Scorpius Holdings, Inc. Announces Pricing of Public Offering

Rhea-AI Summary

Scorpius Holdings, Inc. (NYSE American: SCPX), a contract development and manufacturing organization (CDMO), has announced the pricing of a public offering of 12,500,000 shares of common stock or pre-funded warrants at $1.00 per share. The offering is expected to raise approximately $12,500,000 in gross proceeds. The company has also granted underwriters a 45-day option to purchase up to an additional 1,875,000 shares or warrants to cover over-allotments. Scorpius plans to use the net proceeds for working capital and general corporate purposes. The offering is set to close on August 19, 2024, with trading of SCPX expected to resume on the same day. ThinkEquity is acting as the sole book-running manager for this offering.

Positive

• Expected gross proceeds of $12,500,000 from the public offering
• Potential for additional capital through the 45-day over-allotment option
• NYSE American approved financial viability exception, allowing the offering to proceed

Negative

• Significant dilution for existing shareholders due to 12,500,000 new shares being issued
• Stock trading suspension prior to the offering announcement
• Previous offering termination on August 6, 2024, indicating potential market challenges

Financial Analyst

Scorpius Holdings' $12.5 million public offering at $1.00 per share signals potential financial distress. The low price and use of pre-funded warrants suggest urgency in raising capital. The NYSE American's approval of a financial viability exception is particularly concerning, indicating the company's dire need for funds.

The dilutive effect on existing shareholders is significant, with 12.5 million new shares being issued, potentially increasing by 15% if over-allotments are exercised. This could lead to downward pressure on the stock price in the short term.

While the capital injection provides a lifeline, investors should closely monitor how effectively management deploys these funds to improve the company's financial health and operational performance in the competitive CDMO space.

Market Research Analyst

The pricing of Scorpius Holdings' offering at $1.00 per share reflects challenging market conditions for biotech CDMOs. This sector has faced headwinds due to reduced funding in the biotech industry, impacting demand for CDMO services.

The company's focus on large molecule biologics and cell therapies positions it in a high-growth but competitive market. However, the need for this offering suggests Scorpius may be struggling to capitalize on market opportunities.

Investors should consider the broader industry trends, including increasing outsourcing in drug development and manufacturing, which could provide tailwinds for well-positioned CDMOs. Scorpius' ability to leverage its new facilities and experienced team to capture market share will be important for its future prospects.

Legal Expert

The NYSE American's approval of a financial viability exception to stockholder approval rules is a significant legal development. This exception is typically granted when a company's financial condition is so dire that the viability of the business is in question without immediate funding.

Investors should be aware that this exception bypasses normal shareholder protections, allowing for potentially highly dilutive transactions without a vote. While legally permissible, it raises governance concerns and may increase the risk of shareholder litigation.

The company's use of a Form S-1 registration for this offering, rather than a shelf registration, suggests flexibility in accessing capital markets. This could indicate ongoing financial and legal challenges that warrant careful scrutiny by current and potential investors.

DURHAM, N.C., Aug. 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 new pricing of an underwritten public offering of 12,500,000 shares of common stock (or pre-funded warrants (“Pre-Funded Warrants”) in lieu thereof). Each share of common stock (or Pre-Funded Warrant) is being offered at a public offering price of $1.00 per share (inclusive of the Pre-Funded Warrant exercise price). The gross proceeds to the Company from the offering are expected to be approximately $12,500,000, before deducting underwriting discounts and offering expenses. In addition, the Company has granted the underwriters a 45-day option to purchase up to an additional 1,875,000 shares of common stock and/or Pre-Funded Warrants solely to cover over-allotments, if any. As previously announced, the Company had terminated the pricing of its underwritten public offering that it had announced on August 6, 2024. Subsequently, the Company requested, and the NYSE American approved, a financial viability exception to the NYSE American stockholder approval rules that would allow the Company to proceed with the closing of the underwritten public offering upon the terms set forth above.

The offering is expected to close on August 19, 2024, subject to satisfaction of customary closing conditions and trading of the Company’s common stock on the NYSE American is expected to resume that same day.

The Company intends to use the net proceeds of the offering to fund working capital and for general corporate purposes.

ThinkEquity is acting as sole book-running manager for the offering.

A registration statement on Form S-1 (File No. 333-280887), as amended, including a preliminary prospectus, relating to the securities being offered was filed with the Securities and Exchange Commission (“SEC”) and became effective on August 6, 2024. This offering is being made only by means of a prospectus. Copies of the final prospectus, when available, may be obtained from ThinkEquity, 17 State Street, 41^st Floor, New York, New York 10004. The final prospectus will be filed with the SEC and will be available on the SEC’s website located at http://www.sec.gov.

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 timing and completion of the proposed offering, the timing that trading will resume and the intended use of proceeds. Important factors that could cause actual results to differ materially from current expectations include, among others, the ability to complete the proposed offering, and other factors described in the Company’s annual report on Form 10-K for the year ended December 31, 2023, subsequent quarterly report on Form 10-Q 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 is the price per share for Scorpius Holdings' (SCPX) public offering?

Scorpius Holdings (SCPX) has priced its public offering at $1.00 per share of common stock or pre-funded warrant.

How many shares is Scorpius Holdings (SCPX) offering in its public offering?

Scorpius Holdings (SCPX) is offering 12,500,000 shares of common stock or pre-funded warrants in its public offering.

When is the expected closing date for Scorpius Holdings' (SCPX) public offering?

The public offering for Scorpius Holdings (SCPX) is expected to close on August 19, 2024.

How does Scorpius Holdings (SCPX) plan to use the proceeds from its public offering?

Scorpius Holdings (SCPX) intends to use the net proceeds from the offering to fund working capital and for general corporate purposes.