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 March 31, 2025

☐ 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 May 9, 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	32

ITEM 4. CONTROLS AND PROCEDURES	32

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS	33

ITEM 1A. RISK FACTORS	33

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	34

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	34

ITEM 4. MINE SAFETY DISCLOSURE	34

ITEM 5. OTHER INFORMATION	34

ITEM 6. EXHIBITS	34

SIGNATURES	35

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 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;

●

Adverse macroeconomic conditions, including inflationary pressures and potential recessionary conditions and the threat or actual adoption of tariffs, retaliatory tariffs and duties, trade barriers and restrictions, and related international trade conflicts, including by the United States, Canada or other jurisdictions, could materially and adversely impact the macroeconomic framework in which we (and our counterparties with which we engage) operate;

●

Changes in the status and outcome of pending, or the initiation of new, litigation, claims, proceedings, disputes or arbitrations (such as with respect to the Patent License Matter or otherwise), including our ability to prevail in connection with any such litigation, claims, proceedings, disputes and arbitrations (and any other appeal, cross-claim or counterclaim), could materially and adversely impact our operating results and financial condition;

●

Our ability to seek additional funding through equity financings, debt financings and/or other capital sources, including the Company’s ability to obtain (i) financing on acceptable terms, if at all, and (ii) all related approvals in order to consummate such financing activities; 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 Annual Report on 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 our Quarterly Report on Form 10-Q for the quarter ended December 31, 2024 (the “December 2024 Form 10-Q”), 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 Nine Months Ended March 31, 2025 and 2024

InMed Pharmaceuticals Inc.

(Expressed in U.S. Dollars)

March 31, 2025

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

	March 31,			June 30,
	2025			2024
	Unaudited
	$			$
ASSETS
Current
Cash and cash equivalents		4,679,826			6,571,610
Short-term investments		40,582			43,064
Accounts receivable (less provision for credit losses of $nil in each of March 31, 2025 and June 30, 2024)		367,813			352,838
Inventories, net		813,970			1,244,324
Prepaids and other current assets		507,872			477,749
Total current assets		6,410,063			8,689,585

Non-Current
Property, equipment and operating lease right-of-use (“ROU”) assets, net		1,108,662			1,249,999
Intangible assets, net		1,661,109			1,783,198
Other assets		100,000			100,000
Total Assets		9,279,834			11,822,782

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Accounts payable and accrued liabilities		1,409,715			1,654,011
Current portion of operating lease obligations		429,247			317,797
Total current liabilities		1,838,962			1,971,808

Non-current
Operating lease obligations, net of current portion		419,347			644,865
Total Liabilities		2,258,309			2,616,673
Commitments and Contingencies (Note 11)

Shareholders’ Equity
Common Shares, unlimited authorized shares: 1,207,186 and 445,908, as of March 31, 2025 and June 30, 2024, respectively, issued and outstanding		87,457,095			82,784,400
Additional paid-in capital		34,885,442			35,368,899
Accumulated deficit		(115,449,581	)		(109,075,759	)
Accumulated other comprehensive income		128,569			128,569
Total Shareholders’ Equity		7,021,525			9,206,109
Total Liabilities and Shareholders’ Equity		9,279,834			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 Nine Months Ended
	March 31,						March 31,
	2025			2024			2025			2024
		$			$			$			$
Sales		1,261,578			1,172,601			3,637,923			3,314,663
Cost of sales		1,085,953			883,143			2,507,991			2,679,821
Gross profit		175,625			289,458			1,129,932			634,842

Operating Expenses
Research and development and patents		909,653			656,764			2,741,200			2,558,648
General and administrative		1,328,996			1,374,095			4,304,505			4,036,784
Amortization and depreciation		52,306			54,767			160,087			164,833
Foreign exchange loss		22,165			48,156			50,608			36,717
Total operating expenses		2,313,120			2,133,782			7,256,400			6,796,982

Other Income (Expense)
Interest and other income		16,565			121,458			104,195			424,261
Finance expense		-			-			(351,549	)		-
Loss before income taxes		(2,120,930	)		(1,722,866	)		(6,373,822	)		(5,737,879	)

Tax expense					-			-			-
Net loss for the period		(2,120,930	)		(1,722,866	)		(6,373,822	)		(5,737,879	)

Net loss per share for the period
Basic and diluted		(1.94	)		(3.58	)		(7.93	)		(16.48	)
Weighted average outstanding common shares
Basic and diluted		1,095,973			480,649			803,909			348,097

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 Nine Months ended March 31, 2025 and 2024

