In an attempt to revamp its financial position, StemCells Inc (NASDAQ:STEM) has decided to come up with the final pricing of a public offering of Series A Warrants, common stock and Series B Warrants. As per the reports, it has offered $0.30 for each share common stock; Series A Warrants can purchase 0.50 of a common stock whereas Series B Warrants can purchase 0.75 of common stock.
As a result of this public offering, StemCells expects to raise around $8.1 million gross proceeds. This amount doesn’t include underwriting commission, discounts and other estimated offering expenses.
Insights of Matter
As part of this initiative, StemCells has also decided to grant a 45 days option to all the underwriters during which they can purchase additional 4,000,050 shares of warrants and/or common stock to buy 5,000,063 common stock shares to get rid of over-allotment. At present, the exercise price levied on Series A Warrants is $0.30 per share with immediate exercise feature. They will expire exactly after two years from issuance date.
At the same time, the Series B Warrants come with an exercise price of $0.42 per share, and can be exercised within 12 months from the issuance date, given that StemCells has enough capital to carry out the transaction. These warrants will expire on the 5th anniversary of the date on which they became exercisable.
The offer is likely to close on or before March 14, 2016, provided all the customary closing conditions are met.
To ensure that everything goes as per the expectations, StemCells has appointed Chardan Capital Markets as the Co-Manager, Ascendiant Capital Markets as the Financial Advisor and Maxim Group LLC as the Book-Running Manager for the offering.
StemCells will use the net proceeds from this offering for general corporate purposes, including capital expenditures, working capital and R&D. It will file a final prospectus related to this offering with SEC soon.
