Onconetix, Inc. (NASDAQ:ONCO), a pharmaceutical company, has entered into an amended agreement with Veru (NASDAQ:VERU) Inc. to defer payments on a $15 million debt, according to a filing with the Securities and Exchange Commission (SEC) on Friday.
The Cincinnati-based company, previously known as Blue Water Vaccines Inc., secured an extension on the repayment of two non-interest bearing notes originally due April and September 2024, now extended to March 31, 2025, and June 30, 2025, respectively. This arrangement is part of an Amended and Restated Forbearance Agreement with Veru, superseding the original agreement from April 24, 2024.
Under the new terms, Onconetix is obliged to make monthly payments based on a percentage of specific cash receipts and proceeds from certain transactions. The payments will prioritize accrued interest before reducing the principal amount. The interest rate on the unpaid balances of both notes is set at 10% annually starting from their respective original due dates.
The agreement also stipulates that if Onconetix repays the total outstanding principal and interest in cash by December 31, 2024, the principal balance under the September note will be reduced from $5 million to $3.5 million.
Additionally, Onconetix agreed to convert Veru's shares of Series A Preferred Stock into common stock after a planned reverse stock split and remove any transfer restrictions on these shares after one year from issuance.
The SEC filing also noted that Onconetix would reimburse Veru up to $7,500 for expenses incurred in the negotiation and execution of the amended agreement.
In other recent news, pharmaceutical company Onconetix has revealed plans for a substantial share issuance and a change of control. This move includes the issuance of 269,672,900 shares of common stock and a private placement financing of $5 million.
The company also plans to address the conversion of outstanding stock options of Proteomedix AG. This will result in a "Change of Control" as per Nasdaq Listing Rule 5110(a), requiring Onconetix to meet Nasdaq's initial listing criteria.
In addition, Onconetix has faced significant 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 also needs to address a shortfall in stockholders' equity to meet Nasdaq's Minimum Stockholders' Equity Requirement.
In financial developments, Onconetix has reduced the exercise price of certain existing warrants to $0.15 per share, aiming to raise approximately $1.11 million in gross proceeds. Furthermore, the company 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.
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