SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): February 11,
2010
NEOSTEM,
INC.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
(State
or Other Jurisdiction of Incorporation)
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0-10909
(Commission
File
Number)
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22-2343568
(IRS
Employer Identification No.)
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420 Lexington Avenue, Suite
450, New York, New York 10170
(Address
of Principal Executive Offices)(Zip Code)
(212)
584-4180
Registrant's
Telephone Number
Check
the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2.
below):
|
o
|
Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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|
o
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Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01.
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Entry
into a Material Definitive
Agreement.
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On
February 11, 2010, NeoStem, Inc. (the "Company") entered into an Underwriting
Agreement (the "Underwriting Agreement") with Roth Capital Partners, LLC (the
"Underwriter Representative"), as representative of the underwriters named in
the Underwriting Agreement, related to a public offering of 5,000,000 shares of
the Company's common stock, par value $0.001 per share, (the "Common Stock"), at
a price of $1.35 per share for aggregate proceeds of approximately $5,697,500
(net of underwriting discounts, commissions, fees and expenses). This
offering is being made pursuant to the Company's effective registration
statement (the "Registration Statement") on Form S-1, as amended, (File No.
333-163741) filed with the Securities and Exchange Commission.
In
addition, the Company has granted the underwriters an option to purchase up to
750,000 additional shares of Common Stock to cover over-allotments, if
any. If the over-allotment option is exercised in full, the
additional proceeds to the Company will be approximately $941,625 (net of
underwriting discounts, commissions, fees and expenses).
The above
description of the Underwriting Agreement does not purport to be complete and is
qualified in its entirety by reference to the Underwriting Agreement, which is
filed hereto as Exhibit 1.1 and is incorporated herein by
reference.
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Item
8.01.
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Other
Events.
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On
February 11, 2010, the Company issued a press release announcing the pricing of
the public offering described in Item 1.01 of this Current Report on Form
8-K. A copy of the Company's press release is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
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Item
9.01.
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Financial
Statements and Exhibits.
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(d) Exhibits
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Exhibit Number
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Description
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1.1
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Underwriting
Agreement, dated February 11, 2010.
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99.1
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Press
Release dated February 11, 2010.
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2
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, NeoStem has duly caused this Report to be
signed on its behalf by the undersigned hereunto duly authorized.
| NEOSTEM, INC. | |||
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By:
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/s/ Catherine M. Vaczy | |
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Name: Catherine
M. Vaczy
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|||
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Title: Vice
President and General Counsel
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Date: February
11, 2010
3
5,000,000
Shares
NEOSTEM,
INC.
Common
Stock
UNDERWRITING
AGREEMENT
February
11, 2010
Roth
Capital Partners, LLC
24
Corporate Plaza
Newport
Beach, CA 92660
Maxim
Group LLC
405
Lexington Avenue
New York,
NY 10174
Gilford
Securities
777 Third
Avenue
New York,
NY 10017
Ladies
and Gentlemen:
NeoStem,
Inc., a Delaware corporation (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and sell to Roth
Capital Partners, LLC (“Roth”) for Roth and
on behalf of Maxim Group LLC and Gilford Securities (collectively with
Roth, the “Underwriters”) an aggregate of
5,000,000 authorized but unissued shares (the “Underwritten Shares”)
of Common Stock, par value $0.001 per share (the “Common Stock”), of
the Company. The Company has granted the Underwriters the option to
purchase an aggregate of up to 750,000 additional shares of Common Stock (the
“Additional
Shares”) as may be necessary to cover over-allotments made in connection
with the offering. The Underwritten Shares and the Additional Shares
are collectively referred to as the “Shares.”
The
Company and the Underwriters hereby confirm their agreement as
follows:
1. Registration
Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-1 (File No. 333-163741) under the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the “Securities
Act”), and such amendments to such registration statement (including
post-effective amendments) as may have been required to the date of this
Agreement. Such registration statement, as amended (including any
post-effective amendments) has been declared effective by the
Commission. Such registration statement, including amendments thereto
(including post-effective amendments thereto) at such time, the exhibits and any
schedules thereto at such time and the documents and information otherwise
deemed to be a part thereof or included therein by the Securities Act, is herein
called the “Registration
Statement.” If the Company has filed or files an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act (the
“Rule 462 Registration
Statement”), then any reference herein to the term Registration Statement
shall include such Rule 462 Registration Statement.
1
The
Company is filing with the Commission pursuant to Rule 424 under the Securities
Act a final prospectus relating to the Shares (the “Final
Prospectus”). Such Final Prospectus and any preliminary
prospectus or “red herring,” in the form in which they have been or will be
filed with the Commission under the Securities Act is hereinafter called
a “Prospectus.”
For
purposes of this Agreement, all references to the Registration Statement, the
Rule 462 Registration Statement, the Final Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Interactive Data Electronic
Applications system. All references in this Agreement to amendments
or supplements to the Registration Statement, the Rule 462 Registration
Statement, the Final Prospectus or any Prospectus shall be deemed to mean and
include the subsequent filing of any document or information that is deemed
to be incorporated by reference therein or otherwise deemed to be a part thereof
under the Securities Act.
2. Representations
and Warranties of the Company Regarding the Offering.
(a) The
Company represents and warrants to, and agrees with, the Underwriters, as of the
date hereof and as of the Closing Date (as defined in Section 5(c) below),
except as otherwise indicated, as follows:
(i) At
each of the time of effectiveness, the date hereof and the Closing Date, the
Registration Statement and any post-effective amendment thereto complied or will
comply in all material respects with the requirements of the Securities Act and
did not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Time of Sale Disclosure
Package (as defined below), as of the date hereof and at the Closing Date, and
the Final Prospectus, as amended or supplemented, at the time of filing pursuant
to Rule 424(b) under the Securities Act and at the Closing Date, did not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in the two
immediately preceding sentences shall not apply to statements in or omissions
from the Registration Statement or any Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by the
Underwriters specifically for use in the preparation thereof. The
Registration Statement contains all exhibits and schedules required to be filed
by the Securities Act. No order preventing or suspending the
effectiveness or use of the Registration Statement or any Prospectus is in
effect and no proceedings for such purpose have been instituted or are pending,
or, to the knowledge of the Company, are contemplated or threatened by the
Commission. As used in this paragraph and elsewhere in this
Agreement, “Time of
Sale Disclosure Package” means the Prospectus most recently filed with
the Commission before the time of this Agreement, including any preliminary
prospectus deemed to be a part thereof, information deemed included pursuant to
Rule 430A of the Securities Act, and the information in the script attached
hereto as Schedule
I.
2
(ii) The
financial statements of the Company and China Biopharmaceuticals Holdings, Inc.
and subsidiaries (“CBH”), together with
the related notes included or incorporated by reference in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus comply
in all material respects with the applicable requirements of the Securities Act
and fairly present the financial condition of the Company and CBH, respectively,
as of the dates indicated and the results of operations and changes in cash
flows for the periods therein specified in conformity with generally accepted
accounting principles consistently applied throughout the periods involved; and
the supporting schedules included in the Registration Statement present fairly
the information required to be stated therein. The pro forma
financial information set forth under the headings “Unaudited Proforma Condensed
Combined Financial Statements” and “Footnotes to Unaudited Proforma Condensed
Combined Financial Statements” comply in all material respects with the
applicable requirements of the Securities Act and fairly present, on the basis
stated in the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospects, the information included therein. No other
financial statements, pro forma financial information or schedules are required
under the Securities Act to be included or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus. To the Company’s knowledge, Holtz Rubenstein Reminick LLP
and Moore Stephens Wurth Frazer and Torbet, LLP, each of which has expressed its
opinion with respect to the financial statements and schedules filed as a part
of the Registration Statement and included in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus, are independent public
accounting firms with respect to the Company and its Affiliates and subsidiaries
within the meaning of the Securities Act. For purposes of this
Agreement, “Affiliate” means,
with respect to the Company, any other Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the Company, including, without limitation, CBH and Suzhou
Erye Pharmaceutical Co., Ltd.
(iii) The
Company had a reasonable basis for, and made in good faith, each
“forward-looking statement” (within the meaning of Section 27A of the Act or
Section 21E of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder (collectively, the “Exchange Act”)) and
statements of belief contained in the Registration Statement, the Time of Sale
Disclosure Package or the Final Prospectus.
(iv) All
statistical or market-related data included or incorporated by reference in the
Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus are based on or derived from sources that the Company reasonably
believes to be reliable and accurate, and the Company has obtained the written
consent to the use of such data from such sources, to the extent
required.
3
(v) The
Common Stock is registered pursuant to Section 12(b) of the Exchange Act and the
Shares are included or have been approved for inclusion on NYSE AMEX. There is
no action pending by the Company or, to the Company’s knowledge, NYSE AMEX to
delist the Shares from NYSE AMEX, nor has the Company received any notification
that NYSE AMEX is
contemplating terminating such listing that has not been
resolved. When issued, the Shares will be listed on NYSE
AMEX.
(vi) The
Company has not taken, directly or indirectly, any action that is designed to or
that has constituted or that would reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(vii) The
Company is not and, after giving effect to the offering and sale of the Shares,
will not be an “investment company,” as such term is defined in the Investment
Company Act of 1940, as amended.
(viii) The
Company has not distributed any prospectus or other offering material in
connection with the offering and sale of the Shares that would constitute a
“free writing prospectus” as defined in Rule 405 under the Securities
Act.
(b) Any
certificate signed by any officer of the Company and delivered to the
Underwriters or to counsel for Roth Capital Partners, LLC shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
3. Representations
and Warranties Regarding the Company.
(a) The
Company represents and warrants to and agrees with, the Underwriters, except as
set forth in the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectus, as follows:
(i) Each
of the Company, its Affiliates and subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. Each of the Company, its Affiliates and
subsidiaries has the corporate power and authority to own its properties and
conduct its business as currently being carried on and as described in the
Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus, and is duly qualified to do business as a foreign corporation in
good standing in each jurisdiction in which it owns or leases real property or
in which the conduct of its business makes such qualification necessary and in
which the failure to so qualify would have or is reasonably likely to result in
a material adverse effect upon the business, prospects, properties, operations,
condition (financial or otherwise) or results of operations of the Company and
its subsidiaries, taken as a whole, or in its ability to perform its obligations
under this Agreement (“Material Adverse
Effect”).
