Titan Pharmaceuticals Announces $1 Million Private Placement of Convertible Preferred Stock

Rhea-AI Summary

Titan Pharmaceuticals (NASDAQ: TTNP) has completed a $1 million private placement through the sale of Series B Convertible Preferred Stock to Blue Harbour Asset Management. The agreement involves the purchase of 100,000 preferred shares at a conversion price of $3.00.

The deal includes a beneficial ownership conversion blocker that prevents Blue Harbour from acquiring more than 19.99% of Titan's outstanding common stock or the maximum percentage permissible under Nasdaq rules without shareholder approval. The shares were sold through a private placement under Regulation S of the Securities Act.

The companies have also entered into a registration rights agreement, with ARC Group serving as the sole financial advisor for the transaction.

Positive

• Secured $1 million in immediate funding through preferred stock sale
• Strategic investment from institutional investor Blue Harbour Asset Management
• Ownership dilution protection through 19.99% beneficial ownership blocker

Negative

• Small financing amount may indicate investor interest
• Potential future dilution for existing shareholders upon preferred stock conversion
• Reliance on private placement suggests possible challenges in accessing public markets

Insights

Financial Analyst

Titan Pharmaceuticals' $1 million private placement represents a strategic but potentially dilutive capital raise that warrants close investor attention. This financing equals roughly 29% of Titan's current $3.4 million market cap, making it a significant capital event despite the modest absolute dollar amount.

The $3.00 conversion price represents a 20.4% discount to the current share price of $3.77, which is concerning as it indicates Blue Harbour negotiated favorable terms at existing shareholders' expense. This pricing suggests Titan may have had financing options or urgent capital needs.

The transaction structure includes standard protective provisions limiting Blue Harbour's potential ownership to prevent stealth takeovers, while the registration rights agreement ensures Blue Harbour can eventually sell their converted shares on the open market.

For a micro-cap pharmaceutical company like Titan, securing institutional investment from Blue Harbour could be viewed as a vote of confidence, but the steep discount and relative size of the placement indicate potential liquidity challenges. The company hasn't disclosed specific use of proceeds, leaving questions about how long this capital will sustain operations and what developmental milestones it might support.

Existing shareholders should carefully consider the dilutive impact of this financing and what it signals about Titan's current financial position and capital raising capabilities.

NEW YORK, April 11, 2025 (GLOBE NEWSWIRE) -- Titan Pharmaceuticals, Inc. (NASDAQ: TTNP) ("Titan" or the "Company") announced today that, pursuant to a securities purchase agreement (the “Purchase Agreement”) with Blue Harbour Asset Management L.L.C-FZ (“Blue Harbour”), it has completed a private placement of the Company’s newly designated Series B Convertible Preferred Stock (the “Preferred Stock”). Pursuant to the Purchase Agreement, Blue Harbour purchased 100,000 shares of Preferred Stock for an aggregate purchase price of $1,000,000. The shares have a conversion price of $3.00.

The Certificate of Designations authorizing the Preferred Stock contains a beneficial ownership conversion "blocker" that prevents Blue Harbour from acquiring the lower of either (i) the maximum percentage of common stock permissible under Nasdaq rules and regulations without first obtaining shareholder approval or (ii) 19.99% of the Company's outstanding common stock.

The shares being sold in this transaction do not involve a public offering and have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Regulation S thereunder. Titan and Blue Harbour have concurrently entered into a registration rights agreement (the “Registration Rights Agreement”) pursuant to which Titan has agreed to provide certain registration rights upon the occurrence of certain events set forth in the Registration Rights Agreement. Additional information regarding the agreement can be found in an 8-K that was filed with the SEC: https://ir.titanpharm.com/all-sec-filings.

ARC Group Ltd. served as sole financial advisor to Titan in the private placement.

Forward-Looking Statements

This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Such statements include, but are not limited to, any statements relating to our product development programs and any other statements that are not historical facts. Such statements involve risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from management's current expectations include those risks and uncertainties relating to our ability to raise capital, the regulatory approval process, the development, testing, production and marketing of our drug candidates, patent and intellectual property matters and strategic agreements and relationships. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law. A complete discussion of the risks and uncertainties that may affect Titan's business, including the business of its subsidiary, is included in "Risk Factors" in the Company's most recent Annual Report on Form 10-K as filed by the Company with the Securities and Exchange Commission.

Media & Investor Contacts:

Chay Weei Jye
Chief Executive Officer
(786) 769-7512

FAQ

What is the value and structure of TTNP's recent private placement deal?

Titan Pharmaceuticals completed a $1 million private placement through the sale of 100,000 shares of Series B Convertible Preferred Stock to Blue Harbour Asset Management at a $3.00 conversion price.

What ownership restrictions are placed on Blue Harbour in the TTNP deal?

Blue Harbour is restricted from acquiring more than 19.99% of Titan's outstanding common stock or exceeding Nasdaq's maximum ownership threshold without shareholder approval.

How will the TTNP preferred stock placement be registered?

The shares were sold as a private placement under Regulation S and include registration rights that will be triggered upon certain events specified in the Registration Rights Agreement.

Who advised Titan Pharmaceuticals (TTNP) on the private placement?

ARC Group served as the sole financial advisor to Titan Pharmaceuticals for this private placement transaction.