March 10, 2016 9:24am

 

It’s still mostly debt i.e. convertible preferred stock with some common stock purchase and repayment of a bridge loan

 

Two “un-named institutional healthcare investors and management entered into a definitive agreements of $6.3 M of ISCO's convertible preferred stock and common stock purchase warrants to purchase … “possibly” an additional $25.7 M of the  common stock


 

The gross proceeds for the initial purchase of securities consisted of $2.5 M in cash and conversion of $3.8 M debt.

·         Dr. Andrey Semechkin, ISCO's Co-Chairman and CEO, purchased $4.3 M of the preferred stock (on the same terms as the outside investor) through conversion of the $3.8 M of indebtedness owed to him and $500 K of cash.

 

The closing of the offering is expected to occur on or about March 15, 2016, subject to satisfaction of customary closing conditions set forth in the Purchase Agreement.

 

The Bottom Line: The capital raised will help to drive its “EARLY” P1 study of ISC-hpNSC® for the treatment of moderate to severe Parkinson's disease. With enrollment of patients already underway, ISCO looks forward to the end of this year for preliminary safety and efficacy clinical data – still early.

 

Kudos to the CEO who stepped up for $4.3 M of the preferred stock to be repayed$3.8 M and $500 K!

 

Pursuant to the terms of the private placement, ISCO will issue:

·         6,310 shares of Series I-1 and Series I-2 convertible preferred at a price of $1,000 per share,

·         Series A Common Stock purchase warrants to purchase up to approximately 3.6 M shares of common stock at an initial exercise price of $3.65 per share with a term of five years,

·         Series B Common Stock purchase warrants to purchase up to approximately 3.6 M shares of common stock at an initial exercise price of $1.75 per share with a term of six months and

·         Series C Common Stock purchase warrants to purchase up to approximately 3.6 M shares of common stock at an initial exercise price of $1.75 per share with a term of twelve months.

·         The Series I-1 and Series I-2 preferred stock are both convertible into shares of common stock of ISCO at an initial conversion price of $1.75.

 

$3.81 M of the gross proceeds of this offering will be satisfied by the forgiveness of the total principal balance of ISCO's bridge loan payable to Dr. Semechkin in the same amount.

 

ISCO closed at $3.96

Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC is acting as the exclusive placement agent for the offering.