VERU INC.

Previous wording

In reported third-party clinical trials evaluating currently approved GLP-1 RA in obese patients, trial participants exhibited significant weight loss composed of reductions in both fat and lean (muscle and bone) mass. Of the total weight loss reported in certain of these third-party clinical trials, 20-50% of the total weight loss reported by patients was attributable to lean mass (muscle) loss. According to the Centers for Disease Control and Prevention, 41.5% of older adults are obese and could benefit from weight loss medication. Up to 34.4% of people over the age of 60 with obesity in the United States have sarcopenic obesity. Sarcopenic obese patients are patients who have obesity and low muscle mass at the same time and are potentially at the greatest risk for developing critically low muscle mass when taking a currently approved GLP-1 RA. We therefore believe there is an urgent unmet need for a drug that can ameliorate the muscle wasting effects of currently approved GLP-1 RA therapies and also allow for preferential loss of fat mass in at-risk sarcopenic obese and overweight elderly patients.

Current wording

In reported third-party clinical trials evaluating currently approved GLP-1 RA in obese patients, trial participants exhibited significant weight loss composed of reductions in both fat and lean (muscle) mass. Of the total weight loss reported in certain of these third-party clinical trials, 20-50% of the total weight loss reported by patients was attributable to lean mass (muscle) loss. According to the Centers for Disease Control and Prevention, 41.5% of older adults are obese and could benefit from weight loss medication. Up to 34.4% of people over the age of 60 with obesity in the United States have sarcopenic obesity. Sarcopenic obese patients are patients who have obesity and low muscle mass at the same time and are potentially at the greatest risk for developing critically low muscle mass when taking a currently approved GLP-1 RA. We therefore believe there is an urgent unmet need for a drug that can ameliorate the muscle wasting effects of currently approved GLP-1 RA therapies and also allow for preferential loss of fat mass in at-risk sarcopenic obese and overweight older patients.

Previous wording

Enobosarm is an oral, novel SARM that has demonstrated tissue-selective, dose-dependent improvement in body composition with increases in lean mass and decreases in fat mass, improvement in muscle strength and physical function, has no clinically-relevant masculinizing effects in women and has neutral prostate effects in men in previous clinical trials.

Current wording

We are developing enobosarm which is an oral, novel SARM that has demonstrated in previous clinical studies improvements in body composition with tissue selective increases in lean mass and decreases in fat mass, improvements in both muscle strength and physical function, no masculinizing effects in women, and neutral prostate effects.

Previous wording

We believe the clinical data we own that was generated from third-party clinical trials of enobosarm in both elderly patients and in patients with initial and ongoing muscle wasting caused by loss of appetite, provide strong clinical rationale for the co-administration of enobosarm and a GLP-1 RA in at-risk sarcopenic obese or overweight elderly patients as the combination has the potential to ameliorate the muscle wasting effects of currently approved GLP-1 RA therapies and also allow for preferential and selective loss of fat mass.

Current wording

We believe the clinical data we own that was generated from third-party clinical trials of enobosarm in both older patients and in patients with initial and ongoing muscle wasting caused by loss of appetite, provide strong clinical rationale for the co-administration of enobosarm and a GLP-1 RA in at-risk sarcopenic obese or overweight older patients as the combination has the potential to ameliorate the muscle wasting effects of currently approved GLP-1 RA therapies and also allow for preferential and selective loss of fat mass.

Previous wording

We submitted an Investigational New Drug Application (IND) for enobosarm for a Phase 2b clinical study in January 2024. In February 2024, the Company received FDA clearance to initiate the Phase 2b, multicenter, double-blind, placebo-controlled, randomized, dose-finding QUALITY clinical trial designed to evaluate the safety and efficacy of enobosarm 3mg, enobosarm 6mg, or placebo as a treatment to augment fat loss and to prevent muscle loss in sarcopenic obese or overweight older (>60 years of age) patients receiving semaglutide (Wegovy®). The primary endpoint is percent change from baseline in total lean body mass, and the key secondary endpoints are percent change from baseline in total body fat mass, total body weight, and physical function as measured by stair climb test at 16 weeks. In April 2024 the Company announced that it had enrolled its first patients in the Phase 2b QUALITY clinical study and in August 2024 the Company completed enrollment of 168 subjects in 14 clinical sites in the U.S. The purpose of the Phase 2b QUALITY clinical trial is to select the optimal dose of enobosarm in combination with semaglutide (Wegovy®) that best preserves muscle and reduces fat after 16 weeks of treatment to advance into a Phase 3 obesity clinical trial.

Current wording

We submitted an Investigational New Drug Application (IND) for enobosarm for a Phase 2b clinical study in January 2024. In February 2024, the Company received FDA clearance to initiate the Phase 2b, multicenter, double-blind, placebo-controlled, randomized, dose-finding QUALITY clinical trial designed to evaluate the safety and efficacy of enobosarm 3mg, enobosarm 6mg, or placebo as a treatment to augment fat loss and to prevent muscle loss in sarcopenic obese or overweight older (≥60 years of age) patients receiving semaglutide (Wegovy®) for chronic weight management. The primary endpoint is percent change from baseline in total lean body mass, and the key secondary endpoints are percent change from baseline in total body fat mass, total body weight, and physical function as measured by stair climb test at 16 weeks. In April 2024 the Company announced that it had enrolled its first patients in the Phase 2b QUALITY clinical study and in August 2024 the Company completed enrollment of 168 subjects in 14 clinical sites in the U.S. The purpose of the Phase 2b QUALITY clinical trial is to select the dose of enobosarm in combination with semaglutide (Wegovy) that best preserves lean mass (muscle) and physical function after 16 weeks of treatment to advance into a Phase 3 obesity clinical trial.

