Attached files

file filename
EX-99.1 - PRESS RELEASE, DATED FEBRUARY 10, 2021 - Silo Pharma, Inc.ea135066ex99-1_silopharma.htm
EX-10.4 - FORM OF LOCK-UP AGREEMENT, DATED AS OF FEBRUARY 9, 2021 - Silo Pharma, Inc.ea135066ex10-4_silopharma.htm
EX-10.3 - FORM OF REGISTRATION RIGHTS AGREEMENT, DATED AS OF FEBRUARY 9, 2021, BETWEEN SIL - Silo Pharma, Inc.ea135066ex10-3_silopharma.htm
EX-10.2 - FORM OF WARRANT - Silo Pharma, Inc.ea135066ex10-2_silopharma.htm
EX-10.1 - FORM OF SECURITIES PURCHASE AGREEMENT, DATED AS OF FEBRUARY 9, 2021, BETWEEN SIL - Silo Pharma, Inc.ea135066ex10-1_silopharma.htm
EX-3.1 - CERTIFICATE OF DESIGNATION OF SERIES C CONVERTIBLE PREFERRED STOCK - Silo Pharma, Inc.ea135066ex3-1_silopharma.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 9, 2021

 

SILO PHARMA, INC.

(Name of registrant in its charter)

 

Delaware   000-54872   27-3046338
(State or jurisdiction of   (Commission File   (IRS Employer
incorporation or organization)   Number)   Identification No.)

 

560 Sylvan Ave, Suite 3160

Englewood Cliffs NJ 07632

(Address of principal executive offices)

 

(718) 400-9031

(Registrant’s telephone number)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instructions A.2 below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Item 1.01.  Entry into a Material Definitive Agreement.

 

Series C Convertible Preferred Stock Financing

 

On February 9, 2021 (the “Effectiveness Date”), Silo Pharma, Inc. (the “Company”) entered into securities purchase agreements (collectively, the “Purchase Agreement”) with certain institutional and accredited investors (each an “Investor” and collectively, the “Investors”) for the sale of an aggregate of 4,276 shares of the Company’s series C convertible preferred stock (the “Series C Convertible Preferred Stock”), and warrants (the “Warrants”) to purchase 14,253,333 of our common stock (the “Common Stock”) for gross proceeds of $4,276,000, before deducting placement agent and other offering expenses. The terms of the Series C Convertible Preferred Stock are set forth under Items 3.02 and 5.03 below.

 

The Warrants are exercisable for a period of five years from the date of issuance at an exercise price of $0.30 per share (the “Exercise Price”). The Investors may exercise the Warrants on a cashless basis if the shares of common stock underlying the Warrants are not then registered pursuant to an effective registration statement.

 

The conversion price of the Series C Convertible Preferred Stock and the exercise price of the Warrants are subject to anti-dilution adjustment for subsequent lower price issuances by the Company, as well as customary adjustments provisions for stock splits, stock dividends, recapitalizations and the like.

 

The Series C Convertible Preferred Stock and the Warrant each contain a beneficial ownership limitation that restricts each of the Investor’s ability to exercise the Warrants and convert the Series C Convertible Preferred Stock such that the number of shares of the Company common stock held by each of them and their affiliates after such conversion or exercise does not exceed 4.99% or 9.99% (at the election of the Investor) of the Company’s then issued and outstanding shares of common stock.

 

The Purchase Agreement also provides that until the 18 month anniversary of the date of the Purchase Agreement, in the event of a subsequent financing (except for certain exempt issuances as provided in the Purchase Agreement) by the Company, each Investor will have the right to participate in such subsequent financing up to an amount equal to the Investor’s proportionate share of the subsequent financing based on such Investor’s participation in this private placement on the same terms, conditions and price provided for in the subsequent financing up to an amount equal to 50% of the subsequent financing.

 

In connection with the Private Placement, the Company entered into separate Registration Rights Agreements with the Investors, pursuant to which the Company agreed to undertake to file a registration statement to register the resale of the shares underlying the Registrable Securities (as defined therein) within ten (10) calendar days following the Effectiveness Date. The Company shall use its best efforts to cause the registration statement covering the Registrable Securities to be declared effective no later than the 60th calendar day following the Effectiveness Date, or in the event of a full review by the SEC, the 90th calendar day following the Effective Date , and to maintain the effectiveness of the registration statement until all of such shares of Common Stock have been sold or are otherwise able to be sold pursuant to Rule 144. If the Company fails to file the registration statement or have it declared effective by the dates set forth above, amongst other things, the Company is obligated to pay the investors liquidated damages in the amount of 1% of their subscription amount, per month, until such events are satisfied.

