Hadasit Bio-Holdings

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Term Sheet Signed for Financing Enlivex

Dec. 16, 2013

Link to Hebrew report

Enlivex Therapeutics Ltd. has signed a term sheet agreement outlining the provision of financial resources necessary to realize Enlivex’s objectives.

In accordance with the agreement, which is not a legally binding contract, it was determined that the legal structure of the transaction will be finalized between the parties after the signing of the agreement. An effort will be made to maximize the benefits to the Enlivex operations as well as tax considerations.

In accordance with the term sheet, a new entity will be established for the transaction into which Enlivex will be merged (in an agreed upon format). The new entity will raise between 5 to 10 million U.S. dollars through a private placement (and possibly higher in a case of excessive demand). The private placement will be at a price of $ 1.25 per unit, which will include one share and one warrant (to be exercisable for a period of five years at an exercise price of $ 1.25 per option) following the raise, and considering all the terms agreed upon, HBL will hold 23 % of Enlivex’s issued capital, fully diluted (if $5 million are raised).

In parallel and until the completion of the due diligence and organization of the investor group, a bridge loan in the sum of  between NIS 600,000 to NIS 1,000,000 will be provided to Enlivex, not by the HBL. The final amount will be determined based on the agreed structure of the investment and the date on which it will be concluded. The parties agreed that the terms of the bridge loan will be determined in the negotiations to be held between the parties. The lenders will be entitled to receive options in the new corporation (without changing HBL’s fully diluted holdings in the new corporation).

The parties set essential conditions to the closing, including that the financial statements of Enlivex for 2012 will be in accordance with the U.S. GAAP; The investment will be at least $ 5 million in equity as above; the new company will not have any outstanding debts totaling more than 25 thousand dollars; and receiving a "pre - Rolling "from the Israeli tax authority and more.

The Company wishes to clarify and emphasize that this is only a term sheet which is not legally binding and it is possible that it will not materialize; both for reasons related to Enlivex or for reasons related to the agreement conditions. In addition, the term sheet may be canceled upon the mutual agreement of the parties; breach of the agreement; not reaching a definitive agreement by the date agreed upon, or upon notice given that the results of the due diligence were not completed to satisfaction.


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