Well, I took a stab at cleaning up that 'awful translation' as best I could. I didn't do any checking of factual content and some phrases were ambiguous at best and I had to use some judgement about the author's meaning or intent. I found paragraphs 2-4 were especially confusing and I welcome any help that anyone can provide.
[1]Two weeks ago Kitov Parma completed a secondary offering totaling $12 million. The Company issued one share and a warrant at a negotiated price of $3.40. Unlike the IPO which yielded early losses to investors, the current offering was positive from day one and even now is showing the investors a gain of about 14%.
[2]Today (Haute Stokes?) revealed who the anchor investor was in the transaction - they purchased $6 million in shares and warrants of Kitov. The entity that purchased the stock is a hedge fund named Sabby Capital. Although the deal should theoretically make Sabby a major shareholder in Kitov, it will not happen. (This is part of the issue.?) Most investors sought to buy shares and warrants as a regular deal. However, Sabby chose the option to pay $3.39 and get unlisted warrants exercisable for shares of the company for 1 cent. Since Sabby currently holds warrants – it is not an interested party.
[3]Sabby is a hedge fund with assets of $2 billion. Sabby is also Israeli and is a stakeholder in a variety of companies such as Bioline, MEDIGUS and PLURISTEM. Sabby is also an investor in Intec Pharma and currently holds approximately 6% of its shares. Sabby’s Israeli holdings of each portfolio are not material. However, it is likely that some of its holdings of financial and Sabby are part of the investments are strategic.
[4]It is still unclear how Sabby sees its investment in Kitov. Also, until the warrants are exercised at the gate 1 cent - it will be impossible to know whether the company is working with paper. Either way, it does not really matter. Kitov now has another $12 million in the bank and it may serve the same promoting activity.
[5]You may ask why Kitov needs the money less than a year after she raised $12-13 million in an IPO. There are two reasons for the current round. First, Kitov doesn’t want to be dependent on a single product. It is likely that some of the money raised will go to finance the purchase of a new product investment portfolio. This step is right, necessary, and will cause Kitov to become more interesting in the eyes of investors. At the moment , I understand there is no concrete deal on the table - but that could change very quickly.
[6]The second reason Kitov may want these funds is to strengthen its bargaining power when dealing with pharmaceutical companies regarding KIT-302’s commercialization potential. When Kitov brings a strong balance sheet to the bargaining table, its power in any negotiation increases. It creates a threat that it will market the drug alone since it has the resources. If this does not happen, of course, Kitov will have to find a partner to market the product. However, it is still better to negotiate from financial strength than winding up a transaction that closes under pressure.
[7]The real test of Kitov now is to get a partner to market the drug - and put an initial amount of $10-15-20-25 million to the Company for the product. Any number wins. At the same time, you can expect Kitov to file an NDA to the FDA in the second half of the year. We will continue to monitor and update.
