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What changed in InMed Pharmaceuticals Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of InMed Pharmaceuticals Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+243 added−222 removedSource: 10-K (2025-09-23) vs 10-K (2024-09-30)

Top changes in InMed Pharmaceuticals Inc.'s 2025 10-K

243 paragraphs added · 222 removed · 145 edited across 6 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

88 edited+29 added−49 removed405 unchanged
Biggest changeThis summary may not contain all of our material risks, and it is qualified in its entirety by the more detailed risk factors set forth below. ● Our prospects depend on the success of our Product Candidates, which are in the early stages of development with a statistically high probability of failure and are subject to lengthy, time-consuming and inherently unpredictable regulatory processes. ● If clinical trials of our Product Candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we would incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our Product Candidates. ● We intend to expend our limited resources to pursue our Product Candidates for certain indications and may fail to capitalize on other Product Candidates or other indications for our Product Candidates that may be more profitable or for which there is a greater likelihood of success. ● Our Product Candidates contain compounds that may be classified as “controlled substances”, the use of which may generate public controversy and restrict their development or commercialization. ● Any actual or threatened delisting of our securities by Nasdaq due to our inability to satisfy applicable listing standards, including compliance with the minimum bid price rule, could have a material and adverse effect on our business, operations and financial condition, and the liquidity and value of our securities. ● Research restrictions, product shipment delays or prohibitions could have a material adverse effect on our business, results of operations and financial condition. ● Our relationships with customers and third-party payors are subject to applicable anti-kickback, fraud and abuse, and other healthcare laws and regulations, which could expose us to, among other things, sanctions, penalties, damages, reputational harm and diminished profits and future earnings. ● Our insurance may be insufficient to cover losses that may occur as a result of our operations. ● There may be changes in laws, regulations and guidelines which are detrimental to our business. ● Controlled substance legislation may differ in other jurisdictions and could restrict our ability to market our products internationally, which could materially and adversely affect our financial results. ● Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results. ● Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results. ● The market prices for our common shares, no par value (the “Common Shares”), are volatile and are anticipated to fluctuate in the near term. ● Raising additional capital may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our technologies or Product Candidates. ● Future offerings of debt or equity securities may rank senior to our Common Shares. ● For as long as we are an “emerging growth company” we intend to take advantage of reduced disclosure and governance requirements applicable to emerging growth companies, which could result in our Common Shares being less attractive to investors and could make it more difficult for us to raise capital. ● If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our Common Shares. 25 ● Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. ● Deficiencies in disclosure controls and procedures and internal control over financial reporting could result in a material misstatement in our financial statements, and our ability to identify and effectively remediate any such material weaknesses that could have a material and adverse effect. ● In connection with the audit of our financial statements as of and for the year ended June 30, 2023, a material weakness in our internal control over financial reporting was identified and we may identify additional material weaknesses in the future. ● Future sales and issuances of, and rights to purchase, our Common Shares, including by officers and directors could materially dilute the percentage ownership of our shareholders and may cause our share price to fall. ● We (i) have incurred significant losses since our inception and (ii) anticipate we will incur losses in the future, and our operating losses have raised substantial doubt regarding our ability to continue as a going concern ● We will require additional capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete the development and commercialization of our Product Candidates. ● We currently have limited commercial revenue and may never become profitable. ● Our success is largely dependent upon our patents, proprietary technology, and other intellectual property. ● Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. ● We may become subject to claims or become involved in lawsuits related to intellectual property. ● We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful, and materially and adversely effect our business. ● If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished. ● We may not be able to protect our intellectual property rights throughout the world. ● Patent terms may be inadequate to protect our competitive position on our Product Candidates. ● Intellectual property rights do not necessarily address all potential threats to our competitive advantage. ● We rely heavily on contract manufacturers over whom we have limited control and our existing collaboration agreements and any that we may enter into in the future may not be successful. 26 Risk Factors Investing in our Common Shares involves a high degree of risk.
Biggest changeThis summary may not contain all of our material risks, and it is qualified in its entirety by the more detailed risk factors set forth below. ● Our prospects depend on the success of our Product Candidates, which are in the early stages of development with a statistically high probability of failure and are subject to lengthy, time-consuming and inherently unpredictable regulatory processes. ● If clinical trials of our Product Candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we would incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our Product Candidates. ● We intend to expend our limited resources to pursue our Product Candidates for certain indications and may fail to capitalize on other Product Candidates or other indications for our Product Candidates that may be more profitable or for which there is a greater likelihood of success. ● Our Product Candidates contain compounds that may be classified as “controlled substances”, the use of which may generate public controversy and restrict their development or commercialization. ● Any actual or threatened delisting of our securities by Nasdaq due to our inability to satisfy applicable listing standards, including compliance with the minimum bid price rule, could have a material and adverse effect on our business, operations and financial condition, and the liquidity and value of our securities. ● Research restrictions, product shipment delays or prohibitions could have a material adverse effect on our business, results of operations and financial condition. ● Our relationships with customers and third-party payors are subject to applicable anti-kickback, fraud and abuse, and other healthcare laws and regulations, which could expose us to, among other things, sanctions, penalties, damages, reputational harm and diminished profits and future earnings. ● Our insurance may be insufficient to cover losses that may occur as a result of our operations. ● There may be changes in laws, regulations and guidelines which are detrimental to our business. ● Controlled substance legislation may differ in other jurisdictions and could restrict our ability to market our products internationally, which could materially and adversely affect our financial results. 27 ● Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results. ● Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, adversely impacting our operating results. ● The market prices for our common shares, no par value (the “Common Shares”), are volatile and are anticipated to fluctuate in the near term. ● Raising additional capital may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our technologies or Product Candidates. ● Future offerings of debt or equity securities may rank senior to our Common Shares. ● For as long as we are an “emerging growth company” we intend to take advantage of reduced disclosure and governance requirements applicable to emerging growth companies, which could result in our Common Shares being less attractive to investors and could make it more difficult for us to raise capital. ● If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our Common Shares. ● Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. ● Deficiencies in disclosure controls and procedures and internal control over financial reporting could result in a material misstatement in our financial statements, and our ability to identify and effectively remediate any such material weaknesses that could have a material and adverse effect. ● Future sales and issuances of, and rights to purchase, our Common Shares, including by officers and directors could materially dilute the percentage ownership of our shareholders and may cause our share price to fall. ● We (i) have incurred significant losses since our inception and (ii) anticipate we will incur losses in the future, and our operating losses have raised substantial doubt regarding our ability to continue as a going concern ● We will require additional capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete the development and commercialization of our Product Candidates. ● We currently have limited commercial revenue and may never become profitable. ● Our success is largely dependent upon our patents, proprietary technology, and other intellectual property. ● Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. ● We may become subject to claims or become involved in lawsuits related to intellectual property. ● We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful, and materially and adversely effect our business. ● Our industry follows an outsourcing trend in non-clinical discovery stages which could impact the Company’s business model. 28 ● If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished. ● We may not be able to protect our intellectual property rights throughout the world. ● Patent terms may be inadequate to protect our competitive position on our Product Candidates. ● Intellectual property rights do not necessarily address all potential threats to our competitive advantage. ● We rely heavily on contract manufacturers over whom we have limited control and our existing collaboration agreements and any that we may enter into in the future may not be successful.
Acquisitions involve significant risks and uncertainties, including, but not limited to, the following: ● unanticipated costs and liabilities; ● difficulties in marketing and integrating new products, software, businesses, operations and technology infrastructure in an efficient, effective and secure manner, including the integration of businesses where a portion or all of the business is in an adjacent industry; ● the inability to achieve synergy and cost reduction targets assumed at the time of acquisition; ● difficulties in maintaining customer and key supplier relations, including changing contract manufacturers as a result of lower volumes of business; ● the potential loss of key employees of the acquired businesses, including as a result of cultural differences between the acquired company and our own; ● the diversion of the attention of our senior management from the operation of our daily business; ● the potential adverse effect on our net debt and liquidity position as a result of all or a portion of an acquisition purchase price being paid in cash; ● the potential significant increase of our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition; ● the potential issuance of securities that would dilute our shareholders’ percentage ownership; ● the potential to incur restructuring and other related expenses, including significant transaction costs that may be incurred regardless of whether a potential strategic acquisition or investment is completed; ● use of resources that are needed in other areas of our business; ● the inability to maintain uniform standards, controls, policies and procedures, including the inability to establish and maintain adequate internal controls over financial reporting, and remediate, in whole or in part, any material weaknesses or significant deficiencies identified with respect to internal controls over financial reporting; ● difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions; ● difficulties in securing required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all; 55 ● potential impairment charges on higher levels of goodwill and intangible assets as a result of impairment testing performed on a regular basis; ● higher amortization expenses related to acquired definite-lived intangible assets; and ● becoming subject to intellectual property or other litigation.
Acquisitions involve significant risks and uncertainties, including, but not limited to, the following: ● unanticipated costs and liabilities; ● difficulties in marketing and integrating new products, software, businesses, operations and technology infrastructure in an efficient, effective and secure manner, including the integration of businesses where a portion or all of the business is in an adjacent industry; ● the inability to achieve synergy and cost reduction targets assumed at the time of acquisition; ● difficulties in maintaining customer and key supplier relations, including changing contract manufacturers as a result of lower volumes of business; ● the potential loss of key employees of the acquired businesses, including as a result of cultural differences between the acquired company and our own; ● the diversion of the attention of our senior management from the operation of our daily business; ● the potential adverse effect on our net debt and liquidity position as a result of all or a portion of an acquisition purchase price being paid in cash; ● the potential significant increase of our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition; ● the potential issuance of securities that would dilute our shareholders’ percentage ownership; ● the potential to incur restructuring and other related expenses, including significant transaction costs that may be incurred regardless of whether a potential strategic acquisition or investment is completed; ● use of resources that are needed in other areas of our business; ● the inability to maintain uniform standards, controls, policies and procedures, including the inability to establish and maintain adequate internal controls over financial reporting, and remediate, in whole or in part, any material weaknesses or significant deficiencies identified with respect to internal controls over financial reporting; ● difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions; ● difficulties in securing required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all; 56 ● potential impairment charges on higher levels of goodwill and intangible assets as a result of impairment testing performed on a regular basis; ● higher amortization expenses related to acquired definite-lived intangible assets; and ● becoming subject to intellectual property or other litigation.
Restrictions under applicable federal and state healthcare laws and regulations that may affect our ability to operate include the following: ● the U.S. federal healthcare Anti-Kickback Statute impacts our marketing practices, educational programs, pricing policies and relationships with healthcare providers or other entities, by prohibiting, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; 36 ● federal civil and criminal false claims laws and civil monetary penalty laws impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment of government funds (including through reimbursement by Medicare or Medicaid or other federal health care programs), which has been applied to impermissible promotion of pharmaceutical products for off-label uses, or making a false statement or record to avoid, decrease or conceal an obligation to pay money to the federal government; ● the U.S.
Restrictions under applicable federal and state healthcare laws and regulations that may affect our ability to operate include the following: ● the U.S. federal healthcare Anti-Kickback Statute impacts our marketing practices, educational programs, pricing policies and relationships with healthcare providers or other entities, by prohibiting, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; 38 ● federal civil and criminal false claims laws and civil monetary penalty laws impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment of government funds (including through reimbursement by Medicare or Medicaid or other federal health care programs), which has been applied to impermissible promotion of pharmaceutical products for off-label uses, or making a false statement or record to avoid, decrease or conceal an obligation to pay money to the federal government; ● the U.S.
Our ability to generate revenue and become profitable depends upon a number of additional factors, including our ability to: ● successfully complete development activities, including the remaining preclinical studies and ongoing and planned clinical trials for our Product Candidates; ● in-license or acquire in the future, Product Candidates and other potential lines of business that we may develop; ● complete and submit NDAs to the FDA and Marketing Authorization Applications (“MAAs”) to the EMA, and obtain regulatory approval for indications for which there is a commercial market; ● complete and submit applications to, and obtain regulatory approval from, other foreign regulatory authorities; ● manufacture any approved products in commercial quantities and on commercially reasonable terms; ● develop a commercial organization, or find suitable partners, to market, sell and distribute approved products in the markets in which we have retained commercialization rights; ● achieve acceptance among patients, clinicians and advocacy groups for any products we develop; ● obtain coverage and adequate reimbursement from third parties, including government payors; and ● set a commercially viable price for any products for which we may receive approval. 56 We are unable to predict the timing or amount of increased expenses, or when or if we will be able to achieve or maintain profitability.
