have been iterating for a while!
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.