Registration
No.
333-145988
PROSPECTUS
NEOSTEM,
INC.
3,188,050
Shares
Common
Stock
Our
securityholders named in the table beginning on page 17 of this prospectus
are offering an aggregate of 3,188,050 shares of our Common
Stock. 1,354,688 of such shares are issuable upon the exercise of
currently outstanding warrants. We will not receive any proceeds upon the sale
of shares by the selling stockholders. We will receive the exercise price of
the
outstanding warrants that are exercised. See “Use of Proceeds.”
Our
Common
Stock is traded on the American Stock Exchange under the symbol
“NBS.” Until August 9, 2007 our Common Stock was traded on the OTC
Bulletin Board under the symbol “NEOI” and until August 30, 2006 was traded
under the symbol “PHSM.” On September 10, 2007, the reported last
sale price of our Common Stock on the American Stock Exchange was $4.82 per
share.
Investing
in our Common Stock is speculative and involves a high degree of risk. See
“Risk
Factors” beginning on page 3.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a criminal
offense.
September
27, 2007
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PROSPECTUS
SUMMARY
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1
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RISK
FACTORS
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3
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RISKS
RELATING TO THE COMPANY’S FINANCIAL CONDITION
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3
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RISKS
RELATING TO THIS OFFERING
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4
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RISKS
RELATING TO THE COMPANY’S BUSINESS
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5
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RISKS
RELATING TO COMPETITION
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9
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RISKS
RELATING TO INTELLECTUAL PROPERTY
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10
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SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
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11
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USE
OF PROCEEDS
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11
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RECENT
DEVELOPMENTS
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11
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SELLING
SECURITYHOLDERS
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14
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PLAN
OF DISTRIBUTION
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34
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LEGAL
MATTERS
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35
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EXPERTS
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35
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INCORPORATION
OF CERTAIN
INFORMATION BY REFERENCE
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35
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WHERE
YOU CAN FIND MORE INFORMATION
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36
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LIMITATION
OF LIABILITY AND DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION
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37
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i
This
summary highlights some information contained or incorporated by reference
in
this prospectus. It may not contain all of the information that is
important to you. Important information is incorporated by reference
into this prospectus. To understanding this offering fully, you
should read carefully the entire prospectus, including “Risk Factors” and the
other information incorporated by reference in this prospectus.
We
are in
the business of operating a commercial autologous (donor and recipient are
the
same) adult stem cell bank and are pioneering the pre-disease collection,
processing and long-term storage of stem cells from healthy adult donors that
they can access for their own future medical treatment. On January 19, 2006
we
consummated the acquisition of the assets of NS California, Inc., a California
corporation (“NS California”) relating to NS California’s business of collecting
and storing adult stem cells. Effective with the acquisition, the business
of NS
California became our principal business, rather than our historic business
of
providing capital and business guidance to companies in the healthcare and
life
science industries. We now provide adult stem cell processing, collection and
banking services with the goal of making stem cell collection and storage widely
available, so that the general population will have the opportunity to store
their own stem cells for future healthcare needs. Using our proprietary process,
we provide the infrastructure, methods and systems that allow adults to have
their stem cells safely collected and conveniently banked for future therapeutic
use as needed in the treatment of such life-threatening diseases as diabetes,
heart disease and radiation sickness that may result from a bio-terrorist attack
or nuclear accident. We also hope to become the leading provider of adult stem
cells for diagnostic and therapeutic use in the burgeoning field of regenerative
medicine. According to the National Institutes of Health, there are over 700
clinical trials underway relating to the use of adult stem cells, over 200
relating to autologous use, in the treatment of numerous serious diseases and
conditions, including those that address cardiac disease, autoimmune disorders
such as multiple sclerosis, peripheral vascular diseases, and age-related
musculoskeletal disorders, as well as diabetes, cancer, neurological disease
and
wound healing.
We
are
structuring an aggressive direct to consumer marketing plan to drive awareness
and target individuals who can afford our services. We also believe that those
with economic constraints can now afford our services with the financing
relationship we have established with GE Credit Care. We are planning to educate
individuals that have a family history or early diagnosis of diseases being
treated with stem cell therapy as well as those who have banked their infants
stem cells that can afford this “bioinsurance.” Additionally we are working on
establishing collaborations with high profile medical centers and academic
institutions involved in cutting edge research and clinical trials to evaluate
the use of stem cells for the treatment of various diseases. We believe that
there is a significant need for our banking services for our first responders
and homeland security personnel. We are moving forward to educate those groups
and find resources to protect those individuals who protect us. Our other go-to
market strategies include collaboration with cord blood companies, tissue banks,
pharmaceutical companies, concierge medical programs, executive health plans
and
regenerative medicine specialists.
We
have
engaged in various capital raising activities to pursue this business
opportunity, raising approximately $3,573,000 in 2006 and $2,500,000 through
July 2007 through the private sale of our common stock, warrants and convertible
promissory notes. In August 2007, we completed a public offering of
units consisting of shares of common stock and warrants to purchase common
stock, which raised $6,350,000. Such capital raising activities are enabling
us
to pursue our business plan and grow our adult stem cell collection and storage
business, including expanding marketing and sales activities. However, in order
to fully develop our business, we expect to need to raise additional
funds.
1
On
August
29, 2006, our stockholders approved an amendment to our Certificate of
Incorporation to effect a reverse stock split of our Common Stock at a ratio
of
one-for-ten shares and to change our name from Phase III Medical, Inc. to
NeoStem, Inc. On June 14, 2007, our stockholders approved an
amendment to our Certificate of Incorporation to effect a reverse split of
our
Common Stock at a ratio of up to one-for-ten shares in the event it was deemed
necessary by our Board of Directors in order to be accepted onto a securities
exchange. On July 9, 2007, our Board of Directors approved a one-for-ten
reverse
stock split to be effective upon the initial closing of the Company’s public
offering in order to satisfy the listing requirements of the American Stock
Exchange. On August 9, 2007 the reverse split was effective and the
Company's Common Stock commenced trading on The American Stock Exchange under
the symbol "NBS." Accordingly, all numbers in this prospectus have
been adjusted to reflect both the one-for-ten reverse stock split which was
effective as of August 31, 2006, and the one-for-ten reverse stock split
which
was effective as of August 9, 2007.
NeoStem,
Inc. was incorporated under the laws of the State of Delaware in September
1980
under the name Fidelity Medical Services, Inc. Our corporate headquarters is
located at 420 Lexington Avenue, Suite 450, New York, NY 10170, our telephone
number is (212) 584-4180 and our website address is www.neostem.com. The
information contained on our website is not a part of this
prospectus.
Our
securityholders named in the table beginning on page 17 of this prospectus
are
offering an aggregate of 3,188,050 shares of our Common
Stock. 1,354,653 of such shares are issuable upon the exercise of
currently outstanding warrants. We will not receive any proceeds upon
the sale of shares of Common Stock by the selling stockholders. We will receive
the exercise price of the outstanding warrants that are exercised for cash.
See
“Use of Proceeds.” Substantially all of the shares being offered
hereby were acquired by the selling stockholders as a result of our capital
raising activities in 2006 and 2007. See “Selling
Securityholders.”
2
An
investment in our Common Stock is speculative and involves a high degree of
risk. You should carefully consider the risks and uncertainties described below
and the other information in this prospectus and incorporated by reference
herein before deciding whether to purchase shares of our Common Stock. The
risks
described below are not the only ones facing our Company. Additional risks
not
presently known to us or that we currently believe to be immaterial may also
adversely affect our business and impair our business operations. If any of
the
following risks actually occur, our business strategy, financial condition
or
operating results could be harmed. This could cause the trading price of our
Common Stock to decline, and you may lose all or part of your
investment.
RISKS
RELATING TO THE COMPANY’S FINANCIAL CONDITION
We
have a history of
operating losses and we will continue to incur
losses.
Since
our
inception in 1980, we have generated only limited revenues from sales and have
incurred substantial net losses of $6,051,400, $1,745,039 and $1,748,372 for
the
years ended December 31, 2006, 2005 and 2004, respectively, and $3,774,596
for
the six months ended June 30, 2007. We expect to incur additional operating
losses as well as negative cash flow from our new business operations until
we
successfully commercialize the collection, processing and storage of adult
stem
cells, if ever.
We
have a history of liquidity problems, which may affect our ability to raise
capital.
At
June
30, 2007, we had a cash balance of $85,382, a working capital deficit of
$472,182 and stockholders’ equity of $163,820. Our history of illiquidity and
losses may make it difficult for us to raise capital on favorable terms. We
have
from time to time raised capital for our activities through the sale of our
equity securities and promissory notes. Most recently, we raised $2,500,000
in
January and February 2007 through the private placement sale of our common
stock
and warrants to purchase our common stock, and $6,350,000 in August 2007 through
the public offering sale of units consisting of shares of our common stock
and
warrants to purchase common stock. Such capital raising activities are enabling
us to pursue our business plan and grow our adult stem cell collection and
storage business, including expanding marketing and sales
activities.
We
expect to need substantial additional financing to continue
operations.
We
expect
to require substantial additional capital to fund our current operating plan
for
our new business. In addition, our cash requirements may vary materially from
those now planned because of expenses relating to marketing, advertising, sales,
distribution, research and development and regulatory affairs, as well as the
costs of maintaining, expanding and protecting our intellectual property
portfolio, including potential litigation costs and liabilities.
Our
inability to obtain future capital funding on acceptable terms will negatively
affect our business operations and current investors.
We
expect
that in the future we will seek additional funding through public or private
financings. Additional financing may not be available on acceptable terms,
or at
all. If additional capital is raised through the sale of equity, or securities
convertible into equity, further dilution to then existing stockholders will
result. If additional capital is raised through the incurrence of debt, our
business could be affected by the amount of leverage incurred. For instance,
such borrowings could subject us to covenants restricting our business
activities, paying interest would divert funds that would otherwise be available
to support commercialization and other important activities, and holders of
debt
instruments would have rights and privileges senior to those of equity
investors. If we are unable to obtain adequate financing on a timely basis,
we
may be required to delay, reduce the scope of or eliminate some of our planned
activities, any of which could have a material adverse effect on the
business.
3
We
will continue to experience cash outflows.
We
continue to incur expenses, including the salary of our executive officers,
rent, legal, marketing and accounting fees, insurance and general administrative
expenses. Our business activities are in the early stages of development and
will therefore result in additional cash outflows in the foreseeable future.
It
is not possible at this time to state whether we will be able to finance these
cash outflows or when we will be able to achieve and sustain a positive cash
position. Our ability to become profitable will depend on many factors,
including our ability to successfully commercialize the business. We cannot
assure that we will ever become profitable and we expect to continue to incur
losses. NS California itself had nominal operations and nominal assets at the
time of our acquisition of its adult stem cell business. From its inception
in
2002 through September 30, 2005, NS California had aggregate revenues of
$25,500, and aggregate losses of $2,357,940.
RISKS
RELATING TO THIS OFFERING
Our
stock has historically had limited trading volume.
Our
common
stock currently trades on the American Stock Exchange and until August 9, 2007
was traded on the OTC Bulletin Board, an electronic, screen-based trading system
operated by the National Association of Securities Dealers, Inc. Our stock
has
generally been thinly traded and we cannot assure you that our securities will
have improved liquidity now that they are traded on the American Stock
Exchange. As a result, an investor may find it difficult to dispose
of our common stock.
Our
stock price could be volatile.
The
price
of our common stock has fluctuated in the past and may be more volatile in
the
future. Factors such as the announcements of government regulation, new products
or services introduced by us or by our competition, healthcare legislation,
trends in health insurance, litigation, fluctuations in operating results,
our
success in commercializing our business and market conditions for healthcare
stocks in general could have a significant impact on the future price of our
common stock. The historically low volume of trading in our common stock has
made it more vulnerable, and it may continue to be more vulnerable, to rapid
changes in price in response to market conditions.
Sales
of substantial amounts of our common stock in the open market, or the
availability of such shares for sale, could adversely affect the price of our
common stock.
We
had
3,991,168 shares of common stock outstanding as of September 10, 2007. The
following securities that may be exercised for, or are convertible into, shares
of our common stock were issued and outstanding as of September 10,
2007:
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Options.
Stock options to purchase 616,600 shares of our common stock at a
weighted
average exercise price of approximately $6.84 per
share.
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Warrants.
Warrants to purchase 1,354,688 shares of our common stock at a weighted
average exercise price of approximately $7.57 per
share.
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Class
A Warrants. Warrants to purchase 635,000 shares of our common
stock at an exercise price of $6.00 per share. The Class A
warrants were issued in our public offering in August
2007.
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Underwriters
Warrants. Warrants issued to the underwriter in our public
offering in August 2007 to purchase 95,250 shares of our common stock
at a
price of $6.50 per share (130% of the price of the common stock sold
in
the public offering).
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Substantially
all of the outstanding shares of our common stock, as well as substantially
all
the shares of our common stock that may be issued under our outstanding options,
warrants, Class A warrants and underwriter warrants, are or will be registered
or otherwise not restricted from trading.
4
Our
outstanding warrants may negatively affect our ability to raise additional
capital.
During
the
terms of our outstanding warrants, their holders are given the opportunity
to
profit from a rise in the market price of our common stock. So long as the
warrants are outstanding, the terms on which we could obtain additional capital
may be adversely affected. The holders of the warrants might be expected to
exercise them at a time when we would, in all likelihood, be able to obtain
any
needed capital by a new offering of securities on terms more favorable than
those provided by the warrants.
RISKS
RELATING TO THE COMPANY’S BUSINESS
If
the potential of stem cell therapy to treat serious disease is not realized,
the
value of our stem cell collection, processing and storage and our development
programs could be significantly reduced.
