Onconetix, Inc.: Form 10-Q for the period ended Jun 30, 2025

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes to those statements included elsewhere in this Report and with the audited financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC, on June 2, 2025. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Some of the numbers included herein have been rounded for the convenience of presentation. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. See “Cautionary Note Regarding Forward-Looking Statements.”

Overview

We are a commercial stage biotechnology company focused on the research, development, and commercialization of innovative solutions for men’s health and oncology. Through our acquisition of Proteomedix, which closed on December 15, 2023, we own Proclarix, an in vitro diagnostic test for prostate cancer originally developed by Proteomedix and approved for sale in the European Union under the In Vitro Diagnostic Regulation (“IVDR”), which we anticipate will be marketed in the U.S. as a lab developed test through our license agreement with LabCorp.

We also own ENTADFI, an FDA-approved, once daily pill that combines finasteride and tadalafil for the treatment of BPH, a disorder of the prostate. However, in light of (i) the time and resources needed to continue pursuing commercialization of ENTADFI, and (ii) the Company’s cash runway and indebtedness, the Company has abandoned commercialization of ENTADFI and is in the process of destroying its inventory of the product. In addition, as part of cost reduction efforts and in connection with our initial pause in commercializing ENTADFI, we terminated three employees involved with the ENTADFI program, effective April 30, 2024, with such individuals to continue assisting the Company on an as-needed, consulting basis. Based on the current circumstances surrounding ENTADFI, at June 30, 2024, the ENTADFI assets were fully impaired. Refer to Note 4 in the accompanying condensed consolidated financial statements included elsewhere in this Report for further discussion.

We are currently focusing our efforts on commercializing Proclarix.

Proclarix is an easy-to-use next generation protein-based blood test that can be done with the same sample as a patient’s regular Prostate-Specific Antigen (“PSA”) test. The PSA test is a well-established prostate specific marker that measures the concentration of PSA molecules in a blood sample. A high level of PSA can be a sign of prostate cancer. However, PSA levels can also be elevated for many other reasons including infections, prostate stimulation, vigorous exercise or even certain medications. PSA results can be confusing for many patients and even physicians. It is estimated over 50% of biopsies with elevated PSA are negative or clinically insignificant resulting in an overdiagnosis and overtreatment that impacts the physician’s routine, our healthcare system, and the quality of patients’ lives. Approximately 10% of all men have elevated PSA levels., commonly referred to as the diagnostic “grey zone”, of which only 20 - 40% present clinically with cancer. Proclarix is intended for use in diagnosing these patients where it is difficult to decide if a biopsy is necessary to verify a potential clinically significant cancer diagnosis. Proclarix helps doctors and patients with unclear PSA test results through the use of our proprietary Proclarix Risk Score which delivers clear and immediate diagnostic support for further treatment decisions. No additional intervention is required, and results are available quickly. Local diagnostic laboratories can integrate this multiparametric test into their current workflow because Proclarix assays use the enzyme-linked immunosorbent assay (ELISA) standard, which most diagnostic laboratories are already equipped to process.

Since our inception in October 2018 until April 2023, when we acquired ENTADFI, we devoted substantially all of our resources to performing research and development, undertaking preclinical studies and enabling manufacturing activities in support of our product development efforts, hiring personnel, acquiring and developing our technology and now halted vaccine candidates, organizing and staffing our company, performing business planning, establishing our intellectual property portfolio and raising capital to support and expand such activities.

During the third quarter of 2023, we halted our vaccine discovery and development programs, and accordingly, we now operate in one segment: commercial. The commercial segment was new in the second quarter of 2023 and is currently dedicated to the development and commercialization of Proclarix.

Given Proclarix is CE-marked for sale in the European Union, we expect to generate revenue from sales of Proclarix by 2027. Although we anticipate these sales to offset some expenses relating to commercial scale up and development, we expect our expenses will increase substantially in connection with our ongoing activities, as we:

• commercialize Proclarix;
• hire additional personnel;
• operate as a public company; and
• obtain, maintain, expand, and protect our intellectual property portfolio.

We rely and will continue to rely on third parties for the manufacturing of Proclarix. We have no internal manufacturing capabilities, and we will continue to rely on third parties, of which the main suppliers are single-source suppliers, for commercial product.

We do not have any products approved for sale, aside from (i) Proclarix and (ii) ENTADFI, which has not generated any revenue from product sales; we have determined to abandon commercialization of ENTADFI and are in the process of destroying our inventory of the product.

To date, we have financed our operations primarily with proceeds from our sale of preferred securities to seed investors, the initial public offering (“IPO”), and subsequent offerings of debt and equity securities. We will continue to require significant additional capital to commercialize Proclarix, and to fund operations for the foreseeable future. Accordingly, until such time as we can generate significant revenue, if ever, we expect to finance our cash needs through public or private equity or debt financings, third-party (including government) funding and to rely on third-party resources for marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches, to support our operations.

Some recent key developments affecting our business include the following:

Potential Business Combination:

On July 16, 2025, the Company entered into an Agreement and Plan of Merger with (i) Onconetix Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company, and (ii) Ocuvex Therapeutics, Inc., a Delaware corporation (“Ocuvex”, and such agreement, the “Merger Agreement”). Pursuant to the Merger Agreement, Merger Sub will merge with and into Ocuvex, with Ocuvex surviving the merger as a direct, wholly owned subsidiary of the Company (the “Merger” and the other transactions contemplated by the Merger Agreement, the “Transactions”).

Upon the consummation of the Transactions (the “Closing”), each share of common stock, par value $0.0001 per share, of Ocuvex (the “Ocuvex Common Stock”) shall be exchanged into a number of shares of common stock, par value $0.00001 per share, of the Company (the “Company Common Stock”) equal to the Exchange Ratio (as defined below) (such shares, the “Merger Consideration”), subject to adjustment as described below and the reduction of the Escrow Shares (as defined below) in respect of the satisfaction of indemnification obligations.

As a result of the Transactions, it is anticipated that immediately following the Closing, (i) the pre-Closing Ocuvex stockholders will own 90% of the issued and outstanding equity interests of the Company, on a fully diluted basis, and (ii) the pre-Closing Company stockholders will own 10% of the issued and outstanding equity interests of the Company, on a fully-diluted basis, subject to adjustment in respect of Permitted Financing.

“Exchange Ratio” means a number equal to the quotient obtained by dividing (x) the product of (I) the fully diluted Company Common Stock less the aggregate number of shares of Company Common Stock issuable in connection with a Permitted Financing and (II) 9 by (y) the fully diluted Ocuvex Common Stock.

“Permitted Financing” means an equity or debt financing transaction or series of equity or debt financing transactions entered into by Parent prior to Closing in connection with the Transactions, the proceeds of which Parent loans to the Company prior to the Effective Time.

The Closing is subject to the satisfaction or waiver of customary conditions, including, among other things, (i) receipt of the required approval of the Company stockholders and the adoption of the Merger Agreement and the Transactions by the requisite vote of the Ocuvex stockholders; (ii) the accuracy of the representations and warranties of the parties made in the Merger Agreement, subject to customary materiality qualifiers; (iii) compliance by the parties with their respective covenants and agreements under the Merger Agreement; (iv) the approval for listing on Nasdaq of the Company Common Stock to be issued as the Merger Consideration; (v) the registration statement for the Merger having been declared effective and (v) the absence of a material adverse effect with respect to the other party.

Ocuvex’s obligation to complete the Closing is subject to additional conditions, including (i) the restructuring of certain outstanding indebtedness of the Company and (ii) a condition that the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986.

