Core Viewpoint - Onconetix, Inc. and Ocuvex Therapeutics, Inc. have mutually terminated their merger agreement, deciding to pursue independent paths for the benefit of their stakeholders [1][2]. Company Summaries Onconetix, Inc. - Onconetix is a commercial-stage biotechnology company focused on innovative solutions for men's health and oncology [4]. - The company owns Proclarix®, an in vitro diagnostic test for prostate cancer, which is approved for sale in the European Union under the IVDR [4]. Ocuvex Therapeutics, Inc. - Ocuvex is dedicated to advancing ophthalmic science and improving patient outcomes through innovative research and product development [5]. - The company has received its New Jersey state pharmaceutical license and plans to launch Omlonti in the coming weeks [3].

Core Viewpoint - Onconetix, Inc. has announced a licensing agreement with Immunovia AB for the production of antibodies related to pancreatic cancer diagnostics, which is expected to enhance the early detection of pancreatic cancer through the PancreaSure test [1][2]. Group 1: Licensing Agreement Details - Proteomedix AG, a subsidiary of Onconetix, will provide Immunovia with master cells necessary for producing antibodies for three of the five biomarkers in the PancreaSure test [2]. - The agreement includes a license for key intellectual property related to the manufacturing of reagents for measuring these biomarkers, allowing Immunovia to purchase reagents directly from Proteomedix [2]. - Immunovia will pay a total of $700,000 to Proteomedix in 2025 and 2026, along with a 3% royalty on net sales of PancreaSure and other products using the licensed intellectual property from 2026 to 2032 [3]. Group 2: Company Focus and Products - Onconetix is focused on innovative solutions for men's health and oncology, with a particular emphasis on the early detection of prostate cancer through its Proclarix® test [4][5]. - Proclarix® is CE-certified and indicated for prostate cancer diagnosis in patients with specific clinical conditions, demonstrating reliability in detecting clinically significant prostate cancer [6].

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This report contains forward-looking statements, primarily in "Risk Factors" and "Management's Discussion and Analysis," reflecting current expectations and views of future events. Actual results may differ materially due to known and unknown risks and uncertainties - This report contains forward-looking statements, primarily in "Risk Factors" and "Management's Discussion and Analysis," reflecting current expectations and views of future events. Actual results may differ materially due to known and unknown risks and uncertainties[9](index=9&type=chunk)[11](index=11&type=chunk) - Forward-looking statements cover topics such as the Company's ability to approve the Merger, terms and timing of the Closing, expected benefits of the Merger, projected capitalization, management plans, operating expenses, potential adverse reactions to the Merger, business operations, relationships with third parties, competition, economic conditions, regulatory changes, projected financial position, cash burn rate, capital requirements, going concern ability, and commercialization of Proclarix[10](index=10&type=chunk)[13](index=13&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Onconetix's unaudited condensed consolidated financial statements and management's discussion and analysis for the period ended June 30, 2025 [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for Onconetix, Inc. for the period ended June 30, 2025, including balance sheets, statements of operations and comprehensive loss, statements of convertible preferred stock and stockholders' equity (deficit), and statements of cash flows, along with detailed notes explaining significant accounting policies, going concern issues, and specific financial line items [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show a decrease in total assets and liabilities, reflecting changes in goodwill and current obligations | Metric | June 30, 2025 | December 31, 2024 | Change | | :------------------------------------------------ | :------------ | :---------------- | :----- | | **ASSETS** | | | | | Total current assets | $930,531 | $950,267 | $(19,736) | | Goodwill | $18,123,296 | $27,048,973 | $(8,925,677) | | Total assets | $19,119,036 | $28,181,563 | $(9,062,527) | | **LIABILITIES & EQUITY** | | | | | Total current liabilities | $12,692,188 | $18,290,129 | $(5,597,941) | | Total liabilities | $12,765,832 | $18,571,008 | $(5,805,176) | | Series C Redeemable Preferred Stock | $443,443 | $1,067,928 | $(624,485) | | Total stockholders' equity | $5,909,761 | $8,542,627 | $(2,632,866) | | Total liabilities, convertible preferred stock, and stockholders' equity | $19,119,036 | $28,181,563 | $(9,062,527) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This statement details the company's revenue, expenses, and net loss for the three and six months ended June 30, 2025 and 2024 | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $106,494 | $704,848 | $208,124 | $1,405,281 | | Gross profit | $70,503 | $100,716 | $116,335 | $289,716 | | Total operating expenses | $2,005,921 | $13,715,735 | $14,622,582 | $24,986,725 | | Loss from operations | $(1,935,418) | $(13,615,019) | $(14,506,247) | $(24,697,009) | | Total other (expense) income | $(437,024) | $(640,917) | $3,587,920 | $(799,066) | | Net loss | $(2,372,442) | $(14,306,704) | $(10,918,327) | $(25,425,276) | | Net loss applicable to common stockholders | $(2,700,946) | $(14,306,704) | $(12,416,922) | $(25,425,276) | | Net loss per share, basic and diluted | $(4.76) | $(2,191.59) | $(31.67) | $(3,898.98) | | Total comprehensive loss | $(144,660) | $(14,230,110) | $(8,580,276) | $(30,185,148) | [Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) This statement outlines changes in equity components, including common stock, preferred stock, and accumulated deficit, over the reporting period - The statement details changes in stockholders' equity, including common stock, additional paid-in capital, treasury stock, accumulated deficit, and accumulated other comprehensive loss, reflecting transactions such as stock-based compensation, foreign currency translation adjustments, changes in pension benefit obligations, net loss, and issuance/redemption of preferred stock[21](index=21&type=chunk)[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(3,409,976) | $(8,431,591) | | Net cash provided by (used in) investing activities | $0 | $(22,284) | | Net cash provided by financing activities | $3,614,828 | $4,861,667 | | Effect of exchange rate changes on cash | $(567,837) | $(31,586) | | Net decrease in cash | $(362,985) | $(3,623,794) | | Cash, end of period | $283,515 | $930,541 | [Notes to Unaudited Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) These notes provide detailed explanations of significant accounting policies, financial statement line items, and other relevant disclosures [Note 1 — Organization and Basis of Presentation](index=10&type=section&id=Note%201%20%E2%80%94%20Organization%20and%20Basis%20of%20Presentation) This note describes the company's business, recent acquisitions, and significant corporate actions like reverse stock splits - Onconetix, Inc. (formerly Blue Water Biotech, Inc. and Blue Water Vaccines Inc.) is a commercial-stage biotechnology company focused on men's health and oncology. The company acquired Proteomedix AG and its diagnostic product Proclarix in December 2023, and ENTADFI in April 2023, though commercialization of ENTADFI has been abandoned due to resource constraints and indebtedness[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - The company underwent two reverse stock splits: one-for-forty (1:40) on September 24, 2024, and one-for-eighty-five (1:85) on June 13, 2025, retrospectively adjusted in financial statements[31](index=31&type=chunk)[32](index=32&type=chunk) [Note 2 — Going Concern and