The
potential of stem cell therapy to treat serious disease is currently being
explored. Stem cell therapy is not a commonly used procedure and it has not
been
proven in clinical trials that stem cell therapy will be an effective treatment
for diseases other than those currently addressed by hematopoietic stem cell
transplants. No stem cell products have been successfully developed and
commercialized to date, and none have received regulatory approval in the United
States or internationally. Stem cell therapy may be susceptible to various
risks, including undesirable and unintended side effects, unintended immune
system responses, inadequate therapeutic efficacy or other characteristics
that
may prevent or limit its approval or commercial use. The value of our stem
cell
collection, processing and storage and our development programs could be
significantly reduced if the use of stem cell therapy to treat serious disease
is not proven effective in the near future.
Because
the stem cell industry is subject to rapid technological and therapeutic
changes, our future success will materially depend on the viability of the
commercial use of stem cells for the treatment of
disease.
Our
success materially depends on the development of therapeutic treatments and
cures for disease using stem cells. The broader medical and research environment
for such treatments and cures critically affects the utility of stem cells,
the
services we offer to the public, and our future success. The value of stem
cells
in the treatment of disease is subject to potentially revolutionary
technological, medical and therapeutic changes. However, future technological
and medical developments or improvements in conventional therapies could render
the use of stem cells and our services and equipment obsolete and unmarketable.
As a result, there can be no assurance that our services will provide
competitive advantages over other technologies. If technological or medical
developments arise that materially alter the commercial viability of our
technology or services, we may be forced to incur significant costs in replacing
or modifying equipment in which we have already made a substantial investment
prior to the end of its anticipated useful life. Alternatively, significant
advances may be made in other treatment methods or in disease prevention
techniques which could significantly reduce or entirely eliminate the need
for
the services we provide. The materialization of any of these risks could have
a
material adverse effect on our business, financial condition, the results of
operations or our ability to operate at all.
We
may be forced to undertake lengthy and costly efforts to build market acceptance
of our stem cell collection, processing and storage services, the success of
which is critical to our profitability. There can be no assurance that these
services will gain market acceptance.
We
anticipate that service fees from the processing and storage of stem cells
will
comprise a substantial majority of our revenue in the future and, therefore,
our
future success depends on the successful and continued market acceptance of
this
service. Broad use and acceptance of our service requires marketing expenditures
and education and awareness of consumers and medical practitioners who, under
present law, must order stem cell collection on behalf of a potential customer.
The time and expense required to educate and build awareness of our services
and
its potential benefits could significantly delay market acceptance and our
ultimate profitability. The successful commercialization of our services will
also require that we satisfactorily address the concerns of medical
practitioners in order to avoid potential resistance to recommendations for
our
services and ultimately reach our potential consumers. No assurances can be
given that our business plan and marketing efforts will be successful, that
we
will be able to commercialize our services, or that there will be market
acceptance of our services or clinical acceptance of our services by physicians
sufficient to generate any material revenues for us.
5
Ethical
and other concerns surrounding the use of stem cell therapy may increase the
regulation of or negatively impact the public perception of our stem cell
services, thereby reducing demand for our services.
The
use of
embryonic stem cells for research and stem cell therapy has been the subject
of
debate regarding related ethical, legal and social issues. Although our business
only utilizes adult stem cells and does not involve the more controversial
use
of embryonic stem cells, the use of other types of human stem cells for therapy
could give rise to similar ethical, legal and social issues as those associated
with embryonic stem cells. Additionally, it is possible that our business could
be negatively impacted by any stigma associated with the use of embryonic stem
cells if the public fails to appreciate the distinction between the use of
adult
versus embryonic stem cells. The commercial success of our business will depend
in part on public acceptance of the use of stem cell therapy, in general, for
the prevention or treatment of human diseases. Public attitudes may be
influenced by claims that stem cell therapy is unsafe or unnecessary, and stem
cell therapy may not gain the acceptance of the public or the medical community.
Public pressure or adverse events in the field of stem cell therapy that may
occur in the future also may result in greater governmental regulation of our
business creating increased expenses and potential regulatory delays relating
to
the approval or licensing of any or all of the processes and facilities involved
in our stem cell banking services. In the event that the use of stem cell
therapy becomes the subject of adverse commentary or publicity, our business
could be adversely affected and the market price for our common stock could
be
significantly harmed.
We
operate in a highly regulated environment, and our failure to comply with
applicable regulations, registrations and approvals would materially and
adversely affect our business.
Historically,
the FDA has not regulated banks that collect and store stem cells. More recent
changes, however, require establishments engaged in the recovery, processing,
storage, labeling, packaging or distribution of any Human Cells, Tissues, and
Cellular and Tissue-Based Products (HCT/Ps) or the screening or testing of
a
cell tissue donor to register with the FDA. The registration requirement was
effective as of January 2004. The FDA also adopted rules in May 2005 that
regulate current Good Tissues Practices (cGTP). We may be or become subject
to
such registration requirements and regulations, and there can be no assurance
that we will be able, or will have the resources, to comply. Future FDA
regulations could also adversely impact or limit our ability to market or
perform our services. In order to collect and store blood stem cells we must
conduct (or arrange for the conduct of) a variety of laboratory tests which
are
regulated under the federal Clinical Laboratory Improvement Amendments (CLIA).
Any facility conducting regulated tests must obtain a CLIA certificate of
compliance and submit to regular inspection.
Some
states require additional regulation and oversight of clinical laboratories
operating within their borders and some impose obligations on out-of-state
laboratories providing services to their residents. The states in which we
initially plan to engage in processing and storage activities all currently
have
licensing requirements with which we believe we will need to comply.
Additionally, there may be state regulations impacting the storage and use
of
blood products that would impact our business. We obtained our biologics license
from the State of California in May 2006. In April 2007, the Company received
two provisional licenses from the State of New York. The first license permits
the Company’s California facility to collect, process and store hematopoietic
progenitor cells (“HPCs”) collected from New York residents. The second license
permits solicitation in New York relating to the collection of HPCs. Each
license is subject to certain limitations. There can be no assurance that we
will be able to obtain the necessary licenses required to conduct our business
in other states, or maintain licenses that we do obtain in such states,
including California and New York. If we identify other states with licensing
requirements or if other states adopt such other requirements, or if we plan
to
conduct business in a new state with such licensing requirements, we would
also
have to obtain such licenses and/or comply with such other requirements. We
may
also be subject to state and federal privacy laws related to the protection
of
our customers’ personal health information to which we would have access through
the provision of our services. We may be required to spend substantial amounts
of time and money to comply with any regulations and licensing requirements,
as
well as any future legislative and regulatory initiatives. Failure to comply
with applicable regulatory requirements or delay in compliance may result in,
among other things, injunctions, operating restrictions, and civil fines and
criminal prosecution which would have a material adverse effect on the marketing
and sales of our services and impair our ability to operate profitably or
preclude our ability to operate at all in the future.
6
Our
business was not contemplated by many existing laws and
regulations.
The
service that we provide is unique. It is not medical treatment, although it
involves medical procedures, and it is not research, although research
participation is part of our business plan. Our business was not contemplated
by
many of the regulations in the field in which we operate and as a result, there
is often considerable uncertainty when we are analyzing the applicability of
regulatory requirements. We have devoted significant resources to ensuring
compliance with those laws that we believe to be applicable and when
applicability of a law is in doubt, we have opted to comply in order to minimize
risk. It is possible, however, that regulators may disagree with some of our
interpretations of the law prompting additional compliance requirements or
even
enforcement actions. Such enforcement may have a material adverse effect on
our
operations or may require re-structuring of our operations or impair our ability
to operate profitably.
Our
failure to comply with laws related to hazardous materials could materially
harm
us.
We
are
subject to state and federal laws regulating the proper disposal of biohazardous
material. Although we believe we are currently in compliance with all such
applicable laws, a violation of such laws, or the future enactment of more
stringent laws or regulations, could subject us to liability for noncompliance
and may require us to incur costs and/or otherwise have a material adverse
effect on our ability to do business.
Side
effects of the stem cell collection process or a failure in the performance
of
our cryopreservation storage facility or systems could harm our business and
reputation.
To
the
extent a customer experiences adverse side effects from the stem cell collection
process, or our cryopreservation storage service is disrupted, discontinued
or
our ability to provide banked stem cells is impaired for any reason, our
business and operations could be adversely affected. Any equipment failure
that
causes a material interruption or discontinuance in our cryopreservation storage
of stem cell specimens could result in stored specimens being damaged and unable
to be utilized. Adverse side effects of the collection process or specimen
damage (including contamination or loss in transit to us), could result in
litigation against us and reduced future revenue, as well as harm to our
reputation. Our insurance may not adequately compensate us for any losses that
may occur due to any such adverse side effects or failures in our system or
interruptions in our ability to maintain proper, continued, cryopreservation
storage services. Our systems and operations are vulnerable to damage or
interruption from fire, flood, equipment failure, break-ins, tornadoes and
similar events for which we do not have redundant systems or a formal disaster
recovery plan and may not carry sufficient business interruption insurance
to
compensate us for losses that may occur. Any claim of adverse side effects
or
material disruption in our ability to maintain continued uninterrupted storage
systems could have a material adverse effect on our business, operating results
and financial condition.
7
We
are dependent on existing relationships with third parties to conduct our
business.
Our
process of collecting stem cells involves the injection of a “mobilizing agent”
which causes the stem cells to leave the bone marrow and enter into the blood
stream. The injection of this mobilizing agent is an integral part of the
collection process. There is currently only one supplier of this mobilizing
agent, and we are currently dependent upon our relationship with such supplier
to maintain an adequate supply. Although we continue to explore alternative
methods of stem cell collection, there can be no assurance that any such methods
will prove to be successful. In the event that our supplier is unable or
unwilling to continue to supply a mobilizing agent to us on commercially
reasonable terms, and we are unable to identify alternative methods or find
substitute suppliers on commercially reasonable terms, we may not be able to
successfully commercialize our business. We are also currently using only one
outside “apheresis” provider that also is expected to be the aspheresis provider
to certain of our collection centers being operated by third parties.
“Apheresis” is the process through which stem cells are extracted from a
patient’s whole blood and it is an integral part of our collection process.
Although other third parties could provide apheresis services, any disruption
in
the relationship with this service would cause a delay in the delivery of our
services. In order to successfully commercialize our business, we will continue
to depend upon our relationship with such companies or we or the collection
centers operated by third parties will need to develop internal capabilities
to
provide this service and obtain appropriate licensure.
Our
success will depend in part on establishing and maintaining effective strategic
partnerships and collaborations.
A
key
aspect of our business strategy is to establish strategic relationships in
order
to gain access to critical supplies, to expand or complement our development
or
commercialization capabilities, or to reduce the cost of developing or
commercializing services on our own. There can be no assurance that we will
enter into such relationships or that the arrangements will be on favorable
terms. Relationships with licensed professionals such as physicians may be
subject to state and federal laws including fraud and abuse regulations
restricting the referral of business, prohibiting certain payments to
physicians, or otherwise limiting our options for structuring a relationship.
If
our services become reimbursable by government or private insurers in the
future, we could be subject to additional regulation and perhaps additional
limitations on our ability to structure relationships with physicians.
Additionally, state regulators may impose restrictions on the types of business
relationships into which licensed physicians or other licensed professionals
may
enter. Failure to comply with applicable fraud and abuse regulations or other
regulatory requirements could result in civil fines, criminal prosecution or
other sanctions. Even if we do enter into these arrangements, we may not be
able
to maintain these relationships or establish new ones in the future on
acceptable terms. Furthermore, these arrangements may require us to grant
certain rights to third parties, including exclusive rights or may have other
terms that are burdensome to us. If any of our partners terminate their
relationship with us or fail to perform their obligations in a timely manner,
the development or commercialization of our services may be substantially
delayed. If we fail to structure our relationships with physicians in accordance
with applicable fraud and abuse laws or other regulatory requirements it could
have a material adverse effect on our business.
We
are dependent upon our management, scientific and medical personnel and we
may
face difficulties in attracting qualified employees or managing the growth
of
our business.
Our
future
performance and success are dependent upon the efforts and abilities of our
management, medical and scientific personnel. Furthermore, our future growth
will require hiring a significant number of qualified technical, medical,
scientific, commercial, business and administrative personnel. Accordingly,
recruiting and retaining such personnel in the future will be critical to our
success. If we are not able to continue to attract and retain, on acceptable
terms, the qualified personnel necessary for the continued development of our
business, we may not be able to sustain our operations or achieve our business
objectives. Our failure to manage growth effectively could limit our ability
to
achieve our commercialization and other goals relating to, and we may fail
in
developing, our new business.
8
RISKS
RELATING TO COMPETITION
The
stem cell preservation market has and continues to become increasingly
competitive.
We
may
face competition from companies with far greater financial, marketing, technical
and research resources, name recognition, distribution channels and market
presence than us, who are marketing or developing new services that are similar
to the services that are now being or may in the future be developed by us.
There can be no assurance that we will be able to compete
successfully.
For
example, in the established market for cord blood stem cell banking, the growth
in the number of families banking their newborn’s cord blood stem cells has been
accompanied by an increasing landscape of competitors. Our business, which
has
been more recently developed, already faces competition from other established
operators of stem cell preservation businesses and providers of stem cell
storage services. We believe that certain of our competitors have established
stem cell banking services to process and store stem cells collected from
adipose tissue (fat tissue). This type of stem cell banking will require
partnering with cosmetic surgeons who perform liposuction procedures. In
addition, we believe the use of adult stem cells from adipose tissue will
require extensive clinical trials to prove the safety and efficacy of such
cells
and the enzymatic process required to extract adult stem cells from fat. From
a
technology perspective this ability to expand a small number of stem cells
could
present a competitive alternative to stem cell banking. The ability to create
a
therapeutic quantity of stem cells from a small number of cells is essential
to
using embryonic stem cells and would be desirable to treat patients who can
only
supply a small number of their own stem cells. There are many biotechnology
laboratories attempting to develop stem cell expansion technology, but to date,
stem cell expansion techniques are very inefficient and typically the target
cells stop dividing naturally, keeping the yield low. However, stem cell
expansion could also complement adult stem cell banking by allowing individuals
to extend the banking of an initial collection of cells for many
applications.
