60 Degrees Pharma Announces $1.075 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 of 1,503,500 shares of common stock at $0.715 per share, priced at-the-market under Nasdaq rules. The company will also issue unregistered short-term warrants in a concurrent private placement to purchase up to 1,503,500 shares at $0.59 per share, exercisable for 24 months upon issuance.

The offering, expected to close around February 6, 2025, will generate gross proceeds of $1.075 million before deducting placement agent 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

• Immediate capital injection of $1.075 million to strengthen working capital
• At-market pricing indicates fair value alignment
• Short-term warrants could provide additional capital if exercised

Negative

• Significant dilution with 1,503,500 new shares being issued
• Additional potential dilution from warrant exercise of 1,503,500 shares
• Low share price of $0.715 suggests challenging market conditions
• Warrant exercise price of $0.59 is below the offering price, indicating potential downward pressure

Insights

Financial Analyst

This $1.075 million registered direct offering reveals significant insights about 60 Degrees Pharmaceuticals' current position and strategy. The offering represents approximately 35% of the company's market capitalization, indicating a substantial dilution for existing shareholders. The pricing at $0.715 per share, while above the current market price, suggests challenging market conditions for capital raising.

The concurrent issuance of warrants at $0.59 presents a complex dynamic. While it provides potential additional capital through exercise, it also indicates the company's need to offer attractive terms to secure immediate funding. The 24-month exercise period suggests management anticipates needing additional capital within this timeframe, possibly tied to development milestones.

The stated use for working capital, rather than specific development programs or strategic initiatives, raises concerns about cash burn rate and operational sustainability. For infectious disease pharmaceutical companies, typical monthly burn rates can range from $500,000 to $1.5 million, suggesting this raising might provide only 2-3 months of runway without additional revenue or cost reduction measures.

The involvement of H.C. Wainwright as placement agent, a firm known for working with emerging biotech companies, suggests options for traditional financing. This type of offering often indicates a challenging position for small-cap pharmaceutical companies, where immediate capital needs outweigh concerns about dilution and warrant overhang.

WASHINGTON, Feb. 05, 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 1,503,500 shares of its common stock at a purchase price of $0.715 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 1,503,500 shares of common stock. The short-term warrants will have an exercise price of $0.59 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 February 6, 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 $1.075 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

How much capital will SXTP raise in its February 2025 offering?

SXTP will raise gross proceeds of $1.075 million through the registered direct offering of 1,503,500 shares at $0.715 per share.

What is the exercise price and duration of SXTP's new warrants?

The short-term warrants have an exercise price of $0.59 per share and will expire 24 months after issuance.

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

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

When is SXTP's February 2025 offering expected to close?

The offering is expected to close on or about February 6, 2025, subject to customary closing conditions.

How many new shares will be issued in SXTP's February 2025 offering?

SXTP will issue 1,503,500 shares of common stock, with additional warrants to purchase up to 1,503,500 shares.