HOLLISTON, Mass., May 16, 2016 /PRNewswire/ -- Biostage,
Inc. (Nasdaq: BSTG) ("Biostage" or "the Company"), a biotechnology company developing bioengineered organ implants to treat
cancers and other life-threatening conditions of the esophagus, bronchus and trachea, today announced that it has entered into
definitive agreements with institutional investors for an offering of shares of common stock with gross proceeds of approximately
$5 million in an at-the-market registered direct offering. The closing of the offering is expected
to take place on or about May 19, 2016, subject to the satisfaction of customary closing
conditions.
In connection with the offering, the Company will issue approximately 2.8 million registered shares of common stock at a
purchase price of $1.7625 per share. Concurrently in a private placement, for each share of
common stock purchased by an investor, such investor will receive from the Company an unregistered warrant to purchase one-half
of a share of common stock. The warrants have an exercise price of $1.7625 per share, will be
exercisable six months from the date of issuance, and will expire five years from the initial exercise date.
Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC, acted as the exclusive
placement agent in connection with this offering.
Biostage intends to use the net proceeds from the offering for general corporate purposes, including research and development
and advancing Biostage's Cellframe™ technology toward a targeted filing in late 2016 of an IND application with the FDA to
initiate clinical trials for the Company's Cellspan™ esophageal implants. Last week Biostage provided a Research Update on its groundbreaking Pre-Clinical esophageal implant.
The shares of common stock described above (but not the warrants or the shares of common stock underlying the warrants) are
being offered pursuant to a shelf registration statement (File No. 333-200926). Such shares of common stock may be offered
only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement.
The warrants and the shares of common stock underlying the warrants to be issued in the offering have not been registered
under the Securities Act of 1933, as amended, or applicable state securities laws. Accordingly, the warrants and underlying
shares of common stock underlying the warrants may not be offered or sold in the United States
except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the
Securities Act and such applicable state securities laws.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities
described herein. There shall not be any offer, solicitation of an offer to buy, or sale of securities in any state or
jurisdiction in which such an offering, solicitation, or sale would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction. The Company will file a prospectus supplement with the SEC relating to such
shares of common stock, and following such filing, copies of the prospectus supplement and the accompanying base prospectus
relating to this offering may be obtained at the SEC's website at http://www.sec.gov, or from H.C. Wainwright & Co. by e-mailing placements@hcwco.com. The warrants and the shares of common
stock underlying the warrants issued in the offering have not been registered under the Securities Act of 1933, as amended or
applicable state securities laws. Accordingly, the warrants and underlying shares of common stock may not be offered or sold in
the United States except pursuant to an effective registration statement or an applicable
exemption from the registration requirements of the Securities Act and such applicable state securities laws.
About Biostage: (www.biostage.com)
Biostage is a biotechnology company developing bioengineered organ implants based on the company's new Cellframe™ technology
which combines a proprietary biocompatible scaffold with a patient's own stem cells to create Cellspan™ organ implants. Cellspan
implants are being developed to treat life-threatening conditions of the esophagus, bronchus or trachea with the hope of
dramatically improving the treatment paradigm for patients. Based on its preclinical data, Biostage has selected life-threatening
conditions of the esophagus as the initial clinical application of its technology.
Cellspan implants are currently being advanced and tested in a collaborative preclinical study. This testing is expanding the
base of preclinical data in support of Biostage's goal of filing an Investigational New Drug (IND) application with the U.S. FDA
in late 2016. The IND will seek approval to initiate clinical trials for its esophageal implants in humans.
Forward-Looking Statements:
Some of the statements in this press release are "forward-looking" and are made pursuant to the safe harbor provision of the
Private Securities Litigation Reform Act of 1995. These "forward-looking" statements in this press release include, but are not
limited to, statements relating to Biostage's expectations regarding the completion, timing, pricing and size of the offering
described in this press release, whether expressed or implied; development expectations and regulatory approval of any of our
products, including those utilizing our Cellframe technology, by the FDA, EMA, MHRA or otherwise, which expectations or approvals
may not be achieved or obtained on a timely basis or at all; or success with respect to any collaborations, clinical trials and
other development and commercialization efforts of our products, including those utilizing our Cellframe technology, which
such success may not be achieved or obtained on a timely basis or at all. These statements involve risks and uncertainties that
may cause results to differ materially from the statements set forth in this press release, including, among other things, our
ability to obtain and maintain regulatory approval for our products; plus other factors described under the heading "Item 1A.
Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 or
described in our other public filings. Our results may also be affected by factors of which we are not currently aware. The
forward-looking statements in this press release speak only as of the date of this press release. Biostage expressly disclaims
any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its
expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is
based.
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SOURCE Biostage, Inc.