In
the
event that we are not able to compete successfully with our current or potential
competitors, it may be difficult for us to grow our revenue and maintain our
existing business without incurring significant additional expenses to try
and
refine our technology, services or approach to our business to better compete,
and even then there would be no guarantee of success.
We
may face competition in the future from established cord blood banks and some
hospitals.
Cord
blood
banks such as ViaCord (a division of ViaCell International) or Cryo-Cell
International may be drawn to the field of stem cell collection because their
processing labs and storage facilities can be used for processing adult stem
cells from peripheral blood and their customer lists may provide them with
an
easy access to the market. We estimate that there are approximately 43 cord
blood banks in the United States, approximately 25 of which are autologous
(donor and recipient are the same) and approximately 18 of which are allogeneic
(donor and recipient are not the same). Hospitals that have transplant centers
to serve cancer patients may elect to provide some or all of the services that
we provide. We estimate that there are approximately 123 hospitals in the United
States with stem cell transplant centers. All of these competitors may have
access to greater financial resources. In addition, other established companies
with greater access to financial resources may enter our markets and compete
with us. There can be no assurance that we will be able to compete
successfully.
9
RISKS
RELATING TO INTELLECTUAL PROPERTY
There
is significant uncertainty about the validity and permissible scope of patents
in the biotechnological industry. We may not be able to obtain patent
protection.
There
can
be no assurance that the patent applications to which we hold rights will result
in the issuance of patents, or that any patents issued or licensed to our
company will not be challenged and held to be invalid or of a scope of coverage
that is different from what we believe the patent’s scope to be. Further, there
can be no assurance that any future patents related to these technologies will
ultimately provide adequate patent coverage for or protection of our present
or
future technologies, products or processes. Our success will depend, in part,
on
whether we can obtain patents to protect our own technologies; obtain licenses
to use the technologies of third parties if necessary, which may be protected
by
patents; protect our trade secrets and know-how; and operate without infringing
the intellectual property and proprietary rights of others.
We
may be unable to protect our intellectual property from infringement by third
parties.
Despite
our efforts to protect our intellectual property, third parties may infringe
or
misappropriate our intellectual property or may develop intellectual property
competitive to ours. Our competitors may independently develop similar
technology, duplicate our processes or services or design around our
intellectual property rights. As a result, we may have to litigate to enforce
and protect our intellectual property rights to determine their scope, validity
or enforceability. Intellectual property litigation is costly, time-consuming,
diverts the attention of management and technical personnel and could result
in
substantial uncertainty regarding our future viability. The loss of intellectual
property protection or the inability to secure or enforce intellectual property
protection would limit our ability to develop and/or market our services in
the
future. This would also likely have an adverse affect on the revenues generated
by any sale or license of such intellectual property. Furthermore, any public
announcements related to such litigation or regulatory proceedings could
adversely affect the price of our common stock.
Third
parties may claim that we infringe on their intellectual
property.
We
also
may be subject to costly litigation in the event our technology infringes upon
another party’s proprietary rights. Third parties may have, or may eventually be
issued, patents that would be infringed by our technology. Any of these third
parties could make a claim of infringement against us with respect to our
technology. We may also be subject to claims by third parties for breach of
copyright, trademark or license usage rights. An adverse determination in any
litigation of this type could require us to design around a third party’s
patent, license alternative technology from another party or otherwise result
in
limitations in our ability to use the intellectual property subject to such
claims. Litigation and patent interference proceedings could result in
substantial expense to us and significant diversion of efforts by our technical
and management personnel. An adverse determination in any such interference
proceedings or in patent litigation to which we may become a party could subject
us to significant liabilities to third parties or, as noted above, require
us to
seek licenses from third parties. If required, the necessary licenses may not
be
available on acceptable financial or other terms or at all. Adverse
determinations in a judicial or administrative proceeding or failure to obtain
necessary licenses could prevent us, in whole or in part, from commercializing
our products, which could have a material adverse effect on our business,
financial condition and results of operations.
10
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, any prospectus supplement we may use in connection with this
prospectus, and the documents we incorporate by reference into this prospectus
contain forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934 and Section 27A of the Securities Act of
1933. For this purpose, any statements contained herein that relate to future
events or conditions, including without limitation, the statements included
or
incorporated by reference into this prospectus regarding our our financial
position, potential, business strategy, plans and objectives for future
operations, may be deemed to be forward-looking statements. All such
statements, which are all statements other than of historical fact, involve
risks and uncertainties. These statements are commonly identified by
the use of such terms and phrases as “intends,” “expects,” “anticipates,”
“estimates,” “seeks” and “believes.” Additionally, statements concerning our
ability to develop the adult stem cell business, the future of regenerative
medicine and the role of adult stem cells in that future, the future use of
adult stem cells as a treatment option and the potential revenue growth of
such
business are forward-looking statements. Our ability to enter the adult stem
cell arena and future operating results are dependent upon many factors,
including but not limited to: (i) our ability to obtain sufficient capital
or a
strategic business arrangement to fund our expansion plans; (ii) our ability
to
build the management and human resources and infrastructure necessary to support
the growth of our business; (iii) competitive factors and developments beyond
our control; (iv) scientific and medical developments beyond our control;
(v) our inability to obtain appropriate state licenses or any other adverse
effect or limitations caused by government regulation of the business; (vi)
whether any of the Company’s current or future patent applications result in
issued patents; and (vii) other risk factors discussed in "Risk Factors"
contained herein. We cannot guarantee future results or achievements,
and prospective investors are cautioned not to place undue reliance on these
forward-looking statements. In addition, any forward-looking
statements represent our expectation only as of the date of this prospectus
and
should not be relied on as representing our expectations as of any subsequent
date. While we may elect to update forward-looking statements at some point
in
the future, we specifically disclaim any obligation to do so, even if our
expectations change. When we indicate that an event, condition or circumstance
could or would have an adverse effect on us, we mean to include effects upon
our
business, financial and other condition, results of operations, prospects and
ability to service our debt.
USE
OF PROCEEDS
We
will
not receive any proceeds from the sale of our Common Stock covered hereby,
by
any of the selling stockholders. Some of the shares of Common Stock to be sold
in this offering have not yet been issued and will only be issued upon the
exercise of warrants. We will receive estimated net proceeds of
approximately $10,256,123 if all such warrants are exercised for cash, however,
certain of our outstanding warrants have a cashless exercise feature. We intend
to use any proceeds received from the exercise of the warrants for general
corporate purposes, including the funding of development activities. We expect
to incur expenses of approximately $25,000 in connection with this offering.
RECENT
DEVELOPMENTS
Business
NeoStem, Inc.
(the “Company”) is in the business of operating a commercial autologous (donor
and recipient are the same) adult stem cell bank and the pre-disease collection,
processing and long-term storage of adult stem cells that donors can access
for
their own future medical treatment. On January 19, 2006 the Company
consummated the acquisition of the assets of NS California, Inc., a
California corporation (“NS California”) relating to NS California’s business of
collecting and storing adult stem cells. Prior to the acquisition of NS
California, the Company’s business had been providing capital and business
guidance to companies in the healthcare and life science industries, including
NS California. The Company now is providing adult stem cell processing,
collection and banking services with the goal of making stem cell collection
and
storage widely available, so that the general population will have the
opportunity to store their own stem cells for future healthcare needs. Using
its
proprietary process, the Company provides the infrastructure, methods and
systems that allow adults to have their stem cells safely collected and
conveniently banked for future therapeutic use as needed in the treatment of
such life-threatening diseases as diabetes, heart disease and radiation sickness
that may result from a bio-terrorist attack or nuclear accident. The Company
also hopes to become the leading provider of adult stem cells for diagnostic
and
therapeutic use in the burgeoning field of regenerative medicine. According
to
the National Institutes of Health, there are over 700 clinical trials underway
relating to the use of adult stem cells, over 200 relating to autologous use,
in
the treatment of numerous serious diseases and conditions, including those
that
address cardiac disease, autoimmune disorders such as multiple sclerosis,
peripheral vascular diseases and age related musculoskeletal disorders, as
well
as diabetes, cancer, neurological disease, and wound healing.
11
We
are
structuring an aggressive direct to consumer marketing plan to drive awareness
and target individuals who can afford our services. We also believe that those
with economic constraints can now afford our services with the financing
relationship we have established with GE Credit Care. We are planning to educate
individuals that have a family history or early diagnosis of diseases being
treated with stem cell therapy as well as those who have banked their infants
stem cells that can afford this “bioinsurance.” Additionally we are working
on establishing collaborations with high profile medical centers and academic
institutions involved in cutting edge research and clinical trials to evaluate
the use of stem cells for the treatment of various diseases. We believe that
there is a significant need for our banking services for first
responders and homeland security personnel. We are moving forward to educate
those groups and find resources to protect those individuals who protect us.
Our
other go-to market strategies include collaboration with cord blood companies,
tissue banks, pharmaceutical companies, concierge medical programs, executive
health plans and regenerative medicine specialists.
Stem
Cells
Stem
cells
are very primitive and undifferentiated cells that have the unique ability
to
transform into many different cells, such as white blood cells, nerve cells
or
heart muscle cells. Stem cells can be found in the bone marrow or peripheral
blood of adults. Certain processes can cause the stem cells to leave the bone
marrow and enter the blood where they can be collected. The Company currently
only works with adult stem cells collected from peripheral blood through a
safe,
minimally invasive procedure called “apheresis.”
Plan
of Operations
The
Company is engaging in the business of autologous adult stem cell collection,
processing and banking. The Company believes that as adult stem cell therapies
obtain necessary regulatory approvals and become standard of care, individuals
will need the infrastructure, methods and procedures being developed by the
Company to have their stem cells safely collected and conveniently stored for
future therapeutic use. The Company intends to generate revenues from the
following:
|
·
|
initial
collection of adult stem
cells
|
|
·
|
storage
of adult stem cells (generating recurring
revenue)
|
|
·
|
utilization
of adult stem cells (when stem cells are
used)
|
It
is
developing a service model to create a source of stem cells that potentially
enables physicians to treat a variety of diseases and engage in research to
progress therapeutic development using adult stem cells. The Company anticipates
fees being derived from Company-owned collection centers and collection centers
operated by physicians and medical institutions with which it collaborates.
It
anticipates the opening of a flagship collection center in New York City, the
establishment of which is anticipated to be partially funded from the proceeds
of its recent public offering. It also is seeking to obtain government grants
and catalogue and store adult stem cells in a biorepository. As this
biorepository grows, it is anticipated there will be revenues derived from
relationships with pharmaceutical companies and other companies developing
stem
cell therapies who require access to cells. Additionally, the Company plans
to
expand its patent portfolio in the adult stem cell arena. The Company is
currently processing and storing the adult stem cells collected with its
processes at its California facility. As the Company grows, it may choose to
utilize additional processing and storage capabilities in the northeastern
United States or elsewhere, whether through the expansion of its own facilities
and personnel or through the forging of strategic relationships with an
established provider of cell processing and storage services.
12
Company
Initiatives
The
Company’s current initiatives include plans to:
|
·
|
Develop
strategic initiatives with cord blood companies, tissue banks and
pharmaceutical companies
|
|
·
|
Collaborate
with academic institutions on licensing opportunities, build out
of
collection centers and provision of collection services for ongoing
clinical trials
|
|
·
|
Develop
partnerships with executive health programs, wellness physicians,
concierge medical programs, medical spas and first responder
groups
|
|
·
|
Expand
the Company’s intellectual property portfolio within the stem cell
arena
|
|
·
|
Expand
its Government Programs Initiatives and in this regard has recently
hired
Arlene Graime as Director of Government Affairs and Special Projects,
to
spearhead efforts aimed at working with key federal and state
agencies as well as congressional committees in order to raise
awareness
for the benefits of adult stem cell therapy as a treatment
option
|
|
·
|
Submit
grant applications to National Institutes of Health and others
to fund
Company programs
|
|
·
|
Assist
in developing The Stem for Life Foundation, an adult stem cell
foundation
formed to generate awareness of stem cell
therapies
|
In
April 2007, the Company participated in the founding of The Stem for
Life Foundation (the “Foundation”). The Mission of the Foundation is to
heighten public awareness and knowledge of the benefits and promise of Adult
Stem Cells in treating serious medical conditions. The Foundation is committed
to assisting those who protect us. First Responders (Fire, Police, Rescue and
Military) are at high risk for exposure to radiation, burns, wounds, and other
trauma. The Foundation will help provide resources, not just for those emergency
workers, but also to other individuals who become chronically ill and will
be in
need of assistance to collect, process and store their own stem cells now for
use in the future. The Foundation was formed under the Pennsylvania
Not-for-Profit Corporation Law and is intended to qualify as a
501(c)(3) corporation under the Internal Revenue Code, as amended. Certain
members of the Company’s management are officers and/or sit on the Board of
Trustees of the Foundation.
13
SELLING
SECURITYHOLDERS
NeoStem,
Inc. has previously filed Registration Statement No. 333-140512 on
Form SB-2/A in order to register shares of its Common Stock, as well as shares
of Common Stock issuable upon exercise of warrants, held by certain selling
stockholders. The Registration Statement on Form S-3 of which this
prospectus forms a part registers additional shares of Common Stock, as well
as
additional shares of Common Stock issuable upon exercise of warrants, held
by
certain selling stockholders, and also serves as a post-effective amendment
to
Registration Statement No. 333-140512. Accordingly,
the post-effective amendment Registration Statement of which this
prospectus forms a part carries forward from the previously filed Registration
Statement No. 333-140512, (i) 1,795,930 shares of Common Stock and (ii)
1,190,688 shares of Common Stock issuable upon exercise of warrants, for an
aggregate of 2,986,618 shares of Common Stock.
