UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-39685

INMED PHARMACEUTICALS INC.

(Exact name of registrant as specified in its charter)

British Columbia, Canada		98-1428279
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Suite 1445 - 885 W. Georgia Street,

Vancouver, B.C.

Canada

V6C 3E8

(Address of Principal Executive Offices)

(Zip Code)

(604) 669-7207

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Shares, no par value		INM		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes ☐ No ☒

As of February 7, 2025, the registrant had 1,207,186 common shares, without par value, outstanding.

INDEX

	Page
PART I – FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	1

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31

ITEM 4. CONTROLS AND PROCEDURES	31

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS	32

ITEM 1A. RISK FACTORS	32

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	33

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	33

ITEM 4. MINE SAFETY DISCLOSURE	33

ITEM 5. OTHER INFORMATION	33

ITEM 6. EXHIBITS	33

SIGNATURES	34

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities law, which are included but are not limited to statements with respect to the Company’s anticipated results and progress of the Company’s operations, research and development in future periods, plans related to its business strategy, and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. We may, in some cases, use words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements in this Quarterly Report include, but are not limited to, statements about:

	●	Ongoing compliance with applicable standards and requirements for the continued listing on Nasdaq of our common shares, no par value (the “Common Shares”);

	●	The efficacy of the Company’s Reverse Stock Split which was effected by the Company on November 14, 2024, including its direct and indirect impact on the liquidity of our Common Shares;

●

The Company’s ability to stem operating losses and the Company’s ability to obtain additional financing to fund its operations, including under the terms of the SEPA (as defined below) and Amended ATM Agreement (as defined below);

●

The revenues of BayMedica, LLC (“BayMedica”) and the commercial viability of its product portfolio;

●

The Company’s ability to effectively research, develop, manufacture and commercialize pharmaceutical drug candidates that will treat diseases with high unmet medical needs;

●

The continued optimization of key, proprietary manufacturing approaches and technologies;

●

Our ability to commercialize and, where required, register products in the pharmaceutical R&D programs (“Product Candidates”) and those targeted to the health and wellness sector (“Products”) in the United States and other jurisdictions;

●

Our success in initiating discussions with potential partners for licensing various aspects of our Product Candidates;

●

Our ability to successfully access existing manufacturing capacity via leases with third-parties or to transfer our manufacturing processes to contract manufacturing organizations;

●

Our belief that our manufacturing approaches that we are developing are robust and effective and will result in commercially viable yields of cannabinoids and will be a significant improvement upon existing manufacturing platforms;

●

Our ability to successfully scale up our IntegraSyn approach to cannabinoid manufacturing. InMed has created genetically engineered microbes that produce proprietary enzymes, which are then used to optimize subsequent biotransformation reactions or other cost-effective manufacturing approaches;

●

The success of the key next steps in our manufacturing approaches, including continuing efforts to diversify the number of products produced, scaling-up the processes to larger vessels and identifying external vendors to assist in the commercial scale-up of the process;

●

Our ability to successfully make determinations as to which research and development programs to continue based on several strategic factors;

●

Our ability to continue to outsource the majority of our research and development activities through scientific collaboration agreements and arrangements with various scientific collaborators, academic institutions, and their personnel;

●

The success of work to be conducted under the research and development collaboration between us and various contract development and manufacturing organizations (“CDMOs”);

●

Our ability to develop our therapies through early human testing;

●

Our ability to evaluate the financial returns on various commercialization approaches for our Product Candidates, such as a ‘go-it-alone’ commercialization effort, out-licensing to third parties, or co-promotion agreements with strategic collaborators;

●

Our ability to find a partnership early in the development process for our various programs;

●

Our ability to explore our manufacturing technologies as processes which may confer certain benefits, including cost, yield, speed, or all the above, when pursuing specific types of molecules, and filing a provisional patent application for same;

●

Plans regarding our next steps, options, and targeted benefits of our manufacturing technologies;

●

Our Products being bio-identical to the naturally occurring molecules, and offering superior ease, control and quality of manufacturing when compared to alternative methods;

●

U.S. Food and Drug Administration (“FDA”) regulatory acceptance of Product Candidates for potential use in the pharmaceutical industry;

●

Our ability to successfully file, prosecute and defend patent applications;

●

The potential for any of our patent applications to provide intellectual property protection for us;

