Processa Pharmaceuticals secures $6.3M; warrants could add 28M shares

Rhea-AI Filing Summary

Processa Pharmaceuticals, Inc. (Nasdaq: PCSA) filed an 8-K disclosing a capital raise that closed on 18 Jun 2025. The company entered into Securities Purchase Agreements with accredited investors for a best-efforts registered public offering consisting of (i) 14.31 million common shares, (ii) 13.69 million pre-funded warrants and (iii) 28 million five-year common warrants, all priced at a combined $0.25 per share (or $0.2499 when issued as a pre-funded warrant).

Key commercial terms

• Common Warrants: exercise price $0.25, immediately exercisable, expire five years from issuance.
• Pre-Funded Warrants: exercise price $0.0001, immediately exercisable until fully exercised.
• Placement Agent: H.C. Wainwright & Co. receives 7.0% cash fee on gross proceeds, up to $165,950 in expenses, and 1.12 million placement-agent warrants at $0.3125.
• Gross proceeds: approximately $6.3 million, before fees and expenses; additional proceeds possible upon warrant exercise.

Use of proceeds: fund the Phase 2 clinical trial of NGC-Cap and for general working capital.

Lock-up & issuance restrictions:

• No issuance of equity or equivalents for 60 days.
• No ATM, equity-line or variable-rate transactions for six months, except certain transactions with the Placement Agent after 90 days.

The securities were issued under the company’s effective S-1 (Reg. No. 333-287997). Exhibits include the forms of warrants, the purchase agreement and the related press release.

Investor takeaways: The raise strengthens near-term liquidity and advances a core clinical asset, but could increase the fully-diluted share count by up to ~57 million shares, representing meaningful dilution at a discounted price point.

Positive

• $6.3 million gross proceeds extend liquidity and fund the Phase 2 NGC-Cap trial.
• Immediate warrant exercisability could deliver additional capital at $0.25 without new placement costs.
• 60-day issuance lock-up and six-month ban on variable-rate deals limit near-term share supply.
• Placement Agent’s warrant strike ($0.3125) set above offering price, slightly reducing instant arbitrage.

Negative

• Offering price of $0.25 represents a deep discount, signalling weak market demand.
• Potential ~57 million new shares (including warrant shares) materially dilutes existing shareholders.
• 7% cash fee and up to $165,950 in expenses increase financing cost, reducing net proceeds.

Insights

Financial Analyst

TL;DR: $6.3 m cash boosts runway but deep discount and large warrant overhang create dilution risk; net effect neutral.

The offering injects approximately $6.3 million, extending liquidity for the Phase 2 NGC-Cap study. At $0.25, the raise likely priced below recent market levels, signalling limited institutional demand and immediately diluting existing holders. Fully exercised, the transaction could add ~57 million shares (plus 1.12 million PA warrants), materially expanding the float. Lock-up terms restrain additional issuance for up to six months, slightly mitigating supply pressure. Warrant exercise at $0.25 could provide incremental capital but caps upside near term. Overall, the event balances much-needed capital against dilution, leaving the impact financially neutral.

Biotech Industry Specialist

TL;DR: Funding secures Phase 2 trial continuity, a critical inflection for NGC-Cap; strategic positive despite dilution.

For development-stage biotechs like PCSA, uninterrupted clinical progress is paramount. The proceeds earmarked for the Phase 2 NGC-Cap study reduce trial-completion risk and enhance the value of the company’s pipeline. Immediate exercisability of pre-funded warrants signals investor commitment to full allocation while avoiding beneficial-ownership caps. Although the share count expansion is significant, early-stage investors typically expect dilution. The six-month prohibition on variable-rate financings reduces headline financing risk during key trial read-outs. If the clinical data are favourable, warrant conversion could provide inexpensive follow-on capital. Accordingly, this financing is strategically accretive to the drug-development timeline.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 17, 2025

Commission file number 001-39531

PROCESSA PHARMACEUTICALS, INC.

(Exact name of Registrant as Specified in its Charter)

Delaware		45-1539785
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

601 21^st Street, Suite 300 Vero Beach, FL 32960

(Address of Principal Executive Offices, Including Zip Code)

(772) 453-2899

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common stock: Par value $.0001		PCSA		Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

On June 17, 2025, Processa Pharmaceuticals, Inc. (the “Company”) entered into securities purchase agreements (the “Securities Purchase Agreement”) with accredited investors pursuant to which the Company sold, in a best efforts registered public offering (the “Offering”), (i) 14,310,000 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), (ii) Pre-Funded Warrants to purchase up to 13,690,000 shares of common stock in lieu of shares of common stock (the “Pre-Funded Warrants”); and (iii) Common Warrants to purchase up to 28,000,000 shares of common stock (the “Common Warrants”). We sold one share of our common stock and accompanying Common Warrant at a combined price of $0.25 per Share, and a Pre-Funded Warrant and accompanying Common Warrant at a combined price of $0.2499 per share.

