In late trading today, shares of Bio Stem (OTCBB: BTEM) were up 33 cents at $1.88 per share on news of their planned acquisition of Cryobanks International, Inc.
Bio Stem will acquire nearly 9,000 internationally registered cord blood stem cell units presently being inventoried at their Altamore Springs, FL location. This represents one of the largest inventories of donated stem cell units in the world. Cryobanks is a leader in the collection, processing, and banking of stem cells derived from the umbilical cord immediately after birth.
When the merger is complete, Bio Stem will indirectly own the inventory assets held by Cryobanks. If and when cord blood units offered by Cryobanks are used for transplantation, Cryobanks receives $19,000 to $22,500 per unit in reimbursement.
Shortly after the Cryobanks acquisition news came out this morning, Tri State Capital placed a target price of $3.40 per share on Bio Stem common stock. Since March 9th, Bio Stem’s common stock has risen from 60 cents to a high of $2.23 per share.
Back on March 14th, Cryobanks announced that it signed a letter of intent for a $9 million financing. Samarium Technology Group Ltd, a private investment fund with offices in Canada, British Virgin Islands and Europe, agreed to purchase $9 million of class A secured convertible debentures of Cryobanks. The debentures have an interest rate of 10 percent per annum and convert into 7.5 percent of Cryobanks’ outstanding common stock. This deal is expected to close on or before April 15, 2007.
The $9 million is part of an agreement and plan of merger initially filed by Cryobanks and Bio Stem on November 28, 2005. The merger is contingent on the raising of at least $10 million pursuant to a private placement.
Bio Stem recently filed a form NT 10-K with the Securities and Exchange Commission (SEC) notifying that the company’s form 10-K will be filed late. In the filing the company stated, “The registrant has experienced delays in completing its financial statements for the year ended December 31, 2006, as the company’s auditor has not had sufficient time to conduct such audit. As a result, the registrant is delayed in filing its Form 10-K for the year ended December 31, 2006.”
The most recent filing for Bio Stem is for its third quarter ended September 30, 2006. The company reported third quarter revenues of $405 thousand, up 39 percent from the same period last year. The company also reported a better net loss of $188 thousand compared to a loss of $395 thousand for the same period in 2005.