●

The termination or renegotiation of our supplier, technology and other material contracts, including the invoking of force majeure or termination clauses, and actual or threatened claims of our failure to comply with any obligations set forth under such contracts;

●

The adequacy of, or gaps in, insurance coverage upon the occurrence of a catastrophic or other material adverse event, as well as our ability to (i) expand our insurance coverage to include the commercial sale of Products and Product Candidates and (ii) secure insurance coverage for shipping and storage of Product Candidates, and clinical trial insurance;

●

Developing patentable New Chemical Entities (“NCE”) which, if issued, will confer market exclusivity to us for the potential development into pharmaceutical Product Candidates, license, partner or sell to interested external parties;

●

Our ability to initiate discussions and conclude strategic partnerships to assist with the development of certain programs;

●

Our ability to position ourselves to achieve value-driving, near term milestones for our Product Candidates with limited investment;

●

Our ability to effectively execute our business strategy;

●

The sufficiency of our internal controls, including any exposure arising from the failure to (i) establish and maintain effective internal control over financial reporting in accordance with applicable regulatory requirements, and (ii) fully remediate any material weakness identified with respect to such internal controls;

●

Epidemics, pandemics, global health crises, or other public health events and concerns, including any future resurgence of COVID-19, and the effectiveness of associated vaccinations and treatments;

●

Consolidation of our competitors and suppliers;

●

Effects of new products and new technology on the market, including with respect to automation and the use of artificial intelligence;

●

The impact of geopolitical, global, regional or local economic and financial market risks and challenges, applicability of foreign laws, including foreign labor and employment laws, foreign tax and customs regimes, and foreign currency exchange rate risk;

●

Political disturbances, geopolitical instability and tensions, or terrorist attacks, and associated changes in global trade policies and economic sanctions, including, but not limited to, in connection with (i) the Russo-Ukrainian war and (ii) any impact, effect, damage, destruction and/or bodily harm directly or indirectly relating to the ongoing hostilities in the Middle East;

●

The transition to a new presidential administration in the United States, including but not limited to the potential use and effects of tariffs to address the administration’s policy goals, could materially impact the macroeconomic framework in which we operate; and

●

Our ability to effectively and readily identify suitable strategic transaction candidates, including mergers, acquisitions, in- or out-licensing, at reasonable valuations, consummate any transactions and/or successfully integrate any acquired business into our operations, or otherwise consummate a wide range of strategic transactions, and the fact that any such transaction, even if consummated, may not be successful or improve our operating results and financial condition.

This list is not exhaustive of the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under IA. “Risk Factors” in our Form 10-K for the year ended June 30, 2024, which was filed with the SEC on September 30, 2024 (the “2024 Annual Report”), Item 1A. “Risk Factors” in this Quarterly Report and Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report. Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated, or expected. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made and are based only on the information available to us at that time. Except as required by law, we disclaim any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

iii

PART I

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

Unaudited Condensed Consolidated Financial Statements of

InMed Pharmaceuticals Inc.

For the Three and Six Months Ended December 31, 2024 and 2023

InMed Pharmaceuticals Inc.

(Expressed in U.S. Dollars)

December 31, 2024

INDEX		Page
Financial Statements (Unaudited)

●	Condensed Consolidated Balance Sheets	3
●	Condensed Consolidated Statements of Operations	4
●	Condensed Consolidated Statements of Shareholders’ Equity	5
●	Condensed Consolidated Statements of Cash Flows	6
●	Notes to the Condensed Consolidated Financial Statements	7-20

InMed Pharmaceuticals Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

Expressed in U.S. Dollars

	December 31,			June 30,
	2024			2024
	Unaudited
	$			$
ASSETS
Current
Cash and cash equivalents		3,419,422			6,571,610
Short-term investments		40,787			43,064
Accounts receivable (less provision for credit losses of $nil in each of December 31, 2024 and June 30, 2024)		262,569			352,838
Inventories, net		1,103,356			1,244,324
Prepaids and other current assets		643,986			477,749
Total current assets		5,470,120			8,689,585

Non-Current
Property, equipment and operating lease right-of-use (“ROU”) assets, net		1,230,961			1,249,999
Intangible assets, net		1,701,211			1,783,198
Other assets		100,000			100,000
Total Assets		8,502,292			11,822,782