Our ability to generate revenue and become profitable depends upon a number of additional factors, including our ability to: ● successfully complete development activities, including the remaining preclinical studies and ongoing and planned clinical trials for our Product Candidates; ● in-license or acquire in the future, Product Candidates and other potential lines of business that we may develop; ● complete and submit NDAs to the FDA and Marketing Authorization Applications (“MAAs”) to the EMA, and obtain regulatory approval for indications for which there is a commercial market; ● complete and submit applications to, and obtain regulatory approval from, other foreign regulatory authorities; ● manufacture any approved products in commercial quantities and on commercially reasonable terms; ● develop a commercial organization, or find suitable partners, to market, sell and distribute approved products in the markets in which we have retained commercialization rights; ● achieve acceptance among patients, clinicians and advocacy groups for any products we develop; ● obtain coverage and adequate reimbursement from third parties, including government payors; and ● set a commercially viable price for any products for which we may receive approval. 57 We are unable to predict the timing or amount of increased expenses, or when or if we will be able to achieve or maintain profitability.
For example: ● others may be able to make compounds that are the same as or similar to our Product Candidates but that are not covered by the claims of the patents that we own; ● we might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own; ● we might not have been the first to file patent applications covering certain of our inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ● it is possible that our pending patent applications will not lead to issued patents; ● issued patents that we own may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges; ● our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; or ● the patents of others may have an adverse effect on our business. 63 Risks Related to our Third Parties We rely heavily on contract manufacturers over whom we have limited control.
For example: ● others may be able to make compounds that are the same as or similar to our Product Candidates but that are not covered by the claims of the patents that we own; ● we might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own; ● we might not have been the first to file patent applications covering certain of our inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ● it is possible that our pending patent applications will not lead to issued patents; ● issued patents that we own may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges; ● our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; or ● the patents of others may have an adverse effect on our business. 64 Risks Related to our Third Parties We rely heavily on contract manufacturers over whom we have limited control.
Any delay in replacing such persons, or an inability to replace them with persons of similar expertise, would have a material adverse effect on our business, financial condition and results of operations. 39 Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could subject us to significant liability and harm our reputation.
Any delay in replacing such persons, or an inability to replace them with persons of similar expertise, would have a material adverse effect on our business, financial condition and results of operations. Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could subject us to significant liability and harm our reputation.
In particular, we rely on data centers to deliver our solutions, which consume significant amounts of energy. To the extent that energy prices increase as a result of carbon pricing or other measures, this could affect our cost structure. Our success depends on our ability to continue to innovate and create new products and enhancements to our existing products.
In particular, we rely on data centers to deliver our solutions, which consume significant amounts of energy. To the extent that energy prices increase as a result of carbon pricing or other measures, this could affect our cost structure. 47 Our success depends on our ability to continue to innovate and create new products and enhancements to our existing products.
The commencement and completion of clinical trials for our products may be delayed for a number of reasons, including delays related, but not limited, to: ● failure by regulatory authorities to grant permission to proceed or placing the clinical trial on hold; ● import/export and research restrictions for cannabinoid-based pharmaceuticals may delay or prevent clinical trials in various geographical jurisdictions; ● patients failing to enroll or remain in our trials at the rate we expect; ● suspension or termination of clinical trials by regulators for many reasons, including concerns about patient safety or failure of our contract manufacturers to comply with current good manufacturing practice (“cGMP”) requirements; ● any changes to our manufacturing process that may be necessary or desired; ● delays or failure to obtain clinical supply from contract manufacturers of our products necessary to conduct clinical trials; ● Product Candidates demonstrating a lack of safety or efficacy during clinical trials; ● patients choosing an alternative treatment for the indications for which we are developing any of our Product Candidates or participating in competing clinical trials and/or scheduling conflicts with participating clinicians; ● patients failing to complete clinical trials due to dissatisfaction with the treatment, side effects or other reasons; ● reports of clinical testing on similar technologies and products raising safety and/or efficacy concerns; ● clinical investigators not performing our clinical trials on their anticipated schedule, dropping out of a trial, or employing methods not consistent with the clinical trial protocol, regulatory requirements or other third parties not performing data collection and analysis in a timely or accurate manner; ● failure of our CROs, to satisfy their contractual duties or meet expected deadlines; ● inspections of clinical trial sites by regulatory authorities or Institutional Review Boards (“IRBs”) or ethics committees finding regulatory violations that require us to undertake corrective action, resulting in suspension or termination of one or more sites or the imposition of a clinical hold on the entire study; ● one or more IRBs or ethics committees rejecting, suspending or terminating the study at an investigational site, precluding enrollment of additional subjects, or withdrawing its approval of the trial; or ● failure to reach agreement on acceptable terms with prospective clinical trial sites.
The commencement and completion of clinical trials for our products may be delayed for a number of reasons, including delays related, but not limited, to: ● failure by regulatory authorities to grant permission to proceed or placing the clinical trial on hold; ● import/export and research restrictions for cannabinoid-based pharmaceuticals may delay or prevent clinical trials in various geographical jurisdictions; ● patients failing to enroll or remain in our trials at the rate we expect; ● suspension or termination of clinical trials by regulators for many reasons, including concerns about patient safety or failure of our contract manufacturers to comply with current good manufacturing practice (“cGMP”) requirements; ● any changes to our manufacturing process that may be necessary or desired; ● delays or failure to obtain clinical supply from contract manufacturers of our products necessary to conduct clinical trials; ● Product Candidates demonstrating a lack of safety or efficacy during clinical trials; ● patients choosing an alternative treatment for the indications for which we are developing any of our Product Candidates or participating in competing clinical trials and/or scheduling conflicts with participating clinicians; ● patients failing to complete clinical trials due to dissatisfaction with the treatment, side effects or other reasons; ● reports of clinical testing on similar technologies and products raising safety and/or efficacy concerns; ● clinical investigators not performing our clinical trials on their anticipated schedule, dropping out of a trial, or employing methods not consistent with the clinical trial protocol, regulatory requirements or other third parties not performing data collection and analysis in a timely or accurate manner; ● failure of our Contract Research Organization (“CROs”), to satisfy their contractual duties or meet expected deadlines; ● inspections of clinical trial sites by regulatory authorities or Institutional Review Boards (“IRBs”) or ethics committees finding regulatory violations that require us to undertake corrective action, resulting in suspension or termination of one or more sites or the imposition of a clinical hold on the entire study; ● one or more Institutional Review Boards (“IRBs”) or ethics committees rejecting, suspending or terminating the study at an investigational site, precluding enrollment of additional subjects, or withdrawing its approval of the trial; or ● failure to reach agreement on acceptable terms with prospective clinical trial sites.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the development of our product candidates could be delayed. Our insurance may be insufficient to cover losses that may occur as a result of our operations.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the development of our product candidates could be delayed. 41 Our insurance may be insufficient to cover losses that may occur as a result of our operations.
If we are unable to manage our international operations successfully, our financial results could be adversely affected. Controlled substance legislation may differ in other jurisdictions and could restrict our ability to market our products internationally, which would result in increased business and economic risks that could affect our financial results.
If we are unable to manage our international operations successfully, our financial results could be adversely affected. 43 Controlled substance legislation may differ in other jurisdictions and could restrict our ability to market our products internationally, which would result in increased business and economic risks that could affect our financial results.
In the case of intellectual property where we have chosen to protect it by treating it as internal knowhow, there can be no assurance that others with greater expertise or access to greater resources do not develop similar or superior technology that impairs the competitive value of our internal know-how. 60 Moreover, a number of aspects of intellectual property protection in the field of AI are currently under development, and there is uncertainty and ongoing litigation in different jurisdictions as to the degree and extent of protection warranted for AI and machine learning systems, as well as relevant system input and outputs.
In the case of intellectual property where we have chosen to protect it by treating it as internal knowhow, there can be no assurance that others with greater expertise or access to greater resources do not develop similar or superior technology that impairs the competitive value of our internal know-how. 61 Moreover, a number of aspects of intellectual property protection in the field of AI are currently under development, and there is uncertainty and ongoing litigation in different jurisdictions as to the degree and extent of protection warranted for AI and machine learning systems, as well as relevant system input and outputs.
The use of AI technologies presents emerging ethical and social issues, and if we enable or offer solutions that draw scrutiny or controversy due to their perceived or actual impact on customers or on society as a whole, we may experience brand or reputational harm, competitive harm, and/or legal liability. 45 Existing privacy-related laws and regulations in the United States and other countries are evolving and are subject to potentially differing interpretations, and various U.S. federal and state or other international legislative and regulatory bodies may expand or enact laws regarding privacy and data security-related matters.
The use of AI technologies presents emerging ethical and social issues, and if we enable or offer solutions that draw scrutiny or controversy due to their perceived or actual impact on customers or on society as a whole, we may experience brand or reputational harm, competitive harm, and/or legal liability. 46 Existing privacy-related laws and regulations in the United States and other countries are evolving and are subject to potentially differing interpretations, and various U.S. federal and state or other international legislative and regulatory bodies may expand or enact laws regarding privacy and data security-related matters.
Department of Treasury, Federal Reserve and the FDIC have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, the liquidity needs of financial institutions, including as a result of widespread demands for customer withdrawals, may exceed the capacity of such program. 59 Furthermore, we and other parties with who we conduct business and engage commercially may be unable to access critical funds in deposit accounts or other accounts held with a closed or failing financial institution or pursuant to lending arrangements with such financial institutions.
Department of Treasury, Federal Reserve and the FDIC have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, the liquidity needs of financial institutions, including as a result of widespread demands for customer withdrawals, may exceed the capacity of such program. 60 Furthermore, we and other parties with who we conduct business and engage commercially may be unable to access critical funds in deposit accounts or other accounts held with a closed or failing financial institution or pursuant to lending arrangements with such financial institutions.
We would be unable to market our Product Candidates in countries with such obstacles in the near future or perhaps at all without modification to laws and regulations. 42 Product liability lawsuits against us could cause us to incur substantial liabilities.
We would be unable to market our Product Candidates in countries with such obstacles in the near future or perhaps at all without modification to laws and regulations. Product liability lawsuits against us could cause us to incur substantial liabilities.
The actual or threatened delisting of our securities could also have other material and adverse consequences, including the potential loss of confidence by employees and other stakeholders, the loss of institutional investor interest and fewer business development opportunities, limited availability of market quotations for our securities, reduced liquidity with respect to our securities, a determination that our Common Shares is “penny stock,” which will require brokers trading in shares of our Common Shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of our Common Shares, and limited amount of news and analyst coverage of the Company.
The actual or threatened delisting of our securities could also have other material and adverse consequences, including the potential loss of confidence by employees and other stakeholders, the loss of institutional investor interest and fewer business development opportunities, limited availability of market quotations for our securities, reduced liquidity with respect to our securities, a determination that our common shares is “penny stock,” which will require brokers trading in shares of our common shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares of our common shares, and limited amount of news and analyst coverage of us.
Payment of any future dividends will be at the discretion of our Board, after taking into account a multitude of factors appropriate in the circumstances, including our operating results, financial condition and current and anticipated cash needs.
Payment of any future dividends will be at the discretion of our Board of Directors, after taking into account a multitude of factors appropriate in the circumstances, including our operating results, financial condition and current and anticipated cash needs.
