Core Viewpoint - Processa Pharmaceuticals, Inc. has successfully closed a public offering, raising $5 million to support its development of next-generation chemotherapeutic drugs with enhanced efficacy and safety [1][2]. Group 1: Offering Details - The public offering consisted of 8,050,672 shares of common stock and accompanying Series A and Series B warrants, with a combined purchase price of $0.615 for institutional investors and $0.7975 for the CEO and certain board members [1]. - The gross proceeds from the offering, before deducting fees and expenses, were $5 million, excluding potential proceeds from the exercise of the warrants [2]. Group 2: Regulatory Information - A registration statement on Form S-1 was declared effective by the SEC on January 27, 2025, and the offering was made only by means of a prospectus [3]. Group 3: Company Overview - Processa Pharmaceuticals is focused on developing Next Generation Chemotherapy (NGC) drugs that modify existing FDA-approved oncology therapies to improve safety and efficacy while maintaining their cancer-killing mechanisms [5].

Core Viewpoint - Processa Pharmaceuticals, Inc. has announced a public offering aimed at raising funds to support its development of next-generation chemotherapeutic drugs with enhanced efficacy and safety [1][8]. Group 1: Offering Details - The public offering consists of 8,050,672 shares of common stock and accompanying Series A and Series B warrants, with a combined purchase price of $0.615 for institutional investors and $0.7975 for the CEO and certain board members [1]. - The gross proceeds from the offering are expected to be $5 million, excluding any proceeds from the exercise of the Series A and Series B warrants [3]. - The offering is anticipated to close on or about January 29, 2025, pending customary closing conditions [3]. Group 2: Warrants Information - Series A warrants will have an exercise price of $0.65 per share, exercisable upon stockholder approval and expiring five years from that date [2]. - Series B warrants will also have an exercise price of $0.65 per share, exercisable upon stockholder approval and expiring eighteen months from that date [2]. - The company plans to seek stockholder approval for the issuance of shares upon the exercise of these warrants within 90 days after the offering [4]. Group 3: Company Overview - Processa Pharmaceuticals is focused on developing Next Generation Chemotherapy (NGC) drugs that modify existing FDA-approved oncology therapies to improve safety and efficacy [8]. - The company's strategy involves combining its oncology pipeline with proven cancer-killing molecules to create more effective therapy options for cancer patients [8].

Core Insights - Processa Pharmaceuticals, Inc. is actively participating in multiple investor and industry conferences in September 2024, including the H.C. Wainwright 26th Annual Global Investment Conference and the European Society for Medical Oncology (ESMO) Congress 2024 [1][2] Group 1: Conference Participation - Management will hold one-on-one meetings with investors and deliver a company presentation at the H.C. Wainwright conference from September 9-11, 2024 [1] - A recorded presentation will be available on demand starting September 9th at 7:00 am Eastern time on the company's website [1] - At the ESMO Congress from September 13-17, 2024, management will engage with clinicians, researchers, industry key opinion leaders, and potential partners [1] Group 2: Company Overview - Processa is a clinical-stage pharmaceutical company focused on developing Next Generation Chemotherapy (NGC) drugs that offer improved safety and efficacy [2] - The NGC drugs are modifications of existing FDA-approved oncology therapies, altering their metabolism and/or distribution while preserving their cancer-killing mechanisms [2] - The company's strategy combines a novel oncology pipeline with proven active molecules and a Regulatory Science Approach to create more effective therapy options with better tolerability for cancer patients [2]

