Dermata Therapeutics Announces $2.55 Million Private Placement Priced At-The-Market Under Nasdaq Rules

Rhea-AI Summary

Dermata Therapeutics (NASDAQ:DRMA) has announced a private placement offering priced at-the-market, raising approximately $2.55 million through the sale of 2,007,880 shares of common stock and accompanying warrants. The transaction is priced at $1.27 per share, with warrants having the same exercise price and a five-year expiration term from stockholder approval.

Company insiders, including the CEO, CFO, and board members, are participating in the offering at the same purchase price as other investors. H.C. Wainwright & Co. is serving as the exclusive placement agent. The closing is expected around January 23, 2025.

The funds will be used for general corporate purposes, including research, pre-clinical studies, clinical trials, technology development, potential acquisitions, and working capital. The securities are being offered under Section 4(a)(2) of the Securities Act and have not been registered, with the company agreeing to file a resale registration statement.

Positive

• Company insiders (CEO, CFO, board members) participating in the offering at same price as other investors
• Secured $2.55 million in additional funding
• Registration rights agreement in place for investors

Negative

• Dilution of existing shareholders through new share issuance
• Additional warrants could lead to further dilution if exercised
• At-market pricing indicates no premium valuation for the placement

Insights

Financial Analyst

Dermata Therapeutics' $2.55M private placement reveals both opportunities and challenges for this late-stage biotech company. The financing structure is particularly noteworthy - priced at $1.27 per share with a 1:1 warrant coverage, effectively providing investors with significant upside potential through the 5-year warrants that match the purchase price.

The insider participation from the CEO, CFO and board members is a positive signal, demonstrating management's confidence and alignment with external investors. However, this type of at-the-market offering typically indicates immediate capital needs and the relatively small size suggests a bridge financing rather than a transformative capital raise.

For retail investors, several key implications emerge:

• The offering will result in immediate dilution through the issuance of 2,007,880 new shares, with potential further dilution if warrants are exercised
• The warrant exercise could eventually double the share issuance to over 4 million shares
• The pricing at market level, rather than a typical biotech discount, suggests reasonable terms given current market conditions

The planned use of proceeds for research, clinical trials and potential acquisitions indicates a broad strategic approach, though the size of the raise may only provide a few quarters of runway. In the current challenging biotech funding environment, securing capital with insider support and at-market pricing demonstrates some market confidence in Dermata's prospects, but investors should monitor the company's burn rate and development milestones closely.

SAN DIEGO, CA / ACCESS Newswire / January 22, 2025 / Dermata Therapeutics, Inc. (NASDAQ:DRMA)(NASDAQ:DRMAW) ("Dermata," or the "Company"), a late-stage biotechnology company focused on the treatment of medical and aesthetic skin diseases and conditions, today announced that it has entered into definitive agreements for the issuance and sale of an aggregate of 2,007,880 shares of common stock (or pre-funded warrants in lieu thereof) and accompanying warrants to purchase up to 2,007,880 shares of common stock at a purchase price of $1.27 per share of common stock (or per pre-funded warrant in lieu thereof) and accompanying warrant in a private placement priced at-the-market under the rules of the Nasdaq Stock Market. The warrants will have an exercise price of $1.27 per share, will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares issuable upon exercise of the warrants and will expire five years from the effective date of stockholder approval. The closing of the offering is expected to occur on or about January 23, 2025, subject to the satisfaction of customary closing conditions.

Company insiders, including the Company's Chief Executive Officer, Chief Financial Officer and certain members of the Company's board of directors, are participating in the offering. The purchase price per share of common stock (or per pre-funded warrant in lieu thereof) and accompanying warrant for these Company insiders is the same purchase price as paid by other investors in the offering.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

The gross proceeds from the offering are expected to be approximately $2.55 million, prior to deducting placement agent's fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for general corporate purposes which includes, without limitation, ongoing research and pre-clinical studies, clinical trials, the development of new biological and pharmaceutical technologies, investing in or acquiring companies that are synergistic with or complementary to the Company's technologies, licensing activities related to the Company's current and future product candidates, and to the development of emerging technologies, investing in or acquiring companies that are developing emerging technologies, licensing activities, or the acquisition of other businesses and working capital.

The securities described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and/or Regulation D promulgated thereunder and, along with the shares of common stock underlying the warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the shares, warrants and underlying shares of common stock may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. Pursuant to a registration rights agreement with investors, the Company has agreed to file a resale registration statement covering the securities described above.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Dermata Therapeutics

Dermata Therapeutics is a late-stage biotechnology company focusing on the treatment of medical and aesthetic skin diseases and conditions. Dermata's lead product candidate, Xyngari™ (formerly DMT310), is its first product candidate being developed from its Spongilla technology platform. Xyngari™ is a once-weekly, topical product candidate derived from a naturally sourced freshwater sponge with multiple unique mechanisms of action. In addition to acne, Xyngari™ has been studied for the treatment of psoriasis and rosacea. Dermata's second program, uses Xyngari™ as a new method for needle-free intradermal delivery of botulinum toxin for the treatment of multiple aesthetic and medical skin diseases and conditions. Dermata is headquartered in San Diego, California. For more information, please visit http://www.dermatarx.com/.

Forward-looking Statements

Statements in this press release that are not strictly historical in nature are forward-looking statements. These statements are based on the Company's current beliefs and expectations and new risks may emerge from time to time. Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions, and other factors including, but are not limited to, statements related to: statements related to: the completion of the offering; the satisfaction of customary closing conditions related to the offering; the intended use of proceeds therefrom; the receipt of stockholder approval; the potential development and commercialization of product candidates; the ability of the Company's product candidates to achieve applicable endpoints in clinical trials; whether the results of the Company's product candidates will lead to future product development; and whether the Company will have the ability to obtain adequate funding for future development of its product candidates. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties, including but not limited to, market and other conditions. Actual events or results may differ materially from those projected in any of such statements due to various factors, including the risks and uncertainties inherent in drug development, approval, and commercialization, and the fact that past results of clinical trials may not be indicative of future trial results. For a discussion of these and other factors, please refer to Dermata's filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are qualified in their entirety by this cautionary statement and Dermata undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof, except as required by law.

Investors:

Cliff Mastricola
Investor Relations
cmastricola@dermatarx.com

SOURCE: Dermata Therapeutics

View the original press release on ACCESS Newswire

FAQ

How much did Dermata Therapeutics (DRMA) raise in its January 2025 private placement?

Dermata Therapeutics raised approximately $2.55 million through the private placement offering.

What is the price per share for DRMA's January 2025 private placement?

The private placement was priced at $1.27 per share of common stock and accompanying warrant.

When will the warrants issued in DRMA's 2025 private placement expire?

The warrants will expire five years from the effective date of stockholder approval.

How many shares and warrants were issued in DRMA's January 2025 private placement?

Dermata issued 2,007,880 shares of common stock and accompanying warrants to purchase up to 2,007,880 shares.

What will DRMA use the proceeds from the January 2025 private placement for?

The proceeds will be used for general corporate purposes, including research, clinical trials, technology development, potential acquisitions, and working capital.