MARLBOROUGH, Massachusetts - Phio Pharmaceuticals Corp. (NASDAQ: PHIO), a biotechnology company focused on immuno-oncology, has entered into agreements to exercise warrants for purchasing up to 545,286 shares of common stock at a reduced price of $5.45 per share.
These warrants were originally issued between February 2020 and December 2023 with prices ranging from $324.00 to $9.72 per share. The exercise of these warrants is anticipated to generate gross proceeds of approximately $3.1 million for Phio, before accounting for placement agent fees and other estimated expenses.
H.C. Wainwright & Co. is serving as the exclusive placement agent for this transaction. In exchange for the immediate cash exercise of the warrants and an additional payment of $0.125 per new warrant, warrant holders will receive new unregistered warrants to purchase up to 1,090,572 shares of common stock. These new warrants will be immediately exercisable upon issuance, with 583,098 having a five-and-a-half-year term and 507,474 having an eighteen-month term from the issuance date.
The offering is expected to close today, subject to the fulfillment of customary closing conditions. Phio intends to allocate the net proceeds from this offering towards working capital and other general corporate expenses.
The new warrants were offered privately in accordance with Section 4(a)(2) of the Securities Act of 1933, as amended, and are not registered under the Act. Consequently, they may not be sold in the U.S. without registration with the SEC or an applicable exemption from such requirements. The securities were exclusively offered to accredited investors. Phio has committed to filing a registration statement with the SEC for the resale of the shares issuable upon the exercise of the new warrants.
Phio's proprietary INTASYL® siRNA gene silencing technology is designed to enhance the capability of immune cells to destroy tumor cells. This technology is unique in its self-delivery mechanism for RNAi therapeutics in the field of immuno-oncology.
This press release contains forward-looking statements and the company cautions that actual results could differ materially due to various factors detailed in its SEC filings. The information in this article is based on a press release statement.
In other recent news, Phio Pharmaceuticals has terminated its share purchase agreement with Triton Funds LP, which previously allowed Triton the option to acquire up to 18.8% of Phio's common stock. The termination of the agreement could have implications for Phio's capital structure and funding efforts. In addition, Phio Pharmaceuticals has been granted a patent in South Korea for its INTASYL RXI-185 compound, targeting skin aging and disorders.
The company has also advanced to the next dose concentration in its Phase 1b clinical trial of PH-762, following positive safety data from the initial cohort. Furthermore, Phio secured an agreement with TRITON Funds for the purchase of approximately 18.8% of its common shares, expected to yield gross proceeds of up to $621,000. Lastly, the company reported that its lead clinical product candidate, PH-762, has shown promising results in preclinical studies. All these developments are part of the company's recent activities.
InvestingPro Insights
Amidst the strategic financial maneuvers by Phio Pharmaceuticals Corp. (NASDAQ: PHIO), a deeper dive into the company's financial health and market performance through InvestingPro reveals a mix of challenges and opportunities. With a market capitalization of just 2.98M USD, Phio's size is relatively small in the biotech industry. The company's Price to Book ratio as of the last twelve months ending in Q1 2024 stands at a modest 0.53, suggesting that the market values the company at slightly over half of its book value.
An analysis of Phio's recent stock performance shows a significant return over the last week, with a 1 Week Price Total Return of 11.45%. This could indicate a short-term positive sentiment among investors. However, this uptick comes in the context of a broader downward trend, as evidenced by a dramatic 1 Year Price Total Return of -77.05%, reflecting investor concerns or a response to broader market trends.
Looking at the company's operational metrics, Phio is facing substantial challenges. It has reported a Gross Profit of -5.35M USD and an Operating Income, Adjusted of -9.23M USD in the last twelve months as of Q1 2024. These figures highlight the company's current inability to generate profit from its core operations.
InvestingPro Tips for Phio suggest that while the company holds more cash than debt on its balance sheet and liquid assets exceed short term obligations, it is quickly burning through cash and has not been profitable over the last twelve months. Analysts predict the company will be profitable this year, which could be a pivotal point if those forecasts hold true.
For those looking to delve deeper into Phio's financials and future prospects, there are additional InvestingPro Tips available. Readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking further insights that could inform investment decisions. With 12 additional tips listed on InvestingPro, such as the company's weak gross profit margins and the valuation implying a poor free cash flow yield, investors can gain a comprehensive understanding of Phio's position in the competitive biotech landscape.
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