Scorpius Holdings, Inc. Provides Update on its Previously Announced Public Offering

Rhea-AI Summary

Scorpius Holdings (NYSE American: SCPX) has announced a delay in its previously announced public offering. The company has received approval from NYSE for a financial viability exception to shareholder approval rules, allowing it to proceed with an underwritten public offering. Scorpius intends to offer 12,500,000 shares of common stock (or pre-funded warrants) at $1.00 per share. The previous underwriting agreement was terminated, and a new one will be entered if the offering is consummated. The closing is intended to occur ten days after notifying shareholders. Proceeds will fund working capital and general corporate purposes. ThinkEquity is the sole book-running manager. A registration statement has been filed with the SEC and became effective on August 6, 2024.

Positive

• Received NYSE approval for financial viability exception, allowing the offering to proceed
• Intends to raise $12.5 million through the offering (excluding over-allotment option)
• Funds to be used for working capital and general corporate purposes

Negative

• Delay in previously announced public offering
• Termination of previous underwriting agreement
• Uncertainty about consummation of the offering under new terms
• Potential dilution for existing shareholders due to new share issuance

Insights

Financial Analyst

Scorpius Holdings' delayed public offering raises significant concerns about the company's financial health. The need for a financial viability exception from NYSE American suggests potential cash flow issues. The planned offering of 12.5 million shares at $1.00 each indicates a substantial dilution for existing shareholders. The termination of the previous underwriting agreement and uncertainty around consummating a new one further highlights execution risks. While the capital raise could provide necessary working capital, it comes at a high cost to shareholder value. Investors should closely monitor the company's ability to close this offering and its subsequent use of funds.

Legal Expert

The financial viability exception granted by NYSE American is a critical development. This exemption from shareholder approval rules underscores the urgency of Scorpius' capital needs. The company must adhere to Section 710 of the NYSE American Company Guide, including the 10-day notification period to shareholders. The amended S-1 filing and upcoming final prospectus will be important documents for investors to scrutinize. The disclaimer about the press release not constituting an offer to sell is standard legal protection. However, the overall situation suggests heightened regulatory scrutiny and potential compliance challenges for Scorpius moving forward.

Market Research Analyst

The CDMO market is growing, but Scorpius' struggles indicate company-specific issues rather than industry-wide challenges. The planned $12.5 million raise, if successful, seems insufficient for significant expansion in the capital-intensive biologics manufacturing sector. The offering price of $1.00 per share suggests the market views Scorpius as a high-risk investment. The inclusion of pre-funded warrants may indicate weak demand for common shares. ThinkEquity's role as sole book-runner, rather than a larger syndicate, might reflect institutional interest. This offering could be a make-or-break moment for Scorpius in a competitive CDMO landscape.

DURHAM, N.C., Aug. 09, 2024 (GLOBE NEWSWIRE) -- Scorpius Holdings, Inc. (NYSE American: SCPX), (“Scorpius”, or the “Company”), an integrated contract development and manufacturing organization (CDMO), today announced a delay in its previously announced public offering. The Company has requested, and the NYSE has approved, a financial viability exception to the NYSE American shareholder approval rules that would allow it to proceed with the closing of an underwritten public offering. The Company intends to pursue the sale of 12,500,000 shares of common stock (or pre-funded warrants ("Pre-Funded Warrants") in lieu thereof, exclusive of the over-allotment option) at a price of $1.00 per share (inclusive of the Pre-Funded Warrant exercise price). The underwriting agreement was terminated in connection with the previously announced offering and a new underwriting agreement will be entered into if the offering is consummated. There can be no assurance that the Company will be able to consummate an offering under these terms or otherwise. The Company will adhere to all applicable provisions relating to the exemption, as outlined in Section 710 of the NYSE American Company Guide, and a closing is intended to occur ten days following the mailing of a notification letter to the Company’s shareholders.

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 repricing of the offering, the ability to consummate an offering under the specified terms or otherwise the timing and completion of the proposed offering 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 new offering price for Scorpius Holdings (SCPX) shares?

Scorpius Holdings (SCPX) intends to offer shares at $1.00 per share, including common stock and pre-funded warrants.

How many shares does Scorpius Holdings (SCPX) plan to offer in the delayed public offering?

Scorpius Holdings (SCPX) plans to offer 12,500,000 shares of common stock or pre-funded warrants in the delayed public offering.

When did the SEC registration statement for Scorpius Holdings (SCPX) offering become effective?

The SEC registration statement for Scorpius Holdings (SCPX) offering became effective on August 6, 2024.

What is the intended use of proceeds from Scorpius Holdings (SCPX) public offering?

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