8-K: Silexion Therapeutics and Moringa Acquisition Corp Complete Business Combination, Begin Trading on Nasdaq

Silexion Therapeutics Corp, formerly Biomotion Sciences, and Moringa Acquisition Corp have finalized their business combination, with the combined entity's shares and warrants set to trade on Nasdaq under the symbols SLXN and SLXNW, respectively, starting August 16, 2024.

Summary

• Silexion Therapeutics Corp, previously known as Biomotion Sciences, has completed its business combination with Moringa Acquisition Corp.
• The combined company's shares and warrants are expected to begin trading on Nasdaq under the tickers SLXN and SLXNW, respectively, on August 16, 2024.
• The transaction involved a merger of Moringa with a subsidiary of Biomotion Sciences, followed by a merger of Silexion with another subsidiary of Biomotion Sciences, with Biomotion Sciences becoming the publicly traded holding company.
• Moringa shareholders who did not redeem their shares received one ordinary share of the combined company for each Moringa share they held.
• Silexion shareholders received a number of ordinary shares of the combined company based on a set exchange ratio.
• The combined company will focus on developing innovative treatments for pancreatic cancer based on siRNA technology.
• The transaction was accounted for as a reverse recapitalization, with Silexion treated as the accounting acquirer.
• The remaining balance of Moringas Trust Account of $333,936 was used to partially fund the Business Combination.
• In connection with the closing, New Pubco issued to EarlyBird a convertible promissory note, due December 31, 2025, in an amount of $1.25 million to be paid by New Pubco to EarlyBird in cash and/or via conversion of outstanding amounts into ordinary shares of New Pubco.
• Also in connection with the Closing, New Pubco entered into an ordinary share purchase agreement for an equity line of credit with White Lion Capital, LLC, whereby New Pubco will be able to request to sell to the ELOC Investor, and the ELOC Investor will be required to purchase, via private placement transactions, up to $15.0 million of New Pubco ordinary shares from time to time after the Closing, up until December 31, 2025.
• As a result of the redemptions of Moringa ordinary shares, a total of 87,722 Moringa public shares remained outstanding at the Closing.
• After giving effect to the Business Combination and the following changes to share capital, immediately following the Closing, there were 9,768,396 New Silexion ordinary shares issued and outstanding.

Sentiment

Score: 5

Explanation: The document is a mix of positive and negative signals. The completion of the business combination and the Nasdaq listing are positive, but the company's history of losses and need for additional funding temper the overall sentiment. The company is still in the early stages of development and faces significant risks.

Positives

• The business combination provides Silexion with greater financial and strategic flexibility.
• The listing on Nasdaq is a significant milestone for Silexion.
• The combined company will focus on developing innovative treatments for pancreatic cancer.
• The transaction provides Silexion with access to public markets and potential for future capital raises.
• The equity line of credit provides New Silexion with access to additional capital.

Negatives

• The transaction involved a reduction in the fee payable to EarlyBird, which may indicate a need to reduce costs.
• The company will need to raise additional capital to finance its operations.
• The company has a history of operating losses and negative cash flows from operations.

Risks

• The company is a development-stage company with a limited operating history.
• The company has never generated any revenue from product sales and may never be profitable.
• The company will need to raise substantial additional funding, which may not be available on acceptable terms, or at all, and which will cause dilution to its shareholders.
• The approach Silexion is taking to discover and develop novel RNAi therapeutics is unproven for oncology and may never lead to marketable products.
• Silexion does not have experience producing its product candidates at commercial levels, currently has no marketing and sales organization, has an uncertain market receptiveness to its product candidates, and is uncertain as to whether there will be insurance coverage and reimbursement for its potential products.
• Silexion may be unable to attract, develop and/or retain its key personnel or additional employees required for its development and future success.
• The company may issue additional New Silexion ordinary shares or other equity securities without your approval, including shares underlying warrants and Note Shares, which would dilute your ownership interest and may depress the market price of the New Silexion ordinary shares.

Future Outlook

The company expects to continue to incur significant expenses and operating losses for the foreseeable future. The company will need to raise additional capital to finance its operations, expand its business and pipeline, or for other reasons.

