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NLS Pharmaceutics Announces $1.75 Million Registered Direct Offering

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NLS Pharmaceutics announces a registered direct offering of 7,000,000 common shares at $0.25 per share, along with a private placement of unregistered warrants to purchase up to 3,500,000 common shares.
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The recent move by NLS Pharmaceutics to issue 7 million common shares at a price of $0.25 each, along with warrants for an additional 3.5 million shares, represents a capital raising strategy. The capital infusion is likely aimed at funding ongoing research and development projects or to shore up the company's balance sheet. Such offerings can dilute existing shareholders but may be necessary for the company's growth.

Investors should note the share price at which the new equity is issued. A discount to the current market price could indicate the company's urgent need for cash or a lack of negotiating power. The warrant exercise price being set at the same level as the share price in the direct offering suggests a confidence in maintaining the stock's value at or above the offering price.

Long-term implications include the potential for increased liquidity and future growth fueled by the capital raised. However, shareholders should be aware of the immediate dilutive effect and the possibility of downward pressure on the stock price in the short term.

NLS Pharmaceutics operates in the high-stakes biopharmaceutical sector, where the development of treatments for central nervous system disorders can be a lengthy and expensive process. The direct offering indicates that NLS is likely at a critical juncture in its development pipeline, necessitating substantial capital.

The biotech industry often sees companies with no product revenue stream relying on capital markets to fund their operations. The success of such companies is highly dependent on their ability to reach clinical milestones that validate their research and potentially lead to profitable partnerships or acquisitions.

For stakeholders, the key will be monitoring the deployment of these funds towards clinical trials or other research initiatives that could lead to value-creating events. The issuance of warrants is also a strategic move, as it could potentially bring in additional capital if the stock performs well, but it also adds to future dilution risk.

The structure of the offering, involving both registered direct offerings and private placement of unregistered warrants, is a common fundraising approach in the pharmaceutical industry. It is designed to balance immediate funding needs with the opportunity to raise additional capital in the future.

From a legal standpoint, the offering's compliance with securities regulations is crucial, as is the transparency of the terms to investors. The exercise of the warrants will be subject to market conditions and regulatory considerations, which can impact the company's financials and operational strategy.

The legal frameworks governing such transactions are designed to protect both the company and its investors. Investors should be aware of their rights regarding the warrants, including the exercisability and expiration terms. The five-year expiration on the warrants is a standard term, giving investors a relatively long window to decide on exercising them based on the company's performance and market conditions.

ZURICH, SWITZERLAND / ACCESSWIRE / March 20, 2024 / NLS Pharmaceutics Ltd. (Nasdaq:NLSP)(Nasdaq:NLSPW) ("NLS" or the "Company"), a Swiss clinical-stage biopharmaceutical company focused on the discovery and development of innovative therapies for patients with rare and complex central nervous system disorders, today announced that it has entered into a definitive agreement for the issuance and sale of an aggregate of 7,000,000 of its common shares (or common share equivalents in lieu thereof) at a purchase price of $0.25 per share (or per common share equivalent in lieu thereof) in a registered direct offering. NLS has also agreed to issue in a private placement unregistered warrants to purchase up to an aggregate of 3,500,000 common shares at an exercise price of $0.25 per share. The warrants will become immediately exercisable upon issuance and will expire five years from the date of issuance. The closing of the offering is expected to occur on or about March 22, 2024, subject to the satisfaction of customary closing conditions.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

The gross proceeds to the Company from the offering are expected to be $1.75 million, before deducting the placement agent's fees and other offering expenses payable by the Company. The Company currently intends to use the net proceeds from the offering for working capital and general corporate purposes.

The common shares (or common share equivalents) offered in the registered direct offering (but excluding the unregistered warrants and the common shares underlying such unregistered warrants) described above are being offered and sold by the Company pursuant to a "shelf" registration statement on Form F-3 (Registration No. 333-262489), including a base prospectus, previously filed with the Securities and Exchange Commission ("SEC") on February 3, 2022, and declared effective by the SEC on February 11, 2022. The common shares (or common share equivalents) to be issued in the registered direct offering are being offered only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and the accompanying base prospectus relating to, and describing the terms of, the registered direct offering will be filed with the SEC and will be available on the SEC's website located at http://www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying base prospectus relating to the registered direct offering, when available, may also be obtained by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by phone at (212) 856-5711 or e-mail at placements@hcwco.com.