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
Private Placement		483,034		2,935,004			-			-			-		2,935,004
Share issuance costs		-		(15,103	)		-			-			-		(15,103	)
Loss for the period		-		-			-			(2,120,930	)		-		(2,120,930	)
Share-based compensation		-		-			40,454			-			-		40,454
Balance March 31, 2025		1,207,186		87,457,095			34,885,442			(115,449,581	)		128,569		7,021,525

	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
Net loss		-		-		-			(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
Private placement		33,850		670,230		(670,230	)		-			-		-
Loss for the period		-		-					(1,722,866	)		-		(1,722,866	)
Share-based compensation		-		-		55,305			-			-		55,305
Balance March 31, 2024		317,249		80,606,863		37,507,306			(107,138,088	)		128,569		11,104,650

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 Nine Months ended March 31, 2025 and 2024

Expressed in U.S. Dollars

	For the Nine Months Ended
	March 31,
	2025			2024
	$			$
Cash used in:

Operating Activities
Net loss		(6,373,822	)		(5,737,879	)
Items not requiring cash:
Amortization and depreciation		160,087			164,833
Share-based compensation		92,577			98,760
Amortization of ROU assets		243,555			287,824
Interest income received on short-term investments		567			(1,271	)
Unrealized foreign exchange loss		44,875			2,607
Inventory write-down		-			263,404
Changes in operating assets and liabilities:
Inventories		430,354			159,000
Prepaids and other currents assets		(12,145	)		(520,653	)
Other non-current assets		-			4,908
Accounts receivable		(14,975	)		52,718
Accounts payable and accrued liabilities		(244,297	)		(425,446	)
Deferred rent		-			(16,171	)
Operating lease obligations		(315,221	)		(289,302	)
Total cash used in operating activities		(5,988,445	)		(5,956,668	)

Investing Activities
Sale of short-term investments		40,039			42,513
Purchase of short-term investments		(40,039	)		(42,513	)
Purchase of property and equipment		-			(9,293	)
Total cash used in investing activities		-			(9,293	)

Financing Activities
Proceeds from the private placement		4,361,220			5,216,193
Private placement issuance costs		(264,559	)		(562,151	)
Total cash provided by financing activities		4,096,661			4,654,042
Decrease in cash and cash equivalents during the period		(1,891,784	)		(1,311,919	)
Cash and cash equivalents beginning of the period		6,571,610			8,912,517
Cash and cash equivalents end of the period		4,679,826			7,600,598

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, circumstances and events, considered individually and 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 March 31, 2025, 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”) to unaffiliated third parties. The Company has incurred recurring losses and negative cash flows from operations since its inception, including net losses of approximately $6.4 million and $5.7 million for the nine months ended March 31, 2025 and 2024, respectively. In addition, the Company has an accumulated deficit of approximately $115.4 million as of March 31, 2025. The Company expects to continue to generate operating losses for the foreseeable future.

As of the date of this Quarterly Report, the Company expects its cash, cash equivalents and short-term investments of $4.7 million as of March 31, 2025 will be sufficient to fund its operating expenses and capital expenditure requirements into the third 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 has concluded that there is substantial doubt about its ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued.

The Company expects to continue to seek additional funding through equity financings, debt financings and/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 nine months ended March 31, 2025 and 2024 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 March 31, 2025 and June 30, 2024, the Company held $1,624,576 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 March 31, 2025 was $2.5 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 March 31, 2025
Revenues, customer concentration risk		25	%		37	%		*	%		*	%		*	%

Three Months Ended March 31, 2024
Revenues, customer concentration risk		16	%		21	%		29	%		16	%		10	%

Nine Months Ended March 31, 2025
Revenues, customer concentration risk		27	%		29	%		11	%		*	%		*	%

Nine Months Ended March 31, 2024
Revenues, customer concentration risk		*	%		16	%		39	%		15	%		10	%

As of March 31, 2025
Accounts receivable, customer concentration risk		34	%		47	%		*	%		14	%		*	%

As of June 30, 2024
Accounts receivable, customer concentration risk		32	%		20	%		15	%		15	%		14	%

*	Less than 10%.

Deferred Offering Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After the consummation of equity or debt financings, these related costs are recorded in shareholders’ equity or liabilities as a reduction of proceeds generated as a result of the offering. If the planned financing is abandoned, the deferred offering costs are thereafter expensed as a charge to other income (expense) in the consolidated statement of operations. For the nine months ended March 31, 2025, the Company recorded deferred offering costs of $25,000, in connection with ongoing financing.

Inventories

Inventories are initially valued at weighted average cost and subsequently valued at the lower of weighted average cost and net realizable value. Costs included in inventories are the purchase price of goods and cost of services rendered, freight costs, warehousing costs, purchasing costs and production and labor costs related to manufacturing.

