Neuphoria Therapeutics Inc.: Form 10-Q for the period ended Mar 31, 2025

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of our Annual Report on Form 10-K for the year ended June 30, 2024 ("Form 10-K") and in this report, as well as disclosures in this report and our other reports filed with the Securities and Exchange Commission ("SEC"), for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a clinical-stage biopharmaceutical company developing novel, allosteric ion channel modulators designed to transform the lives of patients suffering from serious central nervous system (“CNS”) disorders with high unmet medical need. Ion channels serve as important mediators of physiological function in the CNS and the modulation of ion channels influences neurotransmission that leads to downstream signaling in the brain. The α7 nicotinic acetylcholine (“ACh”) receptor (“α7 receptor”) is an ion channel that plays an important role in driving emotional responses and cognitive performance. Utilizing our expertise in ion channel biology and translational medicine, we are developing orally active small molecule negative allosteric modulators (“NAMs”) to treat anxiety and stressor-related disorders. In addition, through a long-standing strategic partnership with Merck & Co., Inc., in the United States and Canada (“MSD”), we are also developing positive allosteric modulators (“PAMs”) of the α7 receptor to treat cognitive dysfunction. Neuphoria's pipeline also includes preclinical assets that target Kv3.1/3.2 and Nav1.7/1.8 ion channels being developed for CNS conditions of high unmet need.

We are a clinical-stage biotechnology company dedicated to developing therapies that address the complex needs of individuals affected by neuropsychiatric disorders. We are advancing our lead product candidate, BNC210, an oral, proprietary, selective NAM of the α7 receptor, for the chronic treatment of Post-Traumatic Stress Disorder (“PTSD”) and the acute treatment of Social Anxiety Disorder (“SAD”). There remains a significant unmet medical need for the over 27 million patients in the United States alone suffering from SAD and PTSD. BNC210 is a first-of-its-kind, well tolerated, broad spectrum anti-anxiety experimental therapeutic, designed to restore neurotransmitter balance in relevant brain areas, providing rapid relief from stress and anxiety symptoms without the common pitfalls of sedation, cognitive impairment, or addiction. Current pharmacological treatments include certain antidepressants and benzodiazepines, and there have been no new FDA approved therapies in these indications in nearly two decades. These existing treatments have multiple shortcomings, such as a slow onset of action of antidepressants, and significant side effects of both classes of drugs, including abuse liability, addiction potential and withdrawal symptoms. BNC210 has been observed in our clinical trials to have a fast onset of action and clinical activity without the limiting side effects seen with the current standard of care.

In addition, the Company has a strategic partnership with Merck & Co., Inc. (known as MSD outside the United States and Canada) with two drugs in early-stage clinical trials for the treatment of cognitive deficits in Alzheimer’s disease and other central nervous system conditions. Our pipeline also includes the α7 nicotinic acetylcholine receptor next generation and the Kv3.1/3.2 preclinical programs, both in the lead optimization development stage.

We were incorporated in 1996 in Australia, completed our initial public offering and listing of ordinary shares on the ASX in 1999, and completed our initial public offering and listing of our ADSs on the Nasdaq Global Market in 2021. On July 25, 2023, we requested to be delisted from the official list of the ASX, which became effective August 28, 2023 and, as a result, our ordinary shares are no longer quoted or traded on the ASX. We were formally known as Bionomics Limited, an Australian company. On October 1, 2024 we entered into a Scheme Implementation Agreement with Neuphoria to re-domicile to the State of Delaware pursuant to a Scheme of Arrangement under Australian law. On December 23, 2024, the re-domiciliation of Bionomics was implemented and effectuated in accordance with the Scheme Implementation Agreement, as amended, and more fully described under “Recent Developments” below.

Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. As of March 31, 2025, our operations have been financed primarily by aggregate net proceeds of $192.7 million from the sale and issuances of our equity, $28.5 million in the form of an upfront payment, research funding and a milestone payment from the 2014 Merck Agreement, and $66.8 million from Australian research and development credits and government grants and assistance.

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our trade and other payables. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, and our administrative and other expenses will continue to increase. In particular, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our product candidates, as well as hire additional personnel, pay fees to outside consultants, lawyers and accountants, and incur other increased costs associated with being a U.S. public company, hiring U.S. personnel and establishing a U.S. infrastructure. In addition, if we seek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditure on other research and development activities.