Previous wording

After completing the efficacy dose-finding portion of the Phase 2b QUALITY clinical trial, the participants continued into a Phase 2b extension trial where all patients have stopped treatment with semaglutide (Wegovy®), but continue taking placebo, 3mg of enobosarm, or 6mg of enobosarm in a blinded fashion for 12 weeks. The Phase 2b extension clinical trial will evaluate whether enobosarm can maintain muscle and prevent the fat that generally occurs after discontinuing a GLP-1 RA. The topline results of the separate blinded Phase 2b extension clinical study are expected in the second quarter of calendar 2025. The Company plans to present the full clinical efficacy and safety data set for the Phase 2b QUALITY clinical study in future scientific conferences and publications after the Phase 2b extension portion of study is completed and unblinded. As the Phase 2b QUALITY study has positive topline clinical results, we are planning to move forward to request an end of Phase 2 meeting with the FDA.

Current wording

After completing the efficacy dose-assessment portion of the Phase 2b QUALITY clinical trial, the participants continued into a Phase 2b extension maintenance trial where all patients have stopped treatment with semaglutide (Wegovy), but continue taking placebo, enobosarm 3mg, or enobosarm 6mg in a blinded fashion for 12 additional weeks. The Phase 2b extension clinical trial will evaluate whether enobosarm can maintain muscle and prevent the fat regain that generally occurs after discontinuing a GLP-1 RA.

Previous wording

As for secondary clinical endpoints, enobosarm + semaglutide treatment resulted in dose dependent greater loss of fat mass compared to placebo + semaglutide with the enobosarm 6mg dose having a 46% greater relative loss of fat mass compared to placebo + semaglutide group at 16 weeks (p=0.014). Although enobosarm + semaglutide significantly preserved lean mass, the additional loss of fat mass caused by enobosarm treatment was able to replace the lean mass preserved to allow a similar net mean weight loss with semaglutide at 16 weeks. Accordingly, the tissue composition of the total weight loss shifted to greater and selective loss of fat with enobosarm treatment. The median percentage of total body weight loss in the placebo + semaglutide group that was due to lean mass was 32% and estimated fat loss was 68%. In contrast, in the all enobosarm + semaglutide group, the total weight loss due to lean mass was 9.4% and estimated fat loss was 90.6%, and for the enobosarm 3mg + semaglutide group, it was 0.9% lean mass and 99.1% estimated fat loss. Therefore, enobosarm + semaglutide improved changes in body composition resulting in more selective and greater loss of adiposity than in subjects receiving placebo + semaglutide.

Current wording

As for secondary clinical endpoints, enobosarm + semaglutide treatment resulted in dose dependent greater loss of fat mass compared to placebo + semaglutide with the enobosarm 6mg dose having a 46% greater relative loss of fat mass compared to placebo + semaglutide group at 16 weeks (p=0.014). Although enobosarm + semaglutide significantly preserved lean mass, the additional loss of fat mass caused by enobosarm treatment was able to replace the lean mass preserved to allow a similar net mean weight loss measured by DEXA with semaglutide at 16 weeks. Accordingly, the tissue composition of the total weight loss shifted to greater and selective loss of fat with enobosarm treatment. The median percentage of total body weight loss in the placebo + semaglutide group that was due to lean mass was 32% and estimated fat loss was 68%. In contrast, in the all enobosarm + semaglutide group, the total weight loss due to lean mass was 9.4% and estimated fat loss was 90.6%, and for the enobosarm 3mg + semaglutide group, it was 0.9% lean mass and 99.1% estimated fat loss. Therefore, enobosarm + semaglutide improved changes in body composition resulting in more selective and greater loss of adiposity than in subjects receiving placebo + semaglutide.

Previous wording

Physical function was measured by the Stair Climb Test. Climbing stairs is an activity of daily living, and the Stair Climb Test measures functional muscle strength, balance and agility. Declines in performance measured by Stair Climb Test predicts in older patients higher risk for mobility disabilities, gait difficulties, hospitalizations, falls, and bone fractures. As a point of reference, stair climb power declines by -1.38% annually with aging according to Van Roie E. PLOS ONE 14:e0210653, 2019.

Current wording

Physical function was measured by the Stair Climb Test. Climbing stairs is an activity of daily living, and the Stair Climb Test measures functional muscle strength, balance and agility. Declines in performance measured by Stair Climb Test predicts in older patients a higher risk for mobility disabilities, gait difficulties, falls and bone fractures, hospitalizations, and mortality. As a point of reference, stair climb power declines by -1.38% annually with aging according to Van Roie E. PLOS ONE 14:e0210653, 2019.

Previous wording

Enobosarm represents a next generation drug that improves GLP-1 RA therapy to result in tissue selective quality weight reduction, that is, enobosarm + semaglutide improved changes in body composition which resulted in more selective and greater loss of adiposity (fat mass) than in subjects receiving placebo + semaglutide alone.

Current wording

Enobosarm represents a novel drug that improves GLP-1 RA therapy resulting in tissue selective quality weight reduction, that is, enobosarm + semaglutide improved changes in body composition which resulted in more selective and greater loss of adiposity (fat mass) than in subjects receiving placebo + semaglutide alone.

Previous wording

Safety data for the Phase 2b QUALITY study remains blinded as the Phase 2b extension clinical study portion is ongoing. The unblinded complete safety set will be available after the Phase 2b extension study is completed. However, the aggregate, blinded safety data have not shown any significant differences compared to previous studies of enobosarm and what is expected with GLP-1 RAs. The Independent Data Monitoring Committee met on February 10, 2025 to evaluate the unblinded safety data, and they made the recommendation to continue the study as designed.

Current wording

Safety data for the Phase 2b QUALITY study remains blinded as the Phase 2b extension clinical study portion is ongoing. The unblinded complete safety set will be available after the Phase 2b extension study is completed in the second quarter of calendar year 2025. However, the aggregate, blinded safety data have not to date shown any significant differences compared to previous studies of enobosarm and what is expected with GLP-1 RAs. The Independent Data Monitoring Committee met on February 10, 2025 to evaluate the unblinded safety data, and they made the recommendation to continue the study as designed.

