aibioOncotelic Therapeutics issues $560,000 secured convertible note to Mast Hill Fund
Tickers OTLC
Oncotelic's $560,000 note converts at a fixed $0.07 per share and carries 10% interest, and a separate equity purchase agreement with the same lender could add up to $25 million of stock sales.
Key facts
- Company
- Oncotelic Therapeutics, Inc. (OTC: OTLC)
- News type
- Debt Financing
- Primary source
- Oncotelic Therapeutics, Inc. 8-K (2025-08-06)
Oncotelic Therapeutics, Inc. issued a convertible promissory note with a gross principal amount of $560,000 to Mast Hill Fund, LP, according to a Form 8-K filed on August 6, 2025. The company signed the securities purchase agreement on July 31, 2025. The filing names no placement agent, underwriter or counsel for the note.
Note terms and collateral
The note carries an original issue discount of 10%, so the company receives less cash than the face amount. It bears interest at 10% a year and matures on the earlier of one year after the purchase agreement, acceleration after an event of default, or prepayment in full. Mast Hill may convert outstanding principal and accrued interest into common stock at a fixed price of $0.07 per share. The company also issued 2,000,000 warrants with an exercise price of $0.15.
If an event of default occurs, the outstanding principal and accrued interest become due in cash at the holder's election. The purchase agreement requires the company to use the proceeds for general working capital.
The filing says the new note and a prior $605,000 note issued to Mast Hill in May 2022 are both secured against the company's assets. The security excludes the equity interests and assets held through the joint venture with Dragon Overseas Capital Limited, known as GMP Biotechnology and its subsidiaries. The filing says those excluded assets include OT-101, CA4P, Oxi4503, AI and AI CDMO technologies and the nanoparticle platform.
That exclusion matters for the lender's position. The annual report filed April 15, 2025 says the company is developing OT-101 through the joint venture, and that the rare pediatric designation for OT-101 "was transferred to our joint venture as part of the joint venture agreement." On the filing's own wording, the lender's security does not reach the joint venture's assets, which include OT-101.
The equity purchase agreement
On August 1, 2025, Oncotelic signed an equity purchase agreement with Mast Hill. It gives the company the right, but not the obligation, to direct Mast Hill to buy up to $25 million of common stock in multiple tranches. Each put notice is capped at the lesser of $500,000 or 20% of the average daily trading value, as the agreement defines it.
The purchase price is 97% of the market price or 102% of the market alternative price, as the agreement defines them. In exchange for Mast Hill entering the agreement, the company agreed to issue warrants for 3,350,000 shares and to file a resale registration statement within 60 calendar days. The 8-K gives no count of shares outstanding.
Consultants paid in stock
A second 8-K describes independent contractor agreements with Jefferson Capital Ventures, LLC and Valor Nation, Inc. for consulting and advisory services. The agreements run for 18 months.
Jefferson will receive $20,000 a month in cash and 20,320,930 forfeitable restricted stock awards. The shares underlying those awards are to be issued on signing, but Jefferson earns them only when corporate milestones are met. Those milestones are a market capitalization above $100 million on any single trading day's close, a cumulative increase of at least $10 million in shareholder equity, and a successful uplisting to a U.S. national exchange. Each milestone earns Jefferson 6,774,310 shares, and any awards tied to unmet milestones are forfeited. The filing does not say whether any milestone has been reached.
Valor will receive 4,064,586 shares, which it earned on signing.
Clinical work and the joint venture
The annual report says the company is developing OT-101 through the joint venture, which is also preparing an initial public offering. The company says the offering is anticipated to be a liquidity event, but it "cannot provide assurance" that the offering will be completed or succeed.
The filing describes a randomized, double-blind, placebo-controlled Phase 2 study of OT-101 in hospitalized adults with COVID-19 and pneumonia, run in South America. The filing says the trial was planned for expansion into Phase 3 based on its final results. The company says it will re-evaluate the treatment for further development, citing a reduced impact of COVID-19 over the past year.
The 8-K gives no cash balance or operating figures.