PALATINE, IL – Acura Pharmaceuticals, Inc. (OTC Market: ACUR) has entered into a new financial agreement with Abuse Deterrent Pharma, LLC (AD Pharma), receiving a loan of $150,000 on Monday, September 30, 2024. This latest transaction adds to previous loans of $100,000 and $125,000 received on September 20, 2024, and August 19, 2024, respectively, bringing the total principal balance owed to AD Pharma to $6,519,279, with accrued interest of approximately $433,000.
The loan carries an interest rate of 5.25%, with a maturity date set for October 31, 2024, at which point all principal and interest are due. In the event of default, including bankruptcy or failure to pay within 5 days of due date, the overdue amount will incur a higher interest rate of 7.5%.
The funding is crucial for Acura Pharmaceuticals as it seeks to maintain its day-to-day operations. Without additional financing by mid-October 2024, the company may need to scale back or terminate operations, potentially leading to a complete loss of shareholder value. The company is actively seeking additional financing to avoid such outcomes.
AD Pharma, which is controlled by Mr. Schutte, holds approximately 65% of Acura's outstanding common stock, not including warrants for an additional 10.0 million shares. Mr. Schutte directly owns about 13% of the company's outstanding common stock.
In other recent news, Acura Pharmaceuticals has secured extensions on loans and agreements vital to its operations and product development, according to a recent SEC filing. The company received loans totaling $275,000 from Abuse Deterrent Pharma (AD Pharma) in early June 2024, part of a larger debt of around $5.9 million, with an additional $350,000 in accrued interest.
The pharmaceutical firm also amended its agreement with AD Pharma regarding the development of its lead product candidate, LTX-03, extending the deadline for the FDA to accept a New Drug Application for LTX-03 from June 30, 2024, to October 31, 2024.
In a subsequent development, Acura Pharmaceuticals secured two new loan agreements with AD Pharma, totaling $250,000. These loans, received on July 3 and July 22, 2024, respectively, added 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.
The company disclosed that without additional financing by mid-August 2024, it may need to scale back or terminate operations, potentially leading to a complete loss of shareholder value. Acura also faces a potential event of default if it fails to meet its debt obligations, which would incur an increased interest rate of 7.5%. As of June 28, 2024, AD Pharma, managed by Mr. John Schutte, owns approximately 65% of Acura's common stock, excluding potential ownership through warrants.
InvestingPro Insights
Recent InvestingPro data paints a volatile picture for Acura Pharmaceuticals (ACUR). The company's market capitalization stands at a modest $0.33 million, reflecting its current financial challenges. Despite the recent loan from AD Pharma, ACUR's price-to-earnings ratio of -0.06 indicates ongoing profitability issues, aligning with the article's mention of potential operational scaling back.
Interestingly, ACUR has shown remarkable price volatility. While its 3-month price return is down 82.55%, its year-to-date return has surged by an astounding 4700%. This extreme fluctuation underscores the high-risk nature of the investment, particularly given the company's precarious financial situation described in the article.
InvestingPro Tips highlight that ACUR's stock price is trading at just 0.86% of its 52-week high, further emphasizing the company's current struggles. Additionally, with an average daily trading volume of only 0.0M USD over the past three months, liquidity appears to be a significant concern for investors.
For those considering ACUR's investment potential, InvestingPro offers 7 additional tips that could provide deeper insights into the company's financial health and market position.
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