Since inception, we have had significant operating losses and have an accumulated deficit of $169.5 million at March 31, 2025. The Company realized net income of $11.3 million and $8.5 million for the three and nine months ended March 31, 2025 and incurred a net loss of $15.5 million for the year ended June 30, 2024. The Company also generated $3.7 million of cash from operating activities during the nine months ended March 31, 2025.

Based upon the Company’s current operating plans, the Company believes that its existing cash and cash equivalents will be sufficient to continue funding its development activities into the first quarter of fiscal year 2027, which is more than twelve months from the date these condensed consolidated financial statements are issued. Consequently, management has determined there is no substantial doubt regarding the Company's ability to continue as a going concern for the twelve-month period from the date these financial statements are issued.

The Company has based projections of operating capital requirements on the current operating plan, which includes several assumptions that may prove to be incorrect, and the Company may use all available capital resources sooner than the Company expects. The accompanying condensed consolidated financial statements do not include adjustments that might result from the outcome of uncertainties and assumes the Company will continue as a going concern through the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all, nor is it considered probable under the accounting standards. If the Company is unable to obtain sufficient funding on acceptable terms, it could be forced to delay, reduce or eliminate some or all its research and development programs or commercialization activities, which could materially adversely affect its business prospects or its ability to continue operations.

Recent Developments

On October 1, 2024, Bionomics Limited, an Australian corporation ("Bionomics") announced its intention to redomicile from Australia to the United States (the “Redomiciliation”) via a proposed scheme of arrangement under Australian law between Bionomics and its shareholders (the “Scheme”). Implementation of the Scheme was subject to approval of Bionomics’ shareholders as well as Australian regulatory and court approvals.

On December 23, 2024 U.S. time (“Effective Date”), the Redomiciliation of Bionomics was implemented under Australian law in accordance with a Scheme Implementation Agreement (as amended) between Bionomics and Neuphoria Therapeutics Inc., a Delaware corporation. The Redomiciliation was effected pursuant to a statutory Scheme of Arrangement under Australian law (the “Scheme”). As a result of the Redomiciliation, Bionomics became a wholly-owned subsidiary of Neuphoria, which is the new ultimate parent company. The terms “we,” “our,” “us” in this description refer to Bionomics prior to the Effective Date and Neuphoria after the Effective Date.

In connection with the Scheme:

• holders of ordinary shares of Bionomics received one share of common stock in Neuphoria for every 2,160 ordinary shares of Bionomics held on the Scheme record date; and
• holders of American Depositary Shares (“ADSs”), with each ADS representing 180 ordinary shares of Bionomics, received one share of common stock of Neuphoria for every 12 ADSs held on the Scheme record date.

The shares of common stock issued by Neuphoria upon implementation of the Scheme were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 3(a)(10) thereof.

In addition, pursuant to Stock Option Notice and Agreements, Neuphoria has issued options to acquire shares of common stock in Neuphoria (“Neuphoria Options”) to holders of options to acquire shares in Bionomics in exchange for their outstanding stock options granted by Bionomics Limited at a ratio of one share of Neuphoria’s common stock for every 2,160 ordinary shares of Bionomics. The issuance of Neuphoria Options will be issued under a registration statement on Form S-8 (File No. 333-284544), which has been filed with and declared effective by the SEC on January 28, 2025.

Neuphoria has also issued a warrant to purchase 1,054,381 shares of common stock in Neuphoria (“Neuphoria Warrant”) pursuant to the terms of an exchange agreement to an institutional investor that previously held a warrant to purchase 12,652,572 American Depositary Shares (“ADSs”) of Bionomics (“Bionomics Warrant”), in exchange for the Bionomics Warrant. The issuance of the Neuphoria Warrant is exempt from registration under the Securities Act, pursuant to Section 4(a)(2) thereof.

Prior to the Redomiciliation, Bionomics’ ordinary shares were registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and ADSs representing its ordinary shares were listed on the Nasdaq Global Market (“Nasdaq”). Bionomics’ ADSs were suspended from trading on Nasdaq prior to the start of trading on the Effective Date and, following the Effective Date, will no longer trade on Nasdaq.