We
have
filed with the Securities and Exchange Commission a registration statement
on
Form S-3, of which this prospectus is a part, to register for resale
(i) 1,833,362 shares of outstanding Common Stock; and (ii) 1,354,688 shares
of Common Stock issuable upon exercise of outstanding warrants, for an aggregate
of 3,188,050 shares of Common Stock, 201,432 of which have not previously been
registered and 2,986,618 of which are being carried forward from the previously
effective registration statement being amended hereby. All of the shares and
warrants are owned by the selling securityholders.
Selling
securityholders who acquired Company securities in the January 2007 private
placement (defined below) acquired registration rights with respect to (i)
500,000 shares of Common Stock and (ii) 500,000 shares of Common Stock issuable
upon exercise of warrants, for an aggregate of 1,000,000 shares of Common
Stock. In January and February 2007, the Company raised an
aggregate of $2,500,000 through the private placement of 250,000 units at a
price of $10.00 per unit to 35 accredited investors (the “January 2007
private placement”). Each unit was comprised of two shares of the Company’s
common stock, one redeemable seven-year warrant to purchase one share of common
stock at a purchase price of $8.00 per share and one non-redeemable seven-year
warrant to purchase one share of common stock at a purchase price of $8.00
per
share. The Company issued an aggregate of 500,000 shares of common stock, and
warrants to purchase up to an aggregate of 500,000 shares of common stock at
an
exercise price of $8.00 per share. Emerging Growth Equities, Ltd (“EGE”), the
placement agent for the January 2007 private placement, received redeemable
seven-year warrants to purchase 34,255 shares of common stock at a purchase
price of $5.00 per share, redeemable seven-year warrants to purchase 17,128
shares of common stock at a purchase price of $8.00 per share and non-redeemable
seven-year warrants to purchase 17,128 shares of common stock at a purchase
price of $8.00 per share. All of such shares of common stock, and
shares of common stock issuable upon exercise of all such warrants, are being
registered for resale.
Selling
securityholders who acquired Company securities in the June 2006 private
placement (as defined below) acquired registration rights with respect to
(i) 472,500 shares of Common Stock
and (ii) 236,250 shares of Common Stock issuable upon
exercise of warrants, for an aggregate of 708,750 shares of Common
Stock. On June 2, 2006 (the “June 2006 private placement”),
the Company entered into a securities purchase agreement with 17 accredited
investors (the “June 2006 investors”). DCI Master LDC, an affiliate of
Duncan Capital Group LLC (“Duncan,” which was then acting as an advisor to the
Company), acted as lead investor. The Company issued to each
June 2006 investor shares of its common stock at a per-share price of $4.40
along with a five-year warrant to purchase a number of shares of common stock
equal to 50% of the number of shares of common stock purchased by the
June 2006 investor. Duncan received a fee of 24,000 shares of
common stock. The gross proceeds from this sale were
$2,079,000. All of such shares of common stock, and shares of common
stock issuable upon exercise of all such warrants, are being registered for
resale, with the exception of 7,638 shares sold under a previously-effective
registration statement.
Selling
securityholders who acquired Company securities in the Summer 2006 private
placement (as defined below) acquired registration rights with respect to
(i) 397,760 shares of Common Stock
and (ii) 198,900 shares of Common Stock issuable upon
exercise of warrants, for an aggregate of 596,660 shares of Common
Stock. During July and August 2006, the Company raised an
aggregate of $1,750,000 through the private placement to 34 accredited investors
of 397,760 shares of its common stock at $4.40 per share and warrants to
purchase 198,900 shares of common stock at $8.00 per share (the “Summer 2006
private placement”). The terms of the Summer 2006 private placement were
substantially similar to the terms of the June 2006 private
placement. All of such shares are being registered for resale, with
the exception of 77,546 shares sold under a previously-effective registration
statement.
14
Selling
securityholders who acquired Company securities in the WestPark private
placement (as defined below) or who acquired Company securities as a result
of a
special offer (as described below) by the Company to convert or extend the
promissory notes issued in the WestPark private placement, acquired registration
rights with respect to an aggregate of: (i) 116,100 shares of common
stock; (ii) 162,530 shares of Common Stock issuable
upon exercise of warrants exercisable at $8.00 or $12.00 per share; and
(iii) a maximum of 12,500 shares of Common Stock issuable upon conversion
of convertible promissory notes, for an aggregate of 291,130 shares of Common
Stock. All of the shares of common stock so issued, and the shares of
common stock issuable upon exercise of the warrants so issued, are being
registered for resale, with the exception of 29,134 shares sold under a
previously-effective registration statement and the 12,500 shares of Common
Stock issuable upon conversion of the convertible promissory notes which have
been paid and are no longer outstanding.
On
December 30, 2005, and in January 2006, the Company consummated the
private placement sale to 19 accredited investors (the “WestPark investors”) of
units consisting of convertible promissory notes and detachable warrants (“the
WestPark private placement”). Gross proceeds raised were $250,000 on
December 30, 2005 and $250,000 in January 2006, totaling an aggregate
of $500,000. Each unit was comprised of: (a) a nine month note
in the principal amount of $25,000 bearing 9% simple interest, payable
semi-annually, with the 2nd payment paid upon maturity, convertible into shares
of the Company’s common stock at a conversion price of $6.00 per share; and
(b) 4,167 detachable three year warrants, each for the purchase of one
share of common stock at an exercise price of $12.00 per share. The
Company issued to WestPark Capital, Inc., the placement agent for the
WestPark private placement, (i) 5,000 shares of common stock (2,500 shares
on December 30, 2005 and 2,500 shares in January 2006); and
(ii) warrants to purchase an aggregate of 8,334 shares of the Company’s
common stock (4,167 on December 30, 2005 and 4,167 in
January 2006).
In
an
effort to improve the Company’s financial position, in August 2006 the Company
had approached the WestPark investors with a special offer to either extend
the
term of their promissory notes or convert their promissory notes to common
stock
of the Company earlier than the original terms called for, in partial
consideration for which the WestPark investors were asked to waive certain
penalties. Incentives included, among other things, the issuance of shares
of
common stock (568 shares for each $25,000 in principal amount of note converted
or extended), the issuance of additional warrants to purchase shares of common
stock (a second warrant identical to the amount of first warrant originally
issued, for each note converted), reduced conversion prices for the notes from
$6.00 to $4.40 per share and reduced exercise prices for the warrants from
$12.00 to $8.00 per share. In September 2006, the Company revised the offer
relating to the option of conversion of the WestPark Notes by eliminating the
issuance of the additional 568 shares of common stock for each $25,000 in
principal amount of the Note converted. As of October 30, 2006, WestPark
investors holding $425,000 of the $500,000 of convertible promissory notes
had
agreed to convert them into shares of common stock and $162,500 (of which
$137,500 in principal amount was subsequently transferred and converted by
the
transferees) had agreed to extend the term of the convertible promissory notes
on the terms set forth above. By January 2007, the
remaining $75,000 in principal amount had been repaid and therefore all the
convertible promissory notes issued in the WestPark private placement had either
been converted into shares of the Company’s common stock or were repaid by the
Company and are no longer outstanding.
The
other
selling securityholders acquired their shares of Common Stock and/or warrants
in
connection with: (i) private financings; (ii) provision of services to
the Company; (iii) conversion of outstanding indebtedness to the Company
including in an exchange offer during 2005; or (iv) the NS California
acquisition (see “Prospectus Summary” and “Recent Developments”).
15
Stock
Ownership
The
table
below sets forth the number of shares of Common Stock that are:
|
·
|
owned
beneficially by each of the selling
stockholders;
|
|
·
|
offered by each selling stockholder pursuant to this prospectus; |
|
·
|
to
be owned beneficially by each selling stockholder after completion
of the
offering, assuming that all of the warrants held by the selling
stockholder are exercised and all of the shares offered in
this prospectus
are sold and that none of the other shares held by the selling
stockholders if any, are sold; and
|
|
·
|
the percentage to be owned by each selling stockholder after completion of the offering, assuming that all of the warrants held by the selling stockholder are exercised and all of the shares offered in this prospectus are sold and that none of the other shares held by the selling stockholder, if any, are sold. |
For
purposes of this table each selling stockholder is deemed to beneficially
own:
|
·
|
the issued and outstanding shares of Common Stock owned by the selling stockholder as of September 10, 2007; |
|
·
|
the
shares of Common Stock underlying all warrants being registered
hereunder
owned by the selling stockholders;
|
|
·
|
the shares of Common Stock underlying any other options or warrants owned by the selling stockholder which are exercisable as of September 10, 2007 or which were exercisable within 60 days after September 10, 2007. |
Because
the selling stockholders may offer all or some portion of the above-referenced
securities under this prospectus or otherwise, no estimate can be given as
to
the amount or percentage that will be held by the selling stockholders upon
termination of any sale. In addition, the selling stockholders identified below
may have sold, transferred or otherwise disposed of all or a portion of such
securities since the date on which information in this table is provided, in
transactions exempt from the registration requirements of the Securities Act.
Information about the selling stockholders may change from time to time. Any
changed information will be set forth in prospectus supplements, if
required.
Except
as
otherwise noted, none of such persons or entities has had any material
relationship with us during the past three years.
In
connection with the registration of the shares of Common Stock offered in this
prospectus, we will supply prospectuses to the selling
stockholders.
16
| Name |
Number of
Shares
beneficially
owned before
Offering
|
Number of
Shares being
offered hereby
|
Number of
Shares
beneficially
owned after the
Offering
|
Percentage of
Shares
beneficially
owned after
the Offering1
|
|||
|
305
Investments LP 2
|
6,000
|
6,000
|
0
|
Less
than 1%
|
|||
|
Apheresis
Services of Southern California
|
3
|
3
|
0
|
Less
than 1%
|
|||
|
Aron
Abecassis 3
|
17,046
|
17,046
|
0
|
|
Less
than 1%
|
||
|
Byung
Koo Ahn
|
315
|
315
|
0
|
|
Less
than 1%
|
||
|
The
Altman Group
|
2,000
|
2,000
|
0
|
|
Less
than 1%
|
||
|
Joseph
D. Ament Revocable Trust 4
|
17,046
|
17,046
|
0
|
|
Less
than 1%
|
||
|
David
Azus
|
1,205
|
1,205
|
0
|
|
Less
than 1%
|
||
|
Christopher
P. Baker 5
|
66,454
|
66,454
|
0
|
|
Less
than 1%
|
||
|
Ballyshannon
Family Partners, LP 6
|
10,000
|
10,000
|
0
|
Less
than 1%
|
|||
|
Ballyshannon
Partners, LP 7
|
40,000
|
40,000
|
0
|
Less
than 1%
|
1 The
percentage of
stock outstanding for each stockholder after the offering is calculated by
dividing (i) (A) the number of shares of Common Stock deemed to be
beneficially held by such stockholder as of September 10, 2007, minus
(B) the number of shares being offered in this offering by such stockholder
(including shares underlying warrants) by (i) the sum of (A) the
number of shares of Common Stock outstanding as of September 10, 2007 plus
(B) the number of shares of Common Stock issuable upon the exercise of
options and warrants held by such stockholder which were exercisable as of
September 10, 2007 or which will be exercisable within 60 days after September
10, 2007.
2
Beneficial
ownership
includes 3,000 shares of Common Stock underlying warrants, all of which are
being
offered pursuant to this Registration Statement.
3
Beneficial
ownership
includes 5,682 shares of Common Stock underlying warrants, all of which
are being offered pursuant to this Registration
Statement.
4
Beneficial
ownership includes 5,682 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement.
5
Christopher P. Baker is an affiliate of a broker-dealer.
Beneficial ownership includes 31,364 shares of Common Stock underlying warrants,
all of which are being offered pursuant to this Registration
Statement.
6
Beneficial
ownership
includes 5,000 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement. Beneficial
ownership also includes an additional 20,000 shares of Common Stock and 20,000
shares of Common Stock underlying warrants, held in the name of Ballyshannon
Partners, L.P., all of which are being offered pursuant to this Registration
Statement. Ballyshannon Partners, L.P. and Ballyshannon Family Partner,
L.P. are limited partners of EGE Holdings, Ltd. EGE Holdings, Ltd. owns
Emerging Growth Equities, Ltd., a registered broker-dealer and the placement
agent for the Company’s January 2007 private placement.
7
Beneficial
ownership
includes 20,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement. Beneficial
ownership also includes an additional 5,000 shares of Common Stock and 5,000
shares of Common Stock underlying warrants, held in the name of Ballyshannon
Family Partners, L.P., all of which are being offered pursuant to this
Registration Statement. Ballyshannon Partners, L.P. and Ballyshannon
Family Partners, L.P. are limited partners of EGE Holdings, Ltd. EGE
Holdings, Ltd. owns Emerging Growth Equities, Ltd., a registered broker-dealer
and the placement agent for the Company’s January 2007 private
placement.
17
|
Michael
Barrasso 8
|
1,024
|
|
424
|
|
600
|
|
Less
than 1%
|
|
Beacon
Trust Co., TTEE FBO F. Chandler Coddington Jr. IRA
9
|
102,274
|
|
102,274
|
|
0
|
|
Less
than 1%
|
|
Gregory
J. Berlacher 10
|
10,000
|
10,000
|
0
|
Less
than 1%
|
|||
|
Julie
T. Berlacher 11
|
20,000
|
20,000
|
0
|
Less
than 1%
|
|||
|
Richard
Berman 12
|
74,092
|
|
34,092
|
|
40,000
|
|
Less
than 1%
|
|
Carmen
Berman Revocable Trust
|
603
|
|
603
|
|
0
|
|
Less
than 1%
|
|
Robert
Berman Revocable Trust
|
603
|
|
603
|
|
0
|
|
Less
than 1%
|
|
Michele
E. Beuerlein, Trustee of the Epstein/Beuerlein Living Trust
UTA
dated August 7,
2002
|
4,800
|
|
4,800
|
|
0
|
|
Less
than 1%
|
|
BlausenLisi,
L.P. 13
|
8,167
|
|
8,167
|
|
0
|
|
Less
than 1%
|
8
Beneficial
ownership includes 424 shares of Common Stock underlying warrants, all of which
are being offered pursuant to this Registration Statement.
