Neuphoria Therapeutics Inc

Current report

Risks Related to Our Financial Condition and Capital Requirements and Ownership of our Common Stock

Current report

Raising additional capital may cause dilution to our shareholders, including holders of our common stock, restrict our operations or require us to relinquish rights to our technologies or product candidates.

Current report

Until such time, if ever, as we can generate substantial revenues, we expect to finance our business and operational needs through equity offerings, debt financings or other financing sources, including potentially collaborations, licenses and other similar arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, investors’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect investors’ rights as a holder of our common stock. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Current report

If we raise funds through future collaborations, licenses and other similar arrangements, we may have to relinquish valuable rights to our future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our shares of common stock. We may also lose control of the development of our products or product candidates, such as the pace and scope of clinical trials, as a result of such third-party arrangements. If we are unable to raise funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product 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.

Current report

For example, on May 31, 2024, we (then Bionomics) entered into a Securities Purchase Agreement with a select institutional accredited investor, pursuant to which the Company agreed to issue and sell to the Investor in a private placement (the “Private Placement”) American Depositary Shares (“ADS”, with each ADS representing 180 ordinary shares of the Company) (or pre-funded warrants to purchase ADSs (the “Pre-Funded Warrants”) in lieu thereof), and an accompanying five year cash purchase warrant (the “Accompanying Warrant,” related solely to the first tranche of the private placement). The first tranche of the Private Placement consisted of 1,296,486 ADSs (or 108,040 shares of common stock post redomiciliation) and 6,279,905 Pre-Funded Warrants (or 523,325 shares of common stock post redomiciliation), at a combined purchase price of $0.99 per ADS (or $11.88 per share of common stock post redomiciliation; or $0.9899 per Pre-Funded Warrant, or $11.8788 per share of common stock post redomiciliation) (the “Initial Purchase Price”), and the accompanying five-year cash exercise warrant to purchase up to 12,652,572 ADSs (or 1,054,381 shares of common stock post redomiciliation, at an exercise price of $0.99 per ADS (or $11.88 per share of common stock post redomiciliation; or pre-funded warrants in lieu thereof). The first tranche of the private placement closed on June 3, 2024, resulting in aggregate gross proceeds to the Company of $7.5 million. As of the date of this quarterly report, only the accompanying warrants for 1,054,381 shares remain issued and outstanding from this Private Placement.

Current report

The trading price of our shares of common stock has been volatile, and holders of our common stock may not be able to resell the shares of common stock at or above the price paid.

Current report

The trading price of our common stock on the Nasdaq Global Market has been highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. These factors include but are not limited to the “Risk Factors” noted below and as set forth in our Annual Report and positive, negative or unexpected developments relating to:

Current report

results from, or any delays in, clinical trial programs relating to our product candidates;

Current report

our ability to obtain regulatory approval for our product candidates, or delays in obtaining such approval;

Current report

our ability to commercialize any future drugs, or delays in commercializing such drugs;

Current report

announcements of regulatory approval or a complete response letter to our product candidates, or specific label indications or patient populations for its use, or changes or delays in the regulatory review process;

Current report

the timing and amount of payments to us under our collaborations, if any;

Current report

announcements of therapeutic innovations or new drugs by us or our competitors;

Current report

announcements regarding the parent drugs that we use in developing our product candidates;

Current report

actions taken by regulatory authorities with respect to our clinical trials, manufacturing supply chain or sales and marketing activities;

Current report

any changes to our relationship with any manufacturers or suppliers;

Current report

the success of our testing and clinical trials;

Current report

the success of our efforts to acquire or license or discover additional product candidates;

Current report

achievement of expected drug sales and profitability;

Current report

manufacture, supply or distribution shortages;

Current report

the FDA, EMA or other similar regulatory actions affecting us or our industry or other healthcare reform measures in the United States or elsewhere;

Current report

trading volume of our common stock;

Current report

sales of our common stock or other securities by us, our senior management and directors or our shareholders in the future;

Current report

general economic and market conditions and overall fluctuations in the equity markets; and

Current report

the loss of any of our key scientific or senior management personnel.

Current report

In addition, the stock markets in general, and the markets for biotechnology and pharmaceutical stocks in particular, have experienced extreme volatility that may have been unrelated to the operating performance of the issuer. These broad market fluctuations may adversely affect the trading price or liquidity of our common stock. In the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer. If any of our shareholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our senior management would be diverted from the operation of our business, which could seriously harm our financial position. Any adverse determination in litigation could also subject us to significant liabilities.

Current report

Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and results of operations and the price of our common stock.

Current report

From time to time, the global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that future deterioration in credit and financial markets and confidence in economic conditions will not occur. Our business strategy and performance may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine, conflicts in the Middle East, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, trade disputes, illegal immigration, drug trafficking and more may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. If the current equity and credit markets deteriorate or become illiquid, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our business, financial condition and results of operations and the price of our common stock.

Current report

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

Current report

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.

Current report

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; however, 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.

Current report

Investors’ right to participate in any future rights offering may be limited, which may cause dilution to holdings in our Common Stock.

Current report

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make rights available to investors in the United States unless we register the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. We are currently under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective, other than as have been previously filed and declared effective in connection with prior securities offerings. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, investors may be unable to participate in our rights offerings and may experience dilution in holdings in our common stock.

Current report

Our executive officers, directors, principal shareholders and their affiliates will continue to exercise significant influence over our company, which will limit the ability of holders of our common stock to influence corporate matters and could delay or prevent a change in corporate control.