Pursuant to Rule 12g-3(a) under the Exchange Act, as of the Effective Date:

• Neuphoria is the successor issuer to Bionomics;
• Neuphoria’s shares of common stock are deemed to be registered under Section 12(b) of the Exchange Act; and
• Neuphoria is subject to the periodic and current reporting requirements of the Exchange Act and the rules and regulations promulgated thereunder. Neuphoria hereby reports this succession in accordance with Rule 12g-3(f) under the Exchange Act.

Neuphoria’s shares of common stock commenced trading on Nasdaq at the start of trading on December 24, 2024 under the symbol “NEUP”. The CUSIP for Neuphoria’s shares of common stock is 64136E102.

Bionomics has also filed Form 15 with the Securities and Exchange Commission (“SEC”) to terminate the registration (and the registration statements related thereto) under the Exchange Act of Bionomics’ ordinary shares and to suspend its reporting obligations under Sections 13 and 15(d) of the Exchange Act, and each such registration termination has been declared effective by the SEC.

Research Collaboration and License Agreements

In January 2012, we entered into a research and license agreement with Ironwood Pharmaceuticals, Inc. (“Ironwood”), pursuant to which Ironwood was granted worldwide development and commercialization rights for BNC210. In November 2014, the parties mutually agreed to terminate this license agreement, reverting all rights to BNC210 back to us. The sole obligation to Ironwood is to pay Ironwood low to mid-single digit royalties on the net sales of BNC210, if commercialized.

In September 2014, we entered the 2014 Merck Research Collaboration and License Agreement to develop compounds targeting cognitive dysfunction associated with Alzheimer’s disease and other central nervous system conditions. Pursuant to the Merck Agreement, we received upfront payments totaling $17 million, another $10 million in February 2017 when the first compound from the collaboration entered Phase 1 clinical trials, and another $15 million in March 2025 upon the first dosing of a patient in a phase II clinical trial. We are also eligible to receive up to an additional $450 million in milestone payments for achievement of certain development and commercial milestones.

On March 14, 2025, the Company and Merck executed the Fifth Amendment to the Research Collaboration and License Agreement which amended the patent royalty rate set out in the Merck Agreement, such that, conditioned upon achievement of net sales thresholds set forth in the Merck Agreement, as amended, the Company will be paid royalties on net sales ranging from a low single digits percentage to a low sub-teens percentage, depending on net sales volume. There were no other changes in the transaction price during the nine months ended March 31, 2025.

In November 2020, we entered into an IP license agreement (the “Carina Biotech License”) with Carina Biotech ("Carina"). Pursuant to the Carina Biotech License, we are eligible to receive approximately $3 million in certain development, regulatory milestone payments if Carina Biotech advances the development of the therapy to a Phase 3 trial. Carina Biotech is also obligated to pay us royalties on its net sales of licensed products, on a country-by-country and product-by-product basis, ranging from the low single digits to the mid-single digits, subject to certain specified deductions. Royalties are payable until the later of expiration of all licensed patents covering the licensed products, or expiration of all data exclusivity with respect to the licensed product. If Carina Biotech enters into one or more sublicensing agreements relating to the licensed product, we are eligible to receive a percentage of sublicensing revenues. On October 30, 2024, Carina made a milestone payment to the Company in the gross amount of A$1,000,000 which was recorded as revenue in the Condensed Consolidated Statement of Operations and Other Comprehensive Income (Loss) included in this Form 10-Q.

Components of Operating Results from Continuing Operations

Expenses

Our expenses since inception have consisted primarily of research and development expenses, general and administrative expenses, and other costs.

Research and Development Expenses

Our research and development expenses represent costs incurred to conduct discovery and development of our proprietary drug candidates and consist primarily of:

• personnel costs, which include salaries, benefits and share-based compensation;
• expenses incurred under agreements with outside consultants and advisors, including their fees and related travel expenses; and
• expenses incurred under agreements with third parties, including CROs that conduct research, preclinical activities and clinical trials on our behalf as well as CMOs that manufacture our product candidates for use in our preclinical studies and clinical trials and perform other required manufacturing activities.

We expense all research and development costs as they are incurred, with development expenses being expensed to the extent they do not meet the criteria for capitalization. To date, we have not capitalized any of our research and development costs and manage our research and development costs on a consolidated basis. Our collaboration partners typically carry the majority of the research and development expenses for out-licensed product candidates at amounts that are not known or made available to us. Therefore, our research and development expenses do not reflect a complete picture of all financial resources devoted to our product candidates, nor do historical research and development expenses necessarily reflect the stage of development for particular product candidates or development projects.