Successfully completing our clinical program and obtaining approval of an application seeking commercialization approval is a complex, lengthy, expensive and uncertain process, and the regulatory authorities may delay, limit or deny approval of our Product Candidates for many reasons, including, among others, because: ● we may not be able to demonstrate that our Product Candidates are safe and effective in treating patients to the satisfaction of the regulatory authorities such as the FDA, HC or EMA; ● the results of our clinical trials may not meet the level of statistical or clinical significance required by the regulatory authorities for marketing approval; ● the regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical trials; ● the regulatory authorities may require that we conduct additional clinical trials; ● the regulatory authorities or other applicable foreign regulatory authorities may not approve the formulation, labeling or specifications of our Product Candidates; ● the contract manufacturing organizations and other contractors that we may retain to conduct our clinical trials may take actions outside of our control that materially adversely impact our clinical trials; 31 ● the regulatory authorities may find the data from clinical studies and clinical trials insufficient to demonstrate that our Product Candidates are safe and effective for their proposed indications; ● the regulatory authorities may disagree with our interpretation of data from our preclinical studies and clinical trials; ● the regulatory authorities may not accept data generated at our clinical trial sites or may disagree with us over whether to accept efficacy results from clinical trial sites outside the United States, Canada or outside the European Union, as applicable, where the standard of care is potentially different from that in the United States, Canada or in the European Union, as applicable; ● if our applications are submitted to the regulatory authorities, the regulatory authorities may have difficulties scheduling the necessary review meetings in a timely manner, may recommend against approval of our application or may recommend or require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; ● the FDA may require development of a Risk Evaluation and Mitigation Strategy which would use risk minimization strategies to ensure that the benefits of certain prescription drugs outweigh their risks, as a condition of approval or post-approval, and the EMA may grant only conditional marketing authorization or impose specific obligations as a condition for marketing authorization, or may require us to conduct post-authorization safety studies; ● the FDA, DEA, HC, EMA or other applicable foreign regulatory agencies may not approve the manufacturing processes or facilities of third-party manufacturers with which we contract or DEA or other applicable foreign regulatory agency quotas may limit the quantities of controlled substances available to our manufacturers; or ● the FDA, HC, EMA or other applicable foreign regulatory agencies may change their approval policies or adopt new regulations.
Successfully completing our clinical program and obtaining approval of an application seeking commercialization approval is a complex, lengthy, expensive and uncertain process, and the regulatory authorities may delay, limit or deny approval of our Product Candidates for many reasons, including, among others, because: ● we may not be able to demonstrate that our Product Candidates are safe and effective in treating patients to the satisfaction of the regulatory authorities such as the FDA, HC or EMA; ● the results of our clinical trials may not meet the level of statistical or clinical significance required by the regulatory authorities for marketing approval; ● the regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical trials; ● the regulatory authorities may require that we conduct additional clinical trials; ● the regulatory authorities or other applicable foreign regulatory authorities may not approve the formulation, labeling or specifications of our Product Candidates; ● the contract manufacturing organizations and other contractors that we may retain to conduct our clinical trials may take actions outside of our control that materially adversely impact our clinical trials; 33 ● the regulatory authorities may find the data from clinical studies and clinical trials insufficient to demonstrate that our Product Candidates are safe and effective for their proposed indications; ● the regulatory authorities may disagree with our interpretation of data from our preclinical studies and clinical trials; ● the regulatory authorities may not accept data generated at our clinical trial sites or may disagree with us over whether to accept efficacy results from clinical trial sites outside the United States, Canada or outside the European Union, as applicable, where the standard of care is potentially different from that in the United States, Canada or in the European Union, as applicable; ● if our applications are submitted to the regulatory authorities, the regulatory authorities may have difficulties scheduling the necessary review meetings in a timely manner, may recommend against approval of our application or may recommend or require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions; ● the FDA may require development of a Risk Evaluation and Mitigation Strategy which would use risk minimization strategies to ensure that the benefits of certain prescription drugs outweigh their risks, as a condition of approval or post-approval, and the EMA may grant only conditional marketing authorization or impose specific obligations as a condition for marketing authorization, or may require us to conduct post-authorization safety studies; ● the FDA, Drug Enforcement Administration (“DEA”), HC, EMA or other applicable foreign regulatory agencies may not approve the manufacturing processes or facilities of third-party manufacturers with which we contract or DEA or other applicable foreign regulatory agency quotas may limit the quantities of controlled substances available to our manufacturers; or ● the FDA, HC, EMA or other applicable foreign regulatory agencies may change their approval policies or adopt new regulations.
A product liability claim or series of claims brought against us could cause our share price to decline and, if we are unsuccessful in defending such a claim or claims and the resulting judgments exceed our insurance coverage, our financial condition, results of operations, business and prospects could be materially adversely affected. 43 Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results.
A product liability claim or series of claims brought against us could cause our share price to decline and, if we are unsuccessful in defending such a claim or claims and the resulting judgments exceed our insurance coverage, our financial condition, results of operations, business and prospects could be materially adversely affected. 44 Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results.
A major risk we face is the possibility that none of our Product Candidates under development will successfully gain market approval from the FDA or other regulatory authorities, resulting in us being unable to derive any commercial revenue from them after investing significant amounts of capital in multiple stages of preclinical and clinical testing. 29 If we experience delays in clinical testing, we will be delayed in commercializing our Product Candidates, and our business may be substantially harmed.
A major risk we face is the possibility that none of our Product Candidates under development will successfully gain market approval from the FDA or other regulatory authorities, resulting in us being unable to derive any commercial revenue from them after investing significant amounts of capital in multiple stages of preclinical and clinical testing. 31 If we experience delays in clinical testing, we will be delayed in commercializing our Product Candidates, and our business may be substantially harmed.
Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment. 35 In the United States, the Medicare Modernization Act, established the Medicare Part D program and provided authority for limiting the number of drugs that will be covered in any therapeutic class thereunder.
Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment. 37 In the United States, the Medicare Modernization Act, established the Medicare Part D program and provided authority for limiting the number of drugs that will be covered in any therapeutic class thereunder.
Any of these factors, many of which are beyond our control, could increase development costs, jeopardize our ability to obtain regulatory approval for and successfully market our Product Candidates and generate product revenue. 32 We intend to conduct clinical trials for our Product Candidates in several international jurisdictions, and acceptance by all regulatory authorities for such “international” data is not certain.
Any of these factors, many of which are beyond our control, could increase development costs, jeopardize our ability to obtain regulatory approval for and successfully market our Product Candidates and generate product revenue. 34 We intend to conduct clinical trials for our Product Candidates in several international jurisdictions, and acceptance by all regulatory authorities for such “international” data is not certain.
If the FDA or any other regulatory authorities does not accept any such data, it would likely result in the need for additional clinical trials, which would be costly and time-consuming and delay aspects of our development plan. In addition, the conduct of clinical trials outside the United States could have a significant impact on us.
If the FDA or any other regulatory authorities do not accept any such data, it would likely result in the need for additional clinical trials, which would be costly and time-consuming and delay aspects of our development plan. In addition, the conduct of clinical trials outside the United States could have a significant impact on us.
The successful commercialization of our Product Candidates may require permits or approvals from regulatory bodies, such as the DEA, that regulate controlled substances. 33 If any of our Product Candidates receives marketing approval and we or others later identify undesirable side effects caused by the Product Candidate, our ability to market and derive revenue from the product candidates could be compromised.
The successful commercialization of our Product Candidates may require permits or approvals from regulatory bodies, such as the DEA, that regulate controlled substances. 35 If any of our Product Candidates receives marketing approval and we or others later identify undesirable side effects caused by the Product Candidate, our ability to market and derive revenue from the product candidates could be compromised.
If such increased levels of volatility and market turmoil continue for a protracted period of time, our operations could be materially adversely impacted and the trading price of our Common Shares may be materially adversely affected. 47 Raising additional capital may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our technologies or Product Candidates.
If such increased levels of volatility and market turmoil continue for a protracted period of time, our operations could be materially adversely impacted and the trading price of our Common Shares may be materially adversely affected. 48 Raising additional capital may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our technologies or Product Candidates.
Any claims by third parties that we have misappropriated their confidential information or trade secrets could have a similar negative impact on our business. 61 While our preclinical studies are ongoing, we believe that the use of our Product Candidates in these preclinical studies fall within the scope of the exemptions provided by 35 U.S.C.
Any claims by third parties that we have misappropriated their confidential information or trade secrets could have a similar negative impact on our business. 62 While our preclinical studies are ongoing, we believe that the use of our Product Candidates in these preclinical studies fall within the scope of the exemptions provided by 35 U.S.C.
If any of our trade secrets were to be disclosed to or independently developed by a competitor or other third-party, our competitive position would be harmed. 62 We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting and defending patents on all of our Product Candidates throughout the world would be prohibitively expensive.
If any of our trade secrets were to be disclosed to or independently developed by a competitor or other third-party, our competitive position would be harmed. 63 We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting and defending patents on all of our Product Candidates throughout the world would be prohibitively expensive.
A slowdown in the financial markets or other economic conditions, including but not limited to reduced consumer spending, decreased employment rates, adverse business conditions, high inflation, high fuel and energy costs, high consumer debt levels, a lack of available credit, the state of turmoil in the financial markets, high interest rates and/or tax rates, may adversely affect the Company’s growth and profitability.
A slowdown in the financial markets or other economic conditions, including but not limited to reduced consumer spending, decreased employment rates, adverse business conditions, high inflation, high fuel and energy costs, high consumer debt levels, a lack of available credit, the state of turmoil in the financial markets, high interest rates and/or tax rates, may adversely affect our growth and profitability.
The implementation of cost containment measures or other healthcare reforms may compromise our ability to generate revenue, attain profitability or commercialize our products. 34 Any Product Candidates we develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, thereby materially and adversely impacting our business.
The implementation of cost containment measures or other healthcare reforms may compromise our ability to generate revenue, attain profitability or commercialize our products. 36 Any Product Candidates we develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, thereby materially and adversely impacting our business.
Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets. 50 Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets. 51 Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
Our consolidated financial statements do not include any adjustment to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. 54 We may have difficulties identifying, successfully completing or integrating acquisitions, or maintaining or growing our acquired businesses.
Our consolidated financial statements do not include any adjustment to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. 55 We may have difficulties identifying, successfully completing or integrating acquisitions, or maintaining or growing our acquired businesses.
However, the future sale of a substantial number of Common Shares by our directors and officers and their affiliates, or the perception that such sales could occur, could adversely affect prevailing market prices for our Common Shares. 48 We do not currently pay dividends on our Common Shares and have no intention to pay dividends on our Common Shares for the foreseeable future.
However, the future sale of a substantial number of Common Shares by our directors and officers and their affiliates, or the perception that such sales could occur, could adversely affect prevailing market prices for our Common Shares. 49 We do not currently pay dividends on our Common Shares and have no intention to pay dividends on our Common Shares for the foreseeable future.
The terms of any collaboration or other arrangements that we may establish may not be favorable to us. 64 For all of the aforesaid reasons and others set forth in this Annual Report, an investment in Common Shares and any other securities that we may offer from time to time involves a high degree of risk.
The terms of any collaboration or other arrangements that we may establish may not be favorable to us. 65 For all of the aforesaid reasons and others set forth in this Annual Report, an investment in Common Shares and any other securities that we may offer from time to time involves a high degree of risk.
Due to our limited operating history and history of losses, any predictions about our future success, performance or viability may not be accurate. 53 We will require additional capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete the development and commercialization of our Product Candidates.
Due to our limited operating history and history of losses, any predictions about our future success, performance or viability may not be accurate. 54 We will require additional capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete the development and commercialization of our Product Candidates.
Any of the foregoing could prevent or delay a change of control and may deprive or limit strategic opportunities for our shareholders to sell their shares. 52 If securities or industry analysts publish inaccurate or unfavorable research about our business, our share price and trading volume may decline.
Any of the foregoing could prevent or delay a change of control and may deprive or limit strategic opportunities for our shareholders to sell their shares. 53 If securities or industry analysts publish inaccurate or unfavorable research about our business, our share price and trading volume may decline.
Any loss of confidence arising from a significant data security breach could hurt our reputation, further damaging our business. 44 Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.
Any loss of confidence arising from a significant data security breach could hurt our reputation, further damaging our business. 45 Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.
If we are unable to successfully commercialize any of our products, our financial condition and results of operations may be materially and adversely affected. 27 Even if our Product Candidates advance through preclinical studies and clinical trials, we may experience difficulties in managing our growth and expanding our operations.
If we are unable to successfully commercialize any of our products, our financial condition and results of operations may be materially and adversely affected. 29 Even if our Product Candidates advance through preclinical studies and clinical trials, we may experience difficulties in managing our growth and expanding our operations.
To the extent that our Common Shares became eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, an investor may find it more difficult to dispose of their Common Shares or obtain accurate quotations as to the market value of our Common Shares. 28 Furthermore, the National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Common Shares are currently listed on Nasdaq, such securities will be deemed covered securities.
