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) 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.

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 greater loss of fat mass in at-risk sarcopenic obese and overweight older patients.

Previous 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.

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 in men.

Previous wording

Advanced cancer can cause a loss of appetite where there is significant loss of both lean mass and fat mass. Enobosarm has been evaluated in five separate third-party clinical trials in which lean mass measurement was a primary or co-primary endpoint. These third-party clinical trials include two Phase 2 clinical trials in healthy older or sarcopenic subjects (168 subjects) and one Phase 2b clinical trial and two Phase 3 clinical trials in subjects with muscle wasting because of cancer (800 subjects), generating lean mass and safety data from a total of 968 patients. Based on a large safety database which includes 1,581 men and women with treatment duration for up to 3 years, enobosarm has been generally well tolerated in clinical trials completed to date. However, no preclinical studies or clinical trials evaluating the combination of enobosarm and a GLP-1 RA have been completed to date. All the nonclinical and clinical efficacy and safety data on enobosarm including those generated by these five third-party clinical trials are owned by Veru pursuant to an assignment from the University of Tennessee Research Foundation.

Current wording

Enobosarm has been evaluated in five separate third-party clinical trials in which lean mass measurement was a primary or co-primary endpoint. These third-party clinical trials include two Phase 2 clinical trials in healthy older or sarcopenic subjects (168 subjects) and one Phase 2b clinical trial and two Phase 3 clinical trials in subjects with muscle wasting because of cancer (800 subjects), generating lean mass and safety data from a total of 968 patients. Based on a large safety database which includes 1,581 men and women with treatment duration for up to 3 years, enobosarm has been generally well tolerated in clinical trials completed to date. All the nonclinical and clinical efficacy and safety data on enobosarm including those generated by these five third-party clinical trials are owned by Veru pursuant to an assignment from the University of Tennessee Research Foundation.

Previous 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.

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, 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

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.

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 evaluated whether enobosarm can maintain muscle and prevent the fat regain that generally occurs after discontinuing a GLP-1 RA.

Previous wording

On January 27, 2025, the Company announced positive topline results from the Phase 2b QUALITY clinical study. The Phase 2b QUALITY study is the first human study to report the effects of a muscle preservation drug candidate on body composition in older patients who have obesity or are overweight and receiving a GLP-1 receptor agonist. In the topline efficacy analysis, the trial met its prespecified primary endpoint with a statistically significant and a clinically meaningful benefit in the preservation of total lean body mass in all patients receiving enobosarm + semaglutide versus placebo + semaglutide at 16 weeks (71% relative reduction in lean mass loss, p=0.002). The enobosarm 3mg + semaglutide was the best dose with a >99% mean relative reduction in loss of lean mass (p <0.001). Enobosarm 6mg + semaglutide dose was not better than the Enobosarm 3mg + semaglutide dose on lean mass.

Current wording

The Phase 2b QUALITY study is the first human study to report the effects of a muscle preservation drug candidate on body composition in older patients who have obesity or are overweight and receiving a GLP-1 receptor agonist. The trial met its prespecified primary endpoint with a statistically significant and a clinically meaningful benefit in the preservation of total lean body mass in all patients receiving enobosarm 3mg + semaglutide versus placebo + semaglutide at 16 weeks (100% relative reduction in lean mass loss, p<0.001).

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 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.

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 42% greater relative loss of fat mass compared to placebo + semaglutide group at 16 weeks (p=0.017) and the enobosarm 3mg having a 12% greater fat loss. 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 mean percentage of total body mass loss in the placebo + semaglutide group that was due to lean mass was 34% and estimated fat loss was 66%. In contrast, in the enobosarm 3mg + semaglutide group, the total weight loss due to lean mass was 0% and estimated fat loss was 100%, and for the enobosarm 6mg + semaglutide group, it was 16.7% lean mass and 83.3% 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

As the Phase 2b QUALITY clinical trial had positive topline results, we plan to request an End of Phase 2 meeting with the FDA. During the preIND FDA meeting, the FDA provided general comments about a regulatory path forward for enobosarm as a drug that improves body composition during weight loss including input on Phase 3 clinical program design.

