Core Viewpoint - Scinai Immunotherapeutics Ltd. has received an updated non-binding Letter of Intent from the European Investment Bank to convert a significant portion of its loan into equity, which is expected to improve its financial standing and compliance with Nasdaq listing requirements [1][2][6]. Financial Restructuring - The updated Letter of Intent outlines the conversion of approximately $28 million of the loan into preferred shares, representing 19.5% of the fully diluted capital of the Company at closing [1][6]. - The outstanding principal amount owed to the EIB will be reduced to approximately $270,000, with a maturity date of December 31, 2031 [4][9]. - The Company plans to file financial statements for Q2 2024, which will include the implications of the LOI [2]. Preferred Shares Details - The preferred shares will not have anti-dilution rights and will be convertible into a fixed number of American Depositary Shares [1][9]. - Holders of the preferred shares will have veto rights over certain corporate actions, including incurring additional debt and entering mergers and acquisitions [9]. - The current variable remuneration rights, including a 10% payment on equity raises and a 3% royalty on revenues exceeding EUR 5 million, will be canceled [9]. Compliance and Future Plans - The Company aims to regain compliance with Nasdaq's minimum shareholders' equity requirement through this restructuring [2][6]. - A white paper analyzing the accounting impact of the loan-to-equity conversion is under review, which is expected to eliminate the shareholders' deficit of $5.1 million [6]. - The Company will seek shareholder approval for the creation of the preferred shares at a meeting scheduled for August 12, 2024 [9].
Scinai Immunotherapeutics Announces Receipt of an Updated Letter of Intent from the European Investment Bank Providing Specific Terms for Conversion of its Loan to Equity