Onconetix, Inc.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

Risks Related to Pending Business Combination

Previous report

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

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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

Previous report

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:

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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

Previous report

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.