Wize Pharma (OTCQB: WIZP), from Hod Hasharon, has reported that it has met all the preconditions for implementing the offer to purchase the shares of Australian bitcoin miner Cosmos Capital Ltd. Wize Pharma expects to complete the purchase of the shares by March 9, 2021. One of the conditions was that the level of response should be a minimum of 90% of Cosmos shareholders, and as of yesterday a response had been received (including a commitment to respond) of Cosmos shareholders, holding about 94.5% of the company's equity.
Cosmos specializes in Bitcoin mining and providing digital infrastructures, which aim to serve as a bridge between the growing digital currencies industry and traditional capital markets. The company will merge within Wize Pharma, which is traded over the counter in the US at a market cap of $22.5 million. The largest shareholders currently in Wize Pharma are Yair Goldfinger and Noam Danenberg.
Wize Pharma also reported in its announcement that Cosmos has completed its offering of $21 million in convertible bonds to investors. The bonds, which were issued without collateral, will be convertible to Cosmos shares at a price of $18.16 per share, which reflects a company valuation of $185 million, "before money." The bond will be converted automatically to Cosmos shares within six months of the date of its issue. The bonds bear an annual interest rate of 8%, which will be repaid in cash or Cosmos shares - as the company chooses.
If the merger between the two companies is completed before the end of May 2021, Cosmos will work to transfer the bond to Wize itself, on the same terms, but the bond will be convertible to Wize shares at a conversion price of $0.339 per share, and it will be converted on the earlier date of the two: (1) six months from the date of its transfer, or (2) listing of Wize shares on Nasdaq.
Cosmos operates in the field of Bitcoin mining, which has recently gained major interest, during a period when Bitcoin has reached an all-time high value of about $50,000, and many investors and large financial institutions have become to adopt its use. The leading companies with which Cosmos intends competing with that are operating in this sector are Riot and Marathon, which are both traded with a value of billions of dollars.
At the same time as acquiring Cosmos, Wize Pharma will spin off its biopharmaceutical operations in order to leverage value for its shareholders. This activity is the development of a drug for the treatment of a dry eye inflammation called LO2A.
Wize management chose to implement this process after good Phase II clinical trial results were presented at the beginning of November for the LO2A eye drops for the treatment of Sjogren Syndrome, which is a side effect of dry eye. Sjorgen Syndrome is a chronic autoimmune disease and one of the significant complications is the development of lymphoma cancer. In the United States alone there are more than 16 million adults suffering dry eye, and in 2018 the eye drop market for treating this disease was worth $4.5 billion and it is expected to grow to $6.2 billion by 2024 - the rate of growth shows the large potential contained in this market.
Published by Globes, Israel business news - en.globes.co.il - on February 17, 2021
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