Financial Performance - For the three months ended June 30, 2024, the company reported a net loss of $3,010,326, compared to a net loss of $2,612,565 in the same period of 2023[67]. - Research and development expenses for the six months ended June 30, 2024, totaled $3,269,555, a decrease of $72,954 from $3,342,509 in 2023[67]. - General and administrative expenses decreased by approximately $855,000 to $2.6 million for the six months ended June 30, 2024, compared to $3.5 million in 2023[75]. - The company used net cash of $5,394,713 in operating activities during the six months ended June 30, 2024, up from $4,178,539 in 2023[76]. - The company had cash and cash equivalents of $5.6 million as of June 30, 2024, which is expected to meet operating needs into late 2024[81]. - The accumulated deficit reached $81.1 million as of June 30, 2024, with no product revenue generated to date[82]. - The company raised net proceeds of $6.3 million from the sale of common stock and warrants during the six months ended June 30, 2024[83]. Stock and Financing Activities - The company raised gross proceeds of $7.0 million (net proceeds of $6.3 million) from the sale of 476,000 shares in a public offering on January 30, 2024[64]. - The company filed a registration statement for an ATM offering of up to $50 million, with an initial offering price of $2.4 million[65]. - The company filed a registration statement with the SEC for an offering of up to $50 million in securities, including an "at the market offering" of common stock with an aggregate offering price of up to $2.4 million[84]. - Future funding plans include public or private equity offerings, debt financings, and strategic alliances, but the company may delay or suspend clinical trials if adequate financing is not obtained[85]. Corporate Governance - Russell Skibsted was appointed as CFO with an annual salary of $400,000 and a potential bonus of 35% of his base compensation[66]. Clinical Development - The company is advancing its pipeline of Next Generation Chemotherapy (NGC) drugs, including NGC-Cap, NGC-Gem, and NGC-Iri, which aim to improve safety and efficacy profiles compared to existing therapies[50]. - NGC-Cap has demonstrated up to 50 times greater potency than capecitabine alone in a Phase 1B trial, indicating a potentially improved safety-efficacy profile[54]. - The Phase 2 trial for NGC-Cap is set to initiate, comparing its safety-efficacy profile against FDA-approved capecitabine in approximately 60 to 90 patients with advanced or metastatic breast cancer[57]. - The company plans to meet with the FDA to discuss trial designs for NGC-Gem, which is expected to offer benefits for patients resistant to gemcitabine[58]. - The company terminated the Phase 2 trial for PCS499 due to challenges in patient enrollment but completed a Phase 2A trial for PCS12852 with positive results[63]. - The company is committed to meeting specific diligence milestones for its licensing agreements, including dosing the first patient in a Phase 2 or 3 clinical trial for NGC-Cap by October 2, 2024[57]. - The company anticipates increased research and development costs as it begins its Phase 2 clinical trial for NGC-Cap in breast cancer[77]. Strategic Focus - The company is exploring options to monetize non-core drug assets, including out-licensing or partnering opportunities[63]. - The company’s strategic focus is on utilizing its Regulatory Science Approach to enhance the development of oncology drugs, aiming for greater efficiencies and improved chances of FDA approval[49]. Accounting and Reporting - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring estimates and judgments that may affect reported amounts of assets and liabilities[87]. - There have been no changes in critical accounting policies from the most recent Annual Report on Form 10-K, and actual results may differ from estimates used[88]. - Recently issued accounting pronouncements have been evaluated, showing no material impact on the company's financial position or results of operations[89]. - As of June 30, 2024, there were no off-balance sheet arrangements reported by the company[86].

At the highest NGC-Cap dose, all three evaluable patients had PFS with two partial responses (PR) and one stable disease (SD) HANOVER, MD., June 11, 2024 (GLOBE NEWSWIRE) -- Processa Pharmaceuticals, Inc. (Nasdaq: PCSA) (Processa or the Company), a clinical-stage pharmaceutical company focused on developing the next generation of chemotherapeutic drugs with improved efficacy and safety, today announced positive efficacy results from the preliminary evaluation of its recently completed Phase 1b clinical tria ...

Eight of 12 evaluable patients (66.7%) had progression-free survival (PFS) ranging from 5 to 11 months Processa is a clinical-stage pharmaceutical company focused on developing the Next Generation Chemotherapy (NGC) drugs to improve the safety and efficacy of cancer treatment. By combining its novel oncology pipeline with proven cancer-killing active molecules and the Processa Regulatory Science Approach, as well as experience in defining Optimal Dosage Regimens for FDA approvals, Processa not only will pro ...

