SCHEDULE: Chiliz Group Takes 10.9% Stake in Processa Pharma

Chiliz Group Ltd. has acquired a 10.9% stake in Processa Pharmaceuticals, Inc. for approximately $1.24 million, citing a strategic investment in biotech-fintech convergence.

Summary

• Chiliz Group Ltd. (formerly HX Entertainment Ltd.) acquired 5,467,181 shares of Processa Pharmaceuticals, Inc. common stock.
• This acquisition represents approximately 10.9% of the outstanding common stock, based on 50,349,149 shares outstanding as of August 5, 2025.
• The aggregate purchase price for these shares was approximately $1,243,784, at an average price of approximately $0.2275 per share.
• The investment is strategic, aligning with Chiliz Group's interest in companies exploring innovative financial strategies, particularly in the emerging biotech-fintech convergence sector.
• Processa Pharmaceuticals, Inc. has announced its exploration of cryptocurrency treasury strategies, which complements Chiliz Group's expertise in blockchain and digital asset technologies.
• Chiliz Group funded the acquisition using its working capital and investment funds, without borrowing any portion of the purchase price.

Sentiment

Score: 7

Explanation: The strategic investment by a prominent blockchain entity into a biotech company exploring cryptocurrency treasury strategies is a positive signal for innovation and potential future growth, despite the inherent uncertainties of such a convergence.

Positives

• Strategic investment by Chiliz Group, a prominent player in blockchain and digital assets, signals potential for Processa's cryptocurrency treasury initiatives.
• The investment aligns Processa with expertise in the emerging biotech-fintech convergence sector, potentially opening new avenues for growth and innovation.
• Chiliz Group's potential future actions, including seeking board representation and proposing strategic alternatives, could enhance shareholder value and corporate direction.

Risks

• Chiliz Group continuously evaluates its investment and may acquire additional securities, dispose of securities, engage in discussions, seek board representation, propose changes in capitalization, ownership, board, or management, propose strategic alternatives (mergers), or propose changes to business strategy, including cryptocurrency treasury initiatives. These potential actions introduce uncertainty regarding Processa's future corporate direction and control.

Future Outlook

Chiliz Group currently intends to hold the Common Stock for investment purposes but continuously evaluates its investment. It may acquire or dispose of additional securities, engage in discussions with management and the board, seek board representation, propose changes in capitalization, ownership structure, board composition, or management, propose strategic alternatives including business combinations, or propose changes to the Issuer's business strategy, such as its cryptocurrency treasury initiatives, to maximize investment value.

Management Comments

• "The investment aligns with The Chiliz Groups's interest in companies exploring innovative financial strategies, particularly in the emerging biotech-fintech convergence sector."
• "The Issuer has announced its exploration of cryptocurrency treasury strategies, which complements The Chiliz Group's expertise and investment focus in blockchain and digital asset technologies through its association with blockchain companies Chiliz and Socios.com."

Industry Context

This investment highlights a growing trend of convergence between traditional biotech and emerging fintech/blockchain sectors. Processa's exploration of cryptocurrency treasury strategies positions it at the forefront of this intersection, attracting investors like Chiliz Group who specialize in digital asset technologies. This could signal a new avenue for capital management and strategic financing within the biotech industry.

Comparison to Industry Standards

• The investment by Chiliz Group, a prominent entity in the blockchain and cryptocurrency space (associated with Chiliz and Socios.com), into a pharmaceutical company exploring cryptocurrency treasury strategies, is a novel development.
• While specific comparable companies or projects are not detailed in the filing, this move positions Processa Pharmaceuticals as an early adopter in integrating digital asset strategies into its corporate finance, a trend that is still nascent in the broader biotech industry.
• Most biotech companies typically rely on traditional financing methods (equity, debt, grants), making Processa's announced exploration of crypto treasury strategies a departure from industry norms and a potential differentiator.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if Chiliz Group's strategic involvement leads to successful implementation of innovative financial strategies or corporate changes. Uncertainty regarding future corporate direction and control due to Chiliz Group's stated intentions.
• Management/Board: Potential for new strategic direction, discussions, or even changes in composition if Chiliz Group seeks board representation or proposes management changes.
• Industry: This investment could serve as a precedent or signal for other biotech companies to explore fintech and blockchain integrations.

Next Steps

• Chiliz Group may acquire additional securities or dispose of existing holdings in Processa Pharmaceuticals, Inc.
• Chiliz Group may engage in discussions with Processa's management, board, and other stockholders.
• Chiliz Group may seek representation on Processa's board of directors.
• Chiliz Group may propose changes in Processa's capitalization, ownership structure, board composition, or management.
• Chiliz Group may propose strategic alternatives for Processa, including potential business combinations or mergers.
• Chiliz Group may propose changes to Processa's business strategy, including its announced cryptocurrency treasury initiatives.

Key Dates

Recommendation

While the strategic investment by Chiliz Group and the alignment with Processa's cryptocurrency treasury initiatives present an intriguing long-term growth narrative, the immediate impact and execution risks associated with such a novel biotech-fintech convergence warrant a 'hold' recommendation. Investors should monitor Chiliz Group's future actions and Processa's progress in implementing these strategies before making further commitments. The potential for board representation and strategic changes introduces both upside and uncertainty.

Keywords

Processa Pharmaceuticals, Chiliz Group, HX Entertainment, Alexandre Dreyfus, Socios.com, Blockchain, Cryptocurrency, Biotech-Fintech, Strategic Investment, SEC Filing, Schedule 13D, PRSA