JERUSALEM, Aug. 13,
2024 /PRNewswire/ -- Scinai Immunotherapeutics
Ltd. (NASDAQ: SCNI) (the "Company"), a biopharmaceutical
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
signed a definitive Loan Restructuring Agreement (the
"Restructuring Agreement") with its lender, the European Investment
Bank (the "EIB"). The Restructuring Agreement also included
an amendment and restatement to the Finance Contract (the "Finance
Contract") between the parties.
In connection with the transactions, an amount equal to
approximately EUR 26.6 million
(equal to approximately $29 million), including interest
accrued to date, owed by the Company to the EIB under the Finance
Contract between the parties will be converted into 1,000 preferred
shares, no par value per share, of the Company (the "Preferred
Shares"). Following the conversion, the total outstanding loan
amount owed by the Company to the EIB will be EUR 250,000 (equal to approximately $273,000). The new outstanding loan amount will
have a maturity date of December 31, 2031, will not be
prepayable in advance, and no interest will accrue or be due and
payable on such amount.
The terms of the Preferred Shares are set forth in the Amended
and Restated Articles of Association of the Company approved by the
shareholders at the Extraordinary Meeting of Shareholders of the
Company held today, August 12, 2024 (the "Amended Articles").
The Preferred Shares are convertible (in whole or in part), at the
option of the EIB, into a fixed number of ADSs equal to in the
aggregate 19.5% of the fully diluted capital of the Company as of
the closing date. The Preferred Shares do not contain any
anti-dilution provisions, do not accrue dividends, and are not
subject to mandatory redemption, but are redeemable at the election
of the Company, as more fully described below, at a cumulative
redemption value of $34 million.
Amir Reichman, CEO of the
Company, commented, "Scinai's management and board of directors
once again extend their appreciation and thanks to the EIB's
officers for their relentless support and cooperation. The
completion of this important financial contract restructuring will
eliminate almost $28 million of debt
and its conversion to equity marks a significant turning point for
the Company. We expect this achievement to help establish a
more stable financial base for Scinai and propel Scinai's plans to
develop novel therapeutics for the treatment of unmet needs within
inflammation and immunology diseases."
The Preferred Shares entitle the holders to redemption payments
in the aggregate amount of $34 million ($34,000 per Preferred Share) in the event that
the Company elects, at its sole discretion, to make any such
redemption payments, provided that such redemption is in compliance
with applicable law, including the Company's legal ability to pay a
dividend to its shareholders. In the event of
Liquidation (as defined in the Amended Articles) the Preferred
Shares are entitled to distributions up to the then unpaid
redemption value before distributions are made to holders of
ordinary shares. In the event a Preferred Share is converted into
ADSs, the right to receive such payment for such Preferred Share
will be extinguished. The Company has a right of first refusal in
the event that the EIB intends to sell, transfer, assign or
otherwise dispose of any or all of the Preferred Shares.
The Preferred Shares also contain a provision preventing the
holder from converting Preferred Shares into ADSs to the extent
that (i) the holder would become the beneficial owner of more than
4.99% of the Company's outstanding ADSs and (ii) the holder will
receive, or would have been entitled to receive, within the twelve
month period prior to such conversion, an aggregate number of ADSs
in excess of 4.99% of the ADSs issued and outstanding at the time
of such conversion. In addition, a holder of Preferred Shares may
not convert such shares for a period of twelve (12) months
commencing on the date of issuance of the Preferred Shares.
In addition, the Company may only take any of the
following actions provided (a) it either (i) first redeems all
then-outstanding Preferred Shares by making a redemption payment or
(ii) obtains the written consent or affirmative vote of the holders
of a majority of the Preferred Shares in order to proceed without
making such a redemption; or (b) the action in question is not in
the control of the Company: incurring certain
indebtedness, consummating certain acquisition or merger
transactions, taking any action or step in relation to the
delisting of the Company's securities on Nasdaq; authorizing
the creation of any security having rights, preferences or
privileges equal to or greater than those of the Preferred Shares,
including the issuance of additional Preferred Shares.
The amendments to the Finance Contract also eliminate the
requirement for the Company to pay to the EIB the variable
remuneration previously required under the Finance Contract.
The closing of the transaction is subject to customary
closing conditions.
About Scinai Immunotherapeutics
Scinai Immunotherapeutics Ltd. (NASDAQ: SCNI) is a
biopharmaceutical company with two complementary business units,
one focused on in-house development of inflammation and immunology
(I&I) biological therapeutic products beginning with an
innovative, de-risked pipeline of nanosized VHH antibodies
(NanoAbs) targeting diseases with large unmet medical needs, and
the other a boutique CDMO providing biological drug development,
analytical methods development, clinical cGMP manufacturing, and
pre-clinical and clinical trial design and execution services for
early stage biotech drug development projects.
Company website: www.scinai.com.
Company Contacts:
Investor Relations | +972 8 930 2529 | ir@scinai.com
Business Development | +972 8 930 2529 | bd@scinai.com
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Litigation Reform Act of 1995. Words
such as "expect," "believe," "intend," "plan," "continue," "may,"
"will," "anticipate," and similar expressions are intended to
identify forward-looking statements. All statements, other than
statements of historical facts, are forward-looking statements.
Examples of such statements include, but are not limited to, the
closing of the transaction with the EIB. These forward-looking
statements reflect management's current views with respect to
certain current and future events and are subject to various risks,
uncertainties and assumptions that could cause the results to
differ materially from those expected by the management of Scinai
Immunotherapeutics Ltd. Risks and uncertainties include, but are
not limited to, the risk that the closing of the transaction with
the EIB will not occur or will be delayed. More detailed
information about the risks and uncertainties affecting the Company
is contained under the heading "Risk Factors" in the Company's
Annual Report on Form 20-F filed with the Securities and Exchange
Commission ("SEC") on May 15, 2024,
and the Company's subsequent filings with the SEC. Scinai
undertakes no obligation to revise or update any forward-looking
statement for any reason.
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SOURCE Scinai Immunotherapeutics Ltd.