Previous wording

We have previously met with the FDA to discuss our regulatory path forward as an improvement in body composition drug, and the FDA has provided general advice on Phase 3 design. Based on the Phase 2b QUALITY clinical trial, the proposed Phase 3 clinical trial design is currently expected to be a double-blind, placebo-controlled study in older (> 60 years of age), patients who have obesity or who are overweight and who are eligible for treatment with GLP-1 RA. The GLP-1 RA may be either WEGOVY (semaglutide) and/or Zepbound® (tirzepatide). Patients will be randomized to oral daily enobosarm or matching placebo. All subjects will start and receive GLP-1 RA during the study.

Current wording

As a path forward, we plan to propose a Phase 3 clinical program that is similar to the positive Phase 2b QUALITY clinical trial. The proposed Phase 3 clinical trial design is a double-blind, placebo-controlled study in older patients, greater than or equal to 60 years of age, who have obesity or who are overweight and who are eligible for treatment with GLP-1 RA. The GLP-1 RA may be either WEGOVY (semaglutide) and/or Zepbound® (tirzepatide). Patients will be randomized to oral daily enobosarm or matching placebo. All subjects will start and receive GLP-1 RA during the study. The proposed primary objective will be the effect of enobosarm on physical function measured by the Stair Climb Test at 24 weeks. Proposed key secondary objectives will be to assess the effect of enobosarm on total lean mass, total fat mass, HOMA-IR, and hemoglobin A1c at 24 weeks.

Previous wording

The proposed primary objective will be the effect of enobosarm on physical function measured by the Stair Climb Test. Proposed key secondary objectives will be to assess the effect of enobosarm on total lean mass, total body weight, total fat mass, bone mineral density, HOMA-IR, and hemoglobin A1c. The duration of treatment is expected to be 52 weeks which will allow us to also capture the longer-term benefits of enobosarm improvements on body composition for greater loss of adiposity and weight reduction.

Current wording

After the Phase 3 clinical trial ends at 24 weeks of treatment, the plan is to continue to measure total lean mass, total body weight, stair climb, total fat mass, bone mineral density, HOMA-IR, and hemoglobin A1c up to 68 weeks to capture the longer-term benefits of enobosarm improvements on body composition for greater loss of adiposity or fat, weight reduction, and preservation of both lean mass and bone.

Previous wording

Veru is currently developing a novel, patentable, modified release formulation for enobosarm with multiple releases during the dosing period. We anticipate the actual formulation, pharmacokinetic release profile(s), and method of manufacturing will be the subjects of future patents. The drug product formulation is currently in animal trials and is anticipated to be available for a Phase 1 bioavailability clinical trial during the first half of 2025. The expectation is that the oral enobosarm modified release drug formulation will be utilized for the Phase 3 obesity clinical studies and for commercialization.

Current wording

Veru is currently developing a novel, patentable, modified release oral formulation for enobosarm. The actual formulation, pharmacokinetic release profile(s), and method of manufacturing will be the subjects of future patent applications. If issued, the expiry for the new modified release oral enobosarm formulation patent is expected to be 2045. The new enobosarm formulation has completed animal trials and is anticipated to be in Phase 1 bioavailability clinical trials during the first half of calendar 2025. The expectation is that this novel modified release oral enobosarm formulation will be available for the Phase 3 clinical studies and for commercialization.

Previous wording

We believe there are compelling scientific evidence and rationale to evaluate sabizabulin as a treatment for the inflammation associated with atherosclerotic cardiovascular disease. Sabizabulin is an oral novel microtubule disruptor that targets the colchicine binding site of beta tubulin, and binds and crosslinks both the α and β tubulin subunits to inhibit tubulin polymerization and to induce depolymerization of microtubules at low nanomolar concentrations. Sabizabulin is more effective than colchicine in inhibiting tubulin polymerization. Sabizabulin is orally bioavailable with a 5-hour half-life. Sabizabulin is not a substrate for P-glycoprotein or CYP3A4. Overall preclinical data fromin vitro andin vivo inflammation studies show that sabizabulin treatment suppressed all cytokines and chemokines tested which includes IL-1α, IL-1β, IL-6, IL-8, TNF-α, Interferon-γ, and IP-10 (CXCL-10). In Phase 2 and 3 pulmonary inflammation COVID-19 clinical studies, sabizabulin has demonstrated broad anti-inflammatory activity. The safety database consists of 266 dosed patients from the sabizabulin clinical development program comprised of the Phase 2 and Phase 3 studies in hospitalized COVID-19 patients for acute use (149 patients at 9 mg daily for ≤ 21 days), as well as data from the Phase 1b/2 and Phase 3 studies in prostate cancer for chronic use (117 patients treated at up to 32 mg daily for up to 3 years).

Current wording

We believe there is compelling scientific evidence and rationale to evaluate sabizabulin as a treatment for the inflammation associated with atherosclerotic cardiovascular disease. Sabizabulin is an oral novel microtubule disruptor that targets the colchicine binding site of beta tubulin, and binds and crosslinks both the α and β tubulin subunits to inhibit tubulin polymerization and to induce depolymerization of microtubules at low nanomolar concentrations. Sabizabulin is more effective than colchicine in inhibiting tubulin polymerization. Sabizabulin is orally bioavailable with a 5-hour half-life. Sabizabulin is not a substrate for P-glycoprotein or CYP3A4. Overall preclinical data fromin vitro andin vivo inflammation studies show that sabizabulin treatment suppressed all cytokines and chemokines tested which includes IL-1α, IL-1β, IL-6, IL-8, TNF-α, Interferon-γ, and IP-10 (CXCL-10). In Phase 2 and 3 pulmonary inflammation COVID-19 clinical studies, sabizabulin has demonstrated broad anti-inflammatory activity. The safety database consists of 266 dosed patients from the sabizabulin clinical development program comprised of the Phase 2 and Phase 3 studies in hospitalized COVID-19 patients for acute use (149 patients at 9 mg daily for ≤ 21 days), as well as data from the Phase 1b/2 and Phase 3 studies in prostate cancer for chronic use (117 patients treated at up to 32 mg daily for up to 3 years).