Management's Plans](index=11&type=section&id=Note%202%20%E2%80%94%20Going%20Concern%20and%20Management's%20Plans) This note addresses the company's liquidity challenges and management's strategies to secure future funding - As of June 30, 2025, Onconetix had **$0.3 million** in cash, a working capital deficit of **$11.8 million**, and an accumulated deficit of **$128.1 million**, having used **$3.4 million** in cash for operations in the first six months of 2025. The current cash balance is insufficient to fund operations for the next twelve months, raising substantial doubt about the company's ability to continue as a going concern[38](index=38&type=chunk) - Management plans to fund operations through Proclarix revenue, equity/debt financings, and an existing Equity Financing Line of Credit (ELOC), but the ELOC's current maximum availability is insufficient. There are no other financing commitments, creating significant uncertainty about sustaining operations and expanding Proclarix commercialization[39](index=39&type=chunk) [Note 3 — Summary of Significant Accounting Policies](index=12&type=section&id=Note%203%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements, including revenue recognition and fair value measurements - The company operates in one segment: commercial, as of June 30, 2025, and December 31, 2024[43](index=43&type=chunk) | Description | Total (June 30, 2025) | Level 1 | Level 2 | Level 3 | | :------------------------ | :-------------------- | :------ | :------ | :------ | | Contingent warrant liability | $53,113 | $0 | $0 | $53,113 | | **Total** | **$53,113** | **$0** | **$0** | **$53,113** | | | | | | | | Description | Total (Dec 31, 2024) | Level 1 | Level 2 | Level 3 | | :------------------------ | :-------------------- | :------ | :------ | :------ | | Contingent warrant liability | $43,089 | $0 | $0 | $43,089 | | Subscription agreement liability – related party | $4,123,000 | $0 | $0 | $4,123,000 | | **Total** | **$4,166,089** | **$0** | **$0** | **$4,166,089** | - Revenue is generated from Development Services (time and materials basis, recognized over time) and Product Sales (Proclarix, recognized upon transfer to customer). For the three months ended June 30, 2025, revenue was **$0.1 million**, primarily from product sales in the European Union. For the six months ended June 30, 2025, revenue was **$0.2 million**, also mainly from product sales in the European Union[52](index=52&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[58](index=58&type=chunk) [Note 4 — Balance Sheet Details](index=16&type=section&id=Note%204%20%E2%80%94%20Balance%20Sheet%20Details) This note provides detailed breakdowns of specific balance sheet accounts, including inventory, intangible assets, goodwill, and accrued expenses | Inventory Type | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Raw materials | $103,711 | $57,446 | | Finished goods | $49,361 | $6,633 | | **Total** | **$153,072** | **$64,079** | - Intangible assets from ENTADFI and Proteomedix acquisitions (customer relationships, product rights, trade name) were fully impaired during the year ended December 31, 2024, resulting in a zero balance. Goodwill impairment losses of **$0.6 million** and **$11.5 million** were recognized for the three and six months ended June 30, 2025, respectively, due to declines in stock price and market capitalization[66](index=66&type=chunk)[70](index=70&type=chunk) | Accrued Expense | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Accrued compensation | $62,743 | $186,956 | | Accrued research and development | $215,599 | $320,096 | | Accrued professional fees | $208,878 | $161,981 | | Accrued interest | $396,091 | $139,409 | | **Total** | **$894,986** | **$888,988** | [Note 5 — Significant Agreements](index=18&type=section&id=Note%205%20%E2%80%94%20Significant%20Agreements) This note describes key contractual agreements, including terminated service agreements and licensing arrangements for Proclarix - The company terminated a Master Services Agreement for commercialization services in October 2023, resulting in a reduced termination fee of **$0.9 million**, which was settled during the six months ended June 30, 2025, recognizing a **$0.9 million gain** on forgiveness of accounts payable[74](index=74&type=chunk) - Proteomedix has an exclusive license agreement with LabCorp for the development and commercialization of Proclarix in the U.S., entitling Proteomedix to royalty payments (**5-10% of net sales**) and up to **$2.5 million** in milestone payments. As of June 30, 2025, commercial sales by LabCorp have not commenced[75](index=75&type=chunk)[77](index=77&type=chunk)[80](index=80&type=chunk) [Note 6 — Notes Payable](index=19&type=section&id=Note%206%20%E2%80%94%20Notes%20Payable) This note details the company's various debt obligations, including notes to Veru and Keystone Capital Partners, and their terms - Onconetix has two non-interest-bearing notes payable to Veru, each for **$5.0 million**, with maturity dates extended multiple times, most recently to **August 14, 2025**. Interest accrues at **10% per annum** on unpaid principal balances[81](index=81&type=chunk)[84](index=84&type=chunk)[89](index=89&type=chunk)[91](index=91&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[100](index=100&type=chunk) - A **$5.0 million** non-convertible debenture issued to a related party (PMX Investor) in January 2024 was converted into common stock and pre-funded warrants on September 24, 2024, with no outstanding balance as of December 31, 2024[101](index=101&type=chunk)[105](index=105&type=chunk) - During the six months ended June 30, 2025, the Company obtained financing for D&O insurance premiums totaling approximately **$0.5 million** at **7.25% annual interest**, resulting in a **$0.2 million** insurance financing note payable[107](index=107&type=chunk)[108](index=108&type=chunk) - The Company issued three subordinated promissory notes to Keystone Capital Partners, LLC during the six months ended June 30, 2025, with original issue discounts, payable upon receipt of ELOC proceeds or specified maturity dates (November 2025, February 2026, March 2026)[110](index=110&type=chunk)[115](index=115&type=chunk) [Note 7 — Subscription Agreement](index=23&type=section&id=Note%207%20%E2%80%94%20Subscription%20Agreement) This note explains the subscription agreement with a related party, including the make-whole provision and its settlement - A subscription agreement with a related party (PMX Investor) for **5,882 units** (common stock and pre-funded warrants) closed on September 24, 2024. A make-whole provision, which required additional share issuance if the 270-day volume weighted average price was below **$850**, expired and was settled on June 24, 2025, resulting in the issuance of **241,514 common shares**[111](index=111&type=chunk)[112](index=112&type=chunk) - The subscription agreement was accounted for as a liability, with its fair value changing by approximately **$3.1 million** for the six months ended June 30, 2025, and settling to **$0** as of June 30, 2025[113](index=113&type=chunk) [Note 8 — Convertible Preferred Stock and Stockholders' Equity](index=24&type=section&id=Note%208%20%E2%80%94%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity) This note details the company's capital structure, including authorized shares, preferred stock conversions, and the Equity Line of Credit - The Company is authorized to issue **250,000,000 shares** of common stock and **10,000,000 shares** of preferred stock, both with a par value of **$0.00001**[117](index=117&type=chunk) - All **3,000 Series A Convertible Preferred Stock shares** were converted into **1,679 common shares** on September 24, 2024. All **2,696,729 Series B Convertible Preferred Stock shares** were converted into **79,315 common shares** on September 24, 2024, following stockholder approval[121](index=121&type=chunk)[125](index=125&type=chunk) - As of June 30, 2025, **2,130 shares of Series C