OQP Concludes Intangible Asset Acquisition with Corporate Bond Issuance... Increased Likelihood of Unqualified Audit Opinion

Completion of unpaid claims payment under ATA asset transfer agreement signed last April
Issued short-term corporate bonds to pay OQ, resolving uncertainties about asset transfer
Intangible asset revaluation by EY, Duff & Phelps, global accounting firms and consulting companies

[Asia Economy Reporter Jang Hyowon] OQP (OncoQuest Pharmaceuticals) has resolved uncertainties regarding asset transfer.

Last April, OQP signed an intangible asset acquisition agreement with Canada’s OncoQuest (hereinafter ‘OQ’), agreeing to acquire all immuno-oncology treatment patents, the U.S. FDA clinical program, and intellectual property rights. In May, the company changed its name to OncoQuest Pharmaceuticals (formerly Duol Industry) and officially began its bio business.

The payment of unpaid receivables for the acquisition contract was initially planned to be made through an in-kind capital contribution, but uncertainties regarding the asset transfer increased due to a refusal of the semi-annual review opinion and delays in court approval.

Accordingly, the company reached an agreement with OQ to issue short-term corporate bonds to pay the unpaid receivables, thereby concluding the ATA (Intangible Asset Transfer Agreement) and resolving the uncertainty over the asset transfer at once.

An OQP official stated, “The ATA asset transfer contract has finally been concluded, and the corporate bonds will be paid with the proceeds from the rights offering in the future.”

He also added, “The value of the assets acquired from OQ has advanced beyond the time of the ATA contract signing due to ongoing clinical progress. We will do our best to ensure that the pipeline transferred as assets, along with the ongoing Phase 3 clinical trials, proceeds successfully.”

Earlier, in August last year, OQP received a ‘disclaimer of opinion’ on the semi-annual review from the auditor and promptly began preparing a re-examination report. The value of the intangible assets, as OQP’s intact assets, was re-evaluated by Ernst & Young (E&Y) and Duff & Phelps, a global consulting firm recognized as one of the world’s top credit and asset valuation companies.

In addition, to prepare for this semi-annual review and full-year audit, OQP signed an internal accounting advisory contract with Samil Accounting Corporation and strengthened expertise for transparent and accurate accounting by receiving legal advice from law firms Kim & Chang, Yulchon, Dentons Lee, and Gwangjang, all of which have extensive international deal experience.