In determining any valuation allowances, the Company reviews inventory for obsolete, redundant, and slow-moving goods.

Property, Equipment and ROU Assets, Net

Computer equipment, lab equipment and furnishings are recorded at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of computer equipment, lab equipment and furnishings comprises their purchase price. The computer equipment, lab equipment and furnishings are reviewed at least once per year for impairment. Equipment and furniture are depreciated using the straight-line method based on their estimated useful lives as follows:

	●	Computer equipment — 5 years

	●	Lab equipment — 6 - 10 years

●

Furnishings — 5 years

Computer equipment, lab equipment and furnishings, acquired or disposed of during the year, are depreciated proportionately for the period they are in use.

The ROU assets are initially measured based on the initial amount of the operating lease liability adjusted for any lease payments made at or before the commencement date, less any lease incentives received. The assets are amortized to the earlier of the end of the useful life of the ROU asset or the lease term using the straight-line method as this most closely reflects the expected pattern of consumption of the future economic benefits. The lease term includes periods covered by an option to extend if the Company is reasonably certain to exercise that option. In addition, the ROU assets are periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability (see Note 2 Lease (i)).

Intangible Assets, Net

Intangible assets are comprised of acquired intellectual property, which consists of certain patents and technical know-how. The intellectual property is recorded at cost and is amortized on a straight-line basis over an estimated useful life of 18 years net of any accumulated impairment losses. There was no impairment loss during the three and nine months ended March 31, 2025 and 2024.

Impairment of Long-Lived Assets

The Company assesses the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset or assets. If carrying value exceeds the sum of undiscounted cash flows, the Company then determines the fair value of the underlying asset. Any impairment to be recognized is measured as the amount by which the carrying amount of the asset group exceeds the estimated fair value of the asset group. Assets classified as held for sale are reported at the lower of the carrying amount or fair value, less costs to sell.

Fair Value Measurements

Financial Assets

Financial assets are initially recognized at fair value, plus transaction costs that are directly attributable to their acquisition or issue and subsequently carried at amortized cost, using the effective interest rate method, less any impairment losses. No financial assets are elected to be carried at fair value through profit or loss, or where changes in fair value are recognized in these consolidated statements of operations and comprehensive loss in other comprehensive loss.

Short-term investments are subsequently recorded at cost plus accrued interest, which approximates fair value due to their short-term nature. Accounts receivable are reported at outstanding amounts, net of credit losses.

Financial Liabilities

To determine the fair value of financial instruments, the Company uses the fair value hierarchy for inputs used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority).

Level 1 –

Unadjusted quoted prices in active markets for identical instruments.

Level 2 –

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 –

Inputs are unobservable and reflect the Company’s assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

The carrying value of cash and cash equivalents, short-term investments, accounts receivable, and accounts payable and accrued liabilities, approximate their carrying values as of March 31, 2025 and June 30, 2024 due to their immediate or short-term maturities.

Revenue Recognition

The Company recognizes revenue when the Company satisfies the performance obligations under the terms of a contract and control of its products and services is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products and services. ASC 606, Revenue from Contracts with Customers defines a five-step process to recognize revenue that requires judgment and estimates, including identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract, and recognizing revenue when or as the performance obligation is satisfied.

Revenue consists of manufacturing and distribution sales of bulk rare cannabinoids, which are generally recognized at a point in time. The Company recognizes revenue when control over the products has been transferred to the customer and the Company has a present right to payment. Sales and other taxes that are required to be remitted to regulatory authorities are recorded as liabilities and excluded from sales. Limited rights of return for claims of damaged or non-compliant products, exist with the Company’s customers.

The Company has elected the practical expedient that allows it to recognize the incremental costs of obtaining a contract as an expense, when incurred, if the amortization period of the asset that the Company otherwise would have recognized is one year or less.

Revenues within the scope of ASC 606 do not include material amounts of variable consideration. Customer payments are generally due in advance of when control is transferred to the customer. Some of our larger customers are eligible for payment terms up to ‘net 30 days’.

Cost of Sales

Cost of sales consists primarily of the purchase price of goods and cost of services rendered, freight costs, warehousing costs, and purchasing costs. Cost of sales also includes production and labor costs for the Company’s manufacturing business.

Shipping and Handling

The Company records freight billed to customers within net sales. Shipping and handling costs associated with inbound freight and goods shipped to customers are recorded in cost of sales. Other shipping and handling costs, such as for quality assurance, are recorded in operating expenses.

