Scinai Announces Entering into $2 Million Private Equity Commitment Agreement with its largest Existing Shareholder
Scinai Immunotherapeutics (Nasdaq: SCNI) has entered into a $2 million Investment Commitment Agreement with RK Stone Miami , an affiliate of its largest shareholder, Daniel Stone. The agreement allows Scinai to issue and sell ADSs to the investor until December 31, 2024, with a minimum sale amount of $200,000 and a maximum of $500,000 per transaction. The ADS price will be calculated based on the lower of two VWAP methods, subject to a 5% discount.
The agreement includes provisions to prevent the investor from exceeding 9.99% ownership of outstanding ordinary shares, with pre-funded warrants issued if necessary. Scinai will pay a commitment fee of $100,000 if an advance notice is provided, or $40,000 if no advance is made during the commitment period. The company maintains discretion over initiating sales and is not required to register the ADSs for resale.
Scinai Immunotherapeutics (Nasdaq: SCNI) ha stipulato un Accordo di Impegno all'Investimento da 2 milioni di dollari con RK Stone Miami, un'affiliata del suo maggiore azionista, Daniel Stone. L'accordo consente a Scinai di emettere e vendere ADS all'investitore fino al 31 dicembre 2024, con un importo minimo di vendita di 200.000 dollari e un massimo di 500.000 dollari per transazione. Il prezzo degli ADS sarà calcolato in base al valore minimo tra due metodi VWAP, soggetto a uno sconto del 5%.
L'accordo include disposizioni per impedire all'investitore di superare il 9,99% di possesso delle azioni ordinarie in circolazione, con warrant pre-finanziati emessi se necessario. Scinai pagherà una commissione di impegno di 100.000 dollari se viene fornito un preavviso, o 40.000 dollari se non viene effettuato alcun preavviso durante il periodo di impegno. L'azienda mantiene la discrezione sull'inizio delle vendite e non è tenuta a registrare gli ADS per la rivendita.
Scinai Immunotherapeutics (Nasdaq: SCNI) ha entrado en un Acuerdo de Compromiso de Inversión de 2 millones de dólares con RK Stone Miami, una afiliada de su mayor accionista, Daniel Stone. El acuerdo permite a Scinai emitir y vender ADS al inversor hasta el 31 de diciembre de 2024, con un monto mínimo de venta de 200,000 dólares y un máximo de 500,000 dólares por transacción. El precio de los ADS se calculará en función del menor de dos métodos VWAP, sujeto a un descuento del 5%.
El acuerdo incluye disposiciones para evitar que el inversor supere el 9.99% de propiedad de las acciones ordinarias en circulación, con warrants prefinanciados emitidos si es necesario. Scinai pagará una tarifa de compromiso de 100,000 dólares si se proporciona un aviso previo, o 40,000 dólares si no se hace ningún aviso anticipado durante el período de compromiso. La empresa mantiene la discreción sobre el inicio de las ventas y no está obligada a registrar los ADS para reventa.
Scinai Immunotherapeutics (Nasdaq: SCNI)는 최대 주주인 다니엘 스톤의 제휴사인 RK Stone Miami와 200만 달러 투자 약정 계약을 체결했습니다. 이 계약은 Scinai가 2024년 12월 31일까지 투자자에게 ADS를 발행하고 판매할 수 있도록 하며, 최소 판매 금액은 200,000달러, 최대는 거래당 500,000달러입니다. ADS 가격은 두 가지 VWAP 방법 중 낮은 가격을 기준으로 계산되며, 5%의 할인율이 적용됩니다.
이 계약은 투자자가 유통되는 보통주 9.99%를 초과하지 않도록 하는 조항을 포함하고 있으며, 필요 시 사전 자금 지원 워런트가 발행됩니다. Scinai는 사전 공지가 제공될 경우 100,000달러의 약정 수수료를 지급하며, 약정 기간 동안 사전 공지가 없으면 40,000달러를 지급합니다. 회사는 판매 시작에 대한 재량권을 유지하며 ADS의 재판매를 위해 등록할 의무가 없습니다.
Scinai Immunotherapeutics (Nasdaq: SCNI) a conclu un Accord d'Engagement d'Investissement de 2 millions de dollars avec RK Stone Miami, une affiliée de son plus grand actionnaire, Daniel Stone. Cet accord permet à Scinai d'émettre et de vendre des ADS à l'investisseur jusqu'au 31 décembre 2024, avec un montant de vente minimum de 200 000 dollars et un maximum de 500 000 dollars par transaction. Le prix des ADS sera calculé sur la base de la méthode VWAP la plus basse des deux, avec une remise de 5% applicable.