Previous wording

Colchicine may be first-in-class and the first FDA approved treatment for this significant indication to treat atherosclerotic inflammation, but unfortunately colchicine has significant safety concerns that may limit its expected widespread use. Sabizabulin is a new molecular entity, small molecule that targets the colchicine binding site on β-tubulin. Like colchicine, sabizabulin inhibits microtubule polymerization and has demonstrated the ability to reduce the most important inflammatory mediators that play a role in the initiation and progression of atherosclerotic CAD. However, because sabizabulin has a different chemical structure than colchicine, it is not a substrate for CYP3A4 and P-glycoprotein potentially eliminating drug-drug interactions concerns associated with colchicine. In contrast to colchicine, sabizabulin has stable pharmacokinetics and low potential for drug-drug interactions; thus, sabizabulin may be administered potentially more safely as a secondary therapy in combination with statin therapy for the reduction of inflammation to slow the progression or promote regression of atherosclerotic cardiovascular disease.

Current wording

Colchicine may be first-in-class and the first FDA approved treatment for this significant indication to treat atherosclerotic inflammation, but unfortunately colchicine has significant safety concerns that may limit its expected widespread use and therefore does not address the current unmet medical need of atherosclerotic inflammation. Sabizabulin is a new molecular entity, small molecule that targets the colchicine binding site on β-tubulin. Like colchicine, sabizabulin inhibits microtubule polymerization and has demonstrated the ability to reduce the most important inflammatory mediators that play a role in the initiation and progression of atherosclerotic CAD. However, because sabizabulin has a different chemical structure than colchicine, it is not a substrate for CYP3A4 and P-glycoprotein potentially eliminating drug-drug interactions concerns associated with colchicine. In contrast to colchicine, sabizabulin has stable pharmacokinetics and low potential for drug-drug interactions; thus, sabizabulin may be administered potentially more safely as a secondary therapy in combination with statin therapy for the reduction of inflammation to slow the progression or promote regression of atherosclerotic cardiovascular disease.

Previous wording

On December 30, 2024, the Company and The Female Health Company Limited entered into a Stock and Asset Purchase Agreement (the “Purchase Agreement”) with Clear Future, Inc. (the “Purchaser”). Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Purchaser purchased substantially all of the assets (the “FC2 Business Sale”) related to the Company's FC2 female condom business ® (internal condom), including the stock of the Company’s U.K. and Malaysian operating subsidiaries. The Purchaser assumed certain liabilities relating to the FC2 business that are specified in the Purchase Agreement. The transaction closed on December 30, 2024.

Current wording

On December 30, 2024, the Company and The Female Health Company Limited (collectively, the “Sellers”) entered into a Stock and Asset Purchase Agreement (the “Purchase Agreement”) with Clear Future, Inc. (the “Purchaser”). Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Purchaser purchased substantially all of the assets (the “FC2 Business Sale”) related to the Company's FC2 female condom business ® (internal condom), including the stock of the Company’s U.K. and Malaysian operating subsidiaries. The Purchaser assumed certain liabilities relating to the FC2 business that are specified in the Purchase Agreement. The transaction closed on December 30, 2024. The Sellers and the Purchaser made customary representations and warranties, and agreed to certain customary covenants, in the Purchase Agreement. Subject to certain exceptions and limitations, each party agreed to indemnify the other for breaches of representations, warranties and covenants and for certain other matters. The Purchase Agreement also specifies that, subject to a $54,000 retention amount, a representations and warranties insurance policy (the “R&W Policy”) issued to the Purchaser would be the sole and exclusive remedy for breach of representations and warranties (other than certain specified representations and warranties) by the Sellers except in the case of fraud.

Previous wording

The purchase price for the FC2 Business Sale was $18.0 million in cash, subject to adjustment as set forth in the Purchase Agreement. The adjustments to the purchase price in the Purchase Agreement include a customary working capital adjustment in 90 days from closing based on the amount by which certain working capital items at closing are greater or less than a target set forth in the Purchase Agreement. Net proceeds from the FC2 Business Sale are expected to be $16.4 million, which is the purchase price per the Purchase Agreement, net of costs incurred of $1.4 million, estimated purchase price adjustments of $0.1 million, and amounts allocated to the related Transition Services Agreement of $0.2 million, but excluding the change of control payment pursuant to the Residual Royalty Agreement of $4.2 million. These net proceeds are subject to adjustment as set forth in the Purchase Agreement. The loss on sale of the FC2 business is $4.2 million, which is the difference between estimated net proceeds of $16.4 million and the total carrying value of the FC2 business of $20.6 million. The carrying value of the FC2 business at December 30, 2024 primarily included deferred income tax assets of $12.3 million, accounts receivable of $4.6 million, and inventory of $3.4 million, partially offset by accrued expenses and other current liabilities of $1.5 million. In addition, due to the FC2 Business Sale, liabilities associated with the Residual Royalty Agreement, which totaled $9.9 million at September 30, 2024, were extinguished.

