CINCINNATI - Onconetix, Inc. (NASDAQ:ONCO), a biotechnology firm, has announced the immediate exercise of certain existing warrants for purchasing its common stock at a reduced price. Originally issued in August of the past two years with prices between $1.09 and $2.546, these warrants can now be exercised at $0.15 per share.
The transaction is set to close tomorrow, subject to customary closing conditions, with H.C. Wainwright & Co. serving as the exclusive placement agent. Onconetix anticipates raising approximately $1.11 million in gross proceeds before fees and expenses, which will be allocated to working capital and general corporate purposes.
The common stock issuable upon exercise of the existing warrants is registered under a Form S-1 Registration Statement, effective as of July 1, 2024. Additionally, Onconetix plans to issue new unregistered warrants for up to 22,375,926 shares of common stock at the same reduced price of $0.15 in a private placement, contingent on stockholder approval.
These new warrants will become exercisable following stockholder consent, with one-third valid for five years and the remaining two-thirds for twenty-four months from the approval date.
The company has committed to convene a stockholders' meeting within 90 days post-closing to seek the necessary approval. The new warrants and the shares of common stock they may convert into are not registered under the Securities Act of 1933 and, as such, cannot be offered or sold in the U.S. without registration or an applicable exemption.
Onconetix, previously known as Blue Water Biotech, Inc., focuses on men's health and oncology solutions. It owns Proclarix, a prostate cancer diagnostic test approved in the European Union, and ENTADFI, an FDA-approved treatment for benign prostatic hyperplasia. The company intends to file a registration statement with the SEC for the resale of the shares issuable upon exercise of the new warrants.
In other recent news, Onconetix, a pharmaceutical company, has undergone significant executive changes, including the departure of CFO Bruce Harmon and the appointment of Karina M. Fedasz as the interim CFO.
The company announced that Harmon's departure was followed by a severance package of two months. Fedasz, with over two decades of experience in financial management and strategic planning, has held roles in business development and served as CFO in diverse industries.
Before joining Onconetix, Fedasz offered her expertise to clients, including a not-for-profit organization and an early-stage company focused on artificial intelligence and health tracking. She also managed the initial public offering for IDW Media Holdings. In addition to Fedasz's appointment, Onconetix has engaged CFO Squad LLC for certain accounting services.
The company has not disclosed the compensatory arrangements for Fedasz, stating that the Compensation Committee of the Board of Directors will determine these at a later date. Onconetix clarified that there are no familial relationships between Fedasz and any of the company's directors or executive officers, and she does not have any material interest in transactions requiring disclosure.
InvestingPro Insights
In the context of Onconetix, Inc.'s (NASDAQ:ONCO) recent announcement on the exercise of warrants, a closer look at the company's financial health and stock performance may offer investors additional insights. According to InvestingPro data, Onconetix has a market capitalization of just $3.35 million, reflecting a small-cap stock. The company's price-to-earnings (P/E) ratio stands at -0.07, indicating that it is not currently profitable. Furthermore, the gross profit margin for the last twelve months as of Q1 2024 is deeply negative at -123.62%, which underscores the company's challenges in maintaining profitability.
InvestingPro Tips highlight several areas of concern for Onconetix, including a significant debt burden and a rapid cash burn rate. Analysts are also anticipating a sales decline in the current year, which could impact the company's ability to generate revenue. With the stock experiencing high price volatility, these factors should be carefully considered by potential investors. Additionally, Onconetix does not pay a dividend, which may affect its attractiveness to income-seeking shareholders. It's worth noting that there are 13 additional InvestingPro Tips available that could provide further context on the company's financial status and stock performance.
For investors interested in a deeper analysis of Onconetix, Inc., using InvestingPro could provide valuable insights to inform their investment decisions. Remember to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, which includes additional InvestingPro Tips and real-time metrics.
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