To the extent that our common shares became eligible to trade on the Over-The-Counter (“OTC”) Bulletin Board, another over-the-counter quotation system, or on the pink sheets, an investor may find it more difficult to dispose of their common shares or obtain accurate quotations as to the market value of our common shares. 30 Furthermore, the National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Common Shares are currently listed on Nasdaq, such securities will be deemed covered securities.
Potential negative outcomes from this program include but are not limited to: ● the technology fails to produce sufficient quantities of cannabinoids or ones for which we or others have a need; or ● the cost structure of the technology is such that it is not commercially competitive with alternate methods of cannabinoid manufacturing leading to the technology having no value proposition nor incremental value to the Company. 30 Negative results from clinical trials or studies of others and adverse safety events involving the targets of our products may have an adverse impact on our future commercialization efforts.
Potential negative outcomes from this program include but are not limited to: ● the technology fails to produce sufficient quantities of cannabinoids or ones for which we or others have a need; or ● the cost structure of the technology is such that it is not commercially competitive with alternate methods of cannabinoid manufacturing leading to the technology having no value proposition nor incremental value to us. 32 Negative results from clinical trials or studies of others and adverse safety events involving the targets of our products may have an adverse impact on our future commercialization efforts.
Our management and other personnel devote a substantial amount of time to these compliance initiatives. 51 Moreover, these rules and regulations have substantially increased our legal and financial compliance costs and made some activities more time-consuming and costly. The increased costs have increased our net loss.
Our management and other personnel devote a substantial amount of time to these compliance initiatives. 52 Moreover, these rules and regulations have substantially increased our legal and financial compliance costs and made some activities more time-consuming and costly. The increased costs have increased our net loss.
Any negative developments in respect thereof could have a material and adverse effect on our business, operations, financial condition, and the value of our securities. 58 High rates of global inflation, the occurrence of a recession and higher interest rates could have a material and adverse impact on our business, results of operations and financial condition.
Any negative developments in respect thereof could have a material and adverse effect on our business, operations, financial condition, and the value of our securities. 59 High rates of global inflation, the occurrence of a recession and higher interest rates could have a material and adverse impact on our business, results of operations and financial condition.
Our net loss for the fiscal years ended June 30, 2024 and 2023 was approximately $7.7 million and $8.0 million, respectively. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
Our net loss for the fiscal years ended June 30, 2025 and 2024 was approximately $8.2 million and $7.7 million, respectively. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
The FCPA and the CFPOA, as well as any other applicable domestic or foreign anti-corruption or anti-bribery laws to which we are or may become subject generally prohibit corporations and individuals from engaging in certain activities to obtain or retain business or to influence a person working in an official capacity and requires companies to maintain accurate books and records and internal controls, including at foreign-controlled subsidiaries.
The FCPA and the Corruption of Foreign Public Officials Act (“CFPOA”), as well as any other applicable domestic or foreign anti-corruption or anti-bribery laws to which we are or may become subject generally prohibit corporations and individuals from engaging in certain activities to obtain or retain business or to influence a person working in an official capacity and requires companies to maintain accurate books and records and internal controls, including at foreign-controlled subsidiaries.
Comparable laws and regulations exist in the countries within the European Economic Area (“EEA”). Although such laws are partially based upon European Union (“EU”), law, they may vary from country to country.
Comparable laws and regulations exist in the countries within the European Economic Area (“EEA”). Although such laws are partially based upon EU, law, they may vary from country to country.
The methods and techniques used by cyber threat actors to gain entry into our network and access our computer systems, software and data will become more advanced with the use of AI and may become increasingly difficult or impossible to detect and prevent.
The methods and techniques used by cyber threat actors to gain entry into our network and access our computer systems, software and data will become more advanced with the use of Artificial Intelligence (“AI”) and may become increasingly difficult or impossible to detect and prevent.
If we are subject to quality, cost or delivery issues with the preclinical and clinical grade materials supplied by contract manufacturers, our business operations could suffer significant harm. We currently have no manufacturing capabilities and rely on CDMOs to manufacture our Product Candidates for preclinical studies and clinical trials.
If we are subject to quality, cost or delivery issues with the preclinical and clinical grade materials supplied by contract manufacturers, our business operations could suffer significant harm. We currently have no manufacturing capabilities and rely on contract research, development and manufacturing organization (“CDMOs”) to manufacture our Product Candidates for preclinical studies and clinical trials.
As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of and for the years ended June 30, 2024 and June 30, 2023 with respect to this uncertainty.
As a result, our independent registered public accounting firms included an explanatory paragraph in its report on our financial statements as of and for the years ended June 30, 2025 and June 30, 2024 with respect to this uncertainty.
Should market conditions and commodity prices worsen and persist in a worsened state for a prolonged period of time, an assessment of the Company’s assets for impairment may be required.
Should market conditions and commodity prices worsen and persist in a worsened state for a prolonged period of time, an assessment of our assets for impairment may be required.
ITEM 1A. RISK FACTORS Summary of Risk Factors The following is a summary of material risks that could affect the Company.
ITEM 1A. RISK FACTORS Summary of Risk Factors The following is a summary of material risks that could affect us.
The regulatory approval processes of the FDA, HC, the EMA and other comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our Product Candidates, our business will be substantially harmed.
The regulatory approval processes of the FDA, HC, the European Medicines Agency (“EMA”) and other comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our Product Candidates, our business will be substantially harmed.
Our competitors or other third parties may incorporate AI technologies into their services, products and business more quickly or more successfully than us, which could impair our ability to compete effectively and materially and adversely affect our results of operations and financial condition.
Our competitors or other third parties may incorporate AI technologies into their services, products and business more quickly or more successfully than us, which could impair our ability to compete effectively and materially and adversely affect our results of operations and financial condition. Climate change may have an impact on our business.
Since our inception as a pharmaceutical company in October 2014, we have devoted substantially all of our resources to the development of our proprietary Product Candidates. We have generated significant operating losses since our inception with an accumulated deficit to June 30, 2024 of approximately $109.1 million.
Since our inception as a pharmaceutical company in October 2014, we have devoted substantially all of our resources to the development of our proprietary Product Candidates. We have generated significant operating losses since our inception with an accumulated deficit to June 30, 2025 of approximately $118.0 million.
We may take advantage of these reporting exemptions until we are no longer an emerging growth company. 49 There remains increased focus from lawmakers and regulators on corporate ESG practices, including climate change and related ESG disclosure requirements.
We may take advantage of these reporting exemptions until we are no longer an emerging growth company. 50 There remains increased focus from lawmakers and regulators on corporate Environmental, Social and Governance (“ESG”) practices, including climate change and related ESG disclosure requirements.
In either event, we may incur additional or higher premiums for such coverage than in prior years. 40 Among other factors, national security concerns, catastrophic events, pandemics such as the COVID-19 pandemic, or any changes in any applicable statutory requirement binding insurance carriers to offer certain types of coverage could also adversely affect available insurance coverage and result in, among other things, increased premiums on available coverage (which may cause us to elect to reduce our policy limits or not renew our coverage) and additional exclusions from coverage.
Among other factors, national security concerns, catastrophic events, pandemics such as the COVID-19 pandemic, or any changes in any applicable statutory requirement binding insurance carriers to offer certain types of coverage could also adversely affect available insurance coverage and result in, among other things, increased premiums on available coverage (which may cause us to elect to reduce our policy limits or not renew our coverage) and additional exclusions from coverage.
Any sudden or rapid destabilization of global economic conditions could impact the Company’s ability to obtain equity or debt financing in the future on terms favorable to the Company or at all. In such an event, the Company’s operations and financial condition could be adversely impacted. 57 The Company assesses on a quarterly basis the carrying values of its assets.
Any sudden or rapid destabilization of global economic conditions could impact the our ability to obtain equity or debt financing in the future on terms favorable to us or at all. In such an event, our operations and financial condition could be adversely impacted. We assess on a quarterly basis the carrying values of our assets.
As of June 30, 2024, we had approximately $6.6 million in cash, cash equivalents and short-term investments, which, we currently estimate funds our operations to the end of the fourth quarter of calendar 2024 (being the second fiscal quarter of 2025), depending on the level and timing of realizing revenues from the sale of BayMedica inventory as well as the level and timing of the Company’s operating expenses.
As of June 30, 2025, we had approximately $11.1 million in cash, cash equivalents and short-term investments, which, we currently estimate funds our operations into the fourth quarter of calendar 2026 (being the second fiscal quarter of 2027), depending on the level and timing of realizing revenues from the sale of BayMedica inventory as well as the level and timing of our operating expenses.
On the other hand, we may determine that we either do not have certain coverage that would be prudent for our business and the risks associated with our business or that our current coverages are too low to adequately cover such risks.
On the other hand, we may determine that we either do not have certain coverage that would be prudent for our business and the risks associated with our business or that our current coverages are too low to adequately cover such risks. In either event, we may incur additional or higher premiums for such coverage than in prior years.
The volatile nature of our Common Share price may cause investment losses for our stockholders. In addition, the market price of stock in small capitalization biotech companies is often driven by investor sentiment, expectation, and perception, all of which may be independent of fundamental, objective, and intrinsic valuation metrics or traditional financial performance metrics, thereby exacerbating volatility.
In addition, the market price of stock in small capitalization biotech companies is often driven by investor sentiment, expectation, and perception, all of which may be independent of fundamental, objective, and intrinsic valuation metrics or traditional financial performance metrics, thereby exacerbating volatility.
As of June 30, 2024, we had non-capital loss (“NOL”) carryforwards of approximately $80.2 million available to offset future taxable income in Canada and the United States. These NOL carry-forwards begin to expire in 2026. Our NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities.
As of June 30, 2025, we had net operating loss (“NOL”) carryforwards of approximately $97.3 million available to offset future taxable income in Canada and the United States. These NOL carry-forwards begin to expire in 2026. Our NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities.
Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disrupt our operations, damage to our ability to obtain patent protection for our Product Candidates, damage to our reputation, and cause a loss of confidence in our products and our ability to conduct clinical trials, which could adversely affect our business and reputation and lead to delays in gaining regulatory approvals. 41 We expect to face intense competition, often from companies with greater resources and experience than we have.
Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disrupt our operations, damage to our ability to obtain patent protection for our Product Candidates, damage to our reputation, and cause a loss of confidence in our products and our ability to conduct clinical trials, which could adversely affect our business and reputation and lead to delays in gaining regulatory approvals.
As of September 20, 2024, there were 179,293 options available for future allocation pursuant to the 20% of the issued and outstanding shares allowed to be issued according to the terms of the Plan.
As of September 12, 2025, there were 42,332 options available for future allocation pursuant to the 20% of the issued and outstanding shares allowed to be issued according to the terms of the Plan.
We currently have no products that have been approved by the FDA, HC, or any similar regulatory authority. To obtain regulatory approvals for our Product Candidates being developed and to achieve commercial success, clinical trials must demonstrate that the Product Candidates are safe for human use and that they demonstrate efficacy.
To obtain regulatory approvals for our Product Candidates being developed and to achieve commercial success, clinical trials must demonstrate that the Product Candidates are safe for human use and that they demonstrate efficacy. We have no products or technologies which are currently in human clinical trials.
The market and demand for metal commodities and related products has in recent years been adversely affected by global economic uncertainty, reduced confidence in financial markets, the COVID-19 pandemic, including any resurgence thereof, bank failures and credit availability concerns. These macro-economic events negatively affected the mining and minerals sectors in general.
Changes in the global economic environment have created market uncertainty and volatility in recent years. The market and demand for metal commodities and related products has in recent years been adversely affected by global economic uncertainty, reduced confidence in financial markets, the COVID-19 pandemic, including any resurgence thereof, bank failures and credit availability concerns.
Therefore, you should carefully consider each of the following risks, together with all other information set forth in this Annual Report, including the consolidated financial statements and the related notes, before making a decision to buy our Common Shares. If any of the following risks actually occurs, our business could be harmed.
Risk Factors Investing in our Common Shares involves a high degree of risk. Therefore, you should carefully consider each of the following risks, together with all other information set forth in this Annual Report, including the consolidated financial statements and the related notes, before making a decision to buy our Common Shares.
