Protagenic Therapeutics and Phytanix Announce Business Combination to form Neuroactive Biopharmaceutical Company with Six Drug Candidates in Development including Treatments for Obesity and Metabolic Disorders

NEW YORK, NY AND SANTA BARBARA, CA / ACCESS Newswire / May 19, 2025 / Protagenic Therapeutics, Inc. (Nasdaq:PTIX) (the "Company") and Phytanix Bio Inc. have entered into a definitive share exchange agreement pursuant to which the two entities will combine in an all-stock transaction (the "Combination"). The combined entity, to be called Phytanix, Inc., will bring together two pipelines focused on stress-related and CNS disorders, five preclinical assets and one clinical-stage asset.

Pipeline Assets

• PT-00114 (Phase I/IIa): peptide asset in BLA pathway; may qualify for regulatory data exclusivity

• PHYX-001: potassium channel modulator with mechanism similar to XEN1101 and BHV-7000

• Cannabinoid Assets: multiple cannabinoid-based compounds with composition-of-matter IP; potential in CNS, cardiometabolic, and other indications. Including a proprietary molecule with significant potential in the obesity, metabolic dysfunction sector, where the GLP-1 agonists have become blockbuster medications

• Modified Stilbenoid Assets: modified stilbenoid compounds with composition-of-matter IP and anticonvulsant activity in preclinical models

Key Benefits for Protagenic Shareholders

• Pipeline Expansion: adds new CNS programs to existing stress-disorder portfolio

• Pipeline Diversity: clinical- and preclinical-stage assets with potential significant milestones over the next 18 months

• CNS Expertise: integrates Phytanix Bio team members who worked on Sativex and Epidiolex at GW Pharma

• Patent Estate: broader composition-of-matter coverage across the pipeline

• Talent Pool: combined teams to advance development and regulatory activities

"This combination aligns two pipelines with complementary assets and expertise to address unmet needs in neuropsychiatry, CNS and other disorders," said Garo H. Armen, PhD, Executive Chairman.

"We look forward to uniting our teams and advancing these programs for patients and shareholders," said Barrett Evans, President and Chief Executive Officer.

Structure of Combination

Under the terms of the Exchange Agreement, the Company, in exchange for all of the outstanding shares of Phytanix Bio, issued on a pro rata basis to each of the common stockholders of Phytanix Bio, an aggregate of (A) 117,690 shares of the Company's common stock, par value $0.0001 per share ("Common Stock"), which shares represent a number equal to no more than 19.99% of the outstanding shares of Common Stock as of immediately before the closing on May 16, 2025, (B) 5,705 shares of the Company's Series C Convertible Preferred Stock, par value $0.000001 per share (the "Series C"), and (C) 950,000 shares of the Company's Series C-1 Convertible Preferred Stock, par value $0.000001 per share (the "Series C-1"). In addition, in exchange for all of the outstanding preferred stock of Phytanix Bio, the Company issued on a pro rata basis to each of PHX's preferred stockholders an aggregate of (i) 20,000 shares of Series D Preferred Stock, par value $0.000001 per share of the Company (the "Series D" together with the Series C and Series C-1, the "Preferred Stock"), and (ii) common stock purchase warrants to purchase up to 715,493 shares of common stock (the "Warrants"). The issuance of the shares of Common Stock, the Preferred Stock, and the Warrants occurred on May 16, 2025. Each share of Preferred Stock is convertible into one of common stock, subject to certain conditions described in the Exchange Agreement.