SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): June 29, 2009
NEOSTEM,
INC.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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0-10909
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22-2343568
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||
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File
Number)
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(IRS
Employer Identification
No.)
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420 Lexington Avenue, Suite
450, New York, New York 10170
(Address
of Principal Executive Offices)(Zip Code)
(212)
584-4180
Registrant's
Telephone Number
Check
the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2.
below):
o
Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item
3.02.
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Unregistered
Sales of Equity Securities.
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As of July 6, 2009, NeoStem,
Inc. (the "Company") closed on a private placement financing totaling
approximately $5 million from institutional and private
investors. The financing consisted of the issuance of 400,280 units
priced at $12.50 per unit, with each unit consisting of one share of the
Company’s Series D Convertible Redeemable Preferred Stock (convertible, subject
to shareholder approval as described below, into 10 shares of common stock) and
ten warrants each to purchase one share of common stock. The terms of
the units were substantially the same as those issued by the
Company in its April 2009 Regulation S offering in which it raised
$11 million.
Upon the affirmative vote of holders of
a majority of the voting power of the Company’s stock required pursuant to the
Company’s Amended and Restated By-Laws and the NYSE Amex, each share of Series D
Stock will automatically be converted into ten (10) shares of Company Common
Stock at an initial conversion price of $1.25 per share; provided that if by
October 31, 2009 such affirmative vote is not achieved, the Company must redeem
all shares of Series D Stock at a redemption price per share of $12.50 plus the
accrued dividends as of such date. The Series D Stock has an accruing
dividend of ten percent (10%) per annum, payable (i) annually in cash on
April 9th of each year, provided that the shares of Series D
Stock remain outstanding on such date or (ii) upon a liquidation, dissolution or
winding up of the Company. The Series D Stock (i) ranks senior to all
of the Company’s capital stock with respect to the payment of dividends and to
the distribution of assets upon liquidation, dissolution or winding up, (ii)
does not have any voting rights, (iii) does not have any anti-dilution
protection, and (iv) does not have any preemptive
rights.
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.
The funds will be used to support the
development of NeoStem’s VSEL (very small embryonic-like stem cells) technology
licensed from the University of Louisville and help advance NeoStem’s expansion
activities in China, including those relating to its pending acquisition and
medical tourism – defined as travel by people whose primary and explicit purpose
is to access in a foreign country medical treatment not yet available in their
own nation. Through its connections with leading physicians in China
and the U.S., NeoStem expects to connect U.S. citizens with advanced therapies
not yet available in the U.S., and attract people from other countries to seek
safe and effective regenerative therapies as they become available here. A
portion of the funds also will be used to expand U.S.-based operations and other
general corporate purposes.
One of the investors was an affiliate
of the 49% owner of Suzhou Erye Pharmaceuticals Company, Ltd ("Erye"), whose
total investment was $800,000. As part of its China expansion
activities, NeoStem is anticipating, subject to shareholder and other approvals,
to merge with China Biopharmaceuticals Holdings, Inc., the owner of 51% of
Erye.
The securities sold were sold without
registration under the Securities Act of 1933, as amended (the "Act") pursuant
to Regulation S and Regulation D, each promulgated under the Act and may not be
resold in the United States or to U.S. persons unless registered under the Act
or pursuant to an exemption from registration under the Act. Hedging
transactions involving such securities may not be conducted unless in compliance
with the Act.
2
Garden State Securities, Inc., a
registered broker dealer with FINRA, acted as selling agent for the
on-shore investors and received a fee equal to 8% of the gross proceeds plus 4%
of the units sold by it resulting in an aggregate fee of $324,280 and 12,971
units.
Item
9.01. Financial
Statements and Exhibits.
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(d)
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Exhibits
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| Exhibit 99.1 Press Release dated July 1, 2009 |
3
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, NeoStem has duly caused this Report to be
signed on its behalf by the undersigned hereunto duly authorized.
| NEOSTEM, INC. | |||
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By:
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/s/ Catherine M. Vaczy | |
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Name: Catherine
M. Vaczy
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Title: Vice
President and General Counsel
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Date: July
6, 2009
4
EXHIBIT
99.1
NeoStem
Raises Additional Funds from Principals of Suzhou Erye Pharmaceuticals Company
Ltd. and U.S. Institutional and Private Investors, Bringing the Total Recent
Financings to Over $15 Million; Funds Will Support Expansion Activities in the
United States and China as well as Further Development of NeoStem's VSEL and
other Licensed Technologies
Press Release
Source:
NeoStem, Inc.
On
Wednesday July 1, 2009, 7:30 am EDT
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. Our growing stem cell technology base and our
expanding relationships with key business partners in the U.S. and China open
the way to new markets, distribution channels and production capabilities in the
world's two largest economies. By successfully leveraging both the medical and
commercial potential of emerging adult stem cell therapies, NeoStem is
establishing an international leadership position in this rapidly developing
field." She added, "We are also excited that the principals of Suzhou Erye have
made a second investment in our future, which we believe solidifies their
commitment to our post-merger endeavors."
The
securities sold were sold without registration under the Securities Act of 1933,
as amended (the "Act") pursuant to Regulation S or Regulation D, each
promulgated under the Act and may not be resold in the United States or to U.S.
persons unless registered under the Act or pursuant to an exemption from
registration under the Act. Hedging transactions involving such securities may
not be conducted unless in compliance with the Act.
About
NeoStem, Inc.
NeoStem
is managing a network of adult stem cell collection centers in major
metropolitan areas in the United States, enabling people to donate and store
their own (autologous) stem cells when they are young and healthy for their
personal use in times of future medical need. The Company also has entered into
research and development through the acquisition of a worldwide exclusive
license of technology to identify and isolate VSEL(very small embryonic-like)
stem cells, which have been shown to have several physical characteristics that
are generally found in embryonic stem cells and is pursuing other technologies
to advance its position in the field of adult stem cell tissue
regeneration.
Forward-Looking
Statements
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including, without limitation,
statements regarding the Company's expansion activities in China and the future
for the commercial use of stem cell therapies and the Company's VSEL technology.
Forward-looking statements reflect management's current expectations, as of the
date of this press release, and involve certain risks and uncertainties. The
Company's actual results could differ materially from those anticipated in these
forward-looking statements as a result of various factors. Factors that could
cause future results to materially differ from those projected in
forward-looking statements include the "Risk Factors" described in the Company's
Annual Report on Form 10-K for its fiscal year ended December 31, 2008 and the
Company's other periodic filings with the Securities and Exchange Commission.
The Company's further development is highly dependent on future medical and
research developments and market acceptance which are outside its
control.
Contact:
NeoStem,
Inc.
Robin
Smith, Chief Executive Officer
T:
212-584-4180
E:
rsmith@neostem.com
www.neostem.com