Oncotelic Therapeutics (OTLC) issues $178,410 12% convertible note to Pacific Pier
Rhea-AI Filing Summary
Oncotelic Therapeutics, Inc. entered into a Securities Purchase Agreement with Pacific Pier Capital II, LP and issued a 2026 Pacific Pier Note 2, a convertible promissory note with aggregate gross principal of $178,410. The note bears 12% annual interest, includes a 12% original issue discount, and matures on the earlier of one year from the agreement date, acceleration upon an Event of Default, or full prepayment.
The note is convertible into common stock at the lesser of a fixed $0.06 per share Conversion Price or 85% of the lowest traded price over the ten trading days before conversion, with adjustment for certain corporate events. Oncotelic also issued 500,000 commitment shares to Pacific Pier. Prepayment is permitted at any time prior to six months from the note date with notice, and upon an Event of Default the amount becomes immediately due in cash with default interest of 16% per annum. The issuance relies on a Section 4(a)(2) Securities Act exemption.
Positive
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Negative
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8-K Event Classification
4 items: 1.01, 2.03, 3.02, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 3.02
Unregistered Sales of Equity Securities
Securities
The company sold equity securities in a private placement or other unregistered transaction.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Convertible note principal: $178,410
Original issue discount: 12%
Interest rate: 12% per annum
+5 more
8 metrics
Convertible note principal
$178,410
Aggregate gross principal amount of the 2026 Pacific Pier Note 2
Original issue discount
12%
Original issue discount on the 2026 Pacific Pier Note 2
Interest rate
12% per annum
Annual interest rate on the 2026 Pacific Pier Note 2
Default interest rate
16%
Interest rate applicable upon an Event of Default
Fixed conversion price
$0.06 per share
Fixed Conversion Price option for converting note into common stock
Market-based conversion discount
85%
Conversion at 85% of lowest traded price over prior 10 trading days
Commitment shares
500,000 shares of Common Stock
Shares issued to Pacific Pier as Commitment Shares
Prepayment window
prior to six months
Prepayment permitted at any time prior to six months from note date
Key Terms
convertible promissory note, original issue discount, Event of Default, Conversion Price, +1 more
5 terms
convertible promissory note financial
"the Company issued a convertible promissory note in the aggregate gross principal"
A convertible promissory note is a loan a company takes now that can later be turned into shares instead of being repaid in cash. Think of it as lending money with the option to accept ownership in the business down the road; that matters to investors because it affects who gets paid first, how much ownership existing shareholders keep, and the company’s future valuation and cash needs. Terms such as conversion price, interest and maturity determine the financial impact.
original issue discount financial
"The 2026 Pacific Pier Note 2 has an original issue discount of 12%"
Original issue discount (OID) is the difference between a debt security’s face value and the lower price at which it is first sold, treated as additional interest that accrues over the life of the instrument. For investors it matters because OID raises the effective yield and changes taxable income and the holding’s cost basis over time — think of buying a $100 voucher for $90 and recognizing the $10 gain as earned interest as the voucher approaches maturity.
Event of Default financial
"upon occurrence of an Event of Default (as defined below)"
An event of default is a specific breach of a loan or bond agreement—such as missed payments or breaking agreed rules—that gives lenders the legal right to act, for example by demanding immediate repayment, seizing collateral, or accelerating other obligations. For investors, it’s a red flag because it can sharply reduce a company’s ability to operate or raise money, like a car lender repossessing a vehicle after missed payments, and often leads to falling share or bond prices.
Conversion Price financial
"into shares of Common Stock (the “Conversion Shares”), at a fixed price of $0.06 per share (the “Conversion Price”)"
The conversion price is the fixed price at which a convertible security, like a bond or preferred stock, can be exchanged for shares of common stock. It acts like a set rate that determines how many shares an investor can receive if they choose to convert their investment. This helps investors understand the value and potential benefits of converting their securities into company shares.
Section 4(a)(2) of the Securities Act regulatory
"in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act"
A legal exemption that allows a company to sell securities directly to a limited group of buyers without registering the offering with the Securities and Exchange Commission. Think of it like a private sale among known parties rather than a public auction: it can speed fundraising and reduce disclosure requirements, but it also means less public information, lower liquidity and resale restrictions—factors investors should consider when weighing risk and exit options.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What financing transaction did OTLC complete on August 3, 2026?
On August 3, 2026, Oncotelic Therapeutics (OTLC) entered into a Securities Purchase Agreement with Pacific Pier Capital II, LP and issued a $178,410 2026 Pacific Pier Note 2, a convertible promissory note with a 12% original issue discount and 12% annual interest.
What are the key terms of the 2026 Pacific Pier Note 2 for OTLC?
The 2026 Pacific Pier Note 2 has $178,410 aggregate gross principal, a 12% original issue discount, 12% annual interest, and matures on the earlier of one year from the agreement, acceleration upon an Event of Default, or full prepayment by Oncotelic Therapeutics (OTLC).
How is the 2026 Pacific Pier Note 2 convertible into OTLC common stock?
Pacific Pier may voluntarily convert outstanding principal and interest into OTLC common stock at the lesser of a fixed $0.06 per share or 85% of the lowest traded price over the prior ten trading days, with adjustments for certain corporate events, creating potential equity issuance.
What happens if an Event of Default occurs under OTLC’s 2026 Pacific Pier Note 2?
If an Event of Default occurs, Pacific Pier may declare the outstanding principal plus accrued but unpaid interest immediately due and payable in cash, and the interest rate on the 2026 Pacific Pier Note 2 increases to a default rate of 16% per annum until paid.
What additional equity did OTLC issue to Pacific Pier in this transaction?
Alongside the 2026 Pacific Pier Note 2, Oncotelic Therapeutics (OTLC) issued 500,000 shares of common stock as Commitment Shares to Pacific Pier. These shares are separate from any Conversion Shares that may be issued upon conversion of the note’s principal and interest.