Skystar Bio-Pharmaceutical Company (NASDAQ:SKBI) Initiates $5 Million Registered Direct Offering

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Skystar Bio-Pharmaceutical Company (NASDAQ:SKBI), a holding company engaged in the research, development, production, marketing, and sales of veterinary healthcare and medical care products, said Wednesday that it has entered into a definitive agreement with a dedicated healthcare institutional investor to purchase an aggregate of $5 million of registered securities of the company in a registered direct offering.

Under the agreement, the investor shall purchase from the company 790,514 shares of common stock and warrants to purchase up to 197,629 shares of common stock for an aggregate purchase price of $4 million and 1,000 shares of convertible preferred stock and warrants to purchase up to 49,407 shares of common stock for an aggregate purchase price of $1 million.

The shares of common stock have a purchase price of $5.06 per share. The convertible preferred stock has an aggregate stated value of $1,000,000 and a conversion price of $5.06 and carries no dividend rights. The investor shall receive warrants to purchase up to an aggregate of 247,036 shares of common stock with an exercise price of $6.25 per share, which warrants will be exercisable six months following issuance and will expire twelve months from the initial exercise date.

SKBI said it will use a portion of the proceeds of the offering for acquisitions, licenses of new vaccine and aquaculture products, research & development and other general corporate purposes.

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