NLS Pharmaceutics Announces Registered Direct Offering

Rhea-AI Summary

NLS Pharmaceutics, a Swiss clinical-stage biopharmaceutical company specializing in treatments for rare and complex CNS disorders, announced a registered direct offering of 3,277,750 common shares at $0.24 per share. This offering is expected to close around July 1, 2024, subject to customary conditions. Additionally, NLS will issue unregistered warrants for the same number of shares, exercisable immediately at $0.24 per share and expiring in five years. The gross proceeds of $786,660 will support working capital, R&D, and strategic expansion. H.C. Wainwright & Co. is acting as the exclusive placement agent.

Positive

• Gross proceeds of $786,660 to support working capital, R&D, and strategic expansion.

Negative

• Potential dilution from the issuance of 3,277,750 common shares and an identical number of unregistered warrants.

Financial Analyst

The direct offering by NLS Pharmaceutics will raise $786,660, which is a modest amount in the grand scheme of pharmaceutical financing. This funding round, aimed at advancing research and development as well as enhancing the company’s overall pipeline, indicates a strategic step towards maintaining its operations and future growth. However, the low share price of $0.24 per share may suggest underlying concerns about market confidence in the company’s current valuation and prospects.

From a financial perspective, the timing and pricing of this offering are critical. Given the depressed share price, it’s prudent for retail investors to consider whether the company can leverage this capital effectively for long-term growth or if it’s simply a means to extend its operational runway. Furthermore, the issuance of warrants, which are exercisable immediately, could lead to a dilutive effect on existing shares, potentially impacting shareholder value adversely in the short term.

While the registered direct offering provides immediate liquidity, the potential dilution and low pricing may not bode well for existing shareholders. Investors should monitor how effectively the raised capital is utilized and whether it translates into tangible progress in R&D and strategic initiatives.

Market Research Analyst

For a company like NLS Pharmaceutics, which is focused on developing therapies for rare and complex central nervous system disorders, the ability to secure financing is crucial. The offering highlights the company’s need to secure additional funds, possibly due to the high costs associated with clinical trials and regulatory processes. However, the relatively small size of this offering may limit its impact on the company’s ability to advance its pipeline significantly.

Given the company’s niche focus, it's important to consider how well they can compete in the market. The fact that they are performing a direct offering could indicate a lack of better financing options, which might reflect on the company's current market position and competitive edge. The market’s reception of this offering and the company's subsequent use of funds will be vital indicators of its future trajectory.

From a market standpoint, the offering might not provide a robust boost in competitive positioning. Investors need to track any announcements or updates regarding partnerships, advancements in their pipeline, or new clinical trials, as these would be more impactful on the company’s future prospects.

ZURICH, SWITZERLAND / ACCESSWIRE / June 28, 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 3,277,750 of its common shares at a purchase price of $0.24 per share in a registered direct offering. NLS has also agreed to issue in a private placement unregistered warrants to purchase up to an aggregate of 3,277,750 common shares at an exercise price of $0.24 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 July 1, 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 $786,660, 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, which includes research and development, to advance the Company's technology and general corporate purposes and pursuing strategic opportunities including expanding the Company's pipeline.

The common shares 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 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, 2023 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:

Elena Thyen, CFO
NLS Pharmaceutics Ltd.
+41(0) 44 512 21 50
etp@nls-pharma.com
www.nls-pharma.com

SOURCE: NLS Pharmaceutics Ltd.

View the original press release on accesswire.com

FAQ

What is the size of NLS Pharmaceutics' direct offering announced on June 28, 2024?

NLS Pharmaceutics announced a registered direct offering of 3,277,750 common shares at a price of $0.24 per share.

When is the closing date for NLS Pharmaceutics' direct offering?

The closing of the offering is expected to occur on or about July 1, 2024.

What is the purpose of NLS Pharmaceutics' direct offering?

The net proceeds will be used for working capital, R&D, advancing the company's technology, and pursuing strategic opportunities.

How much will NLS Pharmaceutics raise from its direct offering?

NLS Pharmaceutics expects to raise gross proceeds of $786,660 from the offering.

What is the exercise price for the unregistered warrants issued by NLS Pharmaceutics?

The unregistered warrants have an exercise price of $0.24 per share.

For how long are the warrants issued by NLS Pharmaceutics valid?

The warrants will expire five years from the date of issuance.