Pluristem Therapeutics (PSTI) Enters $30M Equity Investment Agreement with China's Innovative Medical

October 25, 2016 6:41 AM EDT
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Pluristem Therapeutics Inc. (Nasdaq: PSTI) announced it has signed a term sheet for an investment of approximately $30,000,000 by China-based Innovative Medical Management Co., Ltd. (Innovative Medical) (stock code: 002173), a publicly listed Chinese Company active in the healthcare industry and an affiliate of Zheshang Venture Capital Co., Ltd. (ZSVC). ZSVC has ¥ 30 billion yuan ($4.45 billion) under management through more than 30 venture capital, private equity, angel, and buyout funds. The term sheet has been approved by Innovative Medical’s Board of Directors and is subject to its shares holders’ approval, which is expected to occur on or about November 9, 2016. Upon the approval of Innovative Medical’s shareholders, the term sheet will become binding. Pursuant to the term sheet, approximately 16,890,000 shares of Pluristem common stock will be sold at $1.77 per share. In addition, Pluristem will issue to Innovative Medical approximately 4,422,500 warrants to purchase shares of Pluristem’s common stock with an exercise price of $2.50 per warrant, exercisable for a period of five years. The shares will be subject to a lock up agreement for 6 months after the closing of the agreement. In accordance with the term sheet, Innovative Medical will have one seat on Pluristem’s Board of Directors for as long as it holds at least 12.5% of Pluristem’s issued and outstanding stock. Innovative Medical will also have certain information, registration and pre-emptive rights as well as certain negotiation rights with respect to potential transactions of Pluristem in China.

The parties plan to enter into definitive agreements no later than December 26, 2016. Until the earlier of December 26, 2016 or the entry into the definitive agreements, Pluristem has agreed not to enter into any agreement or arrangement regarding equity financing of the company at a common stock price per share equal to or less than $2.20, without the prior written consent of Innovative Medical.

The securities which may be sold in the proposed private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC) or an applicable exemption from such registration requirements. Pursuant to the term sheet, Pluristem has agreed to file a registration statement with the SEC registering the resale of the shares of common stock purchased in the private placement and the shares of common stock underlying the warrants.

This press release does not constitute an offer to sell or a solicitation of an offer to buy Pluristem’s securities and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Innovative Medical Co. and ZSVC

Innovative Medical Management Co., Ltd (stock code: 002173) was founded in September 2003. The company completed an IPO and listed on the Shenzhen Stock Exchange on 25th September, 2007. Its main business is a combination of healthcare service, hospital management, scientific research, and pearl culture and design. Innovative Medical owns 3 major hospitals in China: Qiqihar Jianhua Hospital, Zhejiang Haining Kanghua Hospital and Jiangsu Futian Rehabilitation Hospital. These hospitals have more than 2,100 professional staff and 2,300 clinical beds.

ZSVC is one of the most active venture capital firms in China. Company executives have extensive industrial and managerial experience, as well as a deep understanding of private equity investments. A leading investment management firm in China, Zheshang Venture Capital (ZSVC) was founded in November 2007, and is headquartered in Hangzhou, with offices in Beijing, Shanghai, Shenzhen, Shenyang and San Francisco. In November 2015, ZSVC became a publicly listed company in China (stock code: 834089).



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