On Thursday, Scinai Immunotherapeutics Ltd. (NASDAQ: SCNI) saw a notable recovery in its stock performance during the extended trading session. SCNI shares surged by 9.48%, rebounding from a previous regular-session loss of 8.13%, and closed at $4.01. This significant fluctuation in stock value followed the company’s recent equity adjustments.
Scinai Finalized The Loan Restructuring Agreement
The European Investment Bank (EIB) and Scinai have successfully completed a loan restructuring agreement that includes changes to the parties’ current finance contract. As per the deal, 1,000 preferred shares of Scinai were exchanged for roughly EUR 26.6 million, which is equivalent to nearly $29 million, including accrued interest.
The company’s remaining debt to the EIB has been lowered to EUR 250,000 (about $273,000) as a consequence. The balance is scheduled to maturity on December 31, 2031, and there will be no more interest charged or prepayment penalties.
Impact on SCNI Stockholders’ Equity and Nasdaq Compliance
Following the restructuring, SCNI has achieved a stockholders’ equity exceeding $2.5 million, meeting the Nasdaq Listing Rules’ requirements. The company anticipates receiving formal confirmation from the Nasdaq Hearing Panel regarding its compliance with the equity requirement. This development marks a significant milestone in Scinai’s efforts to stabilize its financial standing.
Preferred Shares and Finance Contract Amendments
The terms of the newly issued Preferred Shares, detailed in the Amended and Restated Articles of Association approved by shareholders on August 12, 2024, stipulate that each share can be converted into 364 American Depositary Shares (ADSs), representing 19.5% of the company’s fully diluted capital as of the closing date.
Additionally, the Preferred Shares are redeemable by Scinai (SCNI) at a cumulative value of $34 million. The recent amendments to the Finance Contract also remove the requirement for variable remuneration payments previously stipulated. This restructuring and subsequent stock recovery reflect a pivotal shift in Scinai’s financial landscape, positioning the company for potential future growth and stability.