The warrants described above will be issued in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Regulation D promulgated thereunder and, along with the common shares underlying such warrants, will not be registered under the Securities Act, or applicable state securities laws. Accordingly, the warrants and underlying common shares, upon issuance, may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About NLS Pharmaceutics Ltd.

NLS is a global development-stage biopharmaceutical company, working with a network of world-class partners and internationally recognized scientists, focused on the discovery and development of innovative therapies for patients with rare and complex central nervous system disorders who have unmet medical needs. Headquartered in Switzerland and founded in 2015, NLS is led by an experienced management team with a track record of developing and commercializing product candidates. For more information, please visit www.nlspharma.com.

Safe Harbor Statement

This press release contains expressed or implied forward-looking statements pursuant to U.S. Federal securities laws, including statements related to the timing and completion of the offering, the satisfaction of customary closing conditions related to the offering and the intended use of proceeds therefrom. These forward-looking statements and their implications are based on the current expectations of the management of NLS only and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: market and other conditions; NLS' ability to regain and maintain compliance with Nasdaq's continued listing requirements; changes in technology and market requirements; NLS may encounter delays or obstacles in launching and/or successfully completing its clinical trials; NLS' products may not be approved by regulatory agencies, NLS' technology may not be validated as it progresses further and its methods may not be accepted by the scientific community; NLS may be unable to retain or attract key employees whose knowledge is essential to the development of its products; unforeseen scientific difficulties may develop with NLS' process; NLS' products may wind up being more expensive than it anticipates; results in the laboratory may not translate to equally good results in real clinical settings; results of preclinical studies may not correlate with the results of human clinical trials; NLS' patents may not be sufficient; NLS' products may harm recipients; changes in legislation may adversely impact NLS; inability to timely develop and introduce new technologies, products and applications; and loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of NLS to differ materially from those contemplated in such forward-looking statements. Except as otherwise required by law, NLS undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. More detailed information about the risks and uncertainties affecting NLS is contained under the heading "Risk Factors" in NLS' annual report on Form 20-F for the year ended December 31, 2022 filed with the SEC, which is available on the SEC's website, www.sec.gov, and in subsequent filings made by NLS with the SEC.

For additional information:

Marianne Lambertson (investors & media)
NLS Pharmaceutics Ltd.
+1 239.682.8500
ml@nls-pharma.com
www.nlspharmaceutics.com

SOURCE: NLS Pharmaceutics AG



View the original press release on accesswire.com

FAQ

What is the purchase price for the common shares in the registered direct offering by NLS Pharmaceutics ?

The purchase price for the common shares in the registered direct offering by NLS Pharmaceutics is $0.25 per share.

How many common shares are being offered in the registered direct offering by NLS Pharmaceutics ?

NLS Pharmaceutics is offering an aggregate of 7,000,000 common shares in the registered direct offering.

What is the exercise price for the unregistered warrants in the private placement by NLS Pharmaceutics ?

The exercise price for the unregistered warrants in the private placement by NLS Pharmaceutics is $0.25 per share.

When will the warrants issued in the private placement by NLS Pharmaceutics expire?

The warrants issued in the private placement by NLS Pharmaceutics will expire five years from the date of issuance.

NLS Pharmaceutics Ltd.

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mission & values to serve our patients we design affordable, safe and effective therapeutics to safeguard and empower the brain throughout all stages of life. we value partnership and integrity, we are ethical and responsible and show respect and compassion for our patients. r&d strategy the successful companies of tomorrow are those that go beyond delivering products to delivering real solutions and services. r&d is the cornerstone of our company and we promote ingenuity through an effective intellectual property policy. the advancements in science mean that more targeted, more (cost-)effective treatments are within reach and we are here to take on this challenge. our innovative r&d is centered on patients’ needs and delivering affordable, safe and effective solutions. not only will these enable us to improve access to quality healthcare and meet unmet needs, but they will also deliver the sustainable growth required to allow us to continue to invest in innovative research & developm