Scinai Reports Third Quarter 2023 Financial Results and Provides Business Update

JERUSALEM, ISRAEL - Oct. 31, 2023 – Scinai Immunotherapeutics Ltd (Nasdaq: SCNI), a biopharmaceutical company focused on developing, manufacturing, and commercializing innovative inflammation and immunology (I&I) biological products primarily for the treatment of autoimmune and infectious diseases, announced the publication today of its financial results for the third quarter ended Sept. 30, 2023 and provided a business update.

THIRD QUARTER 2023 FINANCIAL SUMMARY

  • R&D expenses for the three months ended Sept. 30, 2023 amounted to $1.13 million compared to $1.19 million for the three months ended Sept. 30, 2022.

  • Marketing, general and administrative expenses for the three months ended Sept. 30, 2023 amounted to $0.97 million compared to $0.96 million for the three months ended Sept. 30, 2022.

  • Total operating expenses for the three months ended Sept. 30, 2023 amounted to $2.1 million compared to $2.1 million for the three months ended Sept. 30, 2022.

  • Financial income for the three months ended Sept. 30, 2023 amounted to $5.2 million compared to $6.9 million income for the three months ended Sept. 30, 2022.

  • Net Income (loss) for the three months ended Sept. 30, 2023 amounted to $3.1 million income compared to $4.7 million loss for the three months ended Sept. 30, 2022.

As of Sept. 30, 2023, Scinai had cash and cash equivalents of $6.4 million as compared to $14.2 million as of Dec. 31, 2022. In the nine months ended Sept. 30, 2023, Scinai had an operating loss of $7.8 million and negative cash flows from operating activities of $8.1 million.

A summary of unaudited financial results is included in the tables below.


BUSINESS UPDATE

Strategic pivot

  • In support of the Company’s strategic pivot, in Sept. 2023, we raised $1.33 million in gross proceeds ($1.08 million in net proceeds) via a registered direct offering with H.C. Wainwright & Co. acting as placement agent.

  • In order to extend our cash runway and address the Nasdaq minimum shareholders’ equity compliance issue, our primary creditor, the European Investment Bank (EIB), is currently considering favorably adjusting the terms of the EIB’s financial facility contract with the Company, in particular by extending the facility’s maturity. There is no guarantee that the EIB will approve the adjustment of the terms of the EIB’s financial facility with the Company. In addition, we are implementing a cost saving plan as mentioned in our Q2’23 financial results press release.

  • As part of the strategic pivot, in September 2023 the company rebranded as Scinai Immunotherapeutics.

New CDMO Business Unit’s first client

  • In October 2023, the Company closed its first contract to provide CDMO services. We are in advanced contract discussions with several other potential clients. In addition, we are pursuing extensive targeted marketing activities, including participation at major pharmaceutical conferences such as CPHI in Barcelona (October 2023) and BIO-Europe in Munich (November 2023).

Pipeline Development

  • We are aggressively advancing the NanoAb preclinical development. Meaningful ex vivo results for our IL-17 NanoAb tested in human psoriatic skin specimens are anticipated in Q4 ’23, and we continue to expect to enter clinical testing of the NanoAb as a biobetter psoriasis treatment in 2024.

  • NanoAbs for treatment of additional autoimmune diseases, such as asthma and wet AMD have been discovered and characterized at Max Planck and University Medical Center Göttingen as part of their research collaboration agreement with Scinai. Scinai holds exclusive options for exclusive licenses at pre agreed financial terms for each of the resulting NanoAbs.

  • We are pursuing a strategic partnership for our COVID-19 self-administered inhaled NanoAb which demonstrated highly promising in vivo results in animals as both a therapeutic and prophylactic treatment.

 

About Scinai: Scinai Immunotherapeutics Ltd. (Nasdaq: SCNI) is a biopharmaceutical company focused on developing, manufacturing, and commercializing innovative inflammation and immunology (I&I) biological products primarily for the treatment of autoimmune and infectious diseases. With a state-of-the-art facility for biopharmaceutical product development and manufacturing and highly experienced pharmaceutical industry leadership, Scinai offers end-to-end boutique CDMO services in parallel to developing its own pipeline of diversified and commercially viable products and platforms beginning with an innovative nanosized VHH antibody (NanoAb) pipeline targeting diseases with large unmet medical needs. Company website: www.scinai.com.

