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Introducing NovelStem International Corp.

Hollywood Media Corp. (HMC) will be renamed NovelStem International Corp. in the next several weeks to reflect the Company’s July 2018 investment (link to press release)and new focus on the commercial potential of NewStem Ltd. The stock symbol will also change in conjunction with the name change. 

NovelStem/HMC has 20% initial ownership interest in NewStem and the right to increase its ownership up to 33% through the completion of up to $2 million in follow-on investments over the next 18 months (details below). 

NovelStem/HMC owns a 50% interest in Netco Partners, a joint venture that owns the Net Force publishing franchise. NovelStem is working to monetize this legacy asset.

NovelStem has 35.4 million shares outstanding, incuding 19.25 million shares issued in a July 2018 private placement at $0.10 per share, to fund the NewStem investment.

About NewStem Ltd.

NewStem has developed novel diagnostic technology that can predict patients’ resistance to chemotherapy allowing for better, targeted cancer treatments and the potential to reduce resistance to chemotherapy. Drug resistance is a major cause of treatment failure in cancer chemotherapy, and currently it is only recognized after the first course of treatment has been completed. In nearly 50% of all cancer cases, resistance to chemotherapy already exists in the tumors before initiation of the treatment.

NewStem’s diagnostic solutions are based on the research of human haploid (1)pluripotent (2)stem cells (3) (hHPSCs) by Chief Science Officer, Professor Nissim Benvenisty of the Azrieli Center for Stem Cells and Genetic Researchat the Hebrew University of Jerusalem. NewStem holds the intellectual property, reagents and experience required for hHPSC isolation, differentiation, genetic manipulation, immunogenicity and tumorigenicity.

NewStem’s technology enables informed, personalized selection of chemotherapy treatments for cancer patients. Genetic screenings performed on haploid cells provide a unique opportunity to identify the genes responsible for resistance to chemotherapeutic agents. NewStem’s genetic screenings of hHESCs are creating a comprehensive library of mutated genes which confer resistance to individual chemotherapeutic agents. Integration of this proprietary database with the genetic profile of the patient's tumor will enable the prediction of resistance to chemotherapy prior to treatment.

NewStem is a spinoff of Yissum, The Technology Transfer Company of The Hebrew University, and is led by CEO Ayelet Dilion-Mashiah. NewStem holds the intellectual property, reagents and experience required for hHPSC isolation, differentiation, genetic manipulation, immunogenicity and tumorigenicity. In addition to its in-house development of chemotherapy resistance diagnostics, NewStem looks to leverage its unique haploid technology through collaborations with leading pharmaceutical companies or promising start-ups for the development of therapeutics for genetic disorders and for reproductive purposes.

The remaining 80% ownership of NewStem is evenly divided between Professor Nissim Benvenisty and Yissum Research Development.

Glossary of Terms:

1. Haploid cells: are human cells containing only one set of chromosomes. Most cells in our body are diploid, containing two sets of chromosomes, one inherited from the mother and the other from the father. The only exception are haploid egg and sperm; however, these cells cannot divide to make more of their own. Recently, haploid human pluripotent stem cells were derived, and these cells can divide and differentiate to all cell types while remaining haploid. Link to video about Haploid Human Embryonic Stem Cells

2. Stem cells: are undifferentiated cells of a multicellular organism that are capable of giving rise to indefinitely more cells of the same type, and from which certain other kinds of cell arise by differentiation. In other words, stem cells can divide to produce more stem cells and can also differentiate into other types of cells.

3.  Pluripotent stem cells: are master stem cells that can produce any cell or tissue in the body. This “master” property is called pluripotency, and like all stem cells, they arealso able to self-renewor perpetually create more copies of themselves.

 

NovelStem/HMC Board of Directors

Jan Loeb – Chairman

Mr. Loeb has more than 35 years of business, money management and investment banking experience. He has been the Managing Member of Leap Tide Capital Management LLC since 2007 and has served as President and CEO of Acorn Energy, Inc. since January 2016 and as a Director since August 2015. He has been a Director of Keweenaw Land Association, Ltd. since December 2016. From 2005 to 2007, Mr. Loeb was President of Leap Tide’s predecessor, formerly known as AmTrust Capital Management Inc. He served as a Portfolio Manager of Chesapeake Partners from February 2004 to January 2005 and as Managing Director at Jefferies & Company, Inc. from 2002 to 2004. From 1994 to 2001, he served as Managing Director at Dresdner Kleinwort Wasserstein, Inc. (formerly Wasserstein Perella & Co., Inc.). Mr. Loeb was a Lead Director of American Pacific Corporation from 2013 to 2014 and a Director from 1997 to 2014. He also served as an Independent Director of Pernix Therapeutics Holdings Inc. (formerly, Golf Trust of America, Inc.) from 2006 to 2011 and as a Director of TAT Technologies, Ltd. from 2009 to 2016. 

Mitchell Rubenstein – Director

Mr. Rubenstein co-founded and served as Chairman and CEO of HMC from its inception in 1993 to June 2018, during which period the company returned approximately $37 million to shareholders in the form of dividends and share repurchases, including a tender offer. He founded Syfy Channel and numerous other media businesses. 