Management Comments

• Silexion and Moringa have been working diligently towards the completion of the Business Combination and we are excited to become listed on Nasdaq, commented Ilan Hadar, Chairman and CEO of Silexion.
• The transaction is a significant milestone for us and will provide us with greater financial and strategic flexibility to advance our mission of developing novel siRNA therapies that can revolutionize cancer treatment and provide patients with not only hope, but also improved outcomes.

Industry Context

This announcement reflects a trend of biotechnology companies seeking public listings through mergers with special purpose acquisition companies (SPACs). The focus on siRNA therapeutics for cancer treatment aligns with the growing interest in targeted therapies and personalized medicine.

Comparison to Industry Standards

• The company's focus on siRNA therapeutics for pancreatic cancer is a niche area within the broader oncology market, with limited direct comparables.
• Other companies developing RNAi therapeutics include Alnylam Pharmaceuticals and Arrowhead Pharmaceuticals, but their focus areas and clinical stages may differ.
• The company's financial metrics, such as operating losses and cash burn, are typical for a clinical-stage biotechnology company.
• The company's reliance on external funding is also common in the biotechnology industry, particularly for companies that have not yet generated revenue from product sales.
• The company's valuation and market capitalization will be determined by investor sentiment and market conditions following the listing on Nasdaq.

Management Changes

Corporate Governance

Related Party Transactions

• The Sponsor loaned to Moringa funds as working capital and for contributions to Moringas trust account prior to the Closing, for which the obligation to repay those loan amounts is being assigned by Moringa to New Pubco upon the Closing, and which loan amounts may therefore potentially be (i) converted into New Pubco ordinary shares by the Sponsor, or (ii) repaid by New Pubco via the issuance of New Pubco ordinary shares to the Sponsor, under the terms of an amended and restated promissory note (the A&R Sponsor Promissory Note).
• The Sponsor will receive, upon the Merger, 1,735,182 ordinary shares of a par value of US$0.0001 each of Biomotion Sciences, a Cayman Islands exempted company that is the sole member of the Merging Company (Biomotion Sciences), and which Sponsor is the sole limited partner of an exempted limited partnership that will receive 200,000 ordinary shares of a par value of US$0.0001 each of Biomotion Sciences upon the Merger.
• Ilan Levin, a director of each of the Merging Company and the Surviving Company, holds an economic interest in the sponsor of the Surviving Company (the Sponsor), which Sponsor will receive, upon the Merger, 1,735,182 ordinary shares of a par value of US$0.0001 each of Biomotion Sciences, a Cayman Islands exempted company that is the sole member of the Merging Company (Biomotion Sciences), and which Sponsor is the sole limited partner of an exempted limited partnership that will receive 200,000 ordinary shares of a par value of US$0.0001 each of Biomotion Sciences upon the Merger, and Mr. Levin will be paid, for his services as a director of Biomotion Sciences, US$10,000 per month for the first 36 months following the Merger.
• Ruth Alon, a director of the Surviving Company, will receive, upon the Merger, a grant of 39,325 restricted share units that may be settled for an equivalent number of ordinary shares of a par value of US$0.0001 each, of Biomotion Sciences.
• Other directors of the Surviving Company have economic interests in the Sponsor, which will receive 1,735,182 shares of Biomotion Sciences and which is the sole limited partner of an exempted limited partnership that will receive 200,000 shares of Biomotion Sciences upon the Merger.

Stakeholder Impact

• Shareholders of Moringa and Silexion have received shares in the combined company.
• Employees of Silexion will become employees of the combined company.
• Customers and suppliers of Silexion will continue to do business with the combined company.
• Creditors of Moringa and Silexion will become creditors of the combined company.

Next Steps

• The combined company will begin trading on Nasdaq under the symbols SLXN and SLXNW on August 16, 2024.
• The company will continue to develop its lead product candidate, SIL-204B, for locally advanced pancreatic cancer.
• The company will seek to raise additional capital to fund its operations and development programs.
• The company will continue to evaluate and develop its technology as a platform focused on the silencing of the KRAS oncogene using RNA-interference therapeutics.

Key Dates

Keywords

Silexion Therapeutics, Moringa Acquisition Corp, Business Combination, Nasdaq, siRNA, pancreatic cancer, RNA interference, SIL-204B, equity financing, convertible note, equity line of credit