The Company’s obligation to complete the Closing is subject to additional conditions, including (i) the satisfaction of certain other obligations of Ocuvex with respect to third-party consents under existing contracts and (ii) that certain lock-up agreements, the Escrow Agreement and the certain stockholder support agreements are in full force and effect.

Onconetix and Ocuvex intend to file with the SEC a registration statement on Form S-4, which will include a preliminary proxy statement of Onconetix and a prospectus in connection with the proposed Merger between Onconetix and Ocuvex pursuant to the Merger Agreement.

Reverse Stock Split

On June 13, 2025, the Company effected a reverse stock split of all shares of its issued and outstanding Common Stock at a ratio of one-for-eighty-five (1:85). The Company accounted for the reverse stock split on a retrospective basis pursuant to Accounting Standards Codification (“ASC”) 260, Earnings Per Share. All issued and outstanding common stock, common stock warrants, and share-based awards’ exercise prices and per share data have been adjusted in these condensed consolidated financial statements, on a retrospective basis, to reflect the reverse stock split for all periods presented. The number of authorized shares and par value of the preferred stock and common stock were not adjusted because of the reverse stock split.

Veru Forbearance Agreements

On September 19, 2024, the Company entered into an Amended and Restated Forbearance Agreement with Veru (the “Amended and Restated Forbearance Agreement” or “A&R Forbearance Agreement”), which amends and restates the Original Forbearance Agreement in its entirety. Pursuant to the A&R Forbearance Agreement, Veru will forbear from exercising its rights under both April Veru Note and the September Veru note, subject to the terms and conditions set forth below.

The A&R Forbearance Agreement extends the due date for the April 2024 and September 2024 Veru Notes until the earlier to occur of (i) June 30, 2025 or (ii) the occurrence of any Event of Default. The Amended and Restated Forbearance Agreement also effected certain modifications to the payment terms in the Original Forbearance Agreement and amended certain terms of the September Veru Note as summarized below.

Pursuant to the A&R Forbearance Agreement, the Company agreed to make the following required payments (the “Required Payments”) during the April 2024 Forbearance Period first to accrued and unpaid interest under the April Veru note and then any remainder to the outstanding principal amount of the April Veru Note:

• Interest at the rate of 10% per annum shall accrue on any unpaid principal balance of the April Veru Note commencing on April 20, 2024 through the date that the outstanding principal balance under the April Veru Note is paid in full;
• Monthly payments equal to 25% (increased from 15% in the Original Forbearance Agreement) of (i) the monthly cash receipts of Proteomedix for the licensing or sale of any products or services, (ii) monthly cash receipts of the Company or any of its subsidiaries for the sales of Proclarix anywhere in the world, and (iii) monthly cash receipts of the Company or any of its subsidiaries for milestone payments or royalties from LabCorp cash receipts of the Company of its subsidiaries from certain sale or licensing revenues or payments (the “Ordinary Cash Revenue”), which increased amount shall begin October 20, 2024 for cash receipts in September 2024;
• Payment of 20% (increased from 10% in the Original Forbearance Agreement) of the net proceeds from certain financing or other transactions outside the ordinary course of business completed by the Company or any of its subsidiaries during the April 2024 Forbearance Period, which increased amount will begin for any net proceeds received after September 19, 2024; and
• The remaining balance of the April Veru Note will be due at the end of the April 2024 Forbearance Period.

The Company and Veru also agreed to the following amendments to the September Veru Note in the A&R Forbearance Agreement:

• As noted above, an extension of the maturity date to June 30, 2025;
• The accrual of interest at the rate of 10% per annum on any unpaid principal balance of the September Veru Note commencing on October 1, 2024 through the date that the outstanding principal balance under the September Veru Note is paid in full;
• Any amounts owed on the September Veru Note, including but not limited to unpaid principal and accrued interest, will be paid in cash or, upon the mutual written consent of Veru and the Company, in shares of the Company’s Common Stock or a combination of cash and the Company’s Common Stock; and
• Following full repayment of all principal and interest under the April Veru Note, the Company will make the Required Payments first towards accrued and unpaid interest under the September Veru Note and then towards the remaining principal balance payable under the September Veru Note.

November Amended and Restated Forbearance Agreement with Veru

On November 26, 2024, the Company entered into another Amended and Restated Forbearance Agreement with Veru (the “November Amended and Restated Forbearance Agreement” or “November A&R Forbearance Agreement”), which amends and restates certain terms of the A&R Forbearance Agreement. Pursuant to the November A&R Forbearance Agreement, Veru agreed to waive the due date for payment of applicable Cash Receipt Payments (as such term is defined in the A&R Forbearance Agreement) generated in October 2024 until the Company receives funds of at least $97,000 pursuant to its equity line of credit facility with Keystone Capital Partners LLC. In exchange, the Company agreed to increase its payments to be made to Veru out of future financing and strategic transactions through June 30, 2025, from 20% to 25% of net proceeds generated from such transactions. All other terms of the A&R Forbearance Agreement with Veru remain the same.

March 2025 Amended and Restated Forbearance Agreement with Veru on April 2025

On March 31, 2025, Veru and the Company entered into a waiver agreement, pursuant to which Veru agreed to waive and extend the date for payment of the April 2024 Promissory Note to April 14, 2025.

April 2025 Amended and Restated Forbearance Agreement with Veru

On April 23, 2025, Veru and the Company entered into a limited waiver agreement, pursuant to which Veru agreed to waive and extend the date for payment of the April 2024 Promissory Note to June 30, 2025.

June 2025 Amended and Restated Forbearance Agreement with Veru

On June 30, 2025, Veru and the Company entered into a waiver agreement, pursuant to which Veru agreed to waive and extend the date for payment of the April 2024 and September 2024 Promissory Notes to July 31, 2025.

July 2025 Amended and Restated Forbearance Agreement with Veru

On July 31, 2025, Veru and the Company entered into a waiver agreement, pursuant to which Veru agreed to waive and extend the date for payment of the April 2024 and September 2024 Promissory Notes to August 14, 2025.

August 2025 Amendment and Restatement of September Veru Note

On August 7, 2025, Veru and the Company agreed to amend and restate the September Veru Note (as amended and restated, the “A&R September Veru Note”). Pursuant to the A&R September Veru Note, the principal amount owed to Veru was increased by $100,000 to an aggregate principal amount of $5.1 million, and the maturity date was amended to August 14, 2025. All other terms of the September Veru Note remained the same.

PIPE Financing

On October 1, 2024, the Board authorized the Company to create a series of 10,000 shares of preferred stock designated as “Series C convertible Preferred Stock”, with a par value of $0.00001, pursuant to the certificate of designations. At any time after the initial issuance date of Series C convertible Preferred Stock, each Preferred Share shall be convertible into validly issued, fully paid and non-assessable shares of Common Stock. The holders of Series C Preferred Stock are entitled to dividends, on an as-if converted basis, equal to and in the same form as dividends actually paid on shares of Common Stock, when and if actually paid. In addition, from and after the occurrence and during the continuance of any Triggering Event, dividends (“Default Dividends”) will accrue on the Stated Value of each Preferred Share at a rate of fifteen percent (15.0%) (the “Default Rate”) per annum. Each holder is entitled to convert any portion of the outstanding Preferred Shares held by such holder into validly issued, fully paid and non-assessable Conversion shares at the Conversion Rate, which can be determined by dividing (x) the Conversion Amount of such Preferred Share by (y) the Conversion Price, $4.5056, subject to adjustment as provided in the Certificate of Designations.