Current wording

We have been granted a meeting with the FDA to discuss our planned Phase 3 clinical program for enobosarm as a treatment to augment fat loss and to prevent muscle loss in sarcopenic obese or overweight elderly patients receiving a GLP-1 RA for chronic weight management. During the preIND FDA meeting, the FDA provided general comments about a regulatory path forward for enobosarm as a drug that improves body composition during weight loss including input on Phase 3 clinical program design.

Previous 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.

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 patients 60 years of age and older 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

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.

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 the initial Phase 1 bioavailability clinical trial in July 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

Given the recent positive topline results from the Phase 2b QUALITY study evaluating enobosarm as a cardiometabolic agent that has the potential to preserve muscle and augment fat loss in overweight and obese patients receiving GLP-1 RA therapy for weight reduction, Veru has evolved its drug development strategy for sabizabulin and is exploring the possibility of the clinical development of sabizabulin, a novel oral broad anti-inflammatory agent, for the treatment of inflammation in atherosclerotic cardiovascular disease. The Company’s decision to explore this major cardiometabolic indication was based on the significant unmet medical need to treat inflammation in atherosclerotic cardiovascular disease, the large global market opportunity, current clinical and safety sabizabulin database of 266 patients, high probability of success of the drug’s mechanism of action which is similar to colchicine, and strong intellectual property position. Furthermore, we believe sabizabulin may be evaluated in a small Phase 2 dose finding proof of concept study (approximately 40 patients per arm) to assess the progression of coronary atherosclerosis in patients with stable CAD using as the primary endpoint coronary plaque volume and composition measured by coronary CT angiography imaging. More specifically, low attenuation plaque volume (LAPV) has been shown be an excellent predictor of cardiovascular events in the SCOT-HEART Trial (Scottish Computed Tomography of the HEART). It should be noted that the FDA has granted drug approvals from CAD atherosclerosis clinical studies using coronary or carotid artery imaging as a primary endpoint to support the indication for the treatment to slow the progression or promote regression of atherosclerotic disease (CRESTOR (rosuvastatin calcium) tablets package insert and NIASPAN® (niacin) extended release tablets package insert).

Current wording

Given the recent positive topline results from the Phase 2b QUALITY study evaluating enobosarm as a cardiometabolic agent that has the potential to preserve muscle and augment fat loss in overweight and obese patients receiving GLP-1 RA therapy for weight reduction, Veru has evolved its drug development strategy for sabizabulin and is exploring the possibility of the clinical development of sabizabulin, a novel oral broad anti-inflammatory agent, for the treatment of inflammation in atherosclerotic cardiovascular disease. The Company’s decision to explore this major cardiometabolic indication was based on the significant unmet medical need to treat inflammation in atherosclerotic cardiovascular disease, the large global market opportunity, current clinical and safety sabizabulin database of 266 patients, high probability of success of the drug’s mechanism of action which is similar to colchicine, and strong intellectual property position. Furthermore, we believe sabizabulin may be evaluated in a small Phase 2 dose finding proof of concept study to assess whether sabizabulin reduces blood levels of high sensitivity C-reactive protein, a measurement of inflammation, in patients with stable CAD.

Previous wording

Veru had a pre-IND meeting with the FDA Division of Cardiology and Nephrology Center for Drug Evaluation and Research on December 26, 2024. The indication for discussion was the use of sabizabulin to slow progression or promote regression of atherosclerotic disease in patients with a history of coronary artery disease. The FDA agreed that there remains an unmet medical need based on disease pathophysiology and concurred with the general design of the small Phase 2 study using coronary CT angiography imaging as primary endpoint. The FDA also requested that the Company conduct chronic nonclinical toxicology animal studies to support the chronic use of sabizabulin for this indication. The chronic nonclinical toxicology studies are expected to be completed and a new IND for the proposed indication is planned to be submitted by the first half of calendar 2026. Veru currently has sufficient drug substance to supply the proposed Phase 2 clinical study.

