NEW YORK, July 1 /PRNewswire-FirstCall/ -- NeoStem, Inc. (NYSE Amex: NBS) announced today that it has raised additional gross funds of over $4 million from institutional and private investors. These funds, together with the $11 million private placement from three Asia-based investors announced April 13, 2009, bring the total investment obtained by NeoStem in the past two and half months to over $15 million. In addition, affiliates of Suzhou Erye Pharmaceuticals Company, Ltd. have increased their overall investment in the Company to over $1,000,000. As part of its China expansion activities, NeoStem is anticipating, subject to approval of its shareholders, on closing before year end on the acquisition of a 51% interest in Suzhou Erye through a merger with its current 51% owner.
The funds will be used to support NeoStem's continuing initiatives in VSEL (very small embryonic-like) stem cell technology licensed from the University of Louisville and to advance NeoStem's expansion activities in China, as well as other general corporate purposes. A portion of the funds also will be used to expand U.S.-based operations and add seasoned management to the NeoStem team with experience in clinical drug development in pharmaceutical and biotechnology industry and administration of overseas based clinical trials.
The terms and conditions of the current financing are the same as those of the earlier April round. Units are priced at $12.50 per unit, with each unit consisting of one share of the Company's Series D Convertible Redeemable Preferred Stock, convertible into ten shares of common stock and ten warrants each to purchase one share of common stock. The warrants have a per share exercise price equal to $2.50 and are callable by the Company if the common stock trades at a price equal to $3.50. Subject to the affirmative vote of the Company's shareholders and the rules of the NYSE Amex, the warrants will become exercisable for a period of five years and each share of Series D Convertible Redeemable Preferred Sock will automatically convert into ten shares of Common Stock.
Dr. Robin Smith, Chairman and CEO of NeoStem, stated, 'We are very pleased to receive this additional investment from a group of institutional and private onshore investors who recognize the many recent achievements of NeoStem under our multi-faceted business plan.