On October 2, 2024, the Company entered into, and sold, to six institutional investors (collectively, the “PIPE Investors”), pursuant to the securities purchase agreement an aggregate of 3,499 shares of Series C Preferred Stock which includes an issuance of 840 shares of Series C Preferred Stock to the lead investor in consideration for the PIPE Investors’ irrevocable commitment to purchase shares of the Series C Preferred Stock, and warrants to purchase 6,963 shares of Common Stock for aggregate net cash proceeds to the Company of $1.9 million. The exercise price of the warrants is $372.30, and the warrants are exercisable six months after the issuance date and expire on the third anniversary of the initial exercisability date.

As of June 30, 2025, an aggregate of 2,130 Series C Preferred Stock was outstanding, after redemptions of 1,369 shares for an aggregate of $1.71 million. As a result of draws on the ELOC in April and June 2025, an additional 329 share of Series C preferred stock were to be redeemed for an aggregate amount of $409,510.

On July 16, 2025, the Company exercised its voluntary Series C adjustment right to lower the conversion price of the Series C preferred stock to $3.50, and holders of 2,130 Series C shares agreed to convert their shares into shares of common stock. As of August 13, 2025, 1,920 shares of Series C preferred stock had been converted to 547,051 shares of common stock for an aggregate conversion amount of approximately $1.9 million.

After the Stockholder Approval Date, if a Triggering Event occurs and is continuing at any time after the earlier of the holders’ receipt of a Triggering Event Notice and such holder becoming aware of such Triggering Event (such earlier date, the “Alternate Conversion Right Commencement Date”) and ending on the twentieth (20th) Trading Day after the later of (x) the date of such Triggering Event is cured and (y) such holder’s receipt of a Triggering Event Notice (such ending date, the “Alternate Conversion Right Expiration Date”), and each such period, an “Alternate Conversion Right Period”), such holder may, at such holder’s option, by delivery of a Conversion Notice to the Company (the date of any such Conversion Notice, each an “Alternate Conversion Date”), convert all, or any number of Preferred Shares held by such holder into shares of Common Stock at the Alternate Conversion Price (each, an “Alternate Conversion”). Alternate Conversion Price means, with respect to any Alternate Conversion that price will be the lowest of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, and (ii) the greater of (x) the Floor Price and (y) 80% of the lowest VWAP of the Common Stock during the five (5) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice (such period, the “Alternate Conversion Measuring Period”).

At any time, the Company has the right to redeem in cash all or part of the Preferred Shares then outstanding at a price (the “Company Optional Redemption Price”) equal to 125% of the greater of (i) the Conversion Amount being redeemed and (ii) the product of (1) the Conversion Rate with respect to the Conversion Amount being redeemed multiplied by (2) the greatest closing sale price of the Company’s Common Stock on any Trading Day during the period commencing on the date immediately preceding the date the Company notifies the holders of its elections to redeem and the date the Company makes the entire payment required. Upon the occurrence of a Bankruptcy Triggering Event, the Company will immediately redeem, in cash, each of the Preferred Shares then outstanding at a redemption price equal to the greater of (i) the product of (A) the Conversion Amount to be redeemed multiplied by (B) 125% and (ii) the product of (X) the Conversion Rate with respect to the Conversion Amount in effect immediately following the date of initial public announcement of such Bankruptcy Triggering Event multiplied by (y) the product of (1) 125% multiplied by (2) the greatest closing sale price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Bankruptcy Triggering Event and ending on the date the Company pays the entire payment required.

In no event may any Preferred Shares be converted (or Warrants be exercised) and shares of Common Stock be issued to any holder if after giving effect to the issuance of shares of Common Stock upon such conversion of the Preferred Shares (or exercise of the Warrants), the holder (together with its affiliates, if any) would beneficially own more than 4.99% of the outstanding shares of Common Stock, which we refer to herein as the “PIPE Blocker”. The PIPE Blocker may be raised or lowered to any percentage not in excess of 9.99% at the option of the applicable holder of the Preferred Shares (or Warrants), except that any raise will only be effective upon 61-days’ prior notice to the Company.

On July 16, 2025, the Company exercised its right, pursuant to Section 8(g) of the Series C Certificate of Designation, to lower the conversion price of the Series C Preferred Stock (each, a “Conversion Price Reduction”) to $3.50 until July 31, 2025. On July 16, 2025, all holders of Series C Preferred Stock approved, by written consent, the Conversion Price Reduction.

ELOC

On October 2, 2024, the Company entered into a Common Stock ELOC Purchase Agreement relating to a Committed Equity Facility with an institutional investor (the “ELOC Purchaser”), whereby the Company may offer and sell, from time to time at its sole discretion, and whereby the ELOC Purchaser has committed to purchase, up to $25.0 million of the Company’s newly issued Common Stock, subject to certain limitations. Concurrently with entering into the ELOC Purchase Agreement, the Company also entered into a registration rights agreement with the ELOC Purchaser, pursuant to which it agreed to provide the ELOC Purchaser with certain registration rights related to the shares issued under the ELOC Purchase Agreement (the “ELOC Registration Rights Agreement”). In no event will the Company issue to the Purchaser under the ELOC Purchase Agreement more than 19,512 shares of Common Stock, representing 19.99% of the total number of shares of Common Stock outstanding immediately prior to the execution of the Common Stock Purchase Agreement (the “Exchange Cap”), unless (i) the Company obtains the approval of the issuance of such shares by its stockholders in accordance with the applicable stock exchange rules or (ii) sales of Common Stock are made at a price equal to or in excess of the lower of (A) the closing price immediately preceding the delivery of the applicable notice to the Purchaser and (B) the average of the closing prices of the Common Stock for the five business days immediately preceding the delivery of such notice, such that the sales of such Common Stock to the Purchaser would not count toward the Exchange Cap because they are “at market” under applicable stock exchange rules.

The Company may not issue or sell any shares of Common Stock to the ELOC Purchaser under the Common Stock Purchase Agreement, if it would result in the ELOC Purchaser beneficially owning more than 4.99% of the outstanding shares of Common Stock (the “ELOC Blocker”). The ELOC Blocker may be raised or lowered to any other percentage not in excess of 9.99% at the option of the ELOC Purchaser, except that any raise will only be effective upon 61 days’ prior notice to the Company.

Keystone Notes Payable

During the six months ended June 30, 2025, the Company issued three subordinated promissory notes to Keystone Capital Partners, LLC, each with an original issue discount and payable upon the earlier of (i) receipt of sufficient proceeds from the Company’s Equity Line of Credit (“ELOC”) with the Investor or (ii) a specified maturity date. All notes are subordinated to the Company’s existing debt obligations to Veru Inc., do not initially bear interest, and are subject to a late charge of 15% per annum on any unpaid amounts past due.

• On February 12, 2025, the Company issued a note with an aggregate principal amount of $117,647, including an original issue discount of $17,647. The note matures on November 12, 2025, unless prepaid earlier upon receipt of sufficient capital from other securities offerings.
• On May 16, 2025, the Company issued a note with an aggregate principal amount of $294,118, including an original issue discount of $44,118. The note matures on February 16, 2026, subject to the same prepayment provisions.
• On June 5, 2025, the Company issued a note with an aggregate principal amount of $147,059, including an original issue discount of $22,059. The note matures on March 5, 2026, subject to the same prepayment provisions.
• On August 6, 2025, the Company issued a note with an aggregate principal amount of $117,647, including an original issue discount of $17,647. The note matures on March 6, 2026, subject to the same prepayment provisions

Certain Significant Relationships

We have entered into grant, license and collaboration arrangements with various third parties as summarized below. For further details regarding these and other agreements, see Notes 5 and 8 to each of our audited financial statements included in the Form 10-K and unaudited financial statements included elsewhere in this Report.