Current wording

The purchase price for the FC2 Business Sale was $18.0 million in cash, subject to adjustment as set forth in the Purchase Agreement. The adjustments to the purchase price in the Purchase Agreement include a customary working capital adjustment in 90 days from closing based on the amount by which certain working capital items at closing are greater or less than a target set forth in the Purchase Agreement. Net proceeds from the FC2 Business Sale are expected to be $16.3 million, which is the purchase price per the Purchase Agreement, net of costs incurred of $1.4 million, estimated purchase price adjustments of $0.1 million, and amounts allocated to the related Transition Services Agreement of $0.2 million, but excluding the change of control payment pursuant to the Residual Royalty Agreement of $4.2 million. These net proceeds are subject to adjustment as set forth in the Purchase Agreement. The loss on sale of the FC2 business is $4.2 million, which is the difference between estimated net proceeds of $16.3 million and the total carrying value of the FC2 business of $20.6 million. The carrying value of the FC2 business at December 30, 2024 primarily included deferred income tax assets of $12.3 million, accounts receivable of $4.6 million, and inventory of $3.4 million, partially offset by accrued expenses and other current liabilities of $1.5 million. In addition, due to the FC2 Business Sale, liabilities associated with the Residual Royalty Agreement, which totaled $9.9 million at September 30, 2024, were extinguished.

Previous wording

ONCO agreed in the Forbearance Agreement to make the following required payments (the “Required Payments”) to Veru during the April 2024 Forbearance Period first to accrued and unpaid interest under the April 2024 Promissory Note and then any remainder to the outstanding principal balance of the April 2024 Promissory Note: (1) monthly payments equal to 25% (increased from 15% in the original April 24, 2024 Forbearance Agreement) of cash receipts of ONCO or its subsidiaries from certain sale or licensing revenues or payments, which increased amount began on October 20, 2024 for cash receipts in September 2024; and (2) payment of 20% (increased from 10% in the original April 24, 2024 Forbearance Agreement) of the net proceeds from certain financing or other transactions outside the ordinary course of business completed by ONCO or any of its subsidiaries during the April 24 Forbearance Period, which increased amount began for any net proceeds received after September 19, 2024. The remaining balance of the April 2024 Promissory Note will be due at the end of the April 2024 Forbearance Period. The remaining balance of the April 2024 Promissory Note will be due at the end of the Forbearance Period. The Company and ONCO entered into a Waiver and Amendment No. 1 to Forbearance Agreement, dated November 26, 2024, that (x) extended the time for the payment by ONCO of the monthly payment of a percentage of its cash receipts referenced in clause (1) above in this paragraph and conditioned the payment of those amounts upon ONCO being able to raise capital of at least $97,000 and (y) increased the percentage of the net proceeds from certain financings payable to the Company from 20% to 25%.

Current wording

ONCO agreed in the Forbearance Agreement to make the following required payments (the “Required Payments”) to Veru during the April 2024 Forbearance Period first to accrued and unpaid interest under the April 2024 Promissory Note and then any remainder to the outstanding principal balance of the April 2024 Promissory Note: (1) monthly payments equal to 25% (increased from 15% in the original April 24, 2024 Forbearance Agreement) of cash receipts of ONCO or its subsidiaries from certain sale or licensing revenues or payments, which increased amount began on October 20, 2024 for cash receipts in September 2024; and (2) payment of 20% (increased from 10% in the original April 24, 2024 Forbearance Agreement) of the net proceeds from certain financing or other transactions outside the ordinary course of business completed by ONCO or any of its subsidiaries during the April 24 Forbearance Period, which increased amount began for any net proceeds received after September 19, 2024. The remaining balance of the April 2024 Promissory Note will be due at the end of the April 2024 Forbearance Period. The remaining balance of the April 2024 Promissory Note will be due at the end of the Forbearance Period. The Company and ONCO entered into a Waiver and Amendment No. 1 to Forbearance Agreement, dated November 26, 2024, that (x) extended the time for the payment by ONCO of the monthly payment of a percentage of its cash receipts referenced in clause (1) above in this paragraph and conditioned the payment of those amounts upon ONCO being able to raise capital of at least $97,000 and (y) increased the percentage of the net proceeds from certain financings payable to the Company from 20% to 25%. The Company and ONCO entered into a Limited Waiver, dated March 31, 2025, to extend the maturity date of the April 2024 Promissory Note to April 14, 2025, and the Company and ONCO entered into a Limited Waiver, dated April 23, 2025, to extend the maturity date of the April 2024 Promissory Note to June 30, 2025.

Previous wording

Operating Expenses. Conducting research and development is central to our metabolic diseases, oncology, and infectious disease programs. The Company has several products under development and management routinely evaluates each product in its portfolio of products. Advancement is limited to available working capital and management’s understanding of the prospects for each product. If future prospects do not meet management’s strategic goals, advancement may be discontinued. We have invested and expect to continue to invest significant time and capital in our research and development operations. Our research and development expenses were $5.7 million and $1.7 million for the three months ended December 31, 2024 and 2023, respectively. The increase in expenses in the three months ended December 31, 2024 is due to the ongoing Phase 2b QUALITY clinical trial. We expect to continue investing significant resources in research and development in the future due to advancement of our drug candidates.

Current wording

Operating Expenses. Conducting research and development is central to our drug development programs. The Company has several products under development and management routinely evaluates each product in its portfolio of products. Advancement is limited to available working capital and management’s understanding of the prospects for each product. If future prospects do not meet management’s strategic goals, advancement may be discontinued. We have invested and expect to continue to invest significant time and capital in our research and development operations. Our research and development expenses were $3.9 million and $3.0 million for the three months ended March 31, 2025 and 2024, respectively, and $9.6 million and $4.6 million for the six months ended March 31, 2025 and 2024, respectively. The increase in expenses in the three and six months ended March 31, 2025 is due to the ongoing Phase 2b QUALITY clinical trial. We expect to continue investing significant resources in research and development in the future due to advancement of our drug candidates.

