SCHEDULE: HX Entertainment Takes 10.9% Stake in Processa Pharma

HX Entertainment Ltd., controlled by blockchain entrepreneur Alexandre Dreyfus, has acquired a 10.9% stake in Processa Pharmaceuticals, Inc. for investment purposes, aligning with Processa's exploration of cryptocurrency treasury strategies.

Summary

• HX Entertainment Ltd. acquired 5,467,181 shares of Processa Pharmaceuticals, Inc. Common Stock.
• The total purchase price was approximately $1,243,784, at an average price of $0.2275 per share.
• This acquisition represents approximately 10.9% of Processa Pharmaceuticals' outstanding Common Stock, based on 50,349,149 shares outstanding as of August 5, 2025.
• The funds for the acquisition came from HX Entertainment's working capital and investment funds, with no borrowed capital or pledged securities.
• The investment is strategic, aligning with HX Entertainment's interest in companies exploring innovative financial strategies, particularly in the biotech-fintech convergence sector, and Processa's announced exploration of cryptocurrency treasury strategies.

Sentiment

Score: 7

Explanation: The filing indicates a significant strategic investment by a prominent blockchain entity into a biotech company exploring innovative financial strategies. This suggests potential for growth and strategic alignment, though it's an acquisition disclosure rather than an operational update.

Positives

• HX Entertainment's strategic investment aligns with Processa Pharmaceuticals' exploration of cryptocurrency treasury strategies, potentially bringing expertise in blockchain and digital assets.
• The investment was funded entirely from HX Entertainment's working capital and investment funds, indicating financial stability of the investor.
• The acquisition of a significant 10.9% stake demonstrates a strong belief in the Issuer's potential.

Future Outlook

HX Entertainment currently intends to hold its 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, 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 HX Entertainment'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 HX Entertainment's expertise and investment focus in blockchain and digital asset technologies.

Industry Context

This investment highlights a growing trend of convergence between traditional biotech and emerging fintech/blockchain sectors. Processa Pharmaceuticals' exploration of cryptocurrency treasury strategies positions it at the forefront of this intersection, attracting investors like HX Entertainment who specialize in digital asset technologies through their association with companies like Chiliz and Socios.com. This could signal a new avenue for funding and financial management within the biotech industry.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if HX Entertainment's strategic involvement and proposed initiatives (e.g., cryptocurrency treasury strategies, strategic alternatives) prove successful. Potential for changes in corporate governance or strategic direction.
• Management/Board: Potential for engagement, discussions, and proposals from a significant new shareholder, possibly leading to changes in strategy or composition.
• Employees: No direct impact mentioned, but strategic shifts could indirectly affect employees.
• Customers/Suppliers/Creditors: No direct impact mentioned.

Next Steps

• HX Entertainment may acquire additional securities of Processa Pharmaceuticals or dispose of existing securities.
• HX Entertainment may engage in discussions with Processa Pharmaceuticals' management, board of directors, and/or other stockholders regarding business, operations, management, strategic alternatives, and future plans.
• HX Entertainment may seek representation on the board of directors of Processa Pharmaceuticals.
• HX Entertainment may propose changes in the capitalization, ownership structure, board composition, or management of Processa Pharmaceuticals.
• HX Entertainment may propose strategic alternatives for Processa Pharmaceuticals, including potential business combinations, mergers, or similar transactions.
• HX Entertainment may propose changes to Processa Pharmaceuticals' business strategy, including its announced cryptocurrency treasury initiatives.
• HX Entertainment may take any other actions deemed necessary or desirable to maximize the value of its investment in Processa Pharmaceuticals.

Key Dates

Recommendation

This filing reports a significant strategic investment by HX Entertainment, a firm with expertise in blockchain and digital assets, into Processa Pharmaceuticals, which is exploring cryptocurrency treasury strategies. While the alignment is positive and could unlock new value, the filing is primarily an ownership disclosure and does not provide new operational or financial performance data for Processa. The investor's stated intent to potentially seek board representation or propose strategic changes introduces an element of future uncertainty and potential for significant shifts. Therefore, a "hold" recommendation is appropriate as investors should monitor how this strategic alignment and potential future actions by HX Entertainment translate into tangible benefits or changes for Processa Pharmaceuticals before making further investment decisions.

Keywords

Processa Pharmaceuticals, HX Entertainment, Alexandre Dreyfus, Biotech, Fintech, Cryptocurrency Treasury, Blockchain, Strategic Investment, Schedule 13D, Common Stock