Earnings (Loss) Per Share

Basic earnings (loss) per Common Share (“EPS”) is computed by dividing the net income or loss applicable to Common Shares by the weighted average number of Common Shares outstanding for the relevant period. Diluted earnings (loss) per Common Share (“Diluted EPS”) is computed by dividing the net income or loss applicable to Common Shares by the sum of the weighted average number of Common Shares issued and outstanding and all additional Common Shares that would have been outstanding, if potentially dilutive instruments were converted. If the conversion of outstanding stock options and warrants into Common Shares is anti-dilutive, then diluted EPS is not presented separately from EPS.

The following table sets forth the number of potential Common Shares that have been excluded from diluted net income (loss) per because their effect was anti-dilutive:

	As of March 31,
	2025		2024
Options		61,864		33,924
Warrants		509,580		660,204
		571,444		694,128

Share-based Payments

The Company follows the requirements of FASB ASC 718-10-10, Share-Based Payments with regards to stock-based compensation issued to employees and non-employees. The Company has agreements and arrangements that call for stock to be awarded to the employees and consultants at various times as compensation and periodic bonuses. The expense for this stock-based compensation is equal to the fair value of the stock price on the day the stock was awarded multiplied by the number of shares awarded. The Company has a relatively low forfeiture rate of stock-based compensation and forfeitures are recognized as they occur.

The valuation methodology used to determine the fair value of the options issued during the period is the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions, including the volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the options. Risk-free interest rates are calculated based on continuously compounded risk-free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common Shares and does not intend to pay dividends on its Common Shares in the foreseeable future. The expected forfeiture rate is estimated based on management’s best assessment.

Estimated volatility is a measure of the amount by which InMed’s stock price is expected to fluctuate each year during the expected life of the award. The Company’s calculation of estimated volatility is based on historical stock prices over a period equal to the expected life of the awards.

Research and Development Costs

The Company conducts research and development programs and incurs costs related to these activities, including research and development personnel compensation, services provided by contract research organizations and lab supplies. Research and development costs are expensed in the periods in which they are incurred.

Patents and Intellectual Property Costs

The costs of filing for patents and of prosecuting and maintaining intellectual property rights are expensed as incurred due to the uncertainty surrounding the drug development process and the uncertainty of future benefits. Patents and intellectual property acquired from third parties for approved products or where there are alternative future uses are capitalized and amortized over the remaining life of the patent.

Segment Reporting

The Company’s operations consist of two operating and reportable segments, the “InMed Pharma” segment and the “BayMedica Commercial” segment.

The “InMed Pharma” segment is largely organized around the research and development of small molecule pharmaceuticals drug candidates and the “BayMedica Commercial” segment is largely organized around manufacturing technologies to produce and commercialize bulk rare cannabinoids for sale as ingredients in the health and wellness industry (See Note 10).

Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The lease liability is initially measured as the present value of future lease payments excluding payments made at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension, or termination option. When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the ROU asset or is recorded in profit or loss if the carrying amount of the ROU asset has been reduced to nil.

The Company has lease arrangements that include both lease and non-lease components. The Company accounts for each separate lease component and its associated non-lease components as a single lease component for all of its asset classes.

The Company has elected to apply the practical expedient to exclude initial direct costs such as annual operating costs from the measurement of the ROU asset at the date of initial application. The Company has elected to apply the practical expedient not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less. The lease payments associated with these leases is recognized as an expense on a straight-line basis over the lease term.

Recent Accounting Pronouncements

The Company has reviewed recent accounting pronouncements and concluded that they are either not applicable to the Company or that there was no material impact or no material impact is expected in these unaudited condensed consolidated financial statements as a result of future adoption.

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments in this update improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This ASU should be applied on a prospective basis, with retrospective application permitted. The amendments in this update are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the future effect the adoption of this ASU will have on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of specific categories meeting a quantitative threshold within the income tax rate reconciliation, as well as disaggregation of income taxes paid by jurisdiction. This ASU, which can be applied either prospectively or retrospectively, is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this ASU and expects to include updated income tax disclosures in its fiscal year 2026.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances reportable segment disclosure requirements primarily through expanded disclosures around significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company has early adopted this accounting pronouncement.

3.	INVENTORIES

Inventories consisted of the following:

	March 31, 2025		June 30, 2024
	$		$
Raw materials		258,300		372,695
Work in process		323,714		30,817
Finished goods		231,956		840,812
Inventories		813,970		1,244,324

In determining any valuation allowances, the Company reviews inventory for obsolete, redundant, and slow-moving goods. During the three months ended March 31, 2025 and 2024, the write-down of inventories to net realizable value was $0 and $0 respectively. During the nine months ended March 31, 2025 and 2024, the write-down of inventories to net realizable value was $0 and $263,404 respectively. Contributing factors to the decrease in net realizable value included lower demand and downward pricing pressure for certain products. As of March 31, 2025 and June 30, 2024, the Company has $103,434 as a valuation allowance to reduce weighted average cost to new basis.