9
Beneficial
ownership includes 34,092 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement. Beneficial ownership also includes an additional 10,000
shares of Common Stock and 10,000 shares of Common Stock underlying warrants,
all of which are being offered pursuant to this Registration Statement, all
held
in the name of F. Chandler Coddington Jr.
10
Beneficial
ownership
includes 5,000 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement. In addition,
Gregory J. Berlacher exercises voting and dispositive power over an additional
5,000 shares of Common Stock and 73,510 shares of Common Stock underlying
warrants held in the name of VFT Special Ventures, Ltd., all of which are being
offered pursuant to this Registration Statement. Mr. Berlacher is the
President and Chief Executive Officer of Emerging Growth Equities, Ltd., a
registered broker-dealer and the placement agent for the Company’s January 2007
private placement. He is also a limited partner (and the principal
owner) of EGE Holdings, Ltd. EGE Holdings, Ltd. owns Emerging Growth
Equities, Ltd. and VFT Special Ventures Ltd.
11
Beneficial
ownership includes 10,000 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration Statement. Julie T.
Berlacher’s husband, Robert A. Berlacher, exercises voting and dispositive power
over 6,000 shares of Common Stock and 6,000 shares of Common Stock underlying
warrants held in the name of Chardonnay Partners, L.P. and 30,000 shares
of
Common Stock and 30,000 shares of Common Stock underlying warrants held in
the
name of Northwood Capital Partners, L.P., all of which are being offered
pursuant to this Registration Statement. Mr. Berlacher is a limited partner
and member of the Board of Directors of EGE Holdings, Ltd. EGE Holdings,
Ltd.
owns Emerging Growth Equities, Ltd., a registered broker-dealer and the
placement agent for the Company’s January 2007 private placement. Mr.
Berlacher is also the beneficial owner of an additional 10,000 shares of
Common
Stock and 10,000 shares of Common Stock underlying warrants held in the name
of
Julie T. Berlacher, Mr. Berlacher’s wife, all of which are being offered
pursuant to this Registration Statement.
12
Beneficial
ownership includes 11,364 shares of Common Stock underlying warrants, all
of
which are being
offered pursuant to this Registration Statement. Mr. Berman is a
Director of the Company and Chairman
of the Company’s Audit, Compensation and Nominating Committees.
13
BlausenLisi,
L.P. serves as a consultant to the Company. Beneficial ownership
includes 4,000 shares of Common
Stock underlying warrants, all of which are being offered pursuant to this
Registration Statement.
18
|
Kurt
J. Boyce 14
|
509
|
|
509
|
|
0
|
|
Less
than 1%
|
|
Sara
Boyce 15
|
509
|
|
509
|
|
0
|
|
Less
than 1%
|
|
Kurt
J. Boyce and Sara Boyce 16
|
1205
|
|
1205
|
|
0
|
|
Less
than 1%
|
|
Dov
B. Braun 17
|
17,046
|
|
17,046
|
|
0
|
|
Less
than 1%
|
|
Glenn
S. Bromley 18
|
17,046
|
|
17,046
|
|
0
|
|
Less
than 1%
|
|
Caribbean
Stem Cell Group Inc.
|
62,500
|
|
62,500
|
|
0
|
|
Less
than 1%
|
|
Catalytix
LDC 19
|
40,000
|
40,000
|
0
|
Less
than 1%
|
|||
|
Catalytix
LDC Life Science Hedge AC 20
|
40,000
|
40,000
|
0
|
Less
than 1%
|
|||
|
Chardonnay
Partners, L.P. 21
|
12,000
|
12,000
|
0
|
Less
than 1%
|
14
Beneficial
ownership includes 160 shares of Common Stock underlying warrants, all of
which are being offered pursuant to this Registration Statement. Mr. Boyce
is also the beneficial owner of an additional 349 shares of Common Stock
and 160 shares of Common Stock underlying warrants, all held in the name of
Mr. Boyce’s wife, Sara Boyce, and 1,205 shares of Common Stock held in
the name of Kurt J. Boyce and Sara Boyce. All such additional shares of
Common Stock are being offered pursuant to this Registration
Statement.
15
Beneficial
ownership
includes 160 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement. Mrs. Boyce is also
the beneficial owner of an additional 349 shares of Common Stock and
160 shares of Common Stock underlying warrants, all held in the name of
Mrs. Boyce’s husband, Kurt J. Boyce, and 1,205 shares of Common
Stock held in the name of Kurt J. Boyce and Sara Boyce. All such additional
shares of Common Stock are being offered pursuant to this Registration
Statement.
16
Kurt J.
Boyce and Sara Boyce are also the beneficial owners of an additional
349 shares of Common Stock and 160 shares of Common Stock underlying
warrants, all held in the name of Kurt J. Boyce, and 349 shares of
Common Stock and 160 shares of Common Stock underlying warrants, all held
in the name of Sara Boyce. All such additional shares of Common Stock are
being
offered pursuant to this Registration Statement.
17
Beneficial
ownership includes 5,682 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement.
18
Beneficial
ownership includes 5,682 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement.
19
Beneficial
ownership includes 20,000 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration Statement.
Beneficial ownership also includes 20,000 shares of Common Stock, and 20,000
shares of Common Stock underlying warrants, all held in the name of Catalytix
LDC Life Science Hedge AC, and all of which are being offered pursuant to
this
Registration Statement.
20
Beneficial
ownership includes 20,000 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration Statement.
Beneficial ownership also includes 20,000 shares of Common Stock, and 20,000
shares of Common Stock underlying warrants, all held in the name of Catalytix
LDC, and all of which are being offered pursuant to this Registration
Statement.
21
Beneficial
ownership includes 6,000 shares of Common Stock underlying warrants, all
of
which are being
offered pursuant to this Registration Statement. Robert A. Berlacher
exercises voting and dispositive
power over 6,000 shares of Common Stock and 6,000 shares of Common Stock
underlying
warrants held in the name of Chardonnay Partners, L.P. and 30,000 shares
of
Common Stock and 30,000 shares of Common Stock underlying warrants held in
the
name of Northwood Capital Partners, L.P., all of which are being offered
pursuant to this Registration Statement. Mr. Berlacher is a limited
partner and member of the Board of Directors of EGE Holdings, Ltd. EGE
Holdings, Ltd. owns Emerging Growth Equities, Ltd., a registered broker-dealer
and the placement agent for the Company’s January 2007 private
placement.
19
|
David
A. Chazanovitz 22
|
8,500
|
8,000
|
500
|
Less
than 1%
|
|||
|
S.J.
Choi
|
2,519
|
|
2,519
|
|
0
|
|
Less
than 1%
|
|
F.
Chandler Coddington Jr. 23
|
20,000
|
20,000
|
0
|
Less
than 1%
|
|||
|
Richard
Cohen
|
2,000
|
|
2,000
|
|
0
|
|
Less
than 1%
|
|
Robert
M. Cohen 24
|
2,404
|
|
2,402
|
|
2
|
|
Less
than 1%
|
|
Patricia
Coleine 25
|
1,713
|
|
1,713
|
|
0
|
|
Less
than 1%
|
|
Evan
Collins 26
|
10,986
|
|
10,986
|
|
0
|
|
Less
than 1%
|
|
Michelle
Cona 27
|
250
|
|
250
|
|
0
|
|
Less
than 1%
|
|
Consulting
for Strategic Growth 1 Ltd. 28
|
33,030
|
|
32,863
|
|
167
|
|
Less
than 1%
|
|
MW
Crow Family LP 29
|
25,000
|
25,000
|
0
|
Less
than 1%
|
22
Beneficial
ownership
includes 4,000 shares of Common Stock underlying warrants, all of which are
being
offered pursuant to this Registration Statement.
23
Beneficial
ownership includes 10,000 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement. Beneficial ownership also includes an additional 68,182
shares of Common Stock, all of which are being offered pursuant to this
Registration Statement, and 34,092 shares of Common Stock underlying warrants,
all of which are being offered pursuant to this Registration Statement, all
held
in the name of Beacon Trust Co., TTEE FBO F. Chandler Coddington Jr.
IRA.
24
Beneficial
ownership
includes 2,402 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
25 Beneficial
ownership includes 160 shares of Common Stock underlying warrants, all of
which
are being offered pursuant to this Registration Statement.
26
Beneficial
ownership
includes 2,273 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
27
Michelle Cona is an
affiliate of WestPark Capital, Inc., a broker-dealer and the placement
agent for the Company’s private offering of warrants and convertible promissory
notes from December 2005 to January 2006.
28
Consulting for Strategic
Growth 1 Ltd. serves as a consultant to the Company. Beneficial ownership
includes 11,500 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
29
Michael
Crow, the general
partner of the MW Crow Family LP, is a director of DCI Master LDC and
the
President of Duncan Capital Group
LLC (“Duncan Capital”). Duncan Capital is owned by the MW Crow Family
LP. DCI Master LDC, an affiliate of Duncan Capital, was the lead
investor in the Company’s June 2006 Private Placement and is the beneficial
owner of 170,455 shares of Common Stock, all of which are being offered pursuant
to this Registration Statement. An additional 85,228 shares of Common
Stock underlying warrants in the name of DCI Master LDC are also being offered
pursuant to this Registration Statement; however, such shares are subject
to an
“Issuance Limitation” and are not beneficially owned to the extent their
exercise would cause beneficial ownership to exceed 4.99%. See
“Selling Securityholders – DCI Master LDC.” Duncan Capital was a
party to an Advisory Agreement with the Company from May 2006 to August
2007 and is the beneficial owner of 25,705 shares of Common Stock, all of
which
are being offered pursuant to this Registration Statement. The
Company currently subleases its executive office space from DC
Associates LLC, an affiliate of Duncan Capital and DCI Master LDC,
which is the beneficial owner of 3,060 shares of Common Stock, all of which
are
also being offered pursuant to this Registration Statement. All
shares deemed beneficially owned by Mr. Crow, including shares in the name
of
the MW Crow Family LP, DCI Master LDC, Duncan Capital Group LLC and DC
Associates LLC, are currently being held subject to the terms of an irrevocable
proxy agreement whereby the proxy has agreed to vote the shares in favor
of
nominees for director proposed by the nominating committee of the Board of
Directors of the Company and in favor of all other matters of whatever nature
proposed by the board on issues requiring shareholder approval and shall
abstain
from matters not proposed by the Board. The Company understands that,
pursuant to an agreement of Mr. Crow to reduce his beneficial ownership to
below
4.99%, the requisite number of shares beneficially owned by Mr. Crow are
in the
process of being sold or distributed to third parties unrelated to Mr. Crow
or to non-affiliates in his fund. Mr. Crow has further agreed to the
early termination of the Duncan Capital financial advisory agreement, the
relinquishment of the right to appoint a designee to the Company’s Board of
Directors and the Company agreed to reimburse him for certain costs and expenses
relating to the irrevocable proxy agreement, register the shares held by
the
transferees on this registration statement and vest certain unvested shares
held
by Duncan Capital.
20
|
DC
Associates LLC30
|
3,060
|
3,060
|
0
|
Less
than 1%
|
|||
|
DCI
Master LDC 31
|
170,455
|
255,683
|
0
|
Less
than 1%
|
|||
|
C.
Douglas Dickson
|
6
|
6
|
0
|
Less
than 1%
|
|||
|
Diversified
Equity Funding, LP 32
|
20,000
|
20,000
|
|
0
|
Less
than 1%
|
||
|
Drake
Investments Ltd.
|
20,000
|
20,000
|
0
|
Less
than 1%
|
|||
|
Duncan
Capital Group LLC 33
|
25,705
|
25,705
|
0
|
Less
than 1%
|
30 DC
Associates LLC, an affiliate of DCI Master LDC and Duncan Capital Group LLC,
currently subleases executive office space to the Company.
31
DCI
Master LDC, an
affiliate of Duncan Capital Group LLC, was the lead investor in the Company’s
June 2006 Private Placement. Beneficial ownership does not include
85,228 shares of Common Stock underlying warrants held by DCI Master LDC;
however, all of the shares of Common Stock underlying such warrants are being
offered pursuant to this Registration Statement. Such warrants are exercisable
immediately, have an exercise price of $.80 per share, and expire on
June 1, 2011. Such warrants are subject to beneficial ownership limitations
that render them unexercisable while the holder thereof beneficially owns
more
than 4.99% of the total number of shares of Common Stock of the Company then
issued and outstanding, or to the extent exercise thereof would result in
the
beneficial ownership by the holder thereof of more than 4.99% of the total
number of shares of Common Stock of the Company then issued and outstanding
(the
“Issuance Limitation”). The holder may waive the Issuance Limitation only upon
61 days’ prior written notice. DCI Master LDC is also the beneficial owner
of an additional 25,705 shares of Common Stock held in the name of Duncan
Capital Group LLC, and 3,060 shares of Common Stock held in the name of DC
Associates LLC, all of which are being offered pursuant to this Registration
Statement. See also “Selling Securityholders – MW Crow Family LP” and
“Selling Securityholders – Duncan Capital Group LLC.”
32
Beneficial
ownership
includes 10,000 shares of Common Stock underlying warrants, all of which
are being offered pursuant to this Registration
Statement.
33
Duncan
Capital Group LLC,
an affiliate of DCI Master LDC, was a party to an Advisory Agreement with
the
Company from May 2006 to August 2007. The Company currently subleases its
executive office space from DC Associates LLC, an affiliate of Duncan
Capital Group LLC and DCI Master LDC. Duncan Capital Group LLC is also
the beneficial owner of an additional 170,455 shares of Common Stock held
in the name of DCI Master LDC, and 3,060 shares of Common Stock held in the
name of DC Associates LLC, all of which are being offered pursuant to this
Registration Statement. See also “Selling Securityholders – MW
Crow Family LP” and “Selling Securityholders – DCI Master
LDC.”