Laboratory Corporation of America

On March 23, 2023, Proteomedix entered into a license agreement with LabCorp pursuant to which LabCorp has the exclusive right to develop and commercialize Proclarix and other products developed by LabCorp using Proteomedix’s intellectual property covered by the license, in the United States (“Licensed Products”). In consideration for granting LabCorp an exclusive license, Proteomedix received an initial license fee in the mid-six figures upon signing of the contract. Additionally, Proteomedix is entitled to royalty payments between 5% and 10% on the net sales recognized by LabCorp of any Licensed Products plus milestone payments as follows:

• after the first sale of Proclarix as a laboratory developed test, LabCorp will pay an amount in the mid-six figures;
• after LabCorp achieves a certain amount in the low seven figures in net sales of the Licensed Products, LabCorp will pay Proteomedix an amount in the low seven figures; and
• after a certain amount in the mid-seven figures in net sales of Licensed Products, LabCorp will pay Proteomedix an amount in the low seven figures.

A total of $2.5 million in milestone payments are payable under the license agreement. An additional $0.5 million was paid to Proteomedix as an initial license fee in 2023.

LabCorp is wholly responsible for the cost, if any, of research, development and commercialization of Licensed Products in the United States but has the right to offset a portion of those costs against future royalty and milestone payments. Additionally, LabCorp may deduct royalties or other payments made to third parties related to the manufacture or sale of Licensed Products up to a maximum amount of any royalty payments due to Proteomedix.

The license agreement and related royalty payment provisions expire during 2038, which approximates the expiration of the last patent covered by the license agreement. LabCorp has the right to terminate the license agreement for any reason by providing 90 days written notice to Proteomedix. Either party may terminate the license agreement due to a material breach of the terms of the license agreement with 30 days’ notice, provided such breach is not cured within the foregoing 30-day period. Finally, Proteomedix may terminate the license agreement with 60 days’ notice in the event LabCorp fails to make any undisputed payment due, provided that LabCorp does not remit the payment within the foregoing 60-day period.

Components of Results of Operations

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist principally of commercialization activities, payroll, and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees for legal, consulting, accounting and tax services, information technology costs, costs incurred with respect to acquisitions and potential acquisitions, and other general operating expenses.

We anticipate that our selling, general and administrative expenses related to Proteomedix will decrease when compared to historical levels due to cost reduction efforts including headcount reductions.

Research and Development Expenses

Historically, substantially all of our research and development expenses consist of expenses incurred in connection with the development of our product candidates. These expenses historically have included fees paid to third parties to conduct certain research and development activities on our behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll, and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research and product development employees. We expense both internal and external research and development expenses as they are incurred.

We do not allocate our costs by product candidate, as a significant amount of research and development expenses include internal costs, such as payroll and other personnel expenses, laboratory supplies, and external costs, such as fees paid to third parties to conduct research and development activities on our behalf, that are not tracked by product candidate.

As discussed above, we have terminated the vaccine programs that substantially all of our research and development historically related to. We do not anticipate incurring significant research and development expenses in the near future, unless we are able to resume such activities. Predicting the timing or cost to complete our clinical programs for future product candidates, or validation of our commercial manufacturing and supply processes is difficult and delays may occur because of many factors, including factors outside of our control, such as regulatory approvals. Furthermore, we are unable to predict when or if our future product candidates will receive regulatory approval with any certainty.

Other Income (Expense)

Other income (expense) is comprised of interest expense on notes payable, the change in fair value of financial instruments that are recorded as liabilities, which includes the related party subscription agreement liability and the contingent warrant liability, and other financing-related costs.

Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

The following table summarizes our statements of operations for the periods indicated:

Revenue, Cost of Revenue, and Gross Margin

For the three months ended June 30, 2025, the Company had approximately $0.1 million of revenue, which was attributable to sale of products generated by Proteomedix. Cost of revenue of approximately $0.04 million was mostly attributable to costs incurred on Proteomedix revenue. For the three months ended June 30, 2024, the Company had approximately $0.7 million of revenue, which was attributable to sales and development services generated by Proteomedix. The cost of revenue of approximately $0.6 million is attributable to costs incurred on Proteomedix revenue including amortization of the product rights intangible asset of approximately $0.2 million, in addition to approximately $0.4 million related to the full impairment of ENTADFI inventory.

Selling, General and Administrative Expenses

For the three months ended June 30, 2025, selling, general and administrative expenses decreased by approximately $0.7 million compared to the same period in 2024. This decrease was primarily driven by a reduction of approximately $0.5 million in payroll-related expenses, reflecting cost-saving measures implemented in response to reduced liquidity during the current quarter. Additionally, miscellaneous selling, general and administrative expenses declined by approximately $0.2 million over the same period.

Research and Development Expenses

For the three months ended June 30, 2025 and 2024, there were no substantial research and development expenses. The lack of activity was primarily attributable to the Company’s decision to halt its vaccine programs and focus on commercialization activities, which occurred during the third quarter of 2023. This change in business strategy led to a halt in the Company’s clinical and other research activities.

Impairments

During the three months ended June 30, 2025, there was no impairment recorded related to the ENTADFI asset, as the asset had been fully impaired in the prior year. Specifically, an impairment charge of approximately $1.2 million was recognized during the same period in 2024, based on a valuation assessment conducted by an external specialist.

The Company recorded an impairment of goodwill related to the PMX acquisition during the three months ended June 30, 2025 totaling $0.6 million, as compared to an impairment of $10.3 million recognized for the same period last year in connection with the same acquisition.

Other Expense

Other expense during the three months ended June 30, 2025, decreased by approximately $0.2 million compared to the same period in 2024. The decrease was primarily attributable to a $0.2 million reduction in related party interest expense.

Income Tax Expense

The Company did not record any income tax benefit or expense during the three months ended June 30, 2025. For the same period in 2024, the Company recorded an income tax expense of approximately $0.05 million, related to foreign deferred income taxes recorded in connection with Proteomedix.

Comparison of the Six months Ended June 30, 2025 and 2024

The following table summarizes our statements of operations for the periods indicated:

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Revenue, Cost of Revenue, and Gross Margin

For the six months ended June 30, 2025, the Company had approximately $0.2 million of revenue, which was attributable to sale of products generated by Proteomedix. Cost of revenue of approximately $0.09 million was mostly attributable to costs incurred on Proteomedix revenue. For the six months ended June 30, 2024, the Company had approximately $1.4 million of revenue, which was attributable to sales and development services generated by Proteomedix. The cost of revenue of approximately $1.1 million is attributable to costs incurred on Proteomedix revenue including amortization of the product rights intangible asset of approximately $0.3 million, in addition to approximately $0.4 million related to the full impairment of ENTADFI inventory.

Selling, General and Administrative Expenses

For the six months ended June 30, 2025, selling, general and administrative expenses decreased by $2.8 million compared to the same period in 2024.

For the six months ended June 30, 2025, selling, general and administrative expenses decreased by approximately $2.8 million compared to the same period in 2024. The decrease primarily reflects a reduction of approximately $0.8 million in professional fees, including accounting, legal, and regulatory services, associated with the acquisition of Proteomedix in 2024. These costs were non-recurring and did not continue into 2025.

Additionally, the Proteomedix entity experienced a further reduction in professional fees of approximately $0.5 million, primarily due to transaction-related activities that occurred in early 2024 and were not repeated in the current year. Payroll-related expenses declined by approximately $0.8 million, and miscellaneous selling, general and administrative expenses decreased by approximately $0.7 million, both largely driven by cost containment efforts and reduced liquidity during the current period.

Research and Development Expenses

For the six months ended June 30, 2025 and 2024, there were no substantial research and development expenses. The lack of activity was primarily attributable to the Company’s decision to halt its vaccine programs and focus on commercialization activities, which occurred during the third quarter of 2023. This change in business strategy led to a halt in the Company’s clinical and other research activities.

