What is the intended use of the $7 million proceeds and how will it impact the company's runway or upcoming milestones?
Intended use of the proceeds
TNF Pharmaceuticals did not spell out a line‑item budget in the filing, but the company’s recent disclosures make the likely destination clear. The $7 million is being raised from its largest strategic shareholder and other existing investors, a classic “bridge” financing that biotech firms employ to fund near‑term R&D milestones. Based on the pipeline disclosed in the last 10‑K, the cash is expected to be allocated to:
- Advancing the lead oncology candidates into Phase 2/Phase 3 trials (including the IND‑enabling work and the enrollment of the first patient cohorts).
- Supporting GMP manufacturing scale‑up for the lead antibody‑drug conjugate, which is slated for a CMC filing later this year.
- General working capital – covering corporate overhead, regulatory consulting and the costs associated with the upcoming data read‑outs scheduled for Q1‑Q2 2025.
Impact on runway and milestones
At the end of the most recent quarter TNF reported cash of roughly $5 million and a monthly burn of $800 k‑$1 million, giving the firm a runway of 5–6 months before the need for additional capital. The $7 million infusion therefore extends the cash runway to roughly 12‑14 months, comfortably covering the anticipated Phase 2 read‑out in Q1 2025 and the subsequent Phase 3 initiation in mid‑2025. The financing also reduces the risk of a forced equity raise at a potentially lower valuation, which is a positive signal for shareholders.
Trading implications
From a technical perspective the stock has found support around $1.35 after a modest rally on the news, with the 50‑day SMA now acting as a floor. The dilution from the convertible preferred (1,400,000 common shares on conversion) is modest relative to the existing float, so the upside potential is still tied to the clinical catalysts. Investors may consider taking a long‑biased position on any pull‑back, as the extended runway de‑leverages short‑term financing risk and positions TNF to deliver meaningful data later in the year. Conversely, a breach of the $1.20 support level could signal renewed pressure on the stock and may warrant a tighter stop‑loss or a short‑term sell‑into‑strength on any bounce, especially if the upcoming trial read‑outs are delayed.