Scinai Immunotherapeutics Regains Compliance with Nasdaq Minimum Bid Price Requirement; Continues to Work with the European Investment Bank to Convert Loan to Equity to Regain Compliance with Nasdaq Minimum Shareholders' Equity Requirement
Scinai Immunotherapeutics announced on June 7, 2024, that it regained compliance with Nasdaq's $1.00 minimum bid price requirement as of June 5, 2024. This achievement follows a strategic adjustment in its American Depositary Shares (ADSs) ratio, approved by the Board, which increased the number of ordinary shares represented by each ADS from 400 to 4,000 effective May 21, 2024. Consequently, the bid price exceeded $1.00 for ten consecutive business days. Despite this progress, Scinai remains non-compliant with Nasdaq's minimum shareholders' equity requirement. The company is in advanced discussions with the European Investment Bank (EIB) to convert a significant portion of its loan into equity, aiming to present this plan at a Nasdaq hearing on June 18, 2024.
- Regained compliance with Nasdaq's $1.00 minimum bid price requirement.
- Successful strategic adjustment of ADS ratio from 400 to 4,000 shares.
- Positive impact on bid price, meeting requirements for ten consecutive business days.
- Advanced discussions with EIB regarding favorable loan-to-equity conversion terms.
- Continued non-compliance with Nasdaq's minimum shareholders' equity requirement.
- Pending formal approval and finalization of revised finance contract terms with EIB.
- Uncertainty surrounding the outcome of the June 18, 2024, Nasdaq hearing.
Insights
Scinai Immunotherapeutics Ltd.'s achievement in regaining compliance with Nasdaq's minimum bid price requirement is a positive, but it’s only part of the story. While addressing the $1.00 bid price is important to avoid delisting, the company still faces the important task of meeting the minimum shareholders' equity requirement, which is a bigger challenge and poses significant risk if not achieved. The plan to convert a portion of its debt to equity with the European Investment Bank (EIB) could be a strategic move, reducing debt burden and boosting equity. However, it requires formal approval and successful negotiation, which introduces uncertainty. Investors should monitor the upcoming June 18 hearing closely, as the outcome could significantly affect shareholder value.
From an industry standpoint, Scinai's effort to regain compliance with Nasdaq's listing requirements is critical for maintaining investor confidence and access to capital markets. The company's focus on developing inflammation and immunology biological products remains promising, but operational stability is key. Converting the EIB loan to equity may provide a financial lifeline, but it also potentially dilutes current shareholders. The success of this conversion can impact the company’s ability to fund ongoing and future R&D projects. Given the evolving biotech landscape, keeping a stable financial position is essential for long-term innovation and competitiveness.
The Company previously disclosed in a press release dated May 6, 2024, that it received a letter from the Staff notifying the Company of its noncompliance with the Rule by failing to maintain the required minimum bid price for the Company's American Depositary Shares ("ADSs"). The Company also disclosed in that press release that it had timely requested a hearing before an independent Nasdaq Hearings Panel (the "Hearings Panel") to present a plan to regain compliance and that its Board of Directors had already approved a ratio change of the ADSs to its non-traded ordinary shares, increasing the number of ordinary shares represented by each ADS from 400 to 4,000, effective May 21, 2024. Following the ratio change the closing bid price of the ADSs equaled or exceeded
On May 24, 2024, the Company announced the receipt of a Nasdaq Staff determination letter regarding noncompliance with the minimum shareholders' equity required for continued listing and that as part of the hearing previously requested with the Hearings Panel it would present a plan for the Company to regain compliance with this requirement (the "Plan"). The Company also announced that it was engaged in discussions with the European Investment Bank (the "EIB") regarding amending the finance contract with the EIB and the conversion of a significant portion of the loan owed by the Company to EIB into equity in the Company on terms the Company considers favorable to the Company and its shareholders. These discussions are advancing, and the Company believes it will be in a position to include the potential conversion as a key component of the Plan to be presented to the Hearings Panel on June 18, 2024. Any revised terms of the finance contract with the EIB are subject to obtaining formal approval from appropriate EIB governing bodies, negotiating and finalizing definitive agreements relating to the revised terms, and the fulfilment of any condition precedent, all to the EIB's satisfaction.
In the notification provided by the Staff on June 5, 2024, the Staff stated that the Company remains non-compliant with the equity requirement in Listing Rule 5550(b)(1), or any of the alternative requirements under Listing Rule 5550(b), and accordingly the June 18, 2024, hearing will be held as scheduled.
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 to early stage biotech drug development programs. 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 future price of the ADSs. 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 Company will be unable to meet the continued listing requirements of Nasdaq, including the risk that the consummation of the conversion of the EIB loan to equity would not resolve the recent deficiency notice from NASDAQ with respect to the Stockholders' Equity Requirement; the risk of delay in, Scinai's inability to conduct, or the unsuccessful results of, its research and development activities, including the contemplated in-vivo studies and a clinical trial; the risk that Scinai will not be successful in expanding its CDMO business or in-license other NanoAbs; the risk that Scinai may not be able to secure additional capital on attractive terms, if at all; the risk that the therapeutic and commercial potential of NanoAbs will not be met or that Scinai will not be successful in bringing the NanoAbs towards commercialization; the risk of a delay in the preclinical and clinical trials data for NanoAbs, if any; the risk that our business strategy may not be successful; the risk that the European Investment Bank (EIB) may accelerate the financial facility under its finance contract with Scinai; Scinai's ability to acquire rights to additional product opportunities; Scinai's ability to enter into collaborations on terms acceptable to Scinai or at all; timing of receipt of regulatory approval of Scinai's manufacturing facility in
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