Amarantus Signs Non-Binding Term Sheet to Divest Cutanogen Corporation in Exchange for the Extinguishment of Potential $21M+ in Liabilities

Rhea-AI Summary

Amarantus Bioscience Holdings (AMBS) recently announced a non-binding term sheet to sell its Engineered Skin Substitute subsidiary, Cutanogen Corporation. This transaction aims to extinguish between $21.5 million and $25.3 million of secured and unsecured debt. In exchange, AMBS will transfer its subsidiary and 50 million shares of Todos Medical Ltd. common stock. Acting CEO Donald Huffman highlighted this sale as a crucial step toward improving the company's financial position and facilitating a potential capital raise. The completion of the transaction is anticipated in Q2 2022.

Positive

• Potential to extinguish $21.5 million to $25.3 million in debt and payables.
• Formation of a joint venture with a CRO VC to advance the ESS program.
• Anticipation of significant shareholder upside through the recapitalization plan.

Negative

• Debt remains high despite potential extinguishments after the sale.
• Continued reliance on partnerships for advancing clinical programs raises uncertainty.

• Board Member/Acting CEO Provides Shareholder Update
• Sale of Engineered Skin Substitute (ESS) subsidiary, Cutanogen Corporation.
• Emphasis placed on advancing Elto Pharma, Inc. and MANF Therapeutics programs

NEW YORK, NY / ACCESSWIRE / April 27, 2022 / Amarantus Bioscience Holdings, Inc. (OTC PINK:AMBS) ("Amarantus," or AMBS), a JLABS-alumnus biotechnology holding company developing proprietary orphan neurologic, regenerative medicine and ophthalmic therapies through its subsidiaries, today released a letter to its shareholders announcing it has entered into a non-binding term sheet to sell the Company's Engineered Skin Substitute (ESS) subsidiary, Cutanogen Corporation upon execution of definitive agreements. Additionally, the Company's Acting CEO Donald Huffman, a member of the Board of Directors, provided an update for shareholders about the future direction of the Company.

Non-binding Term Sheet:

The Cutanogen purchasers are a group of holders (the "Group") of the Company's senior secured and unsecured notes. Certain other note holders who are not part of the Group may also choose to participate with the Group (together the "Noteholders"). As payment, in exchange, the Noteholders will relieve the Company of between $21.5 million and $25.3 million of secured and unsecured debt and payables obligations related to the ESS program.

The second part of the transaction is the Group's formation of a joint venture with a Contract Research Organization's venture capital (the "CRO VC")arm to finance and manage the further clinical development of the ESS program. Amarantus will share in the future returns of the joint venture after Noteholders have received a specified threshold amount.

The key terms of the transaction are:

Amarantus sells to the group of Noteholders its:

1. subsidiary, Cutanogen Corporation, and
2. 50,000,000 shares of Todos Medical Ltd. common stock

in exchange for the extinguishment of:

1. a minimum of $13,867,474 and up to $17,719,810 in secured and unsecured debt (the "Notes"), and
2. $7,581,828 in accounts payable associated with the ESS program, before a $500,000 cash payment against one of the payables, and

a participation right to receive:

1. 25% of all funds received by the Noteholders from the joint venture with the CRO VC after the Noteholders are fully repaid the value of the Notes and the ESS program accounts payable, and
2. half of any remaining unsold Todos common stock will be returned to Amarantus if actual cash received by the Noteholders from the sale of Todos shares exceeds $13,867,474 (after addressing, fees, 3rd party expenses and like).

Amarantus and the Group expect to complete the transaction in the second quarter of 2022.

Board Member/Acting CEO Update

Additionally, Board Member/Acting CEO Donald Huffman provided this update for Amarantus shareholders:

"I am pleased to provide an update regarding progress on several fronts and on the plan to deliver a recapitalization of the Company that would allow for shareholders to benefit from the value of Amarantus' compelling portfolio. Our goal has been to place our development programs into separate subsidiary companies, and then work with partners to attract financial resources to advance these programs through FDA approval and into commercialization via those subsidiaries. This plan would also allow for the settlement of certain of the Company's outstanding liabilities and potentially provide significant upside for Amarantus shareholders.

As announced, we entered into non-binding term sheet to sell the Company's Engineered Skin Substitute (ESS) subsidiary, Cutanogen Corporation, upon execution of definitive agreements. This is an important first step in significantly improving the financial position of the Company and getting on track to raising capital. The proceeds of this sale will directly reduce our debt and payables to a manageable level.

Our goal is to position the Company for a capital raise via Reg A.