The Company was unable to regain compliance during the Extended Compliance Period and on September 17, 2024, the Company received an additional notification from the Listing Qualifications Department stating that due to the deficiency, the Company’s securities would be delisted from Nasdaq on September 26, 2024, unless the Company appealed Nasdaq’s determination to a Hearings Panel (the “Panel”).
We were unable to regain compliance during the Extended Compliance Period and on September 17, 2024, we received an additional notification from the Nasdaq Staff stating that due to the deficiency, our securities would be delisted from Nasdaq on September 26, 2024, unless we appealed Nasdaq’s determination to Nasdaq’s Panel.
We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us. Additional federal, state and local laws and regulations affecting our operations may be adopted in the future. We may incur substantial costs to comply with, and substantial fines or penalties if we violate, any of these laws or regulations.
We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us. Additional federal, state and local laws and regulations affecting our operations may be adopted in the future.
If any physicians or other healthcare providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs. 37 Failure to comply with the FCPA, the CFPOA, and other global anti-corruption and anti-bribery laws could subject us to penalties and other adverse consequences.
If any physicians or other healthcare providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.
Moreover, in the event that a global recession were to occur, it could adversely impact the critical counterparties that we engage, including in the form of a decrease in the products and services they seek to obtain from us.
Moreover, in the event that a global recession were to occur, it could adversely impact the critical counterparties that we engage, including in the form of a decrease in the products and services they seek to obtain from us. Relatively high interest rates will increase cost of capital and the cost of borrowings for any other corporate purpose.
Compliance with these anti-corruption laws and anti-bribery laws may be expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, these laws present particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and physicians and other hospital employees are considered to be foreign officials.
In addition, these laws present particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and physicians and other hospital employees are considered to be foreign officials.
We are currently working to get policies and processes in place to monitor compliance with the FCPA and CFPOA. We can make no assurance that they will not engage in prohibited conduct, and we may be held liable for their acts under applicable anti-corruption and anti-bribery laws.
We can make no assurance that they will not engage in prohibited conduct, and we may be held liable for their acts under applicable anti-corruption and anti-bribery laws.
It is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.
It is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity. 39 Compliance with these anti-corruption laws and anti-bribery laws may be expensive and difficult, particularly in countries in which corruption is a recognized problem.
While the Company has filed the Appeal Request, there can be no assurances, however, that we will be successful in regaining compliance with the continued listing requirements and maintaining the listing of our Common Shares on Nasdaq.
While the Panel determined to continue the listing of our common shares on the Nasdaq Stock Market, there can be no assurances, however, that we will be successful in remaining in compliance with the continued listing requirements and maintaining the listing of our common shares on Nasdaq in the future.
The pharmaceutical industry is highly competitive and subject to rapid change. The industry continues to expand and evolve as an increasing number of competitors and potential competitors enter the market. Many of these competitors and potential competitors have substantially greater financial, technological, managerial and research and development resources and experience than we have.
We expect to face intense competition, often from companies with greater resources and experience than we have. The pharmaceutical industry is highly competitive and subject to rapid change. The industry continues to expand and evolve as an increasing number of competitors and potential competitors enter the market.
Many potential pharmaceuticals products never reach the stage of clinical testing and even those that do have only a small chance of successfully completing clinical development and gaining regulatory approval.
Additionally, we have no products for commercial sale or licensed for commercial sale, nor do we expect to have any such products for the next several years. Many potential pharmaceuticals products never reach the stage of clinical testing and even those that do have only a small chance of successfully completing clinical development and gaining regulatory approval.
In addition, any further changes in regulations or shifts in political conditions are beyond the control of the Company and may materially and adversely affect our business, or if significant enough, may significantly impede our ability to transact in certain countries.
In addition, any further changes in regulations or shifts in political conditions are beyond our control and may materially and adversely affect our business, or if significant enough, may significantly impede our ability to transact in certain countries. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls and foreign exchange restrictions.
Federal legislation and actions by state and local governments may permit reimportation of drugs from/to foreign countries where the drugs are sold at lower prices than in the country of origination, which could materially adversely affect our business and financial condition.
For additional information, see Note 12, Commitments and Contingencies in the Notes to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report and the section titled “Legal Proceedings” in Part I, Item 3 of this Annual Report. 40 Federal legislation and actions by state and local governments may permit reimportation of drugs from/to foreign countries where the drugs are sold at lower prices than in the country of origination, which could materially adversely affect our business and financial condition.
There are ongoing projects conducted by the Financial Accounting Standards Board in the United States that are expected to result in new pronouncements that continue to evolve, which could adversely impact the manner in which we report our financial position and operating results.
There are ongoing projects conducted by the Financial Accounting Standards Board in the United States that are expected to result in new pronouncements that continue to evolve, which could adversely impact the manner in which we report our financial position and operating results. 58 Natural disasters, public health crises, political crises, or other catastrophic events may adversely affect our business affairs, results of operations, financial condition, liquidity, availability of credit and foreign exchange exposure.
Global financial conditions remain subject to sudden and rapid destabilizations in response to economic shocks.
These macro-economic events negatively affected the mining and minerals sectors in general. Global financial conditions remain subject to sudden and rapid destabilizations in response to economic shocks.
As previously reported by the Company, on March 19, 2024, the Company received written notification from the Listing Qualifications Department of Nasdaq that the Company has been granted an additional 180-day compliance period, or until September 16, 2024 (the “Extended Compliance Period”), to regain compliance with Nasdaq’s minimum bid price requirement for the continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”).
As previously reported, on March 19, 2024, we received written notification from the Nasdaq Staff that we were granted an additional 180-day compliance period, or until September 16, 2024, or the Extended Compliance Period, to regain compliance with Nasdaq’s Minimum Bid Price Rule.
During 2022 and 2023, the global markets experienced, and continue to experience, higher rates of inflation as a result of several market factors, including in the form of increased costs pertaining to labor, materials and overhead. The U.S. capital markets in particular have experienced and continue to experience extreme volatility and disruption.
In recent years, the global markets experienced, higher rates of inflation as a result of several market factors, including in the form of increased costs pertaining to labor, materials and overhead. Inflation rates in the U.S. significantly increased in recent years resulting in action by the U.S. federal government to increase interest rates, adversely affecting capital markets activity.
Our proprietary information, or that of our customers, suppliers and business partners, may be lost or we may suffer security breaches.
We may incur substantial costs to comply with, and substantial fines or penalties if we violate, any of these laws or regulations. 42 Our proprietary information, or that of our customers, suppliers and business partners, may be lost or we may suffer security breaches.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company additionally utilizes the assistance of a third-party service provider, an information technology solutions service provider located in Richmond, BC, for purposes of broadly managing its cybersecurity risks. 65
Biggest changeWe additionally utilizes the assistance of a third-party service provider, an information technology solutions service provider located in Richmond, BC, for purposes of broadly managing its cybersecurity risks. 66
For additional information regarding whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Annual Report .
For additional information regarding whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Annual Report .

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn October 2023, BayMedica entered into an amended facility lease agreement for approximately 7,000 square feet of office space in San Francisco, California. The lease expires in April 2027. We believe substantially all of our property and equipment is in good condition and that InMed has sufficient capacity to meet its current operational needs.
Biggest changeIn October 2023, BayMedica entered into an amended facility lease agreement for approximately 7,000 square feet of office space in San Francisco, California with average monthly operating charge of $30,134 over the three and a half-year term of the agreement. The lease expires in April 2027.
ITEM 2. PROPERTIES Our corporate headquarters are located at Suite 1445 - 885 West Georgia Street, Vancouver, British Columbia V6C 1B4, Canada. This new lease was signed in July 2024 and the office space occupies approximately 2,243 square feet with a monthly basic rental rate and operating charges of an estimated C$12,296 over the two-year term of the agreement.
ITEM 2. PROPERTIES Our corporate headquarters are located at Suite 1445 - 885 West Georgia Street, Vancouver, British Columbia V6C 1B4, Canada. This lease was signed in July 2024 and the office space occupies approximately 2,243 square feet with a monthly basic rental rate and operating charges of an estimated C$12,296 over the two-year term of the agreement.
In July 2019, InMed entered into a facility lease agreement for approximately 4,000 square feet of office space in Vancouver, BC, which served as our corporate headquarters until August 2024, when the lease expired. The Company did not take the option to renew for an additional three-year period.
In July 2019, we entered into a facility lease agreement for approximately 4,000 square feet of office space in Vancouver, BC, which served as our corporate headquarters until August 2024, when the lease expired. We did not take the option to renew for an additional three-year period.
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We believe substantially all of our property and equipment is in good condition and that we have sufficient capacity to meet our current operational needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. However, as of the date of this Annual Report, we are not involved in any material pending legal or governmental proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 66 PART II
Biggest changeRegardless of the outcomes, however, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
ITEM 3. LEGAL PROCEEDINGS From time to time, we are subject to various legal proceedings, claims and administrative proceedings that arise in the ordinary course of our business activities.
ITEM 3. LEGAL PROCEEDINGS From time to time, we may be subject to various legal proceedings, claims and administrative proceedings that arise in the ordinary course of our business activities.
Although the results of the litigation and claims cannot be predicted with certainty, as of the date of this report, we do not believe we are party to any claim, proceeding or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business.
Although the results of the litigation and claims cannot be predicted with certainty, as of the date of this Annual Report, with the exception of the Patent License Matter discussed below in which BayMedica, our wholly-owned subsidiary, is involved, we do not believe we are party to any claim, proceeding or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business.
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On February 15, 2021, BayMedica entered into an exclusive technology license agreement (the “Agreement”) with a third party (the “Licensor”) pursuant to which it agreed to license a proprietary process in the United States where it has a pending U.S. patent application in exchange for certain annual royalty payments contingent on the net sales of products made using the licensed process.
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The royalty payments were to be made for the period beginning on the first commercial sale of the licensed product and ending on the later of the expiration of the Licensor’s patent rights or ten years after the first commercial sale of such licensed product.
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On April 29, 2025, BayMedica received a letter from the Licensor stating its intention to commence arbitration proceedings pursuant the Agreement, together with a Notice of Arbitration (the “Patent License Matter”). Such arbitration proceedings will be subject to final, binding and non-appealable arbitration under the Arbitration Act, 1991 (Ontario) and determined pursuant to Ontario law.
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In its Notice of Arbitration, the Licensor takes the position that the annual royalty payments are meant to function as guaranteed annual minimum payments required to be made for the duration of the Agreement regardless of net sales.
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The Licensor seeks relief against BayMedica including (a) approximately US $3.4M in annual payments for the years 2022 through 2024 and (b) a declaration that BayMedica is liable to pay certain guaranteed annual minimum payments of approximately $2.3M for the remainder of the term of the Agreement.
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BayMedica disputes the amount owing and to be paid over the duration of the agreement. BayMedica vehemently contests the Licensor’s interpretation of the Agreement and its position in the Patent License Matter, and intends to take all necessary steps to vigorously defend the Patent License Matter.
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While we are not able to predict the outcome of the Patent License Matter with any certainty, an unfavorable outcome to BayMedica would have a material adverse impact on the Company’s business and financial condition and on BayMedica’s ability to continue operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 67 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s shares are listed on the on the Nasdaq Capital Market (“Nasdaq”) under the trading symbol “INM”). There were approximately 11,764 holders of record of our Common Shares as of September 20, 2024.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our shares are listed on the on the Nasdaq Capital Market (“Nasdaq”) under the trading symbol “INM”). There were approximately 7,521 holders of record of our Common Shares as of September 12, 2025.
On September 20, 2024, the last reported sales price per share of our Common Shares was $0.26 per share. Unregistered Sales of Equity Securities None. Repurchases of Equity Securities None. ITEM 6. [RESERVED]
On September 12, 2025, the last reported sales price per share of our Common Shares was $2.14 per share. Unregistered Sales of Equity Securities None. Repurchases of Equity Securities None. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe Company has determined its reportable segments to be InMed Pharmaceuticals (“InMed Pharma”) and BayMedica Commercial based on the information used by the CODM. 72 Comparison of the year ended June 30, 2024 and 2023 for InMed Segment Year Ended June 30, 2024 2023 Change % Change (in thousands) Operating expenses: Research and development and patents 3,627 3,579 48 1 % General and administrative 4,495 4,997 (502 ) (10 )% Amortization and depreciation 217 201 16 8 % Foreign exchange loss 62 48 14 29 % Total operating expenses 8,401 8,825 (424 ) (5 )% Interest and other income 533 491 42 9 % Net loss $ (7,868 ) $ (8,334 ) $ 466 (6 )% Research and Development and Patents Expenses Research and development and patents expenses increased by less than $0.1 million in our InMed segment, or 1%, for the year ended June 30, 2024 as compared to the year ended June 30, 2023.
