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

JERUSALEM, July 8, 2024 /PRNewswire/ -- Scinai Immunotherapeutics Ltd. (Nasdaq: SCNI) (the "Company"), a biotechnology company focused on developing inflammation and immunology (I&I) biological products and on providing CDMO services through its Scinai Bioservices business unit, today announced that it has received an updated non-binding Letter of Intent ("LoI") from the European Investment Bank (the "EIB"). This updated LoI outlines specific indicative terms for converting the majority of the EIB's loan into equity in the form of preferred shares (the "Preferred Shares"), which are convertible into American Depositary Shares ("ADSs") representing 19.5% of the fully diluted capital of the Company at the time of closing. The number of ADSs into which the preferred shares would be convertible would be fixed and without anti-dilution rights. The updated LoI does not require a variable remuneration, which in the previous LOI included 3% royalty on the Company's revenues and 5% of any equity raise up to a limit of EUR 70 million, nor does it provide for mandatory dividends or mandatory redemption. The amount of the loan that would be converted is approximately $28 million, while approximately $270,000 will stay as a loan payable on Dec 31^st, 2031. As previously announced, the Company received a Nasdaq Staff determination letter regarding noncompliance with the minimum shareholders' equity required for continued listing (under Listing Rule 5550(b)(1) or the "Equity Requirement").  At a hearing with the Nasdaq Hearings Panel (the 'Hearings Panel") held on June 18, 2024, the Company presented a plan to address the Equity Requirement matter by converting a significant portion of the loan owed by the Company to the EIB into equity and as announced on July 3, 2024 the Hearing Panel has determined to grant the Company's request to continue its listing on The Nasdaq Stock Market, subject to the Company meeting certain conditions, including filing on or before August 14, 2024, a public disclosure demonstrating compliance with the Equity Requirement.