Preferred Stock** remain outstanding with a carrying value of **$0.44 million**, after redemptions of **$1.71 million** during the six months ended June 30, 2025. These shares are accounted for as mezzanine equity due to a contingent redemption feature tied to ELOC sales[131](index=131&type=chunk)[136](index=136&type=chunk) - The Company entered into an Equity Line of Credit (ELOC) Purchase Agreement on October 2, 2024, allowing it to sell up to **$25.0 million** of common stock to an institutional investor, with **30% of gross proceeds** applied to Series C Preferred Stock redemption. During the six months ended June 30, 2025, the Company received **$6.4 million** under the ELOC[135](index=135&type=chunk)[138](index=138&type=chunk) | Stock-Based Compensation Expense | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Selling, general and administrative | $30,982 | $42,663 | $60,238 | $96,449 | | Research and development | $0 | $(43,438) | $0 | $(44,574) | | **Total** | **$30,982** | **$(775)** | **$60,238** | **$51,875** | [Note 9 — Commitments and Contingencies](index=29&type=section&id=Note%209%20%E2%80%94%20Commitments%20and%20Contingencies) This note outlines the company's lease obligations and confirms the absence of material legal proceedings - Proteomedix amended its office and lab lease in April 2024, then partially terminated it in May 2025, reducing leased premises. As of June 30, 2025, remaining leases resulted in a right-of-use asset and lease liability of approximately **$21,400**[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - The Company is not currently a party to any material legal proceedings and has no further obligations pertaining to Registration Rights Agreements from prior private placements as of June 30, 2025[165](index=165&type=chunk)[167](index=167&type=chunk) [Note 10 — Related Party Transactions](index=30&type=section&id=Note%2010%20%E2%80%94%20Related%20Party%20Transactions) This note discloses transactions with related parties, including a subscription agreement and consulting services from a board member - The Company entered into a subscription agreement with the PMX Investor (a **5% stockholder**) and issued a **$5.0 million** non-convertible debenture, which was later settled through the issuance of shares[169](index=169&type=chunk) - Dr. Thomas Meier, a board member, provides consulting services to Proteomedix through an affiliated firm, entitling him to **10% of success fees**. No related expenses were recorded in Q2 2025[170](index=170&type=chunk) [Note 11 — Income Taxes](index=31&type=section&id=Note%2011%20%E2%80%94%20Income%20Taxes) This note explains the company's income tax position, including net operating losses and valuation allowances - No income tax provision or benefit was recorded for the three and six months ended June 30, 2025. For the same periods in 2024, an income tax expense of **$(51,000)** and a benefit of **$71,000** were recorded, respectively, related to foreign deferred taxes from the Proteomedix acquisition[174](index=174&type=chunk) - The Company has incurred net operating losses and recorded a full valuation allowance against its U.S. deferred tax assets due to uncertainty of realization. All deferred tax liabilities related to intangibles were reversed in 2024[175](index=175&type=chunk) [Note 12 — Net Loss Per Share](index=31&type=section&id=Note%2012%20%E2%80%94%20Net%20Loss%20Per%20Share) This note details the calculation of basic and diluted net loss per share, including excluded securities - Basic net loss per share is calculated by dividing net loss applicable to common shares by the weighted average number of common shares outstanding, including pre-funded warrants. The two-class method is used for participating securities[177](index=177&type=chunk)[178](index=178&type=chunk) | Securities Excluded from Diluted Shares | As of June 30, 2025 | As of June 30, 2024 | | :-------------------------------------- | :------------------ | :------------------ | | Options to purchase shares of common stock | 162 | 332 | | Warrants | 13,818 | 2,323 | | Unvested shares of restricted stock | 231 | 31 | | Common stock issuable upon conversion of Series A Preferred Stock | 0 | 1,679 | | Common stock issuable upon conversion of Series C Redeemable Preferred Stock | 399,587 | 0 | | **Total** | **413,798** | **4,365** | [Note 13 — Defined Benefit Plan](index=32&type=section&id=Note%2013%20%E2%80%94%20Defined%20Benefit%20Plan) This note provides information on Proteomedix's defined benefit pension plan, including actuarial assumptions and funded status - Proteomedix sponsors a defined benefit pension plan (Swiss Plan) for eligible employees. Significant actuarial assumptions for June 30, 2025, include a discount rate of **1.25%**, expected long-term rate of return on plan assets of **1.25%**, and a compensation increase rate of **1.50%**[181](index=181&type=chunk) | Net Periodic Benefit Cost Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Service cost | $24,436 | $23,794 | $47,164 | $48,444 | | Interest cost | $3,451 | $7,293 | $9,443 | $14,851 | | Expected return on plan assets | $(5,695) | $409 | $(10,990) | $(23,086) | | Amortization of net (gain) | $(7,840) | $269 | $(15,131) | $(15,177) | | Settlement gains | $(487,485) | $0 | $(510,947) | $0 | | **Total** | **$(473,133)** | **$31,765** | **$(480,461)** | **$25,032** | | Funded Status | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Projected benefit obligation | $831,242 | $2,593,360 | | Fair value of plan assets | $757,598 | $2,312,481 | | **Overfunded (underfunded) status** | **$(73,644)** | **$(280,879)** | [Note 14 – Segment Information](index=34&type=section&id=Note%2014%20%E2%80%93%20Segment%20Information) This note clarifies that the company operates as a single commercial segment and provides revenue breakdown by geographic region - The Company operates and reports financial results as a single business segment, "commercial," consistent with how the CEO (Chief Operating Decision Maker) evaluates performance and allocates resources[190](index=190&type=chunk) | Geographic Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $0 | $0 | $0 | $65,522 | | United Kingdom | $2,281 | $0 | $9,096 | $10,666 | | Switzerland | $104,213 | $704,848 | $199,028 | $1,329,093 | | **Total Revenue** | **$106,494** | **$704,848** | **$208,124** | **$1,405,281** | [Note 15 — Subsequent Events](index=35&type=section&id=Note%2015%20%E2%80%94%20Subsequent%20Events) This note discloses significant events occurring after the reporting period, including the merger agreement with Ocuvex and recent financing activities - On July 16, 2025, Onconetix entered into a Merger Agreement with Ocuvex Therapeutics, Inc., where Ocuvex will become a wholly-owned subsidiary. Post-closing, Ocuvex stockholders are anticipated to own **90%** of the combined company, and pre-closing Onconetix stockholders **10%**, subject to adjustments[193](index=193&type=chunk)[195](index=195&type=chunk) - The Merger is subject to customary conditions, including stockholder approvals, accuracy of representations, compliance with covenants, Nasdaq listing approval, and an effective registration statement. Ocuvex's closing is also conditional on restructuring Onconetix's debt and the merger qualifying as a tax-free reorganization[199](index=199&type=chunk)[202](index=202&type=chunk) - On July 16, 2025, Onconetix lowered the conversion price of Series C preferred stock to **$3.50**. As of August 13, 2025, **1,920 Series C shares** had been converted into **547,051 common shares** for approximately **$1.9 million**[205](index=205&type=chunk) - On August 6, 2025, the Company issued a **$117,647 promissory note** to Keystone Capital Partners, LLC, due March 6, 2026, or earlier upon sufficient ELOC proceeds. On August 7, 2025, the September Veru Note was amended, increasing the principal by **$100,000** to **$5.1 million** and setting the maturity date to **August 14, 