Substantially all our direct research and development expenses during the three months ended March 31, 2025 and 2024 were on BNC210 and consisted primarily of external costs, such as consultants, CMOs that conduct research and development activities on our behalf, costs related to production of preclinical and clinical materials including fees paid to CMOs, and laboratory and vendor expenses related to the execution of our ongoing and planned preclinical studies and clinical trials. We deploy our personnel resources across all our research and development activities.

Because of the numerous risks and uncertainties associated with product development and the current stage of development of our product candidates, we cannot reasonably estimate or know the nature, timing, and estimated costs necessary to complete the remainder of the development of our product candidates. We are also unable to predict if, when, or to what extent we will obtain approval and generate revenues from the commercialization and sale of our product candidates. The duration, costs, and timing of preclinical studies and clinical trials and development of our product candidates will depend on a variety of factors, including:

• successful completion of our planned Phase 3 clinical trials in SAD and PTSD;
• successful completion of preclinical studies and of clinical trials for BNC210 and our other current product candidates and any future product candidates;
• data from our clinical programs that support an acceptable risk-benefit profile of our product candidates in the intended patient populations;
• acceptance by the FDA, regulatory authorities in Europe, or other regulatory agencies, of the IND applications, clinical trial applications and/or other regulatory filings for BNC210, our other current product candidates and any future product candidates;
• expansion and maintenance of a workforce of experienced scientists and others to continue to develop our product candidates;
• successful application for and receipt of marketing approvals from applicable regulatory authorities;
• obtainment and maintenance of regulatory exclusivity for our product candidates;
• arrangements with third-party manufacturers for, or establishment of, commercial manufacturing capabilities;
• establishment of sales, marketing and distribution capabilities and successful launch of commercial sales of our products, if and when approved, whether alone or in collaboration with others;
• acceptance of our products, if and when approved, by patients, the medical community and third-party payors;
• effective competition with other therapies;
• obtainment and maintenance of coverage, adequate pricing and adequate reimbursement from third-party payors, including government payors;
• obtainment, maintenance, enforcement, defense and protection of our rights in our intellectual property portfolio;
• avoidance of infringement, misappropriation or other violations with respect to others’ intellectual property or proprietary rights; and
• maintenance of a continued acceptable safety profile of our products following receipt of any marketing approvals.

We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our preclinical studies and clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current and future preclinical and clinical product candidates. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or clinical trials, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development.

Research and development activities account for a significant portion of our operating expenses. We expect our research and development expenses to increase substantially for the foreseeable future as we continue to implement our business strategy, which includes advancing BNC210 through clinical development and other product candidates into clinical development, expanding our research and development efforts, including hiring additional personnel to support our research and development efforts, and seeking regulatory approvals for our product candidates that successfully complete clinical trials. In addition, product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect our research and development expenses to increase as our product candidates advance into later stages of clinical development. However, we do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. The process of conducting the necessary clinical development to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain.

General and Administration Expenses

We expect our general and administration expenses to increase over the next several years to support expanded research and development activities and operating as a U.S. public company, including costs of additional personnel, increased costs related to additional investor relations activities, director and officer insurance premiums, and increased fees to outside consultants, lawyers, and accountants.

Our general and administration expenses consist primarily of:

• personnel costs, which include salaries, benefits and share-based compensation;
• expenses incurred under agreements with outside consultants and advisors, including their fees and related travel expenses;
• filing and maintenance of patents and intellectual property rights;
• costs relating to audit, tax and regulatory compliance; and
• other expenses, including facilities costs, legal fees and insurance.

Other Income (Loss)

Other income (loss) consists of net interest income, foreign currency gains and losses, fair value adjustments, and other gains and losses.

Foreign Currency Exchange

Our financial results are reported in U.S. dollars. A substantial portion of our operating expenses and other income are denominated in the Australian dollar. During the nine months ended March 31, 2025 and 2024, we managed our exchange rate exposure principally by maintaining foreign currency cash accounts and managing our payments from the most appropriate accounts. From time to time, we may additionally use forward exchange contracts in an effort to manage certain foreign exchange rate exposures when appropriate. There were no foreign exchange contracts used during the nine months ended March 31, 2025 and 2024, respectively. See “Quantitative and Qualitative Disclosures about Market Risk” for more information.