Current wording

Veru had a pre-IND meeting with the FDA Division of Cardiology and Nephrology Center for Drug Evaluation and Research on December 26, 2024. The indication for discussion was the use of sabizabulin to slow progression or promote regression of atherosclerotic disease in patients with a history of coronary artery disease. The FDA agreed that there remains an unmet medical need based on disease pathophysiology. Veru currently has sufficient drug substance to supply the proposed Phase 2 clinical study in patients with stable CAD to measure levels of high sensitivity C-reactive protein.

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 $16.3 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.

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 $4.3 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%. 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.

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; 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; the Company and ONCO entered into a Limited Waiver, dated June 30, 2025, to extend the maturity date of the April 2024 Promissory Note to July 31, 2025; and the Company and ONCO entered into a Limited Waiver, dated July 31, 2025, to extend the maturity date of the April 2024 Promissory Note to August 14, 2025.

Previous wording

ONCO and the Company also agreed to the following amendments to the September 2024 Promissory Note in the Forbearance Agreement: (1) the maturity date of the September 2024 Promissory Note was extended to June 30, 2025; (2) the accrual of interest at the rate of 10% per annum on any unpaid principal balance of the September 2024 Promissory Note commencing on October 1, 2024 through the date that the outstanding principal balance under the September 2024 Promissory Note is paid in full; (3) any amounts owed on the September 2024 Promissory Note, including but not limited to unpaid principal and accrued interest, will be paid in cash or, upon the mutual written consent of ONCO and the Company, in shares of the ONCO common stock or a combination of cash and ONCO common stock; (4) following full repayment of all principal and interest under the April 2024 Promissory Note, ONCO will make the Required Payments first towards accrued and unpaid interest under the September 2024 Promissory Note and then towards the remaining principal balance payable under the September 2024 Promissory Note; and (5) if the aggregate unpaid principal outstanding under the April 2024 Promissory Note and the September 2024 Promissory Note and all accrued and unpaid interest thereon is repaid in cash on or before December 31, 2024, then the total principal balance under the September 2024 Promissory Note that will be payable by ONCO in satisfaction of its obligations under the September 2024 Promissory Note will be reduced from $5,000,000 to $3,500,000.

Current wording

ONCO and the Company also agreed to the following amendments to the September 2024 Promissory Note in the Forbearance Agreement: (1) the maturity date of the September 2024 Promissory Note was extended to June 30, 2025; (2) the accrual of interest at the rate of 10% per annum on any unpaid principal balance of the September 2024 Promissory Note commencing on October 1, 2024 through the date that the outstanding principal balance under the September 2024 Promissory Note is paid in full; (3) any amounts owed on the September 2024 Promissory Note, including but not limited to unpaid principal and accrued interest, will be paid in cash or, upon the mutual written consent of ONCO and the Company, in shares of the ONCO common stock or a combination of cash and ONCO common stock; (4) following full repayment of all principal and interest under the April 2024 Promissory Note, ONCO will make the Required Payments first towards accrued and unpaid interest under the September 2024 Promissory Note and then towards the remaining principal balance payable under the September 2024 Promissory Note; and (5) if the aggregate unpaid principal outstanding under the April 2024 Promissory Note and the September 2024 Promissory Note and all accrued and unpaid interest thereon is repaid in cash on or before December 31, 2024, then the total principal balance under the September 2024 Promissory Note that will be payable by ONCO in satisfaction of its obligations under the September 2024 Promissory Note will be reduced from $5,000,000 to $3,500,000. The Company and ONCO entered into a Limited Waiver, dated June 30, 2025, to extend the maturity date of the September 2024 Promissory Note to July 31, 2025 and the Company and ONCO entered into a Limited Waiver, dated July 31, 2025, to extend the maturity of the September 2024 Promissory Note to August 14, 2025. On August 7, 2025, the Company and ONCO entered into an Amended and Restated Promissory Note increasing the principal amount due under the September 2024 Promissory Note to $5.1 million from $5.0 million, after the Company loaned an additional $0.1 million to ONCO.

