Onconetix(ONCO) - 2025 Q4 - Annual Report

Acquisition and Corporate Structure - The company acquired Proteomedix on December 15, 2023, gaining Proclarix, an in vitro diagnostic test for prostate cancer approved for sale in the EU[23]. - Onconetix acquired Proteomedix for approximately $75 million, issuing 1,081 shares of Common Stock and 2,696,729 shares of Series B Preferred Stock convertible into 79,315 shares of Common Stock[67]. - Following the acquisition, Proteomedix became a wholly owned subsidiary of Onconetix, with the Sellers owning approximately 87.2% of Onconetix's outstanding equity interests[70]. - Onconetix's stockholders prior to the acquisition retained approximately 5.3% of the outstanding equity interests post-transaction[70]. - The Share Exchange Agreement with Realbotix Corp. was signed on February 11, 2026, involving the acquisition of Realbotix Interests in exchange for newly issued shares of Common Stock[34]. Financial Performance and Position - As of December 31, 2025, the company had cash of approximately $5.2 million, a working capital deficit of approximately $3.1 million, and an accumulated deficit of approximately $131.2 million[31]. - The company has incurred net losses since inception and expects to continue doing so in the foreseeable future, with a cash balance insufficient to fund operations for one year from the issuance of the financial statements[31]. - The net loss for the year ended December 31, 2025, was $14.0 million, compared to a net loss of $58.7 million for the year ended December 31, 2024[214]. - The Company expects to incur substantial and increasing operating losses over the next several years, raising doubts about its ability to continue as a going concern[215]. - Total current liabilities as of December 31, 2025, were approximately $9.1 million, including accounts payable of approximately $1.8 million[221]. Product Development and Commercialization - Proclarix is expected to generate growing revenues starting in 2026, which will help offset some expenses related to its commercialization[27]. - Proclarix, the company's lead product, is an in vitro diagnostic test for prostate cancer, approved for sale in the EU and designed to reduce unnecessary biopsies[96]. - The company aims to enhance Proclarix by integrating additional biomarkers and imaging data into its clinical decision support system[96]. - Proclarix generated revenues of $23,091 in 2025, while Proteomedix had total sales of $67,380 prior to its acquisition by Onconetix in 2023[97]. - Proclarix has demonstrated a high sensitivity of 90% and a negative predictive value of 95% for clinically significant prostate cancer, potentially reducing unnecessary biopsies by approximately 43% compared to clinical comparators[108]. Regulatory Compliance and Market Access - Regulatory compliance is critical for marketing Proclarix, with varying requirements across countries, including the EU and the U.S.[149]. - The FDA and other regulatory authorities impose extensive regulations on the development and marketing of diagnostic products, impacting timelines and processes[148]. - The new regulatory framework for medical devices in the EU, including the Medical Devices Regulation (MDR) and In Vitro Diagnostic Medical Devices Regulation (IVDR), was implemented to address significant gaps in market surveillance and compliance[172]. - Proteomedix AG has successfully transitioned its Proclarix devices to comply with the IVDR, making them one of the first IVDs under the new EU regime[178]. - The IVDR provides a systematic post-market surveillance data collection from Proclarix devices, which supports the clinical evidence of their validity[178]. Funding and Capital Structure - The company entered into Series D and Series E PIPE financings in September and October 2025, respectively, to support near-term operations[31]. - The company will need to raise additional capital to fund ongoing operations and product development, raising substantial doubt about its ability to continue as a going concern[32]. - The company entered into a Subscription Agreement for a private placement of $5.0 million, with each unit comprising one share of Common Stock and a warrant to purchase 0.3 shares at an exercise price of $3.40 per share[76]. - The Series C Preferred Stock issuance resulted in net cash proceeds of $1.9 million from the sale of 3,499 shares to institutional investors[206]. - The Company sold 16,099 shares of Series D convertible preferred stock for approximately $12.9 million, resulting in net cash proceeds of $9.3 million[210]. Market and Competitive Landscape - The global in vitro diagnostic (IVD) market is projected to reach $109 billion by 2025, with Europe and North America being the largest markets[130]. - The molecular diagnostics field is highly competitive, with many companies having greater financial and market resources, posing challenges for Proclarix[135]. - Proclarix's competitive positioning is complemented by the growing adoption of MRI-based diagnosis, which requires supportive diagnostic tools for effective patient selection[142]. - Approximately 60% of men undergoing prostate biopsies do not have clinically significant cancer, highlighting the need for improved diagnostic tools like Proclarix[132]. Employee and Operational Aspects - As of March 10, 2026, Proteomedix employed 2 full-time and 6 subcontracted employees, maintaining good relations with its workforce[201]. - The company has a monthly lease of $2,000 for its office and lab space in Switzerland, renewed for a two-year term[203]. - The company has recorded common stock of $2 and additional paid-in capital of $995,036 related to the issuance of 241,514 shares due to the Make-Whole Provision[82]. Partnerships and Collaborations - In the United States, Proteomedix entered an exclusive partnership with LabCorp in 2023 for the development and commercialization of Proclarix, receiving an upfront license fee and future royalty payments[123]. - A licensing agreement with Immunovia in September 2025 includes payments of $300,000 each and a 3% royalty on net sales of PancreaSure from January 1, 2026, through December 31, 2032[192]. - In 2022, Proteomedix partnered with Immunovia AB to enhance research and development productivity, accelerating the roll-out of the IMMray PanCan-d test[191].