Oncology Drug Development - The company is focused on developing Next Generation Chemotherapy (NGC) oncology drug products to improve patient survival and quality of life [59]. - NGC-Cap (PCS6422) is currently in Phase 1B trials, demonstrating up to 50 times greater potency than capecitabine alone [66]. - The Phase 1B trial for NGC-Cap has completed enrollment, and the recommended Phase 2 dosage regimens have been determined [68]. - The next Phase 2 trial for NGC-Cap will focus on breast cancer, with patient enrollment expected to begin in Q3 2024 [71]. - NGC-Gem (PCS3117) is being evaluated for its potential use in pancreatic and other cancers, with a meeting planned with the FDA in 2024 to discuss trial designs [73]. - The company is also developing NGC-Iri, an analog of SN38, with IND-enabling toxicology studies planned for 2024, subject to funding availability [73]. - The company aims to provide improved safety-efficacy profiles for its NGC products compared to existing therapies like capecitabine, gemcitabine, and irinotecan [62]. - The regulatory science approach utilized by the company is designed to enhance the likelihood of FDA approval and improve treatment options for patients [64]. Financial Performance - The company reported a net loss of $2,726,381 for the three months ended March 31, 2024, down from a net loss of $4,022,073 in the same period of 2023 [78]. - Research and development expenses decreased by $88,410 to $1,539,070 for the three months ended March 31, 2024, compared to $1,627,480 in the same period of 2023 [82]. - Operating expenses for the three months ended March 31, 2024, included $1,270,528 in general and administrative expenses, down from $2,478,055 in the same period of 2023 [87]. - The company has an accumulated deficit of $78.1 million as of March 31, 2024 [97]. - The company used net cash of $2,048,884 in operating activities during the three months ended March 31, 2024, compared to $2,114,070 in the same period of 2023 [92]. Funding and Capital Needs - The company raised gross proceeds of $7.0 million from a public offering on January 30, 2024, with net proceeds of $6.3 million [77]. - Cash and cash equivalents totaled $8.9 million as of March 31, 2024, which is expected to satisfy capital needs into early 2025 [96]. - The company anticipates an increase in research and development costs as it continues its Phase 1B clinical trial for NGC-Cap and begins its Phase 2 trial [83]. - The company plans to raise additional funds through public or private equity offerings, debt financings, and strategic alliances [99]. Other Developments - The company completed its Phase 2A trial for PCS12852 in gastroparesis patients with positive results in 2023 [75]. - The license agreement with Elion for NGC-Cap includes a milestone to dose the first patient in a Phase 2 or 3 clinical trial by October 2, 2024 [72]. - The company is exploring options for two non-oncology drugs, which may include out-licensing or partnership opportunities [63]. - Item 3 regarding quantitative and qualitative disclosures about market risk is not applicable to the company as a smaller reporting company and has been omitted [106].

