Deal with Aspire Capital to span three years, company reports in 8-K
By Devika Patel and Stephanie N. Rotondo
Knoxville, Tenn., Dec. 13 - International Stem Cell Corp. arranged a three-year at-the-market firm commitment investment with Aspire Capital Fund, LLC on Dec. 9, according to an 8-K filed Monday with the Securities and Exchange Commission. When the $25 million deal priced, Aspire bought 333,333 shares for $500,000.
Under the agreement's terms, Aspire is committed to purchase the shares at a price equal to the lower of the lowest sale price for the stock on the sale date or the average of the three lowest closing sale prices for the stock during the 12 consecutive business days ending on the business day immediately preceding the purchase date.
Each tranche will consist of 100,000 shares if the closing price is above $0.25, 150,000 shares if the closing price is above $1.25, 200,000 shares if the closing price is above $1.75 and 300,000 shares if the closing price is above $2.25.
"We've been making investments in stem cell companies; we really like that space," said Steven Martin, managing member of Aspire. What intrigued him about International Stem Cell was its Lifeline Skin Care product, which he called "an interesting aspect that they are doing that other people [in the stem cell space] are not doing."
"We had followed them for a number of years, meeting with them off and on for some time," he continued. "The circumstances were right [to do the deal]."
Martin said Aspire and International Stem Cell met several times over the course of many months before a deal was ever signed in what Martin called "meaningful and substantial due diligence."
"We like the terms, but it is all about how the company performs going forward," he said. He said the deal was "designed as a win-win approach," as the deal gives great flexibility to the company, but Aspire stands to win big if the company is successful as well.
"We have investment risk from the beginning," he said, referring to the upfront purchase of 333,333 shares. If Aspire is asked to buy more shares under the terms of the financing agreement, it will only increase that risk.
"And that makes us a better partner in the whole structure of the transaction," he said.
Proceeds will be used for research and development activities, general corporate purposes and working capital requirements.
International Stem Cell is a biotechnology company based in Oceanside, Calif.
| Issuer: | International Stem Cell Corp.
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| Issue: | Committed equity financing facility
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| Amount: | $25 million
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| Tenor: | Three years
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| Price: | Lower of the lowest price of stock on purchase date and average of three lowest closing sale prices during the 12 consecutive trading days ending on the business day immediately preceding the purchase date
|
| Warrants: | No
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| Investor: | Aspire Capital Fund, LLC
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| Pricing date: | Dec. 9
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| Settlement date: | Dec. 9 (for $500,000)
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| Stock symbol: | OTCBB: ISCO
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| Stock price: | $1.40 at close Dec. 9
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| Market capitalization: | $106.51 million
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