2025**[206](index=206&type=chunk)[207](index=207&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on Onconetix's financial condition and operational results for the periods ended June 30, 2025, highlighting the company's strategic shift to commercializing Proclarix, the abandonment of ENTADFI, ongoing liquidity challenges, and the proposed merger with Ocuvex Therapeutics. It also details revenue, expense, and cash flow trends, along with critical accounting policies and future funding requirements [Overview](index=37&type=section&id=Overview) This overview introduces Onconetix's business focus on Proclarix, the abandonment of ENTADFI, and the proposed merger with Ocuvex Therapeutics - Onconetix is a commercial-stage biotechnology company focused on men's health and oncology, primarily through its Proclarix diagnostic product for prostate cancer, approved in the EU and anticipated for U.S. marketing via LabCorp[210](index=210&type=chunk)[213](index=213&type=chunk) - The company has abandoned commercialization of ENTADFI due to resource constraints and indebtedness, fully impairing its assets by June 30, 2024, and is now focused solely on Proclarix[211](index=211&type=chunk)[212](index=212&type=chunk)[217](index=217&type=chunk) - On July 16, 2025, Onconetix entered into a Merger Agreement with Ocuvex Therapeutics, Inc., where Ocuvex stockholders are expected to own **90%** of the combined company post-closing, and Onconetix stockholders **10%**[219](index=219&type=chunk)[222](index=222&type=chunk) - On June 13, 2025, the Company effected a **one-for-eighty-five (1:85) reverse stock split**, retrospectively adjusting all common stock and share-based awards[229](index=229&type=chunk) [Components of Results of Operations](index=44&type=section&id=Components%20of%20Results%20of%20Operations) This section defines the key categories of expenses and other income/expense that impact the company's financial performance - Selling, general, and administrative (SG&A) expenses include commercialization activities, payroll, professional fees, and acquisition-related costs, and are anticipated to decrease due to cost reduction efforts[256](index=256&type=chunk)[257](index=257&type=chunk) - Research and development (R&D) expenses historically covered product candidate development, but the company halted vaccine programs in Q3 2023 and does not anticipate significant R&D expenses in the near future[258](index=258&type=chunk)[260](index=260&type=chunk) - Other income (expense) comprises interest expense on notes payable, changes in fair value of financial instruments (subscription agreement liability, contingent warrant liability), and other financing-related costs[261](index=261&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance by comparing revenue, expenses, and net loss across different reporting periods [Comparison of the Three Months Ended June 30, 2025 and 2024](index=45&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the company's financial performance for the second quarter of 2025 against the same period in 2024 | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | $ Change | % Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :------- | :------- | | Revenue | $106,494 | $704,848 | $(598,354) | (84.9)% | | Cost of revenue | $35,991 | $604,132 | $(568,141) | (94.0)% | | Gross profit | $70,503 | $100,716 | $(30,213) | (30.0)% | | Selling, general and administrative | $1,523,591 | $2,221,275 | $(697,684) | (31.4)% | | Research and development | $(111,670) | $(3,680) | $(107,990) | (2934.5)% | | Impairment of ENTADFI assets | $0 | $1,237,140 | $(1,237,140) | (100.0)% | | Impairment of goodwill | $594,000 | $10,261,000 | $(9,667,000) | (94.2)% | | Loss from operations | $(1,935,418) | $(13,615,019) | $11,679,601 | 85.8% | | Total other expense | $(437,024) | $(640,917) | $203,893 | 31.8% | | Net loss | $(2,372,442) | $(14,306,704) | $11,934,262 | (83.4)% | - Revenue decreased by **84.9%** to **$0.1 million**, primarily from Proteomedix product sales, while cost of revenue decreased by **94.0%** due to lower sales and the prior year's ENTADFI inventory impairment[263](index=263&type=chunk) - Selling, general and administrative expenses decreased by **$0.7 million (31.4%)** due to a **$0.5 million** reduction in payroll-related expenses and a **$0.2 million** decline in miscellaneous expenses, reflecting cost-saving measures[264](index=264&type=chunk) - Goodwill impairment decreased significantly to **$0.6 million** in Q2 2025 from **$10.3 million** in Q2 2024[267](index=267&type=chunk) [Comparison of the Six months Ended June 30, 2025 and 2024](index=46&type=section&id=Comparison%20of%20the%20Six%20months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the company's financial performance for the first half of 2025 against the same period in 2024 | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | $ Change | % Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :------- | :------- | | Revenue | $208,124 | $1,405,281 | $(1,197,157) | (85.2)% | | Cost of revenue | $91,789 | $1,115,565 | $(1,023,776) | (91.8)% | | Gross profit | $116,335 | $289,716 | $(173,381) | (59.8)% | | Selling, general and administrative | $3,197,797 | $5,957,725 | $(2,759,928) | (46.3)% | | Research and development | $(87,215) | $45,284 | $(132,499) | (292.6)% | | Impairment of ENTADFI assets | $0 | $3,530,716 | $(3,530,716) | (100.0)% | | Impairment of goodwill | $11,512,000 | $15,453,000 | $(3,941,000) | (25.5)% | | Loss from operations | $(14,506,247) | $(24,697,009) | $10,190,762 | 41.3% | | Total other income (expense) | $3,587,920 | $(799,066) | $4,386,986 | 549.0% | | Net loss | $(10,918,327) | $(25,425,276) | $14,506,949 | 57.1% | - Revenue for the six months ended June 30, 2025, was **$0.2 million**, down **85.2%** from **$1.4 million** in 2024, primarily from Proteomedix product sales. Cost of revenue decreased by **91.8%**[271](index=271&type=chunk) - Selling, general and administrative expenses decreased by **$2.8 million (46.3%)**, driven by a **$0.8 million** reduction in professional fees related to the Proteomedix acquisition, a **$0.5 million** reduction in Proteomedix-specific professional fees, and an **$0.8 million** decrease in payroll-related expenses[273](index=273&type=chunk)[274](index=274&type=chunk) - Other income (expense) increased by **$4.4 million**, primarily due to a **$3.2 million** increase in the fair value of the subscription agreement liability and a **$0.9 million gain** on forgiveness of accounts payable[278](index=278&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's current cash position, working capital, and ability to meet short-term and long-term financial obligations - As of June 30, 2025, the Company had **$0.3 million** in cash, a working capital deficit of **$11.8 million**, and an accumulated deficit of **$128.1 million**. Cash used in operating activities for the six months ended June 30, 2025, was **$3.4 million**[281](index=281&type=chunk)[282](index=282&type=chunk) - The current cash balance is insufficient to fund operations for the next twelve months, raising substantial doubt about the Company's ability to continue as a going concern. Management plans to seek additional funding through Proclarix revenue, equity/debt financings, and the ELOC, but the ELOC's current availability is insufficient[282](index=282&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) [Future Funding Requirements](index=49&type=section&id=Future%20Funding%20Requirements) This section outlines the anticipated capital needs for commercialization, operations, and debt obligations, and factors influencing funding - Onconetix anticipates significant future expenses for Proclarix commercialization and will require substantial additional capital in the short-term to fund operations, satisfy obligations (including Veru payments), and support business activities[285](index=285&type=chunk)[286](index=286&type=chunk) - Future funding will depend on factors such as commercialization costs, R&D timing