Previous 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.

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 $3.0 million and $4.8 million for the three months ended June 30, 2025 and 2024, respectively, and $12.7 million and $9.5 million for the nine months ended June 30, 2025 and 2024, respectively. The expenses incurred in the three and nine months ended June 30, 2025 are primarily due to the 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

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.

Current wording

Research and development expenses decreased to $3.0 million in the three months ended June 30, 2025 from $4.8 million in the same period in fiscal 2024. The decrease in research and development expenses is due primarily to the wind down of the Company’s Phase 2b QUALITY clinical study for enobosarm as a treatment to augment fat loss and to prevent muscle loss, which was completed during the quarter ended June 30, 2025. The Company initiated the Phase 2b QUALITY clinical study during the quarter ended June 30, 2024.

Previous 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.

Current wording

Selling, general and administrative expenses were $5.0 million in the three months ended June 30, 2025, which is a decrease from $5.8 million in the three months ended June 30, 2024. The decrease is due primarily to a decrease in corporate personnel costs, due to a decrease in share-based compensation expense of $1.0 million.

Previous wording

The Company recorded a gain on sale of ENTADFI assets of $1.0 million in the three months ended March 31, 2025, compared to zero in the three 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.

Current wording

The Company recorded a gain on sale of ENTADFI assets of $0.5 million in the three months ended June 30, 2025, compared to $0.1 million in the three months ended June 30, 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 net loss from discontinued operations, net of taxes, related to the FC2 business of $49,000 for the three months ended March 31, 2025, compared with $1.3 million for the three months ended March 31, 2024. The net loss from discontinued operations during the three months ended March 31, 2025 is due to changes in estimates made at the time the FC2 business was sold. The net loss from discontinued operations in the three months ended March 31, 2024 is attributable to the operations of the FC2 business during that period.

Current wording

The Company recorded a net loss from discontinued operations, net of taxes, related to the FC2 business of $10,000 for the three months ended June 30, 2025, compared with $0.6 million for the three months ended June 30, 2024. The net loss from discontinued operations during the three months ended June 30, 2025 is due to changes in estimates made at the time the FC2 business was sold. The net loss from discontinued operations in the three months ended June 30, 2024 is attributable to the operations of the FC2 business during that period.

Previous wording

Research and development expenses increased to $3.9 million in the three months ended March 31, 2025 from $3.0 million in the same period in fiscal 2024. The increase in research and development expenses is due primarily to an increase of $1.1 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 $12.7 million in the nine months ended June 30, 2025 from $9.5 million in the same period in fiscal 2024. The increase is due to an increase of $4.5 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, partially offset by a decrease in expenditures related to the Company’s other drug development programs that were terminated in previous years.

Previous wording

Selling, general and administrative expenses were $10.4 million in the six months ended March 31, 2025, which is a decrease from $12.6 million in the six 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 $1.6 million, and a decrease in legal expenses incurred of $0.4 million.

Current wording

Selling, general and administrative expenses were $15.4 million in the nine months ended June 30, 2025, which is a decrease from $18.4 million in the nine months ended June 30, 2024. The decrease is due primarily to a decrease in corporate personnel costs, due to a decrease in share-based compensation expense of $2.6 million.

Previous 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.

Current wording

The Company recorded a gain on sale of ENTADFI assets of $2.2 million in the nine months ended June 30, 2025, an increase from the gain of $1.0 million in the nine months ended June 30, 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 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.

Current wording

The Company recorded a gain on extinguishment of debt of $8.6 million in the nine months ended June 30, 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 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.