Eric Richman – Director

Mr. Richman is a life science executive with significant leadership, operational and strategic experience from over 25 years in the field. He is currently a Venture Partner at Brace Pharma Capital and serves on the boards of LabConnect, F2G (board observer) and ADMA Biologics (NASDAQ: ADMA). Previously he served as President & CEO of PharmAthene and prior to that was part of the founding team at MedImmune, responsible for the U.S. launch of its first commercial product an integral part of the global launch teams for other products. He began his career at HealthCare Ventures, a life-sciences focused VC firm and formerly was a Director of Lev Pharmaceuticals (sold to Viropharma) and American Bank (sold to Congressional Bancshares) and served as CEO of Tyrogenex (sold to Betta Pharma).

David Seltzer – Director

Mr. Seltzer is the CEO and Founder of Reliable 1 Laboratories LLC, a distributor of OTC medications and nutritional supplements to independent pharmacies, long-term care pharmacies, hospitals and government organizations. He is also a minority owner and Director at Leading Pharma LLC, a generic manufacturer of prescription drugs, having previously served as President and CEO and later Chairman of Hi-Tech Pharmacal Co., Inc., which was acquired by Akorn, Inc., for $640 million in 2014.

Jerry Wolasky – Director

Mr. Wolasky has over 35 years experience in the wholesale Pharmaceutical business, most recently for the past 15 years in his current role as President of HealthSource Distributors LLC. He previously served in executive positions of increasing responsibility for AmerisourceBergen, and its predecessor company, Bergen Brunswig. 

Tracy Clifford – Director

Ms. Clifford has over twenty years of experience in accounting and finance, including mergers and acquisitions of public companies. Ms. Clifford was recently named CFO of Acorn Energy, Inc. and since 2015 she has served as a contract CFO and COO for several clients, participated on advisory boards and worked on numerous project engagements. Ms. Clifford previously served as CFO, Principal Accounting Officer, Corporate Controller and Secretary for a publicly-traded pharmaceutical company and a publicly-traded REIT from 1999 to 2015. Ms. Clifford's prior experience included accounting leadership positions at United Healthcare, the North Broward Hospital District and the audit team of Deloitte & Touche. 

NewStem Team: 

About Professor Benvenisty:

Prof. Benvenisty Chief Science Officer of NewStem, the Herbert Cohn Chair in Cancer Research at the Hebrew University, and the Director of the Azrieli Center for Stem Cells and Genetic Research. His research focuses on stem cell biology, tissue engineering, human genetics and cancer research. He is a member of the steering committee of the International Stem Cell Initiative and the Board of Directors of the International Society for Stem Cell Research. Prof. Benvenisty has been awarded the Foulkes Prize (London), the Hestrin Prize, the Teva Prize, and the Kaye Prize. He earned his M.D. and Ph.D. degrees from the Hebrew University and conducted postdoctoral studies at Harvard University.

About Ayelet Dilion-Mashiah:

Ms. Dilion-Mashiah is CEO of NewStem and has served in executive leadership roles in the Life Sciences and Pharmaceutical industries for the past 16 years. Prior to joining NewStem in 2016, she served as CEO of BioMAS from 2011 to 2016. She previously served as CEO of Do-Coop Technologies from 2007 to 2011 after four years as Director – Corporate Economic Development at Teva Pharmaceuticals Industries.

Details of NewStem Investment

NovelStem/HMC completed a $2 million investment in NewStem Ltd., securing an initial 20% ownership in the company at a $10.0 million post-money valuation. NoveStem also secured the right to increase its NewStem ownership up to 33%, based on the completion of up to $2 million in follow-on investments. Pending the achievement of certain development milestones, NovelStem will invest an additional $1 million in NewStem on each of the 12-month and 18-month anniversaries of its initial investment. 

Details of Investment in NovelStem/HMC

The NewStem investment was funded with available cash and proceeds from a $1.925 million investment in HMC at $0.10 per share by an investor group led by Leap Tide Capital Management LLC. The new investors purchased 19.25 million shares, or approximately 54.4% of HMC’s 35.4 million shares outstanding after the investment. Terms of the new investment were based on HMC’s estimated per share value of its current cash position, plus the present value of $600,000 in expected holdback payments from the previous sale of an online ticketing business, which represented approximately $0.10 per share as of June 30, 2018. HMC’s share of the total potential holdback is $1.5 million and any funds received by HMC in excess of $600,000 would be paid to HMC shareholders, excluding those who participated in the recent private placement. There were 16,131,477 HMC shares outstanding prior to the private placement. 

Investors in the HMC financing have agreed to an 18-month resale prohibition on their shares, in addition to waving participation in any profits generated by the Netco Partners publishing joint venture over the next 18 months. If publishing revenues are reasonably expected to exceed $500,000 over the next three years, then the allocation of 100% of these profits to HMC shareholders, excluding new investors in the private placement, will become permanent. The resale and Netco Partners profit provisions were put in place to ensure that existing HMC investors would be the sole beneficiaries of any value derived from the joint venture in the event its expected income is suffiently large ($500,000 or greater) to warrant a permanent carveout to all shareholders, excluding new investors in the private placement.