and costs, regulatory approvals, strategic collaborations, potential lawsuits, personnel expenses, Proclarix revenue, and intellectual property costs[287](index=287&type=chunk)[288](index=288&type=chunk) [Cash Flows](index=50&type=section&id=Cash%20Flows) This section analyzes the changes in cash from operating, investing, and financing activities for the six-month periods | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(3,409,976) | $(8,431,591) | | Net cash provided by (used in) investing activities | $0 | $(22,284) | | Net cash provided by financing activities | $3,614,828 | $4,861,667 | | Net decrease in cash | $(362,985) | $(3,623,794) | - Net cash used in operating activities decreased from **$8.4 million** in H1 2024 to **$3.4 million** in H1 2025, primarily due to a lower net loss and significant non-cash adjustments like goodwill impairment and changes in subscription liability fair value[290](index=290&type=chunk)[291](index=291&type=chunk) - Net cash provided by financing activities was **$3.6 million** in H1 2025, mainly from **$6.4 million** in ELOC proceeds and **$0.5 million** from notes payable, offset by **$1.5 million** in note payments and **$1.7 million** in Series C Preferred Stock redemptions[293](index=293&type=chunk) [Legal Contingencies](index=50&type=section&id=Legal%20Contingencies) This section describes the company's policy for recording liabilities related to legal matters - The Company records a liability for legal matters when future losses are probable and estimable[295](index=295&type=chunk) [Off-Balance Sheet Arrangements](index=50&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any off-balance sheet arrangements during the reporting periods - The Company did not have any off-balance sheet arrangements during the periods presented[296](index=296&type=chunk) [Recent Accounting Pronouncements Not Yet Adopted](index=50&type=section&id=Recent%20Accounting%20Pronouncements%20Not%20Yet%20Adopted) This section states that no new accounting pronouncements significantly affect the financial statements - There were no new accounting pronouncements issued since the Company's 2024 10-K filing that would significantly affect the condensed consolidated financial statements[62](index=62&type=chunk)[297](index=297&type=chunk) [Critical Accounting Policies and Estimates](index=51&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the key accounting policies and estimates requiring significant management judgment in financial reporting - The preparation of financial statements requires management to make estimates and assumptions, with significant estimates relating to acquisitions, inventory valuation, intangible asset useful life and impairment, pension benefit obligations, related party subscription agreement liability, notes payable, and income taxes[42](index=42&type=chunk)[298](index=298&type=chunk) - As of June 30, 2025, there have been no material changes to the critical accounting policies and estimates from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[299](index=299&type=chunk) [JOBS Act](index=51&type=section&id=JOBS%20Act) This section explains the company's status as an emerging growth company and the associated regulatory benefits under the JOBS Act - As an "emerging growth company" under the JOBS Act, Onconetix has elected to use the extended transition period for new accounting standards and benefits from reduced regulatory and reporting requirements, including exemptions from Section 404(b) of Sarbanes-Oxley and detailed executive compensation disclosures[300](index=300&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, Onconetix is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Onconetix is exempt from providing quantitative and qualitative disclosures about market risk[303](index=303&type=chunk) [Item 4. Controls and Procedures.](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that Onconetix's disclosure controls and procedures were not effective as of June 30, 2025, due to identified material weaknesses in internal control over financial reporting, including inadequate segregation of duties, ineffective risk assessment, and insufficient accounting resources. Remediation efforts are underway to address these deficiencies [Evaluation of Disclosure Controls and Procedures](index=52&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section presents management's conclusion on the effectiveness of the company's disclosure controls and procedures - Management, with CEO and CFO participation, concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses[304](index=304&type=chunk) [Material Weaknesses in Internal Control Over Financial Reporting](index=52&type=section&id=Material%20Weaknesses%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section details the specific deficiencies identified in the company's internal control over financial reporting - Identified material weaknesses include inadequate segregation of duties for cash disbursements, ineffective risk assessment and monitoring of accounting policies, insufficient controls over expense payment approval and reporting, inadequate internal controls for timely identification/approval/reporting of related party transactions, insufficient accounting resources, and ineffective IT general controls (user authentication, access privileges, data backup/recovery, monitoring)[306](index=306&type=chunk)[307](index=307&type=chunk) [Remediation of Material Weaknesses](index=53&type=section&id=Remediation%20of%20Material%20Weaknesses) This section outlines management's plans and ongoing efforts to address and correct the identified material weaknesses - Management is reassessing and modifying controls to remediate material weaknesses, including improving change management, enhancing the control environment with formal policies, designing and implementing effective review/approval controls, and ensuring appropriate segregation of duties[308](index=308&type=chunk) [Inherent Limitation on the Effectiveness of Internal Control Processes](index=53&type=section&id=Inherent%20Limitation%20on%20the%20Effectiveness%20of%20Internal%20Control%20Processes) This section acknowledges that internal control systems provide reasonable, but not absolute, assurance and are subject to inherent limitations - The Interim CEO and CFO acknowledge that control systems provide only reasonable assurance, not absolute, and are subject to inherent limitations such as faulty judgments, simple errors, circumvention by individual acts or collusion, and management override[311](index=311&type=chunk) [Changes in Internal Control over Financial Reporting](index=53&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section confirms no material changes to internal control over financial reporting during the quarter ended June 30, 2025 - There were no changes in internal control over financial reporting during the fiscal quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[312](index=312&type=chunk) [PART II. OTHER INFORMATION](index=54&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) Onconetix is not currently subject to any material legal proceedings, nor is it aware of any pending or threatened material legal proceedings against the company or its officers/directors - Onconetix is not currently involved in any material legal proceedings, nor is it aware of any threatened against the company or its officers/directors[314](index=314&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks, including substantial doubt about Onconetix's ability to continue as a going concern due to recurring losses and insufficient capital, significant debt obligations to Veru, and various risks associated with the pending merger with Ocuvex Therapeutics, such as completion uncertainty, potential disruptions, and dilution for existing stockholders [Risks Related to our Financial Position and Need for Capital](index=54&type=section&id=Risks%20Related%20to%20our%20Financial%20Position%20and%20Need%20for%20Capital) This