Neostem Raises Additional Funds From Principals Of Suzhou Erye Pharmaceuticals Company Ltd. And U.s.

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2nd July 2009, 12:34am - Views: 725

Community Health NeoStem, Inc. 1 image


NeoStem Raises Additional Funds from Principals of Suzhou Erye Pharmaceuticals Company Ltd.

and U.S. Institutional and Private Investors, Bringing the Total Recent Financings to Over $15


NEW YORK, July 1 /PRNewswire-AsiaNet/ --

   Funds Will Support Expansion Activities in the United States and China as 

well as Further Development of NeoStem's VSEL and other Licensed Technologies

    NeoStem, Inc. (NYSE Amex: NBS) announced today that it has raised

additional gross funds of over $4 million from institutional and private

investors. These funds, together with the $11 million private placement from

three Asia-based investors announced April 13, 2009, bring the total

investment obtained by NeoStem in the past two and half months to over $15

million. In addition, affiliates of Suzhou Erye Pharmaceuticals Company, Ltd.

have increased their overall investment in the Company to over $1,000,000. As

part of its China expansion activities, NeoStem is anticipating, subject to

approval of its shareholders, on closing before year end on the acquisition

of a 51% interest in Suzhou Erye through a merger with its current 51% owner.

    The funds will be used to support NeoStem's continuing initiatives in

VSEL (very small embryonic-like) stem cell technology licensed from the

University of Louisville and to advance NeoStem's expansion activities in

China, as well as other general corporate purposes. A portion of the funds

also will be used to expand U.S.-based operations and add seasoned management

to the NeoStem team with experience in clinical drug development in

pharmaceutical and biotechnology industry and administration of overseas

based clinical trials.

    The terms and conditions of the current financing are the same as those

of the earlier April round. Units are priced at $12.50 per unit, with each

unit consisting of one share of the Company's Series D Convertible Redeemable

Preferred Stock, convertible into ten shares of common stock and ten warrants

each to purchase one share of common stock. The warrants have a per share

exercise price equal to $2.50 and are callable by the Company if the common

stock trades at a price equal to $3.50. Subject to the affirmative vote of

the Company's shareholders and the rules of the NYSE Amex, the warrants will

become exercisable for a period of five years and each share of Series D

Convertible Redeemable Preferred Sock will automatically convert into ten

shares of Common Stock.

    Dr. Robin Smith, Chairman and CEO of NeoStem, stated, "We are very

pleased to receive this additional investment from a group of institutional

and private onshore investors who recognize the many recent achievements of

NeoStem under our multi-faceted business plan. Our growing stem cell

technology base and our expanding relationships with key business partners in

the U.S. and China open the way to new markets, distribution channels and

production capabilities in the world's two largest economies. By successfully

leveraging both the medical and commercial potential of emerging adult stem

cell therapies, NeoStem is establishing an international leadership position

in this rapidly developing field." She added, "We are also excited that the

principals of Suzhou Erye have made a second investment in our future, which

Community Health NeoStem, Inc. 2 image

we believe solidifies their commitment to our post-merger endeavors."

    The securities sold were sold without registration under the Securities

Act of 1933, as amended (the "Act") pursuant to Regulation S or Regulation D,

each promulgated under the Act and may not be resold in the United States or

to U.S. persons unless registered under the Act or pursuant to an exemption

from registration under the Act. Hedging transactions involving such

securities may not be conducted unless in compliance with the Act.

    About NeoStem, Inc.

    NeoStem is managing a network of adult stem cell collection centers in

major metropolitan areas in the United States, enabling people to donate and

store their own (autologous) stem cells when they are young and healthy for

their personal use in times of future medical need. The Company also has

entered into research and development through the acquisition of a worldwide

exclusive license of technology to identify and isolate VSEL(very small

embryonic-like) stem cells, which have been shown to have several physical

characteristics that are generally found in embryonic stem cells and is

pursuing other technologies to advance its position in the field of adult

stem cell tissue regeneration.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning

of the Private Securities Litigation Reform Act of 1995, including, without

limitation, statements regarding the Company's expansion activities in China

and the future for the commercial use of stem cell therapies and the

Company's VSEL technology. Forward-looking statements reflect management's

current expectations, as of the date of this press release, and involve

certain risks and uncertainties. The Company's actual results could differ

materially from those anticipated in these forward-looking statements as a

result of various factors. Factors that could cause future results to

materially differ from those projected in forward-looking statements include

the "Risk Factors" described in the Company's Annual Report on Form 10-K for

its fiscal year ended December 31, 2008 and the Company's other periodic

filings with the Securities and Exchange Commission. The Company's further

development is highly dependent on future medical and research developments

and market acceptance which are outside its control.


        NeoStem, Inc.

        Robin Smith, Chief Executive Officer

        T: 212-584-4180


    SOURCE:  NeoStem, Inc.

    CONTACT: NeoStem, Inc.

             Robin Smith

             Chief Executive Officer



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