Key Highlights

• Oncotelic Therapeutics (OTC: OTLC) secured a $178,410 convertible note from Pacific Pier Capital II, LP, with a one-year maturity.

• The note features a 12% annual interest rate and an original issue discount of 12%, with a conversion price established in the agreement.

• The company issued 500,000 commitment shares to Pacific Pier Capital as part of the transaction.

• Default interest increases to 16% if an event of default occurs under the note’s terms.

Financing Deal Announced

Oncotelic Therapeutics (OTC: OTLC) has completed a financing arrangement, obtaining $178,410 through a convertible promissory note with Pacific Pier Capital II, LP. The agreement, executed recently, provides the company with immediate liquidity while allowing the investor the option to convert debt into equity. This move aligns with the company’s strategy to bolster its financial resources as it advances its development objectives in the biopharmaceutical sector.

Note Terms and Conditions

The $178,410 note includes an original issue discount of 12% and carries an annual interest rate of the same percentage. The instrument is set to mature within one year unless an event of default triggers acceleration. Pacific Pier Capital retains the right to convert the outstanding principal and accrued interest into shares of the company’s common stock, par value $0.01 per share, at a predetermined price or a rate reflecting a discount to recent market prices.

Commitment Shares Issued

In connection with the financing, Oncotelic Therapeutics issued 500,000 commitment shares to Pacific Pier Capital. These shares were issued under an exemption from registration requirements of the Securities Act of 1933, specifically relying on Section 4(a)(2). As unregistered securities, they cannot be resold in the U.S.

Without further regulatory compliance.

Conversion and Prepayment Options

The note provides the investor with the flexibility to voluntarily convert debt into common stock at the agreed-upon conversion price or a discounted market-based rate. Early repayment is permitted after six months, subject to a three-day notice period. Upon prepayment, the company is responsible for covering administrative costs and repaying the outstanding principal along with any accrued interest.

Default and Acceleration Clauses

The financing agreement outlines standard events of default, which would entitle the investor to demand immediate repayment of principal and interest at a higher default rate. Pacific Pier Capital also holds the right to accelerate the note’s maturity if such events occur. These provisions are designed to protect the investor while allowing the company operational flexibility under normal circumstances.

Regulatory and Market Context

The transaction was structured under exemptions from the Securities Act of 1933, avoiding the need for full registration. The company’s common stock, with a par value of $0.01 per share, serves as the underlying asset for potential conversions. Investors should consider the potential impact of future conversions on shareholder equity and stock performance.

Investor Considerations

The financing terms, including the 12% discount and conversion price, reflect the higher-risk profile associated with such transactions. While the capital infusion provides near-term financial support, the structure may introduce dilution risks for existing shareholders. Market response will likely depend on how effectively Oncotelic Therapeutics utilizes the funds to advance its pipeline and operational goals in the competitive biotech landscape.

 

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.