section details financial risks, including recurring losses, going concern issues, significant debt, and insufficient liquidity - Onconetix has incurred significant net losses (**$10.9 million** for H1 2025) and an accumulated deficit of **$128.1 million** as of June 30, 2025, with negative operating cash flows, indicating a highly speculative investment[316](index=316&type=chunk) - There is substantial doubt about the Company's ability to continue as a going concern, with only **$0.3 million** cash as of June 30, 2025, and **$8.7 million** in debt due within 12 months. Additional capital is required to fund operations and commercialize Proclarix[318](index=318&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk) - The Company owes a significant amount to Veru (totaling **$10 million**, with maturity dates extended to **August 14, 2025**), which it may be unable to pay, potentially leading to legal action, bankruptcy, or forced scaling back of business plans[322](index=322&type=chunk) - Current liabilities are significant (**$12.7 million** as of June 30, 2025, including **$2.6 million** in accounts payable and **$8.7 million** in notes payable), far exceeding cash on hand (**$0.3 million**), posing a risk of inability to pay if creditors demand immediate payment[326](index=326&type=chunk) [Risks Related to Pending Business Combination](index=56&type=section&id=Risks%20Related%20to%20Pending%20Business%20Combination) This section outlines risks associated with the proposed merger, including completion uncertainty, operational disruptions, and potential stockholder dilution - The completion of the merger with Ocuvex is uncertain and subject to various conditions, including stockholder approvals. Failure to close could result in Onconetix paying a termination fee and incurring significant expenses, harming its market price and future business[327](index=327&type=chunk)[331](index=331&type=chunk)[333](index=333&type=chunk) - The merger process could cause substantial disruptions, create uncertainty for employees and business relationships, and divert management attention from day-to-day operations[329](index=329&type=chunk) - The Merger Agreement restricts Onconetix from taking certain actions outside the ordinary course of business and includes "no-shop" provisions, which could deter alternative takeover proposals and potentially disadvantage Onconetix if the merger is not completed[330](index=330&type=chunk)[338](index=338&type=chunk)[339](index=339&type=chunk) - Onconetix expects to incur significant non-recurring transaction costs for the merger, which will be borne regardless of completion and could adversely affect financial condition[342](index=342&type=chunk) - If the merger is not completed, the Onconetix Board may pursue dissolution and liquidation, where the amount of cash available for distribution to stockholders would depend on timing and reserves for obligations, potentially leading to significant investment loss[344](index=344&type=chunk) - Post-merger, the combined company may issue additional securities, diluting existing stockholders' ownership and potentially reducing per-share financial measures[345](index=345&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There are no unregistered sales of equity securities or uses of proceeds that have not been previously reported in a Current Report on Form 8-K - No unregistered sales of equity securities or uses of proceeds have occurred that were not previously reported in a Current Report on Form 8-K[346](index=346&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There are no defaults upon senior securities to report - No defaults upon senior securities[348](index=348&type=chunk) [Item 4. Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Onconetix - Not applicable[349](index=349&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - No other information to report[350](index=350&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of this Quarterly Report on Form 10-Q, including the Merger Agreement, corporate charter documents, various notes, lock-up agreements, and certifications - The exhibit index includes the Agreement and Plan of Merger, corporate charter documents, various promissory notes, lock-up agreements, conversion price reduction consent, and certifications[352](index=352&type=chunk)[354](index=354&type=chunk) [SIGNATURES](index=61&type=section&id=SIGNATURES) This section contains the official signatures certifying the accuracy and completeness of the report - The report is signed by Karina M. Fedasz, Interim Chief Executive Officer and Interim Chief Financial Officer, on August 13, 2025[359](index=359&type=chunk)

Core Viewpoint - Monteverde & Associates PC is investigating Onconetix, Inc. regarding its merger with Ocuvex Therapeutics, Inc., where Ocuvex shareholders will own approximately 90% of the combined company and Onconetix shareholders will own approximately 10% [1] Group 1 - Monteverde & Associates PC has recovered millions for shareholders and is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report [1] - The proposed transaction involves an exchange of Ocuvex shares for Onconetix shares based on a defined exchange ratio [1] - The firm is headquartered in the Empire State Building, New York City [1] Group 2 - The firm emphasizes that it litigates and has a successful track record in trial and appellate courts, including the U.S. Supreme Court [2] - The firm offers free consultations for shareholders with concerns regarding the merger [3]

Core Viewpoint - Onconetix, Inc. has entered into a definitive merger agreement with Ocuvex Therapeutics, Inc., aiming to enhance its portfolio with ophthalmic therapeutic candidates and create significant value for shareholders [1][2]. Company Overview Onconetix - Onconetix is a commercial stage biotechnology company focused on innovative solutions for men's health and oncology, including the Proclarix® diagnostic test for prostate cancer [6]. Ocuvex - Ocuvex is a privately held biopharmaceutical company specializing in ophthalmic therapeutic candidates, with its lead asset, Omlonti® (omidenepag isopropyl ophthalmic solution) 0.002%, approved by the FDA for ocular hypertension and open-angle glaucoma [8]. Transaction Details - The merger agreement has been approved by the boards of directors of both companies, with Onconetix acquiring all equity interests of Ocuvex [3][4]. - Ocuvex equity holders will receive newly-issued shares of Onconetix common stock equal to 90% of the combined company’s equity interests post-transaction, while Onconetix shareholders will retain 10% [4]. - The board of directors of the combined company will consist of seven directors, with five from Ocuvex and two from Onconetix [5]. Anticipated Timeline - The completion of the proposed transaction is expected in the fourth quarter of 2025, subject to customary conditions including regulatory and stockholder approvals [5].

Core Viewpoint - Onconetix, Inc. has received approval from the Nasdaq Hearings Panel for continued listing on The Nasdaq Stock Market, contingent upon compliance with specific Nasdaq Listing Rules by set deadlines [1][2]. Group 1: Compliance and Listing Status - On June 11, 2025, Onconetix was granted a decision for continued listing, requiring compliance with the Periodic Filing Listing Rule by June 13, 2025, and the Bid Price Listing Rule by June 30, 2025 [1]. - The company demonstrated compliance with the Periodic Filing Listing Rule on June 12, 2025, by filing the Form 10-Q for the period ended March 31, 2025 [2]. - A 1-for-85 reverse stock split of its outstanding shares was completed on June 13, 2025, to help meet listing requirements [2]. Group 2: Company Overview - Onconetix, Inc. is a commercial-stage biotechnology company focused on innovative solutions for men's health and oncology [3]. - The company owns Proclarix, an in vitro diagnostic test for prostate cancer, which is approved for sale in the European Union [3].

