PALATINE, IL—Acura Pharmaceuticals, Inc. (OTC Market: ACUR), a pharmaceutical company specializing in the development of abuse-deterrent drugs, has entered into two new loan agreements with Abuse Deterrent Pharma, LLC, totaling $250,000. This funding comes at a critical time as the company faces the need for additional financing to continue operations.
On July 22, 2024, Acura Pharmaceuticals reported receiving a $100,000 loan following a previous loan of $150,000 on July 3, 2024. These loans add to the existing principal balance under a secured promissory note from November 10, 2022, bringing the total owed to approximately $6.14 million with accrued interest of around $375,000. The note carries an interest rate of 5.25% and is set to mature on October 31, 2024, when all principal and interest are due.
The company disclosed that if additional financing is not obtained by mid-August 2024, it may be forced to scale back or terminate operations, potentially leading to a complete loss of shareholder value. Despite efforts to secure more funds, there is no guarantee that sufficient resources will be available to sustain the company until its products generate enough revenue for operational growth.
Acura Pharmaceuticals also faces a potential event of default if it fails to meet its debt obligations. The note stipulates that any overdue payments will incur an increased interest rate of 7.5%. The funds provided by AD Pharma are intended to support the company's daily operations.
As of June 28, 2024, AD Pharma owns approximately 65% of Acura's common stock, not including warrants to purchase additional shares. Mr. Schutte, the managing partner and investor of AD Pharma, directly holds about 13% of Acura's common stock.
InvestingPro Insights
Acura Pharmaceuticals' recent financial maneuvers illustrate a company striving to navigate through turbulent financial waters. The real-time data from InvestingPro underscores this narrative with a few key metrics. The company's market capitalization stands at a modest $1.33 million, reflecting the market's current valuation of the company's worth. The P/E ratio is reported at -0.06, which can be indicative of investor skepticism about future earnings or potentially a company in distress.
In terms of stock performance, Acura has experienced a significant rollercoaster. Over the past six months, the stock has seen an astonishing 1566.67% total return, with a year-to-date increase of 19900%. Despite this, the stock is currently trading at 40% of its 52-week high, suggesting a recent downturn. These figures provide a stark contrast to the 1-month total return of -27.27%, highlighting the stock's volatility and the potential risks for investors.
InvestingPro Tips suggest that investors should closely monitor the company's next earnings date on August 20, 2024, as it may provide crucial insights into Acura's ability to manage its debt and finance its operations. For those considering an investment, it might be worthwhile to explore the additional 15 InvestingPro Tips available, which could offer a deeper understanding of the company's financial health and market position.
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