Biostar Pharmaceuticals Inc (NASDAQ:BSPM) has announced the initiation of a securities purchase agreement, with various institutional investors, for the sale of 425,000 shares of its common stock. The company stated that the sale would be conducted through a direct offering, at $4.5 per share. In addition to this, BSPM would also be selling warrants, to purchase a total of 212,500 shares of its common stock. Through this agreement, the company aims to raise a total of $1.91 million.
BSPM revealed that the securities purchase warrants would be valid for a total of 3.5 years, from the date of issuance and are exercisable after 6-months and 1-day from the issuance date. Moreover, the warrants carry an exercise price of $5.55 per share. The company noted that it plans to use these proceeds as working capital, as well as for general corporate purposes. Biostar had hired FT Global Capital Inc as the exclusive placement agent for the offering.
The announcement came following the launch of series of new products, from Biostar, aimed at the treatment of respiratory irritation and inflammation. Following the launch, BSPM experienced a significant surge in its share price, which nearly doubled in a single session. It should be noted here that the product is not due to be launched, until November and is specifically developed as a treatment for rhinitis and sinusitis. Analysts were of the view that the renewed investor interest in the stock was purely based on the size of the market; the drug was being introduced in, China.
The company noted that it had been developing the product for the last 3-years now and is based on traditional Chinese medicine. The chairman of Biostar, Wang Ronghua, claimed that the product was developed by their R&D team, after carefully analyzing public demands. He also revealed that the company planned to make use of a number of online media platforms, to market the product. It should be noted here that the drug offers a short and cost effective treatment to patients.
Biostar Pharmaceuticals Inc (NASDAQ:BSPM) had a trade volume of 9.05 million and gained 14.21% in terms of its share value, to close at $4.26 per share, at the end of the October 18 trading session.
