Protagenic Therapeutics (PTIX, Financial) has announced a merger with Phytanix Bio through a definitive share exchange agreement, resulting in the creation of Phytanix, Inc. This merger will combine their pipelines focused on stress-related and central nervous system (CNS) disorders. The newly formed entity will manage five preclinical and one clinical-stage asset.
As part of the agreement, PTIX issued 117,690 shares of its common stock to Phytanix Bio’s common shareholders, which accounts for no more than 19.99% of PTIX's outstanding shares prior to the merge on May 16. Additionally, PTIX allocated 5,705 shares of its Series C Convertible Preferred Stock and 950,000 shares of its Series C-1 Convertible Preferred Stock to Phytanix Bio’s preferred shareholders, along with 20,000 shares of Series D Preferred Stock and warrants for 715,493 common shares.
These shares and warrants were issued on May 16, with each preferred stock share convertible into common stock under specific conditions outlined in the agreement. The merger results in a post-combination ownership structure where PTIX stockholders will hold approximately 35%, and Phytanix Bio stockholders will possess about 65%. The conversion of preferred shares and exercise of warrants is subject to shareholder approval in compliance with Nasdaq regulations.