4.	PROPERTY, EQUIPMENT AND ROU ASSETS, NET

Property, equipment and ROU assets consisted of the following:

	March 31, 2025			June 30, 2024
	$			$
ROU Assets (leases)		1,891,009			2,135,811
Equipment		429,091			429,090
Furnishings		-			40,409
Property and equipment		2,320,100			2,605,310
Less: accumulated depreciation and amortization		(1,211,438	)		(1,355,311	)
Property, equipment and ROU assets, net		1,108,662			1,249,999

Depreciation expense on computer equipment, lab equipment and furnishing for the three months ended March 31, 2025 and 2024, was $12,203 and $14,220, respectively, and was recorded in general and administrative expenses. Amortization expense related to the ROU assets for the three months ended March 31, 2025 and 2024, was $77,278 and $95,615, respectively, and was recorded in general and administrative expenses.

Depreciation expense on computer equipment, lab equipment and furnishing for the nine months ended March 31, 2025 and 2024, was $37,998 and $42,302, respectively, and was recorded in general and administrative expenses. Amortization expense related to the ROU assets for the nine months ended March 31, 2025 and 2024, was $243,555 and $287,824, respectively, and was recorded in general and administrative expenses.

5.	INTANGIBLE ASSETS

The following table summarizes the Company’s intangible assets:

	March 31, 2025			June 30, 2024
	$			$
Intellectual property		1,736,420			1,736,420
Patents		1,191,000			1,191,000
Intangible assets		2,927,420			2,927,420
Less: accumulated amortization		(1,266,311	)		(1,144,222	)
Intangible assets, net		1,661,109			1,783,198

Acquired intellectual property is recorded at cost and is amortized on a straight-line basis over 18 years. Acquired patents consist of patents related to the development of cannabinoid analogs. This intangible asset is being amortized over an estimated useful life of 18 years. As of March 31, 2025, the definite-lived intangible assets had a weighted average estimated remaining useful life of approximately 11 years.

Amortization expense on intangible assets for the three months ended March 31, 2025 and 2024 was $40,103 and $40,993 respectively. Amortization expense on intangible assets for the nine months ended March 31, 2025 and 2024 was $122,089 and $122,531 respectively. The Company expects amortization expense to be incurred over the next five years as follows:

Year ending June 30,	$
2025 (remaining)		40,657
2026		162,746
2027		162,746
2028		162,746
2029		162,746
Thereafter		969,468
Total		1,661,109

6.	ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following:

	March 31, 2025		June 30, 2024
	$		$
Trade payables		559,811		626,190
Accrued research and development expenses		105,797		242,066
Inventory related accruals		3,698		41,004
Employee compensation, benefits and related accruals		464,665		488,278
Accrued general and administrative expenses		275,744		256,473
Accounts payable and accrued liabilities		1,409,715		1,654,011

7.	SHARE CAPITAL AND RESERVES

Authorized

As of March 31, 2025, the Company’s authorized share structure consisted of an unlimited number of: (i) Common Shares; and (ii) preferred shares without par value (the “Preferred Shares”). No Preferred Shares were issued and outstanding as of March 31, 2025 and June 30, 2024.

The Company may, from time to time, issue Preferred Shares and may, at the time of issuance, determine the rights, preferences and limitations pertaining to these shares. Holders of preferred shares may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding up of the Company before any payment is made to the holders of Common Shares.

On June 27, 2024, the Company entered into an amendment (the “ATM Amendment”) to its At-the-Market Offering Agreement, dated April 7, 2022 (the “Original ATM Agreement” and together with the ATM Amendment, the “Amended ATM Agreement”), pursuant to which the Company may offer and sell Common Shares, from time to time, in “at the market” offerings through the Agent. The ATM Amendment amends the Original ATM Agreement to reflect, among other provisions, updates to certain sales settlement provisions and reimbursement terms, and to supplement the representations being made by the Company to the Agent. During the nine months ended March 31, 2025, the Company issued 313,242 Common Shares for gross proceeds of approximately $1.9 million. This amount has been offset by financing fees of approximately $265,000. The Company’s Registration Statement on Form S-3 which was previously filed with the SEC in connection with the transactions contemplated by the Amended ATM Agreement expired on February 10, 2025.