The Common Warrants have an exercise price of $0.25 per share, are immediately exercisable and expire five years after their original issuance. The Pre-Funded Warrants have an exercise price of $0.0001, are immediately exercisable and will remain exercisable until exercised in full.

H.C. Wainwright & Co., LLC (the “Placement Agent”) acted as the Company’s exclusive placement agent in the Offering. The Company has agreed to pay the Placement Agent a cash fee equal to 7.0% of the gross proceeds raised in the Offering. The Company has also agreed to pay the Placement Agent a non-accountable expense allowance of up to $50,000, reimburse the placement agent for its legal fees and expenses in an amount of up to $100,000, and for its clearing expenses in the amount of $15,950. In addition, the Company issued to the Placement Agent warrants (the “Placement Agent Warrants”) to purchase 1,120,000 shares of our common stock at an exercise price equal $0.3125.

The Offering closed on June 18, 2025. The gross proceeds to the Company from the Offering were approximately $6.3 million (excluding any proceeds that may be received upon the exercise of the Common Warrants), before deducting the Placement Agent fees and other Offering expenses payable by the Company. The Company anticipates using the net proceeds from the Offering to continue the Phase 2 clinical trial of NGC-Cap and for working capital and other general corporate purposes. The Securities Purchase Agreement provides that, subject to certain exceptions, the Company agreed not to effect or enter into an agreement to effect any issuance by the Company or any of its subsidiaries of shares of Common Stock or Common Stock equivalents for a period of sixty (60) days and will not directly or indirectly offer to sell, sell, grant any option to sell or otherwise dispose of shares of its Common Stock or any securities convertible into, exercisable or exchangeable for its shares of Common Stock in any “at-the-market,” continuous equity, equity lines, or variable rate transaction, for a period of six (6) months after the Closing Date of the Offering, provided that the foregoing shall not apply, following the ninety (90) day anniversary of the Closing Date, to an equity line of credit and an “at-the-market” offering in which the Placement Agent is the sales agent.

The securities were offered and sold pursuant to the Company’s Registration Statement on Form S-1 (Registration No. 333-287997) previously filed with the Securities and Exchange Commission (the “Commission”) and declared effective on June 17, 2025.

The foregoing summaries of the terms of the Securities Purchase Agreement, Common Warrants, Pre-Funded Warrants, and Placement Agent Warrants are subject to, and qualified in their entirety by, such documents attached hereto as Exhibits 10.1, 4.1, 4.2, and 4.3 respectively, and are incorporated herein by reference. The provisions of the Securities Purchase Agreement, including the representations and warranties contained therein, are not for the benefit of any party other than the parties to such agreement or as stated therein and are not intended as a document for investors and the public to obtain factual information about the current state of affairs of the parties to the documents and agreements. Rather, investors and the public should look to other disclosures contained in the Company’s filings with the Commission.

Item 7.01 Regulation FD Disclosure.

On June 17, 2025, the Company issued a press release announcing the pricing of the Offering. A copy of the press release is attached hereto and furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit		Description
4.1		Form of Common Warrant
4.2		Form of Pre-Funded Warrant
4.3		Form of Placement Agent Warrant
10.1		Form of Securities Purchase Agreement, dated June 17, 2025, by and between Processa Pharmaceuticals, Inc. and each of the Purchasers (as defined therein).
99.1		Press release by Processa Pharmaceuticals, dated June 17, 2025.
104		Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized, on June 18, 2025.

	PROCESSA PHARMACEUTICALS, INC.
	Registrant
	By:	/s/ George Ng
		George Ng
		Chief Executive Officer

FAQ

How much cash did Processa Pharmaceuticals (PCSA) raise in the June 2025 offering?

Approximately $6.3 million in gross proceeds before fees and expenses.

What securities were issued by PCSA in the June 2025 8-K?

14.31 million common shares, 13.69 million pre-funded warrants, and 28 million five-year common warrants at $0.25.

What is the exercise price and term of PCSA's common warrants?

The common warrants carry a $0.25 exercise price, are immediately exercisable, and expire five years from issuance.

How will PCSA use the net proceeds from the offering?

Funds will continue the Phase 2 clinical trial of NGC-Cap and support general corporate purposes.

Are there lock-up restrictions on further equity issuance by PCSA?

Yes. No new equity for 60 days and no ATM or variable-rate deals for six months, with limited exceptions.