Aastrom ($ASTM) Raises Capital - $40 MLN Private Placement
Aastrom Biosciences (ASTM) completed a $40M private placement with Eastern Capital ($1.81 -$0.01) Net proceeds to Aastrom, after placement fees and other offering expenses, are ~$38M.
The company intends to use the net proceeds from the financing for general corporate purposes, including research and development expenses related to the pivotal Phase 3 REVIVE-CLI clinical trial with ixmyelocel-T initiated in February 2012.
At closing, Aastrom issued approximately 12,300 shares of Series B convertible preferred stock to Eastern Capital at a price of $3,250 per share.
The shares will accrue dividends at a rate of 11.5% per annum during the 5-year term.
The Series B preferred stock is convertible into shares of the company's common stock only after 8-Mar-17 at a rate of 1,000 common shares for one preferred share.
There were no warrants issued in connection with the financing and Eastern Capital will not take a board seat.
Daily Dose Conclusion: This strikes us as a last resort financing. Aastrom has the capital to see the CLI trial to its conclusion, and if the trial hits, they can pay off this "expensive financing" and if it does'nt its essentially the end of Aastom. As such we view this deal as raising risk for investors and making the "B" in Binary now a capital letter.
CMXI, astm, psti | Print Article Email Article Posted on Friday, March 9, 2012 at 12:02PM Permalink in Regenerative Medicine
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