S-1: Seelos Therapeutics Eyes $12 Million Capital Raise Through Stock and Warrant Offering

Sentiment:

S-1 Filing 25 September 2024 6:09 AM

📋All filings for Seelos Therapeutics, INC

Seelos Therapeutics is seeking to raise capital through a public offering of common stock and warrants to fund general corporate purposes and advance its product pipeline.

Delay expectedAdditional enrollment of patients in the SLS-005-302 study in SCA has been temporarily paused due to financial considerations.

Capital raiseSeelos Therapeutics is offering shares of common stock and common warrants in a public offering.Pre-funded warrants are available for investors who would exceed ownership thresholds.The company intends to use the proceeds for general corporate purposes, product development, and debt repayment.

Summary

Seelos Therapeutics has filed a registration statement for a proposed public offering.
The offering includes shares of common stock and common warrants to purchase additional shares.
Pre-funded warrants are also being offered to investors who would exceed ownership limits with common stock purchases.
The company intends to use the net proceeds for general corporate purposes, advancing product development, and repaying debt.
The offering is being conducted on a reasonable best efforts basis with no minimum amount required to be sold.
The company's common stock is listed on the Nasdaq Capital Market under the symbol SEEL.
The company has engaged a placement agent to assist in the offering.
The company is offering up to $6,000,000 in common stock and up to $6,000,000 in common stock underlying common warrants.
The company estimates net proceeds from the offering will be approximately $ million.
The company intends to use the proceeds from this offering primarily for general corporate purposes, to advance the development of our product candidates and to make periodic principal and interest payments under, or to repay a portion of, the Note.

Sentiment

Score: 5

Explanation: The document presents a mix of positive and negative aspects. The company is raising capital to fund its operations and advance its product pipeline, but it also faces challenges such as Nasdaq compliance and debt obligations. The sentiment is neutral.

Positives

The company has multiple late-stage therapeutic candidates with proven mechanisms of action.
SLS-002 has shown a 76.5% response rate in the primary endpoint on MADRS 24 hours after first dose, with a mean reduction in total score from 39.4 to 14.5 points.
SLS-005 has Orphan Drug Designation for OPMD and SCA3 in the United States and in the European Union (EU).
The company has an agreement with the U.S. Army Medical Materiel Development Activity (USAMMDA) to supply SLS-002 (intranasal racemic ketamine) for the U.S. Department of Defense's (DOD) Military and Veterans Adaptive Platform Clinical Trial to evaluate its potential for treatment of post-traumatic stress disorder (PTSD).

Negatives

The company's debt agreement contains restrictive and financial covenants that may limit our operating flexibility and the failure to comply with such covenants could cause our outstanding debt to become immediately payable.
The company must continue to satisfy the Nasdaq Capital Markets continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share for 30 consecutive business days.
The company has broad discretion in how we use the proceeds of this offering and may not use these proceeds effectively, which could affect our results of operations and cause our common stock to decline.
The company will require substantial funding, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations.
Purchasers in this offering will experience immediate and substantial dilution in net tangible book value.
There is no public market for the Warrants being offered in this offering.
This is a best efforts offering. No minimum amount of securities is required to be sold, and we may not raise the amount of capital we believe is required for our business plans, including our near-term business plans.

Risks

Failure to comply with Nasdaq continued listing requirements could lead to delisting.
The company has broad discretion in the use of proceeds, which may not be effective.
Substantial funding is required, and may not be available on acceptable terms.
Purchasers will experience immediate and substantial dilution in net tangible book value.
There is no public market for the warrants being offered.
The company's debt agreement contains restrictive and financial covenants that may limit our operating flexibility and the failure to comply with such covenants could cause our outstanding debt to become immediately payable.
This is a best efforts offering. No minimum amount of securities is required to be sold, and we may not raise the amount of capital we believe is required for our business plans, including our near-term business plans.

Future Outlook

The company intends to use the net proceeds from this offering primarily for general corporate purposes, to advance the development of our product candidates and to make periodic principal and interest payments under, or to repay a portion of, the Note.

Industry Context

The company is operating in the competitive biopharmaceutical industry, focusing on CNS disorders and rare diseases. The success of the company depends on the clinical trial results, regulatory approvals, and commercialization of its product candidates.

Comparison to Industry Standards

The document does not provide enough information to make a detailed comparison to industry standards.
The company's approach of focusing on late-stage therapeutic candidates with proven mechanisms of action is a common strategy in the biopharmaceutical industry.
The company's participation in the Healey ALS platform trial is a positive sign, as it allows for faster and more efficient evaluation of potential treatments.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chairman of the Board of Directors	Unknown	Richard Pascoe	April 29, 2024	To lead the ongoing strategic process and business development discussions and negotiations.

Stakeholder Impact

Shareholders will be impacted by the potential dilution from the offering.
Employees were impacted by the reduction in workforce.
The company's ability to develop and commercialize its product candidates will impact patients with CNS disorders and rare diseases.
Creditors will be impacted by the company's ability to repay its debt obligations.

Next Steps

Complete the public offering of common stock and warrants.
Advance the development of product candidates, including SLS-002 and SLS-005.
Make periodic principal and interest payments under, or to repay a portion of, the Note.
Regain compliance with Nasdaq continued listing requirements.
Seek stockholder approval for the issuance of new warrants and shares upon exercise thereof.

