Onconetix, Inc., a Delaware-incorporated pharmaceutical company, has announced a series of corporate actions including a reverse stock split, equity issuances, and changes to its common stock's rights and outstanding share count. These actions come in response to compliance requirements with Nasdaq listing rules.
The company effected a reverse stock split of its issued and outstanding common stock at a one-for-forty ratio on Tuesday, September 24, 2024. This move was designed to address non-compliance with Nasdaq's minimum $1.00 bid price requirement. The stock, trading under the ticker ONCO on The Nasdaq Stock Market LLC, began trading on a split-adjusted basis on the same day.
Prior to the reverse stock split, Onconetix was notified by Nasdaq that its securities faced delisting due to the bid price requirement non-compliance. However, following the issuance of additional common shares, Nasdaq determined that the company met the initial listing criteria, including a $4.00 minimum closing bid price requirement, thus closing the non-compliance matter.
On September 24, 2024, Onconetix issued 142,749 post-reverse stock split shares of common stock to Veru (NASDAQ:VERU) Inc., following the conversion of Series A preferred stock issued in September 2023. Additionally, the company issued 6,741,820 post-reverse stock split shares of common stock to certain stockholders as a result of the automatic conversion of all shares of Series B preferred stock.
Moreover, Onconetix issued 513,424 units to Altos Venture AG, each comprising one share of common stock and one pre-funded warrant to purchase additional shares. Altos exercised all warrants, resulting in the issuance of an additional 154,027 shares of common stock.
Following these transactions, Onconetix reports a total of 8,307,051 shares of common stock issued and outstanding, excluding unvested restricted stock. These corporate actions are expected to realign the company with Nasdaq's continued listing standards and modify the rights of its security holders accordingly.
In other recent news, pharmaceutical company Onconetix has deferred payments on a $15 million debt to Veru Inc., as per an amended agreement. The repayment of two non-interest bearing notes, originally due April and September 2024, has been extended to March 31, 2025, and June 30, 2025, respectively.
The company has also revealed plans for a substantial share issuance and a change of control, including the issuance of 269,672,900 shares of common stock and a private placement financing of $5 million.
Onconetix is facing compliance challenges with Nasdaq's listing standards, leading to 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.
Additionally, Onconetix plans to issue new unregistered warrants for up to 22,375,926 shares of common stock at the same reduced price, pending stockholder approval.
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
In light of Onconetix, Inc.'s recent corporate actions aimed at compliance with Nasdaq listing rules, current and potential investors might find recent metrics and analyst insights from InvestingPro valuable for assessing the company's financial health and stock performance. As of the last twelve months leading into Q2 2024, Onconetix holds a market capitalization of $2.21 million, reflecting the size of the company in the marketplace. Despite undertaking measures to meet Nasdaq's requirements, Onconetix's financials show a gross profit margin of -57.21%, indicating challenges in generating profit from their revenues. Additionally, the company's operating income margin stands at an alarming -1065.46%, further emphasizing operational difficulties.
InvestingPro Tips suggest that Onconetix's stock is currently in oversold territory according to the RSI, a potential signal for investors looking for entry points. However, concerns are raised by the company's quick cash burn and the anticipation of a sales decline in the current year. With the stock experiencing significant volatility and a sustained decrease in price over various time frames, these factors are critical for investors to consider. For those seeking a deeper analysis, InvestingPro offers additional tips on Onconetix, providing a broader perspective on the company's financial health and stock performance.
For a more comprehensive understanding of Onconetix's financial position and future outlook, investors may explore the full list of 15 InvestingPro Tips available on the platform.
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