Every party needs a pooper. After celebrating solid gains yesterday, Biostar Pharmaceuticals Inc (NASDAQ:BSPM) investors saw their shares falling nearly 15% today, after the Chinese pharmaceuticals maker announced that it has entered into a securities purchase agreement with certain institutional investors for the sale of 425,000 shares of common stock in a registered direct offering at the price of $4.50 per share, 19% discount to yesterday’s closing price.
In addition, warrants to purchase 212,500 shares of common stock in the aggregate will be issued to the investors. The warrants will be exercisable six months and one day from the date of the closing of the offering at an exercise price of $5.55 per share and expire 3 1/2 years from the date of issuance.
Gross proceeds of the offering, before deducting placement agent fees and other estimated offering expenses payable by the Company, are expected to be approximately $1.91 million. The net proceeds from this offering will be used for working capital and other general corporate purposes.
The completion of the offering is expected to occur on or before October 17, 2016, subject to customary closing conditions. FT Global Capital, Inc. served as the exclusive placement agent for the offering. (Original Source)
BioStar Pharmaceuticals, Inc., develops, manufactures and markets pharmaceutical and health supplement products for a variety of diseases and conditions. The company’s products include AoXing Oleanlic Acid Capsule (treatment for Hepatitis B), Danshen Granule (treatment for coronory heart disease, myocarditis and angina pectoris), GanWang (treatment for colds, runny nose, sore throat, headache and fever), Taohuasan (treatment for bronchial congestion and coughs) and Tianqi Dysmenorrhea Capsule (treatment for dysmenorrhea).