XORTX Announces Pricing of US$1.5 Million Registered Direct Offering and Concurrent Private Placement
XORTX Therapeutics Inc. (NASDAQ: XRTX | TSXV: XRTX | Frankfurt: ANU) has announced a US$1.5 million registered direct offering and concurrent private placement. The company will sell 810,810 common shares (or equivalents) at US$1.85 per share and issue warrants to purchase up to 810,810 common shares at US$2.18 per share. The warrants will be immediately exercisable and expire in five years. The offering is expected to close around October 18, 2024, subject to conditions. A.G.P./Alliance Global Partners is acting as the sole placement agent. XORTX intends to use the net proceeds for working capital and general corporate purposes. The offering includes a registered direct offering under an effective shelf registration and a private placement of warrants.
- Raising approximately US$1.5 million in gross proceeds
- Warrants provide potential for additional future funding
- Strengthening working capital position
- Potential dilution for existing shareholders
- Offering price of US$1.85 per share may be below current market price
- Additional expenses related to placement agent fees and offering costs
Insights
XORTX Therapeutics' announcement of a
The offering structure, combining common shares (or equivalents) with warrants, is typical for small biotech firms seeking to maximize fundraising potential. The
However, this financing will likely result in significant dilution for existing shareholders. The addition of 810,810 new shares represents a considerable increase to the outstanding share count for a company of this size. The potential exercise of warrants could lead to further dilution in the future.
While the additional capital will provide much-needed working capital, investors should closely monitor how efficiently XORTX utilizes these funds to advance its clinical programs in progressive kidney disease. The company's ability to achieve meaningful milestones with this relatively modest sum will be important for maintaining investor interest and potentially securing more favorable financing terms in the future.
This financing deal for XORTX Therapeutics highlights the challenging environment for small-cap biotech companies in the current market. Despite being in the late-stage clinical phase, which typically attracts more investor interest, XORTX had to resort to a dilutive offering to secure relatively modest funding.
The company's focus on developing therapies for progressive kidney disease places it in a significant market with high unmet medical needs. However, the small size of this raise suggests that XORTX may face challenges in fully funding its clinical programs without additional capital infusions in the near future.
Investors should pay close attention to XORTX's burn rate and the expected timeline for key clinical milestones. The company's ability to stretch this
On a positive note, the involvement of institutional investors in this offering may provide some validation of XORTX's technology and market potential. However, the overall impact on the company's valuation and long-term prospects remains uncertain, warranting cautious optimism from investors in this high-risk, high-reward sector.
CALGARY, Alberta, Oct. 17, 2024 (GLOBE NEWSWIRE) -- XORTX Therapeutics Inc. ("XORTX" or the “Company”) (NASDAQ: XRTX | TSXV: XRTX | Frankfurt: ANU), a late-stage clinical pharmaceutical company focused on developing innovative therapies to treat progressive kidney disease, announces that it has entered into securities purchase agreements with institutional investors for the purchase and sale of 810,810 common shares (or common share equivalents in lieu thereof) in a registered direct offering and common warrants to purchase up to 810,810 common shares in a concurrent private placement (together with the registered direct offering, the “Offering”) at a combined purchase price of US
The closing of the Offering is expected to occur on or about October 18, 2024, subject to the satisfaction of customary closing conditions and approval from the TSX Venture Exchange. The gross proceeds from the Offering are expected to be approximately US
A.G.P./Alliance Global Partners is acting as sole placement agent for the Offering.
The common shares (and common share equivalents in lieu thereof) will be issued in a registered direct offering pursuant to an effective shelf registration statement on Form F-3 (File No. 333-269429) previously filed with the U.S. Securities and Exchange Commission (the “SEC”), under the Securities Act of 1933, as amended (the “Securities Act”), and declared effective by the SEC on February 3, 2023. A prospectus supplement describing the terms of the proposed registered direct offering will be filed with the SEC and, once filed, will be available on the SEC’s website located at http://www.sec.gov. Electronic copies of the prospectus supplement may be obtained, when available, from A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022, or by telephone at (212) 624-2060, or by email at prospectus@allianceg.com.
The private placement of the common warrants and the underlying common shares will be made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D thereunder. Accordingly, the securities issued in the concurrent private placement 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 applicable state securities laws.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About XORTX Therapeutics Inc.
XORTX is a pharmaceutical company with two clinically advanced products in development: 1) our lead, XRx-008 program for ADPKD; and 2) our secondary program in XRx-101 for acute kidney and other acute organ injury associated with Coronavirus / COVID-19 infection. In addition, XRx-225 is a pre-clinical stage program for Type 2 Diabetic Nephropathy. XORTX is working to advance its clinical development stage products that target aberrant purine metabolism and xanthine oxidase to decrease or inhibit production of uric acid.
| For more information, please contact: | |
| Allen Davidoff, CEO adavidoff@xortx.com or +1 403 455 7727 | Nick Rigopulos, Director of Communications nick@alpineequityadv.com or +1 617 901 0785 |
Neither the TSX Venture Exchange nor Nasdaq has approved or disapproved the contents of this news release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
Forward Looking Statements
This press release contains express or implied forward-looking statements pursuant to applicable securities laws. For example, the Company is using forward-looking statement in this press release when it discusses the intended use of proceeds and closing of the Offering. These forward-looking statements and their implications are based on the current expectations of the management of XORTX only, and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Except as otherwise required by applicable law and stock exchange rules, XORTX undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. More detailed information about the risks and uncertainties affecting XORTX is contained under the heading “Risk Factors” in XORTX’s Annual Report on Form 20-F filed with the SEC, which is available on the SEC's website, www.sec.gov (including any documents forming a part thereof or incorporated by reference therein), as well as in our reports, public disclosure documents and other filings with the securities commissions and other regulatory bodies in Canada, which are available on www.sedarplus.ca.
FAQ
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