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

Rhea-AI Summary

60 Degrees Pharmaceuticals, Inc. (NASDAQ: SXTP) has closed a $4 million private placement of common stock and warrants. The offering included 2,898,551 shares (or equivalents) at $1.38 per share, with accompanying series A and B warrants. H.C. Wainwright & Co. acted as the exclusive placement agent. The company plans to use the proceeds for working capital, general operations, commercialization of Arakoda, and R&D. The securities were offered under Section 4(a)(2) of the Securities Act and have not been registered, limiting their sale in the United States.

Positive

• Raised $4 million in gross proceeds through private placement
• Funds to be used for working capital, operations, and product commercialization
• Successful placement of shares and warrants at $1.38 per share

Negative

• Potential dilution of existing shareholders due to new share issuance
• Warrants may lead to further dilution if exercised
• Securities not registered, limiting their tradability

Insights

Financial Analyst

60 Degrees Pharmaceuticals' $4 million private placement is a double-edged sword for investors. While it provides much-needed capital for operations and R&D, the significant dilution at $1.38 per share, well below the current market price, is concerning. The inclusion of warrants further complicates the picture, potentially leading to additional dilution if exercised. This financing structure suggests the company faced challenges in raising capital through more traditional means, possibly indicating underlying financial pressures. Investors should closely monitor the company's burn rate and progress in commercializing Arakoda to assess the long-term impact of this capital raise.

Medical Research Analyst

The capital injection for 60 Degrees Pharmaceuticals is crucial for advancing their infectious disease portfolio, particularly Arakoda. However, the need for additional funding raises questions about the commercial viability of their current products. The allocation of funds to both commercialization and R&D suggests a balanced approach, but it's essential to see tangible progress in their pipeline to justify this investment. The focus on infectious diseases remains relevant in the post-pandemic era, but investors should watch for key milestones in clinical trials and regulatory approvals to gauge the company's potential for breakthrough treatments.

Legal Expert

The private placement's structure under Section 4(a)(2) of the Securities Act and Regulation D is standard for small-cap biotech companies. However, the requirement for stockholder approval for warrant exercises adds a layer of uncertainty. This could potentially delay access to additional capital if needed urgently. The company's emphasis on the unregistered status of the securities and the limitations on their resale is prudent from a legal standpoint, but it may restrict liquidity for participating investors. The involvement of H.C. Wainwright as the exclusive placement agent suggests professional handling of the transaction, which is a positive sign for regulatory compliance.

WASHINGTON, Sept. 06, 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 the closing of its previously announced private placement, priced at-the-market under Nasdaq rules, 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. The series A warrants and short-term series B warrants 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.

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

The gross proceeds to 60P from the offering are 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 were 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.

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 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 was the total amount raised by 60 Degrees Pharmaceuticals (SXTP) in its recent private placement?

60 Degrees Pharmaceuticals (SXTP) raised approximately $4 million in gross proceeds from its recent private placement.

How does 60 Degrees Pharmaceuticals (SXTP) plan to use the proceeds from the private placement?

SXTP intends to use the net proceeds for working capital, general operations, commercialization activities related to Arakoda, and the company's research and development program.

What was the price per share for the private placement of 60 Degrees Pharmaceuticals (SXTP)?

The private placement was priced at $1.38 per share (or per common stock equivalent) and accompanying warrants.

How many shares and warrants were issued in the 60 Degrees Pharmaceuticals (SXTP) private placement?

SXTP issued 2,898,551 shares (or equivalents) and two series of warrants, each to purchase up to 2,898,551 shares of common stock.