Current wording

The loss associated with the change in fair value of equity securities for the nine months ended June 30, 2025 was $0.3 million compared with the $0.7 million loss for the nine months ended June 30, 2024. This is due to the change in fair value of the shares of ONCO Preferred Stock or ONCO Common Stock, which were sold during the nine months ended June 30, 2025. Refer to Note 4 to the financial statements included in this report for additional information.

Previous 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.

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 nine months ended June 30, 2025, which includes a loss on the sale of the FC2 business of $4.3 million, compared with $2.6 million for the nine months ended June 30, 2024. The increase in the net loss from discontinued operations of $4.6 million is due primarily to the loss on the sale of the FC2 business of $4.3 million as well as an increase in the loss from the change in fair value of derivative liabilities of $3.2 million, partially offset by a decrease in operating expenses of $3.9 million.

Previous 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.

Current wording

Our cash, cash equivalents, and restricted cash on hand at June 30, 2025 was $15.0 million, compared to $24.9 million at September 30, 2024. Restricted cash included in this balance is $0.4 million at June 30, 2025, for amounts held in escrow related to the FC2 Business Sale, compared to zero at September 30, 2024. At June 30, 2025, the Company had working capital of $9.5 million and stockholders’ equity of $15.3 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 $9.9 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 $1.7 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 $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.

Current wording

Operating activities used cash of $24.6 million in the nine months ended June 30, 2025. Cash used in operating activities included net loss of $24.2 million, adjustments to reconcile net loss to net cash used in operating activities totaling an increase of $3.9 million and changes in operating assets and liabilities resulting in a decrease of $4.3 million. Adjustments to net loss primarily consisted of $6.6 million for share-based compensation, $4.3 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 $2.2 million. The decrease in cash from changes in operating assets and liabilities primarily included a decrease in accrued expenses and other current liabilities of $1.9 million and a decrease in accounts payable of $1.9 million.

Previous 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.

Current wording

Operating activities used cash of $17.3 million in the nine months ended June 30, 2024. Cash used in operating activities included net loss of $29.3 million, adjustments to reconcile net loss to net cash used in operating activities totaling an increase of $12.2 million and changes in operating assets and liabilities resulting in a decrease of $0.2 million. Adjustments to net loss primarily consisted of $10.4 million of share-based compensation, $1.3 million for a provision for obsolete inventory, and $0.7 million for the change in fair value of equity securities, partially offset by the gain on sale of ENTADFI assets of $1.0 million. The decrease in cash from changes in operating assets and liabilities included a decrease in accounts payable of $5.2 million and a decrease in operating lease liabilities of $0.6 million, partially offset by a decrease in accounts receivable of $2.9 million and an increase in accrued expenses and other current liabilities of $2.8 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 six months ended March 31, 2025 and 2024 are outflows of $0.3 million and inflows of $2.8 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 nine months ended June 30, 2025 and 2024 are outflows of $0.3 million and inflows of $4.1 million, respectively.

Previous 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.

Current wording

Net cash provided by investing activities was $18.9 million in the nine months ended June 30, 2025, and primarily consisted of net proceeds of $16.3 million from the sale of the FC2 business, proceeds of $2.2 million from the sale of ENTADFI assets, and proceeds of $0.4 million from the sale of equity securities.

Previous wording

Net cash used in investing activities was $41,000 during the six months ended March 31, 2024, and consisted of capital expenditures in Malaysia, related to the FC2 business.

Current wording

Net cash used in investing activities was $15,000 during the nine months ended June 30, 2024, and consisted of proceeds of $110,000 from the sale of ENTADFI assets, partially offset by $95,000 of capital expenditures primarily at our Malaysia location, related to the FC2 business.

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 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.

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 nine months ended June 30, 2025 and 2024 are inflows of $16.3 million, which includes net proceeds from the sale of the FC2 business, and outflows of $96,000, respectively.

Previous 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.

Current wording

Net cash used in financing activities in the nine months ended June 30, 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 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.

Current wording

Net cash provided by financing activities in the nine months ended June 30, 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

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.

