Silo Pharma Announces $2.1 Million Registered Direct Offering Priced At-The-Market Under Nasdaq Rules

Rhea-AI Summary

Silo Pharma (NASDAQ: SILO) has announced a $2.1 million registered direct offering priced at-the-market under Nasdaq rules. The company will sell 763,638 shares of common stock at $2.75 per share. Additionally, Silo will issue unregistered warrants to purchase up to 763,638 shares at an exercise price of $2.75 per share in a concurrent private placement. These warrants will be immediately exercisable and expire after five years.

The offering is expected to close around July 22, 2024. H.C. Wainwright & Co. is acting as the exclusive placement agent. Silo intends to use the net proceeds for working capital and general corporate purposes. The common stock is being offered under a shelf registration statement, while the warrants are offered in a private placement under Section 4(a)(2) of the Securities Act.

Positive

• Secured $2.1 million in gross proceeds through a registered direct offering
• Offering priced at-the-market under Nasdaq rules, potentially indicating fair market value
• Concurrent issuance of warrants may provide additional future funding if exercised

Negative

• Potential dilution of existing shareholders' ownership due to new share issuance
• Warrants, if exercised, could lead to further dilution in the future
• Use of proceeds for general corporate purposes may not directly fund specific growth initiatives

Financial Analyst

The announcement of a $2.1 million registered direct offering by Silo Pharma, Inc. holds notable implications for the company's short-term liquidity and funding strategy. The issuance of 763,638 shares of common stock at a purchase price of $2.75 per share indicates a direct method to raise capital without going through traditional underwriting channels, which can be quicker and often less expensive. This decision suggests a need for immediate working capital and funding for general corporate purposes, aligning with the company's developmental stage and its focus on novel drug formulations.

For investors, the immediate financial injection could be seen as a positive move to support ongoing projects and operations. However, it also brings about share dilution. The issuance of additional shares generally dilutes the value of existing shares unless the capital raised is utilized effectively to generate higher returns.

Additionally, the concurrent issuance of unregistered warrants with an exercise price of $2.75 and a five-year expiration period provides potential for future capital influx. This long-dated warrant issuance could be viewed as a vote of confidence from the company in its long-term prospects, offering an incentive for investors to stay engaged over the longer term.

Given the company's focus on biopharmaceutical innovations, the raised funds could expedite research and development, potentially accelerating the timeline for bringing new treatments to market. Yet, investors should remain mindful of the inherent risks in the biotech sector, where R&D timelines and regulatory approvals can be unpredictable and capital-intensive.

SARASOTA, FL, July 19, 2024 (GLOBE NEWSWIRE) -- Silo Pharma, Inc. (Nasdaq: SILO) (“Silo” or the “Company”), a developmental stage biopharmaceutical company focused on developing novel formulations and drug delivery systems for traditional therapeutics and psychedelic treatments, today announced that it has entered into definitive agreements for the purchase and sale of 763,638 shares of common stock at a purchase price of $2.75 per share in a registered direct offering priced at-the-market under Nasdaq rules. In a concurrent private placement, the Company will issue unregistered warrants to purchase up to 763,638 shares of common stock at an exercise price of $2.75 per share that will be immediately exercisable upon issuance and will expire five years following the date of issuance. The closing of the offering is expected to occur on or about July 22, 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 approximately $2.1 million before deducting placement agent fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.

The common stock (but not the unregistered warrants and the shares of common stock underlying the unregistered warrants) described above are being offered by the Company pursuant to a “shelf” registration statement on Form S-3 (File No. 333-276658) that was declared effective by the Securities and Exchange Commission (the “SEC”) on January 30, 2024. The offering of the shares of common stock is being made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus relating to the registered direct offering will be filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained, when available, on the SEC’s website at http://www.sec.gov or by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, New York 10022, by phone at (212) 856-5711 or e-mail at placements@hcwco.com.

The unregistered warrants described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated thereunder and, along with the shares of common stock underlying such unregistered warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the unregistered warrants and underlying shares of common stock 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 the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

About Silo Pharma

Silo Pharma Inc. (Nasdaq: SILO) is a developmental stage biopharmaceutical company developing novel therapeutics that address underserved conditions including stress-induced psychiatric disorders, chronic pain conditions, and central nervous system (CNS) diseases. Silo focuses on developing traditional therapies and psychedelic treatments in novel formulations and drug delivery systems. The Company’s lead program, SPC-15, is an intranasal treatment targeting PTSD and stress-induced anxiety disorders. SP-26 is a time-release ketamine-loaded implant for fibromyalgia and chronic pain relief. Silo’s two preclinical programs are SPC-14, an intranasal compound for the treatment of Alzheimer’s disease, and SPU-16, a CNS-homing peptide targeting multiple sclerosis (MS). Silo’s research and development programs are conducted through collaborations with Columbia University and the University of Maryland, Baltimore. For more information, visit www.silopharma.com and connect on social media at LinkedIn, X, and Facebook.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by the use of words “could”, “believe”, “anticipate”, “intend”, “estimate”, “expect”, “may”, “continue”, “predict”, “potential”, and similar expressions that are intended to identify forward-looking statements. Such statements involve known and unknown risks, uncertainties, and other factors that could cause the actual results of Silo Pharma, Inc. (“Silo” or “the Company”) to differ materially from the results expressed or implied by such statements, including statements pertaining to the completion of the offering, the satisfaction of customary closing conditions related to the offering, the intended use of proceeds from the offering, changes to anticipated sources of revenues, future economic and competitive conditions, difficulties in developing the Company’s technology platforms, retaining and expanding the Company’s customer base, fluctuations in consumer spending on the Company’s products and other factors. Accordingly, although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company disclaims any obligations to publicly update or release any revisions to the forward-looking information contained in this presentation, whether as a result of new information, future events, or otherwise, after the date of this presentation or to reflect the occurrence of unanticipated events except as required by law.

Contact

800-705-0120
investors@silopharma.com

FAQ

What is the size and price of Silo Pharma's (SILO) recent stock offering?

Silo Pharma (SILO) announced a $2.1 million registered direct offering, selling 763,638 shares of common stock at $2.75 per share.

When is the expected closing date for Silo Pharma's (SILO) recent offering?

The offering is expected to close on or about July 22, 2024, subject to customary closing conditions.

What are the terms of the warrants issued by Silo Pharma (SILO) in the concurrent private placement?

Silo Pharma (SILO) is issuing unregistered warrants to purchase up to 763,638 shares at an exercise price of $2.75 per share, exercisable immediately and expiring five years from issuance.

How does Silo Pharma (SILO) intend to use the proceeds from the offering?

Silo Pharma (SILO) intends to use the net proceeds from the offering for working capital and general corporate purposes.