Cord Blood America Inc. on Tuesday said that it entered into a definitive agreement with a health care fund for a $7.5 million capital commitment to be drawn down by selling preferred stock and warrants.
The Santa Monica company, which collects and preserves umbilical cord blood stem cells for research and treatment though its CorCell unit, said proceeds are expected to be used to fund new stem cell initiatives, potential acquisitions, and working capital needs. The fund providing the financing was not named.
Chief Executive Matthew Schissler said the proceeds, once available and when coupled with internally generated revenues, should be sufficient to fund operations in the foreseeable future. The company's shares now trade for less than 1 cent on the Over-the-Counter Bulletin Board.
"This long term equity financing will allow for the company to grow and expand in ways we have not seen before, without the constant pressure of discounted debt financing," Schissler, a company founder, said in a statement. "To have secured this financing in these difficult economic times is a major signal and endorsement of our business strategies and our management team."
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