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Accounts payable and accrued liabilities		1,371,233			1,654,011
Current portion of operating lease obligations		419,711			317,797
Total current liabilities		1,790,944			1,971,808

Non-current
Operating lease obligations, net of current portion		529,248			644,865
Total Liabilities		2,320,192			2,616,673
Commitments and Contingencies (Note 11)

Shareholders’ Equity
Common Shares, unlimited authorized shares: 724,152 and 445,908, as of December 31, 2024 and June 30, 2024, respectively, issued and outstanding		84,537,194			82,784,400
Additional paid-in capital		34,844,988			35,368,899
Accumulated deficit		(113,328,651	)		(109,075,759	)
Accumulated other comprehensive income		128,569			128,569
Total Shareholders’ Equity		6,182,100			9,206,109
Total Liabilities and Shareholders’ Equity		8,502,292			11,822,782

The accompanying notes form an integral part of these condensed consolidated financial statements.

InMed Pharmaceuticals Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Expressed in U.S. Dollars

	For the Three Months Ended						For the Six Months Ended
	December 31,						December 31,
	2024			2023			2024			2023
	$			$			$			$
Sales		1,111,707			1,240,200			2,376,345			2,142,062
Cost of sales		650,813			916,058			1,422,038			1,796,678
Gross profit		460,894			324,142			954,307			345,384

Operating Expenses
Research and development and patents		1,060,367			609,791			1,831,547			1,901,884
General and administrative		1,553,583			1,363,958			2,975,509			2,662,689
Amortization and depreciation		53,202			55,234			107,781			110,066
Foreign exchange loss (gain)		47,753			(59,896	)		28,443			(11,439	)
Total operating expenses		2,714,905			1,969,087			4,943,280			4,663,200

Other Income (Expense)
Interest and other income		30,536			166,760			87,630			302,803
Finance expense		(351,549	)		-			(351,549	)		-
Loss before income taxes		(2,575,024	)		(1,478,185	)		(4,252,892	)		(4,015,013	)

Tax expense		-			-			-			-
Net loss for the period		(2,575,024	)		(1,478,185	)		(4,252,892	)		(4,015,013	)

Net loss per share for the period
Basic and diluted		(3.64	)		(3.71	)		(6.43	)		(14.21	)
Weighted average outstanding common shares
Basic and diluted		706,546			398,673			661,052			282,541

The accompanying notes form an integral part of these condensed consolidated financial statements.

InMed Pharmaceuticals Inc.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

For the Three and Six Months ended December 31, 2024 and 2023

Expressed in U.S. Dollars

	Common Shares				Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income		Total
		#	$			$			$			$		$
Balance July 1, 2024		445,908	82,784,400			35,368,899			(109,075,759	)		128,569		9,206,109
Private placement		186,361	1,030,063			-			-			-		1,030,063
Share issuance costs		-	(191,824	)		-			-			-		(191,824	)
Exercise of pre-funded warrants		34,700	576,034			(576,034	)		-			-		-
Loss for the period		-	-			-			(1,677,868	)		-		(1,677,868	)
Share-based compensation		-	-			28,964			-			-		28,964
Balance September 30, 2024		666,969	84,198,673			34,821,829			(110,753,627	)		128,569		8,395,444
Private Placement		57,183	396,153			-			-			-		396,153
Share issuance costs		-	(57,632	)		-			-			-		(57,632	)
Loss for the period		-	-			-			(2,575,024	)		-		(2,575,024	)
Share-based compensation		-	-			23,159			-			-		23,159
Balance December 31, 2024		724,152	84,537,194			34,844,988			(113,328,651	)		128,569		6,182,100

	Common Shares			Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income		Total
		#	$		$			$			$		$
Balance July 1, 2023		166,410	77,620,252		35,741,115			(101,400,209	)		128,569		12,089,727
Loss for the period		-	-		-			(2,536,828	)		-		(2,536,828	)
Share-based compensation		-	-		25,191			-			-		25,191
Balance September 30, 2023		166,410	77,620,252		35,766,306			(103,937,037	)		128,569		(9,578,090	)
Private placement		116,989	2,316,381		2,899,812			-			-		5,216,193
Share issuance costs		-	-		(562,151	)		-			-		(562,151	)
Loss for the period		-	-		-			(1,478,185	)		-		(1,478,185	)
Share-based compensation		-	-		18,264			-			-		18,264
Balance December 31,2023		283,399	79,936,633		38,122,231			(105,415,222	)		128,569		12,772,211

The accompanying notes form an integral part of these condensed consolidated financial statements.