(ii) The
Company has the power and authority to enter into this Agreement and to
authorize, issue and sell the Underwritten and Additional Shares as contemplated
by this Agreement. This Agreement has been duly authorized, executed
and delivered by the Company, and constitutes a valid, legal and binding
obligation of the Company, enforceable in accordance with its terms, except as
rights to indemnity hereunder may be limited by federal or state securities laws
and except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity.
4
(iii) The
execution, delivery and performance of this Agreement and the consummation of
the transactions herein contemplated will not (A) result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any law, rule or regulation to which the Company or any Affiliate or subsidiary
is subject, or by which any property or asset of the Company or any Affiliate or
subsidiary is bound or affected, (B) except for the agreements listed on Schedule VII of the
Underwriting Agreement, conflict with, result in any violation or breach of, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, lease, credit facility, debt, note, bond, mortgage,
indenture or other instrument (the “Contracts”) or
obligation or other understanding to which the Company or any Affiliate or
subsidiary is a party of by which any property or asset of the Company or any
Affiliate or subsidiary is bound or affected, except to the extent that such
conflict, default, termination, amendment, acceleration or cancellation right is
not reasonably likely to result in a Material Adverse Effect, or (C) result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, the Company’s charter or by-laws.
(iv) Neither
the Company nor any of its Affiliates or subsidiaries is in violation, breach or
default under its certificate of incorporation, by-laws or other equivalent
organizational or governing documents.
(v) All
consents, approvals, orders, authorizations and filings required on the part of
the Company and its Affiliates and subsidiaries in connection with the
execution, delivery or performance of this Agreement have been obtained or
made.
(vi) All
of the issued and outstanding shares of capital stock of the Company are duly
authorized and validly issued, fully paid and nonassessable, and have been
issued in compliance with all applicable securities laws, and conform to the
description thereof in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectus. Except for the issuances of
options, warrants or restricted stock in the ordinary course of business, since
the respective dates as of which information is provided in the Registration
Statement, the Time of Sale Disclosure Package or the Final Prospectus, the
Company has not entered into or granted any convertible or exchangeable
securities, options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from the Company any shares of the capital
stock of the Company. The Shares, when issued, will be duly
authorized and validly issued, fully paid and nonassessable, will be issued in
compliance with all applicable securities laws, and will be free of preemptive,
registration or similar rights.
(vii) Each
of the Company and its Affiliates and subsidiaries has filed all returns (as
hereinafter defined) required to be filed with taxing authorities since January
1, 2003, or has duly obtained extensions of time for the filing
thereof. Each of the Company and its Affiliates and subsidiaries has
paid all taxes (as hereinafter defined) shown as due on such returns that were
filed and has paid all taxes imposed on or assessed against the Company or such
Affiliate or subsidiary. The provisions for taxes payable, if any,
shown on the financial statements filed with or as part of the Registration
Statement are sufficient for all accrued and unpaid taxes, whether or not
disputed, and for all periods to and including the dates of such consolidated
financial statements. Except as disclosed in writing to the
Underwriters (including disclosures set forth in the Registration Statement),
(i) no issues have been raised (and are currently pending) by any taxing
authority in connection with any of the returns or taxes asserted as due from
the Company or its Affiliates or subsidiaries, and (ii) no waivers of statutes
of limitation with respect to the returns or collection of taxes have been given
by or requested from the Company or its Affiliates or
subsidiaries. The term “taxes” means all
federal, state, local, foreign, and other net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, windfall profits, customs, duties or other
taxes, fees, assessments, or charges of any kind whatever, together with any
interest and any penalties, additions to tax, or additional amounts with respect
thereto. The term “returns” means all
returns, declarations, reports, statements, and other documents required to be
filed in respect to taxes.
5
(viii) Since
the respective dates as of which information is given in the Registration
Statement, the Time of Sale Disclosure Package or the Final Prospectus, (a)
neither the Company nor any of its Affiliates or subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered into any
material transactions other than in the ordinary course of business, (b) the
Company has not declared or paid any dividends or made any distribution of any
kind with respect to its capital stock; (c) there has not been any material
change in the capital stock of the Company or any of its Affiliates or
subsidiaries (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or
warrants or the issuance of restricted stock awards or restricted stock units or
option, warrants or other securities under the Company’s existing equity
compensation plans or upon the conversion of any convertible securities, or
any new grants thereof in the ordinary course of business), (d) there has not
been any material change in the Company’s long-term or short-term debt, and (e)
there has not been the occurrence of any Material Adverse Effect.
(ix) There
is not pending or, to the knowledge of the Company, threatened, any action, suit
or proceeding to which the Company or any of its Affiliates or subsidiaries is a
party or of which any property or assets of the Company is the subject before or
by any court or governmental agency, authority or body, or any arbitrator or
mediator, which is reasonably likely to result in a Material Adverse
Effect.
(x) The
Company and each of its Affiliates and subsidiaries holds, and is in compliance
with, all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders (“Permits”) of any
governmental or self-regulatory agency, authority or body required for the
conduct of its business, and all such Permits are in full force and effect, in
each case except where the failure to hold, or comply with, any of them is not
reasonably likely to result in a Material Adverse Effect.
6
(xi) The
Company and its Affiliates and subsidiaries have good and marketable title to
all real or personal property (except with respect to real property located in
the PRC, with respect to which the Company and its Affiliates have valid land
use rights) described in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectus as being owned by them that are material to the
business of the Company, in each case free and clear of all liens, claims,
security interests, other encumbrances or defects, except those that are not
reasonably likely to result in a Material Adverse Effect. The
property held under lease or other property rights agreements by the Company and
its Affiliates and subsidiaries is held by them under valid, subsisting and
enforceable leases or agreements with only such exceptions with respect to any
particular lease as do not interfere in any material respect with the conduct of
the business of the Company and its Affiliates and subsidiaries.
(xii) The
Company and each of its Affiliates and subsidiaries owns or possesses or has
valid right to use all patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations, copyrights,
licenses, inventions, trade secrets, technology, know-how and similar rights
(“Intellectual
Property”) necessary for the conduct of the business of the Company and
its Affiliates and subsidiaries as currently carried on and as described in the
Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus. To the knowledge of the Company, no action or use by the
Company or any of its Affiliates or subsidiaries will involve or give rise to
any infringement of, or license or similar fees for, any Intellectual Property
of others. Neither the Company nor any of its Affiliates or
subsidiaries has received any notice alleging any such infringement or
fee.
(xiii) The
Company and each of its Affiliates and subsidiaries has operated and currently
is in compliance in all material respects with all applicable rules and
regulations of the U.S. Food and Drug Administration and comparable foreign
regulatory agencies outside of the United States, including but not limited to
the State Food and Drug Administration of China.
(xiv) The
Company has filed on a timely basis all forms, reports and other documents (the
“SEC Filings”)
required to be filed by it with the SEC for the period from January 1, 2009 to
the date hereof. Each of the Company’s SEC Filings (i) complied as to
form in all material respects with the requirements of the Exchange Act, and
(ii) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading. The financial statements included in the SEC
Filings comply in all material respects with the applicable requirements of the
Exchange Act and fairly present the financial condition of the Company and CBH,
respectively, as of the dates indicated and the results of operations and
changes in cash flows for the period therein specified in conformity with
generally accepted accounting principles consistently applied throughout the
periods involved. The pro forma financial information included in the
SEC Filings comply in all material respects with the applicable requirements of
the Exchange Act and fairly present the financial condition of the Company and
CBH, respectively, as of the dates indicated. No other financial statements, pro
forma financial information or schedules are required to be filed under the
Exchange Act.
7
(xv) The
Company and each of its Affiliates and subsidiaries has complied with, is not in
violation of, and has not received any notice of violation relating to any
applicable law, rule or regulation relating to the conduct of its business, or
the ownership or operation of its property and assets, including, without
limitation, (A) the Currency and Foreign Transactions Reporting Act of 1970, as
amended, or any money laundering laws, rules or regulations, (B) any laws, rules
or regulations related to health, safety or the environment, including those
relating to the regulation of hazardous substances, (C) the Sarbanes-Oxley Act
and the rules and regulations of the Commission thereunder, (D) the Foreign
Corrupt Practices Act of 1977 and the rules and regulations thereunder, and (E)
the Employment Retirement Income Security Act of 1974 and the rules and
regulations thereunder, in each case except where the failure to be in
compliance is not reasonably likely to result in a Material Adverse
Effect.
(xvi) The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xvii) Neither
the Company nor any of its Affiliates or subsidiaries nor, to the knowledge of
the Company, any director, officer, employee, representative, agent or affiliate
of the Company or any of its subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering of the
Shares contemplated hereby, or lend, contribute or otherwise make available such
proceeds to any person or entity, for the purpose of financing the activities of
any person currently subject to any U.S. sanctions administered by
OFAC.
(xviii) The
Company and each of its Affiliates and subsidiaries carries, or is covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of its business and the value of its properties.
(xix) No
labor dispute with the employees of the Company or any of its Affiliates or
subsidiaries exists or, to the knowledge of the Company, is imminent that is
reasonably likely to result in a Material Adverse Effect.
(xx) Neither
the Company, its Affiliates, its subsidiaries nor, to its knowledge, any other
party is in violation, breach or default of any Contract that is reasonably
likely to result in a Material Adverse Effect.
8
(xxi) No
supplier, customer, distributor or sales agent of the Company or its
Affiliates or subsidiaries has notified the Company that it intends
to discontinue or decrease the rate of business
done with the Company or its Affiliates or subsidiaries, except where
such decrease is not reasonably likely to result in a Material Adverse
Effect.
(xxii) There
are no claims, payments, issuances, arrangements or understandings for services
in the nature of a finder’s, consulting or origination fee with respect to the
introduction of the Company to the Underwriters or the sale of the Shares
hereunder or any other arrangements, agreements, understandings, payments or
issuances with respect to the Company that may affect the Underwriters’
compensation, as determined by FINRA.
(xxiii) Except
as disclosed to the Underwriters in writing, the Company has not made any direct
or indirect payments (in cash, securities or otherwise) to (i) any person, as a
finder’s fee, investing fee or otherwise, in consideration of such person
raising capital for the Company or introducing to the Company persons who
provided capital to the Company, (ii) any FINRA member, or (iii) any person or
entity that has any direct or indirect affiliation or association with any FINRA
member within the 12-month period prior to the date on which the Registration
Statement was filed with the Commission (“Filing Date”) or
thereafter.
