Onconetix, Inc. Material Event - What Happened

Onconetix, Inc. recently announced a significant development that impacts its stock and future. This summary breaks down the event in clear, accessible language, avoiding complex financial jargon.

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Event Description

Onconetix, Inc. stockholders have approved a plan to implement a reverse stock split. Imagine a pie cut into many small slices; a reverse stock split combines those small slices into fewer, larger ones. Consequently, you will own fewer shares, but each share will be worth more. The company's Board of Directors now holds the authority to determine the exact ratio, which can range from combining 2 shares into 1 (a "1-for-2" split) up to combining 50 shares into 1 (a "1-for-50" split). This flexibility allows the Board to select a ratio that best addresses market conditions and Nasdaq listing requirements at the time of implementation. They can execute this action at any point within the next year.

This decision typically occurs when a company's stock price has fallen very low, often trading below the Nasdaq minimum of $1.00 per share for an extended period. While the filing does not explicitly state the reason, Onconetix is highly likely pursuing this action to:

• Meet Nasdaq listing requirements: A low stock price risks delisting from Nasdaq. Delisting moves shares to less liquid over-the-counter (OTC) markets, making them harder to trade and significantly reducing investor interest. A higher share price helps the company maintain its listing on a major exchange.
• Attract more investors: Many larger institutional investors and funds have policies against investing in "penny stocks" (stocks trading at very low prices). A higher share price can make the stock appear more legitimate and attractive to a broader range of investors, potentially opening doors for future capital raises.
• Improve perception: A very low stock price can sometimes suggest a company is struggling, even if its underlying business is not. A higher price can improve this perception, making the company seem more stable.

Event Date/Timeline

Key dates for this event include:

• February 3, 2026: Onconetix held a special meeting for its stockholders.
• February 9, 2026: The company filed an official announcement with the SEC regarding the approval.

The Board of Directors has up to one year from the meeting date (February 3, 2026) to implement the reverse stock split.

Impact Assessment

This development carries significant implications as it directly impacts the company's stock and its ability to remain listed on a major exchange like Nasdaq.

• For the stock price: Immediately after the split, the price per share will increase proportionally to the chosen split ratio. For example, if a 1-for-10 split occurs and the stock was trading at $0.50, it would become $5.00.
• For your investment value: Initially, the total value of your investment should not change. If you owned 100 shares at $0.50 ($50 total), a 1-for-10 split would result in you owning 10 shares at $5.00 ($50 total).
• For the company's future: Successfully completing a reverse split and maintaining its Nasdaq listing is crucial for Onconetix's visibility and access to capital. This is a necessary step to avoid being pushed to less liquid markets, which could severely hinder its ability to fund operations and growth.

Who is affected?

• Investors (you): Your number of shares will decrease, but the price per share will increase. The total value of your investment should remain the same at the moment of the split. However, the market's reaction to the split can cause the value to change afterward.
• Onconetix Employees: This move primarily concerns the company's stock structure and listing; it does not directly affect their day-to-day jobs or job security.
• The company itself: This is a strategic move to maintain its listing and potentially improve its market perception and access to capital.
• Customers/patients or competitors: This specific event has no direct impact on these groups.

What happens next?

• Immediately: The Board of Directors will decide the exact reverse split ratio (between 1-for-2 and 1-for-50) and the effective date for the split.
• In the short term (when the split happens): Your brokerage account will reflect fewer shares at a higher price per share. The stock symbol (ONCO) will likely remain the same, though a temporary 'D' might be added for a short period to indicate a corporate action.
• Longer term (next year and beyond): The success of this move will depend on whether it helps Onconetix maintain its Nasdaq listing and if the market responds positively to the company's efforts to stabilize its stock and grow its business. Investors will closely monitor progress in core business areas, such as clinical trial advancements, regulatory milestones for its drug pipeline, and any strategic partnerships or commercialization efforts.

Financial Impact

The reverse stock split will primarily reduce the number of outstanding common shares of Onconetix, Inc. For instance, if a 1-for-10 split is implemented, every ten shares held will convert into one share. The par value per share will remain unchanged. While the total market value of outstanding shares should not immediately change, market reactions can cause fluctuations thereafter. This action will also proportionally adjust the exercise price and share count for outstanding stock options, warrants, and convertible securities. This action aims to increase the per-share trading price, meet Nasdaq listing requirements, and potentially attract a broader range of institutional investors, which could facilitate future capital raises. Fractional shares resulting from the split will typically be paid out in cash based on the closing price on the effective date.

Key Takeaways for Investors

For investors watching Onconetix stock, here are the key takeaways:

• Expect fewer shares: When the split occurs, your share count will decrease, but the price per share will increase. Your total investment value should remain the same immediately after the split.
• Monitor for the Board's decision: Watch for an announcement from Onconetix regarding the specific ratio and the effective date of the split.
• Understand reverse splits: While often necessary to meet listing requirements, some investors view them as a sign of a struggling company. However, for companies striving to turn things around, it can be a vital step.
• Focus on fundamentals: This action changes the structure of the stock, not the underlying business. Beyond the stock split, it is crucial to evaluate Onconetix's underlying financial health. Review their latest financial reports (10-Q, 10-K) for details on revenue, operating expenses, cash burn rate, and projected cash reserves. A reverse split does not directly alter the company's balance sheet or income statement.
• Recognize inherent risks: Consider the inherent risks of a biotechnology company, including the high costs and uncertainties of drug development, potential clinical trial failures, regulatory approval hurdles, market competition, and the ongoing need for capital to fund operations.
• Evaluate the company's strategy: Understand Onconetix's long-term strategy: What are their key drug candidates? What markets are they targeting? What is their path to profitability or significant revenue generation? A reverse split is a structural fix; sustained success depends on business execution.
• Anticipate volatility: The stock might experience volatility around the announcement of the specific ratio and the effective date.
• Fractional shares: If the split ratio results in you owning a fraction of a share (e.g., 10 shares become 1.5 shares), your brokerage will typically either round up or pay you cash for the fractional part. Confirm with your broker.
• Potential for future dilution: While the split itself does not dilute existing shareholders, companies often pursue reverse splits to enable future capital raises. Keep an eye on any announcements regarding new share offerings, which could dilute your ownership percentage.