Previous wording

Selling, general and administrative expenses were $5.2 million in the three months ended December 31, 2024, which is a decrease from $6.7 million in the three months ended December 31, 2023. The decrease is due primarily to a decrease in corporate personnel costs, due to a decrease in share-based compensation expense and a decrease in headcount from 23 to 22, totaling $1.1 million. Additionally, in the prior year period, we incurred severance and other termination costs of $0.2 million, related to two employees in the Company's infectious disease program, which was suspended.

Current wording

Selling, general and administrative expenses were $5.2 million in the three months ended March 31, 2025, which is a decrease from $5.9 million in the three months ended March 31, 2024. The decrease is due primarily to a decrease in corporate personnel costs, due to a decrease in share-based compensation expense of $0.8 million.

Previous wording

Research and development expenses increased to $5.7 million in the three months ended December 31, 2024 from $1.7 million in the same period in fiscal 2023. The increase is due to $4.3 million incurred related to the Company’s Phase 2b QUALITY clinical study for enobosarm as a treatment to augment fat loss and to prevent muscle loss.

Current wording

Research and development expenses increased to $9.6 million in the six months ended March 31, 2025 from $4.6 million in the same period in fiscal 2024. The increase is due to $6.4 million incurred during the six months ended March 31, 2025 related to the Company’s Phase 2b QUALITY clinical study for enobosarm as a treatment to augment fat loss and to prevent muscle loss.

Previous wording

The Company recorded a gain on sale of ENTADFI assets of $0.7 in the three months ended December 31, 2024, a decrease from the gain of $0.9 million in the three months ended December 31, 2023. The Company recognizes a gain on sale of ENTADFI assets as nonrefundable consideration is received. Refer to Note 15 to the financial statements included in this report for additional information.

Current wording

The Company recorded a gain on sale of ENTADFI assets of $1.7 million in the six months ended March 31, 2025, an increase from the gain of $0.9 million in the six months ended March 31, 2024. The Company recognizes a gain on sale of ENTADFI assets as nonrefundable consideration is received. Refer to Note 15 to the financial statements included in this report for additional information.

Previous wording

The Company recorded a gain on extinguishment of debt of $8.6 million in the three months ended December 31, 2024, related to the termination of the Residual Royalty Agreement, in connection with the FC2 Business Sale. The gain is the difference between the change of control payment of $4.2 million and the net carrying amount of the extinguished debt of $12.8 million, which included an embedded derivative for the change of control provision at fair value of $4.7 million.

Current wording

The Company recorded a gain on extinguishment of debt of $8.6 million in the six months ended March 31, 2025, related to the termination of the Residual Royalty Agreement, in connection with the FC2 Business Sale. The gain is the difference between the change of control payment of $4.2 million and the net carrying amount of the extinguished debt of $12.8 million, which included an embedded derivative for the change of control provision at fair value of $4.7 million.

Previous wording

The loss associated with the change in fair value of equity securities for the three months ended December 31, 2024 was $0.3 million compared with $0.4 million for the three months ended December 31, 2023. This is due to the change in fair value of the shares of ONCO Preferred Stock or ONCO Common Stock. Refer to Note 4 to the financial statements included in this report for additional information.

Current wording

The loss associated with the change in fair value of equity securities for the six months ended March 31, 2025 was $0.3 million compared with the $0.6 million loss for the six months ended March 31, 2024. This is due to the change in fair value of the shares of ONCO Preferred Stock or ONCO Common Stock. Refer to Note 4 to the financial statements included in this report for additional information.

Previous wording

The Company recorded net loss from discontinued operations, net of taxes, related to the FC2 business of $7.1 million for the three months ended December 31, 2024, which includes a loss on the sale of the FC2 business of $4.2 million, compared with $0.6 million for the three months ended December 31, 2023. The increase in the net loss from discontinued operations of $6.5 million is due primarily to the loss on the sale of the FC2 business as well as an increase in the loss from the change in fair value of derivative liabilities of $3.1 million, partially offset by an increase in gross profit of $0.4 million and a decrease in selling, general and administrative expenses of $0.5 million.

Current wording

The Company recorded a net loss from discontinued operations, net of taxes, related to the FC2 business of $7.2 million for the six months ended March 31, 2025, which includes a loss on the sale of the FC2 business of $4.2 million, compared with $1.9 million for the six months ended March 31, 2024. The increase in the net loss from discontinued operations of $5.3 million is due primarily to the loss on the sale of the FC2 business of $4.2 million as well as an increase in the loss from the change in fair value of derivative liabilities of $3.0 million, partially offset by a decrease in selling, general and administrative expenses of $2.2 million.

Previous wording

Our cash, cash equivalents, and restricted cash on hand at December 31, 2024 was $26.6 million, compared to $24.9 million at September 30, 2024. Restricted cash included in this balance is $0.4 million at December 31, 2024, for amounts held in escrow related to the FC2 Business Sale, compared to zero at September 30, 2024. At December 31, 2024, the Company had working capital of $22.0 million and stockholders’ equity of $26.6 million compared to working capital of $23.4 million and stockholders’ equity of $32.3 million as of September 30, 2024. The decrease in working capital of discontinued operations, related to the FC2 Business, of $6.1 million at September 30, 2024, was partially offset by an increase in cash, cash equivalents and restricted cash of $1.7 million and a decrease in accrued compensation of $3.0 million.

Current wording

Our cash, cash equivalents, and restricted cash on hand at March 31, 2025 was $20.0 million, compared to $24.9 million at September 30, 2024. Restricted cash included in this balance is $0.4 million at March 31, 2025, for amounts held in escrow related to the FC2 Business Sale, compared to zero at September 30, 2024. At March 31, 2025, the Company had working capital of $15.8 million and stockholders’ equity of $21.0 million compared to working capital of $23.4 million and stockholders’ equity of $32.3 million as of September 30, 2024. The decrease in working capital is due to the decrease in cash, cash equivalents, and restricted cash of $4.9 million and a decrease in working capital of discontinued operations, related to the FC2 Business, of $6.1 million at September 30, 2024, which was partially offset by a decrease in accrued compensation of $2.5 million and the extinguishment of the residual royalty agreement liability, which had a current balance of $1.0 million at September 30, 2024.