Key Dates

Date	Description
March 31, 2020	Completed a Type C meeting with the U.S. Food and Drug Administration (the FDA) and received guidance to conduct a Phase II PoC study of SLS-002 for ASIB in adults with MDD.
June 23, 2020	Announced the final safety data from our Phase I pharmacokinetics/pharmacodynamics study of intranasal racemic ketamine (SLS-002) as well as the planned design of a Phase II double blind, placebo-controlled PoC study for ASIB in subjects with MDD.
January 15, 2021	Announced dosing of the first subjects in Part 1 of the PoC study.
May 17, 2021	Announced positive topline data from Part 1 of the PoC study, the open-label cohort, of our study of SLS-002 (intranasal racemic ketamine), demonstrating a significant treatment effect and a well-tolerated safety profile for ASIB in patients with MDD.
July 6, 2021	Announced dosing of the first subject in Part 2 of the Phase II study.
November 23, 2021	Entered into a Securities Purchase Agreement with Lind Global Asset Management V, LLC (Lind) pursuant to which, among other things, on November 23, 2021, we issued and sold to Lind, in a private placement transaction, in exchange for the payment by Lind of $20.0 million, (i) a convertible promissory note (the Note) in an aggregate principal amount of $22.0 million, which bore no interest until the first anniversary of the issuance of the 2021 Note and thereafter bore interest at a rate of 5% per annum until October 1, 2023 when the 2021 Note began to bear interest at an annual rate of 12% per annum, and is set to mature on November 23, 2024, and (ii) 2,229 shares of common stock.
February 28, 2022	Announced the dosing of the first participants in the Healey ALS platform trial.
October 2022	Announced the dosing of the first participant in the registrational Phase II/III study for the treatment of SCA.
February 2023	Completed enrollment for a clinical study in ALS.
March 2023	Announced that in order to focus the majority of our resources on the Phase II study of SLS-002 (intranasal racemic ketamine) for ASIB in adults with MDD and the fully enrolled Phase II/III study of SLS-005 in ALS, we have temporarily paused additional enrollment of patients in the SLS-005-302 study in SCA.
June 2023	Announced the close of enrollment of this study and released the topline results on September 20, 2023.
March 19, 2024	Announced topline results for SLS-005 in ALS.
April 29, 2024	Announced our strategic focus on mental health initiatives and that Richard Pascoe has been appointed as the Chairman of the Board of Directors to lead the ongoing strategic process and business development discussions and negotiations.
April 30, 2024	Received written notice (the Bid Notice) from Nasdaq indicating that, for the last thirty consecutive business days, the bid price for our common stock had closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (Rule 5550(a)(2)).
April 30, 2024	Announced a reduction in its workforce that affected approximately 33% of our current employees (the RIF), along with a reduction in working hours and related compensation for all of our remaining employees.
May 1, 2024	Received written notice (the Delist Notice and, together with the Bid Notice and the Initial Notice, the Notices) from Nasdaq indicating that, based upon our continued non-compliance with Rule 5550(b)(2), the Nasdaq staff has determined to delist our common stock from the Nasdaq Capital Market effective May 10, 2024 unless we timely requested an appeal of this determination before the Nasdaq Hearings Panel (the Panel) by May 8, 2024.
May 1, 2024	Effective May 1, 2024, we and Lind entered into an Amendment No. 6 to Convertible Promissory Note (Amendment No. 6), which amended the convertible promissory note we previously issued to Lind on November 23, 2021.
May 15, 2024	Filed a Certificate of Change with the Secretary of State of the State of Nevada to (i) effect a 1-for-8 reverse stock split (the Reverse Stock Split) of our issued and outstanding shares of common stock, effective at 12:01 a.m. Eastern Time, on May 16, 2024, and (ii) decrease the number of total authorized shares of our common stock from 400,000,000 shares to 50,000,000 shares (the Authorized Share Decrease).
May 16, 2024	Entered into a securities purchase agreement with certain institutional investors pursuant to which we agreed to issue and sell 380,968 shares of common stock and pre-funded warrants to purchase up to 81,239 shares of common stock in a registered direct offering.
June 1, 2024	Effective June 1, 2024, we and Lind entered into an Amendment No. 7 to Convertible Promissory Note (Amendment No. 7), which amended the convertible promissory note we previously issued to Lind on November 23, 2021 (as amended, the Amended Note).
July 11, 2024	Entered into an inducement offer letter agreement (the Inducement Letter) with certain accredited investors, who at the time of execution of the Inducement Letter, were holders of warrants to purchase up to an aggregate of 939,739 shares of common stock, originally issued to such investors on December 1, 2023, with an exercise price of $10.56 per share of common stock and a termination date of December 1, 2028, and January 30, 2024, with an exercise price of $8.40 per share of common stock and a termination date of January 30, 2029.
July 16, 2024	Effective July 16, 2024, we and Lind entered into an Amendment No. 8 to Convertible Promissory Note (Amendment No. 8), which amended the Note.
July 25, 2024	Received written notification (the Extension Notice) from the Panel notifying us that the Panel had granted our request for an additional period, during which the Company will remain listed on Nasdaq, to regain compliance with Rule 5550(b)(2) and demonstrate continued compliance with Rule 5550(a)(2).
August 16, 2024	Entered into an agreement with the U.S. Army Medical Materiel Development Activity (USAMMDA) to supply SLS-002 (intranasal racemic ketamine) for the U.S. Department of Defense's (DOD) Military and Veterans Adaptive Platform Clinical Trial to evaluate its potential for treatment of post-traumatic stress disorder (PTSD).
August 30, 2024	Entered into an agreement with Lind (the Lind Agreement). The Lind Agreement relates to the Purchase Agreement.
October 28, 2024	Deadline to regain compliance with Nasdaq Listing Rule 5550(a)(2).
September 30, 2024	Deadline to regain compliance with Rule 5550(a)(2).
November 23, 2024	Maturity date of the convertible promissory note issued to Lind.

Keywords

public offering, common stock, warrants, pre-funded warrants, capital raise, SLS-002, SLS-005, Nasdaq, SEEL, biopharmaceutical

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