NovelStem Now an SEC-Reporting Company, Secures Commitment for up to $600K in Bridge Funding, Provides Financial Update
Boca Raton, FL, October 13, 2022 – NovelStem International Corp. (OTC Pink: NSTM), a development-stage company focused on the stem cell-based technology platform developed by 30%-owned, Israel-based NewStem Ltd., today announced that it has become an SEC-reporting company following the automatic effectiveness of its Form 10 registration statement filed August 2, 2022. NovelStem filed a Form 10 Amendment yesterday, which included its results of operations for the six months ended June 30, 2022. The Form 10, as amended, remains subject to further SEC review and comment.
NovelStem reported a net loss of $581,000 for the first six months of 2022 versus $404,000 for the first six months of 2021. NovelStem’s general and administrative (“G&A”) expenses increased to $245,000 for the six months ended June 30, 2022 compared to $76,000 for the six months ended June 30, 2021. The G&A increase included $142,000 in accounting and other professional fees associated with the preparation of the Company’s Form 10, as well as a $21,000 increase in directors and officers insurance expense.
NovelStem recorded contra expenses of $310,000 in the aggregate in the first six months of 2022, representing a nonrecourse reimbursement from Omni Bridgeway pursuant to an agreement to fund arbitration proceedings relating to the Company’s investment in NetCo Partners. The reimbursement was for $140,000 in previously incurred legal expenses as well as $170,000 for working capital needs. NovelStem has no obligation to repay any funds received under the agreement, however, in the event of a favorable arbitration outcome, Omni Bridgeway would recover disbursed funding in addition to its fees. NovelStem expects the arbitration hearings to be completed in late October; however, it is unable to predict the outcome of the arbitration or its timing.
NovelStem had current assets of $109,000 and current liabilities of $102,000 as of June 30, 2022. NovelStem entered into an agreement with its Executive Chairman, Jan Loeb, and its Board Member, Jerry Wolasky, to borrow up to an aggregate of $600,000 for working capital needs, $200,000 of which has been funded as of the date of this release. The loan agreement provides for an interest rate of 8% per annum and matures on January 31, 2024, unless the lenders agree to extend the due date.
Jan Loeb commented, “Regaining fully-reporting public company status is an important milestone which provides greater transparency for investors and should help us achieve our long-term strategic vision. We appreciate the significant amount of work by our team, including our lawyers, audit firm and our CFO to accomplish our Form 10 filing. We plan to file our third quarter 10-Q on or about November 15, 2022.”
About NovelStem International Corp. www.novelstem.com
NovelStem owns a 30% stake in NewStem Ltd. which is advancing its novel stem-cell-based diagnostic technology for predicting patients’ resistance to cancer therapies, allowing for better, targeted cancer treatments with the potential to reduce incidents of drug resistance. The technology is also being used for genetic research related to other medical needs.
About NewStem newstem.com
NewStem Ltd., a biotechnology spinoff of Yissum, The Hebrew University of Jerusalem’s technology-transfer company, has established a bio-platform for genome wide screenings based on proprietary Haploid human Embryonic Stem Cell (HhESC) technology. These cells can potentially change the way we develop genetic based therapeutics and diagnostics, as they are superior to other cells used for whole genome screenings. NewStem is currently the only company worldwide to develop innovative practice-changing products based on this innovative and exclusive technology. NewStem utilizes this bio-platform for the discovery and development of precision oncology drugs based on synthetic lethal interaction modality and for diagnostics of anti-cancer drugs resistance. NewStem’s licensed technology is based on the research of Professor Nissim Benvenisty, Director of the Azrieli Center for Stem Cells and Genetic Research at the Hebrew University. NewStem holds the intellectual property, reagents and experience required for HhESC isolation, differentiation, genetic manipulation, immunogenicity and tumorigenicity.
Statements in this press release and its hyperlinks may be “forward-looking statements” within the meaning of federal securities laws. Forward-looking statements generally are identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “should,” “would,” “strategy,” “plan,” and similar expressions. All statements other than statements made of historical fact are statements that could be deemed forward-looking statements and are not guarantees of future performance. Such statements speak only as of the date hereof, are subject to change and should not be relied upon for investment purposes. The matters discussed herein that are forward-looking statements are based on current board and management expectations that involve risks and uncertainties that may result in such expectations not being realized. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous potential risks and uncertainties, including, but not limited to, the success of NewStem’s research and future commercialization of its diagnostics utilizing human haploid pluripotent stem cells, competition in the area of genetic diagnostics, the ability to retain key personnel involved in research and development, the ability to secure appropriate regulatory approvals, the ability to fund future investment in NewStem and other risks and uncertainties described in the section entitled “Risk Factors” in NovelStem’s Registration Statement on Form 10. Accordingly, NovelStem cannot give assurance that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of NovelStem. Such forward-looking statements speak only as of the date on which they are made and NovelStem undertakes no obligation to revise or update any statements for any reasons.
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NovelStem Investor Relations
Bill Jones and David Collins