NEW YORK - Protagenic Therapeutics, Inc. (NASDAQ:PTIX), a biopharmaceutical company, has entered into a purchase agreement to sell securities in a private placement, with the expectation to raise approximately $1.275 million in gross proceeds. The transaction involves the sale of 1,948,295 shares of common stock or pre-funded warrants in lieu of shares, along with series A and B common stock purchase warrants, exercisable post stockholder approval.
The series A warrants, exercisable for eighteen months, and series B warrants, exercisable for five years, both have an exercise price of $0.64 per share. The purchase price per share and associated warrants is set at $0.64, and $0.89 for insiders. The offering is anticipated to close by November 4, 2024, subject to customary closing conditions.
The company has stated that the net proceeds from the sale will be allocated for working capital purposes. Brookline Capital Markets is the sole placement agent for this private placement.
The securities in this private placement were offered under an exemption from the registration requirements of the Securities Act of 1933, pursuant to Section 4(a)(2) thereof and Regulation D promulgated thereunder. They have not been registered under the Securities Act or any state securities laws, and as such, cannot be sold in any jurisdiction where such sale would be prohibited prior to registration or qualification under the securities laws of such state or jurisdiction.
Protagenic Therapeutics specializes in developing neuro-active peptides for the treatment of stress-related disorders, such as depression, anxiety, and PTSD. Their lead compound, PT00114, is a synthetic peptide designed to emulate the active part of the natural brain hormone TCAP, with the potential to lower cortisol levels.
This press release statement serves as the basis for the information provided and does not constitute an offer to sell the securities described.
In other recent news, Protagenic Therapeutics, Inc. has shared updates on the clinical development milestones for its drug candidate PT00114. The New York-based pharmaceutical company plans to commence the multiple dose portion of the Phase I study for PT00114 in the fourth quarter of 2024, with results expected by the second quarter of 2025. The initiation of the Phase IIa study is scheduled for the third quarter of 2025.
In addition, Protagenic Therapeutics has received a warning from Nasdaq about a potential delisting due to its inability to meet the minimum bid price requirement for continued listing. The company has been granted a 180-day period, until January 20, 2025, to regain compliance with the minimum bid price rule. If unable to meet this requirement within the grace period, the company could face delisting from the Nasdaq Capital Market, though it would have the option to appeal the decision.
These are recent developments concerning Protagenic Therapeutics. The company continues to provide updates on the clinical development schedule, a significant step in its efforts to progress drug candidate PT00114 through the necessary phases of clinical research. Investors and stakeholders in the pharmaceutical preparations sector may closely monitor these developments.
InvestingPro Insights
As Protagenic Therapeutics (NASDAQ:PTIX) moves forward with its private placement to raise capital, investors should consider some key financial metrics and insights from InvestingPro.
The company's market capitalization stands at a modest $2.99 million, reflecting its early-stage status in the biopharmaceutical industry. This aligns with the company's focus on developing neuro-active peptides and its need for additional funding to support ongoing research and development efforts.
InvestingPro Tips highlight that PTIX holds more cash than debt on its balance sheet, which could be seen as a positive factor for a company in the capital-intensive biotech sector. However, it's also noted that the company is quickly burning through cash, underscoring the importance of the recent private placement in bolstering its financial position.
The stock has taken a significant hit over the last six months, with a price total return of -60.28% during that period. This decline may have contributed to the company's decision to pursue additional funding through the private placement.
It's worth noting that analysts do not anticipate the company will be profitable this year, which is not uncommon for early-stage biopharmaceutical firms focused on research and development. The company's adjusted operating income for the last twelve months stands at -$6.05 million, reflecting the substantial costs associated with drug development.
For investors considering PTIX, it's important to note that InvestingPro offers 11 additional tips that could provide further insights into the company's financial health and market position. These additional tips could be particularly valuable given the company's current fundraising efforts and its position in the competitive biopharmaceutical landscape.
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