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Protagenic Therapeutics, Inc. (NASDAQ:PTIX), a micro-cap biotech company with a market capitalization of $1.63 million, announced a significant restructuring plan on Friday, including a transition to a virtual operating model, a reduction in workforce, and a change in its fiscal year-end. The stock, currently trading at $2.78, has experienced significant pressure, falling nearly 75% over the past six months, according to InvestingPro data. The information was disclosed in a press release statement filed with the Securities and Exchange Commission.
The company’s board of directors approved the restructuring plan to focus resources on its lead clinical program and reduce operating costs. As part of this plan, Protagenic has temporarily suspended spending on its preclinical programs and is evaluating strategic alternatives for these assets, such as partnerships or out-licensing. The company aims to advance these programs with external funding while preserving capital for its primary clinical assets.
When fully implemented, the restructuring plan is expected to reduce annualized operating expenses by approximately $8 million. Protagenic anticipates incurring one-time charges related to the restructuring but has not yet determined the total amount or timing of these charges. The company stated it will provide further details in a subsequent filing once estimates are available.
In connection with the restructuring, the board terminated the employment of Barrett Evans as Chief Executive Officer and President and Colin Stott as Chief Operating Officer, both effective immediately as of Friday. Evans and Stott will remain on the board of directors. Any severance or compensatory arrangements will be disclosed when finalized.
The company is shifting to a virtual operating model to minimize expenses and will retain external consultants as needed, with annual fees not expected to exceed $200,000. Workforce reductions include the elimination of executive positions and roles primarily associated with preclinical operations, regulatory affairs, and intellectual property.
Protagenic will continue to allocate resources to its ongoing Phase 2 clinical trial of PT00114, which is expected to complete in approximately 9 to 12 months, subject to enrollment and other customary factors. With an overall Financial Health Score of 1.2, rated as ’WEAK’ by InvestingPro, which offers 6 additional key insights about the company’s performance and prospects, the success of this clinical trial could be crucial for the company’s future.
Additionally, on Thursday, the board approved a change in fiscal year-end from December 31 to March 31, effective immediately. Protagenic will file a transition report on Form 10-QT for the period from April 1, 2025, to June 30, 2025.
All information is based on a press release statement filed with the SEC.
In other recent news, Protagenic Therapeutics has secured a Japanese patent for a modified stilbenoid compound intended to treat epilepsy and seizures, which will remain in effect until March 31, 2041. Additionally, Protagenic Therapeutics has raised $3.1 million through warrant exchanges and exercises, which will support the company’s working capital and further drug development efforts. The company also announced a definitive share exchange agreement with Phytanix Bio Inc., aiming to form a new entity, Phytanix, Inc., focusing on treatments for obesity, metabolic disorders, and stress-related and CNS disorders.
Furthermore, Protagenic Therapeutics has entered into a Warrant Exchange Agreement, allowing an investor to exchange 459,420 warrants for 367,544 shares of common stock. This transaction is expected to be completed within six months, leading to the cancellation of the warrants. The company has also appointed Timothy R. Wright as an independent director to its board, effective immediately. These developments highlight Protagenic Therapeutics’ ongoing strategic efforts in expanding its pipeline and strengthening its financial and leadership positions.
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