In a recent development, Onconetix, Inc. (NASDAQ:ONCO), a pharmaceutical company based in Cincinnati, Ohio, has negotiated an amendment to its existing forbearance agreement with Veru (NASDAQ:VERU) Inc. The amendment, finalized on Monday, November 26, 2024, modifies the payment terms of the agreement. Trading at $0.61, just cents above its 52-week low of $0.59, InvestingPro analysis suggests the stock is currently undervalued.
Under the terms of the asset purchase agreement originally entered into on April 19, 2023, Onconetix agreed to acquire certain assets from Veru for a total consideration of $20.0 million. This sum was to be paid in a combination of immediate cash, a non-interest bearing note due on September 30, 2023, and two additional non-interest bearing notes due on April 19 and September 30, 2024. With a current ratio of 0.1 and negative EBITDA of $15.15 million, InvestingPro data reveals significant financial challenges for the company. Subscribers can access 15+ additional financial health indicators.
The amendment comes after Onconetix and Veru entered into a forbearance agreement on April 24, 2024, which was subsequently amended on September 20, 2024. The latest amendment stipulates that Veru will waive the due date for payment generated in October 2024 until Onconetix secures at least $97,000 from its equity line of credit with Keystone Capital Partners (WA:CPAP) LLC. In return, Onconetix has agreed to increase the percentage of net proceeds allocated to Veru from future financing and strategic transactions from 20% to 25% through June 30, 2025.
This strategic maneuver provides Onconetix with additional financial flexibility as it continues to navigate its obligations under the asset purchase agreement. The company's securities, including its common stock, are listed on The Nasdaq Stock Market under the trading symbol ONCO.
In other recent news, Onconetix has announced a series of significant corporate actions. The pharmaceutical company reported a change in its independent registered public accounting firm, EisnerAmper LLP, which resigned following the filing of the company's Quarterly Report for the quarter ended September 2024.
Onconetix also completed a private placement totaling approximately $2 million, intended for working capital and general corporate purposes. The company entered into an agreement with an institutional investor, setting the stage for potential sales of up to $25 million in common stock.
In addition, 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 Inc., as per an amended agreement. Furthermore, 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.
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. These are the recent developments in the company.
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