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Onconetix announces change in certifying accountant

Published 22/10/2024, 08:08 am
ONCO
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Onconetix, Inc. (NASDAQ:ONCO), a pharmaceutical company specializing in preparations, has reported a change in its independent registered public accounting firm, as per the latest 8-K filing with the Securities and Exchange Commission. The Cincinnati-based company, formerly known as Blue Water Biotech, Inc., announced that EisnerAmper LLP (EA) resigned on October 15, 2024, effective following the filing of the company's Quarterly Report for the quarter ended September 30, 2024.

EA had been appointed on July 6, 2023, and their audit report for the fiscal year ended December 31, 2023, did not contain any adverse opinion or disclaimer of opinion. However, it included an explanatory paragraph about Onconetix's ability to continue as a going concern.

During the engagement period with EA, Onconetix had no disagreements with the firm on accounting principles, practices, financial statement disclosure, or auditing scope or procedure. However, the company acknowledged material weaknesses in internal controls related to cash disbursements, risk assessment, accounting policies and procedures, approval and reporting of expenses, segregation of duties, and information technology controls.

Onconetix has provided EA with the disclosures regarding these material weaknesses and has included EA's response letter as part of the 8-K filing. The company is incorporated in Delaware and has its fiscal year end on December 31.

In other recent news, Onconetix, a pharmaceutical company, has completed a private placement totaling approximately $2 million. The funding is intended for working capital and general corporate purposes. Onconetix also entered into an agreement with an institutional investor, setting the stage for potential sales of up to $25 million in common stock.

In other developments, Onconetix has faced compliance challenges with Nasdaq's listing standards, leading to a reverse stock split and equity issuances. The company also deferred payments on a $15 million debt to Veru (NASDAQ:VERU) Inc., as per an amended agreement.

Moreover, Onconetix announced plans for a substantial share issuance and a change of control, including a proposal for a reverse stock split to increase the per-share trading price of its common stock. The company has also reduced the exercise price of certain existing warrants to $0.15 per share, aiming to raise approximately $1.11 million in gross proceeds.

Lastly, there have been significant changes in the executive team, with the departure of former CFO Bruce Harmon and the appointment of Karina M. Fedasz as the interim CFO. Onconetix has also engaged CFO Squad LLC for certain accounting services.

InvestingPro Insights

Recent InvestingPro data provides additional context to Onconetix's financial situation. The company's market capitalization stands at $48.53 million, with a revenue of $1.46 million for the last twelve months as of Q2 2024. This relatively low revenue figure aligns with the company's current developmental stage in the pharmaceutical industry.

InvestingPro Tips highlight some challenges facing Onconetix. The company is "quickly burning through cash" and "not profitable over the last twelve months," which corroborates the going concern issues mentioned in the audit report. Additionally, the tip that "short term obligations exceed liquid assets" underscores the financial pressures the company is facing, potentially contributing to the material weaknesses in internal controls identified in the article.

Despite these challenges, Onconetix has shown a "strong return over the last month" with a 77.49% price total return. However, investors should note that the stock "generally trades with high price volatility," which is typical for early-stage pharmaceutical companies.

For a more comprehensive analysis, InvestingPro offers 11 additional tips for Onconetix, providing deeper insights into the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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