Company Contact: Joshua Phillipson | +972 8 930 2529 | joshua.phillipson@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, included in this press release regarding strategy, future operations, future financial position, future revenue, projected expenses, prospects, plans and objectives of management are forward-looking statements. Examples of such statements include, but are not limited to, statements regarding the Company’s cash runway, adjustments to the terms of the EIB’s loan to the Company and compliance with the Nasdaq Listing Rules. 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 EIB will not agree to adjust the terms of its loan to the Company, that the Company’s ADSs will not return to compliance with the Nasdaq Listing Rules, that Scinai may not be able to secure additional capital on attractive terms, if at all, and the risk that the Company’s cash runway will be extended; the risk that the therapeutic and commercial potential of NanoAbs will not be met; 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 loans 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 Jerusalem, if at all or when required; the risk that the manufacturing facility will not be able to be used for a wide variety of applications and other vaccine and treatment technologies; and the risk that drug development involves a lengthy and expensive process with uncertain outcomes. 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 10-K filed with the Securities and Exchange Commission on April 17, 2023. Scinai undertakes no obligation to revise or update any forward-looking statement for any reason.


 
CONDENSED BALANCE SHEETS (Unaudited)
U.S. dollars in thousands(except share and per share data)
 


 


 

September 30,

 

December 31,

 

2023

 

2022

 

Unaudited

 

Audited

ASSETS

   
    

CURRENT ASSETS:

   

Cash and cash equivalents

6,362

  

14,075

 

Restricted cash

122

  

140

 

Prepaid expenses and other receivables

228

  

155

 
    

Total current assets

6,712

  

14,370

 
    

NON-CURRENT ASSETS:

   

Property, plant and equipment, net

10,660

  

11,245

 

Operating lease right-of-use assets

1,210

  

1,452

 
    

Total non-current assets

11,870

  

12,697

 
    

Total assets

18,582

  

27,067

 
    

LIABILITIES AND SHAREHOLDERS’ EQUITY

   
    

CURRENT LIABILITIES:

   

Trade payables

546

  

716

 

Operating lease liabilities

382

  

382

 

Other payables

610

  

1,240

 
    

Total current liabilities

1,538

  

2,338

 
    

NON-CURRENT LIABILITIES:

   

Warrants liability

311

  

5,329

 

Loan from others

18,602

  

20,082

 

Non-current operating lease liabilities

823

  

1,078

 
    

Total non-current liabilities

19,736

  

26,489

 
    

CONTINGENT LIABILITIES AND COMMITMENTS

   
    

SHAREHOLDERS’ EQUITY (DEFICIT):

   

Ordinary shares of no par value: Authorized: 20,000,000,000 shares at September 30, 2023 and at December 31, 2022; Issued and outstanding 1,740,770,784 shares at September 30, 2023 and 989,290,784 shares at December 31, 2022

-

  

-

 

Additional paid-in capital

119,053

  

116,082

 

Accumulated deficit

(120005

)

 

(115835

)

Accumulated other comprehensive loss

(1740

)

 

(2007

)

    

Total shareholders’ deficit

(2692

)

 

(1760

)

    

Total liabilities and shareholders’ deficit

18,582

  

27,067

 
    

 
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
U.S. dollars in thousands (except share and per share data)
    
 

Three months ended September 30,

 

Nine months ended September 30,

 

2023

 

2022

 

2023

 

2022

 

Unaudited

           

Research and development expenses, net

1,134

  

1,194

  

4,583

  

4,331

 

Marketing, general and administrative

968

  

967

  

3,300

  

3,708

 
           

Total operating loss

2,102

  

2,161

  

7,883

  

8,039

 
           

Financial loss (income), net

(5,209

)

 

(6,939

)

 

(3,713

)

 

(7,359

)

           

Net loss (income)

(3,107

)

 

(4,778

)

 

4,170

  

680

 
           
           

Net Gain loss (Gain) per share attributable to



 



 


  


 

basic ordinary shareholders,

(0.002

)

 

(0.01

)

 

0.002

  

0.001

 

diluted ordinary shareholders

(0.002

)

 

(0.01

)

 

0.002

  

0.001

 
           

Weighted average number of shares used for computing basic net loss per share

1,876,885,253

  

781,436,944

  

1,682,990,012

  

746,294,693

 
           

 
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
U.S. dollars in thousands (except share and per share data)
     
  

 

Three months ended
September 30,

 

Nine months ended
September 30,

  

2023

 

2022

 

2023

 

2022

  

Unaudited

          

Net loss (income)

 

(3,107

)

$

(4,778

)

 

4,170

  

680

 
          

Other comprehensive (income) loss:

         

Foreign currency translation adjustments

 

-

  

413

  

267)

(

 

460

 
          

Total comprehensive loss

 

(3,107

)

 

(4,365(

 

3,903

  

1,140

 
            

 
CONDENSED STATEMENTS CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
U.S. dollars in thousands (except share and per share data)
                
  

Three months ended September 30, 2023

  

Ordinary shares

 

Additional paid-in

 

Accumulated

 

Accumulated

  Total shareholders’
  

Number

 

Amount

 

capital

 

comprehensive loss

 

deficit

 

equity

             

Balance as of June 30, 2023

 

1,453,970,784

 

-

 

117,740

 

(1,740

)

 

(123,112

)

 

(7,112

)

             

Exercise of warrants

 

120,000,000

 

-

 

-

 

-

  

-

  

