Azitra (AZTR) Stock Explodes 87% — Here’s What Triggered the Move

TLDR

• Azitra (AZTR) stock surged as much as 87% on Friday after announcing a private placement deal
• The placement raises an initial $10.5 million through preferred stock, with up to $31.4 million total including warrant exercises
• Investors include Stonepine Capital, Nantahala Capital, healthcare professionals, and company insiders including the CEO
• Proceeds will fund development of filaggrin proteins and peptides for the cosmetic market
• AZTR is under a NYSE American delisting warning due to an equity shortfall, and has fallen over 91% in the past 12 months

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Azitra (AZTR) stock jumped as much as 87% on Friday after the company revealed details of a private placement deal that could bring in up to $31.4 million in gross proceeds.

Azitra, Inc., AZTR

The deal closed on or around Friday, pending customary conditions. It follows a 28.82% rally the day before, when the placement was first announced.

The financing is structured in two parts. Azitra raised an initial $10.5 million through the sale of 10,470 shares of Series A convertible non-redeemable preferred stock at $1,000 per share.

The remaining $20.9 million could come in through the cash exercise of Series B and Series C warrants. Both warrant series allow holders to purchase up to 85,101,201 shares of AZTR common stock each, at an exercise price of $0.123 per share.

Each preferred share automatically converts into roughly 8,129 shares of common stock upon stockholder approval. Series B Warrants expire 18 months after that approval. Series C Warrants expire 30 days after the company announces data from a planned human cosmetic study.

Trading volume exploded on the news. More than 166 million AZTR shares changed hands on Friday, compared to a three-month daily average of around 170,000.

What the Money Is For

Azitra plans to use the proceeds to develop proteins and peptides for the consumer cosmeceutical market, with a focus on filaggrin technology. The company uses a microbial genetic engineering platform to do this work.

General corporate expenses, research and development, and working capital will also be funded by the raise.

Participating investors include Stonepine Capital, Nantahala Capital, other institutional healthcare funds, healthcare professionals, and company insiders — notably the Chief Executive Officer.

The Financial Backdrop

The stock price context here is stark. AZTR was trading at around $0.14 before the rally, down roughly 94% over the past year. Its market cap sat at just $2.21 million.

The company is burning cash fast, with levered free cash flow of negative $10.93 million over the past twelve months. That said, it does hold more cash than debt, and carries a current ratio of 2.83.

AZTR has also received a delisting warning from NYSE American. The exchange flagged the company for non-compliance with Section 1003(a)(iii), which requires a minimum stockholders’ equity of $6 million for companies that have reported losses from continuing operations over five fiscal years.

The company must resolve this to keep its listing on the exchange.

On the analyst side, Maxim Group’s Jason McCarthy carries the sole coverage of AZTR, with a Buy rating and a $1 price target.

Year-to-date, AZTR is still down 33.3%.

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