21
|
Robert
Edinger 34
|
1,553
|
|
1,553
|
|
0
|
|
Less
than 1%
|
|
EDJ
Limited 35
|
12,000
|
12,000
|
0
|
Less
than 1%
|
|||
|
Arthur
D. Emil 36
|
8,523
|
|
8,523
|
|
0
|
|
Less
than 1%
|
|
Elizabeth
M. Englett 37
|
5,115
|
|
5,115
|
|
0
|
|
Less
than 1%
|
|
Martin
Euler 38
|
4,736
|
|
4,736
|
|
0
|
|
Less
than 1%
|
|
David
and Marion Fass 39
|
7,103
|
|
7,103
|
|
0
|
|
Less
than 1%
|
|
Sandy
Fein 40
|
8,523
|
|
8,523
|
|
0
|
|
Less
than 1%
|
|
Dennis
Fenton
|
970
|
|
970
|
|
0
|
|
Less
than 1%
|
|
N.
Scott Fine and Cathy M. Fine, JTWROS 41
|
16,000
|
16,000
|
0
|
Less
than 1%
|
|||
|
Paul
Fruchthandler 42
|
8,523
|
|
8,523
|
|
0
|
|
Less
than 1%
|
|
Michael
Gardner 43
|
34,092
|
|
34,092
|
|
0
|
|
Less
than 1%
|
|
Edward
F. Garnett 44
|
5,482
|
|
5,482
|
|
0
|
|
Less
than 1%
|
|
Garnett,
Shiffer & Associates, Inc.
|
6,202
|
|
6,202
|
|
0
|
|
Less
than 1%
|
34
Beneficial
ownership
includes 160 shares of Common Stock underlying warrants, all of which are
being
offered pursuant to this Registration Statement.
35 Beneficial
ownership includes 6,000 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement.
36 Beneficial
ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
37
Beneficial ownership
includes 1,705 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
38
Beneficial ownership
includes 4,167 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
39
Beneficial ownership
includes 6,250 of Common Stock underlying warrants, all of which are being
offered pursuant to this Registration Statement.
40
Beneficial ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
41
Beneficial
ownership
includes 8,000 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement. Selling
securityholder is an affiliate of a broker-dealer.
42
Paul Fruchthandler is an
affiliate of a broker-dealer. Beneficial ownership includes 2,841 shares
of
Common Stock underlying warrants, all of which are being offered pursuant
to
this Registration Statement.
43
Beneficial ownership
includes 11,364 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
44
Edward F. Garnett is a
director of NS California, Inc. Mr. Garnett is also the beneficial owner of
an additional 6,202 shares of Common Stock held in the name of Garnett, Shiffer
& Associates, Inc., all of which are being offered pursuant to this
Registration Statement.
22
|
The
Garnett Trust dated 4/25/2001
|
1,293
|
|
1,293
|
|
0
|
Less
than 1%
|
|
|
Dr. Steven
Glickman
|
1,700
|
|
1,700
|
|
0
|
Less
than 1%
|
|
|
Gold
Living Trust 45
|
40,000
|
40,000
|
0
|
Less
than 1%
|
|||
|
Yanky
Greenberg 46
|
17,046
|
|
17,046
|
|
0
|
Less
than 1%
|
|
|
Felicia
Grossman 47
|
4,167
|
|
4,167
|
|
0
|
Less
than 1%
|
|
|
Matthew
Hadden 48
|
1,500
|
|
1,500
|
|
0
|
Less
than 1%
|
|
|
Joshua
Halberstam 49
|
4,262
|
|
4,262
|
|
0
|
Less
than 1%
|
|
|
Richard
S. Harman SEP IRA 50
|
20,000
|
20,000
|
0
|
Less
than 1%
|
|||
|
Mark
Harris
|
1,626
|
|
1,626
|
|
0
|
Less
than 1%
|
|
|
Janet
Heetner 51
|
4,262
|
|
4,262
|
|
0
|
Less
than 1%
|
|
|
Dwight
L. Hershman 52
|
8,523
|
|
8,523
|
|
0
|
Less
than 1%
|
|
|
Hershman
Holdings LLC 53
|
51,137
|
|
51,137
|
|
0
|
Less
than 1%
|
|
|
Thomas
G. Hirose, M.D.
|
3,455
|
2,455
|
1,000
|
Less
than 1%
|
|||
|
Barry
Honig 54
|
20,000
|
20,000
|
0
|
Less
than 1%
|
|||
|
Hospital
for Joint Diseases 55
|
500
|
|
500
|
|
0
|
Less
than 1%
|
|
|
Koby
Huberman 56
|
8,514
|
|
8,514
|
|
0
|
Less
than 1%
|
45
Beneficial
ownership includes 20,000 shares of Common Stock underlying warrants, all
of
which are being
offered pursuant to this Registration Statement.
46
Beneficial
ownership
includes 5,682 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
47
Beneficial ownership
includes 4,167 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
48 Beneficial
ownership
includes 500 shares of Common Stock underlying warrants, all of which are
being
offered pursuant to this Registration Statement.
49
Beneficial ownership
includes 1,421 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
50
Beneficial
ownership
includes 10,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
51
Beneficial
ownership includes 1,421 shares of Common Stock underlying warrants, all of
which are being offered pursuant to this Registration
Statement.
52
Beneficial ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
53
Beneficial ownership
includes 17,046 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
54
Beneficial
ownership
includes 10,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
55
Dr. Robin Smith, the
Chief Executive Officer and Chairman of the Board of the Company, and
Dr. Joseph Zuckerman, a director of the Company, are each directors of the
Hospital for Joint Diseases.
56 Beneficial
ownership includes 2,838 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement.
23
|
Iroquois
Master Fund Ltd. 57
|
85,000
|
40,000
|
45,000
|
1.12%
|
|||
|
Paula
Kadison
|
9,091
|
|
9,091
|
|
0
|
Less
than 1%
|
|
|
Emerging
Growth Equities PSP dtd 9/1/99 FBO Phyllis Kalista 401K
58
|
20,000
|
20,000
|
0
|
Less
than 1%
|
|||
|
Gary
S. Kaminsky 59
|
20,000
|
20,000
|
0
|
Less
than 1%
|
|||
|
Sam
Kirschenbaum 60
|
40,000
|
40,000
|
0
|
Less
than 1%
|
|||
|
Custodian
for Jacob Michael Klein
|
1,510
|
|
1,510
|
|
0
|
Less
than 1%
|
|
|
Mark
T. Klein, M.D. 61
|
1,510
|
|
1,510
|
|
0
|
Less
than 1%
|
|
|
Klein
Intervivos Trust
|
1,510
|
|
1,510
|
|
0
|
Less
than 1%
|
|
|
Kaare
Kolstad 62
|
21,509
|
|
21,509
|
|
0
|
Less
than 1%
|
|
|
Moshe
Koppel 63
|
9,849
|
|
9,849
|
|
0
|
Less
than 1%
|
|
|
Cathy
Kruchko
|
2,410
|
|
2,410
|
|
0
|
Less
than 1%
|
|
|
Simon
Lam
|
2,681
|
2,681
|
0
|
Less
than 1%
|
|||
|
Isaac
Lamm 64
|
8,523
|
|
8,523
|
|
0
|
Less
than 1%
|
|
|
Martin
Lamm 65
|
8,523
|
|
8,523
|
|
0
|
Less
than 1%
|
|
|
Adrienne
Landau 66
|
15,153
|
|
15,153
|
|
0
|
Less
than 1%
|
|
|
Jeffrey
and Sheryl Levine 67
|
2,841
|
|
2,841
|
|
0
|
Less
than 1%
|
57
Beneficial
ownership includes 35,000 shares of Common Stock underlying warrants, 20,000
of
which are being offered pursuant to this Registration
Statement.
58
Beneficial
ownership
includes 10,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement. Phyllis Kalista is
an
employee of Emerging Growth Equities, Ltd., a registered broker-dealer and
the
placement agent for the Company’s January 2007 private
placement.
59
Beneficial
ownership
includes 10,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
60
Beneficial ownership
includes 20,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
61 Mark
T.
Klein, M.D. is also the beneficial owner of an additional 1,510 shares of
Common
Stock held in the
name
of Custodian for Jacob Michael Klein, and 1,510 shares of Common Stock held
in
the name of Klein Intervivos Trust, all of which are being offered pursuant
to
this Registration Statement.
62 Beneficial
ownership
includes 4,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
63
Beneficial
ownership includes 4,167 shares of Common Stock underlying warrants, all of
which are being offered pursuant to this Registration
Statement.
64 Beneficial
ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
65 Beneficial
ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
66 Beneficial
ownership
includes 8,334 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
67
Beneficial ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
24
|
Hanka
Lew 68
|
4,167
|
|
4,167
|
|
0
|
|
Less
than 1%
|
|
Arthur
Luxenberg 69
|
22,428
|
|
22,428
|
|
0
|
|
Less
than 1%
|
|
Jeffrey
Malkus 70
|
17,046
|
|
17,046
|
|
0
|
|
Less
than 1%
|
|
Wayne
A. Marasco 71
|
58,618
|
|
14,368
|
|
44,250
|
|
1.10%
|
|
Wayne
A. Marasco, TTEE, Wayne A. Marasco Revocable Trust
72
|
12,500
|
|
12,500
|
|
0
|
|
Less
than 1%
|
|
Raymond
Markman 73
|
16,153
|
|
16,153
|
|
0
|
|
Less
than 1%
|
|
Brad
Maroni
|
1,499
|
1,499
|
0
|
Less
than 1%
|
|||
|
Larry
A. May 74
|
27,274
|
|
11,774
|
|
15,500
|
|
Less
than 1%
|
|
Patricia
E. May 75
|
51
|
51
|
0
|
Less
than 1%
|
|||
|
J.
Gregory Mears 76
|
17,046
|
|
17,046
|
|
0
|
|
Less
than 1%
|
68
Beneficial ownership
includes 4,167 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
69
Beneficial ownership
includes 16,668 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
70
Beneficial ownership
includes 5,682 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
71
Wayne A. Marasco is the
Chairman of the Company’s Scientific Advisory Board and a consultant to the
Company. Until November 12, 2006, Dr. Marasco was a director of the
Company and until January 29, 2007 he was the Company’s Senior Scientific
Advisor. Beneficial ownership includes 35,250 shares issuable upon
exercise of options, none of which are being offered pursuant to this
Registration Statement. Dr. Marasco is also the beneficial owner of an
additional 12,500 shares of Common Stock held in the name of Wayne A.
Marasco, TTEE, Wayne A. Marasco Revocable Trust, all of which are being
offered pursuant to this Registration Statement.
72
The trustee, Wayne A.
Marasco, is the Chairman of the Company’s Scientific Advisory Board and a
consultant to the Company. Until November 12, 2006, Dr. Marasco was a
director of the Company and until January 29, 2007 he was the Company’s Senior
Scientific Advisor.
73
Raymond Markman provides
investor relations services to the Company. Beneficial ownership
includes 8,334 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
74
Larry
A. May is the Chief Financial
Officer of the Company and the former Chief Executive Officer of NS
California, Inc. Beneficial ownership includes 10,500 shares of
Common Stock issuable upon exercise of options, none of which are being offered
pursuant to this Registration Statement. Mr. May is also the
beneficial owner of an additional 51 shares of Common Stock held in the name
of
Mr. May’s wife, Patricia E. May, all of which are being offered pursuant to this
Registration Statement.
75 Patricia
E. May is the wife of Larry A. May, the Chief Financial Officer of the Company
and the former Chief
Executive Officer of NS California, Inc. Mrs. May is also the
beneficial owner of an additional 16,774 shares of Common Stock (11,774 of
which
are being offered pursuant to this Registration Statement) and 10,500 shares
of
Common Stock issuable upon the exercise of options (none of which are being
offered pursuant to this registration statement), all held in the name of
Larry
A. May.
76
Beneficial ownership
includes 5,682 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
25
|
Jonathan
Medved 77
|
34,472
|
|
34,472
|
|
0
|
|
Less
than 1%
|
|
Bernard
Mermelstein 78
|
8,334
|
|
8,334
|
|
0
|
|
Less
than 1%
|
|
Meyer
Ventures Investments, LLC 79
|
85,229
|
|
85,229
|
|
0
|
|
Less
than 1%
|
|
Isaac
Michalovsky 80
|
8,523
|
|
8,523
|
|
0
|
|
Less
than 1%
|
|
Migosa
Enterprises Inc. 81
|
8,523
|
|
8,523
|
|
0
|
|
Less
than 1%
|
|
Donald
O. Miller, IRA 82
|
17,046
|
|
17,046
|
|
0
|
|
Less
than 1%
|
|
Jane
Milmore 83
|
4,925
|
|
4,925
|
|
0
|
|
Less
than 1%
|
|
Kenji
Mizuguchi
|
1,277
|
|
1,277
|
|
0
|
|
Less
than 1%
|
|
Ken
D. Mroczek
|
1,544
|
|
1,544
|
|
0
|
|
Less
than 1%
|
|
Armando
Munoz 84
|
4,167
|
|
4,167
|
|
0
|
|
Less
than 1%
|
|
Steven
S. Myers Revocable Trust 85
|
89,083
|
|
68,183
|
|
20,900
|
|
Less
than 1%
|
|
Michael
Nimaroff 86
|
4,168
|
|
4,168
|
|
0
|
|
Less
than 1%
|
77
Beneficial ownership
includes 14,585 shares of Common Stock underlying warrants, all of which
are being offered pursuant to this Registration Statement.
78
Beneficial
ownership includes 8,334 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement.