(xxiv) None
of the net proceeds of the offering will be paid by the Company to any
participating FINRA member or any affiliate or associate of any participating
FINRA member, except as specifically authorized herein.
(xxv) To
the Company’s knowledge, no (i) officer or director of the Company or its
Affiliates or subsidiaries, (ii) owner of 5% or more of the Company’s
unregistered securities or that of its Affiliates or subsidiaries or (iii) owner
of any amount of the Company’s unregistered securities acquired within the
180-day period prior to the Filing Date, has any direct or indirect affiliation
or association with any FINRA member. The Company will advise the
Underwriters and their respective counsel if it becomes aware that any officer,
director or stockholder of the Company or its Affiliates or subsidiaries is or
becomes an affiliate or associated person of a FINRA member participating in the
offering.
(xxvi) Other
than the Underwriters, no person has the right to act as an underwriter or as a
financial advisor to the Company in connection with the transactions
contemplated hereby.
9
4. Representations
and Warranties of the Company Regarding the PRC.
(a) The
Company represents and warrants to, and agrees with, the Underwriters, as of the
date hereof and as of the Closing Date, as follows:
(i) The
Company conducts a substantial portion of its operations and generates
substantially all of its revenue through (i) NeoStem (China), Inc., a wholly
foreign-owned enterprise formed under the laws of the People’s Republic of China
(the “PRC”)
(“NeoStem
China”), (ii) Qingdao Niao Bio-Technology Ltd., a company formed
under the laws of the PRC (“Qingdao”),
(iii) Beijing Ruijieao Bio-Technology Ltd., a company formed under the laws
of the PRC (“Beijing” and together
with Qingdao, the “PRC
VIEs”), and (v) Suzhou Erye Pharmaceuticals Ltd., a joint venture formed
under the laws of the PRC (the “JV”). The
NeoStem China, the PRC VIEs and the JV are collectively referred to hereinafter
as the “PRC
Entities.”
(ii) Each
of the PRC Entities has been duly established, is validly existing as a company
in good standing under the laws of the PRC, has the corporate power and
authority to own, lease and operate its property and to conduct its business as
described in the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectus, and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not,
singly or in the aggregate, have a Material Adverse Effect. Each PRC
Entity has applied for and obtained all requisite business licenses, clearance
and permits required under PRC law as necessary for the conduct of its
businesses, and each PRC Entity has complied in all material respects
with all PRC Laws in connection with foreign exchange, including without
limitation, carrying out all relevant filings, registrations and applications
for relevant permits with the PRC State Administration of Foreign Exchange and
any other relevant authorities, and all such permits are validly
subsisting. The registered capital of each PRC Entity has been fully
paid up in accordance with the schedule of payment stipulated in its respective
articles of association, approval document, certificate of approval and legal
person business license (hereinafter referred to as the “Establishment
Documents”) and in compliance with PRC laws and regulations, and there is
no outstanding capital contribution commitment for any PRC
Entity. The Establishment Documents of the PRC Entities have been
duly approved in accordance with the laws of the PRC and are valid and
enforceable. The business scope specified in the Establishment
Documents of each PRC Entity complies with the requirements of all relevant PRC
laws and regulations. The outstanding equity interests of each PRC
Entity is owned of record by the respective entities or individuals identified
as the registered holders thereof in the Registration Statement, the Time of
Sale Disclosure Package and the Final Prospectus.
(iii) Except
as disclosed in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus, no consents, approvals, authorizations, orders,
registrations, clearances, certificates, franchises, licenses, permits or
qualifications of or with any PRC governmental agency are required for the
Company’s or its Affiliates’ or subsidiaries’ contractual arrangements and
agreements with the PRC VIEs and their registered equity holders (the “VIE Structure”) or
the execution, delivery and performance of such contractual arrangements and
agreements (the “VIE
Structuring Documents”). None of the VIE Structuring Documents
has been revoked and no such revocation is pending or
threatened. Each of the VIE Structuring Documents has been entered
into prior to the date thereof in compliance with all applicable laws and
regulations and constitutes a valid and legally binding agreement, enforceable
in accordance with its terms.
10
(iv) The
VIE Structure and the execution, delivery and performance of the VIE Structuring
Documents and the consummation of the transactions contemplated thereby did not
and do not (i) conflict with, or result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which any PRC Entity is a party or by which any PRC Entity is bound or by which
any of the properties or assets of any PRC Entity is subject, (ii) violate
or conflict with the Establishment Documents of any PRC Entity, or
(iii) violate or conflict with any applicable laws, regulations, rules,
orders, decrees, guidelines, notices or other legislation of the
PRC.
(v) The
VIE Structure complies, and immediately following the consummation of the
offering and sale of the Shares will comply, with all applicable laws,
regulations, rules, orders, decrees, guidelines, notices or other legislation of
the PRC; the VIE Structure has not been challenged by any PRC governmental
agency and there are no legal, arbitration, governmental or other proceedings
(including, without limitation, governmental investigations or inquiries)
pending before or, to the Company’s knowledge, threatened or contemplated by any
PRC governmental agency in respect of the VIE Structure; and the Company
reasonably believes that after the consummation of the offering and sale of the
Shares, the VIE Structure will not be challenged by any PRC governmental
agency.
(vi) The
Company possesses, directly or indirectly, the power to direct, or cause the
direction of, the management and policies of the PRC VIEs.
(vii) Except
as set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus, no PRC Subsidiary is currently prohibited, directly or
indirectly, from paying any dividends to the Company (or the Company’s
subsidiary that holds the outstanding equity interest of such PRC Subsidiary),
and no PRC VIE is currently prohibited, directly or indirectly, from paying any
of its obligations set forth in the VIE Structuring Documents. No PRC
Entity is prohibited, directly or indirectly, from making any other distribution
on such PRC Entity’s equity capital, from repaying to the Company any loans or
advances to such PRC Entity from the Company or any of the Company’s
subsidiaries.
(viii) None
of the PRC Entities nor any of their properties, assets or revenues are entitled
to any right of immunity on the grounds of sovereignty from any legal action,
suit or proceeding, from set-off or counterclaim, from the jurisdiction of any
court, from services of process, from attachment prior to or in aid of execution
of judgment, or from any other legal process or proceeding for the giving of any
relief or for the enforcement of any judgment.
(ix) It
is not necessary that this Agreement, the Registration Statement, the Time of
Sale Disclosure Package, the Final Prospectus or any other document be filed or
recorded with any governmental agency, court or other authority in the
PRC.
11
(x) No
transaction, stamp, capital or other issuance, registration, transaction,
transfer or withholding taxes or duties are payable in the PRC by or on behalf
of the Underwriters to any PRC taxing authority in connection with (i) the
issuance, sale and delivery of the Underwritten and Additional Shares by the
Company and the delivery of the Shares to or for the account of the
Underwriters, (ii) the purchase from the Company and the initial sale and
delivery by the Underwriters of the Shares to purchasers thereof, or
(iii) the execution and delivery of this Agreement.
(xi) The
Company has taken all steps reasonably necessary to comply with any applicable
rules and regulations of the PRC State Administration of Foreign Exchange of the
PRC (the “SAFE Rules
and Regulations”).
(xii) The
Company is aware of, and has been advised as to, the content of the Rules on
Mergers and Acquisitions of Domestic Enterprises by Foreign Investors jointly
promulgated on August 8, 2006 by the PRC Ministry of Commerce, the PRC State
Assets Supervision and Administration Commission, the PRC State Administration
of Taxation, the PRC State Administration of Industry and Commerce, the China
Securities Regulatory Commission (“CSRC”) and the PRC
State Administration of Foreign Exchange of the PRC (the “M&A Rules”), in
particular the relevant provisions thereof that purport to require offshore
special purpose vehicles controlled directly or indirectly by PRC-incorporated
companies or PRC residents and established for the purpose of obtaining a stock
exchange listing outside of the PRC to obtain the approval of the CSRC prior to
the listing and trading of their securities on any stock exchange located
outside of the PRC. The Company has received legal advice
specifically with respect to the M&A Rules from its PRC counsel and the
Company understands such legal advice. In addition, the Company has
communicated such legal advice in full to each of its directors that signed the
Registration Statement and each such director has confirmed that he or she
understands such legal advice.
(xiii) The
issuance and sale of the Shares, the listing and trading of the Shares on NYSE
AMEX and the consummation of the transactions contemplated by this Agreement,
the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus are not and will not be, as of the date hereof and on the Closing
Date, affected by the M&A Rules or any official clarifications, guidance,
interpretations or implementation rules in connection with or related to the
M&A Rules, including the guidance and notices issued by the CSRC on
September 8 and September 21, 2006 (together with the M&A Rules, the “M&A Rules and Related
Clarifications”).
(xiv) The
Company has taken all necessary steps to ensure compliance by each of its
stockholders, option holders, directors, officers and employees that is, or is
directly or indirectly owned or controlled by, a PRC resident or citizen with
any applicable rules and regulations of the relevant PRC government agencies
(including but not limited to the PRC Ministry of Commerce, the PRC National
Development and Reform Commission and the PRC State Administration of Foreign
Exchange) relating to overseas investment by PRC residents and citizens (the
“PRC Overseas
Investment and Listing Regulations”), including, requesting each
stockholder, option holder, director, officer, employee and participant that is,
or is directly or indirectly owned or controlled by, a PRC resident or citizen
to complete any registration and other procedures required under applicable PRC
Overseas Investment and Listing Regulations.
12
(xv) As
of the date hereof, the M&A Rules and Related Clarifications do not require
the Company to obtain the approval of the CSRC prior to the issuance and sale of
the Shares, the listing and trading of the Shares on the NYSE AMEX, or the
consummation of the transactions contemplated by this Agreement, the
Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus.
(xvi) Each
of the PRC Entities is in compliance with all requirements under all applicable
PRC laws and regulations to qualify for their exemptions from enterprise income
tax or other income tax benefits (the “Tax Benefits”) as
described in the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectus, and the actual operations and business activities of each
such PRC Entity are sufficient to meet the qualifications for the Tax
Benefits. No submissions made to any PRC government authority in
connection with obtaining the Tax Benefits contained any misstatement or
omission that would have affected the granting of the Tax
Benefits. No PRC Entity has received notice of any deficiency in its
respective applications for the Tax Benefits, and the Company is not aware of
any reason why any such PRC Entity might not qualify for, or be in compliance
with the requirements for, the Tax Benefits.
