PharmAla Biotech Holdings (OTC:MDXFF) Stock Drops After Announcing Private Placement and Concurrent Debt Settlement

If you are going to be on the lookout for biotech stocks this morning, then it could be a good move to perhaps keep an eye on the PharmAla Biotech Holdings Inc. (OTC:MDXFF) stock. The company is involved in the development, research, and manufacturing of LeNeo MDBA and unique derivatives of MDMA. On April 10, the company announced that it was going to have a non-brokered private placement of its units.

PharmAla Biotech announced that it would offer the units for the price of $0.18 each to generate gross proceeds to the tune of $750,000. It was also noted in the news release that the company expected it to be funded entirely by a small number of long-term shareholders who have been known to PharmAla Biotech for a long time and who have already expressed their commitments. Each unit offered by the company would be made up of one share of PharmAla Biotechcapital and half of a common share purchase warrant. A whole warrant would entitle the holder to pick up a share in the company for the price of $0.27 up until thirty-six months since the closing date of the offering.

The company also announced yesterday that it intended to use the net proceeds from the offering for the purpose of securing worldwide patent rights for a range of unique intellectual property assets, in addition to the manufacturing of products for sale, clinical trials for its novel patented candidates, sales, working capital, and general corporate purposes. In the news release, the company also revealed that the officers and directors of the company would also be eligible to acquire the securities that would be part of the offering. If they do acquire securities, then it would be regarded as ‘a’related party transaction’ as per the applicable regulation pertaining to such transactions.