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

Rhea-AI Summary

Silo Pharma (Nasdaq: SILO) has closed a $2.1 million registered direct offering priced at-the-market under Nasdaq rules. The offering included the sale of 763,638 shares of common stock at $2.75 per share. Additionally, in a concurrent private placement, the company issued unregistered warrants to purchase up to 763,638 shares at an exercise price of $2.75 per share, exercisable immediately and expiring in five years.

H.C. Wainwright & Co. acted as the exclusive placement agent. Silo Pharma intends to use the net proceeds for working capital and general corporate purposes. The common stock was offered under a shelf registration statement, while the warrants were offered in a private placement under Section 4(a)(2) of the Securities Act.

Positive

• Raised $2.1 million in gross proceeds through a registered direct offering
• Issued warrants that could potentially bring in additional capital if exercised
• Strengthened working capital position for general corporate purposes

Negative

• Potential dilution of existing shareholders due to the issuance of new shares
• Warrants could lead to further dilution if exercised in the future

Financial Analyst

Silo Pharma's successful completion of a registered direct offering, raising $2.1 million, is a noteworthy development for the company. This influx of capital is important for a developmental stage biopharmaceutical company, as it provides the financial resources necessary for advancing their research and clinical trials. Historically, such capital raises can be a double-edged sword for investors. While they bolster the company's balance sheet, they can also lead to dilution of existing shares. However, given the pricing of this offering at-the-market under Nasdaq rules, it indicates investor confidence and demand at the current price levels. Investors should closely monitor how efficiently Silo utilizes these funds, particularly in its ongoing projects related to innovative drug formulations and delivery systems.

Market Research Analyst

The issuance of unregistered warrants alongside the registered shares is a strategic move by Silo Pharma. These warrants, exercisable at $2.75 per share and expiring in five years, offer investors potential upside while providing the company with a future cash infusion if exercised. This approach also hints at Silo's confidence in its long-term prospects. For retail investors, it's essential to recognize the potential for price volatility as these warrants are exercised. Additionally, the private placement under SEC regulation exemptions suggests a targeted approach to sophisticated investors, which can be a positive indicator of the company's market positioning and investor relations strategies.

Legal Expert

The legal structure of this offering, combining registered and unregistered securities, reflects a careful navigation of SEC regulations. Filing under Form S-3 allows Silo Pharma to expedite the process and access capital more swiftly, which is vital for a developmental stage company. The private placement of unregistered warrants under Section 4(a)(2) and Regulation D shows a strategic maneuver to involve accredited investors, thereby bypassing the lengthy registration process. This dual approach might also mitigate legal risks while ensuring compliance with securities laws. Retail investors should be aware of the different regulatory requirements and potential restrictions associated with unregistered warrants.

SARASOTA, FL, July 22, 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 the closing of its previously announced registered direct offering priced at-the-market under Nasdaq rules for the purchase and sale of 763,638 shares of common stock at a purchase price of $2.75 per share. In a concurrent private placement, the Company issued unregistered warrants to purchase up to 763,638 shares of common stock at an exercise price of $2.75 per share that are immediately exercisable upon issuance and will expire five years following the date of issuance.

H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.

The gross proceeds to the Company from the offering were 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 were 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 was 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 was filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained 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 were 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 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

How much did Silo Pharma (SILO) raise in its recent offering?

Silo Pharma (SILO) raised approximately $2.1 million in gross proceeds through its registered direct offering.

What was the price per share in Silo Pharma's (SILO) July 2024 offering?

The purchase price in Silo Pharma's (SILO) July 2024 offering was $2.75 per share of common stock.

How many shares did Silo Pharma (SILO) sell in its recent offering?

Silo Pharma (SILO) sold 763,638 shares of common stock in its recent registered direct offering.

What are the terms of the warrants issued by Silo Pharma (SILO) in July 2024?

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

How does Silo Pharma (SILO) plan to use the proceeds from its July 2024 offering?

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