(xvii) All
local and national PRC governmental tax holidays, exemptions, waivers, financial
subsidies, and other local and national PRC tax relief, concessions and
preferential treatment enjoyed by any PRC Entity as described in the
Registration Statement, the Time of Disclosure Package and the Final Prospectus
are valid, binding and enforceable and do not violate any laws, regulations,
rules, orders, decrees, guidelines, judicial interpretations, notices or other
legislation of the PRC.
(xviii) The
Underwriters will not be deemed to be resident, domiciled, carrying on business
or subject to taxation in the PRC solely by reason of their execution, delivery,
performance or enforcement of, or the consummation of any transaction
contemplated by, this Agreement, the Registration Statement, the Time of Sale
Disclosure Package or the Final Prospectus.
5. Purchase,
Sale and Delivery of Shares.
(a) On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company agrees to
issue and sell the Underwritten Shares to the Underwriters, and the Underwriters
agree to purchase the Underwritten Shares. The purchase price for
each Underwritten Share shall be $1.2555 per share (the “Per Share Price”);
provided, however, that there shall be no commission or discount on any
Underwritten or Additional Shares sold to RimAsia Capital Partners,
L.P.
(b) The
Company hereby grants to the Underwriters the option to purchase some or
all of the Additional Shares, all of which shall be purchased from the Company,
and, upon the basis of the warranties and representations and subject
to the terms and conditions herein set forth, the Underwriters shall have the
right to purchase all or any portion of the Additional Shares at the Per Share
Price as may be necessary to cover over-allotments made in connection with the
transactions contemplated hereby. This option may be exercised by the
Underwriters at any time (but not more than once) on or before the thirtieth day
following the date hereof, by written notice to the Company (the “Option
Notice”). The Option Notice shall set forth the aggregate
number of Additional Shares as to which the option is being exercised, and the
date and time when the Additional Shares are to be delivered (such date and time
being herein referred to as the “Option Closing
Date”); provided, however, that the Option
Closing Date shall not be earlier than the Closing Date (as defined below) nor
earlier than the first business day after the date on which the option shall
have been exercised nor later than the fifth business day after the date on
which the option shall have been exercised unless the Company and the
Underwriters otherwise agree.
13
Payment
of the purchase price for and delivery of the Additional Shares shall be made at
the Option Closing Date in the same manner and at the same office as the payment
for the Underwritten Shares as set forth in subparagraph (c)
below. For the purpose of expediting the checking of the certificate
for the Additional Shares by the Underwriters, the Company agrees to make a form
of such certificate available to the Underwriters for such purpose at least one
full business day preceding the Option Closing Date.
(c) The
Underwritten Shares will be delivered by the Company to the Underwriters against
payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company at the offices of Roth Capital Partners,
LLC, 24 Corporate Plaza, Newport Beach, CA 92660, or such other location as may
be mutually acceptable, at 6:00 a.m. Pacific time, on the third (or if the
Underwritten Shares are priced, as contemplated by Rule 15c6-1(c) under the
Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day
following the date hereof, or at such other time and date as the Underwriters
and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, or,
in the case of the Additional Shares, at such date and time set forth in the
Option Notice. The time and date of delivery of the Underwritten
Shares or the Additional Shares, as applicable, is referred to herein as the
“Closing
Date.” If the Underwriters so elect, delivery of the
Underwritten Shares and Additional Shares may be made by credit through full
fast transfer to the account at The Depository Trust Company designated by the
Underwriters. Certificates representing the Shares, in definitive
form and in such denominations and registered in such names as the Underwriters
may request upon at least two business days’ prior notice to the Company, will
be made available for checking and packaging not later than 10:30 a.m. Pacific
time on the business day next preceding the Closing Date at the above addresses,
or such other location as may be mutually acceptable.
6. Covenants.
(a) The
Company covenants and agrees with the Underwriters as follows:
(i) During
the period beginning on the date hereof and ending on the later of the Closing
Date or such date as determined by the Underwriters the Final Prospectus is no
longer required by law to be delivered in connection with sales by an
underwriter or dealer (the “Prospectus Delivery
Period”), prior to amending or supplementing the Registration Statement,
including any Rule 462 Registration Statement, the Time of Sale Disclosure
Package or the Final Prospectus, the Company shall furnish to the Underwriters
for review and comment a copy of each such proposed amendment or supplement, and
the Company shall not file any such proposed amendment or supplement to which
the Underwriters reasonably object.
14
(ii) From
the date of this Agreement until the end of the Prospectus Delivery Period, the
Company shall promptly advise the Underwriters in writing (A) of the receipt of
any comments of, or requests for additional or supplemental information from,
the Commission, (B) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to the
Time of Sale Disclosure Package, or the Final Prospectus, (C) of the time and
date that any post-effective amendment to the Registration Statement becomes
effective and (D) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any order preventing or
suspending its use or the use of the Time of Sale Disclosure Package, or of any
proceedings to remove, suspend or terminate from listing or quotation the Common
Stock from any securities exchange upon which it is listed for trading or
included or designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter
any such stop order at any time during the Prospectus Delivery Period, the
Company will use its reasonable efforts to obtain the lifting of such order at
the earliest possible moment. Additionally, the Company agrees that
it shall comply with the provisions of Rules 424(b), 430A and 430B, as
applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under Rule 424(b) or Rule 433 were
received in a timely manner by the Commission (without reliance on Rule
424(b)(8) or 164(b) of the Securities Act).
(iii) During
the Prospectus Delivery Period, the Company will comply with all requirements
imposed upon it by the Securities Act, as now and hereafter amended, and by the
Exchange Act, as now and hereafter amended, so far as necessary to permit the
continuance of sales of or dealings in the Shares as contemplated by the
provisions hereof, the Time of Sale Disclosure Package, the Registration
Statement and the Final Prospectus. If during such period any event
occurs the result of which the Final Prospectus (or if the Final Prospectus is
not yet available to prospective purchasers, the Time of Sale Disclosure Package
) would include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period it is
necessary or appropriate in the opinion of the Company or its counsel or the
Underwriters or counsel for Roth Capital Partners, LLC to amend the Registration
Statement or supplement the Final Prospectus (or if the Final Prospectus is not
yet available to prospective purchasers, the Time of Sale Disclosure Package )
to comply with the Securities Act, the Company will promptly notify the
Underwriters and will amend the Registration Statement or supplement the Final
Prospectus (or if the Final Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package) so as to correct such statement
or omission or effect such compliance.
(iv) The
Company shall take or cause to be taken all necessary action to qualify the
Shares for sale under the securities laws of such U.S. jurisdictions as the
Underwriters reasonably designate and to continue such qualifications in effect
so long as required for the distribution of the Shares, except that the Company
shall not be required in connection therewith to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified, to execute a general consent to service of process in any state or
to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise subject.
15
(v) The
Company will furnish to the Underwriters and counsel for Roth Capital Partners,
LLC copies of the Registration Statement, and each Prospectus, and all
amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Underwriters may from time to time reasonably
request.
(vi) The
Company will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the end of the
Company’s current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that shall satisfy the provisions of Section
11(a) and Rule 158 of the Securities Act.
(vii) The
Company, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, will pay or cause to be paid (A) all
expenses (including transfer taxes allocated to the respective transferees)
incurred in connection with the delivery to the Underwriters of the Shares, (B)
all expenses and fees (including, without limitation, fees and expenses of the
Company’s counsel) in connection with the preparation, printing, filing,
delivery, and shipping of the Registration Statement (including the financial
statements therein and all amendments, schedules, and exhibits thereto), the
Shares, the Time of Sale Disclosure Package, the Final Prospectus, and any
amendment thereof or supplement thereto (excluding fees of Underwriters’
counsel), (C) all reasonable filing fees, (D) the fees and expenses of any
transfer agent or registrar, (E) FINRA filing fees, (F) listing fees, if any,
and (G) all other costs and expenses incident to the performance of the
Company’s obligations hereunder that are not otherwise specifically provided for
herein (including, but not limited to, reasonable fees and disbursements of the
Company’s counsel, travel expenses, postage, facsimile and telephone
charges). In addition to the foregoing, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, the Company will reimburse the Underwriters for up to $200,000 for
their expenses actually incurred in connection with its investigation, preparing
to market and marketing the Shares in contemplation of performing its
obligations hereunder and in connection with the purchase and sale of the Shares
contemplated hereby, inclusive of all fees and expenses of Underwriters’ counsel
(the “Underwriters’
Expenses”).
(viii) The
Company intends to apply the net proceeds from the sale of the Shares to be sold
by it hereunder for the purposes set forth in the Time of Sale Disclosure
Package and in the Final Prospectus.
(ix) The
Company will not take, directly or indirectly, during the Prospectus Delivery
Period, any action designed to or which might reasonably be expected to cause or
result in, or that has constituted, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
16
(x) The
Company will not distribute any prospectus or other offering material in
connection with the offering and sale of the Shares that would constitute a
“free writing prospectus” as defined in Rule 405 under the Securities
Act.
(xi) The
Company hereby agrees that, without the prior written consent of Roth Capital
Partners, LLC, it will not, during the period ending 90 days after the date
hereof (“Lock-Up
Period”): (i) offer, pledge, issue, sell, contract to sell, purchase,
contract to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock; or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise; or (iii) file
any registration statement with the Commission relating to the offering of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock. The restrictions contained in the
preceding sentence shall not apply to: (1) the Shares to be sold hereunder; (2)
the issuance of Common Stock upon the exercise of options or warrants
or upon the conversion of any convertible securities disclosed as outstanding in
the Registration Statement (excluding exhibits thereto) or the Final Prospectus;
(3) the issuance of warrants or employee stock options not exercisable during
the Lock-Up Period and the grant of restricted stock awards or restricted stock
units pursuant to equity incentive plans described in the Registration Statement
(excluding exhibits thereto) and the Final Prospectus; (4) warrants issued in
the ordinary course that are not exercisable during the Lock-Up Period; or (5)
the filing of resale registration statements pursuant to existing registration
rights obligations under the agreements on Schedule
VII. Notwithstanding the foregoing, if (x) the Company issues
an earnings release or material news, or a material event relating to the
Company occurs, during the last 17 days of the Lock-Up Period, or (y) prior to
the expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions imposed by this clause shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event,
unless Roth Capital Partners, LLC waives such extension in writing.