Financial Performance - In 2023, the company reported an operating loss of $11,457,061, a decrease from the operating loss of $27,525,431 in 2022, reflecting a reduction in operating expenses [302]. - The company had no revenue for the years ended December 31, 2023 and 2022, with no immediate sales prospects [303]. - The company reported a net loss of approximately $11.1 million for the year ended December 31, 2023, with an accumulated deficit of approximately $75.4 million [317]. - Net cash used in operating activities was $8,063,346 for the year ended December 31, 2023, compared to $9,605,143 in 2022, reflecting ongoing clinical trial costs [321]. Research and Development - Research and development costs decreased by $5.7 million to $5,799,518 in 2023, down from $11,494,230 in 2022, primarily due to the completion of the PCS12852 clinical trial and the termination of the PCS499 trial [305]. - The company completed its Phase 2A trial for PCS12852 in gastroparesis patients with positive results in 2023 [299]. - The company plans to conduct IND-enabling and toxicology studies for NGC-Iri in 2024-2025, targeting various cancers [299]. - The estimated annual newly diagnosed incidence rate for breast, colorectal, and other cancers relevant to NGC-Cap is greater than 250,000 patients per year [299]. Capital and Funding - The company raised gross proceeds of $7.0 million from a public offering on January 30, 2024, with net proceeds of $6.3 million intended for continued research and development for NGC-Cap [301]. - The company anticipates needing to raise additional capital in early 2025 to fund operations and continue the development of NGC drugs [307]. - Cash and cash equivalents totaled $4.7 million as of December 31, 2023, with an additional $6.3 million raised in January 2024 from a public offering [316]. - The company has an effective shelf registration statement on file with the SEC, providing flexibility to raise capital through public or private equity offerings [319]. Expenses and Impairments - General and administrative expenses decreased by $3.1 million to $5,657,543 for the year ended December 31, 2023, compared to $8,763,058 in 2022, primarily due to a reduction in employee stock-based compensation [311]. - The company recognized an impairment of $7.3 million for the PCS499 intangible asset, reducing its value to zero, due to slow patient enrollment and the decision to terminate the clinical trial [313]. - Stock-based compensation expense is recognized over the requisite service period based on estimated grant-date fair value, with no expense recognized for performance-vesting conditions until probable [335]. Tax and Deferred Assets - A valuation allowance equal to the full recorded amount of net deferred tax assets has been maintained, indicating that benefits from these assets are unlikely to be realized [337]. - The company does not expect to generate income tax benefits or expenses in the foreseeable future due to anticipated net operating losses [337]. - No unrecognized tax benefits were recorded as of December 31, 2023, indicating no liability, interest, or penalties required [338]. Other Financial Information - Net other income increased to $335,541 for the year ended December 31, 2023, compared to $101,202 in 2022, primarily driven by interest income [314]. - The company raised net proceeds of $6.4 million from the sale of common stock during the year ended December 31, 2023 [324]. - Prepaid expenses included $570,000 for advanced payments made to the CRO for the NGC-Cap clinical trial as of December 31, 2023 [310]. - Payments made to third parties in advance of services are recorded as prepaid expenses until the services are rendered [334].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission File Number 001-39531 Processa Pharmaceuticals, Inc. (Exact name of registrant as specified in its charter) Delaware 45-1539785 (S ...

PART 1: FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201%3A%20FINANCIAL%20STATEMENTS) Processa Pharmaceuticals reported a reduced net loss for the six months ended June 30, 2023, but faces significant going concern doubts despite increased cash and a recent CEO appointment Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $8,677,133 | $6,503,595 | | Total Assets | $10,090,423 | $8,619,851 | | Total Liabilities | $930,741 | $1,149,110 | | Total Stockholders' Equity | $9,159,682 | $7,470,741 | | Accumulated Deficit | $(70,882,199) | $(64,247,561) | Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development expenses | $1,688,164 | $3,137,292 | $3,342,509 | $5,181,912 | | General and administrative expenses | $1,026,301 | $2,034,456 | $3,477,490 | $3,218,550 | | Net Loss | $(2,612,565) | $(5,164,368) | $(6,634,638) | $(8,391,499) | | Net Loss per Share - Basic and Diluted | $(0.10) | $(0.32) | $(0.27) | $(0.53) | Condensed Consolidated Statements of Cash Flows (Unaudited, Six Months Ended June 30) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,178,539) | $(4,133,439) | | Net cash provided by (used in) financing activities | $6,352,077 | $(300,000) | | Net Increase (Decrease) in Cash | $2,173,538 | $(4,433,439) | | Cash and Cash Equivalents – End of Period | $8,677,133 | $12,064,142 | - The company has incurred losses since inception, with an accumulated deficit of **$70.9 million** as of June 30, 2023, raising **substantial doubt about the company's ability to continue as a going concern**[24](index=24&type=chunk)[26](index=26&type=chunk) - During the first six months of 2023, the company raised gross proceeds of **$7.0 million** (net proceeds of **$6.4 million**) from the sale of **8,432,192 shares** of common stock[25](index=25&type=chunk)[41](index=41&type=chunk) - On August 8, 2023, **Mr. George Ng** was appointed as the new **Chief Executive Officer** and a **Board Director**, while **Dr. David Young** transitioned to **President, Research and Development**[62](index=62&type=chunk)[63](index=63&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses a strategic shift to the NGC pipeline, reduced R&D expenses, and the critical need for additional funding due to substantial going concern risk - The company has strategically prioritized its pipeline of **Next Generation Chemotherapy (NGC) oncology drugs**, designed to improve the safety-efficacy profiles of existing approved treatments[68](index=68&type=chunk)[73](index=73&type=chunk) - The company's drug pipeline is led by **NGC-Capecitabine (Phase 1B ongoing)**, followed by **NGC-Gemcitabine** and **NGC-Irinotecan**, with non-core assets **PCS12852** and **PCS499** being evaluated for monetization after the PCS499 trial termination[69](index=69&type=chunk)[76](index=76&type=chunk)[88](index=88&type=chunk) Comparison of Operating Expenses (Six Months Ended June 30) | Expense Category | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development expenses | $3,342,509 | $5,181,912 | $(1,839,403) | | General and administrative expenses | $3,477,490 | $3,218,550 | $258,940 | - The **decrease in R&D expenses** for the first six months of 2023 compared to 2022 is mainly due to the **completion of the PCS12852 clinical trial** and the **early termination of the PCS499 trial**[93](index=93&type=chunk) - The **increase in G&A expenses** for the six months ended June 30, 2023, was primarily driven by a **$1.4 million professional fee expense** related to stock warrants, offset by a **$1.4 million decrease in employee stock-based compensation**[100](index=100&type=chunk) - The company's cash balance of **$8.7 million** as of June 30, 2023, is expected to fund operations only through the **second quarter of 2024**, raising **substantial doubt about its ability to continue as a going concern** without securing additional funding[111](index=111&type=chunk)[117](index=117&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company, as a smaller reporting company, has omitted this section as it is not applicable - Item 3 is **not applicable** to the company as it qualifies as a **smaller reporting company**[125](index=125&type=chunk) [Controls and Procedures](index=25&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were effective as of June 30, 2023, with no material changes to internal controls during the quarter - Management concluded that as of June 30, 2023, the company's disclosure controls and procedures were **effective** at a **reasonable assurance level**[126](index=126&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter ended June 30, 2023, that **materially affected** or are likely to materially affect these controls[127](index=127&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=25&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) As of the reporting date, the company is not involved in any material legal proceedings - The company is currently **not a party to any material legal proceedings**[128](index=128&type=chunk) [Risk Factors](index=25&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant Nasdaq listing risk due to a minimum bid price deficiency, potentially leading to delisting and impacting liquidity and capital - On March 22, 2023, the company received a **deficiency letter from Nasdaq** for failing to maintain a **minimum bid price of $1.00 per share**[129](index=129&type=chunk) - The company has until **September 18, 2023**, to **regain compliance** with the Nasdaq minimum bid price rule[129](index=129&type=chunk) - **Potential delisting from Nasdaq** could lead to **reduced liquidity**, **limited market quotations**, and **challenges in raising additional financing**[132](index=132&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no unregistered sales of equity securities, use of public offering proceeds, or issuer equity purchases during the period - There were **no unregistered sales of equity securities**, **no use of proceeds from public offerings**, or **no issuer purchases of equity securities** in the reported period[131](index=131&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) [Other Information](index=26&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No directors or officers modified, adopted, or terminated Rule 10b5-1 trading plans during the second quarter of 2023 - **No modifications, adoptions, or terminations of Rule 10b5-1 trading plans** by directors or officers occurred during the second quarter of 2023[138](index=138&type=chunk) [Exhibits](index=26&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including the new CEO's employment agreement and officer certifications - Exhibits filed include the **employment agreement for the new CEO, George Ng**, and **certifications by the Principal Executive and Financial Officers**[139](index=139&type=chunk)