InMed Pharmaceuticals Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the Six Months ended December 31, 2024 and 2023

Expressed in U.S. Dollars

	2024			2023
	$			$
Cash provided by (used in):

Operating Activities
Net loss		(4,252,892	)		(4,015,013	)
Items not requiring cash:
Amortization and depreciation		107,782			110,063
Share-based compensation		52,123			43,455
Amortization of ROU assets		166,277			191,909
Interest income received on short-term investments		(874	)		(1,019	)
Unrealized foreign exchange loss		20,338			978
Inventory write-down		-			263,404
Changes in operating assets and liabilities:
Inventories		140,968			608,113
Prepaids and other currents assets		(166,237	)		(614,944	)
Other non-current assets		-			4,908
Accounts receivable		90,269			(112,470	)
Accounts payable and accrued liabilities		(282,778	)		(321,106	)
Deferred rent		-			12,485
Operating lease obligations		(203,924	)		(193,109	)
Total cash used in operating activities		(4,328,948	)		(4,022,346	)

Investing Activities
Sale of short-term investments		24,002			21,317
Purchase of short-term investments		(24,002	)		(21,317	)
Purchase of property and equipment		-			(9,291	)
Total cash used in investing activities		-			(9,291	)

Financing Activities
Proceeds from the private placement		1,426,216			5,216,193
Private placement issuance costs		(249,456	)		(562,151	)
Total cash provided by financing activities		1,176,760			4,654,042
(Decrease) increase in cash during the period		(3,152,188	)		622,405
Cash and cash equivalents beginning of the period		6,571,610			8,912,517
Cash and cash equivalents end of the period		3,419,422			9,534,922

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Period for:
Income Taxes	$	-		$	-
Interest	$	-		$	-

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Fair value of warrant modification recorded as equity issuance costs	$	-			3,508,749
Preferred investment options to its placement agent	$	-			325,699
Recognition of ROU asset and corresponding operating lease liability	$	187,223		$	968,376

The accompanying notes form an integral part of these condensed consolidated financial statements.

InMed Pharmaceuticals Inc.

Notes to the Condensed Consolidated Financial Statements

1.	CORPORATE INFORMATION AND CONTINUING OPERATIONS

Business

InMed Pharmaceuticals Inc. (“InMed” or the “Company”) was incorporated in the Province of British Columbia on May 19, 1981 under the Business Corporations Act of British Columbia. InMed is a clinical stage pharmaceutical company developing a pipeline of prescription-based products, including rare cannabinoids and novel cannabinoid analogs, targeting the treatment of diseases with high unmet medical needs as well as developing proprietary manufacturing technologies to produce rare cannabinoids for sale in the health and wellness industry.

The Company’s shares are listed on the Nasdaq Capital Market (“Nasdaq”) under the trading symbol “INM”. InMed’s office and principal place of business is located at Suite 1445– 885 West Georgia Street, Vancouver, B.C., Canada, V6C 3E8.

Going Concern

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued.

Through December 31, 2024, the Company has funded its operations primarily with proceeds from the sale of the Company’s common shares, no par value per share (the “Common Shares”). The Company has incurred recurring losses and negative cash flows from operations since its inception, including net losses of approximately $4.3 and $4.0 million for the six months ended December 31, 2024 and 2023, respectively. In addition, the Company has an accumulated deficit of approximately $113.3 million as of December 31, 2024. The Company expects to continue to generate operating losses for the foreseeable future.

As of the issuance date of these unaudited condensed consolidated financial statements, the Company expects its cash, cash equivalents and short-term investments of $3.5 million as of December 31, 2024 and the receipt of $2.9M in gross proceeds from financing activities which took place in January 2025 (refer to note 7 – Share Capital and Reserves and note 13 – Subsequent Events included in this Quarterly Report), to be sufficient to fund its operating expenses and capital expenditure requirements through the end of the second quarter of calendar 2025, depending on the level and timing of realizing BayMedica revenues from the sale of bulk rare cannabinoids in the ‘health & wellness’ sector as well as the level and timing of Company operating expenses. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations.

The Company expects to continue to seek additional funding through equity financings, debt financings or other capital sources, including collaborations with other companies, government contracts or other strategic transactions. The Company may not be able to obtain financing on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s existing shareholders.