79
Beneficial
ownership
includes 28,410 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
80
Beneficial ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
81
Beneficial ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
82
Beneficial
ownership includes 5,682 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement.
83 Jane
Milmore is the
wife of Richard Vaczy, the brother of Catherine Vaczy, the Vice President
and
General Counsel of the Company. Beneficial ownership includes 2,084 shares
of Common Stock underlying warrants, all of which are being offered pursuant
to
this Registration Statement. Ms. Milmore is also the beneficial owner of an
additional 6,819 shares of Common Stock and 8,334 shares of Common
Stock underlying warrants, all held in the name of Richard Vaczy, all of
which
are being offered pursuant to this Registration Statement.
84 Armando
Munoz is also
the beneficial owner of an additional 62,500 shares of Common Stock which
are
held in the name of Caribbean Stem Cell Group, Inc., of which
Dr. Munoz is President. All of such additional shares are being offered
pursuant to this Registration Statement.
85
Steven S. Myers has been a
director of the Company since November 2006 and is a member of the Company’s
Audit, Compensation and Nominating Committees. Beneficial ownership
includes 22,728 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement. Mr. Myers is
also the beneficial owner of an additional 20,900 shares of Common Stock,
none
of which are being offered pursuant to this Registration
Statement.
86 Beneficial
ownership
includes 4,168 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
26
|
Northwood
Capital Partners, LP 87
|
60,000
|
60,000
|
0
|
Less
than 1%
|
|||
|
NS
California, Inc. 88
|
787
|
|
787
|
|
0
|
|
Less
than 1%
|
|
Fred
Ophus
|
1,616
|
|
1,616
|
|
0
|
|
Less
than 1%
|
|
Samuel
Ottensoser 89
|
3,250
|
|
3,250
|
|
0
|
|
Less
than 1%
|
|
Marc
Palker 90
|
5,600
|
|
600
|
|
5,000
|
|
Less
than 1%
|
|
John
Pappajohn 91
|
155,229
|
|
125,229
|
|
30,000
|
|
Less
than 1%
|
|
Marilyn
Pike 92
|
4,205
|
|
1,205
|
|
3,000
|
|
Less
than 1%
|
|
Anthony
Pintsopoulos 93
|
4,374
|
|
4,374
|
|
0
|
|
Less
than 1%
|
|
Anthony
Pitti
|
3,929
|
|
3,929
|
|
0
|
|
Less
than 1%
|
|
Colin
Poole 94
|
4,736
|
|
4,736
|
|
0
|
|
Less
than 1%
|
|
Porter
Partners, L.P. 95
|
68,000
|
68,000
|
0
|
Less
than 1%
|
|||
|
Rubio
Punzalan
|
3,482
|
2455
|
1,027
|
Less
than 1%
|
|||
|
Mark
A. Raifman 96
|
4,262
|
|
4,262
|
|
0
|
|
Less
than 1%
|
87
Beneficial
ownership
includes 30,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement. Robert A. Berlacher
exercises voting and dispositive power over 6,000 shares of Common Stock
and
6,000 shares of Common Stock underlying warrants held in the name of Chardonnay
Partners, L.P. and 30,000 shares of Common Stock and 30,000 shares of Common
Stock underlying warrants held in the name of Northwood Capital Partners,
L.P.,
all of which are being offered pursuant to this Registration Statement.
Mr. Berlacher is a limited partner and member of the Board of Directors of
EGE Holdings, Ltd. EGE Holdings, Ltd. owns Emerging Growth Equities, Ltd.,
a
registered broker-dealer and the placement agent for the Company’s January 2007
private placement. Mr. Berlacher is also the beneficial owner of an
additional 10,000 shares of Common Stock and 10,000 shares of Common Stock
underlying warrants held in the name of Julie T. Berlacher, Mr. Berlacher’s
wife, all of which are being offered pursuant to this Registration
Statement.
88
NS
California, Inc.
sold its adult stem cell business to the Company on January 19,
2006. See “Prospectus Summary” and “Recent
Developments.”
89
Beneficial ownership
includes 750 shares of Common Stock underlying warrants, all of which are
being
offered pursuant to this Registration Statement.
90
Marc Palker previously
served as a consultant to the Company. Beneficial ownership includes
500 shares held in the name of Marc Palker Rollover IRA and 4,500 shares
issuable upon exercise of options, none of which are being offered pursuant
to
this Registration Statement.
91
Beneficial ownership
includes 58,410 shares of Common Stock underlying warrants, 48,410 of which
are
being offered pursuant to this Registration Statement.
92
Marilyn Pike has been a
consultant to the Company. Beneficial ownership includes 2,000 shares issuable
upon exercise of options, none of which are being offered pursuant to this
Registration Statement.
93
Anthony Pintsopoulos is an
affiliate of WestPark Capital, Inc., a broker-dealer and the placement
agent for the Company’s private offering of warrants and convertible promissory
notes from December 2005 to January 2006. Beneficial ownership
includes 4,167 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
94
Beneficial ownership
includes 4,167 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
95
Beneficial
ownership
includes 34,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
96
Beneficial ownership
includes 1,421 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
27
|
Gilbert
Raker 97
|
4,167
|
|
4,167
|
|
0
|
|
Less
than 1%
|
|
Denis
Rodgerson 98
|
15,407
|
|
12,407
|
|
3,000
|
|
Less
than 1%
|
|
Andrew
Rosenberg
|
4,020
|
|
4,000
|
|
20
|
|
Less
than 1%
|
|
Phillip
Rosenberg 99
|
8,523
|
|
8,523
|
|
0
|
|
Less
than 1%
|
|
Albert
Ruback 100
|
31,153
|
|
31,153
|
|
0
|
|
Less
than 1%
|
|
Joseph
Rubin 101
|
8,523
|
|
8,523
|
|
0
|
|
Less
than 1%
|
|
Richard
Rubenstein 102
|
7,578
|
|
7,578
|
|
0
|
|
Less
than 1%
|
|
Rubenstein
Public Relations, Inc.103
|
3,689
|
3,689
|
0
|
Less
than 1%
|
|||
|
Michael
Sacofsky 104
|
8,516
|
|
8,516
|
|
0
|
|
Less
than 1%
|
|
William
Sarnoff 105
|
34,092
|
|
34,092
|
|
0
|
|
Less
than 1%
|
|
Jutta
Sayles
|
1951
|
|
910
|
|
1,041
|
|
Less
than 1%
|
|
Jeffery
Schnapper 106
|
4,736
|
|
4,736
|
|
0
|
|
Less
than 1%
|
|
Neal
Scott 107
|
250
|
|
250
|
|
0
|
|
Less
than 1%
|
|
Thomas
Scott
|
10,001
|
|
10,001
|
|
0
|
|
Less
than 1%
|
|
Jay
D. Seid 108
|
20,000
|
20,000
|
0
|
Less
than 1%
|
97 Beneficial
ownership
includes 4,167 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
98 Denis
Rodgerson is
the Director of Stem Cell Science for the Company and a founder of NS California
Inc. Beneficial ownership includes 3,000 shares issuable upon
exercise of options, none of which are being offered pursuant to this
Registration Statement.
99
Beneficial ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
100 Beneficial
ownership includes 31,062 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration Statement.
101
Beneficial ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
102 Beneficial
ownership includes 4,168 shares of Common Stock underlying warrants, all
of
which are being
offered pursuant to this Registration Statement.
104
Beneficial ownership
includes 2,839 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
105
Beneficial ownership
includes 11,364 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
106
Beneficial ownership
includes 4,167 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
107
Neal Scott is an affiliate
of WestPark Capital, Inc., a broker-dealer and the placement agent for the
Company’s private offering of warrants and convertible promissory notes from
December 2005 to January 2006.
28
|
Shanala
JAP Investment Services Limited Partnership, LLP
109
|
17,046
|
|
17,046
|
|
0
|
|
Less
than 1%
|
|
Ronald
Shear 110
|
40,000
|
40,000
|
0
|
Less
than 1%
|
|||
|
William
Sheppard 111
|
13,153
|
|
13,153
|
|
0
|
|
Less
than 1%
|
|
Victor
Sim
|
37
|
37
|
0
|
Less
than 1%
|
|||
|
Elly
Slomowitz 112
|
4,841
|
|
4,841
|
|
0
|
|
Less
than 1%
|
|
George
S. Smith 113
|
10,925
|
|
4,925
|
|
6,000
|
|
Less
than 1%
|
|
Gordon
and Norma Smith 114
|
5,000
|
|
5,000
|
|
0
|
|
Less
than 1%
|
|
Robin
L. Smith 115
|
231,207
|
|
79,257
|
|
151,950
|
|
3.71%
|
|
Sokol,
Behot & Fiorenzo 116
|
14,750
|
|
14,750
|
|
0
|
|
Less
than 1%
|
|
Peter
G. and Susan H. Stanley JTWROS 117
|
20,000
|
20,000
|
0
|
Less
than 1%
|
109
Beneficial
ownership includes 5,682 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement.
110
Beneficial
ownership
includes 20,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement. Selling
securityholder is an affiliate of a broker-dealer.
111 Beneficial
ownership
includes 8,334 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
112 Beneficial
ownership
includes 2,841 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
113
George S.
Smith is the
Medical Director of Laboratory Operations for the Company. Beneficial ownership
includes 2,084 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement, and 6,000 shares issuable
upon the exercise of options, none of which are being offered pursuant to
this
Registration Statement.
114
Gordon
and
Norma Smith are the parents of Robin Smith, the Chief Executive Officer and
Chairman of the Board of the Company.
115
Robin L. Smith is the
Chief Executive Officer and Chairman of the Board of the Company effective
June 2, 2006. Prior thereto, Dr. Smith served as Chairman of the
Advisory Board of the Company since
September 2005. Beneficial ownership includes:
33,645 shares of Common Stock underlying warrants (31,995 of which are being
offered pursuant to this Registration Statement); and 97,000 shares of Common
Stock issuable upon exercise of options, none of which are being offered
pursuant to this Registration Statement.
116
Sokol, Behot &
Fiorenzo is a law firm which provides services to the Company. Beneficial
ownership includes 2,750 shares of Common Stock underlying warrants, all
of
which are being offered pursuant to this Registration
Statement.
117
Beneficial
ownership
includes 10,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement. Peter G. Stanley is
a limited partner of EGE Holdings, Ltd. and an employee of Emerging Growth
Equities, Ltd., a registered broker-dealer and the placement agent for the
Company’s January 2007 private placement. EGE Holdings, Ltd. owns Emerging
Growth Equities, Ltd.
29
|
Starobin
Partners, Inc. 118
|
1,461
|
|
1,461
|
|
0
|
|
Less
than 1%
|
|
NFS
Custodian FBO Jill Steier IRA 119
|
6,000
|
6,000
|
0
|
Less
than 1%
|
|||
|
Jason
Stein 120
|
10,000
|
10,000
|
0
|
Less
than 1%
|
|||
|
Harry
Steinmetz 121
|
15,153
|
|
15,153
|
|
0
|
|
Less
than 1%
|
|
Joseph
F. Steliga 122
|
1,553
|
|
1,553
|
|
0
|
|
Less
than 1%
|
118
Beneficial
ownership includes
1,461 shares of Common Stock underlying warrants, all of which are being
offered
pursuant to this Registration Statement. Robin L. Smith, the Chief Executive
Officer and Chairman of the Board of the Company, is the owner of a 7% interest
in Starobin Partners, Inc.; however, she has waived all interest in such
warrants.
119
Beneficial
ownership
includes 3,000 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement. Jill Steier is a
limited partner of EGE Holdings, Ltd. and an employee of Emerging Growth
Equities, Ltd., a registered broker-dealer and the placement agent for the
Company’s January 2007 private placement. EGE Holdings, Ltd. owns Emerging
Growth Equities, Ltd.
120
Beneficial
ownership
includes 5,000 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
121
Beneficial ownership
includes 8,334 shares of Common Stock underlying warrants, all of which are
being offered pursuant to this Registration Statement.
122
Beneficial ownership
includes 160 shares of Common Stock underlying warrants, all of which are
being
offered pursuant to this Registration Statement.
30
|
Baruch
Sterman 123
|
8,523
|
|
8,523
|
|
0
|
|
Less
than 1%
|
|
Yvette
Stoker
|
682
|
|
682
|
|
0
|
|
Less
than 1%
|
|
Symbion
Research International, Inc. 124
|
2,717
|
2,717
|
0
|
Less
than 1%
|
|||
|
Nancy
Talian
|
682
|
|
682
|
|
0
|
|
Less
than 1%
|
|
TCMP3
Partners LP 125
|
51,364
|
|
51,364
|
|
0
|
|
Less
than 1%
|
|
Trilogy
Capital Partners, Inc.126
|
150,000
|
150,000
|
0
|
Less
than 1%
|
|||
|
Cynthia
Tsai 127
|
1,000
|
|
1,000
|
|
0
|
|
Less
than 1%
|
|
Tsunami
Trading Corp. 128
|
17,046
|
|
17,046
|
|
0
|
|
Less
than 1%
|
|
Catherine
Vaczy 129
|
108,856
|
|
72,856
|
|
36,000
|
|
Less
than 1%
|
|
Richard
Vaczy 130
|
15,153
|
|
15,153
|
|
0
|
|
Less
than 1%
|
123 Beneficial
ownership
includes 2,841 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
124
Symbion
Research International, Inc. is the landlord for the Company’s office facilities
in Agoura Hills, California, previously occupied by NS California,
Inc.
125
Beneficial
ownership
includes 31,364 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
126 Trilogy
Capital Partners, Inc. has served as a marketing and investor relations
consultant to the Company
since March 1, 2007. Beneficial ownership includes 150,000 shares of
Common Stock underlying warrants, all of which are being offered pursuant
to
this Registration Statement.