Current wording

Excluding the change of control payment, the Company made total payments under the Residual Royalty Agreement of $0.3 million and $0.5 million during the nine months ended June 30, 2025 and 2024, respectively. The Company is not required to make any additional payments under the Residual Royalty Agreement.

Previous wording

On December 18, 2023, we completed an underwritten public offering of 52,708,332 shares of our common stock, which included the exercise in full of the underwriters’ option to purchase additional shares, at a public offering price of $0.72 per share. Net proceeds to the Company from this offering were approximately $35.2 million after deducting underwriting discounts and commissions and costs paid by the Company. All of the shares sold in the offering were by the Company. The offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-270606).

Current wording

On December 18, 2023, we completed an underwritten public offering of 5,270,833 shares of our common stock, which included the exercise in full of the underwriters’ option to purchase additional shares, at a public offering price of $7.20 per share. Net proceeds to the Company from this offering were approximately $35.2 million after deducting underwriting discounts and commissions and costs paid by the Company. All of the shares sold in the offering were by the Company. The offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-270606).

Previous wording

On May 2, 2023, the Company entered into a common stock purchase agreement (as amended, the “Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company has the right, but not the obligation, to sell to Lincoln Park up to $100.0 million of shares (the “Purchase Shares”) of the Company’s common stock over the 36-month term of the Lincoln Park Purchase Agreement. On the date the Company executed the Lincoln Park Purchase Agreement, we also issued 800,000 shares of the Company’s common stock to Lincoln Park as an initial fee for Lincoln Park’s commitment to purchase shares of the Company’s common stock under the Lincoln Park Purchase Agreement, and we are obligated to issue $1.0 million of shares of the Company’s common stock at the time Lincoln Park’s purchases cumulatively reach an aggregate amount of $50.0 million (such shares, collectively, the “Commitment Shares”). On December 13, 2023, the Company entered into an amendment (the “Lincoln Park Amendment”) with Lincoln Park to reduce the amount of shares of common stock subject to the registration from $100.0 million to $50.0 million until the Company has sold at least $50.0 million of shares of common stock under the Lincoln Park Purchase Agreement. The Purchase Shares up to $50.0 million and Commitment Shares under the Lincoln Park Purchase Agreement have been registered pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-270606), and a related prospectus supplement that was filed with the SEC on May 3, 2023, as further supplemented on December 13, 2023 to reflect the Lincoln Park Amendment.

Current wording

On May 2, 2023, the Company entered into a common stock purchase agreement (as amended, the “Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company has the right, but not the obligation, to sell to Lincoln Park up to $100.0 million of shares (the “Purchase Shares”) of the Company’s common stock over the 36-month term of the Lincoln Park Purchase Agreement. On the date the Company executed the Lincoln Park Purchase Agreement, we also issued 80,000 shares of the Company’s common stock to Lincoln Park as an initial fee for Lincoln Park’s commitment to purchase shares of the Company’s common stock under the Lincoln Park Purchase Agreement, and we are obligated to issue $1.0 million of shares of the Company’s common stock at the time Lincoln Park’s purchases cumulatively reach an aggregate amount of $50.0 million (such shares, collectively, the “Commitment Shares”). On December 13, 2023, the Company entered into an amendment (the “Lincoln Park Amendment”) with Lincoln Park to reduce the amount of shares of common stock subject to the registration from $100.0 million to $50.0 million until the Company has sold at least $50.0 million of shares of common stock under the Lincoln Park Purchase Agreement. The Purchase Shares up to $50.0 million and Commitment Shares under the Lincoln Park Purchase Agreement have been registered pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-270606), and a related prospectus supplement that was filed with the SEC on May 3, 2023, as further supplemented on December 13, 2023 to reflect the Lincoln Park Amendment.

Previous 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.

Current wording

During the nine months ended June 30, 2025, we did not sell any shares under the Lincoln Park Purchase Agreement. During the nine months ended June 30, 2024, we sold 180,000 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 June 30, 2025, we have sold 302,500 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 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

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 3,960,907 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