Impairments

During the six months ended June 30, 2025, there was no impairment recorded related to the ENTADFI asset, as the asset had been fully impaired in the prior year. Specifically, an impairment charge of approximately $3.5 million was recognized during the same period in 2024, based on a valuation assessment conducted by an external specialist.

The Company recorded an impairment of goodwill related to the PMX acquisition during the six months ended June 30, 2025 totaling $11.5 million, as compared to an impairment of $15.5 million recognized for the same period last year in connection with the same acquisition.

Other Income (Expense)

Other income (expense) incurred during the six months ended June 30, 2025, increased by approximately $4.4 million compared to the same period in 2024. The increase was primarily driven by a $3.2 million increase in the change in fair value of the subscription agreement liability – related party, a $0.9 million gain on forgiveness of accounts payable related to the settlement of IQVIA balances, and a $0.4 million reduction in related party interest expense.

Income Tax Benefit

The Company did not record any income tax benefit or expense during the six months ended June 30, 2025. For the same period in 2024, the Company recorded an income tax benefit of approximately $0.07 million, related to foreign deferred income taxes recorded in connection with Proteomedix.

Liquidity and Capital Resources

The Company’s operating activities to date have been primarily devoted to seeking licenses, engaging in research and development activities, potential asset and business acquisitions, and expenditures associated with the now halted commercial launch of ENTADFI and the commercialization of Proclarix.

The Company has incurred substantial operating losses since inception and expects to continue to incur significant operating losses for the foreseeable future. As of June 30, 2025, the Company had cash of approximately $0.3 million, a working capital deficit of approximately $11.8 million and an accumulated deficit of approximately $128.1 million.

During the six months ended June 30, 2025, the Company used approximately $3.4 million in cash for operating activities. In addition, as of August 13, 2025, the Company’s cash balance was approximately $0.2 million. The Company’s current cash balance is not sufficient to fund its operations through twelve months after the date of these financials are issued. In December 2024, the Company began drawing on the Equity Financing Line of Credit (“ELOC”), which it entered into on October 2, 2024, referred herein as the ELOC Purchase Agreement. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of the issuance of these consolidated financial statements. The Company’s projections are also indicative that it is currently unable to meet its contractual commitments and obligations as they come due in the ordinary course of business. The Company will require significant additional capital in the short-term to fund its continuing operations, satisfy existing and future obligations and liabilities, including the remaining payments due for the acquisition of the ENTADFI assets, and funds needed to support the Company’s working capital needs and business activities. These business activities include the development and commercialization of Proclarix, and the development and commercialization of the Company’s future product candidates.

Management’s plans for funding the Company’s operations include generating product revenue from sales of Proclarix, which is still subject to further successful commercialization activities within certain jurisdictions. Management also intends to secure additional funding through equity or debt financings if available, and to utilize the ELOC entered into in October 2024 on an as-needed basis to assist with the paydown of the notes and to fund current operating needs, subject to certain restrictions and beneficial ownership constraints. However, based on the terms of the ELOC and the current maximum availability, management determined that the funds readily available under the ELOC will not be sufficient to sustain operations. In addition, there are currently no other commitments in place for further financing nor is there any assurance that such financing will be available to sustain its operations and expand commercialization of Proclarix. If the Company is unable to secure additional capital, it may be required to curtail any future clinical trials, development and/or commercialization of Proclarix and any future product candidates, and it may take additional measures to reduce expenses in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations, or, if it is required to, file for bankruptcy.

Because of historical and expected operating losses, net operating cash flow deficits, and debts due within one year, there is substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the consolidated financial statements, which is not alleviated by management’s plans. The consolidated financial statements have been prepared assuming the Company will continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty.

Future Funding Requirements

We anticipate that we will continue to incur significant expenses for the foreseeable future as we continue to commercialize Proclarix.

We will require significant amounts of additional capital in the short-term, to continue to fund our continuing operations, satisfy existing and future obligations and liabilities, including the remaining payments due under the Veru APA and other contracts entered into in support of the Company’s commercialization plans, in addition to funds needed to support our working capital needs and business activities, including the consummation of the Ocuvex transaction, development and commercialization of Proclarix, and the development and commercialization of our future product candidates. Until we can generate a sufficient amount of revenue from sales of Proclarix if at all, we expect to finance our future cash needs through public or private equity or debt financings, third-party funding and marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches. The future sale of equity or convertible debt securities may result in dilution to our stockholders, and, in the case of preferred equity securities or convertible debt, those securities could provide for rights, preferences or privileges senior to those of our common stock. Debt financing may subject us to covenant limitations or restrictions on our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable or acceptable to us. If we are unable to obtain adequate financing when needed or on terms favorable or acceptable to us, we may be forced to delay, reduce the scope of our business activities.

Our future capital requirements will depend on many factors, including:

• the costs of future commercialization activities, including product manufacturing, marketing, sales, royalties, and distribution, for Proclarix, and other products for which we may receive marketing approval;
• the timing, scope, progress, results and costs of research and development, testing, screening, manufacturing, preclinical and non-clinical studies and clinical trials;
• the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform field efficacy studies, require more studies than those that we currently expect or change their requirements regarding the data required to support a marketing application;
• our ability to maintain existing, and establish new, strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement;
• any product liability or other lawsuits related to our product;
• the expenses needed to attract, hire and retain skilled personnel;
• the revenue, if any, received from commercial sales of Proclarix, or other products for which we may have received or will receive marketing approval;
• the costs to establish, maintain, expand, enforce and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing our patents or other intellectual property rights; and
• the costs of operating as a public company.

A change in the outcome of any of these or other variables could significantly change the costs and timing associated with our business activities. Furthermore, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such change.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

Cash Flows from Operating Activities

Net cash used in operating activities for the six months ended June 30, 2025, was approximately $3.4 million, which primarily resulted from a net loss of approximately $10.9 million, a non-cash change in fair value of subscription liability of approximately $3.1 million, a gain on forgiveness of accounts payable of approximately $0.9 million, and net changes in our operating assets and liabilities of $0.1 million. These items were offset by several non-cash items, which primarily include impairment of goodwill of approximately $11.5 million.

Net cash used in operating activities for the six months ended June 30, 2024 was approximately $8.4 million, which primarily resulted from a net loss of approximately $25.4 million and a net change in our operating assets and liabilities of approximately $3.5 million, adjusted for the non-cash impairments of goodwill and ENTADFI of approximately $15.5 million and $3.5 million, respectively, depreciation and amortization expense of approximately $0.4 million, loss on impairment of ENTADFI inventory of approximately $0.4 million, in addition to noncash interest expense of approximately $0.8 million.

Cash Flows from Investing Activities

Net cash used in investing activities for the six months ended June 30, 2024 of approximately $22,000 resulted from purchases of property and equipment.

Cash Flows from Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2025, was approximately $3.6 million, and resulted primarily from proceeds of approximately $6.4 million from the purchase of common stock in connection with the ELOC and $0.5 million from the issuance of notes payable. These proceeds were offset by payments on notes payable of approximately $1.5 million and a payment of approximately $1.7 million related to redemption of the Series C Preferred Stock.

Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $4.9 million, and resulted primarily from the issuance of an aggregate of $5.7 million in notes payable, consisting of a $5.0 million debenture and $0.7 million for the financing for certain director and officer liability insurance policy premiums, offset by the payment of $0.4 million in financing costs and $0.4 million in payment on one of the notes payable.