Biggest changeWe have determined our reportable segments to be InMed Pharmaceuticals (“InMed Pharma”) and BayMedica Commercial based on the information used by the CODM. 76 Comparison of the year ended June 30, 2025 and 2024 for InMed Pharma Segment Year Ended June 30, 2025 2024 Change % Change (in thousands) Operating expenses: Research and development 2,821 3,079 (258 ) (8 )% General and administrative 5,415 5,042 373 7 % Amortization and depreciation 210 217 (7 ) (3 )% Foreign exchange loss 28 62 (34 ) (55 )% Total operating expenses 8,474 8,400 74 1 % Interest and other income 156 533 (377 ) (71 )% Finance expense (372 ) - (372 ) (100 )% Net loss $ (8,690 ) $ (7,867 ) $ (823 ) (10 )% Research and Development Expenses Research and development expenses decreased by $0.3 million in our InMed Pharma segment, or 8%, for the year ended June 30, 2025 as compared to the year ended June 30, 2024.
Operating Expenses Research and Development and Patent Expenses Research and development and patent expenses represent costs incurred by us for the discovery, development, and manufacture of our Products and Product Candidates and include: ● external research and development expenses incurred under agreements with contract research organizations (“CROs”), CDMOs and consultants; ● salaries, payroll taxes, employee benefits expenses for individuals involved in research and development efforts; ● research supplies; and ● legal and patent office fees related to patent and intellectual property matters.
Operating Expenses Research and Development Expenses Research and development and patent expenses represent costs incurred by us for the discovery, development, and manufacture of our Products and Product Candidates and include: ● external research and development expenses incurred under agreements with contract research organizations (“CROs”), CDMOs and consultants; ● salaries, payroll taxes, employee benefits expenses for individuals involved in research and development efforts; ● research supplies; and ● legal and patent office fees related to patent and intellectual property matters.
Amortization and Depreciation Intangible assets are comprised of intellectual property that we acquired in 2014 and 2015 and trade secrets, product formulation knowledge, patents that we acquired in October 2021. The acquired intellectual property and patents are amortized on a straight-line basis based on their estimated useful lives.
Amortization and Depreciation Intangible assets are comprised of intellectual property that we acquired in 2014 and 2015 and trade secrets, product formulation knowledge, and patents that we acquired in October 2021. The acquired intellectual property and patents are amortized on a straight-line basis based on their estimated useful lives.
Financing Activities During the year ended June 30, 2024, cash provided by financing activities of $4.7 million consisted of $5.2 million in gross proceeds derived from the 2023 Private Placement, offset by total transaction costs of $0.5 million.
During the year ended June 30, 2024, cash provided by financing activities of $4.7 million consisted of $5.2 million in gross proceeds derived from the 2023 Private Placement, offset by total transaction costs of $0.5 million.
This is due to the numerous risks and uncertainties associated with development, including the uncertainty related to: ● the timing and progress of preclinical and clinical development activities; ● the number and scope of preclinical and clinical programs we decide to pursue; ● our ability to raise additional funds necessary to complete preclinical and clinical development and commercialization of our Product Candidates, to further advance the development of our manufacturing technologies, and to develop and commercialize additional Products, if any; ● our ability to maintain our current research and development programs and to establish new ones; ● our ability to establish sales, licensing or collaboration arrangements; ● the progress of the development efforts of parties with whom we may enter into collaboration arrangements; ● the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; ● the receipt and related terms of regulatory approvals from applicable regulatory authorities; ● the availability of materials for use in production of our Products and Product Candidates; ● our ability to secure manufacturing supply through relationships with third parties or establish and operate a manufacturing facility; ● our ability to consistently manufacture our Product Candidates in quantities sufficient for use in clinical trials; ● our ability to obtain and maintain intellectual property protection and regulatory exclusivity, both in the United States and internationally; ● our ability to maintain, enforce, defend and protect our rights in our intellectual property portfolio; ● the commercialization of our Product Candidates, if and when approved, and of new Products; ● our ability to obtain and maintain third-party payor coverage and adequate reimbursement for our Product Candidates, if approved; ● the acceptance of our Product Candidates, if approved, by patients, the medical community and third-party payors; ● competition with other products; and ● a continued acceptable safety profile of our Product Candidates following receipt of any regulatory approvals. 71 A change in the outcome of any of these variables with respect to the development of any of our Products or Product Candidates would significantly change the costs and timing associated with the development of those Products or Product Candidates.
This is due to the numerous risks and uncertainties associated with development, including the uncertainty related to: ● the timing and progress of preclinical and clinical development activities; ● the number and scope of preclinical and clinical programs we decide to pursue; ● our ability to raise additional funds necessary to complete preclinical and clinical development and commercialization of our Product Candidates, to further advance the development of our manufacturing technologies, and to develop and commercialize additional Products, if any; ● our ability to maintain our current research and development programs and to establish new ones; ● our ability to establish sales, licensing or collaboration arrangements; ● the progress of the development efforts of parties with whom we may enter into collaboration arrangements; ● the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; ● the receipt and related terms of regulatory approvals from applicable regulatory authorities; ● the availability of materials for use in production of our Products and Product Candidates; ● our ability to secure manufacturing supply through relationships with third parties or establish and operate a manufacturing facility; ● our ability to consistently manufacture our Product Candidates in quantities sufficient for use in clinical trials; ● our ability to obtain and maintain intellectual property protection and regulatory exclusivity, both in the United States and internationally; ● our ability to maintain, enforce, defend and protect our rights in our intellectual property portfolio; ● the commercialization of our Product Candidates, if and when approved, and of new Products; ● our ability to obtain and maintain third-party payor coverage and adequate reimbursement for our Product Candidates, if approved; ● the acceptance of our Product Candidates, if approved, by patients, the medical community and third-party payors; ● competition with other products; and ● a continued acceptable safety profile of our Product Candidates following receipt of any regulatory approvals. 75 A change in the outcome of any of these variables with respect to the development of any of our Products or Product Candidates would significantly change the costs and timing associated with the development of those Products or Product Candidates.
General and Administrative Expenses General and administrative expenses consist of personnel-related costs, including salaries, benefits and stock-based compensation expense, for our personnel in executive, finance and accounting, human resources, business operations and other administrative functions, investor relations activities, legal fees related to corporate matters, fees paid for accounting and tax services, consulting fees and facility-related costs.
General and Administrative Expenses General and administrative expenses consist of personnel-related costs, including salaries, benefits and stock-based compensation expense, for our personnel in executive, finance and accounting, human resources, business operations and other administrative functions, investor relations activities, legal fees related to corporate matters, fees paid for accounting and tax services, consulting fees, patent costs and facility-related costs.
Actual results could differ from those estimates. Research & Development and Patents costs : Research and development and patents costs is a critical accounting estimate due to the magnitude and nature of the assumptions that are required to calculate third-party accrued and prepaid research and development expenses.
Actual results could differ from those estimates. Research & Development costs: Research and development costs is a critical accounting estimate due to the magnitude and nature of the assumptions that are required to calculate third-party accrued and prepaid research and development expenses.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate development or future commercialization efforts or grant rights to develop and market Products or Product Candidates that we would otherwise prefer to develop and market ourselves. 76 Off-Balance Sheet Arrangements During the periods presented, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations promulgated by the SEC.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate development or future commercialization efforts or grant rights to develop and market Products or Product Candidates that we would otherwise prefer to develop and market ourselves. 80 Off-Balance Sheet Arrangements During the periods presented, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations promulgated by the SEC.
In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
We monitor these factors and adjust our estimates accordingly. 77 Share-based payments : The fair value, at the grant date, of equity share awards is charged to income or loss over the period for which the benefits of employees and others providing similar services are expected to be received, generally the vesting period.
We monitor these factors and adjust our estimates accordingly. 81 Share-based payments : The fair value, at the grant date, of equity share awards is charged to income or loss over the period for which the benefits of employees and others providing similar services are expected to be received, generally the vesting period.
Critical Accounting Policies and Significant Judgments and Estimates We periodically review our financial reporting and disclosure practices and accounting policies to ensure that they provide accurate and transparent information relative to the current economic and business environment. As part of this process, we have reviewed our selection, application and communication of critical accounting policies and financial disclosures.
Critical Accounting Estimates and Accounting Policies We periodically review our financial reporting and disclosure practices and accounting policies to ensure that they provide accurate and transparent information relative to the current economic and business environment. As part of this process, we have reviewed our selection, application and communication of critical accounting policies and financial disclosures.
The following discussion and analysis should be read in conjunction with our audited consolidated financial statements for the year ended June 30, 2024, and the related notes thereto, which have been prepared in accordance with U.S. GAAP. Additionally, the following discussion and analysis should be read in conjunction with our audited consolidated financial statements included in this Annual Report.
The following discussion and analysis should be read in conjunction with our audited consolidated financial statements for the year ended June 30, 2025, and the related notes thereto, which have been prepared in accordance with U.S. GAAP. Additionally, the following discussion and analysis should be read in conjunction with our audited consolidated financial statements included in this Annual Report.
We do not track our internal research and development expenses on a program-by-program basis as the resources are deployed across multiple projects. 70 The successful development of our Products and Product Candidates is highly uncertain.
We do not track our internal research and development expenses on a program-by-program basis as the resources are deployed across multiple projects. 74 The successful development of our Products and Product Candidates is highly uncertain.
Combined, these mechanisms of action may offer a unique treatment approach targeting several biological pathways associated with Alzheimer’s disease. Our ocular research, based on the proprietary small molecule INM-089, indicates potentially promising neuroprotective effects in the back of the eye, which may lead to the preservation of the retinal function.
Combined, these mechanisms of action may offer a unique treatment approach targeting several biological pathways associated with Alzheimer’s disease. Outcomes from our ocular research, based on the proprietary small molecule INM-089, indicate potentially promising neuroprotective effects in the back of the eye, which may lead to the preservation of retinal function.
The full details of our accounting policies are presented in Note 2 of our audited consolidated financial statements for the year ended June 30, 2024.
The full details of our accounting policies are presented in Note 2 of our audited consolidated financial statements for the year ended June 30, 2025.
However, we expect our research and development expenses to increase significantly in future periods as we continue to implement our business strategy, which includes advancing our drug candidates and our manufacturing technologies into and through clinical development, expanding our research and development efforts, including hiring additional personnel to support our research and development efforts, ultimately seeking regulatory approvals for our drug candidates that successfully complete clinical trials, and further developing selected R&D and commercial BayMedica activities.
However, we expect our research and development expenses to increase significantly in future periods as we continue to implement our business strategy, which includes advancing our drug candidates and our manufacturing technologies through the extensive preclinical testing and into clinical development, expanding our research and development efforts, including hiring additional personnel to support our research and development efforts, ultimately seeking regulatory approvals for our drug candidates that successfully complete clinical trials, and further developing selected R&D and commercial activities.
InMed’s INM-901 is a proprietary small molecule, disease modifying drug candidate being developed as a potential treatment for Alzheimer’s disease. INM-901 has multiple potential mechanisms of action as a preferential signaling agonist for both CB1 and CB2 receptors, as well as impacting the peroxisome proliferator-activated receptor (“PPAR”) signaling pathway.
Our INM-901 is a proprietary small molecule, disease modifying drug candidate being developed as a potential treatment for Alzheimer’s disease. INM-901 has multiple potential mechanisms of action as a preferential signaling agonist for both CB1 and CB2 receptors, as well as impacting the peroxisome proliferator-activated receptor, or PPAR, signaling pathway.
Together with BayMedica, our manufacturing capabilities include traditional approaches such as chemical synthesis and biosynthesis, as well as a proprietary, integrated manufacturing approach called IntegraSyn. With multiple manufacturing approaches, InMed has sought to maintain enhanced flexibility to select the most cost-effective method to deliver high quality, high purity Products and Product Candidates fit for their intended use.