7. Conditions
of the Underwriters’ Obligations. The obligations of the
Underwriters hereunder to purchase the Shares are subject to the accuracy, as of
the date hereof and at the Closing Date (as if made at the Closing Date), of and
compliance with all representations, warranties and agreements of the Company
contained herein, the performance by the Company of its obligations hereunder
and the following additional conditions:
(a) If
filing of the Final Prospectus, or any amendment or supplement thereto, is
required under the Securities Act, the Company shall have filed the Final
Prospectus (or such amendment or supplement) with the Commission in the manner
and within the time period so required (without reliance on Rule 424(b)(8) or
164(b) under the Securities Act); the Registration Statement shall remain
effective; no stop order suspending the effectiveness of the Registration
Statement or any part thereof, any Rule 462 Registration Statement, or any
amendment thereof, nor suspending or preventing the use of the Time of Sale
Disclosure Package, or the Final Prospectus shall have been issued; no
proceedings for the issuance of such an order shall have been initiated or
threatened; any request of the Commission or the Underwriters for additional
information (to be included in the Registration Statement, the Time of Sale
Disclosure Package, the Final Prospectus, or otherwise) shall have been complied
with to the Underwriters’ satisfaction.
17
(b) FINRA
shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(c) The
Underwriters shall not have determined, and advised the Company, that the
Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus, or any amendment thereof or supplement thereto, contains an untrue
statement of fact which, in the Underwriters’ reasonable opinion, is material,
or omits to state a fact which, in the Underwriters’ reasonable opinion, is
material and is required to be stated therein or necessary to make the
statements therein not misleading.
(d) On
the Closing Date, there shall have been furnished to the Underwriters the
opinion and negative assurance letters of Sichenzia Ross Friedman Ference LLP,
counsel for the Company, dated the Closing Date and addressed to the
Underwriters, in form and substance reasonably satisfactory to the Underwriters,
to the effect set forth in Schedule II.
(e) On
the Closing Date, there shall have been furnished to the Underwriters the
opinion of Jun He Law Offices LLC, the Company’s China counsel, dated the
Closing Date and addressed to the Underwriters, in form and substance reasonably
satisfactory to the Underwriters, to the effect set forth in Schedule III.
(f) On
the Closing Date, there shall have been furnished to the Underwriters the
opinion of Mintz Levin, the Company’s patent counsel, dated the Closing Date and
addressed to the Underwriters, in form and substance reasonably satisfactory to
the Underwriters, to the effect set forth in Schedule IV.
(g) On
the Closing Date, there shall have been furnished to the Underwriters the
opinion of Fuerst Humphrey Ittleman, the Company’s regulatory counsel, dated the
Closing Date and addressed to the Underwriters, in form and substance reasonably
satisfactory to the Underwriters, to the effect set forth in Schedule V.
(h) On
the Closing Date, there shall have been furnished to the Underwriters the
opinion of Lowenstein Sandler PC, the Company’s counsel, dated the Closing Date
and addressed to the Underwriters, in form and substance reasonably satisfactory
to the Underwriters, to the effect set forth in Schedule VI.
(i) The
Underwriters shall have received a letter of each of Holtz Rubenstein Reminick
LLP and Moore Stephens Wurth Frazer and Torbet, LLP, on the date hereof and on
the Closing Date addressed to the Underwriters, confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualifications of
accountants under Rule 2-01 of Regulation S-X of the Commission, and confirming,
as of the date of each such letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Time of Sale Disclosure Package, as of a
date not prior to the date hereof or more than five days prior to the date of
such letter), the conclusions and findings of said firm with respect to the
financial information and other matters required by the
Underwriters.
18
(j) On
the Closing Date, there shall have been furnished to the Underwriters a
certificate, dated the Closing Date and addressed to the Underwriters, signed by
the chief executive officer and the chief financial officer of the Company, in
their capacity as officers of the Company, to the effect that:
(i) The
representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of the Closing Date, and
the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the Closing
Date;
(ii) No
stop order or other order (A) suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof, (B) suspending the
qualification of the Shares for offering or sale, or (C) suspending or
preventing the use of the Time of Sale Disclosure Package, or the Final
Prospectus, has been issued, and no proceeding for that purpose has been
instituted or, to their knowledge, is contemplated by the Commission or any
state or regulatory body; and
(iii) There
has been no occurrence of any event resulting or reasonably likely to result in
a Material Adverse Effect during the period from and after the date of this
Agreement and prior to the Closing Date.
(k) On
or before the date hereof, the Underwriters shall have received duly executed
“lock-up” agreements, in a form acceptable to the Underwriters, between the
Underwriters and each of the Company’s directors and officers.
(l) The
Company shall have furnished to the Underwriters and counsel for Roth Capital
Partners, LLC such additional documents, certificates and evidence as the
Underwriters or such counsel may have reasonably requested.
If any
condition specified in this Section 7 shall not have been fulfilled when and as
required to be fulfilled, this Agreement may be terminated by the Underwriters
by notice to the Company at any time at or prior to the Closing Date and such
termination shall be without liability of any party to any other party, except
that Section 6(a)(vii), Section 8 and Section 9 shall survive any such
termination and remain in full force and effect.
19
8. Indemnification and
Contribution.
(a) The
Company agrees to indemnify, defend and hold harmless the Underwriters, their
respective affiliates, directors and officers and employees, and each person, if
any, who controls the Underwriters within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any
losses, claims, damages or liabilities to which the Underwriters or such person
may become subject, under the Securities Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness and at any subsequent time
pursuant to Rules 430A and 430B of the Securities Act, the Time of Sale
Disclosure Package, the Prospectus, or any amendment or supplement thereto or in
any materials or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the offering of the Shares
(“Marketing
Materials”), including any roadshow or investor presentations made to
investors by the Company (whether in person or electronically), or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; (ii) any inaccuracy in the representations and warranties of the
Company contained herein, (iii) any failure of the Company to perform its
obligations hereunder or under law, including the Securities Act, or (iv) any
public comments or interviews made or given by the Company, and will reimburse
the Underwriters for any legal or other expenses reasonably incurred by it in
connection with evaluating, investigating or defending against such loss, claim,
damage, liability or action; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Time of Sale Disclosure Package, the Final
Prospectus, or any amendment or supplement thereto, or any Marketing Materials,
in reliance upon and in conformity with written information furnished to the
Company by the Underwriters specifically for use in the preparation
thereof.
(b) The
Underwriters will indemnify, defend and hold harmless the Company and its
affiliates, directors, officers and employees, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any losses, claims, damages or
liabilities to which the Company may become subject, under the Securities Act or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Underwriters), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Time of Sale Disclosure
Package, the Final Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, the Time of Sale Disclosure
Package, the Final Prospectus, or any amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by the Underwriters specifically for use in the preparation thereof, and
will reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with defending against any such loss, claim,
damage, liability or action.
20
(c) Promptly
after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the failure to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to any indemnified party
except to the extent such indemnifying party has been materially prejudiced by
such failure. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof; provided,
however, that if (i)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(ii) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party), or (iii) the indemnifying
party has not in fact employed counsel reasonably satisfactory to the
indemnified party to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, the indemnified party
shall have the right to employ a single counsel to represent it in any claim in
respect of which indemnity may be sought under subsection (a) or (b) of this
Section 8, in which event the reasonable fees and expenses of such separate
counsel shall be borne by the indemnifying party or parties and reimbursed to
the indemnified party as incurred.
The
indemnifying party under this Section 8 shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is a party or could be named and indemnity was or would be
sought hereunder by such indemnified party, unless such settlement, compromise
or consent (a) includes an unconditional release of such indemnified party from
all liability for claims that are the subject matter of such action, suit or
proceeding and (b) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified
party.
(d) If
the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering and sale of the
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Final Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriters and the parties’ relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or
omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were to be
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the first
sentence of this subsection (d). The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending against any action or claim that is the subject
of this subsection (d). Notwithstanding the provisions of this
subsection (d), the
Underwriters shall not be required to contribute any amount in excess of the
amount of the Underwriters’ commissions referenced in Section 5(a) actually
received by the Underwriters pursuant to this Agreement. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
21
(e) The
obligations of the Company under this Section 8 shall be in addition to any
liability that the Company may otherwise have and the benefits of such
obligations shall extend, upon the same terms and conditions, to each person, if
any, who controls the Underwriters within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability that the
Underwriters may otherwise have and the benefits of such obligations shall
extend, upon the same terms and conditions, to the Company and its officers,
directors and each person who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act.
(f) For
purposes of this Agreement, the Underwriters confirm, and the Company
acknowledges, that there is no information concerning the Underwriters furnished
in writing to the Company by the Underwriters specifically for preparation of or
inclusion in the Registration Statement, the Time of Sale Disclosure Package, or
the Final Prospectus, other than the statements set forth in the last paragraph
on the cover page of the Final Prospectus and the statements set forth in the
“Underwriting” section of the Final Prospectus and Time of Sale Disclosure
Package, only insofar as such statements relate to the amount of selling
concession and re-allowance or to over-allotment and related activities that may
be undertaken by the Underwriters.
9. Representations
and Agreements to Survive Delivery. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, including, but not limited to, the
agreements of the Underwriters and the Company contained in Section
6(a)(vii) and Section 8 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Underwriters
or any controlling person thereof, or the Company or any of its officers,
directors, or controlling persons, and shall survive delivery of, and payment
for, the Shares to and by the Underwriters hereunder.
22
10. Termination of this
Agreement.
(a) The
Underwriters shall have the right to terminate this Agreement by giving notice
to the Company as hereinafter specified at any time at or prior to the Closing
Date, if (i) trading in the Company’s Common Stock shall have been suspended by
the Commission or NYSE AMEX or trading in securities generally on the Nasdaq
Global Market, New York Stock Exchange or NYSE AMEX shall have been suspended,
(ii) minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, on the Nasdaq Global
Market, New York Stock Exchange or NYSE AMEX, by such exchange or by order of
the Commission or any other governmental authority having jurisdiction, (iii) a
banking moratorium shall have been declared by federal or state or PRC
authorities, (iv) there shall have occurred any attack on, outbreak or
escalation of hostilities or act of terrorism involving the United States or the
PRC, any declaration by the United States or the PRC of a national
emergency or war, any change in financial markets, any substantial change or
development involving a prospective substantial change in United States or the
PRC or other international political, financial or economic conditions or any
other calamity or crisis, or (v) the Company suffers any loss by strike, fire,
flood, earthquake, accident or other calamity, whether or not covered by
insurance, the effect of which, in each case described in this subsection (a),
in the Underwriters’ reasonable judgment is material and adverse and makes it
impractical or inadvisable to proceed with the completion of the sale of and
payment for the Shares. Any such termination shall be without
liability of any party to any other party except that the provisions of Section
6(a)(vii) and Section 8 hereof shall at all times be effective and shall survive
such termination.
