Scorpius Holdings, Inc. Announces Closing of Public Offering

Rhea-AI Summary

On May 16, 2024, Scorpius Holdings announced the closing of its underwritten public offering of 60,000,000 common units and/or pre-funded units at $0.10 per unit. Each unit includes one share of common stock or a pre-funded warrant and a common warrant with an exercise price of $0.12, exercisable for five years. The offering raised gross proceeds of $6,000,000 before underwriting discounts and expenses. Additionally, underwriters have a 45-day option to purchase up to an extra 9,000,000 shares and/or warrants to cover over-allotments. Net proceeds will fund working capital, corporate purposes, and repay a $750,000 promissory note. ThinkEquity acted as sole book-running manager.

Positive

• Raised $6,000,000 in gross proceeds.
• Warrants exercisable at $0.12 per share, providing potential future capital.
• Net proceeds to fund working capital and corporate purposes, enhancing operational liquidity.
• Repayment of $750,000 non-convertible promissory note reduces debt obligations.
• Underwriters granted 45-day option to purchase additional shares and warrants, indicating strong interest.

Negative

• Offering price of $0.10 per unit indicates potential undervaluation.
• Dilution risk for current shareholders due to issuance of 60,000,000 new units.
• Repayment of $750,000 promissory note suggests existing liquidity concerns.
• Underwriting discounts and offering expenses will reduce net proceeds.

Insights

Financial Analyst

The recent public offering by Scorpius Holdings, Inc. significantly impacts the company's financial landscape. Raising $6,000,000 through the issuance of 60,000,000 common units at $0.10 per unit is a strategic move to bolster working capital and fund general corporate purposes. Repaying a $750,000 non-convertible promissory note will improve the balance sheet by reducing debt. The inclusion of an additional purchase option for underwriters indicates confidence in market demand. However, the dilution of shares due to the increased number of outstanding shares (up to 69,000,000 if over-allotments are exercised) could pressure the stock price in the short term. The warrants, exercisable at $0.12 per share, might further dilute equity if executed, though potentially beneficial if stock prices exceed the exercise price. In the long term, the successful use of funds to drive growth could mitigate these dilutive effects. Investors should weigh these potential short-term drawbacks against possible long-term gains.

Market Research Analyst

From a market positioning perspective, Scorpius Holdings' public offering demonstrates an effort to strengthen its liquidity, essential for its role as a contract development and manufacturing organization (CDMO). The allocation of proceeds highlights a balanced approach to addressing both immediate financial obligations and future operational needs. The fact that ThinkEquity, a reputable firm, managed the book-running adds credibility to the offering. However, the low unit price ($0.10) and the inclusion of pre-funded warrants suggest cautious investor sentiment toward the company's current valuation. The market's reaction to the offering, particularly the uptake of additional shares via the underwriters' option, will be critical in assessing the broader investor confidence in Scorpius' growth potential. For retail investors, monitoring subsequent movements in stock price and news related to fund utilization will provide additional clarity on the effectiveness of this capital raise.

DURHAM, N.C., May 16, 2024 (GLOBE NEWSWIRE) -- Scorpius Holdings, Inc. (NYSE American: SCPX), (“Scorpius” or the “Company”), an integrated contract development and manufacturing organization (CDMO), today announced the closing of its underwritten public offering of 60,000,000 common units and/or pre-funded units in lieu thereof. Each common (or pre-funded) unit was offered at a public offering price of $0.10 per unit (inclusive of the pre-funded warrant exercise price) and consists of one share of common stock (or pre-funded warrant to purchase one share of common stock in lieu thereof) and a common warrant, for gross proceeds of $6,000,000, before deducting underwriting discounts and offering expenses. The warrants have an exercise price of $0.12 per share and are immediately exercisable upon issuance for a period of five years following the date of issuance. In addition, the Company has granted the underwriters a 45-day option to purchase up to an additional 9,000,000 shares of common stock (and/or pre-funded warrants) and/or up to an additional 9,000,000 common warrants solely to cover over-allotments, if any.

The Company intends to use the net proceeds of the offering to fund working capital, general corporate purposes, and the repayment of a $750,000 non-convertible promissory note, plus accrued and unpaid interest.

ThinkEquity acted as sole book-running manager for the offering.

A registration statement on Form S-1 (File No. 333-279092) relating to the shares of common stock, pre-funded warrants, common warrants, and the shares of common stock underlying such warrants was filed with the Securities and Exchange Commission (“SEC”) and became effective on May 13, 2024. This offering is being made only by means of a prospectus. Copies of the final prospectus may be obtained from ThinkEquity, 17 State Street, 41^st Floor, New York, New York 10004.

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

About Scorpius Holdings, Inc.

Scorpius Holdings Inc. is an integrated large molecule contract development and manufacturing organization (CDMO) focused on rapidly advancing biologic and cell therapy programs to the clinic and beyond. Scorpius offers a broad array of analytical testing, process development, and manufacturing services to pharmaceutical and biotech companies at its state-of-the-art facilities in San Antonio, TX. With an experienced team and new, purpose-built U.S. facilities, Scorpius is dedicated to transparent collaboration and flexible, high-quality biologics biomanufacturing. For more information, please visit www.scorpiusbiologics.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases forward-looking statements can be identified by terminology such as "may," "should," "potential," "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates," and similar expressions and include statements regarding the intended use of proceeds. Important factors that could cause actual results to differ materially from current expectations include, among others, the factors described in the Company’s annual report on Form 10-K for the year ended December 31, 2023 and any other filings the Company makes with the SEC. The information in this presentation is provided only as of the date presented, and the Company undertakes no obligation to update any forward-looking statements contained in this press release on account of new information, future events, or otherwise, except as required by law.

For Investor Relations Inquiries:

David Waldman
+1 (919)-289-4017
investorrelations@nighthawkbio.com

FAQ

What was the offering price of Scorpius Holdings' public offering?

The offering price was $0.10 per unit.

How many units did Scorpius Holdings offer in the public offering?

Scorpius Holdings offered 60,000,000 common units and/or pre-funded units.

What are the exercise terms of the warrants issued in the Scorpius Holdings offering?

The warrants have an exercise price of $0.12 per share and are exercisable for five years.

What is the stock symbol for Scorpius Holdings?

The stock symbol for Scorpius Holdings is SCPX.

How will Scorpius Holdings use the proceeds from the public offering?

The proceeds will be used for working capital, general corporate purposes, and to repay a $750,000 promissory note.

Who acted as the sole book-running manager for Scorpius Holdings' offering?

ThinkEquity acted as the sole book-running manager.

When did the registration statement for Scorpius Holdings' offering become effective?

The registration statement became effective on May 13, 2024.

What options do underwriters have in Scorpius Holdings' public offering?

Underwriters have a 45-day option to purchase up to an additional 9,000,000 shares and/or warrants.