60 Degrees Pharma Announces $1.043 Million Registered Direct Offering Priced At-the-Market Under Nasdaq Rules

Rhea-AI Summary

60 Degrees Pharmaceuticals (NASDAQ: SXTP) has announced a registered direct offering priced at-the-market under Nasdaq rules, consisting of 1,021,549 shares of common stock at $1.021 per share. The company will also issue unregistered short-term warrants in a concurrent private placement to purchase up to 2,043,098 shares at $0.771 per share, exercisable for 24 months upon issuance.

The offering, expected to close around January 30, 2025, will generate gross proceeds of $1.043 million before deducting fees and expenses. H.C. Wainwright & Co. is serving as the exclusive placement agent. The company plans to use the net proceeds for working capital and general corporate purposes.

Positive

• Secured immediate funding of $1.043 million through equity offering
• Offering priced at-the-market, minimizing immediate price impact
• Additional potential capital through warrant exercise could generate $1.575 million if fully exercised

Negative

• Significant dilution with issuance of over 1 million new shares
• Additional potential dilution from over 2 million warrant shares
• Warrants priced at 24.5% discount to the share offering price
• Small offering size suggests institutional interest

Insights

Financial Analyst

This $1.043 million capital raise through a registered direct offering reveals several concerning aspects about 60 Degrees Pharmaceuticals' financial position. The relatively small size of the offering compared to the company's $1.8 million market cap suggests investor interest or urgent cash needs. The structure combining shares at $1.021 with warrants exercisable at $0.771 indicates significant concessions to attract investors.

The warrant coverage ratio of 2:1 (2,043,098 warrant shares vs 1,021,549 common shares) is particularly aggressive, potentially leading to substantial dilution if exercised. The 24-month warrant term creates a prolonged overhang on the stock, as these instruments could flood the market with shares at a 25% discount to the offering price.

The use of proceeds for "working capital and general corporate purposes" lacks specificity and may indicate defensive capital raising rather than growth-oriented investment. The involvement of H.C. Wainwright, known for working with smaller-cap companies and the at-market pricing mechanism suggest negotiating leverage.

This financing appears to be a bridge solution rather than a transformative capital raise, potentially necessitating additional dilutive financings in the near term unless the company achieves significant operational milestones or strategic developments.

WASHINGTON, Jan. 29, 2025 (GLOBE NEWSWIRE) -- 60 Degrees Pharmaceuticals, Inc. (NASDAQ: SXTP; SXTPW) (the “Company”), a pharmaceutical company focused on developing new medicines for infectious diseases, today announced that it has entered into definitive agreements for the purchase and sale of an aggregate of 1,021,549 shares of its common stock at a purchase price of $1.021 per share in a registered direct offering priced at-the-market under Nasdaq rules. In addition, in a concurrent private placement, the Company will issue unregistered short-term warrants to purchase up to an aggregate of 2,043,098 shares of common stock. The short-term warrants will have an exercise price of $0.771 per share, will be exercisable upon issuance and expire twenty-four months following the date of issuance. The closing of the offering is expected to occur on or about January 30, 2025, subject to the satisfaction of customary closing conditions.

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

The aggregate gross proceeds to the Company from the offering are expected to be $1.043 million, before deducting the placement agent fees and other offering expenses payable by the Company. The Company currently intends to use the net proceeds from the offering for working capital and other general corporate purposes.

The shares of common stock (but not the short-term warrants issued in the private placement or the shares of common stock underlying such short-term warrants) are being offered by the Company pursuant to a “shelf” registration statement on Form S-3 (File No. 333-280796) filed with the Securities and Exchange Commission (“SEC”) on July 12, 2024 and became effective on July 18, 2024. The registered direct offering of the shares of common stock is being made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. The prospectus supplement and the accompanying prospectus relating to the shares of common stock being offered in the registered direct offering will be filed with the SEC and be available at the SEC's website at www.sec.gov. Electronic copies of the prospectus supplement and the accompanying prospectus relating to the registered direct offering may also be obtained, when available, by contacting H.C. Wainwright & Co. at 430 Park Avenue, 3rd Floor, New York, NY 10022, by telephone at (212) 856-5711 or e-mail at placements@hcwco.com.

The short-term warrants described above are being issued in a concurrent private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder and, along with the shares of common stock underlying the short-term warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the short-term 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.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, 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 the registration or qualification under the securities laws of any such state or 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 approval by the U.S. Food and Drug Administration (“FDA”) 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. The statements contained herein may include prospects, statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such forward-looking statements.

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. 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: our ability to consummation of the offering; the satisfaction of the closing conditions of the offering and the use of proceeds therefrom; 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 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 or patient recruitment in our trials might be slow or negligible; 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, as well as marked and other conditions. Investors and security holders are urged to read these documents free of charge on the SEC’s website 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 as required by law.

Media Contact:
Sheila A. Burke
SheilaBurke-consultant@60degreespharma.com
(484) 667-6330

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

FAQ

What is the size and price of SXTP's January 2025 direct offering?

SXTP's January 2025 direct offering consists of 1,021,549 shares at $1.021 per share, totaling $1.043 million in gross proceeds.

What are the terms of SXTP's warrant offering in January 2025?

SXTP is issuing warrants to purchase 2,043,098 shares at $0.771 per share, exercisable immediately and expiring in 24 months.

How will SXTP use the proceeds from its January 2025 offering?

SXTP intends to use the net proceeds for working capital and other general corporate purposes.

When will SXTP's January 2025 registered direct offering close?

The offering is expected to close on or about January 30, 2025, subject to customary closing conditions.

What is the potential dilution impact of SXTP's January 2025 offering?

The offering includes 1,021,549 new shares plus potential dilution from 2,043,098 warrant shares if exercised.