 

In addition, pursuant to the terms of the Offering, the Company agreed to issue Bradley Woods & Co, Ltd. & Katalyst Securities LLC warrants (the “Placement Agent Warrants”) to purchase up to 2,850,667 shares (the “Placement Agent Warrant Shares”) of Common Stock, or 10% of the Securities sold in the Offering. The Placement Agent Warrants are exercisable for a period of five years from the closing date of the Offering (the “Initial Exercise Date”) at an exercise price of $0.35 per share, subject to adjustment.

 

The net proceeds of the offering are expected to be used for working capital purposes and to further execute on our existing business.

 

In conjunction with the Purchase Agreement, all officers and directors of the Company have entered into lock-up agreements pursuant to which they have agreed to not sell their shares of common stock or common stock equivalents in the Company until the ninety (90) days after the effective date of the registration statement described above.

 

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Item 3.02.  Unregistered Sale of Equity Securities

 

The disclosure under item 1.01 above is incorporated herein by reference. The securities have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state, and were offered and issued in reliance on the exemption from registration under the Securities Act of 1933, as amended, afforded by Section 4(a)(2) and Rule 506 of Regulation D promulgated thereunder.

 

Item 5.03.  Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On January 9, 2021, the Company filed a Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock (the “Certificate of Designations”) with the Delaware Secretary of State, designating 4,280 shares of preferred stock as Series C Convertible Preferred Stock. The following is only a summary of the Certificate of Designations and is qualified in its entirety by reference to the full text of the Certificate of Designation which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated by reference herein.

 

Designation, Amount and Par Value. The number of shares of Series C Convertible Preferred Stock designated shall be up to 5 million. Each share of Series C Convertible Preferred Stock shall have a par value of $0.0001 per share and a stated value equal to $1,000 (the “Stated Value”).

 

DividendsHolders shall be entitled to receive, and the Company shall pay, dividends on shares of Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of Preferred Stock..

 

Liquidation: Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that a holder of Common Stock would receive if the Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder..

 

Voting Rights. Except as otherwise provided herein or as otherwise required by law, the Series C Convertible Preferred Stock shall have no voting rights. However, as long as any shares of Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (b) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the Holders, (c) increase the number of authorized shares of Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.

 

Conversion Price. The conversion price for the Series C Convertible Preferred Stock shall equal $0.30, subject to adjustment herein (the “Conversion Price”).

 

ExercisabilityA holder may not exercise any portion of the Series C Convertible Preferred Stock to the extent that the holder, together with its affiliates and any other person or entity acting as a group, would own more than 4.99% (or, upon election by a holder prior to issuance, 9.99%) of the outstanding common shares after exercise, except that upon notice from the holder to us, the holder may increase or decrease the amount of ownership of outstanding shares after exercising the holder’s Series C Convertible Preferred Stock up to 9.99% of the number of our Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Series C Convertible Preferred Stock, provided that any increase in such beneficial ownership limitation shall not be effective until 61 days following notice to us.

 

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Subsequent Rights Offerings. If at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder of will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of such Holder’s Preferred Stock (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). 

 

Fundamental Transaction. If we consummate any merger, consolidation, sale or other reorganization event in which our common stock is converted into or exchanged for securities, cash or other property, or if we consummate certain sales or other business combinations, then following such event, the holders of the Series C Convertible Preferred Stock will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the warrants immediately prior to such event.

 

Item 8.01. Other Events.

 

On February 10, 2021, the Company issued a press release announcing the execution of the Agreement. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1, which is incorporated herein by reference.

 

Item 9.01.  Financial Statements and Exhibits.

 

Exhibits

 

Exhibit No.   Description
3.1   Certificate of Designation of Series C Convertible Preferred Stock
10.1   Form of Securities Purchase Agreement, dated as of February 9, 2021, between Silo Pharma, Inc. and the signatories thereto.
10.2   Form of Warrant
10.3   Form of Registration Rights Agreement, dated as of February 9, 2021, between Silo Pharma, Inc. and the signatories thereto.
10.4   Form of Lock-Up Agreement, dated as of February 9, 2021
99.1   Press release, dated February 10, 2021

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  SILO PHARMA, INC.
     
Date: February 10, 2021 By: /s/ Eric Weisblum
   

Eric Weisblum,

Chief Executive Officer

 

 

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