Results of Operations

Comparison of the three months ended March 31, 2025 and 2024

22

Revenue

Our revenue increased during the three months ended March 31, 2025, as compared to the same period ended 2024, as a result of the $15 million milestone payment received from the Merck Agreement in March 2025.

Research and Development Expenses

Our research and development activities in the three months ended March 31, 2025 and 2024 were principally focused on the advancement of BNC210. The increase in the three months ended March 31, 2025 of approximately $0.4 million, as compared to the same period ended 2024, was primarily due to increased expenditures associated with the PTSD ATTUNE clinical trial $0.1 million combined with an increase in expenditures for our SAD PREVAIL Phase 3 clinical trial of $0.5 million, partially offset by decreases in salaries expense and consulting expense of $0.2 million.

During the three months ended March 31, 2025, approximately 80% of the total research and development expenses related to the advancement of our BNC210-based programs. Of the total BNC210-based program spend during the three months ended March 31, 2025, approximately 15% was attributable to PSTD ATTUNE and 65% to SAD Prevail. We do not track labor associated with each program and have allocated headcount costs on a pro-rated basis. Management believes the pro rata allocation results in a reasonable estimate of the headcount costs associated with each of the programs noted above.

General and Administrative Expenses

The $0.2 million increase in general and administrative expenses during the three months ended March 31, 2025, as compared to the same period ended in 2024, was due to an increase in consulting costs of $0.1 million in the current period combined with increases in administrative costs of $0.2 million, as the Company focused on integration activities associated with the redomiciliation that occurred on December 24, 2024, partially offset by a decrease in professional services of $0.1 million.

Other Income (Loss)

The net decrease in other income of $0.4 million for the three months ended March 31, 2025, as compared to the same period ending in 2024, was primarily due to the fair value adjustment associated with our accompanying warrant liability.

Comparison of the nine months ended March 31, 2025 and 2024

Revenue

Our revenue increased during the nine months ended March 31, 2025, as compared to the same period ended 2024, as a result of the $0.7 million milestone payment received from the licensing agreement with Carina Biotech Pty Ltd in October 2024 and the $15 million milestone payment received from the Merck Agreement in March 2025.

Research and Development Expenses

Our research and development activities in the nine months ended March 31, 2025 and 2024 were principally focused on the advancement of BNC210. The decrease in the nine months ended March 31, 2025 of approximately $1.1 million, as compared to the same period ended in 2024, was primarily due to decreased expenditures of $0.6 million for the SAD PREVAIL Phase 3 clinical trial, which started during February 2022, decreased expenditures of $0.2 million for salaries and consulting expenses, decreased expenditures of $0.1 million associated with patent prosecution, and decreased expenditures of $0.2 million for other general research & development activities.

During the nine months ended March 31, 2025, approximately 80% of the total research and development expenses related to the advancement of our BNC210-based programs. Of the total BNC210-based program spend during the nine months ended March 31, 2025, approximately 15% was attributable to PSTD ATTUNE and 65% to SAD Prevail. We do not track labor associated with each program and have allocated headcount costs on a pro-rated basis. Management believes the pro rata allocation results in a reasonable estimate of the headcount costs associated with each of the programs noted above.

General and Administrative Expenses

The $0.4 million decrease in general and administrative expenses during the nine months ended March 31, 2025, as compared to the same period ended in 2024, was due to decreases in headcount-related and consulting costs of $0.5 million resulting from the streamlining of operations upon completion of the redomiciliation, combined with a decrease in insurance costs post-redomiciliation of $0.4 million, partially offset by an increase in professional services of $0.5 million to complete the redomiciliation process as compared to the nine months ended March 31, 2024.

Other Income (Loss)

The net increase in other income of $4.1 million for the nine months ended March 31, 2025, as compared to the same period ending in 2024, was primarily due to an increase in other income for the fair value adjustment associated with our accompanying warrant liability of $3.3 million, an increase in other income associated with research and development incentive awards of approximately $0.2 million, and a gain on foreign currency transactions of approximately $0.7 million, partially offset by a decrease in interest income of approximately $0.1 million.

Off-Balance Sheet Arrangements

We did not have during the nine months ended March 31, 2025, nor we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Liquidity and Capital Resources

We have incurred significant operating losses and negative cash flows from operations since our inception, and we anticipate that we will incur net losses for the next several years. As of March 31, 2025, we had cash and cash equivalents of $17.0 million and an accumulated deficit of $169.5 million.

