NLS Pharmaceutics Announces Closing of $1.75 Million Registered Direct Offering
NLS Pharmaceutics announced the closing of a registered direct offering of 7,000,000 common shares at $0.25 per share, raising $1.75 million. The company also issued unregistered warrants for 3,500,000 common shares at the same price. The proceeds will be used for working capital and general corporate purposes.
The completion of NLS Pharmaceutics Ltd.'s registered direct offering and concurrent private placement of warrants represents a significant capital infusion for the company. With a total gross proceed of $1.75 million, this capital raise, albeit modest in size, is a pivotal step for NLS in bolstering its working capital and supporting general corporate functions. However, the offering price of $0.25 per share suggests a potential dilution effect for existing shareholders. Stakeholders should monitor the utilization of these funds, as efficient deployment could enhance the company's research capabilities and accelerate the development of therapies for central nervous system disorders.
It's important to note that the warrants are immediately exercisable at the same price as the direct offering, which could lead to further dilution if exercised. Investors should consider the five-year expiration on these warrants, as it provides a lengthy window for potential conversion, affecting the stock's performance over time. The role of H.C. Wainwright & Co. as the exclusive placement agent also underscores the importance of experienced intermediaries in executing such financial transactions.
NLS Pharmaceutics Ltd. operates within the high-stakes biopharmaceutical industry, where funding is important for sustaining long-term research and development efforts. The funds raised through this offering are earmarked for working capital and general corporate purposes, which is typical for clinical-stage companies. However, the specificity of the allocation and the impact on the company's pipeline progression are not detailed. For industry observers, the ability of NLS to advance its clinical trials or achieve regulatory milestones with the raised capital will be a key indicator of the offering's success.
Furthermore, the reliance on a 'shelf' registration statement indicates a pre-planned financing strategy, allowing the company to act swiftly in capitalizing on favorable market conditions. This move could be interpreted as a strategic approach to funding, but it also raises questions about the company's cash runway and the need for continued capital raises in the future.
The mechanics of the registered direct offering and the private placement of unregistered warrants involve nuanced securities regulations. NLS's adherence to the 'shelf' registration statement for the common shares and the use of Section 4(a)(2) and Regulation D for the private placement of warrants demonstrate compliance with the Securities Act of 1933. Potential investors and current shareholders should be aware of the implications of these regulatory frameworks, such as the restrictions on the sale of unregistered securities and the conditions under which they may be legally traded.
It is also critical to understand that the warrants, being unregistered, carry certain limitations on their marketability. This can affect their attractiveness to investors who prefer more liquid investment options. The company's decision not to register the warrants hints at a targeted approach to fundraising, possibly aiming at a select group of investors who are familiar with the risks and potential rewards associated with such securities.
03/22/2024 - 04:30 PM
ZÜRICH, SWITZERLAND / ACCESSWIRE / March 22, 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 the closing of its previously announced registered direct offering of 7,000,000 of its common shares at a purchase price of $0.25 per share. NLS also issued 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 are immediately exercisable and will expire five years from the date of issuance.
H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.
The gross proceeds to the Company from the offering were $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 offered in the registered direct offering (but excluding the unregistered warrants and the common shares underlying such unregistered warrants) described above were 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 issued in the registered direct offering were 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 were filed with the SEC and are 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 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 were 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, have not been 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. www.nlspharma.com .
Safe Harbor Statement
For additional information: ml@nls-pharma.com www.nlspharma.com
SOURCE: NLS Pharmaceutics AG
press release on accesswire.com
The purchase price per share in the direct offering announced by NLS Pharmaceutics was $0.25.
NLS Pharmaceutics offered 7,000,000 common shares in the direct offering.
NLS Pharmaceutics raised $1.75 million in gross proceeds from the direct offering.
The net proceeds from the direct offering by NLS Pharmaceutics are intended to be used for working capital and general corporate purposes.
NLS Pharmaceutics is a Swiss clinical-stage biopharmaceutical company focused on the discovery and development of therapies for patients with rare and complex central nervous system disorders.