Post-sale of the ESS program we believe there is high value in the Amarantus portfolio and will focus on advancing these programs principally through partnerships:

• Eltoprazine: Elto Pharma, Inc.
  • Phase 3: Adult ADHD. Next Step: Reformulation
  • Phase 2b - Parkinson's levodopa-induced dyskinesia: Next Step: Reformulation
  • Phase 2 Agitation in Alzheimer's. Next Step: Range Finding Studies
  • Eltoprazine in combination with CBD to treat Parkinson's
• Mesencephalic Astrocyte-derived Neurotrophic Factor (MANF Therapeutics
  • Retinal Vision Loss - Preclinical
    • Wolfram Syndrome (orphan)
    • Retinitis Pigmentosa (orphan)
    • Glaucoma
    • Macular Degeneration
  • Neurological Conditions - Preclinical
    • Parkinson's disease
    • Traumatic Brain Injury
    • Alzheimer's disease
    • Epilepsy
  • Diabetes - Preclinical
    • Wolfram Syndrome (orphan)
    • Type-1 and Type diabetes
    • Biomarker for pre-diabetes / beta-cell health
  • Cardiovascular disease - Preclinical
    • Myocardial infarction and post Covid 19 vascular disease
  • Hearing Loss - Preclinical
    • Antibiotic-induced hearing loss (orphan)
    • Tinnitus
  • Immune stimulation - Preclinical
    • Certain B-cell cancers
• PhenoGuard
  • Discovery of other MANF-like proteins
  • Evaluation of cannabinoid activity on astrocytes and neurons

We would like to thank all shareholders for their patience as we work through the closing of this transaction and prepare for the relaunch of operations at Amarantus."

About Amarantus Bioscience Holdings, Inc.

Amarantus Bioscience Holdings (AMBS) is a JLABS-alumnus biotechnology holding company developing proprietary orphan neurologic, regenerative medicine and ophthalmic therapies through its subsidiaries. AMBS' 50.1%-owned subsidiary Elto Pharma, Inc. has development rights to eltoprazine, a Phase 2b-ready small molecule indicated for Parkinson's disease levodopa-induced dyskinesia, Alzheimer's aggression and adult attention deficit hyperactivity disorder, commonly known as ADHD. AMBS acquired Cutanogen Corporation from Lonza Group in 2015. Cutanogen is preparing for pivotal studies with Engineered Skin Substitute (ESS) for the treatment of pediatric life-threatening severe burns. ESS is a regenerative medicine-based, autologous full-thickness skin graft technology originally developed by the Shriner's Hospital that can be used to treat severe burns, as well as several other catastrophic and cosmetic dermatological indications. AMBS' wholly-owned subsidiary, MANF Therapeutics Inc. owns key intellectual property rights and licenses from a several prominent universities related to the development of the therapeutic protein known as mesencephalic astrocyte-derived neurotrophic factor ("MANF"). MANF Therapeutics is developing MANF-based products as treatments for ophthalmological disorders such as Retinitis Pigmentosa and Glaucoma, Wolfram's Syndrome, as well as neurodegenerative diseases such as Parkinson's disease. MANF was discovered by the Company's Chief Scientific Officer John Commissiong, PhD. Dr. Commissiong discovered MANF from AMBS' proprietary discovery engine PhenoGuard, and believes several other neurotrophic factors remain to be discovered.

For further information please visit https://www.otcmarkets.com/stock/AMBS/overview

Notice Regarding Forward-Looking Statements

This letter contains forward-looking statements, about the Company's expectations, beliefs or intentions regarding, among other things, its product development efforts, business, financial condition, results of operations, strategies or prospects. Forward-looking statements can be identified by the use of forward-looking words such as "believe," "expect," "intend," "plan," "may," "should" or "anticipate" or their negatives or other variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical or current matters. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause actual activities or results to differ materially from the activities and results anticipated in such forward-looking statements, including, but not limited to, the factors summarized in the filings with the SEC. Amarantus does not undertake any obligation to publicly update these forward-looking statements, whether as a result of new information, future events or otherwise.

Amarantus Investor and Media Contact:

Gerald Commissiong
Executive Chairman
Office: 650-862-5391
Email: gerald@amarantus.com

SOURCE: Amarantus Bioscience Holdings, Inc.

View source version on accesswire.com:
https://www.accesswire.com/699049/Amarantus-Signs-Non-Binding-Term-Sheet-to-Divest-Cutanogen-Corporation-in-Exchange-for-the-Extinguishment-of-Potential-21M-in-Liabilities

FAQ

What is the latest update from Amarantus Bioscience Holdings (AMBS)?

Amarantus announced a non-binding term sheet to sell its Cutanogen Corporation subsidiary to reduce debt obligations.

How much debt will Amarantus potentially eliminate with the sale of Cutanogen?

The sale may result in the extinguishment of $21.5 million to $25.3 million in debt.

When is the expected completion date for the Cutanogen sale?

The transaction is expected to be finalized in the second quarter of 2022.

What are the future plans for Amarantus following the sale?

Amarantus plans to focus on advancing its development programs through partnerships and potential capital raises.

What will Amarantus receive in exchange for Cutanogen Corporation?

In exchange, Amarantus will receive a reduction in debt and a share in future joint venture returns.