60 Degrees Pharmaceuticals, Inc. Announces $4 Million Private Placement Priced At-the-Market Under Nasdaq Rules

Rhea-AI Summary

60 Degrees Pharmaceuticals (NASDAQ: SXTP) has announced a $4 million private placement priced at-the-market under Nasdaq rules. The company will issue and sell 2,898,551 shares of common stock (or equivalents) at $1.38 per share, along with series A and short-term series B warrants. The warrants will have an exercise price of $1.38 per share, with series A expiring in five years and series B in 18 months from stockholder approval.

H.C. Wainwright & Co. is acting as the exclusive placement agent. The offering is expected to close around September 5, 2024. 60P plans to use the net proceeds for working capital, general operations, Arakoda commercialization, and research and development. The securities are being offered under Section 4(a)(2) of the Securities Act and have not been registered, limiting their sale in the United States.

Positive

• Secured $4 million in funding through private placement
• Priced at-the-market under Nasdaq rules, potentially indicating fair valuation
• Funds to be used for Arakoda commercialization and R&D activities

Negative

• Potential dilution for existing shareholders due to new share issuance
• Warrants may lead to further dilution if exercised in the future
• Securities not registered under the Securities Act, limiting their tradability

Insights

Financial Analyst

60 Degrees Pharmaceuticals' $4 million private placement is a strategic move to bolster its financial position. The at-the-market pricing of $1.38 per share suggests current market valuation alignment. The inclusion of warrants adds complexity but potentially increases investor interest. However, the dilutive effect on existing shareholders is a concern, with 2,898,551 new shares being issued. The use of proceeds for working capital and R&D is positive for operational sustainability, but investors should monitor the burn rate. The Stockholder Approval requirement for warrant exercise introduces uncertainty. Overall, while the capital raise supports short-term liquidity, its long-term impact on share value remains to be seen.

Biotech Industry Expert

This funding round is important for 60P's commercialization efforts for Arakoda, their antimalarial drug. The focus on infectious diseases aligns with global health priorities, potentially opening doors to partnerships or grants. However, the company's reliance on private placements may indicate challenges in securing traditional financing. The R&D allocation is promising, but investors should scrutinize the pipeline's potential. The $4 million raise seems modest for a biotech company, raising questions about the scope and timeline of their development programs. The market's reception to this placement will be a key indicator of investor confidence in 60P's strategy and potential in the competitive pharmaceutical landscape.

Legal Expert

The private placement's structure under Section 4(a)(2) of the Securities Act and Regulation D is standard for non-public offerings, limiting participation to accredited investors. The registration rights agreement for a resale registration statement is a positive for investors, potentially improving future liquidity. However, the current unregistered status of the securities limits immediate tradability. The Stockholder Approval requirement for warrant exercise adds a layer of corporate governance complexity. Investors should be aware of the restrictions on resale and the conditions precedent to warrant exercise. The company's commitment to file a resale registration statement is important for future investor liquidity and compliance with securities regulations.

WASHINGTON, Sept. 04, 2024 (GLOBE NEWSWIRE) -- 60 Degrees Pharmaceuticals, Inc. (NASDAQ: SXTP; SXTPW) (“60P” or the “Company”), a pharmaceutical company focused on developing new medicines for infectious diseases, today announced that it has entered into definitive agreements for the issuance and sale of an aggregate of 2,898,551 shares of its common stock (or common stock equivalents in lieu thereof), series A warrants to purchase up to 2,898,551 shares of common stock and short-term series B warrants to purchase up to 2,898,551 shares of common stock at a purchase price of $1.38 per share (or per common stock equivalent in lieu thereof) and accompanying warrants in a private placement priced at-the-market under Nasdaq rules. The series A warrants and short-term series B warrants will have an exercise price of $1.38 per share and will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares of common stock upon exercise of the warrants (the “Stockholder Approval”). The series A warrants will expire five years from the Stockholder Approval and the short-term series B warrants will expire eighteen months from the Stockholder Approval. The closing of the offering is expected to occur on or about September 5, 2024, subject to the satisfaction of customary closing conditions.

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

The gross proceeds to 60P from the offering are expected to be approximately $4 million, before deducting the placement agent’s fees and other offering expenses payable by 60P, and excluding the proceeds, if any, from the exercise of the warrants. 60P intends to use the net proceeds from the offering for working capital, general operations, commercialization activities related to Arakoda, and the Company’s research and development program.

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 securities described above, including the shares of common stock underlying the warrants, 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, the Company has agreed to file a resale registration statement covering the securities described above.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, 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 60 Degrees Pharmaceuticals, Inc.

60 Degrees Pharmaceuticals, Inc., founded in 2010, specializes in developing and marketing new medicines for the treatment and prevention of infectious diseases that affect the lives of millions of people. 60 Degrees Pharmaceuticals, Inc. achieved FDA approval of its lead product, ARAKODA® (tafenoquine), for malaria prevention, in 2018. 60 Degrees Pharmaceuticals, Inc. also collaborates with prominent research organizations in the U.S., Australia, and Singapore. The 60 Degrees Pharmaceuticals, Inc. mission has been supported through in-kind funding from the U.S. Department of Defense and private institutional investors including Knight Therapeutics Inc., a Canadian-based pan-American specialty pharmaceutical company. 60 Degrees Pharmaceuticals, Inc. is headquartered in Washington D.C., with a majority-owned subsidiary in Australia. Learn more at www.60degreespharma.com.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the current view about future events, and include, among others, statements related to the completion of the private placement, the satisfaction of customary closing conditions related to the private placement, the receipt of Stockholder Approval and the intended use of proceeds from the private placement. When used in this press release, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, activities of regulators and future regulations and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: market and other conditions; there is substantial doubt as to our ability to continue on a going-concern basis; we might not be eligible for Australian government research and development tax rebates; if we are not able to successfully develop, obtain U.S. Food and Drug Administration (FDA) approval for, and provide for the commercialization of non-malaria prevention indications for tafenoquine (ARAKODA® or other regimen) or Celgosivir in a timely manner, we may not be able to expand our business operations; we may not be able to successfully conduct planned clinical trials; and we have no manufacturing capacity which puts us at risk of lengthy and costly delays of bringing our products to market. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the information contained in our Annual Report on Form 10-K filed with the SEC on April 1, 2024, and our subsequent SEC filings. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at www.sec.gov. As a result of these matters, changes in facts, assumptions not being realized or other circumstances, the Company’s actual results may differ materially from the expected results discussed in the forward-looking statements contained in this press release. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise, except is required by law.

Investor Contact: Patrick Gaynes
patrickgaynes@60degreespharma.com
(310) 989-5666

FAQ

What is the size of 60 Degrees Pharmaceuticals' (SXTP) recent private placement?

60 Degrees Pharmaceuticals (SXTP) announced a $4 million private placement priced at-the-market under Nasdaq rules.

How many shares and warrants is SXTP issuing in the private placement?

SXTP is issuing 2,898,551 shares of common stock (or equivalents), along with series A and short-term series B warrants to purchase up to 2,898,551 shares each.

What is the price per share for SXTP's private placement?

The purchase price is $1.38 per share (or per common stock equivalent) and accompanying warrants.

When is the expected closing date for SXTP's private placement?

The closing of the offering is expected to occur on or about September 5, 2024.

How does SXTP plan to use the proceeds from the private placement?

SXTP intends to use the net proceeds for working capital, general operations, Arakoda commercialization activities, and research and development programs.