(b) If
the Underwriters elect to terminate this Agreement as provided in this Section,
the Company shall be notified promptly by the Underwriters by telephone,
confirmed by letter.
11. Notices. Except as
otherwise provided herein, all communications hereunder shall be in writing and,
if to Underwriters, shall be mailed, delivered or telecopied to Roth Capital
Partners, LLC, 24 Corporate Plaza, Newport Beach, CA 92660, telecopy number:
(949) 720-7227, Attention: Managing Director; and if to the Company,
shall be mailed, delivered or telecopied to it at NeoStem, Inc. 420 Lexington
Avenue, Suite 450, New York, New York 10170, telecopy number: 646-514-7787,
Attention: Chief Executive Officer; or in each case to such other
address as the person to be notified may have requested in
writing. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice of a new
address for such purpose. shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.
23
12. Persons
Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 8. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation
any legal or equitable remedy or claim under or in respect of this Agreement or
any provision herein contained. The term “successors and assigns” as
herein used shall not include any purchaser, as such purchaser, of any of the
Shares from the Underwriters.
13. Absence
of Fiduciary Relationship. The Company
acknowledges and agrees that: (a) the Underwriters have been retained
solely to act as underwriters in connection with the sale of the Shares and that
no fiduciary, advisory or agency relationship between the Company and the
Underwriters has been created in respect of any of the transactions contemplated
by this Agreement, irrespective of whether the Underwriters have advised or
are advising the Company on other matters; (b) the price and other terms of the
Shares set forth in this Agreement were established by the Company following
discussions and arm’s-length negotiations with the Underwriters and the Company
is capable of evaluating and understanding and understands and accepts the
terms, risks and conditions of the transactions contemplated by this Agreement;
(c) the Company has been advised that the Underwriters and their affiliates are
engaged in a broad range of transactions that may involve interests that differ
from those of the Company and that the Underwriters have no obligation to
disclose such interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship; (d) the Company has been advised
that the Underwriters are acting, in respect of the transactions
contemplated by this Agreement, solely for the benefit of the Underwriters, and
not on behalf of the Company.
14. Amendments and
Waivers. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. The failure of a party to
exercise any right or remedy shall not be deemed or constitute a waiver of such
right or remedy in the future. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (regardless of whether similar), nor shall any such waiver be
deemed or constitute a continuing waiver unless otherwise expressly
provided.
15. Partial
Unenforceability. The invalidity or
unenforceability of any section, paragraph, clause or provision of this
Agreement shall not affect the validity or enforceability of any other section,
paragraph, clause or provision.
16. Governing
Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York.
17. Counterparts. This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall each be deemed to be an
original and all such counterparts shall together constitute one and the same
instrument.
24
Please
sign and return to the Company the enclosed duplicates of this letter whereupon
this letter will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
|
Very
truly yours,
NEOSTEM,
INC.
|
|||
|
|
By:
|
/s/Robin L. Smith | |
| Name: | Robin L. Smith | ||
| Title: | CEO | ||
|
Confirmed
as of the date first above-
mentioned
by Roth on behalf of the Underwriters.
ROTH
CAPITAL PARTNERS, LLC
|
|||
|
By:
|
/s/Aaron Gurewitz | ||
| Name: | Aaron Gurewitz | ||
| Title: | Head of Equity Capital Markets | ||
[Signature
page to Underwriting Agreement]
SCHEDULE
I
SCRIPT
|
Issuer:
|
NeoStem,
Inc. (the “Company”)
|
|
Symbol:
|
NBS
|
|
Security:
|
Common
stock, par value $0.001 per share
|
|
Size:
|
5,000,000
shares of common stock
|
|
Over-allotment
option:
|
750,000
additional shares of common stock
|
|
Public
offering price:
|
$1.35
per share
|
|
Underwriting
discounts and commissions:
|
$0.0945
per share1
|
|
Net
proceeds (excluding the over-allotment):
|
$5,697,500
(after deducting the underwriters’ discounts and commissions and estimated
offering expenses payable by the Company)
|
|
Pro
forma net tangible book value dilution per share to new investors in this
offering:
|
$0.65
per share
|
|
Total
Equity
|
$45,981,900
|
|
Trade
date:
|
February
12, 2010
|
|
Settlement
date:
|
February
18, 2010
|
SCHEDULE
II
Company
Opinions
1. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with the requisite
corporate power to own or lease, as the case may be, and operate its properties,
and to conduct its business, as described in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus.
2. The
Company is duly registered or qualified to do business as a foreign corporation
and is in good standing under the laws of such states in which qualification or
registration is required.
3. The
issuance of the Underwritten and Additional Shares has been duly authorized and,
when issued and paid for by you pursuant to the Agreement, the Shares will be
validly issued, fully paid and nonassessable.
4. The
holders of outstanding shares of capital stock of the Company are not entitled
to any preemptive right or right of first refusal (i) set forth in or provided
for by the Company’s currently effective Certificate of Incorporation or By-Laws
(collectively, the “Company Governing
Documents”), or (ii) to our knowledge, granted by the Company in any
currently effective written agreement.
5. The
statements in the most recent Prospectus that is part of the Time of Sale
Disclosure Package (the “Time of Sale
Prospectus”) under the heading "Risk Factors - Risks Related to this
Offering” and the Final Prospectus under the headings “Description of Capital
Stock” and in the Registration Statement in Part II, Item 15, insofar as
such statements purport to summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of such legal
matters, agreements, documents or proceedings, in all material respects.
6. We
have been orally advised by the Staff of the Commission that the Registration
Statement has become effective under the Securities Act. We have been
orally advised by the Staff of the Commission that no stop order suspending the
effectiveness of the Registration Statement has been issued, and to our
knowledge, no proceedings for that purpose have been instituted or overtly
threatened by the Commission. Any required filing of the Final
Prospectus, and any required supplement thereto, pursuant to Rule 424(b) under
the Securities Act, has been made in the manner and within the time period
required by Rule 424(b).
7. The
Agreement has been duly authorized by all necessary corporate action on the part
of the Company and has been duly executed and delivered by the Company.
8. To
the knowledge of such counsel, there is no pending or threatened action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its subsidiaries or affiliates or
its or their property of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Registration
Statement and the Time of Sale Prospectus, and, to our knowledge, there is no
contract or other document of a character required to be described in the
Registration Statement or the Time of Sale Prospectus, or to be filed as an
exhibit to the Registration Statement, which is not described or filed as
required.
9. The
Company is not, and after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Time of Sale
Disclosure Package and the Final Prospectus will not be, required to register as
an “investment company” as defined in the Investment Company Act.
10. No
consent, approval, authorization or filing with or order of any U.S. Federal,
State of Delaware or State of New York court or governmental agency or body
having jurisdiction over the Company is required, under the laws, rules and
regulations of the United States of America and the State of Delaware, for the
consummation by the Company of the transactions contemplated by the Agreement,
except (i) such as have been made or obtained under the Securities Act and (ii)
such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Shares by you in the manner
contemplated in the Agreement and in the Final Prospectus, as to which we
express no opinion.
11. The
issue and sale of the Shares pursuant to the Agreement will not result in a
breach or violation of (or constitute any event that with notice, lapse of time
or both would result in a breach of violation of): (i) the Company Governing
Documents; (ii) any statute, rule, or regulation of the United States of America
or the State of Delaware or the State of New York which, in our experience, is
typically applicable to transactions of the nature contemplated by the Agreement
and is applicable to the Company; (iii) any currently effective order, writ,
judgment, injunction, decree, or award that names and has been entered against
the Company and of which we have knowledge; or (iv) any Contract that was filed
as an exhibit to the Registration Statement, in each case (ii) through (iv) the
breach or violation of which would materially and adversely affect the
Company.
12. To
our knowledge, except as set forth in the Time of Sale Disclosure Package and
the Final Prospectus, the Company is not a party to any written agreement
granting any holders of securities of the Company rights to require the
registration under the Securities Act of resales of such
securities.
In
addition to rendering legal advice and assistance to the Company in the course
of the preparation of the Registration Statement and the Time of Sale Disclosure
Package and the Final Prospectus, involving, among other things, discussions and
inquiries concerning various legal matters and the review of certain corporate
records, documents and proceedings, we also participated in conferences with
certain officers and other representatives of the Company, its independent
certified public accountants and you and your counsel, at which the contents of
the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus, the information incorporated in the Time of Sale Disclosure Package
and the Final Prospectus and related matters were discussed. We have
also reviewed and relied upon certain corporate records and documents of the
Company, letters from counsel and accountants, and oral and written statements
and certificates of officers and other representatives of the Company and others
as to the existence and consequences of certain factual and other
matters.
The
purpose of our professional engagement was not to establish or confirm factual
matters or financial or quantitative information. Therefore, we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements or information contained or incorporated by reference
in the Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectus and have not made, or undertaken any obligation to make, an
independent check or verification thereof. Moreover, many of the
determinations required to be made in the preparation of the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus involve
matters of a non-legal nature.
However,
subject to the foregoing and based on our participation, review and reliance
described in the second preceding paragraph, (i) we believe (a) the
Registration Statement (as of its effective date), the Time of Sale Disclosure
Package (as of the Applicable Time), the Final Prospectus (as of its date), and
any further amendments and supplements thereto (as of their respective dates),
as applicable, made by the Company prior to the Closing Date (other than the
financial statements and schedules and other financial and statistical data
included in the Registration Statement, Final Prospectus or Time of Sale
Disclosure Package, as to which we express no belief) appeared on their face to
be appropriately responsive, and complied as to form, in all material respects
to the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder and (b) the documents incorporated by
reference in the Registration Statement and the Time of Sale Prospectus and the
Final Prospectus, at the time they were filed with the Commission, appeared on
their face to be appropriately responsive, and complied as to form, in all
material respects to the requirements of the Exchange Act and the applicable
rules and regulations of the Commission thereunder, and (ii) we confirm
that no facts have come to our attention that caused us to believe (a) that the
Registration Statement or any amendment thereto filed by the Company prior to
the Closing Date, when the Registration Statement or such amendment became
effective, except as it relates to any class of securities other than the Common
Stock, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (b) that the Time of Sale Disclosure Package, as of 6:00
a.m. PDT on February 12, 2010 (the “Applicable Time,”
which, you have informed us, is a time before the time of the first sale of the
Shares by any Underwriter), contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (c) that, as of its date and as of the Closing Date, the Final
Prospectus or any further amendment or supplement thereto made by the Company
prior to the Closing Date, except as it relates to any class of securities other
than the Common Stock, contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. We do not express any belief with respect to
the assessments of or reports on the effectiveness of internal control over
financial reporting contained in the Registration Statement, the Time of Sale
Disclosure Package or the Final Prospectus, or financial statements and
schedules and other financial and statistical data included in the Registration
Statement, Final Prospectus or Time of Sale Disclosure Package.