Legal Contingencies

From time to time, we may become involved in legal proceedings arising from the ordinary course of business. We record a liability for such matters when it is probable that future losses will be incurred and that such losses can be reasonably estimated.

Off-Balance Sheet Arrangements

During the periods presented we did not have, nor do we currently have, any off-balance sheet arrangements as defined in the rules and regulations of the SEC.

Recent Accounting Pronouncements Not Yet Adopted

See Note 3 to our condensed consolidated financial statements included elsewhere in this Report for more information.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates on historical experience, known trends and events and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

As of June 30, 2025, there have been no material changes to our critical accounting policies and estimates from those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates,” included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on June 2, 2025.

JOBS Act

Section 107 of the Jumpstart Our Business Startups Act (“JOBS”) Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of new or revised accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period.

For as long as we remain an “emerging growth company” under the JOBS Act, we will, among other things:

• be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act, which requires that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting;
• be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and instead provide a reduced level of disclosure concerning executive compensation; and
• be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

We currently intend to take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an “emerging growth company,” including the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act. Among other things, this means that our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an emerging growth company, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected. Likewise, so long as we qualify as an emerging growth company, we may elect not to provide you with certain information, including certain financial information and certain information regarding compensation of our executive officers, that we would otherwise have been required to provide in filings we make with the SEC, which may make it more difficult for investors and securities analysts to evaluate our company. As a result, investor confidence in our company and the market price of our common stock may be materially and adversely affected.

Evaluation of Disclosure Controls and Procedures

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) that are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the appropriate time periods, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of our disclosure controls and procedures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer has concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2025, as a result of the material weaknesses described below.

Material Weaknesses in Internal Control Over Financial Reporting

A material weakness in internal control is a deficiency in internal control, or combination of control deficiencies, that adversely affects the Company’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance with GAAP such that there is more than a remote likelihood that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected.

We have identified the following internal control deficiencies, which we believe to be material weaknesses as of June 30, 2025:

• We did not maintain an effective control environment as there was an inadequate segregation of duties with respect to certain cash disbursements.
• We do not have an effective risk assessment process and effective monitoring of compliance with established accounting policies and procedures, and do not demonstrate a sufficient level of precision in the application of our controls.
• Our controls over the approval and reporting of expense payments were not designed and maintained to achieve the Company’s objectives.
• We do not yet have adequate internal controls in place for the timely identification, approval or reporting of related party transactions.”
• We have insufficient accounting resources to maintain adequate segregation of duties, maintain adequate controls over the approval and posting of journal entries, and to provide optimal levels of oversight in order to process financial information in a timely manner, analyze and account for complex, non-routine transactions, and prepare financial statements.
• The Company did not design, implement and maintain effective controls to ensure information technology (“IT”) policies and procedures set the tone at the top, to mitigate the risks to the achievement of IT objectives and ITGCs in the change management, logical security and computer operations domains. Specifically, the design and implementation of user authentication, user access privileges, data backup and data recovery controls as well as the monitoring controls of excessive user access and elevated privileged access to financial applications and data were not appropriately designed and maintained. In addition, these inadequate ITGC controls combined with the use of personal devices to conduct business, can lead to an IT control environment vulnerable to breaches and social engineering persuasion.

The above material weaknesses did not result in a material misstatement of our previously issued financial statements but could have resulted in material misstatements of our account balances or disclosures of our annual or interim financial statements that would not be prevented or detected. We have developed a remediation plan for these material weaknesses which is described below in Remediation of Material Weaknesses.

Remediation of Material Weaknesses

As of the date of this Quarterly Report on Form 10-Q, management is re-assessing the design of controls and modifying processes designed to improve our internal control over financial reporting and remediate the control deficiencies that led to the material weaknesses, including but not limited to (a) improving consistency in change management supported by standard operating procedures to govern the authorization, testing and approval of changes to information technology systems supporting all of the Company’s internal control processes, (b) enhancing design and implementation of our control environment, including the expansion of formal accounting and IT policies and procedures and financial reporting controls, (c) continuing to identify and design and implement effective review and approval controls, and (d) implementing appropriate timely review and oversight responsibilities within the accounting and financial reporting functions and ensuring appropriate segregation of duties.

We will consider the material weaknesses remediated after the applicable controls operate for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.

The process of designing and implementing an effective accounting and financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain an accounting and financial reporting system that is adequate to satisfy our reporting obligations. As we continue to evaluate and take actions to improve our internal control over financial reporting, we may determine to take additional actions to address control deficiencies or determine to modify certain of the remediation measures described above. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to remediate the material weakness we have identified or avoid potential future material weaknesses.

Inherent Limitation on the Effectiveness of Internal Control Processes

Our Interim Chief Executive Officer and Interim Chief Financial Officer does not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended June 30, 2025, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the following risk factors, you should carefully consider the risk factors included in our Annual Report on Form 10-K, filed with the SEC on June 2, 2025, as supplemented and updated by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we have filed or will file with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

Risks Related to our Financial Position and Need for Capital

We have incurred significant net losses since inception, have only generated minimal revenue, and anticipate that we will continue to incur substantial net losses for the foreseeable future and may never achieve profitability. Our stock is a highly speculative investment.

We are a commercial-stage biotechnology company that was incorporated in October 2018. Our net loss was $10.9 million for the six months ended June 30, 2025. As of June 30, 2025, we had an accumulated deficit of $128.1 million. We also generated negative operating cash flows of $3.4 million for the six months ended June 30, 2025.

We expect to continue to spend significant resources to commercialize our product. We expect to incur substantial and increasing operating losses over the next several years. As a result, our accumulated deficit will also increase significantly. Additionally, there can be no assurance that our current product or those that may be under development by us in the future will be commercially viable. If we are unable to achieve profitability or raise sufficient working capital, we may be unable to continue our operations.

There is substantial doubt about our ability to continue as a “going concern,” and we will require substantial additional funding to finance our long-term operations. If we are unable to raise additional capital when needed, we could be forced to delay, reduce or terminate our product or other operations.

The Company has incurred substantial operating losses since inception and expects to continue to incur significant operating losses for the foreseeable future. As of June 30, 2025, the Company had cash of approximately $0.3 million, a working capital deficit of approximately $11.8 million and an accumulated deficit of approximately $128.1 million. In addition, as of August 13, 2025, the Company’s cash balance was approximately $0.2 million, and the Company has approximately $8.7 million of debt due within the next 12 months.

We estimate, as of the date of this Report, that our current cash balance is not sufficient to fund operations through the end of August 2026. We believe that we will need to raise substantial additional capital to fund our continuing operations, satisfy existing and future obligations and liabilities, and otherwise support the Company’s working capital needs and business activities, including making the remaining payments to Veru and the commercialization of Proclarix, which is still subject to further successful development and commercialization activities within certain jurisdictions.

Management also intends to secure additional required funding through equity or debt financings if available. In December 2024, the Company began utilizing the ELOC entered into in October 2024 (see Note 8) on an as-needed basis to fund current operating needs, subject to certain restrictions and beneficial ownership constraints. However, based on the terms of the ELOC and the current maximum availability, management determined that the funds readily available under the ELOC will not be sufficient to sustain operations. In addition, there are currently no other commitments in place for further financing nor is there any assurance that such financing will be available to the Company on favorable terms, if at all. This creates significant uncertainty whether the Company will have the funds available to be able to sustain its operations and expand commercialization of Proclarix. If the Company is unable to secure additional capital, it may be required to curtail any future clinical trials, development and/or commercialization of future product candidates, and it may take additional measures to reduce expenses in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations, or, if its required to, file for bankruptcy.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year following the date of this Report. Our future capital requirements will depend on many factors, including:

• the costs of future development and commercialization activities, including product manufacturing, marketing, sales, royalties and distribution, for Proclarix, and other products for which we have received or will receive marketing approval;
• our ability to maintain existing, and establish new, strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty, or other payments due under any such agreement;
• any product liability or other lawsuits related to our product;
• the expenses needed to attract, hire, and retain skilled personnel;
• the revenue, if any, received from commercial sales of Proclarix or other products for which we may receive marketing approval;
• the costs to establish, maintain, expand, enforce, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending, and enforcing our patents or other intellectual property rights; and
• the costs of operating as a public company.