L'accord comprend des dispositions empêchant l'investisseur de dépasser 9,99% de propriété des actions ordinaires en circulation, avec des bons préfinancés émis si nécessaire. Scinai paiera des frais d'engagement de 100 000 dollars si un préavis est fourni, ou 40 000 dollars si aucun préavis n'est donné pendant la période d'engagement. La société conserve sa discrétion sur le lancement des ventes et n'est pas tenue d'enregistrer les ADS pour une revente.
Scinai Immunotherapeutics (Nasdaq: SCNI) hat eine Investitionsverpflichtungsvereinbarung über 2 Millionen Dollar mit RK Stone Miami, einer Tochtergesellschaft ihres größten Aktionärs Daniel Stone, abgeschlossen. Die Vereinbarung erlaubt es Scinai, bis zum 31. Dezember 2024 ADS an den Investor auszugeben und zu verkaufen, mit einem Mindestverkaufsbetrag von 200.000 Dollar und einem Höchstbetrag von 500.000 Dollar pro Transaktion. Der Preis für die ADS wird basierend auf dem niedrigeren der beiden VWAP-Methoden berechnet, wobei ein Rabatt von 5% gilt.
Die Vereinbarung enthält Bestimmungen, die verhindern, dass der Investor mehr als 9,99% der ausstehenden Stammaktien besitzt, wobei bei Bedarf vorrangige Warrants ausgegeben werden. Scinai zahlt eine Verpflichtungsgebühr von 100.000 Dollar, wenn eine vorherige Benachrichtigung bereitgestellt wird, oder 40.000 Dollar, wenn während des Verpflichtungszeitraums keine Vorausbenachrichtigung erfolgt. Das Unternehmen behält sich das Recht vor, die Verkäufe zu initiieren und ist nicht verpflichtet, die ADS zur Wiederveräußerung zu registrieren.
- Secured $2 million investment commitment from largest shareholder
- Flexible funding structure with discretionary drawdowns
- 5% discount on ADS price for each transaction
- Agreement extends until December 31, 2024, providing long-term funding option
- Potential dilution of existing shareholders' stake
- Commitment fee of $100,000 or $40,000 payable to investor
- Maximum monthly drawdown to $500,000
- No requirement to register ADSs for resale, potentially limiting liquidity
Insights
Scinai's
- The
5% discount on share price could lead to dilution for existing shareholders. - The agreement's structure, with a minimum
$200,000 and maximum$500,000 per advance, suggests the company may be struggling to secure larger, more stable funding sources. - The commitment fee structure incentivizes Scinai to use the facility, potentially leading to suboptimal capital decisions.
Investors should closely monitor Scinai's cash burn rate and pipeline progress to gauge the necessity and impact of this funding arrangement.
This funding agreement reveals underlying market skepticism towards Scinai. The complex structure, including pre-funded warrants and ownership caps, suggests a lack of confidence in the company's near-term prospects. However, it's noteworthy that the largest shareholder is willing to provide additional capital, indicating some level of insider faith.
The biotech sector has been facing headwinds, with investors becoming more selective. Scinai's move to secure this funding could be seen as a proactive step to weather potential market volatility. Investors should compare this deal's terms with recent financing rounds of peer companies to gauge Scinai's relative market position and attractiveness.
The agreement's structure presents several legal considerations:
- The
9.99% ownership cap and pre-funded warrant mechanism are likely designed to avoid triggering regulatory filing requirements or change-of-control provisions. - The absence of a registration requirement for the ADSs suggests potential resale restrictions, which could impact liquidity for the investor.
- The company's ability to rescind advance notices based on minimum market prices provides flexibility but could lead to disputes over price determination.
Shareholders should scrutinize how this agreement aligns with existing corporate governance policies and whether it adequately protects minority investor interests.
Pursuant to the Agreement, the Company may issue and sell ADSs to the Investor, from time to time through December 31, 2024 (the "Commitment Period"), for an aggregate purchase price of up to
The Agreement provides that if as a result of any advance the Investor would beneficially own in excess of
Pursuant to the Agreement, the Company will pay the Investor a commitment fee, which may be paid in cash or in ADSs at the option of the Company. In the event that during the Commitment Period the Company provides to the Investor an advance notice, the amount of the commitment fee will be equal to
The Agreement does not require the Company to register for resale the ADSs to be issued under the Agreement. The Agreement also includes standard representations, warranties and covenants of the parties and conditions to closing of each advance.
The Company will hold a webinar covering its Q2 2024 financial results and business update today, August 20th, at 11AM EDT/18:00
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 Company providing advance notices to the Investor, selling ADSs to the Investor under the Agreement and the amount of the commitment fee to be paid by the Company under the Agreement. 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.
FAQ
What is the total value of the Investment Commitment Agreement for Scinai Immunotherapeutics (SCNI)?
When does the Investment Commitment Agreement for Scinai (SCNI) expire?
What is the minimum and maximum amount Scinai (SCNI) can raise in each transaction under the agreement?
How is the price of ADSs determined for each transaction in Scinai's (SCNI) Investment Commitment Agreement?
