Synaptogenix, Inc. (NASDAQ:SNPX), a pharmaceutical company specializing in neurological preparations, has announced the creation of a new series of preferred stock, designated as Series C Convertible Preferred Stock, according to a recent SEC filing.
The announcement was made on Thursday, September 12, 2024, when the company filed the Certificate of Designations with the Delaware Secretary of State, which became effective immediately upon filing.
The Preferred Shares are convertible into Synaptogenix's common stock at a conversion price of $4.00, subject to adjustments. Starting October 31, 2024, the company will redeem the Preferred Shares in cash at 107% of the applicable amount in equal quarterly installments.
Additionally, Preferred Shareholders are entitled to a 5% annual dividend, which increases to 15% in the event of certain trigger events, as defined in the Certificate of Designations.
Preferred Shareholders will also have voting rights, with each share's vote equivalent to the stated value divided by $3.52. However, the company's ability to settle conversions is restricted by the number of shares that can be issued, pending stockholder approval for the issuance of shares beyond the 19.99% of the company's outstanding common stock, in compliance with Nasdaq listing standards. A stockholder meeting to address this is expected to be held by December 31, 2024.
In connection with certain trigger events, including the company's failure to maintain an effective registration statement or to make payments when due, Preferred Shareholders can require the company to redeem their shares at a premium.
The Certificate of Designations also includes covenants that limit the company's activities in areas such as incurring debt, asset transfers, and paying dividends other than those specified for Preferred Shares.
The creation of the new preferred stock series follows Synaptogenix's completion of a private placement of Preferred Shares and warrants to purchase common stock, which resulted in aggregate gross proceeds of $5 million before deducting fees, commissions, and expenses. This event was initially reported in a Form 8-K filed on Wednesday, September 11, 2024.
The financial implications for Synaptogenix and its investors are significant, as the company seeks to bolster its financial position while providing new investment opportunities. The full text of the Certificate of Designations is available in Exhibit 3.1 of the SEC filing.
In other recent news, Synaptogenix, Inc. has secured $5 million in preferred stock financing, signaling a notable development in the company's financial trajectory. This capital raise will reportedly fund strategic opportunities, including potential acquisitions and innovative research. Additionally, the company has extended the maturity date of its Series B Convertible Preferred Stock, further showcasing its financial maneuvering.
In partnership with the Neuroscience Center of Excellence at LSU Health New Orleans, Synaptogenix has initiated pre-clinical trials for polyunsaturated fatty acid (PUFA) analogs, targeting spinal cord injuries. The company's PUFA compounds have been granted a patent by the US Patent and Trademark Office, indicating their potential in treating neurodegenerative disorders.
The biopharmaceutical company has also received FDA authorization to proceed with a clinical trial for Bryostatin-1, a potential treatment for multiple sclerosis. The trial will be conducted at the Mellen Center for Multiple Sclerosis, part of the Cleveland Clinic Neurological Institute.
Lastly, Synaptogenix has regained compliance with Nasdaq's minimum bid price requirement through a 1-for-25 reverse stock split, ensuring its continued listing on the Nasdaq Capital Market.
InvestingPro Insights
As Synaptogenix, Inc. (NASDAQ:SNPX) navigates the financial markets with the introduction of its new Series C Convertible Preferred Stock, real-time data and insights from InvestingPro offer a glimpse into the company's current financial health and stock performance. With a market capitalization of just $4.15 million, Synaptogenix is a relatively small player in the pharmaceutical industry. The company's stock price has taken a significant hit over the past week, with a 17.39% decline, and it has continued to underperform over the last month and quarter, reflecting a 24.8% and 34.78% decrease respectively.
InvestingPro Tips highlight that Synaptogenix holds more cash than debt on its balance sheet, which could be a positive sign for investors considering the convertible preferred shares. However, the company has been quickly burning through cash, which is a concern given its lack of profitability over the last twelve months. Additionally, InvestingPro data indicates that the company's Price/Book ratio as of Q2 2024 stands at a low 0.2, suggesting that the stock may be undervalued relative to the company's book value.
For investors interested in deeper analysis, InvestingPro provides a comprehensive list of additional tips on Synaptogenix. These tips may shed light on the company's financial nuances and future prospects, which can be critical for making informed investment decisions. The full suite of InvestingPro Tips for Synaptogenix can be found at https://www.investing.com/pro/SNPX.
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