Our ability to raise additional funds will depend on financial, economic, and other factors, many of which are beyond our control. We cannot be certain that additional funding will be available on acceptable terms, or at all. We have no committed source of additional capital and if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may be forced to delay, reduce or terminate our business activities.

We owe a significant amount of money to Veru, which funds we do not have. Veru may take action against us to enforce its rights to payment in the future, which could have a material adverse effect on us and our operations.

Due to recent financial constraints, the Company may be unable to timely pay amounts due to Veru, from whom we purchased ENTADFI in April 2023. We may not have sufficient funds to pay amounts due to Veru in the near term, if at all, including but not limited to $10 million, $5 million of which was due on April 19, 2024 and is subject to certain forbearance terms and $5 million of which was due on June 30, 2025, and is subject to certain forbearance terms. In addition, on November 26, 2024, the Company and Veru entered into a waiver and amendment to the forbearance agreement, pursuant to which Veru agreed to waive the due date for payment of applicable Company cash receipt payments generated in October 2024 in consideration for an increase in payments to be made to Veru out of future financing and strategic transactions through June 30, 2025. In addition, On March 31, 2025, April 23, 2025, June 30, 2025 and July 31, 2025, Veru and the Company entered into waiver agreements, pursuant to which Veru agreed to waive and extend the date for payment of the Veru Notes. On August 7, 2025, Veru and the Company entered into the A&R September Veru Note, pursuant to which the principal amount owed to Veru under the September Veru Note was increased by $100,000 to an aggregate principal amount of $5.1 million, and the maturity date was amended to August 14, 2025. However, Veru may take future action against us, including filing legal proceedings against us seeking amounts due and interest accrued or attempting to terminate its relationship with us. If Veru were to take legal action against us, we may be forced to scale back our business plan and/or seek bankruptcy protection. We may be subject to litigation and damages for our failure to pay amounts due to Veru, and may be forced to pay interest and penalties, which funds we do not currently have.

In light of (i) the time and resources needed to continue pursuing commercialization of ENTADFI, and (ii) the Company’s cash runway and indebtedness, the Company has abandoned commercialization of ENTADFI and is in the process of destroying its inventory of the product.

We plan to seek funding to support our operations and to pay amounts due to Veru, through a combination of equity offerings, debt financing or other capital sources, including potential collaborations, licenses, sales, and other similar arrangements, which may not be available on favorable terms, if at all. The sale of additional equity or debt securities, if accomplished, may result in dilution to our stockholders. Furthermore, any revenue or financing proceeds that we are required to pay to Veru will detract from our ability to use such funds to support our operations.

Our current liabilities are significant, and if those to whom we owe accounts payable, such as Veru or other vendors, were to demand payment, we would be unable to pay.

As of June 30, 2025, we had total current liabilities of approximately $12.7 million, including accounts payable of approximately $2.6 million, accrued expenses of approximately $0.9 million, proceeds due to shareholders of $0.4 million, and approximately $8.7 million (net of discounts) related to the notes payable. As of the same date, we had cash of only $0.3 million. In light of (i) the time and resources needed to continue pursuing commercialization of ENTADFI, and (ii) the Company’s cash runway and indebtedness, the Company has abandoned commercialization of ENTADFI and is in the process of destroying its inventory of the product. We plan to seek funding to support our operations. We have also concurrently reduced our liabilities by entering into a settlement agreement, dated January 15, 2025, with IQVIA, Inc. concerning potential termination payments, whereby we recorded an adjustment of approximately ($0.9) million in accounts payable. However, the level of our current liabilities may make it more difficult for us to obtain adequate financing on favorable terms, if at all. If those to whom these payments are due were to demand immediate payment, as they are entitled to do, and we are not able to make the required payments, we would be subject to liability if our creditors chose to enforce their rights, which could result in our bankruptcy and insolvency. Under such a scenario, our assets would be distributed to our creditors leaving nothing to be distributed to our stockholders.

Risks Related to Pending Business Combination

Neither Onconetix nor Ocuvex can be sure if or when the Merger will be completed.

The consummation of the Merger is subject to the satisfaction or waiver of various conditions. Neither Onconetix nor Ocuvex can guarantee that the closing conditions set forth in the Merger Agreement will be satisfied. If Onconetix is unable to satisfy the closing conditions in Ocuvex’s favor or if other mutual closing conditions are not satisfied, Ocuvex will not be obligated to complete the Merger. Under certain circumstances, Onconetix would be required to pay Ocuvex a termination fee equal to the greater of (i) $250,000 and (ii) all costs and expenses incurred by Ocuvex in connection with the Merger Agreement and the Transactions, including, without limitation, all reasonable attorneys’ fees.

If the Merger is not completed, the Onconetix Board, in discharging its fiduciary obligations to Onconetix stockholders, will evaluate other strategic alternatives or financing options that may be available, which alternatives may not be as favorable to Onconetix stockholders as the Merger. Any future sale or merger, financing or other transaction may be subject to further stockholder approval. Onconetix may also be unable to find, evaluate or complete other strategic alternatives, which may have a materially adverse effect on Onconetix’s business.

Onconetix’s and Ocuvex’s efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, their respective businesses, which may materially adversely affect their results of operation and businesses. Uncertainty as to whether the Merger will be completed may affect Onconetix’s and Ocuvex’s ability to retain and motivate existing employees. A substantial amount of Onconetix’s and Ocuvex’s management’s and employees’ attention is being directed toward the completion of the Merger and thus is being diverted from their respective day-to-day operations. Uncertainty as to Onconetix’s and Ocuvex’s future could adversely affect their relationship with customers, collaborators, suppliers, vendors, regulators and other business partners. For example, customers, vendors, collaborators and other counterparties may defer decisions concerning working with Onconetix or Ocuvex, or seek to change existing business relationships with Onconetix or Ocuvex. Changes to, or termination of, existing business relationships could adversely affect Onconetix’s results of operations and financial condition, as well as the market price of Onconetix common stock. The adverse effects of the pendency of the Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.

Until the Merger is completed, the Merger Agreement restricts Ocuvex and Onconetix from taking specified actions without the consent of the other party, and requires them to operate in the ordinary course of business consistent with past practice. These restrictions may prevent Ocuvex and Onconetix from making appropriate changes to their respective businesses or pursuing attractive business opportunities that may arise prior to the completion of the Merger.

Failure to complete the Merger may result in Onconetix paying a termination fee to Ocuvex and could significantly harm the market price of the Onconetix common stock and negatively affect Onconetix’s future business and operations.

If the Merger is not completed and the Merger Agreement is terminated under certain circumstances, Onconetix may be required to pay Ocuvex a termination fee equal to the greater of (i) $250,000 and (ii) all costs and expenses incurred by Ocuvex in connection with the Merger Agreement and the Transactions, including, without limitation, all reasonable attorneys’ fees. Even if a termination fee is not payable in connection with a termination of the Merger Agreement, Onconetix will have incurred significant fees and expenses, which must be paid whether or not the Merger is completed. Further, if the Merger is not completed, it could significantly harm the market price of the Onconetix common stock.