PART I. [FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28unaudited%29) This section presents the unaudited condensed consolidated financial statements, detailing financial position, operational results, and cash flows, highlighting a net loss and working capital deficit [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $18.8 million due to a $10.9 million goodwill impairment, resulting in a $11.6 million working capital deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $1,577 | $647 | | Total Current Assets | $2,421 | $950 | | Goodwill | $16,210 | $27,049 | | **Total Assets** | **$18,776** | **$28,182** | | **Liabilities & Equity** | | | | Notes Payable, net | $8,956 | $9,328 | | Total Current Liabilities | $14,039 | $18,290 | | **Total Liabilities** | **$14,258** | **$18,571** | | **Total Stockholders' Equity** | **$3,993** | **$8,543** | - Goodwill decreased from **$27.0 million** to **$16.2 million** due to an impairment loss of **$10.9 million** during the quarter[63](index=63&type=chunk)[65](index=65&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported an $8.5 million net loss, impacted by a $10.9 million goodwill impairment, despite a $4.0 million increase in other income Q1 2025 vs. Q1 2024 Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $101.6 | $700.4 | | Gross Profit | $45.8 | $189.0 | | Impairment of goodwill | $10,918.0 | $5,192.0 | | Loss from operations | $(12,570.8) | $(11,082.0) | | **Net Loss** | **$(8,545.9)** | **$(11,118.6)** | | Net loss per share, basic and diluted | $(0.53) | $(20.08) | - A significant goodwill impairment of **$10.9 million** was recorded in Q1 2025, compared to **$5.2 million** in Q1 2024[17](index=17&type=chunk) - Total other income was **$4.0 million** in Q1 2025, primarily due to a **$3.3 million** change in fair value of a subscription agreement liability and a **$0.9 million** gain on forgiveness of accounts payable[17](index=17&type=chunk)[68](index=68&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was $2.0 million, offset by $2.9 million from financing activities, resulting in a $0.9 million cash increase Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,999.7) | $(5,232.1) | | Net cash provided by (used in) investing activities | $0 | $(4.6) | | Net cash provided by financing activities | $2,870.3 | $5,205.1 | | **Net increase (decrease) in cash** | **$930.7** | **$(90.5)** | - Financing activities in Q1 2025 included **$5.0 million** in proceeds from the issuance of common stock via the ELOC, offset by a **$1.3 million** payment for the redemption of Series C Preferred Stock[23](index=23&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) The notes detail accounting policies, strategic shifts, debt agreements, equity financing, and material weaknesses in internal controls - **Going Concern:** The company has substantial doubt about its ability to continue as a going concern. As of March 31, 2025, cash was **$1.6 million** with a working capital deficit of **$11.6 million**. The current cash balance is **insufficient to fund operations through June 2026** without additional financing[35](index=35&type=chunk)[37](index=37&type=chunk) - **Strategic Shift:** The company has halted vaccine development and abandoned commercialization of ENTADFI to focus on its Proclarix diagnostic product for prostate cancer[28](index=28&type=chunk)[186](index=186&type=chunk) - **Debt and Forbearance:** The company has **two $5.0 million notes** payable to Veru. It failed to repay the first note and entered into forbearance agreements, extending the due dates to June 30, 2025, with modified payment terms[75](index=75&type=chunk)[77](index=77&type=chunk)[84](index=84&type=chunk) - **Financing:** The company is utilizing a Common Stock Equity Line of Credit (ELOC) to raise capital. As of June 12, 2025, it had sold shares for gross proceeds of approximately **$6.2 million** under the agreement[122](index=122&type=chunk)[178](index=178&type=chunk) - **Subsequent Events:** On April 8, 2025, the company announced a non-binding letter of intent for a potential business combination with Ocuvex Therapeutics. On June 11, 2025, it announced a 1-for-85 reverse stock split[177](index=177&type=chunk)[181](index=181&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses financial condition, strategic focus on Proclarix, significant revenue decrease, and reiterates going concern doubt - The company has abandoned commercialization of ENTADFI due to the resources required and its cash runway, and is now focusing its efforts on commercializing Proclarix[186](index=186&type=chunk)[188](index=188&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern. The cash balance was approximately **$0.4 million** as of June 10, 2025, which is **not sufficient to fund operations through the end of December 2025**[248](index=248&type=chunk)[284](index=284&type=chunk) Q1 2025 vs. Q1 2024 Results of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $101.6 | $700.4 | $(598.8) | (85.5)% | | Selling, general and administrative | $1,674.2 | $3,736.5 | $(2,062.2) | (55.2)% | | Impairment of goodwill | $10,918.0 | $5,192.0 | $5,726.0 | 110.3% | | Net loss | $(8,545.9) | $(11,118.6) | $2,572.7 | (23.1)% | - The decrease in SG&A expenses by **$2.1 million** was mainly due to a **$0.8 million** reduction in non-recurring professional fees related to the Proteomedix acquisition in 2024 and a **$0.4 million** decrease in payroll-related expenses[240](index=240&type=chunk) - Management plans to secure additional funding through equity or debt financing and utilize the ELOC, but acknowledges that funds available under the ELOC will not be sufficient to sustain operations[249](index=249&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, Onconetix is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Onconetix is not required to provide quantitative and qualitative disclosures about market risk[269](index=269&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded disclosure controls were ineffective due to material weaknesses in internal control over financial reporting - Management concluded that the Company's disclosure controls and procedures were **not effective** as of March 31, 2025[270](index=270&type=chunk) - Several material weaknesses were identified, including: - Inadequate segregation of duties - Ineffective risk assessment and monitoring - Insufficient accounting resources for complex transactions and timely reporting - Ineffective Information Technology General Controls (ITGCs) related to user access, change management, and data security[272](index=272&type=chunk) - A remediation plan is being implemented, focusing on improving the control environment, enhancing policies and procedures, implementing effective review controls, and ensuring proper segregation of duties[274](index=274&type=chunk) PART II. [OTHER INFORMATION](index=46&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings.) Onconetix is not subject to any material legal proceedings or aware of any threatened material legal actions - The company is not currently subject to any material legal proceedings[280](index=280&type=chunk) [Item 1A. Risk Factors](index=46&type=page&id=Item%201A.