BioTime, Inc. (NYSEMKT: BTX) has kicked off a process for a secondary IPO that is expected to net nearly $17.5 million in gross proceeds. According to the management, the fundraiser is designed to unlock additional capital for use in the company’s various R&D programs and working capital.
How many shares on offer?
BioTime, Inc. (NYSEMKT: BTX) is selling more than 7.3 million shares through underwriters, the result of which will dilute value for existing shareholders. The new shares have been priced at $2.39 apiece and are expected to yield about $17.5 million in net proceeds before deducting expenses and commissions related to the offering.
But the gross proceeds from the secondary IPO could be higher because the underwriters have the option to purchase additional shares numbering nearly 1.1 million. BioTime, Inc. (NYSEMKT: BTX) didn’t provide an estimate of the net proceeds it is expecting from the equity transaction, but disclosed what use it has for the net proceeds if and when it receives them.
The primary reason BioTime, Inc. (NYSEMKT: BTX) is fundraising through equity is to fund its R&D programs. The management didn’t reveal exactly which programs are on focus, but in an earlier note to shareholders, there were disclosures about the future R&D plans. For example, the management talked about focusing funds sharply on therapeutic programs that promise the greatest value and have the shortest time to market. The management also discussed plans to advance core programs such as additional clinical trials of OpRegen and Renevia.
Authorized share count goes up for BioTime, Inc. (NYSEMKT: BTX)
BioTime, Inc. (NYSEMKT: BTX)’s secondary IPO comes just shortly after the company received shareholder approval to raise the number of its authorized shares. The new authorized share count is 150 million, up from 125 million previously.
With slightly over 90 million common shares outstanding and about 8 million earmarked for issuance in the latest secondary IPO, there is still room for significant additional stock dilution in BioTime, Inc. (NYSEMKT:BTX).