Current report

Our executive officers, directors, principal shareholders and their affiliates represent, based on their reported ownership of our outstanding shares of common stock as of December 31, 2024, beneficially own, in the aggregate, approximately 8.5% of our outstanding shares of common stock, assuming no exercise of outstanding options and warrants to acquire additional shares of common stock. Furthermore, many of our current directors were appointed by our principal shareholders. As a result, such persons or their appointees to our board of directors, acting together, have and will continue to have the ability to control or significantly influence all matters submitted to our board of directors or shareholders for approval, including the appointment of our management, the election and removal of directors and approval of any significant transaction, as well as our management and business affairs. A larger concentration of common stock ownership may have the effect of delaying, deferring or preventing a change in control, impeding a merger, consolidation, takeover or other business combination involving us, or discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control of our business, even if such a transaction would benefit other shareholders. A larger concentration of voting power among shareholders may also have an adverse effect on the price of our common stock.

Current report

Resales of our common stock in the public market during an offering by our stockholders may cause the market price of our common stock to fall.

Current report

We may issue common or preferred stock from time to time in connection with an offering. This issuance from time to time of these new shares, or our ability to issue these shares in this offering, could result in resales of our by our current stockholders concerned about the potential dilution of their holdings. In turn, these resales could have the effect of depressing the market price for our common stock.

Current report

We can provide no assurance that we will be able to maintain an active trading market for our common stock. The lack of an active market may impair the ability of any investor to sell our common stock at the time an investor may wish to sell them or at a price that an investor may consider reasonable. An inactive market may also impair our ability to raise capital by selling securities and may impair our ability to acquire other businesses or technologies using our shares as consideration, which, in turn, could materially adversely affect our business.

Current report

We are not currently paying dividends and will likely continue not paying cash dividends on our common stock for the foreseeable future.

Current report

We have not in the past and do not anticipate paying any cash dividends on our common stock for the foreseeable future. Investors should not rely on an investment in us if they require income generated from dividends paid on our capital stock. Any income derived from our common stock may only come from a rise in the market price of our common stock, which is uncertain and unpredictable.

Previous report

The first tranche of the private placement involved the issuance of 1,296,486 ADSs and a Pre-Funded Warrant to purchase up to 6,279,905 ADSs as well as an Accompanying Warrant to purchase up to 12,652,572 ADSs at an exercise price of US$0.99 per ADS (or pre-funded warrants in lieu thereof). Under the terms of the Securities Purchase Agreement and the Warrants, Armistice may not beneficially own more than 9.9% of our outstanding ordinary shares at any one time. Since July 1, 2024, all of the first tranche Pre-Funded Warrant have been exercised and 6,279,905 ADS’ have been issued thereunder.

Previous report

The second tranche of the private placement is subject to the satisfaction of regulatory milestones that, if achieved, would involve the purchase by Armistice of up to an additional US$25.0 million of ADSs (or pre-funded warrants in lieu thereof) from Bionomics at US$0.99 per ADS. The second tranche milestones are the earlier of (i) receipt of formal written correspondence by Bionomics from the FDA following planned interactions with the FDA regarding the outcomes of the end-of-phase meeting 2 and breakthrough designation status for BNC210 for PTSD or (ii) December 31, 2024. In September 2024, the FDA rejected our initial application for breakthrough designation and, as a result, we believe it is unlikely that the second tranche will be exercised by or before its expiration on December 31, 2024.

Previous report

The third tranche of the private placement is subject to the satisfaction of regulatory milestones that, if achieved, would involve the purchase by Armistice of up to an additional US$25.0 million of ADSs (or pre-funded warrants in lieu thereof) from Bionomics at US$0.99 per ADS. The third tranche milestones are the latter of (i) completion of an interim blinded safety review of the planned BNC210 Phase-3 PTSD study or (ii) December 31, 2025.

Previous report

ADS holders may be subject to additional risks related to holding ADSs rather than ordinary shares, and we may incur significant costs related to our Depositary Agreement for the ADSs.

Previous report

ADS holders do not hold ordinary shares directly and, as such, are subject to, among others, the following additional risks:

Previous report

• we do not treat our ADS holders as one of our shareholders and they are not able to exercise shareholder rights, except through the American Depositary Receipt (“ADR”) depositary as permitted by the deposit agreement;

Previous report

• distributions on the ordinary shares represented by our ADSs will be paid to the ADR depositary, and before the ADR depositary makes a distribution to ADS holders on behalf of their held ADSs, any withholding taxes that must be paid will be deducted. Additionally, if the exchange rate fluctuates during a time when the ADR depositary cannot convert the foreign currency, ADS holders may lose some or all of the value of the distribution; and

Previous report

• we and the ADR depositary may amend or terminate the deposit agreement without the ADS holders’ consent in a manner that could prejudice ADS holders.

Previous report

Additionally, under our Depositary Agreement with Citibank N.A., as the depositary for the ADSs, we have and will continue to incur significant costs related to the program through which the ADSs are issued, both in restricted and unrestricted form, and such fees are incurred on a per ADS basis; therefore, the greater the amount of ADSs issued, the greater our costs will be for such issuances. As a result of the June 4, 2024 private placement offering of ADS’ and complete exercise of the pre-funded warrants issued and exercised thereunder, we have paid Citibank significant fees in the aggregate in connection with such offering. Until we no longer are required to issue ADSs, and are able to issue shares of common stock as a domestic U.S. company, then we will continue to incur additional fees and other related costs and expenses. Even if we terminate the Depositary Agreement with Citibank, we may be required to pay significant additional fees for the withdrawal or termination of this program.