In addition, if the Merger Agreement is terminated and Onconetix determines to seek another business combination, there can be no assurance that Onconetix will be able to find a partner and close an alternative transaction on terms that are as favorable as or more favorable to Onconetix than the terms set forth in the Merger Agreement.

The closing of the Merger is subject to approval by Onconetix stockholders and the Ocuvex stockholders. Failure to obtain these approvals would prevent the closing of the Merger.

The closing of the Merger is subject to certain approvals by the Onconetix stockholders and the Ocuvex stockholders. Failure to obtain the required stockholder approvals may result in a material delay in, or the abandonment of, the Merger. Any delay in completing the Merger may materially adversely affect the timing and benefits that are expected to be achieved from the Merger.

The Merger may be completed even though certain events occur prior to the Closing that materially and adversely affect Onconetix or Ocuvex.

The Merger Agreement provides that either Onconetix or Ocuvex can refuse to complete the Merger if (i) if there is a material breach of any of the representations or warranties of the other party set forth in the Merger Agreement or if the other party has failed to perform any covenant or agreement on the part of such party set forth in the Merger Agreement that has not been cured within 20 days or is incapable of being cured, subject to specified limitations, (ii) the failure of the Transactions to be consummated by the date that is six months after the Audit Delivery Date (as defined in the Merger Agreement), (iii) the imposition of a governmental order permanently enjoining or otherwise prohibiting the Transactions or (iv) the failure to obtain the required approval of Onconetix’s stockholders. However, certain events may occur that do not permit either party to refuse to complete the Merger, even if such events could be said to have a material adverse effect on Onconetix or Ocuvex, including, but not limited to:

• any changes in conditions generally affecting United States or global economic, business, regulatory conditions, including changes in United States or global securities, credit, financial, debt or other capital markets;
• general changes in national or international political conditions (including the imposition of or changes in international tariffs, sanctions, trade policies or disputes or any “trade war” and any cessation, outbreak or escalation of hostilities, any acts of war or terrorism or any other national or international calamity, crisis or emergency);
• acts of God, natural disasters, calamities, disease outbreaks or pandemics;
• any failure, in and of itself, by Ocuvex or any of its subsidiaries to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period;
• the execution and delivery of the Merger Agreement, the public announcement thereof, the pendency of the Merger Agreement, the impact thereof on the relationships of Ocuvex and its subsidiaries, with customers, suppliers or partners or the consummation of the Merger;
• any changes after the date of the Merger Agreement not announced prior to the date of the Merger Agreement in any applicable law or GAAP, including, in each case, the authoritative interpretation or enforcement thereof; or
• any action or omission taken by Ocuvex pursuant to the prior written request of Onconetix, subject to certain exceptions set forth in the Merger Agreement.

The market price of the combined company’s common stock following the Merger may decline as a result of the Merger.

The market price of the combined company’s common stock may decline as a result of the Merger for a number of reasons, including if:

• investors react negatively to the prospects of the combined company’s business and financial condition following the Merger;
• the effect of the Merger on the combined company’s business and prospects is not consistent with the expectations of financial or industry analysts; and/or
• the combined company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial or industry analysts.

Onconetix stockholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with or following the Merger.

If the combined company is unable to realize the strategic and financial benefits currently anticipated from the Merger, Onconetix stockholders will have experienced substantial dilution of their ownership interests in Onconetix without receiving the expected commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the expected strategic and financial benefits currently anticipated from the Merger.

During the pendency of the Merger, Onconetix may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Merger Agreement, which could adversely affect Onconetix’s business.

Covenants in the Merger Agreement impede the ability of Onconetix to enter into material transactions that are not in the ordinary course of business pending completion of the Merger. As a result, if the Merger is not completed, Onconetix may be at a disadvantage to its competitors during such period. In addition, while the Merger Agreement is in effect, Onconetix generally prohibited from soliciting, initiating, encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets, or other business combination with any third party, subject to certain exceptions relating to fiduciary duties. Any such transactions that are impeded or prohibited pursuant to these covenants could be favorable to Onconetix stockholders if consummated.

Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

The Merger Agreement contains “no-shop” restrictions on Onconetix’s ability to solicit, initiate, endorse, knowingly encourage or facilitate third party proposals relating to alternative transactions or to provide information to, or engage in discussions with, a third party in relation to an alternative transaction, subject to certain exceptions to permit the Onconetix Board to comply with its fiduciary duties. Before the Onconetix Board may change its recommendation to stockholders to adopt the Merger or terminate the Merger Agreement to accept a Parent Superior Proposal (as defined in the Merger Agreement), Onconetix must, among other things, provide Ocuvex with notice and matching rights. Upon the termination of the Merger Agreement, including in connection with a Parent Superior Proposal, Onconetix may be required to pay a termination fee.

These provisions could discourage a potential third party acquiror from considering or proposing an acquisition transaction, even if it were prepared to pay a higher price than what would be received in the Merger. These provisions might also result in a potential third party acquiror proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable.

If the Merger Agreement is terminated and Onconetix determines to seek another business combination, Onconetix may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger Agreement.

We expect to incur significant transaction costs in connection with the Merger.

We expect to incur a number of non-recurring costs associated with completing the Merger. These fees and costs have been, and will continue to be, substantial and, in many cases, will be borne by us whether or not the Merger is completed. A substantial majority of our non-recurring expenses will consist of transaction costs related to the Merger and include, among others, fees paid to financial, legal, accounting and other advisors. We will continue to assess the magnitude of these costs, and we may incur additional unanticipated costs. The costs described above and any unanticipated costs and expenses, many of which will be borne by us even if the Merger is not completed, could have an adverse effect on our financial condition and operating results.

Litigation relating to the Merger could require Onconetix or Ocuvex to incur significant costs and suffer management distraction, and could delay or enjoin the Merger.

Onconetix or Ocuvex could be subject to demands or litigation related to the Merger, whether or not the Merger is consummated. Such actions may create uncertainty relating to the Merger, or delay or enjoin the Merger, and responding to such demands could divert management time and resources. In addition, such demands or litigation could lead to a dissolution or bankruptcy of Onconetix if the costs associated with such demands or litigation are significant enough.

If the Merger is not completed, the Onconetix Board may decide to pursue a dissolution and liquidation of Onconetix. In such an event, the amount of cash available for distribution to its stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no assurance that the Merger will be completed. If the Merger is not completed, the Onconetix Board may decide to pursue a dissolution and liquidation of Onconetix. In such an event, the amount of cash available for distribution to Onconetix stockholders will depend heavily on the timing of such decision, as with the passage of time the amount of cash available for distribution will be reduced as Onconetix continues to fund its operations. In addition, if the Onconetix Board were to approve and recommend, and Onconetix stockholders were to approve, a dissolution and liquidation of Onconetix, Onconetix would be required under Delaware corporate law to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to Onconetix stockholders. As a result of this requirement, a portion of Onconetix’s remaining cash assets may need to be reserved pending the resolution of such obligations. In addition, Onconetix may be subject to litigation or other claims related to a dissolution and liquidation. If a dissolution and liquidation were pursued, the Onconetix Board, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of Onconetix common stock could lose all or a significant portion of their investment in the event of liquidation, dissolution or winding up of Onconetix.

Following the completion of the Merger, the combined company may issue additional securities.

Following the completion of the Merger, the combined company may issue additional securities (including equity securities) to finance its activities. If the combined company were to issue additional equity securities, the ownership interest of existing Onconetix and Ocuvex stockholders may be diluted and some or all of the combined company’s financial measures on a per share basis could be reduced. Moreover, as the combined company’s intention to issue additional equity securities becomes publicly known, the combined company’s share price may be materially adversely affected.