111 Equity Group increases stake in Matinas Biopharma Holdings, Inc.

Rhea-AI Summary

111 Equity Group and its principal have acquired a 5.17% ownership stake in Matinas Biopharma Holdings (NYSE American: MTNB) as of January 2, 2025, with additional shares purchased thereafter. The investment follows MTNB's October 2024 announcement of a strategic review. 111 Equity identifies several potential value enhancement opportunities, including:

- Monetizing assets like MAT2203 (Phase 3 ready antifungal drug candidate)
- Leveraging MTNB's NYSE listing for potential mergers
- Utilizing MTNB's balance sheet

As of November 13, 2024, MTNB reported $10,295,000 in cash (approximately $2.13 per share), significantly above its January 16, 2025 closing price of $0.55. Despite an 80% workforce reduction and subsequent cash burn, 111 Equity believes the remaining cash exceeds MTNB's current market cap. The firm is actively engaging with MTNB management to enhance shareholder value.

Positive

• Significant cash position of $10.29M ($2.13 per share) exceeds current market value
• Strategic review in progress with potential for asset monetization
• Phase 3 ready antifungal drug candidate (MAT2203) available for potential sale
• NYSE listing provides merger opportunities

Negative

• 80% workforce reduction indicating significant operational restructuring
• Ongoing cash burn affecting balance sheet
• Stock trading significantly below cash value ($0.55 vs $2.13 cash per share)

Insights

Financial Analyst

The accumulation of a 5.17% stake by 111 Equity Group in MTNB marks a pivotal moment that could catalyze significant corporate actions. The timing is particularly strategic, coming shortly after MTNB's announcement of a comprehensive strategic review and major workforce reduction of 80%.

The most compelling aspect of this development is the significant disconnect between MTNB's market valuation and its fundamental value. With reported cash reserves of $10,295,000, the company's current market capitalization appears to substantially discount its liquid assets, even accounting for ongoing cash burn from operations. This valuation gap has likely attracted 111 Equity's attention as a potential catalyst for value creation.

Three key strategic pathways emerge from this situation:

• The monetization of MAT2203, a Phase 3-ready antifungal asset, could unlock significant value, particularly in a market where late-stage assets are increasingly attractive to larger pharmaceutical companies seeking to bolster their pipelines
• MTNB's NYSE listing status represents a valuable asset for potential reverse merger candidates, especially considering the challenging IPO market for biotech companies
• The company's substantial cash position, even after accounting for restructuring costs, provides strategic flexibility and time to execute value-creating initiatives

111 Equity's engagement with management suggests an activist approach focused on accelerating value realization. The firm's continued accumulation of shares post-13D filing indicates strong conviction in the potential outcomes of the strategic review process. This situation bears similarities to other successful biotech restructurings where activist investors have catalyzed favorable outcomes through asset sales or strategic combinations.

NEW YORK, Jan. 24, 2025 /PRNewswire/ - 111 Equity Group, LLC ("111 Equity") and its principal filed a Schedule 13D with the Securities and Exchange Commission ("SEC") to disclose that 111 Equity and its principal have collectively accumulated a 5.17% stock ownership stake in Matinas Biopharma Holdings, Inc. (NYSE American: MTNB) ("MTNB") as of January 2, 2025. Since this filing, the principal of 111 Equity bought more shares to increase 111 Equity's and the principal's collective ownership in MTNB as 111 Equity believes MTNB provides an opportunity for shareholders to enhance shareholder value. MTNB announced the start of a strategic review in late October 2024. 111 Equity believes there are avenues to enhance shareholder value as a part of this strategic review, including, without limitation, monetizing certain existing assets (including the potential asset sale of MAT2203, MTNB's lead Phase 3 ready antifungal drug candidate), leveraging MTNB's value as a listed security on NYSE for potential merger candidates, and leveraging and maintaining MTNB's balance sheet.

As of MTNB's most recent 10-Q (filed on November 13, 2024), MTNB has reported $10,295,000 in cash and cash equivalents which would equate to roughly $2.13 cash per share value, which is below the stock's closing price of $0.55 on January 16, 2025. 111 Equity understands that there has been additional cash burn due to MTNB laying off 80% of the workforce; however, it is 111 Equity's belief that the cash on hand will still be greater than the current market cap of MTNB. 

Since filing the Schedule 13D, 111 Equity has spoken with management at MTNB and expects to continue to engage in discussions with management in an effort to enhance shareholder value in connection with this strategic review.

Disclaimers

This press release is not an offer to purchase or a solicitation of an offer to sell any stock. Any solicitation or offer will only be made through materials filed with the SEC.  

This press release contains 111 Equity's current views on the value of stock of MTNB and certain actions that the board of directors of MTNB might take to enhance the value of MTNB's stock. The views expressed in this press release are based on 111 Equity's and the principal's own analyses of publicly available information and assumptions such parties believe to be reasonable. There can be no assurance that the information considered and analyzed is accurate or complete. Similarly, there can be no assurance that 111 Equity's and the principal's assumptions are correct. The actual performance and results of MTNB may differ materially from 111 Equity's and the principal's assumptions and analyses.

This press release also references the size of 111 Equity's and its principal's current holdings of shares in MTNB. 111 Equity's and its principal's views and holdings could change at any time. 111 Equity Group and its principal reserve the right to modify their ownership of shares, including, without limitation, the purchase or sale of shares at any time and may reconsider and change their plans, including ceasing to engage in discussion with management, at any time. We may take any of these or other actions regarding MTNB without updating this press release or providing any notice whatsoever of any such changes (except as otherwise required by law).

Forward-Looking Statements

Certain statements contained in this press release are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Due to such risks and uncertainties, actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Forward-looking statements can be identified by the use of the future tense or other forward-looking words such as "believe," "might, "expect," "anticipate," "intend," "plan," "estimate," "should," "could," "may," "will," "objective," "projection," "forecast," "continue," "strategy," "position" or the negative of those terms or other variations of them or by any comparable terminology.

Important factors that could cause actual results to differ materially from the expectations set forth in this press release include, among other things, the factors identified in the public filings of MTNB and other information generally available in the market. Such forward-looking statements should therefore be construed considering such factors, and 111 Equity and its principal are under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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SOURCE 111 Equity Group

FAQ

What is 111 Equity Group's current stake in Matinas Biopharma (MTNB) as of January 2025?

111 Equity Group and its principal have acquired a 5.17% ownership stake in MTNB as of January 2, 2025, with additional shares purchased after this date.

How much cash does MTNB have per share compared to its current stock price?

As of November 13, 2024, MTNB reported $2.13 in cash per share, while the stock closed at $0.55 on January 16, 2025, trading significantly below its cash value.

What strategic opportunities has 111 Equity identified for MTNB?

111 Equity identified opportunities including monetizing assets like MAT2203 (Phase 3 ready antifungal drug), leveraging NYSE listing for potential mergers, and utilizing MTNB's balance sheet.

What percentage of MTNB's workforce was recently laid off?

MTNB has laid off 80% of its workforce as part of its restructuring efforts.

When did MTNB announce its strategic review?

MTNB announced the start of a strategic review in late October 2024.