Previous wording

Operating activities used cash of $11.3 million in the three months ended December 31, 2024. Cash used in operating activities included net loss of $8.9 million, adjustments to reconcile net loss to net cash used in operating activities totaling an increase of $1.1 million and changes in operating assets and liabilities resulting in a decrease of $3.5 million. Adjustments to net loss primarily consisted of $4.2 million for the loss on sale of the FC2 business, $3.1 million for the change in fair value of derivative liabilities, and $2.7 million of share-based compensation, partially offset by the gain on extinguishment of debt of $8.6 million. The decrease in cash from changes in operating assets and liabilities included a decrease in accrued expenses and other current liabilities of $1.6 million, a decrease in accounts payable of $1.3 million and an increase in accounts receivable of $0.7 million.

Current wording

Operating activities used cash of $19.1 million in the six months ended March 31, 2025. Cash used in operating activities included net loss of $16.8 million, adjustments to reconcile net loss to net cash used in operating activities totaling an increase of $2.5 million and changes in operating assets and liabilities resulting in a decrease of $4.7 million. Adjustments to net loss primarily consisted of $4.9 million for share-based compensation, $4.2 million for the loss on sale of the FC2 business, $3.1 million for the change in fair value of derivative liabilities, partially offset by the gain on extinguishment of debt of $8.6 million and the gain on sale of ENTADFI assets of $1.7 million. The decrease in cash from changes in operating assets and liabilities included a decrease in accrued expenses and other current liabilities of $2.6 million and a decrease in accounts payable of $1.7 million.

Previous wording

Operating activities used cash of $6.0 million in the three months ended December 31, 2023. Cash used in operating activities included net loss of $8.3 million, adjustments to reconcile net loss to net cash used in operating activities totaling an increase of $3.0 million and changes in operating assets and liabilities resulting in a decrease of $0.8 million. Adjustments to net loss primarily consisted of $3.4 million of share-based compensation and $0.4 million for the change in fair value of equity securities, partially offset by the gain on sale of ENTADFI assets of $0.9 million. The decrease in cash from changes in operating assets and liabilities included a decrease in accounts payable of $2.5 million and an increase in prepaid expenses and other assets of $1.3 million, partially offset by a decrease in accounts receivable of $2.1 million and an increase in accrued expenses and other current liabilities of $1.3 million.

Current wording

Operating activities used cash of $11.7 million in the six months ended March 31, 2024. Cash used in operating activities included net loss of $18.3 million, adjustments to reconcile net loss to net cash used in operating activities totaling an increase of $8.1 million and changes in operating assets and liabilities resulting in a decrease of $1.5 million. Adjustments to net loss primarily consisted of $7.0 million for share-based compensation, $0.8 million for a provision for obsolete inventory, and $0.6 million for the change in fair value of equity securities, partially offset by the gain on sale of ENTADFI assets of $0.9 million. The decrease in cash from changes in operating assets and liabilities included a decrease in accounts payable of $5.5 million and an increase in prepaid expenses and other assets of $0.7 million, partially offset by a decrease in accounts receivable of $1.7 million, a decrease in inventories of $1.1 million, and an increase in accrued expenses and other current liabilities of $2.2 million.

Previous wording

The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. Total operating cash flows of discontinued operations for the three months ended December 31, 2024 and 2023 are outflows of $0.3 million and inflows of $1.5 million, respectively.

Current wording

The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. Total operating cash flows of discontinued operations for the six months ended March 31, 2025 and 2024 are outflows of $0.3 million and inflows of $2.8 million, respectively.

Previous wording

Net cash provided by investing activities was $17.2 in the three months ended December 31, 2024, and consisted of net proceeds of $16.2 million from the sale of the FC2 business, proceeds of $0.7 million from the sale of ENTADFI assets, and proceeds of $0.4 million from the sale of equity securities.

Current wording

Net cash provided by investing activities was $18.4 in the six months ended March 31, 2025, and primarily consisted of net proceeds of $16.3 million from the sale of the FC2 business, proceeds of $1.7 million from the sale of ENTADFI assets, and proceeds of $0.4 million from the sale of equity securities.

Previous wording

The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. Total investing cash flows of discontinued operations for the three months ended December 31, 2024 are inflows of $16.2 million, which includes net proceeds from the sale of the FC2 business. There were no cash flows from investing activities of discontinued operations during the three months ended December 31, 2023.

Current wording

The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. Total investing cash flows of discontinued operations for the six months ended March 31, 2025 and 2024 are inflows of $16.3 million, which includes net proceeds from the sale of the FC2 business, and outflows of $41,000, respectively.

Previous wording

Net cash used in financing activities in the three months ended December 31, 2024 was $4.2 million, and consisted of a change of control payment of $4.2 million to SWK pursuant to the Residual Royalty Agreement, which terminated the Residual Royalty Agreement and extinguished the related debt.

Current wording

Net cash used in financing activities in the six months ended March 31, 2025 was $4.2 million, and consisted of a change of control payment of $4.2 million to SWK pursuant to the Residual Royalty Agreement, which terminated the Residual Royalty Agreement and extinguished the related debt.

Previous wording

Net cash provided by financing activities in the three months ended December 31, 2023 was $37.0 million, and primarily consisted of proceeds from the sale of shares in a public offering, net of commissions and costs, of $35.4 million and proceeds from sale of shares under the common stock purchase agreement with Lincoln Park Capital (see discussion below) of $1.7 million.

