Under the modified agreement, Medistem will receive $1 million cash and the return of 560,000 shares of Medistem common stock (valued at $700,000 based on the closing price on the date of the transaction).
In exchange, the territory of the license agreement is expanded, Medistem will no longer receive an ongoing royalty stream from the Institute for Cellular Medicine (ICM), and all existing loans and royalties due from ICM are satisfied. Medistem estimates that the value of the consideration received exceeds the value of existing amounts due by over $900,000.
Steve Rivers, CFO of Medistem, said: “Our previous relationship with ICM was success-based, and therefore presented economic uncertainty. The new agreement provides us immediate liquidity and reduces our dependence on revenue streams that are beyond our control.”