127
Beneficial ownership
includes 1,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
128 Beneficial
ownership
includes 5,682 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
129
Catherine M. Vaczy is the
Vice President and General Counsel of the Company. Beneficial
ownership includes: 4,084 shares of Common Stock underlying warrants, all
of which are being offered pursuant to this Registration Statement; and
26,000
shares of Common Stock issuable upon exercise of options, none of which
are
being offered pursuant to this Registration Statement.
130
Richard Vaczy is the
brother of Catherine Vaczy, the Vice President and General Counsel of the
Company. Beneficial ownership includes 8,334 shares of Common Stock underlying
warrants, all of which are being offered pursuant to this Registration
Statement. Mr. Vaczy is also the beneficial owner of an additional
2,841 shares of Common Stock, all of which are being offered pursuant to
this Registration Statement, and 2,084 shares of Common Stock underlying
warrants, all of which are being offered pursuant to this Registration
Statement, all held in the name of Mr. Vaczy’s wife, Jane
Milmore.
31
|
VFT
Special Ventures, Ltd. 131
|
78,511
|
78,511
|
0
|
Less
than 1%
|
|||
|
Bennett
J. Wasserman and Bonnie Wasserman, JTWROS 132
|
8,523
|
|
8,523
|
|
0
|
|
Less
than 1%
|
|
Emmanuel
Wasserman, DDS; MSD, APC—
Employees’
Profit Sharing Plan and Trust 133
|
8,523
|
|
8,523
|
|
0
|
|
Less
than 1%
|
|
Schmuel
Wasserman 134
|
12,500
|
|
12,500
|
|
0
|
|
Less
than 1%
|
|
Dan
K. Wassong 135
|
34,092
|
|
34,092
|
|
0
|
|
Less
than 1%
|
|
David
Weinberg 136
|
4,167
|
|
4,167
|
|
0
|
|
Less
than 1%
|
|
Mark
Weinreb 137
|
133,423
|
|
22,923
|
|
110,500
|
|
2.71%
|
|
Stanley
Weinreb 138
|
10,300
|
|
6,800
|
|
3,500
|
|
Less
than 1%
|
131
Beneficial
ownership
includes 73,511 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement. Gregory J.
Berlacher exercises voting and dispositive power over the 5,000 shares
of Common
Stock and 73,511 shares of Common Stock underlying
warrants held in
the name of this selling security holder, VFT Special Ventures, Ltd., all
of
which are being offered pursuant to this Registration Statement. Mr.
Berlacher is the President and Chief Executive Officer of Emerging Growth
Equities, Ltd., a registered broker-dealer and the placement agent for
the
Company’s January 2007 private placement. He is also a limited partner (and the
principal owner) of EGE Holdings, Ltd. EGE Holdings, Ltd. owns Emerging
Growth Equities, Ltd.
132
Beneficial ownership
includes 2,841 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
133
Beneficial ownership
includes 2,841 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
134
Beneficial ownership
includes 12,500 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
135
Beneficial ownership
includes 11,364 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
136
Beneficial
ownership
includes 4,167 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
137
Mark
Weinreb is the
President and a director of the Company. From February 6, 2003, until
June 2, 2006, he also served as the Chief Executive Officer and Chairman of
the Board of the Company. Beneficial ownership includes 80,500 shares issuable
upon exercise of options, none of which are being offered pursuant to this
Registration Statement.
138
Stanley Weinreb is the
father of Mark Weinreb, the President and a director of the Company. Beneficial
ownership includes 2,000 shares issuable upon the exercise of options,
none of
which are being offered pursuant to this Registration
Statement.
32
|
Michael
Weiser 139
|
40,000
|
40,000
|
0
|
Less
than 1%
|
|||
|
Andrew
P. Weiss 140
|
7,500
|
|
7,500
|
|
0
|
|
Less
than 1%
|
|
WestPark
Capital, Inc. 141
|
7,752
|
|
7,752
|
|
0
|
|
Less
than 1%
|
|
Worthington
Growth LP 142
|
100,000
|
100,000
|
0
|
Less
than 1%
|
|||
|
Mia
Beth Yoo
|
315
|
|
315
|
|
0
|
|
Less
than 1%
|
|
Elan
Zivotofsky 143
|
17,046
|
|
17,046
|
|
0
|
|
Less
than 1%
|
|
Joseph
Zuckerman 144
|
34,844
|
|
10,744
|
|
24,100
|
|
Less
than 1%
|
139
Beneficial
ownership
includes 20,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
140
Beneficial ownership
includes 2,500 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
141
WestPark
Capital, Inc., a broker-dealer, was the placement agent in the Company’s
private placement of convertible promissory notes and warrants from
December 2005 to January 2006. Beneficial ownership includes
6,877 shares of Common Stock underlying warrants, all of which are being
offered
pursuant to this Registration Statement.
142
Beneficial
ownership
includes 50,000 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
143
Beneficial ownership
includes 5,682 shares of Common Stock underlying warrants, all of which
are
being offered pursuant to this Registration Statement.
144 Joseph
Zuckerman is a
director of the Company and a member of the Company’s Audit, Compensation and
Nominating Committees. Beneficial ownership includes: 2,084 shares of Common
Stock underlying warrants, all of which are being offered pursuant to this
Registration Statement; and 21,500 shares issuable upon the exercise of
options,
none of which are being offered pursuant to this Registration
Statement.
33
We
are
registering for resale by the selling stockholders a total of 3,188,050 shares
of Common Stock, of which 1,833,362 shares are issued and outstanding and
1,354,688 shares are issuable upon exercise of warrants.
The
Selling Stockholders and any of their respective donees, transferees, pledgees,
assignees and other successors-in-interest may, from time to time, sell any
or
all of their shares of Common Stock on the American Stock Exchange or any stock
exchange, market or trading facility on which the shares are traded in the
future, or in private transactions. These sales may be at market prices
prevailing at the time of sale, at prices related to market prices, or at
negotiated or fixed prices. The Selling Stockholders will act independently
of
NeoStem, Inc. in making decisions with respect to the timing, manner and
size of each sale.
The
Selling Stockholders may use any one or more of the following methods when
selling shares:
|
·
|
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
|
·
|
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
|
·
|
purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
|
·
|
an exchange distribution in accordance with the rules of the applicable exchange; |
|
·
|
privately negotiated transactions; |
|
·
|
short sales; |
|
·
|
broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; |
|
·
|
a combination of any such methods of sale; and |
|
·
|
any other method permitted pursuant to applicable law. |
The
Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the Selling
Stockholders may arrange for other brokers-dealers to participate in sales.
Broker-dealers may receive commissions or discounts from the Selling
Stockholders (or, if any broker-dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to benegotiated.
The Selling Stockholders do
not expect these commissions and discounts to exceed what is customary in the
types of transactions involved.
The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the shares of Common Stock, shares underlying warrants or
shares underlying warrants to purchase units owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act
amending the list of selling stockholders to include the pledgee, transferee
or
other successors in interest as selling stockholders under this
prospectus.
Upon
the
Company being notified in writing by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of Common
Stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to
this
prospectus will be filed, if required, pursuant to Rule 424(b) under
the Securities Act, disclosing (i) the name of each such Selling
Stockholder and of the participating broker-dealer(s), (ii) the number of
shares involved, (iii) the price at which such the shares of Common Stock
were sold, (iv) the commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable, (v) that such broker-
dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus, and (vi) other facts
material to the transaction. In addition, upon the Company being notified in
writing by a Selling Stockholder that a donee or pledge intends to sell more
than 500 shares of Common Stock, a supplement to this prospectus will be filed
if then required in accordance with applicable securities law.
34
The
Selling Stockholders also may transfer the shares of Common Stock in other
circumstances, in which case the transferees, pledgees or other successors
in
interest will be the selling beneficial owners for purposes of this
prospectus.
The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholders has represented
and warranted to the Company that it does not have any agreement or
understanding, directly or indirectly, with any person to distribute the Common
Stock.
The
Company is paying all fees and expenses incident to the registration of the
shares. The Company has agreed to indemnify certain of the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.
The
validity of the shares to be offered by this prospectus will be passed upon
for
us by Lowenstein Sandler PC, Roseland, New Jersey.
Holtz
Rubenstein Reminick LLP, an independent registered public accounting firm,
has
audited our consolidated financial statements as of December 31, 2006 and
for the three year period then ended included in (i) our Annual Report on Form
10-K, for the year ended December 31, 2006, filed on March 29, 2007 and (ii)
our
Current Report on Form 8-K dated September 11, 2007 (which contains such
consolidated financial statements retroactively adjusted to give effect to
the
Company’s one-for-ten reverse stock split of its Common Stock effective August
9, 2007), both of which are incorporated by reference in this prospectus and
elsewhere in the registration statement. Our consolidated financial
statements are incorporated by reference in reliance on the report of Holtz
Rubenstein Reminick LLP, given on the authority of said firm as experts in
auditing and accounting. The audit reports covering the
December 31, 2006 consolidated financial statements contain an explanatory
statement describing the Company’s adoption of the fair value method of
accounting for stock-based compensation as required by Statement of Financial
Accounting Standards No. 123(R), “Share-Based Payment,” effective
January 1, 2006.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We
have
elected to “incorporate by reference” certain information into this prospectus.
By incorporating by reference, we can disclose important information to you
by
referring you to another document we have filed separately with the Securities
and Exchange Commission. The information incorporated by reference is deemed
to
be part of this prospectus, except for information incorporated by reference
that is superseded by information contained in this prospectus. This prospectus
incorporates by reference the documents set forth below that we have previously
filed with the Securities and Exchange Commission:
|
|
•
|
|
The
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2006, filed on March 29,
2007;
|
|
|
•
|
|
The
Company’s Quarterly Reports on Form 10-QSB for the periods ended
March 31, 2007 and June 30, 2007, filed on May 10, 2007 and
August 14, 2007, respectively;
|
35
|
|
•
|
|
The
filed portions of the Company’s Current Reports on Form 8-K, filed on
February 1, February 12, February 28, March 16, April 30, August
9, August
21, and September 11, 2007; and
|
|
|
•
|
|
The
description of our common stock as set forth in the section entitled
“Description of Securities” in the Company’s Registration Statement on
Form 8-A filed on August 8, 2007 pursuant to Section 12(b) of the
Securities Exchange Act of 1934, as amended, which incorporates by
reference the description of the common stock contained in the section
entitled "Description of Securities" in the Prospectus filed on July
16,
2007 pursuant to Rule 424(b) with respect to the Company's Registration
Statement on Form SB-2 (Registration No. 333-142923) filed with the
Securities and Exchange Commission (the "Registration Statement"),
including any amendment or report filed for the purpose of updating
such
description.
|
We
are
also incorporating by reference all other reports that we file with the
Securities and Exchange Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act between the date of this prospectus and
the
termination of the offering.
To
receive
a free copy of any of the documents incorporated by reference in this
prospectus, call or write to NeoStem, Inc., Attention: Secretary, 420 Lexington
Avenue, Suite 450, New York, NY 10170, (telephone number is
(212) 584-4180). The information relating to us contained in this
prospectus does not purport to be comprehensive and should be read together
with
the information contained in the documents incorporated or deemed to be
incorporated by reference in this prospectus.
You
should
rely only on the information contained in this prospectus or any supplement
and
in the documents incorporated by reference above. We have not authorized anyone
else to provide you with different information. You should not assume that
the
information in this prospectus or any supplement or in the documents
incorporated by reference is accurate on any date other than the date on the
front of those documents.The information we incorporate by reference is an
important part of this prospectus, and any information that we file later with
the SEC will automatically update and supersede this information.
WHERE
YOU CAN FIND MORE INFORMATION
We
are
subject to the information requirements of the Securities Exchange Act and
we
therefore file periodic reports, proxy statements and other information with
the
Securities and Exchange Commission relating to our business, financial
statements and other matters. The reports, proxy statements and other
information we file may be inspected and copied at prescribed rates at the
Securities and Exchange Commission’s Public Reference Room located at 100 F
Street, N.E., Washington, D.C. 20549. You may obtain information on the
operation of the Securities and Exchange Commission’s Public Reference Room by
calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities
and Exchange Commission also maintains an Internet site that contains reports,
proxy and information statements and other information regarding issuers like
us
that file electronically with the Securities and Exchange Commission. The
address of the Securities and Exchange Commission’s Internet site is
www.sec.gov. You may also view our filings with the Securities and Exchange
Commission on our Internet site at www.neostem.com.
This
prospectus constitutes part of a registration statement on Form S-3 filed under
the Securities Act with respect to the securities. As permitted by the
Securities and Exchange Commission’s rules, this prospectus omits some of the
information, exhibits and undertakings included in the registration statement.
You may read and copy the information omitted from this prospectus but contained
in the registration statement, as well as the periodic reports and other
information we file with the Securities and Exchange Commission, at the public
reference facilities maintained by the Securities and Exchange Commission in
Washington, D.C.
Statements
contained in this prospectus as to the contents of any contract or other
document are not necessarily complete, and in each instance we refer you to
the
copy of the contract or document filed or incorporated by reference as an
exhibit to the registration statement or as an exhibit to our Securities
Exchange Act filings, each such statement being qualified in all respects by
such reference.
36
LIMITATION
ON LIABILITY AND DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Section
145 of the Delaware General Corporation Law (“GCL”) authorizes a court to award
or a corporation’s Board of Directors to grant indemnification to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act. Our certificate of incorporation
is
consistent with the Delaware GCL. Each of our directors, officers, employees
and
agents will be indemnified to the extent permitted by the Delaware GCL. We
also
maintain insurance on behalf of our directors and officers against liabilities
asserted against such persons and incurred by such persons in such capacities,
whether or not we would have the power to indemnify such persons under the
Delaware GCL. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, we
have
been advised that in the opinion of the Securities and Exchange Commission
such
indemnification is against public policy as expressed in the Securities Act
and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the us
of
expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of its counsel
the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by
the final adjudication of such issue.
37