On December 13, 2024, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, LTD (the “Investor”) to sell up to $10 million in the aggregate of the Company’s Common Shares at any time during the 36-month period following the effective date of the SEPA (the “Effective Date”). The total number of Common Shares under the terms of the SEPA is limited to a number equivalent to 19.99% of the outstanding Common Shares as of the Effective Date unless certain pricing conditions are met, which could have the effect of limiting the total proceeds made available to the Company under the SEPA. In addition, the issuance of our Common Shares under the SEPA is subject to further limitations, including that the Common Shares beneficially owned by the Investor and its affiliates will not exceed 9.99% in the aggregate of our Common Shares issued and outstanding. The Common Shares issued and sold to the Investor will be priced at 97% of the Market Price (as defined in the SEPA) during a specified three-day pricing period.) The Company reserves the right to set a minimum acceptable price for the Common Share issuances made under the SEPA. During the nine months ended March 31, 2025, the Company issued 413,336 Common Shares for gross proceeds of approximately $2.5 million. Certain terms of the SEPA, including with respect to the specified three-day pricing period discussed above, may be modified or waived, as mutually agreed upon by the Investor, on the one hand, and the Company, on the other, in accordance with Section 12.02 and the other provisions of the SEPA. The foregoing description of the terms of the SEPA does not purport to be complete and is qualified in its entirety by reference to the full text of the SEPA.

Under the terms of the SEPA, the Company paid the Investor a one-time structuring fee in the amount of $25,000 and the Company is also obligated to pay a commitment fee in an amount equal to 2.50% of the Commitment Amount (or $250,000), 25% of which was paid in December 2024. The remaining 75% of the Commitment Fee shall be paid in three equal quarterly installments beginning on the three-month anniversary of the Effective Date, with each such installment to be paid at the Company’s option either in cash or by the issuance to the Investor of such number of Common Shares that is equal to such portion of the deferred fee divided by the lowest daily VWAP of the Common Shares during the consecutive Trading Days immediately prior to the date of such installment at the Effective Date. The Commitment Fee and other SEPA related fees of $351,549 were expensed during the three and nine months ended March 31, 2025, since at the inception of the arrangement, the fees exceeded the fair value of the asset recognized. The SEPA was precluded from equity treatment in accordance with ASC 815-40-25 as the SEPA was not deemed fixed according to the accounting standard.

Common Share Warrants

The Company did not grant any warrants during the nine months ended March 31, 2025.

A summary of the Company’s warrant activity and related information for the periods covered were as follows:

	Number of Shares Under Warrants			Weighted Average Exercise Price
Balance as at June 30, 2024		544,280		$	20.4
Warrants Granted		-			-
Exercised		(34,700	)		-
Expire/Cancelled		-			-
Warrants Outstanding as at March 31, 2025		509,580		$	30.18

Warrants Exercisable as at March 31, 2025		509,580		$	30.18

As of March 31, 2025 and June 30, 2024, the warrants exercisable and outstanding have an intrinsic value of $nil and $184,539, respectively, with a weighted average remaining life of 4 years and 6 years, respectively.

8.	SHARE-BASED PAYMENTS

Option Plan Details

On March 24, 2017, and as amended on November 20, 2020, the Company’s shareholders approved: (i) the adoption of a new stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may, from time to time, in its discretion and in accordance with applicable regulatory requirements, grant to directors, officers, employees and consultants of the Company, non-transferable options to purchase Common Shares, provided that the number of Common Shares reserved for issuance will not exceed twenty percent (20%) of the issued and outstanding Common Shares at the date the options are granted (on a non-diluted and rolling basis); and (ii) the application of the Plan to all outstanding stock options of the Company that were granted prior to March 24, 2017 under the terms of the Company’s previous stock option plan. On December 18, 2024 and December 19, 2023, the Company’s Board of Directors approved the reservation of an additional 60,000 and 35,000 Common Shares under the Plan, respectively.

As of March 31, 2025 and June 30, 2024, there were 40,824 and 8,966 stock options immediately available for future allocation pursuant to applicable regulatory requirements. The maximum number of options issuable under the terms of the Plan equates to 20% of the then issued and outstanding shares. The option price under each option shall not be less than the closing price on the day prior to the date of grant. All options vest upon terms as set by the Board of Directors, either over time, up to 36 months, or upon the achievement of certain corporate milestones.

On December 20, 2024, the Company granted 28,700 stock options to its employees and external directors.

The weighted average assumptions used in the Black-Scholes option pricing model in valuing stock options granted during the three and nine months ended March 31, 2025 and 2024, are summarized in the table below.