The following table sets forth the primary sources and uses of cash for each of the periods presented:

Comparison of the nine months ended March 31, 2025 and 2024

Operating Activities

The net cash provided by (used in) operating activities for the nine months ended March 31, 2025 and 2024 was approximately $3.7 million and $(11.7) million, respectively, and represents an increase in cash provided by operations of approximately $15.3 million during the nine months ended March 31, 2025, as compared to the same period ending in 2024. The increase in cash provided by operations is directly due to the $15.7 million of license revenue received and recognized during the nine months ended March 31, 2025, as compared to the same period ended in 2024.

The $8.5 million of net income for the nine months ended March 31, 2025, as compared to the net loss of $12.8 million for the nine months ended March 31, 2024, was partially offset by a $0.6 million decrease in share based compensation during the nine months ended March 31, 2025, combined with the $0.5 million effect of the remeasurement of contingent consideration and the $2.8 million effect of the remeasurement of the accompanying warrant liability, a $0.7 million effect of foreign currency remeasurement, and a $1.4 million increase in cash used for working capital, all as compared to the nine months ended March 31, 2024.

Investing Activities

There were no transactions categorized as investing activities during either of the nine months ended March 31, 2025 and 2024.

Financing Activities

Financing activities in the nine months ended March 31, 2025 represent issuance of shares, net of associated issue costs, associated with the utilization of our at-the-market ("ATM") facility.

Financing activities in the nine months ended March 31, 2024 represent the issuance of ADS shares pursuant to the ATM facility, net of issue costs of $0.9 million.

On November 18, 2024, the Company announced the establishment of an ATM offering agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (the “Sales Agent”). Pursuant to the Sales Agreement, the Sales Agent will act as the Company’s agent with respect to an offering and sale, at any time and from time to time, of the Company’s common stock, par value per share of $.00001(the “Shares”). The Company has authorized the sale, at its discretion, of Shares in an aggregate offering amount up to $3,560,318 under the Sales Agreement. Sales of the Shares, if any, under the Sales Agreement will be made in “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). The Sales Agent will use commercially reasonable efforts consistent with normal trading and sales practices.

The offer and sale of the Shares will be made pursuant to the Company’s shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission (“SEC”) and declared effective on January 8, 2025 (File No. 333-283306, the “Registration Statement”), and a related prospectus, as supplemented by a prospectus supplement pursuant to Rule 424(b). The Company is not obligated to make any sales of Shares under the Sales Agreement and no assurance can be given that we will sell any Shares under the Sales Agreement, or if we do, as to the price or amount of Shares that we will sell, or the dates on which any such sales will take place (other than as reportable on our periodic reports filed with the SEC).

The Company or the Sales Agent, under certain circumstances and upon notice to the other, may suspend the offering of the Shares under the Sales Agreement. The offering of the Shares pursuant to the Sales Agreement will terminate upon the sale of Shares in an aggregate offering amount equal to $3,560,318 (unless the saleable amount is increased), or sooner if either the Company or the Sales Agents terminate the Sales Agreement. The Company will pay the Sales Agent a cash commission in an amount up to 3.0% of the gross proceeds from each sale of Shares sold pursuant to the Sales Agreement.

The Company has made sales under the Sales Agreement for net proceeds of approximately $1.1 million under its ATM facility during the nine months ended March 31, 2025. A copy of the Sales Agreement is filed as Exhibit 10.1 to our current report on Form 8-K filed with the SEC on November 21, 2024, which is incorporated herein by reference.

Funding Requirements

Any product candidates we may develop may never achieve commercialization and we anticipate that we will continue to incur losses for the foreseeable future. We expect that our research and development expenses and our general and administrative expenses will continue to increase. As a result, until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses (including share-based compensation); costs related to third-party clinical research, non-clinical research, manufacturing and development services; costs relating to the build-out of our headquarters and other offices; license payments or milestone obligations that may arise; legal and other regulatory expenses and general overhead costs.

Based upon our current operating plan, we believe that our existing cash and cash equivalents, combined with our existing ATM facility, will be sufficient to continue funding our development activities through late in the first quarter of fiscal 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. To finance our operations beyond that point we will need to raise additional capital, which cannot be assured. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing shareholders, will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our shareholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we will need to delay, reduce or terminate planned activities to reduce costs.

Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development activities. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs.

If we were unable to obtain additional financing to fund our operations through successful development and commercialization of all our potential product candidates, we may be required to reduce the scope of, delay, or terminate some or all of our planned development and commercialization activities, which could harm our business. For more information as to the risks associated with our future funding requirements, see “Risk Factors.”

Contractual Obligations

We do not have any long-term debt or capital lease obligations. We have a long-term operating lease obligation for our Australian office space and a non-current warrant liability which commits us to issuing shares to accompanying warrant holders upon the exercise of their ADS warrants.

Because we are allowed to comply with the disclosure obligations applicable to a "smaller reporting company," as defined by Rule 12b-2 of the Exchange Act, with respect to this Quarterly Report on Form 10-Q, we are not required to provide the information required by this Item.

Under the supervision and with the participation of our Disclosure Committee and management, including our Chief Executive Officer and Principal Financial and Accounting Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)) as of the end of the period covered by this report. Based on our management’s evaluation (with the participation of our Chief Executive Officer and our Principal Financial and Accounting Officer), as of the end of the period covered by this report, our Chief Executive Officer and our Principal Financial and Accounting Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the nine months ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Below we are providing, in supplemental form, changes to our risk factors from those previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended June 30, 2024, and in our Quarterly Report for the three and six months ended December 31, 2024. Our business is subject to substantial risks and uncertainties. Investing in our securities involves a high degree of risk. You should carefully consider the risk factors in Part I, Item 1A of our Annual Report on Form 10-K for the year ended June 30, 2024, filed with the SEC on September 30, 2024, together with the information contained elsewhere in this report, including Part I, Item 1 “Financial Statements” and Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our other SEC filings in evaluating our business. These risks and uncertainties could materially and adversely affect our business, financial condition, results of operations, prospects for growth, and the value of an investment in our securities. Except as set forth below, there were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended June 30, 2024, filed with the SEC on September 30, 2024.

If we fail to meet the continued listing requirements of Nasdaq, it could result in a de-listing of our Common Stock.

If we fail to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements, continued listing requirements such as the minimum $1.00 closing bid price requirement, Nasdaq could take steps to delist our common stock. Any failure by us to comply with Nasdaq’s continued listing standards could result in a deficiency notice and, if not cured within the applicable period, could result in delisting. Our shares of common stock are currently listed on the Nasdaq Global Market. While we believe we are currently in full compliance with applicable Nasdaq listing standards, we have in the past received notices of non-compliance, which we have addressed and resolved. For example, on January 10, 2025, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC stating that the Company had regained compliance with Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”) by maintaining a minimum closing bid price of the Company’s common stock of $1.00 or greater per share for ten (10) consecutive business days, from December 24, 2024 through January 8, 2025, and that the Minimum Bid Price Requirement matter is now closed. It should be noted, however, that any future Nasdaq action relating to a delisting could have a negative effect on the price of our common stock, impair the ability to sell or purchase our common stock or other securities when persons wish to do so, and any such delisting action may materially adversely affect our ability to raise capital or pursue strategic restructuring, refinancing or other transactions on acceptable terms, or at all. Delisting from the Nasdaq Global Market could also have other negative results, including the potential loss of institutional investor interest, reduced research coverage, and fewer business development opportunities.

Our internal computer systems, or those of our third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our drug development programs and other critical business functions.

Our internal computer systems and those of our third-party CROs and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. Following the recent COVID-19 pandemic, we face increased cybersecurity risks due to a broader reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. For example, we recently became aware of a breach of our email system, which we quickly remediated and addressed. While this breach ultimately did not result in immediate material harm to us or our financial position, if such an event were to occur again, it could result in a material disruption of our programs, negatively impact our operations, financial position or prevent us from continuing our clinical trials, among other serious adverse events and impacts. Additionally, the loss of clinical trial data from completed or any future ongoing clinical trials for any of our product candidates could result in delays in our regulatory approval efforts and the loss of research data could result in delays of our research and development efforts and it would be expensive to recover or reproduce the data. We have also outsourced elements of our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our confidential information. If our third-party vendors fail to protect their information technology systems and our confidential and proprietary information, we may be vulnerable to disruptions in service and unauthorized access to our confidential or proprietary information and we could incur liability and reputational damage. To the extent that any disruption or security breach results in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development of our product candidates could be delayed.