60 Degrees Pharmaceuticals sells 1,503,500 shares in $1.075 million registered direct offering

60 Degrees Pharmaceuticals, Inc. sold 1,503,500 shares of common stock to institutional investors at $0.715 per share in a registered direct offering. The company said in a Form 8-K that the deal closed on Feb 6, 2025, after a securities purchase agreement signed on Feb 5. Its pricing release puts gross proceeds at $1.075 million, before placement agent fees and other offering expenses. The shares were sold under a Form S-3 shelf registration declared effective on July 18, 2024, and a prospectus supplement dated Feb 5, 2025.

H.C. Wainwright & Co., LLC was the company's exclusive placement agent. The 8-K names no other bank, underwriter or financial advisor for the deal. Its exhibit list includes a legal opinion and consent from Sichenzia Ross Ference Carmel LLP, which acted as counsel on the registered shares; it names no counsel for the placement agent. The release says the net proceeds will go to working capital and general corporate purposes.

The fees

The 8-K says the company paid H.C. Wainwright a cash transaction fee of 7.5% of gross cash proceeds and a management fee of 1.0% of those proceeds. It also paid $15,000 of non-accountable expenses and a $10,000 clearing fee. The company also issued placement agent warrants to buy 112,763 shares at $0.8938 a share, exercisable from Feb 6, 2025, through Feb 8, 2027.

After the fees and offering expenses, the company says it received net proceeds of approximately $908,627.28. The 8-K says the net figure is after deducting offering expenses paid by the company, including the placement agent fees.

The warrants

The concurrent private placement gave the purchasers unregistered warrants to buy up to 1,503,500 shares, the same number as the shares sold. The warrants have an exercise price of $0.59 a share, which is below the $0.715 offering price, and they are exercisable on issuance. They expire 24 months after issuance. A holder may not exercise a warrant if that would leave it with more than 4.99% of the outstanding common stock, or 9.99% if the holder elects that higher limit. An increase in the limit takes effect only on the 61st day after the holder gives notice.

The warrants were issued under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D, because they were not sold in a public offering. The purchase agreement requires the company to file a registration statement for the warrant shares within 45 days of the agreement. It must use commercially reasonable efforts to have that statement declared effective within 75 days after closing, and to keep it effective until no purchaser holds any warrants or warrant shares.

Going concern and the company's history

The company's release lists, among its risks, that there is substantial doubt about its ability to continue as a going concern. The company describes itself as focused on developing new medicines for infectious diseases, and its 10-K says it has received the majority of its product revenue from sales of ARAKODA to the U.S. Department of Defense and resellers. Its 10-K for 2023, filed April 1, 2024, describes a malaria franchise built on tafenoquine, sold as ARAKODA, and a second program, Celgosivir.

The 10-K also describes a January 2024 public offering in which WallachBeth Capital LLC acted as representative of the underwriters. That offering sold 5,260,901 units at $0.385 per unit, with warrants exercisable at $0.4235. The February 2025 warrants carry a $0.59 exercise price, higher than the earlier warrants.

The February deal adds 1,503,500 shares, and the warrants add the same number on exercise. The filings do not give a cash balance for the company at the end of 2024, so they do not show how much cash the new money replaces.

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