Together with BayMedica, our manufacturing capabilities include traditional approaches such as chemical synthesis and biosynthesis, as well as a proprietary, integrated manufacturing approach called IntegraSyn. With multiple manufacturing approaches, we have sought to maintain enhanced flexibility to select the most cost-effective method to deliver high quality, high purity Products and Product Candidates fit for their intended uses.
These Product Candidates are patentable new chemical entities ( “ NCEs ” ) for pharmaceutical development, aimed at targeting diverse clinical indications. Our current pharmaceutical pipeline consists of three programs, with drug candidates targeting Alzheimer’s disease, dry age-related macular degeneration, and Epidermolysis Bullosa.
These Product Candidates are patentable new chemical entities, or NCEs, for pharmaceutical development, aimed at targeting diverse clinical indications. Our current potential pharmaceutical pipeline consists of three programs, with drug candidates targeting Alzheimer’s disease, dry Age-Related Macular Degeneration, or dry AMD, and Epidermolysis Bullosa, or EB.
Through June 30, 2024, we have funded our operations primarily with proceeds from the sale of our Common Shares. We have incurred recurring losses and negative cash flows from operations since its inception, including net losses of $7.7 million and $7.9 million for the years ended June 30, 2024 and 2023, respectively.
Through June 30, 2025, we have funded our operations primarily with proceeds from the sale of our Common Shares. We have incurred recurring losses and negative cash flows from operations since its inception, including net losses of $8.2 million and $7.7 million for the years ended June 30, 2025 and 2024, respectively.
The Company has concluded that there is substantial doubt about its ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. 75 We expect to continue to seek additional funding through equity financings, debt financings or other capital sources, including collaborations with other companies, government contracts or other strategic transactions.
We have concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. 79 We expect to continue to seek additional funding through equity financings, debt financings or other capital sources, including collaborations with other companies, government contracts or other strategic transactions.
During the year ended June 30, 2023, we used cash in operating activities of $7.3 million, primarily resulting from our net loss of $7.9 million combined with $0.6 million used in changes in our non-cash working capital, partially offset by non-cash share-based compensation expenses and inventory write-down.
During the year ended June 30, 2024, we used cash in operating activities of $7.0 million, primarily resulting from our net loss of $7.7 million combined with $0.4 million used in changes in our non-cash working capital, partially offset by non-cash share-based compensation expenses and inventory write-down.
Results of Operations The Company has two operating and reportable segments based on the management approach which designates the internal reporting used by the Chief Operating Decision Maker (“CODM”), which is the Company’s Chief Executive Officer and the senior management team, for making decisions and assessing performance as the source of the Company’s reportable segments.
Results of Operations We have two operating and reportable segments based on the management approach which designates the internal reporting used by the Chief Operating Decision Maker (“CODM”), which is our Chief Executive Officer and the senior management team, for making decisions and assessing performance as the source of our reportable segments.
Results from the Phase 2 clinical trial showed a positive indication of enhanced anti-itch activity for INM-755 cream versus the control cream alone in an exploratory clinical evaluation. The Company is also pursuing strategic partnership opportunities for INM-755 in epidermolysis bullosa and other itch-related skin conditions.
Results from the Phase 2 clinical trial showed a positive indication of enhanced anti-itch activity for INM-755 cream versus the control cream alone in an exploratory clinical evaluation. We are also pursuing strategic partnership opportunities for INM-755 in EB and other itch-related skin conditions.
The increase in research and development and patents expenses was due primarily to an increase in patent fees and compensation. This was offset by a decrease in research supplies. However, we expect our research and development expenses to increase significantly in future periods as we continue to implement our business strategy.
The decrease in research and development expenses was due primarily to a decrease in external contractors and personnel compensation. This was offset by an increase in research supplies. However, we expect our research and development expenses to increase significantly in future periods as we continue to implement our business strategy.
Investing Activities During the year ended June 30, 2024, cash used in investing activities of less than $0.01 million resulted from the purchases of property and equipment.
Investing Activities During the year ended June 30, 2025, cash used in investing activities of $nil resulted from the purchases and sale of short-term investments. During the year ended June 30, 2024, cash used in investing activities of less than $0.01 million resulted from the purchases of property and equipment.
Overview We are a clinical stage pharmaceutical company developing a pipeline of proprietary small molecule drug candidates that are preferential signaling ligands of the endogenous CB1and CB2 receptors as well as other receptor targets linked to human disease.
Overview We are a pharmaceutical drug development company with a pipeline of proprietary small molecule drug candidates that are preferential signaling ligands of the endogenous CB1 and CB2 receptors as well as other receptor targets linked to human disease.
As of the issuance date of these consolidated annual financial statements, the Company expects its cash, cash equivalents and short-term investments of $6.6 million as of June 30, 2024 will be sufficient to fund its operating expenses and capital expenditure requirements to the end of the fourth quarter of calendar 2024, depending on the level and timing of realizing BayMedica revenues from the sale of bulk rare cannabinoids in the health & wellness sector as well as the level and timing of the Company operating expenses.
As of the issuance date of these consolidated annual financial statements, we expect our cash, cash equivalents and short-term investments of $11.1 million as of June 30, 2025 will be sufficient to fund our operating expenses and capital expenditure requirements into the fourth quarter of calendar 2026, depending on the level and timing of realizing BayMedica revenues from the sale of bulk rare cannabinoids in the health & wellness sector as well as the level and timing of our operating expenses.
Together with BayMedica, we also have significant know-how in developing proprietary manufacturing approaches to produce and sell bulk rare cannabinoids as ingredients for various market sectors. 67 InMed has sought to focus on the research and development of preferential signaling ligands of CB1 and CB2 and has produced a library of novel, proprietary drug candidates (“Product Candidates”).
Together with our wholly owned subsidiary, BayMedica, LLC, or BayMedica, we also have significant know-how in developing proprietary manufacturing approaches to produce and sell bulk rare cannabinoids as ingredients for various market sectors. 68 We have sought to focus on the research and development of preferential signaling ligands of CB1 and CB2, and have produced a library of novel, proprietary drug candidates, or Product Candidates.
Research and Development and Patents Expenses Research and development and patents expenses decreased by less than $0.1 million in our BayMedica segment, or 10%, for the year ended June 30, 2024 as compared to the year ended June 30, 2023. The decrease in research and development and patents expenses was primarily due to research supplies.
Research and Development Expenses Research and development expenses decreased by less than $0.1 million in our BayMedica segment, or 76%, for the year ended June 30, 2025 as compared to the year ended June 30, 2024. The decrease in research and development expenses was primarily due to a decrease in external contractors.
The following table summarizes our cash flows for each of the periods presented: (in thousands) Year Ended June 30, 2024 Year Ended June 30, 2023 Net cash (used in) operating activities $ (6,986 ) $ (7,283 ) Net cash (used in) investing activities (9 ) (662 ) Net cash provided by financing activities 4,654 10,681 Net increase (decrease) in cash and cash equivalents $ (2,341 ) $ 2,736 74 Operating Activities During the year ended June 30, 2024, we used cash in operating activities of $7.0 million, primarily resulting from our net loss of $7.7 million combined with $0.4 million used in changes in our non-cash working capital, partially offset by non-cash share-based compensation expenses and inventory write-down.
The following table summarizes our cash flows for each of the periods presented: (in thousands) Year Ended June 30, 2025 Year Ended June 30, 2024 Net cash used in operating activities $ (7,767 ) $ (6,986 ) Net cash used in investing activities - (9 ) Net cash provided by financing activities 12,271 4,654 Net increase (decrease) in cash and cash equivalents $ 4,504 $ (2,341 ) 78 Operating Activities During the year ended June 30, 2025, we used cash in operating activities of $7.8 million, primarily resulting from our net loss of $8.2 million combined with $1.0 million used in changes in our non-cash working capital, partially offset by non-cash share-based compensation expenses.
The future viability of the Company is dependent on its ability to raise additional capital to finance its operations.
Our future viability is dependent on our ability to raise additional capital to finance its operations.
Cost of Sales Cost of goods sold increased by $0.8 million in our BayMedica segment, or 28%, for the year ended June 30, 2024 as compared to the year ended June 30, 2023.
Cost of Sales Cost of goods sold decreased by $0.3 million in our BayMedica segment, or 7%, for the year ended June 30, 2025 as compared to the year ended June 30, 2024.
As of June 30, 2024, we had cash, cash equivalents and short-term investments of $6.6 million.
As of June 30, 2025, we had cash, cash equivalents and short-term investments of $11.1 million.
Neuroprotection in dry Aged-related Macular Degeneration (“dry AMD”) remains an unmet medical need and a new treatment option may help solve this multifactorial disease. InMed has also completed a Phase 2 clinical trial of INM-755 (cannabinol) cream studying its safety and efficacy in treating symptoms related to Epidermolysis Bullosa (“EB”).
Neuroprotection in dry AMD remains an unmet medical need and a new treatment option may help solve this multifactorial disease. We have completed a Phase 2 clinical trial of INM-755 (cannabinol) cream studying its safety and efficacy in treating symptoms related to EB.
In addition, we have an accumulated deficit of $109.1 million as of June 30, 2024.
In addition, we have an accumulated deficit of $117.2 million as of June 30, 2025.
During the year ended June 30, 2023, cash provided by financing activities of $10.7 million consisted of $12.0 million of gross proceeds from private placements of our Common Shares, offset by total transaction costs of $1.3 million.
Financing Activities During the year ended June 30, 2025, cash provided by financing activities of $12.3 million consisted of $8.1 million in gross proceeds derived from the sale of common stock, $5.0 million in gross proceeds derived from the sale of warrants, offset by total transaction costs of $0.9 million.
General and administrative expenses General and administrative expenses decreased by $0.5 million in our InMed segment, or 10%, for the year ended June 30, 2024 as compared to the year ended June 30, 2023. The decrease results primarily from a combination of changes including lower office and administrative expenses, investor relation expenses, and personnel expenses.
General and administrative expenses General and administrative expenses increased by $0.4 million in our InMed Pharma segment, or 7%, for the year ended June 30, 2025 as compared to the year ended June 30, 2024. The increase results primarily from a combination of changes including higher legal expenses, and consulting fees.
BayMedica’s commercial business specializes in the B2B commercialization of bulk rare, non-intoxicating cannabinoids as raw materials for the Health and Wellness sector that are bioidentical to those found in nature.
BayMedica’s commercial business specializes in the B2B commercialization of bulk rare, non-intoxicating cannabinoids as raw materials for the Health and Wellness sector that are bioidentical to those found in nature Recent Developments Reverse Stock Split On November 14, 2024, the Company effected a reverse stock split of the Company’s issued and outstanding Common Shares, by a ratio of 20-to-1 (the “Reverse Stock Split”).
Cost of Sales Cost of sales consist primarily of the purchase price of goods and cost of services rendered, freight costs, warehousing costs, and purchasing costs. Cost of sales also includes production and labor costs for our manufacturing business.
Cost of sales also includes production and labor costs for our manufacturing business.
Comparison of the year ended June 30, 2024 and 2023 for the BayMedica Segment Year Ended June 30, 2024 2023 Change % Change (in thousands) Sales $ 4,598 $ 4,136 $ 462 11 % Cost of sales 3,497 2,733 764 28 % Gross profit 1,101 1,403 (302 ) (22 )% Operating expenses: Research and development and patents 138 153 (15 ) (10 )% General and administrative 756 851 (95 ) (11 )% Amortization and depreciation 2 2 - - % Total operating expenses 896 1,006 (412 ) (41 )% Interest and other income (5 ) 2 (7 ) (350 )% Tax expense (7 ) (13 ) 6 (46 )% Net Income $ 193 $ 386 $ (193 ) (50 )% 73 Sales Sales increased by $0.5 million in our BayMedica segment, or 11%, for the year ended June 30, 2024 as compared to the year ended June 30, 2023.
Comparison of the year ended June 30, 2025 and 2024 for the BayMedica Segment Year Ended June 30, 2025 2024 Change % Change (in thousands) Sales $ 4,943 $ 4,598 $ 345 8 % Cost of sales 3,236 3,497 (261 ) (7 )% Gross profit 1,707 1,101 606 55 % Operating expenses: Research and development 33 138 (105 ) (76 )% General and administrative 1,143 756 387 51 % Amortization and depreciation 2 2 - - % Total operating expenses 1,178 896 282 31 % Interest and other income - (5 ) 5 (100 )% Tax expense - (7 ) 7 (100 )% Net Income $ 529 $ 193 $ 336 174 % 77 Sales Sales increased by $0.3 million in our BayMedica segment, or 8%, for the year ended June 30, 2025 as compared to the year ended June 30, 2024.