SCHEDULE
III
China
Opinions
1. NeoStem
China has been duly organized and is validly existing as a wholly foreign owned
enterprise with limited liability under the PRC laws. NeoStem China’s
Business License is in full force and effect. NeoStem China has been
duly qualified as a foreign invested enterprise under PRC Laws. 100%
of the equity interests of NeoStem China are owned by the Company, and to the
best of our knowledge after due inquiry, such equity interests are free and
clear of all liens or pledges. The Articles of Association and the
Business License of NeoStem China comply with the requirements of PRC Laws and
are in full force and effect.
2. Each
of Qingdao Niao and Beijing Ruijieao has been duly organized and is validly
existing as a limited liability company under the PRC Laws. The
Business License of each of Qingdao Niao and Beijing Ruijieao is in full force
and effect. 100% of the equity interests of the Qingdao Niao is owned
by Liu Hongbing and 100% of the equity interests of the Beijing Ruijieao is
owned by Fu Wenyuan, and to the best of our knowledge after due inquiry, except
as set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus, such equity interests are free and clear of all liens
or pledges. The Articles of Association and the Business License of
each of Qingdao Niao and Beijing Ruijieao comply with the requirements of PRC
Laws and are in full force and effect.
3. Except
as set forth in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectus, Erye, ever since it was established as a
Sino-foreign equity joint venture in 2005, has been duly organized and is
validly existing as a Sino-foreign equity joint venture under the PRC
Laws. The Business License of Erye is in full force and
effect. 51% of the equity interests of Erye is owned by China
Biopharmaceutical Co. Ltd. and the other 49% of the equity interests in Erye is
owned by Suzhou Erye Economic and Trade Co. Ltd., and to the best of our
knowledge after due inquiry, such equity interests are free and clear of all
liens, or pledges. Except as set forth in the Registration Statement, the Time
of Sale Disclosure Package and the Final Prospectus, the Articles of
Association, and the Business License of Erye comply with the requirements of
PRC Laws and are in full force and effect.
4. Except
as set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus, each of the PRC Group Companies has full corporate
right, power and authority and has all necessary governmental authorizations of
and from, and has made all necessary declarations and filings with, all
governmental agencies to own and use its material properties and assets to
conduct its business as described in the Registration Statement, the Time of
Sale Disclosure Package and the Final Prospectus, and each of the PRC Group
Companies is in compliance with the provisions of all such governmental
authorizations and conducts its business as described in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus in
accordance with, and is not in violation of, PRC Laws to which it is subject or
by which it is bound, in all material respects.
5. Except
as set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus, the ownership structure of the PRC Group Companies
does not violate any prohibitory provisions of the PRC Laws, the establishment
of such ownership structure does not violate any explicit provisions of the PRC
Laws, and no consent, approval or license other than those already obtained is
required under existing PRC laws for such ownership structure. To the
best of our knowledge after due and reasonable inquiries, each of the PRC Group
Companies’ business operations as described in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus comply with PRC Laws in
all material respects.]
6. Except
as set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus, each of the PRC Group Companies owns or otherwise has
the legal right to use the intellectual property described in the “Risk Factors”
and “Business” sections of the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus (the “Intellectual
Property”).
7. Except
as set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus, to the best of our knowledge after due and reasonable
inquiries, no Intellectual Property is subject to any outstanding decree, order,
injunction, judgment or ruling restricting the use of such Intellectual Property
in the PRC that would impair the validity or enforceability of such Intellectual
Property, nor has the Company or any of the PRC Group Companies received any
notice of any claim of infringement or conflict with any such rights of
others.
8. Neither
the Company nor any of the PRC Group Companies will have any obligation to
withhold PRC taxes with respect to holders of the Shares who are non-residents
of the PRC in respect of (A) any payments, dividends or other distributions made
on the Shares or (B) gains made on sales of the Shares between non-residents of
the PRC consummated outside the PRC.
9. Except
as set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus, there are no legal, arbitration or governmental
proceedings in progress or pending or, to the best of our knowledge after due
and reasonable inquiries, threatened in writing, in the PRC to which the
Company, or any PRC Group Company is a party or of which any property of any PRC
Group Company is subject.
10. On
August 8, 2006, six PRC regulatory agencies, namely, the PRC Ministry of
Commerce, the State Assets Supervision and Administration Commission, the State
Administration for Taxation, the State Administration for Industry and Commerce,
the China Securities Regulatory Commission (the “CSRC”), and the State
Administration of Foreign Exchange, jointly adopted the Regulations on Mergers
and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A
Rule”), which became effective on September 8, 2006. The M&A Rule
purports, among others, to require offshore special purpose vehicles (the
“SPVs”), controlled directly or indirectly by PRC companies or individuals, for
purposes of overseas listing of their interests in PRC domestic companies, to
obtain the approval of the CSRC prior to publicly listing the securities of the
SPVs on an overseas stock exchange. On September 21, 2006, pursuant to the
M&A Rule and other PRC Laws, the CSRC, in its official website, promulgated
relevant guidance with respect to the issues of indirect issuing, listing and
trading of domestic enterprises’ securities on overseas stock exchanges,
including a list of application materials with respect to the listing on
overseas stock exchanges by SPVs. Based on our understanding of current PRC
Laws, we believe that CSRC approval is not required in the context of this
Transaction.
11. As
a matter of PRC Laws, none of the PRC Group Companies or their material
properties, or assets or revenues, has any right of immunity, on any grounds,
from any legal action, suit or proceeding, from the giving of any relief in any
such legal action, suit or proceeding, from setoff or counterclaim, from the
jurisdiction of any court, from service of process, attachment upon or prior to
judgment, or attachment in aid of execution of judgment, or from execution of a
judgment, or other legal process or proceeding for the giving of any relief with
respect to their respective obligations, liabilities or any other matter under
or arising out of or in connection with the Transaction.
12. The
sale of the Shares and the compliance by the Company with all of the provisions
of the Underwriting Agreement and the consummation of the Transaction do not
result in any violation of the provisions of the Articles of Association, or
Business License of any of the PRC Group Companies or any PRC Laws, including
without limitation the M&A Rule.
13. No
governmental authorization of any governmental agency in the PRC is required for
the consummation of the Transaction, other than those already
obtained.
14. Although
we do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the Final
Prospectus, we have no reason to believe that any introduction or description of
PRC Laws or any legal conclusion based on PRC Laws included in the Registration
Statement, when it became effective, the Time of Sale Disclosure Package, as of
the date of the Underwriting Agreement and the date hereof, or the Final
Prospectus, at the time the Final Prospectus was filed with the Commission or at
the date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein not misleading.
15. The
entry into, and performance or enforcement of the Underwriting Agreement in
accordance with its terms will not subject the Underwriter to any requirement to
be licensed or otherwise qualified to do business in the PRC, nor will the
Underwriter be deemed to be resident, domiciled, carrying on business or subject
to taxation through an establishment or place in the PRC or in breach of any PRC
Laws by reason of entry into, performance or enforcement of the Underwriting
Agreement or the Transaction.
16. Except
as set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus, none of the PRC Group Companies has taken any action
nor have any steps been taken or legal or administrative proceedings been
commenced or threatened in writing for the winding up, dissolution or
liquidation of any of the PRC Group Companies or for the suspension, withdrawal,
revocation or cancellation of any of their respective Business
License.
17. The
statements included in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectus under the caption (A) “Risk Factors,” including
but not limited to the Risk Factors entitled “Eyre’s success is dependent upon
its ability to establish and maintain its intellectual property rights”,
“China’s State Food and Drug Administration’s regulations may limit our ability
to develop, license, manufacture and market our products and services”, and “In
China, we plan to conduct research and development activities related to stem
cells in cooperation with two domestic Chinese companies. If these
activities are regarded by PRC government authorities as “human genetic
resources research and development activities,” additional approvals by PRC
government authorities will be required” (collectively, the “Regulatory
Information”) that summarize the provisions of the PRC Food, Drug and Cosmetic
Act (“PFDCA”) and implementing regulations, are accurate summaries in all
material respects of the provisions purported to be summarized under such
captions and do not omit to summarize applicable material provisions of the
PFDCA or its implementing regulations necessary to make those statements not
misleading.
18. Nothing
has come to the attention of us, without making any independent investigation,
that causes us to believe that (A) the Regulatory Information, or (B) the
statements under the caption “Business – Governmental Regulation” (collectively,
the “Regulatory Statements”) contained or contains an untrue statement of a
material fact related to State Food and Drug Administration (the “SFDA”) matters
or omitted or omits to state a material fact related to SFDA matters required to
be stated therein or necessary to make the statements therein not
misleading.
SCHEDULE
IV
Patent
Opinions
The
following opinions are subject to delivery of the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus to such
counsel.
1. To our knowledge, the
statements included in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectus relating to Patent Rights under the captions
“Risk Factors – The University of Louisville has the ability to exercise
significant influence over the future development of our VSEL™ technology”;
“Risk Factors - There is significant uncertainty about the validity and
permissible scope of patents in the biotechnological industry and we may not be
able to obtain patent protection”; “Risk Factors - We may be unable to protect
our intellectual property from infringement by third parties”; “Risk Factors -
Third parties may claim that we infringe on their intellectual property”; “Risk
Factors - We may be unable to maintain our licenses, patents or other
intellectual property and could lose important protections that are material to
continuing our operations and growth and our ability to achieve profitability”
and “Business – Intellectual Property”; (collectively, the “Intellectual Property
Information”), are accurate and complete in all material respects and
present fairly the information purported to be shown; nothing has come to our
attention that causes us to believe that the Intellectual Property Information
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
2. We are not aware of (i)
any legal or governmental proceedings pending relating to Patent Rights of the
Company (other than normal processing of the Company's patent applications
before applicable patent authorities), or (ii) that any such proceedings are
threatened or contemplated by governmental authorities or
others.
