Therapix Biosciences

Kurta Law is investigating broker recommendations of Therapix Biosciences (NASDAQ: TRPX). These investments were high-risk and may have been unsuitable for many investors. Unsuitable investments violate FINRA Rule 2111, which requires brokers to consider their investor’s risk tolerance. Regulation Best Interest also requires brokers to exercise reasonable care and skill when they make recommendations.

If a broker recommended unsuitable investments to you, you may have a case for a securities lawyer. Call (877) 600-0098 or email info@kurtalawfir.com for a free case evaluation.

About Therapix Biosciences

According to the prospectus, Therapix Biosciences is a specialty clinical-stage pharmaceutical company that focuses on a portfolio of technologies and assets based on cannabinoid therapies.

The Offering

The prospectus dated November 19, 2020, announced that Therapix Biosciences was offering 835,447 units. Each unit consisted of one American Depository Share and two warrants.

• American Depository Shares are shares of a foreign-based company that trade on a U.S. exchange and are denoted in American dollars.
• Warrants give owners the right to purchase shares at a specified price by a certain deadline.

These warrants gave investors the right to purchase one American Depository Share.

As of April 17, 2024, Therapix Biosciences stock is trading for $0.31 per share.

Risks Associated with a Therapix Biosciences Investment

The following risks appeared in the Therapix Biosciences prospectus. Brokers had access to this information and should have been aware that these stocks may be too risky for ordinary investors.

De-Listing from NASDAQ

At the time of the offering, shares of this stock had been de-listed from the NASDAQ stock exchange.

Penny Stock Rules

At the time of the offering, Therapix Biosciences traded via Pink Sheets, an over-the-counter market for penny stocks that do not have sufficient trading volume to trade via a public stock exchange. There was no guarantee that a liquid market for these shares would develop.

Additional Capital

Therapix Biosciences disclosed that it would need additional capital in the future. If it raised capital by issuing securities, those new securities would dilute share value for existing shareholders.

Immediate Dilution

The unit price for this offering was substantially higher than the tangible book value, which meant that investors would suffer a substantial dilution upon purchase.

External Directors

As a result of de-listing from NASDAQ, Therapix Biosciences was required to elect statutory external directors. At the time of the offering, it was not in compliance with this rule.

Aegis Capital Corp. Underwriting  

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Kurta Law Can Help

Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. If you have any questions, call (877) 600-0098 or email info@kurtalawfirm.com.