	2025			2024
Exercise price	$	4.14		$	0.37
Risk-free interest rate		4.21	%		3.95-4.30	%
Volatility		125	%		116-203	%
Expected life (years)		3.4			3.5-3.6
Dividend yield	$	0	%	$	0	%

The following is a summary of changes in the Company’s outstanding options from July 1, 2024 to March 31, 2025:

	Number			Weighted Average Exercise Price
Balance at July 1, 2024		33,722		$	56.69
Granted		28,700			4.14
Expired/Forfeited		(558	)		45.19
Balance at March 31, 2025		61,864		$	32.41
March 31, 2025:
Vested and exercisable		19,768		$	89.96
Unvested		42,096		$	5.39

Total expenses arising from share-based payment transactions recognized during the three months ended March 31, 2025 and 2024 were $40,454 and $55,305 respectively, of which $23,854 and $9,768, respectively, was allocated to general and administrative expenses, $15,956 and $6,659, respectively, was allocated to research and development expenses, and $644 and $506, respectively, was allocated to Cost of Goods sold.

Total expenses arising from share-based payment transactions recognized during the nine months ended March 31, 2025 and 2024 were $92,578 and $98,760 respectively, of which $55,393 and $57,231, respectively, was allocated to general and administrative expenses, $36,172 and $41,024, respectively, was allocated to research and development expenses, and $1,013 and $505, respectively, was allocated to cost of goods sold.

Unrecognized compensation cost as of March 31, 2025 (which was related to unvested options) was $99,006, which will be recognized over a weighted-average vesting period of approximately 1.3 years.

9.	LEASE OBLIGATIONS

The Company is committed to minimum operating lease payments as follows:

Maturity Analysis	March 31, 2025
	$
Year 1		116,000
Year 2		469,369
Year 3		313,230
Year 4		-
Year 5		-
Total undiscounted operating lease liabilities		898,599
Less: imputed interest		(50,005	)
Present value of operating lease liabilities		848,594

Less: Current portion of operating lease liabilities		(429,247	)
Non-current portion of operating lease liabilities		(419,347	)

On July 29, 2024, the Company entered into a lease agreement for new office space. This office occupies approximately 2,243 square feet with a monthly basic rental rate and operating charges of an estimated C$12,296 for the two-year term of the agreement. The Company used an incremental borrowing rate of 7% and recognized an ROU asset and corresponding operating lease liability of $205,201.

On October 5, 2023, BayMedica amended its lease located at 458 Carlton Court, Suite C, South San Francisco, California, in order to extend its lease to May 14, 2027. The Company is obligated to pay $1,295,759 over the three-year period unless terminated before the end of the period. The Company used an incremental borrowing rate of 6.15% and recognized a ROU asset and corresponding operating lease liability of $953,935. The Company can terminate the lease with three months written notice and a payment of $187,938.

10.

SEGMENT INFORMATION

The Company reports segment information based on the management approach, which designates the internal reporting used by the Chief Operating Decision Maker (“CODM”), the Company’s Chief Executive Officer and the senior management team, for making decisions and assessing performance as the source of the Company’s reportable segments. The CODM allocates resources and assesses the performance of each operating segment based on potential licensing opportunities, historical and potential future product sales, operating expenses, and operating income (loss) before interest and taxes. The Company has determined its reportable segments to be ‘InMed Pharma’ and ‘BayMedica Commercial’ based on the information used by the CODM. As such, the pharmaceutical-related research and development carried out at BayMedica is included with the ‘InMed Pharma’ segment. Other than cash, cash equivalents and short-term investments (“Unrestricted cash”) balances, the CODM does not regularly review asset information by reportable segment and, therefore, the Company does not report asset information by reportable segment.

The ‘InMed Pharma’ segment is largely organized around the research and development of small molecule pharmaceuticals drug candidates and the ‘BayMedica Commercial’ segment is largely organized around manufacturing technologies to produce and commercialize bulk rare cannabinoids for sale as ingredients in the health and wellness industry. Total assets held in the ‘InMed Pharma’ segment as of March 31, 2025 and June 30, 2024 were $5.7 million and $9.2 million, respectively. Total assets as of March 31, 2025 and June 30, 2024, held in the ‘BayMedica Commercial’ segment were $3.6 million and $2.6 million, respectively.