3. To our knowledge (i) the
Company is not infringing, or upon the commercialization of collection and
banking services for adult stem cells or very small embryonic-like stem cells
obtained via apheresis from peripheral blood described in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus as under
development, would not infringe, any valid claim of any issued patents of
others, and (ii) there are no infringements by others of any of the Patent
Rights of the Company or any of its affiliates or
subsidiaries.
4. We have no knowledge of
any facts which would preclude the Company from having valid license rights or
clear title to the Patent Rights referenced in the Registration Statement, the
Time of Sale Disclosure Package or the Final Prospectus; we have no knowledge
that the Company lacks or will be unable to obtain any rights or licenses to use
all Patent Rights that are, or would be, necessary to conduct the business now
conducted or proposed to be conducted as described in the Registration
Statement, the Time of Sale Disclosure Package or the Final Prospectus, except
as described in the Registration Statement, the Time of Sale Disclosure Package
and the Final Prospectus.
5. We have disclosed or
intend to disclose to the United States Patent and Trademark Office any
references known by us to be material to the patentability of the claimed
inventions in the United States patent applications in Patent
Rights. We are not aware of any fact with respect to any allowed
claims of Patent Rights of the Company presently on file that (i) would preclude
the issuance of patents with respect to such applications, (ii) would lead such
counsel to conclude that such patents, when issued, would not be valid and
enforceable in accordance with applicable regulations or (iii) would result in a
third party having any rights in any patents issuing from such patent
applications.
“Patent
Rights” shall mean the patent applications listed on Exhibit 1 (attached
hereto).
SCHEDULE
V
Regulatory
Opinions
1. The
statements included in the Registration Statement, the Time of Disclosure
Package and the Final Prospectus under the captions “Risk Factors” and “Business
– Government Regulation” (collectively, the “Regulatory
Information”) that summarize the provisions of the Federal Food, Drug and
Cosmetic Act (“FDCA”) and
implementing regulations are accurate summaries in all material respects of the
provisions purported to be summarized under such captions and do not omit to
summarize applicable provisions of the FDCA or its implementing regulations
necessary to make those statements not misleading; and
2. Nothing
has come to the attention of such counsel, without making any independent
investigation, that causes such counsel to believe that the Regulatory
Information contained or contains an untrue statement of a material fact related
to matters regulated by the U.S. Food and Drug Administration (“FDA”) or omitted or
omits to state a material fact related to FDA matters required to be stated
therein or necessary to make the statements therein not misleading.
SCHEDULE
VI
Lowenstein
Opinion
1. The
offer and sale of the Common Stock pursuant to the Registration Statement will
not result in a breach or violation of (or constitute any event that with
notice, lapse of time or both would result in a breach or violation of): (i) the
Company’s currently effective Certificate of Incorporation or By-Laws; (ii) any
statute, rule, or regulation of the United States of America or the State of
Delaware which, in our experience, is typically applicable to transactions of
the nature contemplated by the Agreement and is applicable to the Company; (iii)
any currently effective order, writ, judgment, injunction, decree, or award that
names and has been entered against the Company and of which we have knowledge;
or (iv) any contract that was filed as an exhibit to the Company’s registration
statement on Form S-4, declared effective on October 7, 2009 (333-160578), in
each case (ii) through (iv) the breach or violation of which would materially
and adversely affect the Company.
SCHEDULE
VII
Lock-Up
Exemptions
May 2008
Private Placement (investors)
Subscription Agreement, between
NeoStem, Inc. and the investor(s).
Warrant to Purchase Shares of Common
Stock, issued to the investor(s).
May 2008
Private Placement (Finder’s Warrants – JH Darbie & Co., Inc.)
Investment
Banking Agreement, made and entered into as of April 3, 2008, by and between
NeoStem, Inc. and JH Darbie & Co., Inc.
Warrant
to Purchase Shares of Common Stock, issued to J.H. Darbie & Co., Inc. for
the purchase of 7,117 shares.
September
2008 Private Placement (RimAsia)
Subscription
Agreement, between NeoStem, Inc. and the investor(s).
Warrant
to Purchase Shares of Common Stock, issued to the investor(s).
October
2008 Private Placement (MKM Master Opportunity Fund)
Subscription
Agreement, between NeoStem, Inc. and the investor(s).
Warrant
to Purchase Shares of Common Stock, issued to the investor(s).
November
2008 Private Placement (Fullbright)
Subscription
Agreement, between NeoStem, Inc. and Fullbright.
Warrant
to Purchase Shares of Common Stock, issued to Fullbright for the purchase of
400,000 shares.
Markman
Warrant
Warrant
to Purchase Shares of Common Stock, issued to Raymond Markman for the purchase
of 28,586 shares.
Margula
Warrant
Consulting
Agreement, dated as of July 28, 2008, by and between Margula Company LLC and
NeoStem, Inc.
Warrant
to Purchase Shares of Common Stock, issued to Margula Company LLC, dated July
28, 2008, for the purchase of 600,000 shares.
JFS
Investments Stock and Warrants (and new warrants)
Consulting
Agreement, dated as of January 1, 2008, by and between JFS Investments Inc. and
NeoStem, Inc.
Warrant
(No. 220) to Purchase Shares of Common Stock, issued to JFS Investments Inc. for
the purchase of 20,000 shares.
Warrant
(No. 221) to Purchase Shares of Common Stock, issued to JFS Investments Inc. for
the purchase of 100,000 shares.
Wall
Street Communications Warrant
Consulting
Agreement, dated as of June 11, 2008, by and between Wall Street Communications
Group, Inc., and NeoStem, Inc.
Warrant
to Purchase Shares of Common Stock, issued to Wall Street Communications Group,
Inc., to purchase 250,000 shares.
Finder’s
Fee and Non-Circumvention Agreement, made and entered into June 19, 2008,
between NeoStem, Inc. and Wall Street Communications Group, Inc.
Solutions
in Marketing Warrant
Retainer
and Fee for Service Agreement Terms and Conditions, entered into by and between
NeoStem, Inc. and Solutions in Marketing, Inc.
Warrant
(No. 219) to Purchase Shares of Common Stock, issued to Solutions in Marketing,
Inc., for the purchase of 3,000 shares.
Series D
Preferred Stock and Warrants
Subscription
Agreement, between NeoStem, Inc. and the investor(s).
Warrant
to Purchase Shares of Common Stock, issued to the investor(s).
Series D
Convertible Redeemable Preferred Stock
Crocker
Coulson Group Warrants
Engagement
agreement, between NeoStem, Inc. and Crocker Coulson Group.
|
NeoStem,
Inc.
|
CCG
Investor Relations, Inc.
|
|
Robin
Smith, CEO
|
Lei
Huang, Account Manager
|
|
Phone:
+1 (212) 584-4174
|
Phone:
+1 (646) 833-3417
|
|
E-mail:
rsmith@neostem.com
|
E-mail:
lei.huang@ccgir.com
|
|
http://www.neostem.com
|
http://www.ccgirasia.com
|
| Crocker Coulson, President | |
| Phone: +1 (646) 213-1915 | |
| E-mail: crocker.coulson@ccgir.com |
NeoStem
Prices Public Offering of 5,000,000 Shares of Common Stock
NEW YORK,
February 11, 2010 – NeoStem, Inc. (NYSE Amex: NBS) (“NeoStem” or the “Company”),
an international biopharmaceutical company with operations in the U.S. and
China, announced today that it priced a public offering of 5,000,000 shares of
its common stock at $1.35 per share. Net proceeds from the offering, after
underwriting discounts and commissions and expenses, will be approximately
$5,697,500. NeoStem has granted the underwriters an option to purchase up to an
additional 750,000 shares to cover
over-allotments, if any.
“We were
pleased by the participation of new institutional investors as well as the
additional investment by our largest shareholder and other insider
participation,” noted Dr. Robin Smith, Chairman and CEO. “We remain committed to
expanding our revenue opportunities in China, both through our pharmaceutical
business and soon to be launched adult stem cell initiatives. The proceeds of
this offering will help us reach our goals.”
The
Company intends to use the net proceeds from this offering for the construction
of manufacturing and lab facilities in China and the U.S., stem cell-related
research and development projects, development and licensing of new
pharmaceutical products in China, and for working capital and general corporate
purposes.
Roth
Capital Partners, LLC served as sole book-running manager and Maxim Group and
Gilford Securities acted as co-managers for the offering. The offering is
subject to customary closing conditions and is expected to close on February 18,
2010.
This
press release does not constitute an offer to sell or a solicitation of an offer
to buy the securities in this offering. The offering may be made only by means
of a prospectus, copies of which may be obtained, when available, from Roth
Capital Partners, LLC, Attention: Equity Capital Markets, 24 Corporate Plaza
Drive, Newport Beach, CA 92660, by telephone at (800) 678-9147, or via email at
rothecm@roth.com.
About
NeoStem, Inc.
NeoStem,
Inc. is engaged in the development of stem cell-based therapies, pursuit of
anti-aging initiatives and building of a network of adult stem cell collection
centers in the U.S. and China that enable people to donate and store their own
(autologous) stem cells for potential personal use in times of future medical
need. The Company is also the licensee of various stem cell technologies,
including a worldwide exclusive license to VSEL(TM)
Technology, which uses very small embryonic-like stem cells shown to have
several physical characteristics that are generally found in embryonic stem
cells, and is pursuing the licensing of other technologies for therapeutic use.
NeoStem’s majority-controlled Chinese pharmaceutical operation, Suzhou Erye,
manufactures and distributes generic antibiotics in China. For more information,
please visit: www.neostem.com.
Forward-Looking
Statements
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
reflect management's current expectations, as of the date of this press release,
and involve certain risks and uncertainties. Forward looking statements include
statements herein with respect to the success of lab and plant construction, new
stem cell projects and new pharmaceutical development and licensing, about which
no assurances can be given. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a result of
various factors. Factors that could cause future results to materially differ
from the recent results or those projected in forward-looking statements include
the "Risk Factors" described in the Company's Registration Statement on Form S-1
filed with the Securities and Exchange Commission on as well as periodic filings
made with the Securities and Exchange Commission. The Company's further
development is highly dependent on future medical and research developments and
market acceptance, which is outside its control.