Neuphoria Therapeutics Inc.

Previous wording

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 December 31, 2024, our operations have been financed primarily by aggregate net proceeds of $191.5 million from the sale and issuances of our equity, $13.5 million in the form of an upfront payment, research funding and a milestone payment from the 2014 MSD License Agreement, and $66.8 million from Australian research and development credits and government grants and assistance.

Current wording

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.

Previous wording

Based upon the Company’s current operating plans, the Company believes that its existing cash and cash equivalents, combined with its existing ATM facility, potential licensing revenue, and other sources of capital available to us, will be sufficient to continue funding its development activities into late in the fourth quarter of fiscal year 2025, which is less than twelve months from the date these condensed consolidated financial statements are issued. Accordingly, based on its recurring losses from operations incurred since inception, the expectation of continued operating losses, and the need to raise additional capital to finance its future operations, the Company determined that there is substantial doubt about the Company’s ability to continue as a going concern within twelve months of the issuance date of these financial statements. See Note 17 in the accompanying condensed consolidated financial statements for more information related to potential mitigating factors.

Current wording

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.

Previous wording

In September 2014, we entered the 2014 MSD License Agreement to develop compounds targeting cognitive dysfunction associated with Alzheimer’s disease and other central nervous system conditions. Pursuant to the 2014 MSD License Agreement, we received upfront payments totaling A$20 million, and another A$10 million in February 2017 when the first compound from the collaboration entered Phase 1 clinical trials and we are eligible to receive up to an additional A$465 million in milestone payments for achievement of certain development and commercial milestones, including upon the first dosing of a patient in an MSD clinical trial in a phase II clinical trial. Further, MSD is obligated to pay us tiered royalties in the mid-single digit to low sub-teen double digit percentage range on net sales of the licensed products, subject to reduction upon certain events.

Current wording

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.

Previous wording

Substantially all our direct research and development expenses in the three months ended December 31, 2024 and 2023 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.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

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 six months ended December 31, 2024 and 2023, 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 six months ended December 31, 2024, and 2023, respectively. See “Quantitative and Qualitative Disclosures about Market Risk” for more information.

Current wording

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.

Previous wording

Our revenue increased during the three months ended December 31, 2024, as compared to the same period ended 2023, as a result of the milestone payment received from the licensing agreement with Carina Biotech Pty Ltd on October 30, 2024.

Current wording

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.

Previous wording

Our research and development activities in the three months ended December 31, 2024 and 2023 were principally focused on the advancement of BNC210. The decrease in the three months ended December 31, 2024 of approximately $0.3 million, as compared to the three months ended December 31, 2023, was primarily due to decreased expenditures associated with the PTSD ATTUNE clinical trial, which started during July 2021, the SAD PREVAIL clinical trial, which started during February 2022, and work in relation to preparation for an End-of-Phase 2 meeting with the FDA to discuss our Phase 3 clinical program in SAD.

Current wording

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.

Previous wording

In the three months ended December 31, 2024, approximately 74% 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 December 31, 2024, approximately 6% was attributable to PSTD ATTUNE and 68% 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.

Current wording

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.

Previous wording

The net increase in other income of $1.8 million for the three months ended December 31, 2024, as compared to the same period ending in 2023, was primarily due to the fair value adjustment associated with our accompanying warrant liability of $0.6 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 $1.0 million.

Current wording

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.

Previous wording

Our revenue increased during the six months ended December 31, 2024, as compared to the same period ended 2023, as a result of the milestone payment received from the licensing agreement with Carina Biotech Pty Ltd on October 30, 2024.

Current wording

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.

Previous wording

Our research and development activities in the six months ended December 31, 2024 and 2023 were principally focused on the advancement of BNC210. The decrease in the six months ended December 31, 2024 of approximately $1.5 million, as compared to the six months ended December 31, 2023, was primarily due to decreased expenditures associated with the PTSD ATTUNE clinical trial, which started during July 2021, the SAD PREVAIL clinical trial, which started during February 2022, and work in relation to preparation for an End-of-Phase 2 meeting with the FDA to discuss our Phase 3 clinical program in SAD.

Current wording

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.

Previous wording

In the six months ended December 31, 2024, approximately 65% 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 six months ended December 31, 2024, approximately 11% was attributable to PSTD ATTUNE and 54% 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.

Current wording

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.

Previous wording

The $0.6 million decrease in general and administrative expenses during the six months ended December 31, 2024, as compared to the same period ended in 2023, was due to decreases in headcount-related costs of $0.5 million resulting from normal turnover in personnel, decreased insurance expense in the current year of $0.3 million, and decreased administrative costs associated with our delisting from the ASX of $0.4 million during the six months ended December 31, 2023 partially offset by increased professional fees associated with our redomiciliation of approximately $0.6 million.

Current wording

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.

Previous wording

The net increase in other income of $4.5 million for the six months ended December 31, 2024, as compared to the same period ending in 2023, was primarily due to the fair value adjustment associated with our accompanying warrant liability of $3.7 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.

Current wording

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.

Previous wording

We did not have during the six months ended December 31, 2024, 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.

Current wording

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.

Previous wording

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 December 31, 2024, we had cash and cash equivalents of $4.3 million and an accumulated deficit of $180.7 million.

Current wording

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.

Previous wording

The net cash used in operating activities for the six months ended December 31, 2024 and 2023 was approximately $7.8 million and $8.4 million, respectively. The $7.3 million decrease in net loss combined with the $0.2 million effect of the remeasurement of contingent consideration during the six months ended December 31, 2024, as compared to the same period ended December 31, 2023, was offset by a $0.6 million decrease in share based compensation combined with the realization of a $3.8 million change in the fair value of the accompanying warrants, a $0.4 million change in the effect of foreign currency remeasurement on our intercompany accounts, and a $1.8 million increase in cash used for working capital.

Current wording

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.

Previous wording

There were no transactions categorized as investing activities during either of the six months ended December 31, 2024 or 2023.

Current wording

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

Previous wording

Financing activities in the six months ended December 31, 2024 represent issuance of shares, net of associated issue costs, associated with our June 2024 offering of ADS shares, pre-funded ADS warrants, and accompanying ADS warrants.

Current wording

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.

Previous wording

Financing activities in the six months ended December 31, 2023 represent the issuance of ADS shares pursuant to the ATM facility, net of a stock subscription receivable of $0.3 million and issue costs of $0.8 million. Cash proceeds of $0.3 million were received on January 2, 2023 in full satisfaction of the stock subscription receivable.

Current wording

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.

Previous wording

On November 18, 2024, the Company announced the establishment of an “at the market” (“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.

Current wording

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.

Previous wording

The offer and sale of the Shares will be made pursuant to the Company’s shelf registration statement on Form S-3, which was initially filed with the Securities and Exchange Commission (“SEC”) on November 18, 2024 (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).

Current wording

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).

Previous wording

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

Current wording

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.

Previous wording

The Company has not made any sales under the Sales Agreement, nor under the Previous ATM Agreement (described below) during the quarter or six months ended December 31, 2024. 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.

Current wording

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.

Previous wording

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 fourth quarter of 2025. 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.

Current wording

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.