OncoSec Medical (NASDAQ:ONCS) stock is falling hard on Thursday after the clinical-stage biotechnology company filed for bankruptcy.
According to a filing with the Securities and Exchange Commission (SEC), OncoSec Medical is filing for bankruptcy after considering strategic alternatives. As a result, OncoSec Medical Australia, its only subsidiary, will liquidate and wind down operations.
To go along with this, OncoSec Medical will get a new Chapter 7 trustee provided by the Bankruptcy Court for the District of New Jersey. This individual will oversee the bankruptcy process, including the liquidation of the company’s assets.
In addition to this, OncoSec Medical’s board and several executives have resigned from the company. With this change, there’s now no board of directors, and the company no longer has a president or CEO. These resignations were filed as the bankruptcy filing removes any power these positions held.
Finally, OncoSec Medical notes that this bankruptcy filing triggers a default on its Convertible Promissory Note and Security Agreement. This has its $2 million debt with Grand Decade Developments Limited being payable immediately.
What This Means for ONCS Stock
ONCS stock will likely be delisted as a result of its bankruptcy filing and liquidation plans. This has investors jumping ship, which has the shares seeing strong trading. As of this writing, more than 620,000 shares have changed hands. This is closing in on its daily average trading volume of about 883,000 shares.
ONCS stock is down 47.9% as of Thursday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