Current wording

Net cash provided by financing activities in the six months ended March 31, 2024 was $36.8 million, and primarily consisted of proceeds from the sale of shares in a public offering, net of commissions and costs, of $35.2 million and proceeds from sale of shares under the common stock purchase agreement with Lincoln Park Capital (see discussion below) of $1.7 million.

Previous wording

In connection with the Credit Agreement, Veru and the Agent also entered into a Residual Royalty Agreement, dated as of March 5, 2018 (as amended, the “Residual Royalty Agreement”), which provides for an ongoing royalty payment of 5% of product revenue from net sales of FC2, which continues after the repayment of the loan and return premium under the Credit Agreement. The Residual Royalty Agreement will terminate upon (i) a change of control or sale of the FC2 business and the payment by the Company of the amount due in connection therewith pursuant to the Residual Royalty Agreement, or (ii) mutual agreement of the parties.

Current wording

In connection with the Credit Agreement, Veru and the Agent also entered into a Residual Royalty Agreement, dated as of March 5, 2018 (as amended, the “Residual Royalty Agreement”), which provided for an ongoing royalty payment of 5% of product revenue from net sales of FC2, which continued after the repayment of the loan and return premium under the Credit Agreement.

Previous wording

Excluding the change of control payment, the Company made total payments under the Residual Royalty Agreement of $0.3 million and $6.0 million during the three months ended December 31, 2024 and 2023, respectively. The Company is not required to make any additional payments under the Residual Royalty Agreement.

Current wording

Excluding the change of control payment, the Company made total payments under the Residual Royalty Agreement of $0.3 million during each of the six months ended March 31, 2025 and 2024. The Company is not required to make any additional payments under the Residual Royalty Agreement.

Previous wording

During the three months ended December 31, 2024, we did not sell any shares under the Lincoln Park Purchase Agreement. During the three months ended December 31, 2023, we sold 1,800,000 shares of common stock to Lincoln Park resulting in proceeds to the Company of $1.7 million. As a result of these sales, we recorded approximately $164,000 of deferred costs to additional paid-in capital. Since inception of the Lincoln Park Purchase Agreement through December 31, 2024, we have sold 3,025,000 shares of common stock to Lincoln Park resulting in proceeds to the Company of $3.1 million.

Current wording

During the six months ended March 31, 2025, we did not sell any shares under the Lincoln Park Purchase Agreement. During the six months ended March 31, 2024, we sold 1,800,000 shares of common stock to Lincoln Park resulting in proceeds to the Company of $1.7 million. As a result of these sales, we recorded approximately $164,000 of deferred costs to additional paid-in capital. Since inception of the Lincoln Park Purchase Agreement through March 31, 2025, we have sold 3,025,000 shares of common stock to Lincoln Park resulting in proceeds to the Company of $3.1 million.

Previous wording

On May 12, 2023, the Company entered into an Open Market Sale Agreement SM (the “Jefferies Sales Agreement”) with Jefferies LLC (“Jefferies”), as sales agent, pursuant to which we may issue and sell, from time to time, through Jefferies, shares of the Company’s common stock, with an aggregate value of up to $75 million (not to exceed the lesser of 39,609,072 shares of common stock or the number of authorized, unissued and available shares of common stock at any time). On August 19, 2024, the Company delivered notice to Jefferies to terminate the Jefferies Sales Agreement, which was effective on September 3, 2024. Pursuant to the terms of the Jefferies Sales Agreement, the Company could issue and sell, from time to time through or to Jefferies, shares of its common stock as set forth in the Jefferies Sales Agreement with an aggregate value of up to $75 million. As a result of the termination of the Jefferies Sales Agreement, the Company will not issue or sell any additional shares of common stock under the Jefferies Sales Agreement

Current wording

On May 12, 2023, the Company entered into an Open Market Sale Agreement SM (the “Jefferies Sales Agreement”) with Jefferies LLC (“Jefferies”), as sales agent, pursuant to which we could issue and sell, from time to time, through Jefferies, shares of the Company’s common stock, with an aggregate value of up to $75 million (not to exceed the lesser of 39,609,072 shares of common stock or the number of authorized, unissued and available shares of common stock at any time). On August 19, 2024, the Company delivered notice to Jefferies to terminate the Jefferies Sales Agreement, which was effective on September 3, 2024. As a result of the termination of the Jefferies Sales Agreement, the Company will not issue or sell any additional shares of common stock under the Jefferies Sales Agreement

Previous wording

During the three months ended December 31, 2023, we sold 90,156 shares of common stock under the Jefferies Sales Agreement resulting in net proceeds to the Company of $67,000. Since inception of the Jefferies Sales Agreement through the date the Jefferies Sales Agreement was terminated, we sold 1,367,415 shares of common stock resulting in net proceeds to the Company of $1.1 million.

Current wording

During the six months ended March 31, 2024, we sold 90,156 shares of common stock under the Jefferies Sales Agreement resulting in net proceeds to the Company of $67,000. Since inception of the Jefferies Sales Agreement through the date the Jefferies Sales Agreement was terminated, we sold 1,367,415 shares of common stock resulting in net proceeds to the Company of $1.1 million.

Previous wording

As of September 30, 2024, the Company’s financial liabilities measured at fair value on a recurring basis, which consisted of embedded derivatives, represented the fair value of the change of control provision in the Residual Royalty Agreement. During the three months ended December 31, 2024, the Residual Royalty Agreement was terminated and the embedded derivative was extinguished together with the debt. See Note 8 to the financial statements included in this report for additional information.

Current wording

As of September 30, 2024, the Company’s financial liabilities measured at fair value on a recurring basis, which consisted of embedded derivatives, represented the fair value of the change of control provision in the Residual Royalty Agreement. During the six months ended March 31, 2025, the Residual Royalty Agreement was terminated and the embedded derivative was extinguished together with the debt. See Note 8 to the financial statements included in this report for additional information.