Processa Pharmaceuticals Raises $5M in Public Offering Priced At-The-Market Under Nasdaq Rules

Processa Pharmaceuticals, Inc. (PCSA) has successfully closed a $5 million public offering, priced at-the-market under Nasdaq rules. The offering, which was a "reasonable best efforts" offering, was participated in by the Company's Chief Executive Officer, certain board members, and existing institutional investors, along with a healthcare-focused institutional investor. The offering consisted of 8,050,672 shares of common stock (or pre-funded warrants in lieu thereof) and accompanying Series A warrants to purchase up to 8,050,672 shares of common stock (or pre-funded warrants in lieu thereof) and Series B warrants to purchase up to 4,025,336 shares of common stock. The shares and accompanying warrants were sold at a combined purchase price per share (and accompanying warrants) of $0.615 for the institutional investors and $0.7975 for the Company's Chief Executive Officer and certain board members.

The offering was made only by means of a prospectus forming part of the effective registration statement relating to the offering, which was declared effective by the Securities and Exchange Commission (SEC) on January 27, 2025. Electronic copies of the final prospectus may be obtained on the SEC's website at http://www.sec.gov and may also be obtained by contacting A.G.P./Alliance Global Partners at 590 Madison Avenue, 28th Floor, New York, NY 10022, by phone at (212) 624-2060 or e-mail at prospectus@allianceg.com.

The proceeds from the offering, before deducting placement agent fees and other offering expenses payable by the Company, were $5 million (excluding any proceeds that may be received upon the exercise of Series A warrants and Series B warrants). A.G.P./Alliance Global Partners acted as the sole placement agent for the offering.

The successful closing of this public offering is a significant milestone for Processa Pharmaceuticals, as it provides the company with additional capital to support its ongoing research and development efforts. The company reported a net loss of $9.1 million for the nine months ended September 30, 2024, and has not yet generated any product revenue. The proceeds from the offering will help Processa Pharmaceuticals continue its operations and fund its clinical trials, particularly for its lead candidate NGC-Cap, which is currently in a Phase 2 trial for metastatic breast cancer. This additional funding extends the company's runway for further development, allowing it to maintain its momentum in advancing its drug candidates through the clinical pipeline.

The strategic implications of the offering's pricing at-the-market under Nasdaq rules are significant for Processa Pharmaceuticals. This pricing method allows the company to raise capital at a price that reflects the current market demand for its shares, rather than a predetermined price. This approach can help the company secure a higher price per share, as it is based on the most recent trading activity. Additionally, pricing at-the-market can help the company avoid the risk of overpricing or underpricing the offering, which could lead to a lack of interest from investors or a dilution of shareholder value.

In comparison to previous offerings, the pricing at-the-market under Nasdaq rules for this offering is higher than the previous offering in May 2024. In that offering, the company raised $2.4 million at a price of $0.50 per share. In this offering, the company raised $5 million at a price of $0.615 per share for institutional investors and $0.7975 per share for the Company's Chief Executive Officer and certain board members. This increase in pricing indicates a higher level of investor interest and confidence in the company's prospects.

Furthermore, the pricing at-the-market under Nasdaq rules allows the company to tap into a broader range of investors, including those who may not have been interested in a fixed-price offering. This can help the company raise more capital and diversify its shareholder base, which can be beneficial for the company's long-term growth and stability.

The participation of the Company's Chief Executive Officer, board members, and existing institutional investors in the public offering can significantly influence the offering's success and the company's future direction. Their involvement signals their confidence in the company's prospects and the offering, instilling confidence in potential investors and increasing the likelihood of a successful offering. Additionally, their participation aligns their interests with those of new investors, fostering a more collaborative and supportive investor base. This alignment can positively impact the company's future direction, as these stakeholders are more likely to work together to support the company's strategic decisions and growth initiatives.

In conclusion, the successful closing of Processa Pharmaceuticals' $5 million public offering, priced at-the-market under Nasdaq rules, is a significant milestone for the company. The offering provides the company with additional capital to support its ongoing research and development efforts, extends its runway for further development, and indicates a higher level of investor interest and confidence in the company's prospects. The strategic implications of the offering's pricing method and the participation of key stakeholders signal a positive outlook for the company's future growth and direction.