GT Biopharma enlarges preferred stock private placement to $5,950,000.00

The amended deal

GT Biopharma, Inc. (Nasdaq: GTBP) said in an 8-K that it amended a private placement of convertible preferred stock and warrants on May 21, 2025, adding a new purchaser and raising the size of the deal. The company first agreed on May 12, 2025 to sell up to 6,056 shares of Series L 10% Convertible Preferred Stock, with an aggregate stated value of $6,055,555.56, for an aggregate purchase price of $5,450,000.00.

Under the First Amendment to the Securities Purchase Agreement, the deal grows to 6,612 shares of preferred stock, with an aggregate stated value of $6,611,111.00, for an aggregate purchase price of $5,950,000.00. The new purchaser joined the existing purchasers on the same terms and conditions as previously disclosed.

Each purchaser may also elect to buy more preferred stock under greenshoe rights, which are options to add to the purchase later. Together these cover an aggregate stated value of up to $24,018,349, for an aggregate purchase price of $21,616,514, subject to adjustments. Each purchaser's greenshoe share follows its original subscription amount.

The 8-K says the securities were offered privately under Rule 506(b) of Regulation D. It does not name a placement agent or other financial advisor for the offering.

The terms and the dilution

Each share of Series L preferred can be turned into common stock, and buyers also receive common warrants for 100% of the shares issuable on conversion. The deal also includes warrants tied to the greenshoe shares, which the 8-K calls vesting warrants.

GT Biopharma agreed to file a registration statement for the resale of the common stock underlying the preferred and warrants within 30 days after the initial closing and after each closing of a greenshoe right. The statement must become effective no later than 90 days after filing. The new purchaser signed a joinder to the registration rights agreement on May 21, 2025.

On May 22, 2025, the company filed a Certificate of Increase raising the number of designated Series L shares from 28,056 to 30,630. The 8-K says the company is a fully remote company with no principal executive office, and that stockholder communications may be sent to a San Francisco address or by email to its audit committee.

The company and the critical read

The annual report filed February 21, 2025 describes GT Biopharma as a clinical-stage biopharmaceutical company developing immuno-oncology products based on its Tri-specific Killer Engager, or TriKE, platform. The report says the company's first candidate, GTB-3550, had its clinical development suspended so it could focus resources on second-generation TriKE products. It reports interim clinical results for GTB-3550 in CD33-positive leukemias, with CD33-positive bone marrow blast levels reduced by 33.3% in Patient 5 at 25 µg/kg/day, 61.7% in Patient 7 at 50 µg/kg/day, 63.6% in Patient 9 at 100 µg/kg/day and 50% in Patient 11 at 150 µg/kg/day. That is four patients from an interim read, and the program was suspended.

The report also says the company's preclinical data suggest the platform causes less cytokine release syndrome than T-cell immunotherapy. Those are the company's own findings in early studies, and the annual report describes them as potentially safer, not proven safer.

The financing adds preferred stock that converts into common stock and carries warrants for the full conversion amount, with greenshoe rights that could add a further $21,616,514 in purchase price. The company has also increased its own authorized Series L designation to 30,630 shares. Together those terms put a growing claim on the common stock in front of current shareholders.

The annual report's account of the clinical data is early and small, and the 8-K reports no new clinical result alongside the financing.

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