In connection with the Company’s assessment of going concern considerations in accordance with Subtopic 205-40, management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern, which is considered to be for a period of one year from the issuance of these condensed consolidated financial statements. These unaudited condensed consolidated financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts of classification of liabilities that might result from the outcome of this uncertainty. Such adjustments could be material.

2.	SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles as applied in the United States (“US GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for financial information.

These unaudited condensed consolidated financial statements reflect all adjustments, consisting solely of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods presented. The results of operations for the three and six months ended December 31, 2024 and 2023 are not necessarily indicative of results that can be expected for a full year. These unaudited condensed consolidated financial statements follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company for the fiscal year ended June 30, 2024.

On November 14, 2024, the Company effected a reverse stock split of the Company’s issued and outstanding Common Shares, by a ratio of 20-to-1 (the “Reverse Stock Split”). Accordingly, all Common Shares, stock options, warrants, as well as per share information, for all periods presented in the condensed consolidated financial statements and notes thereto have been adjusted retrospectively to reflect this Reverse Stock Split.

Reclassifications

Certain prior year amounts in the unaudited condensed consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. During the year ended June 30, 2024, the Company adopted ASU 2023-07 - Improvements to Reportable Segment Disclosures which has required prior periods to reflect the change in presentation. Refer to discussion on Recent Accounting Pronouncements below.

Use of Estimates

The preparation of financial statements in compliance with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the balance sheet date, and the corresponding revenues and expenses for the periods reported. It also requires management to exercise judgment in applying the Company’s accounting policies. In the future, actual experience may differ from these estimates and assumptions. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to these unaudited condensed consolidated financial statements are the application of the going concern assumptions, determining the fair value of share-based payments, income tax provisions, write-down of inventories to net realizable value, and the assumptions used in the determination of research & development accruals.

Actual results could differ from those estimates.

Basis of Consolidation

These unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, InMed Pharmaceutical Ltd; BayMedica, LLC; Biogen Sciences Inc.; and Sweetnam Consulting Inc. Biogen Sciences Inc. and Sweetnam Consulting Inc. are inactive subsidiaries. A subsidiary is an entity that the Company controls, either directly or indirectly, where control is defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. All inter-company transactions and balances including unrealized income and expenses arising from intercompany transactions are eliminated in preparing these condensed consolidated financial statements.

Foreign Currency

The functional currency of the Company and its subsidiaries is the U.S. Dollar. These unaudited condensed consolidated financial statements are presented in U.S. Dollars. References to “$” and “US$” are to United States (“U.S.”) dollars and references to “C$” are to Canadian dollars.

Cash and Cash Equivalents

Cash and cash equivalents include cash-on-hand, demand deposits with financial institutions and other short-term, highly liquid investments with original maturities of three months or less when acquired that are readily convertible to known amounts of cash and subject to an insignificant risk of change in value. As of December 31, 2024 and June 30, 2024, the Company held $1,031,568 and $1,939,482, respectively, of cash equivalents in a money market fund that is considered Level 1 in the financial instruments hierarchy due to the readily available quoted prices in active markets for identical instruments.

Short-term Investments

Short-term investments include fixed and variable rate guaranteed investment certificates, with terms greater than three months and less than twelve months. Due to the short-term nature of these investments the fair value of the investments approximates the current value. Guaranteed investment certificates are convertible to known amounts of cash and are subject to an insignificant risk of change in value.

Accounts Receivable

Accounts receivable are recorded at invoiced amounts, net of any credit losses. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable.

The Company evaluates the collectability of accounts receivable on a regular basis based upon various factors including the financial condition and payment history of customers, an overall review of collections experience on other accounts and economic factors or events expected to affect future collections experience.

Concentration of Credit Risk and Other Risks and Uncertainties

At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) or Canadian Deposit Insurance Corporation insurable limits. The Company has not previously experienced any losses related to these balances. The uninsured cash balance as of December 31, 2024 was $0.9 million. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.

The Company’s customers are primarily concentrated in the United States.

Concentration of customers

The following tables summarizes the information about the Company’s concentration of customers:

Customer A

Customer B

Customer C

Customer D

Customer E

Three Months Ended December 31, 2024

Revenues, customer concentration risk

SEC Form 10-Q filed by InMed Pharmaceuticals Inc.