Scinai Immunotherapeutics Ltd. (Nasdaq: SCNI) (the "Company"), a biotechnology company focused on developing inflammation and immunology (I&I) biological products and on providing CDMO services through its Scinai Bioservices business unit, today announced that it has received a non-binding Letter of Intent ("LoI") from the European Investment Bank (the "EIB"). This LoI outlines specific indicative terms for converting the EIB's loan into equity in the form of prefunded warrants, which are exercisable into American Depositary Shares ("ADSs") representing 19.5% of the fully diluted capital of the Company at the time of closing, along with a capped variable return primarily in the form of a royalty on the Company's revenues. It is important to note that the number of warrants would be fixed and without anti-dilution rights. The amount of the loan that would be converted is approximately $27.6 million, and based on an initial, unaudited financial analysis, the Company believes that this loan to equity conversion would immediately eliminate the shareholders' deficit of $4.5 million and create an estimated shareholders equity surplus of approximately USD$14.5 million. The Company retained Deloitte to prepare a white paper analyzing the accounting impact of the loan to equity conversion. The accounting analysis is expected to be reflected in the Company's Q3 2024 financial reports. Additional details of the proposed terms are described below. The Company believes that these terms are very favorable to the Company and its shareholders, and that the substantial reduction in its long-term liabilities should improve its standing in the financial community.
As previously announced, the Company has received a Nasdaq Staff determination letter regarding noncompliance with the minimum shareholders' equity required for continued listing (under Listing Rule 5550(b)(1) or the "Rule") and that as part of the hearing previously requested with the Nasdaq Hearings Panel (the 'Hearings Panel") it would present its plan to regain and remain compliant with the Rule (the "Plan") The Company believes that the substantial reduction in long-term liabilities should not only enable it to regain compliance with the Rule but also would allow it to remain compliant for the next 12 months. The Company intends to present its Plan during its upcoming meeting with the Hearings Panel planned for June 18, 2024.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.