This was offset by an increase in external contractors. General and administrative expenses General and administrative expenses decreased by less than $0.1 million in our BayMedica segment, or 11%, for the year ended June 30, 2024 as compared to the year ended June 30, 2023.
This was offset by a decrease in office and administrative fees. Interest and other income Interest and other income decreased by $0.4 million in our InMed segment, or 71% for the year ended June 30, 2025, as compared to the year ended June 30, 2024.
The foregoing description of the terms of the ATM Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the ATM Amendment, a copy of which is filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2024 and is incorporated herein by reference .
The foregoing description of the Existing Investment Option Amendment is not complete and is qualified in its entirety by the full text of the Existing Investment Option Amendment, a copy of which is filed as an exhibit to this Annual Report. 70 Engagement Letter We entered into an engagement letter with H.C.
Research and development activities account for a significant portion of our operating expenses. Research and development expenses decreased in fiscal 2024 as compared to fiscal 2023, largely due to high start-up costs associated with the multicenter Phase 2 clinical trial in our INM-755 program during fiscal 2022.
Research and development activities account for a significant portion of our operating expenses. Research and development expenses decreased in fiscal 2025 as compared to fiscal 2024, largely due to the retirement of our Senior Vice-President, Clinical & Regulatory at the end of June 2024. We do not currently have plans to fill this position.
Foreign exchange loss increased by less than $0.1 million in our InMed segment, or 29% for the year ended June 30, 2024, as compared to the year ended June 30, 2023, as a consequence of holding non-US denominated assets and liabilities combined with fluctuations in foreign exchange rates.
The decrease primarily results from the loss of a sublessor during the year ended June 30, 2025, and the reduction in our average cash on hand during the current year. Finance Expense Finance expense increased by $0.4 million in our InMed segment, or 100% for the year ended June 30, 2025 as compared to the year ended June 30, 2024.
Components of Results of Operations Revenue Our revenue consists of manufacturing and distribution sales of bulk rare cannabinoid Products, which are generally recognized at a point in time. The Company recognizes revenue when control over the products have been transferred to the customer and the Company has a present right to payment.
We recognize revenue when control over the products has been transferred to the customer and we have a present right to payment. Cost of Sales Cost of sales consist primarily of the purchase price of goods and cost of services rendered, freight costs, warehousing costs, and purchasing costs.
The increase in cost of goods sold is primarily the result of hiring a full-time resource to support the cost of goods function, leading to higher personnel costs, as well as an increase in sales mentioned above, during the year ended June 30, 2024.
The decrease in cost of goods sold is primarily the result of the Company lowering its supply chain costs and a decrease in write-down of inventories to net realizable value during the year ended June 30, 2025.
Removed
Recent Developments NASDAQ Delisting Notice As previously reported by the Company, on March 19, 2024, the Company received written notification from the Listing Qualifications Department of Nasdaq that the Company has been granted an additional 180-day compliance period, or until September 16, 2024 (the “Extended Compliance Period”), to regain compliance with Nasdaq’s minimum bid price requirement for the continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”).
Added
Accordingly, all Common Shares, stock options, warrants, as well as per share information, for all periods presented in the consolidated financial statements and notes thereto have been adjusted retrospectively to reflect this Reverse Stock Split.
Removed
Nasdaq’s determination was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market, with the exception of the bid price requirement, and the Company’s written notice of its intention to consider all available options to regain compliance during the Extended Compliance Period, including, if necessary, effecting a reverse stock split.
Added
Private Offering On June 24, 2025, we entered into a securities purchase agreement, or the Purchase Agreement, with the Selling Shareholder, for the sale and issuance of an aggregate of 1,952,363 common shares (or pre-funded warrants in lieu thereof) at a purchase price of $2.561 per share (or pre-funded warrant in lieu thereof).
Removed
The Company was unable to regain compliance during the Extended Compliance Period and, on September 17, 2024, the Company received an additional notification from the Listing Qualifications Department stating that due to the deficiency, the Company’s securities would be delisted from Nasdaq on September 26, 2024, unless the Company appealed Nasdaq’s determination to a Hearings Panel (the “Panel”).
Added
In addition, we agreed to issue to the Selling Shareholder short-term preferred investment options to purchase up to an aggregate of 1,952,363 common shares at an exercise price of $2.436 per share. The foregoing transaction is referred to herein as the Private Placement. On June 26, 2025, the parties consummated the Private Placement.
Removed
A hearing request would stay the suspension of the Company’s securities pending the Panel’s discussion. On September 17, 2024, the Company submitted the hearing request to appeal (the “Appeal Request”) Nasdaq’s determination before the Panel. The hearing will take place on October 31, 2024 and it is anticipated that the Panel’s decision will follow shortly thereafter.
Added
The terms of the Purchase Agreement provided the Selling Shareholder the option of purchasing the pre-funded warrants in lieu of common shares in such manner as to result in the same aggregate purchase price being paid by the Selling Shareholder to us.
Removed
The pendency of the Appeal Request does not have an immediate effect on the listing of our Common Shares and our Common Shares will continue to trade on Nasdaq under the symbol “INM”.
Added
At the closing of the Private Placement, we issued to the Selling Shareholder (i) pre-funded warrants to purchase an aggregate of 1,952,363 common shares and (ii) preferred investment options to purchase up to an aggregate of 1,952,363 common shares. No common shares were issued to the Selling Shareholder at the closing of the Private Placement.
Removed
While the Company has filed the Appeal Request, there can be no assurances, however, that we will be successful in regaining compliance with the continued listing requirements and maintaining the listing of our Common Shares on Nasdaq.
Added
The Company received gross proceeds of approximately $5.0 million and paid approximately $0.5 million in transaction costs The pre-funded warrants have an exercise price of $0.0001 per pre-funded warrant and can be exercised at any time from the date and time of issuance until the pre-funded warrants are exercised in full.
Removed
Delisting from Nasdaq could materially and adversely affect our ability to raise additional financing through the public or private sale of equity securities, would significantly affect the ability of investors to trade our securities and would negatively affect the value and liquidity of our securities, including our Common Shares.
Added
The terms of the pre-funded warrants preclude a holder thereof from exercising such holder’s pre-funded warrants, and us from giving effect to such exercise, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 9.99% of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise. 69 The preferred investment options issued to the Selling Shareholder in the Private Placement have an exercise price of $2.436 per share, became exercisable immediately upon issuance and will expire eighteen (18) months from the effective date of the Resale Registration Statement (as defined below).
Removed
The actual or threatened delisting of our securities could also have other material and adverse consequences, including the potential loss of confidence by employees and other stakeholders, the loss of institutional investor interest and fewer business development opportunities, limited availability of market quotations for our securities, reduced liquidity with respect to our securities, a determination that our Common Shares is “penny stock,” which will require brokers trading in our Common Shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our Common Shares, and limited amount of news and analyst coverage of the Company.
Added
The terms of such preferred investment options preclude a holder thereof from exercising such holder’s preferred investment option, and the Company from giving effect to such exercise, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise.
Removed
To the extent that our Common Shares became eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, an investor may find it more difficult to dispose of their Common Shares or obtain accurate quotations as to the market value of our Common Shares. 68 Renewal of ATM Program On June 27, 2024, the Company entered into an amendment (the “ATM Amendment”) to its At-the-Market Offering Agreement, dated April 7, 2022 (the “Original ATM Agreement” and together with the ATM Amendment, the “Amended ATM Agreement”), by and between the Company and H.C.
Added
A holder may increase or decrease the beneficial ownership thresholds relating to the pre-funded warrants and preferred investment options specified above, except that the issuance of 9.99% can be no sooner than 61 days after notifying us and that the beneficial ownership limitation may not exceed 9.99% in any event.
Removed
Wainwright & Co., LLC (the “Agent”), as sales agent, pursuant to which the Company may offer and sell shares of our Common Shares, from time to time, in “at the market” offerings through the Agent. The Original ATM Agreement was previously filed with the Securities and Exchange Commission on April 7, 2022 on the Company’s Current Report on Form 8-K.
Added
The Selling Shareholder has elected 4.99% for the pre-funded warrants and 9.99% for the preferred investment options as of the date hereof. In connection with the Private Placement, we entered into a Registration Rights Agreement with the Selling Shareholder, dated June 24, 2025, or the Registration Rights Agreement.
Removed
The ATM Amendment amends the Original ATM Agreement to reflect, among other provisions, updates to certain sales settlement provisions and reimbursement terms, and to supplement the representations being made by the Company to the Agent.
Added
The Registration Rights Agreement grants the Selling Shareholder certain registration rights and obligates us to file one or more registration statements with the Securities and Exchange Commission, or the SEC, by certain dates, covering the resale of the common shares issuable upon exercise of the pre-funded warrants and preferred investment options sold in the Private Placement, or the Resale Registration Statement.
Removed
Our Common Shares sold under the Amended ATM Agreement will be offered and sold pursuant to the Company’s shelf registration statement on Form S-3, which was initially filed on February 4, 2022 and amended on February 9, 2022, and was declared effective by the SEC on February 11, 2022.
Added
The Company has met all such obligations and timely filed related Resale Registration Statements.
Removed
Appointments to the Scientific Advisory Board (“SAB”) On September 5, 2024, the Company appointed Dr. Barry Greenberg to its Scientific Advisory Board (“SAB”). Dr. Greenberg is an Associate Professor in the Department of Neurology and Director of the Alzheimer’s Disease Translational Center at the Johns Hopkins University School of Medicine.
Added
The pre-funded warrants and preferred investment options described above were offered in a private placement under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder and, along with the common shares underlying the pre-funded warrants and preferred investment options, have not been registered under the Securities Act or applicable state securities laws.
Removed
He serves on several committees and advisory boards for NIA-funded initiatives focused on genetics, model development and clinical trials in AD, and has recently been selected as Editor-in-Chief of the journal “Alzheimer’s & Dementia: Translational Research and Clinical Interventions” On April 18, 2024, the Company announced the addition of Dr. David G.
Added
Accordingly, the pre-funded warrants, preferred investment options and the common shares underlying the pre-funded warrants and preferred investment options may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements and in accordance with applicable state securities laws. The securities were offered and sold only to accredited investors.
Removed
Morgan, a renowned leader in neurodegenerative disease, to its SAB reinforcing the Company’s commitment to advancing it’s INM-901 program in the treatment of Alzheimer’s disease. Ocular Research Program On April 16, 2024, the Company announced additional preclinical data for INM-089 further demonstrating positive pharmacological effects targeting dry AMD.
Added
The foregoing descriptions of the Purchase Agreement, the Registration Rights Agreement, and the pre-funded warrants and the preferred investment options issued in the Private Placement are not complete and are qualified in their entirety by the full text of such documents, copies of which are filed as exhibits to this Annual Report.
Removed
In vivo preclinical studies in AMD disease models demonstrated significant outcomes for INM-089 including neuroprotection of photoreceptors as well as improved photoreceptor’s function, improved integrity of retinal pigment epithelium and reduction in extracellular autofluorescent deposits, a hallmark of dry AMD.
Added
Existing Investment Option Amendment Concurrently with our entry into the Purchase Agreement, we and the Selling Shareholder entered into an Amendment Letter, dated June 24, 2025, or the Existing Investment Option Amendment, to amend 199,115 preferred investment options issued to the Selling Shareholder on October 24, 2023, or the Existing Investment Options, with an exercise price of $16.60, pursuant to which the Existing Investment Options were amended to be exercisable for 199,115 common shares at a reduced exercise price of $2.436 per share in consideration for the Selling Shareholder’s participation in the Private Placement and the payment by the Selling Shareholder to us cash consideration of $0.125 per Existing Investment Option.
Removed
Additionally, data indicates that INM-089 may be more effective as a therapeutic treatment for dry AMD compared to neovascular, or wet, AMD. More specifically, data suggests INM-089 may be an important candidate for geographic atrophy (“GA”) which is common in more advanced cases of dry AMD, affecting the center of the macula.

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