Neuphoria Therapeutics Inc.

Current report

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.

Current report

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.

Previous report

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

Previous 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.

Previous 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.

Previous 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.

Previous 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.

Previous report

Sales of Common Stock issuable upon exercise of the Warrants and other derivative securities could cause the market price of our Common Stock to decline.

Previous report

If we issue warrants, then such warrants will entitle the holder to receive additional securities from us, diluting your ownership interest. For example, in the Private Placement offering described in the preceding risk factor, the warrants issued in the first tranche of that offering entitled the investor to purchase up to an aggregate of 18,932,477 ADSs (or 1,577,706 shares of common stock post on a post redomiciliation basis), of which 6,279,905 ADSs (or 523,325 shares of common stock if they were issued on post redomiciliation basis) had been issued and subsequently as of the date of this quarterly report. The sale of additional shares of common stock or warrants, or the perception that such sales could occur, could cause the market price of our common stock to decline or become more volatile.

Previous report

Sales of a substantial number of our shares of Common Stock by significant existing shareholders in the public market, or the perception that such sales may occur, could depress the trading price of our shares of Common Stock.

Previous report

Sales of a substantial number of our shares of common stock or securities exercisable or convertible into common stock in the public market or the perception that these sales may occur could significantly reduce the market price of our common stock and impair our ability to raise adequate capital.

Previous report

In particular, on May 31, 2024, prior to our redomiciliation, we had entered into a Securities Purchase Agreement with Armistice Capital Master Fund Ltd. (“Armistice”) pursuant to which the Company agreed to issue and sell in the above described Private Placement a certain number of restricted ADSs, a pre-funded warrant to purchase ADSs and an accompanying 5-year cash purchase warrant.

Previous report

In connection with the first tranche of the Private Placement, we issued an Accompanying Warrant to purchase up to 12,652,572 ADSs (post redomiciliation converted to 1,054,381 shares of common stock at an exercise price of US$11.88 per share) (or pre-funded warrants in lieu thereof), which Accompanying Warrant remains issued and outstanding as of the date of this quarterly report. The Accompanying Warrant is immediately exercisable and remains exercisable until June 2, 2029. However, Armistice may not exercise the Accompanying Warrant to the extent such exercise would cause it to beneficially own a number of ordinary shares that would exceed 4.99% of our then outstanding shares of common stock following such exercise.

Previous 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.

Previous 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:

Previous report

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

Previous report

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

Previous report

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

Previous 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;

Previous report

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

Previous report

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

Previous report

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

Previous report

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

Previous report

any changes to our relationship with any manufacturers or suppliers;

Previous report

the success of our testing and clinical trials;

Previous report

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

Previous report

achievement of expected drug sales and profitability;

Previous report

manufacture, supply or distribution shortages;

Previous 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;

Previous report

trading volume of our common stock;

Previous report

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

Previous report

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

Previous report

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

Previous 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.

Previous 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.

Previous 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.

Previous report

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

Previous 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.

Previous 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.

Previous 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.

Previous 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.

Previous 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.

Previous report — wording carried elsewhere

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.