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Hollywood Media receives makeover along with NewStem investment
JERUSALEM and BOCA RATON, Fla.—Hollywood Media Corp. (HMC) announced today the strategic transformation of the company, its management and board through an initial $2 million investment in Jerusalem, Israel-based NewStem Ltd., a subsidiary of Yissum, The Hebrew University of Jerusalem’s technology-transfer company. HMC will be refocusing on the commercial potential of NewStem’s novel diagnostic technology which can predict patients’ resistance to chemotherapy, allowing for targeted cancer treatments and the potential to reduce resistance to chemotherapy. HMC has also announced a name change, and will rebrand as NovelStem International Corp. (www.novelstem.com), including an expected change in its stock symbol to reflect this transformation.
Mitchell Rubenstein, HMC Director and former Chairman commented, “The technology that NewStem is developing has the potential to change the face of medical research and patient treatment across a broad range of potential applications. Given the potential applications of their technology, combined with the caliber and strength of the scientific, academic and venture capital teams, the Board of HMC felt the pursuit of this investment represented an exciting opportunity to create value for HMC shareholders.
“A driving force in this transaction was partnering with Jan Loeb and the Leap Tide investor group he assembled. Jan has a strong track record in creating value in microcap investments. He brought this opportunity to HMC and was instrumental in structuring and funding our NewStem transaction. Importantly, we have worked to ensure existing long-term investors in HMC will be the sole beneficiaries of all net proceeds from any monetization of our Netco Partners joint venture ownership over the next 18 months, and if this monetization looks to exceed $500,000, the Board will spin-off or otherwise allocate 100% of HMC’s future Netco Partners profits to HMC shareholders, excluding those who participated in the private placement. Recognizing that new skill sets are required to move HMC forward in its new direction, we have formed a strong new board with relevant healthcare, medical and financial expertise, while also retaining continuity with one legacy board seat which I will hold.”
Jan Loeb, president of Leap Tide Capital Management, was responsible for structuring and financing the transactions and has been named Chairman of the HMC Board of Directors, in addition to Eric Richman, David Seltzer, Jerry Wolasky and Tracy Clifford who have been named to the HMC Board. Loeb has also been named to the Board of NewStem. A small team will be put in place at HMC on a part time basis to direct HMC’s operations. Though HMC intends to provide periodic updates via press release as developments warrant, the company intends to remain “dark” for the foreseeable future, to minimize overhead expense.
NewStem’s diagnostic solutions are based on the research of human haploid pluripotent stem cells (hHPSCs) by Chief Science Officer Professor Nissim Benvenisty of the Azrieli Center for Stem Cells and Genetic Research at The Hebrew University of Jerusalem. NewStem’s technology enables informed personalized selection of chemotherapy treatments for cancer patients. Genetic screenings performed on haploid cells provide a unique opportunity to identify the genes responsible for resistance to chemotherapeutic agents. Integration of this proprietary database with the genetic profile of a patient’s tumor will enable the prediction of resistance to chemotherapy prior to treatment.
HMC has completed a $2 million investment in NewStem Ltd., securing an initial 20% ownership in the company, including its technology, intellectual property and future commercial potential, at a $10.0 million post-money valuation. HMC has also secured the right to increase its NewStem ownership up to 33%, based on the completion of up to $2 million in follow-on contributions. Pending the achievement of certain development milestones, HMC will contribute an additional $1 million in NewStem on each of the 12-month and 18-month anniversaries of its initial contribution. Currently, the balance of NewStem ownership is evenly divided between Professor Nissim Benvenisty and Yissum.
NewStem is led by CEO Ayelet Dilion-Mashiah, and holds the intellectual property, reagents and experience required for hHPSC isolation, differentiation, genetic manipulation, immunogenicity and tumorigenicity. In addition to its in-house development of chemotherapy resistance diagnostics, NewStem looks to leverage its unique haploid technology through collaborations with leading pharmaceutical companies or promising start-ups for the development of therapeutics for genetic disorders and for reproductive purposes.
“We are pleased to have secured a commitment for $4 million in funding and a solid partner in HMC. We are now able to further advance NewStem’s diagnostic solutions for chemotherapy targeting while at the same time expanding our base of industry contacts and support. With our efficient development model and funding in hand, I am excited to focus my time on advancing NewStem’s technology and solutions into compelling business models for our stakeholders,” added NewStem CEO, Ayelet Dilion-Mashiah.
Ms. Dilion-Mashiah has served in executive leadership roles in the Life Sciences and Pharmaceutical industries for the past 16 years. Prior to joining NewStem in 2016, she served as CEO of BioMAS from 2011 to 2016. She previously served as CEO of Do-Coop Technologies from 2007 to 2011 after four years as Director – Corporate Economic Development at Teva Pharmaceuticals Industries.
Dr. Yaron Daniely, CEO and President of Yissum, said, “NewStem is an excellent new addition to the dozens of academic-born startups rooted in the strong life science research at the Hebrew University. This investment provides strong support for NewStem’s goal of revolutionizing the treatment of cancer through personalized, patient-centered care.”