-

 

Vested RSU's

 

6,800,000

 

-

 

-

 

-

  

-

  

-

 

Issuance of shares and warrants, net

 

160,000,000

   

1,086

     

1,086

 

Share-based compensation

 

-

 

-

 

227

 

-

  

-

  

227

 

Other comprehensive income

 

-

 

-

 

-

 

-

  

-

  

-

 

Net Gain

 

-

 

-

 

-

 

-

  

3,107

  

3,107

 
             

Balance as of September 30, 2023

 

1,740,770,784

 

-

 

119,053

 

(1,740

)

 

(120,005

)

 

(2,692

)


 


 


 


 



 



 




  

Nine months endedSeptember30, 2023

  

Ordinary shares

 

Additional paid-in

 

Accumulated

 

Accumulated

 

Total shareholders’

  

Number

 

Amount

 

capital

 

comprehensive loss

 

deficit

 

equity

             
             

Balance as of January 1, 2023

 

989,290,784

 

-

 

116,082

 

(2,007

)

 

(115,835

)

 

(1,760

)

             

Exercise of warrants

 

584,015,200

 

-

 

801

 

-

  

-

  

801

 

Vested RSU's

 

7,464,800

 

-

 

-

 

-

  

-

  

-

 

Issuance of shares and warrants, net

 

160,000,000

   

1,484

     

1,484

 

Share-based compensation

 

-

 

-

 

686

 

-

  

-

  

686

 

Other comprehensive income

 

-

 

-

 

-

 

267

  

-

  

267

 

Net loss

 

-

 

-

 

-

 

-

  

(4,170

)

 

(4,170

)

             

Balance as of September 30, 2023

 

1,740,770,784

 

-

 

119,053

 

(1,740

)

 

(120,005

)

 

(2,692

)

                

  

Three months ended June 30, 2022

  

Ordinary shares

 

Additional paid-in

 

Accumulated

 

Accumulated

 

Total shareholders’

  

Number

 

Amount

 

capital

 

comprehensive loss

 

deficit

 

equity

             
             

Balance as of June 30, 2022

 

747,153,064

 

-

 

$114,335

 

(2,102

)

 

(115,497

)

 

(3,264

)

             

Share-based compensation

 

-

   

341

 

-

  

-

  

341

 

Other comprehensive loss

 

-

 

-

 

-

 

(413

)

 

-

  

(413

)

Net loss

 

-

 

-

 

-

 

-

  

4,778

  

4,778

 
             

Balance as of September 30, 2022,

 

747,153,064

 

-

 

114,676

 

(2,515

)

 

(110,719

)

 

1,442

 
                

  

Nine months ended September 30, 2022

  

Ordinary shares

 

Additional paid-in

 

Accumulated

 

Accumulated

 

Total shareholders’

  

Number

 

Amount

 

capital

 

comprehensive loss

 

deficit

 

equity

             
             

Balance as of January 1, 2022

 

739,048,544

 

-

 

113,076

 

)2,055

) 

(110,039

)

 

982

 
             

Issuance of shares, net of issuance costs of 6

 

6,000,000

 

-

 

216

 

-

  

-

  

216

 

Vested RSU's

 

2,104,520

 

-

 

-

 

-

  

-

  

-

 

Expiration of employees options

   

-

 

180

 

-

  

-

  

180

 

Share-based compensation

 

-

   

1,204

 

-

  

-

  

1,204

 

Other comprehensive loss

 

-

 

-

 

-

 

(460

)

 

-

  

(460

)

Net loss

 

-

 

-

 

-

 

-

  

(680

)

 

(680

)

             

Balance as of September 30, 2022,

 

747,153,064

 

                          -

 

            114,676

 

(2,515

)

 

(110,719

)

 

1,442

 

 
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
U.S. dollars in thousands (except share and per share data)
  
 

Nine months ended
September 30,

 

2023

 

2022

 

Unaudited

 

Unaudited

Cash flows from operating activities:

   
    

Net loss

(4,170

)

 

(680

)

    

Adjustments to reconcile net loss to net cash used in operating activities:

   
    

Depreciation of property, plant and equipment

430

  

378

 

Expense of in-process research and development

-

  

179

 

Financial expenses related to loan from others

(369

)

 

(6,948

)

Share-based compensation

686

  

1,204

 

Decrease in other receivables

(82

)

 

96

 

Warrants revaluation

(3,924

)

 

-

 

Changes in operating lease right-of-use assets

(14

)

 

(10

)

Increase in trade payables

(135

)

 

(580

)

Changes in operating lease liabilities

-

  

10

 

(Decrease) increase in other payables

(579

)

 

(321

)

    

Net cash used in operating activities

(8,157

)

 

(6,672

)

    

Cash flows from investing activities:

   
    

Purchase of property, plant and equipment

(403

)

 

(566

)

    

Net cash used in investing activities

(403

)

 

(566

)

      


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