%20Risk%20Factors.) Significant risks include a history of net losses, substantial doubt about going concern, urgent need for capital, and risks from the Ocuvex business combination - **Going Concern and Financial Health:** The company has a history of significant net losses (**$8.5M** for Q1 2025) and an accumulated deficit of **$125.4M**. There is substantial doubt about its ability to continue as a going concern, with a cash balance of only **$0.4M** as of June 10, 2025[282](index=282&type=chunk)[284](index=284&type=chunk) - **Debt to Veru:** The company owes a significant amount to Veru (approximately **$9.0 million**) and may be unable to make timely payments, despite forbearance agreements. Failure to pay could lead to legal action, forced scale-back of operations, or bankruptcy[288](index=288&type=chunk)[291](index=291&type=chunk) - **Pending Ocuvex Business Combination:** The potential merger with Ocuvex Therapeutics is subject to numerous risks, including failure to complete the transaction, assuming unanticipated liabilities, and incurring substantial non-recurring transaction costs[293](index=293&type=chunk)[294](index=294&type=chunk)[297](index=297&type=chunk) - **Need for Capital:** The company requires substantial additional funding to finance operations. Funds from the ELOC are not expected to be sufficient, and there is no assurance that other financing will be available on acceptable terms, if at all[286](index=286&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) No unregistered sales of equity securities were reported during the period that were not previously disclosed - There were no unregistered sales of equity securities that have not been previously reported on a Form 8-K[298](index=298&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information.) A Certificate of Correction was filed to fix a scrivener's error regarding Series C Preferred Stock redemption terms - A Certificate of Correction was filed on June 12, 2025, to correct a scrivener's error in the Certificate of Designation for the Series C Convertible Preferred Stock, allowing for partial redemptions[302](index=302&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits.) This section provides an index of exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents

Core Viewpoint - Onconetix, Inc. has announced a reverse stock split of 1-for-85 shares, approved by stockholders, to regain compliance with Nasdaq's minimum bid price requirement of $1.00 per share, effective June 13, 2025 [1][3][5] Group 1: Reverse Stock Split Details - The reverse stock split will reduce the number of outstanding shares from approximately 44.4 million to about 521,863 [5] - The split will be executed automatically, converting every 85 shares into one share without changing the par value, and no fractional shares will be issued [4] - Fractional shares will be compensated in cash based on the closing price on June 12, 2025 [4] Group 2: Company Overview - Onconetix, Inc. is a commercial-stage biotechnology company focused on men's health and oncology, owning products like Proclarix and ENTADFI [6] - Proclarix is an in vitro diagnostic test for prostate cancer, while ENTADFI is an FDA-approved treatment for benign prostatic hyperplasia [6]

Financial Performance - As of December 31, 2024, the company reported a working capital deficit of approximately $17.3 million and an accumulated deficit of approximately $113.0 million[28]. - The company has incurred net losses since inception and expects to continue doing so, with significant fluctuations in losses depending on various operational activities[28]. - The company incurred a net loss of $58.7 million and $37.4 million for the years ended December 31, 2024 and 2023, respectively, with an accumulated deficit of $115.7 million as of December 31, 2024[198]. - The company generated negative operating cash flows of $10.5 million for the year ended December 31, 2024[198]. - The company has cash of only $0.6 million, which raises concerns about its ability to meet current liabilities[208]. Product Development and Commercialization - The company has generated revenue only from Proclarix since its acquisition, while ENTADFI has not generated any revenue and commercialization activities have been abandoned[27]. - The company is working with an investment advisor to assist with the potential sale or other transaction of the ENTADFI assets, with no current plans to resume its commercialization[25]. - The company has abandoned the commercialization of ENTADFI due to cash runway and indebtedness, and the assets were fully impaired as of June 30, 2024[73]. - Proclarix is an in vitro diagnostic test for prostate cancer, approved for sale in the European Union, and aims to reduce unnecessary biopsies by providing a risk score for patients with elevated PSA levels[48]. - Proclarix is designed to aggregate multimodal information to develop a patient-centric diagnostic approach, with plans to enhance the risk score with additional biomarkers in the future[48]. Acquisitions and Partnerships - The acquisition of Proteomedix was completed on December 15, 2023, providing Proteomedix shareholders with an initial 16.4% ownership stake in the company[45]. - The acquisition of Proteomedix by Onconetix was valued at approximately $75 million, with 91,885 shares of Common Stock and 2,696,729 shares of Series B Preferred Stock issued as consideration[52]. - The Company purchased assets related to Veru's ENTADFI business for a total possible consideration of $100 million, with an initial payment of $20 million[68]. - The Company entered into a Subscription Agreement for a private placement of $5 million, with each unit consisting of one share of Common Stock and a warrant to purchase additional shares[61]. - Proteomedix entered an exclusive partnership with LabCorp in 2023 for the development and commercialization of Proclarix in the United States, receiving an upfront license fee and future royalty payments[109]. Regulatory and Compliance - The company has received multiple deficiency notices from Nasdaq regarding compliance with listing standards, including failure to maintain a minimum bid price and timely filing of reports[38][40]. - The maximum timeframe for the evaluation of a Marketing Authorization Application (MAA) by the EMA is 210 days, with potential accelerated reviews in urgent cases[147]. - The EMA requires a risk management plan (RMP) for all new MAAs, detailing measures to minimize risks associated with the product[153]. - Compliance with the General Data Protection Regulation (GDPR) is mandatory for processing personal health data in the EU, imposing significant obligations on pharmaceutical companies[137]. - Proteomedix has CE marked Proclarix IVDs under IVDD in 2019 and is now in compliance with IVDR, which includes performance and safety testing[161]. Market and Competitive Landscape - The global market for in vitro diagnostic (IVD) products is projected to reach $101 billion in 2024, with Europe and North America being the largest markets[116]. - In 2022, there were 1,467,854 new cases of prostate cancer and 397,430 related deaths worldwide, highlighting the significant market need for improved diagnostic tools[114]. - The molecular diagnostics field is highly competitive, with many companies developing tests that could pose technological and market access advantages over Proclarix[120]. - Proclarix aims to address the diagnostic "grey zone" where approximately 10% of men have elevated PSA levels, with only 20-40% presenting clinically with cancer[115]. - The use of MRI for prostate cancer diagnosis has increased, but costs range from $415 to $900, indicating a need for more accessible non-invasive diagnostic tests like Proclarix[119]. Operational Challenges - The company has significant debt obligations to Veru, including $10 million due, with forbearance agreements in place until June 30, 2025[204]. - The marketing approval process for Proclarix is lengthy and unpredictable, which may harm the company's business if approval is not obtained[209]. - The company may face significant delays and costs in obtaining foreign regulatory approvals for its products[217]. - Coverage and adequate reimbursement for the product may not be available, impacting its commercial success[219]. - The company has no manufacturing facilities and outsources the production of its IVD kits to a CMO in Germany[186].

Core Points - Onconetix, Inc. received a Staff delisting letter from Nasdaq due to failure to file its Annual Report on Form 10-K for the fiscal year ended December 30, 2024, violating Nasdaq's continued listing requirements [1] - The company is already under review for non-compliance with the Minimum Bid Price Rule, having failed to maintain a minimum bid price of $1.00 per share from November 25, 2024, to January 10, 2025 [3] - Onconetix intends to file the Form 10-K promptly to regain compliance with Nasdaq rules [3] Company Overview - Onconetix is a commercial stage biotechnology company focused on men's health and oncology solutions [4] - The company owns Proclarix®, an in vitro diagnostic test for prostate cancer, and ENTADFI, an FDA-approved treatment for benign prostatic hyperplasia [4]