The following table presents information about the Company’s reportable segments for the three months ended March 31, 2025 and 2024:

	Three Months Ended March 31,
	2025									2024
	InMed			BayMedica			Total			InMed			BayMedica			Total
		$			$			$			$			$			$
Sales		-			1,261,578			1,261,578			-			1,172,601			1,172,601
Cost of sales		-			(1,085,953	)		(1,085,953	)		-			(883,143	)		(883,143	)
Research and development patents		(896,466	)		(13,187	)		(909,653	)		(620,223	)		(36,541	)		(656,764	)
General and Administrative		(1,113,297	)		(215,699	)		(1,328,996	)		(1,172,023	)		(202,072	)		(1,374,095	)
Amortization and depreciation		(51,706	)		(600	)		(52,306	)		(54,168	)		(599	)		(54,767	)
Foreign exchange gain (loss)		(22,165	)		-			(22,165	)		(48,156	)		-			(48,156	)
Interest and other income		16,565			-			16,565			102,987			18,471			121,458
Net Income (Loss)		(2,067,069	)		(53,861	)		(2,120,930	)		(1,791,583	)		68,717			(1,722,866	)

The following table presents information about the Company’s reportable segments for the nine months ended March 31, 2025 and 2024:

	Nine Months Ended March 31,
	2025									2024
	InMed			BayMedica			Total			InMed			BayMedica			Total
		$			$			$			$			$			$
Sales		-			3,637,923			3,637,923			-			3,314,663			3,314,663
Cost of sales		-			(2,507,991	)		(2,507,991	)		-			(2,679,821	)		(2,679,821	)
Research and development patents		(2,715,044	)		(26,156	)		(2,741,200	)		(2,458,576	)		(100,072	)		(2,558,648	)
General and Administrative		(3,684,397	)		(620,108	)		(4,304,505	)		(3,434,917	)		(601,867	)		(4,036,784	)
Amortization and depreciation		(158,289	)		(1,798	)		(160,087	)		(163,045	)		(1,788	)		(164,833	)
Foreign exchange gain (loss)		(50,608	)		-			(50,608	)		(36,717	)		-			(36,717	)
Interest and other income		104,195			-			104,195			424,480			(219	)		424,261
Finance expense		(351,549	)					(351,549	)		-			-			-
Net Income (Loss)		(6,855,692	)		481,870			(6,373,822	)		(5,668,775	)		(69,104	)		(5,737,879	)
Cash and Cash Equivalents		4,352,340			327,485			4,679,825			6,578,230			1,022,368			7,600,598

11.

COMMITMENTS AND CONTINGENCIES

Pursuant to the terms of agreements with various contract research organizations, as of March 31, 2025, the Company was committed for contract research services and materials at a cost of approximately $771,999, expected to occur in the following twelve-month period.

Pursuant to the terms of a certain Technology Assignment Agreement, dated as of May 31, 2017 (the “Technology Agreement”), between the Company and the University of British Columbia (“UBC”), the Company is committed to pay royalties to UBC on certain licensing and royalty revenues received by the Company for biosynthesis of certain drug products that are covered by the Technology Agreement. To date, no payments have been required to be made.

Pursuant to the terms of a certain Collaborative Research Agreement, dated as of December 13, 2018, between the Company and UBC, pursuant to which the Company owns all rights, title and interests in and to any intellectual property, in addition to funding research at UBC, the Company is committed to make a one-time payment upon filing of any PCT patent application arising from the research. To date, one such payment has been made to UBC.

Pursuant to the terms of a certain Contribution Agreement, dated as of November 1, 2018, between the Company and National Research Council Canada, as represented by its Industrial Research Assistance Program (NRC-IRAP), under certain circumstances contributions received, including the disposition of the underlying intellectual property developed in part with NRC-IRAP contributions, may become repayable. As of March 31, 2025, there have been no triggering events to cause a repayment.

Short-term investments include guaranteed investment certificates, with one-year terms, of $40,852 and $43,064 as of March 31, 2025 and June 30, 2024, respectively, that are pledged as security for a corporate credit card.

In addition to the foregoing, the Company has entered into certain agreements in the ordinary course of operations that may include indemnification provisions, which are common in such agreements. In some cases, the maximum amount of potential future indemnification is unlimited; however, the Company currently holds commercial general liability insurance. This insurance may limit the Company’s overall liability and may enable the Company to recover a portion of any future amounts paid. Historically, the Company has not made any indemnification payments under such agreements, and it believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations for any period presented.

Pursuant to that certain Technology Licensing Agreement, dated as of March 11, 2021, between the Company and EyeCRO, the Company is committed to issue, subject to regulatory approval, up to 700 warrants to purchase 700 Common Shares upon the achievement of certain milestones. The exercise price of the warrants will be equal to the five-day VWAP of our Common Shares prior to each milestone achievement and the warrants will be exercisable for a period of three years from the issuance date. On May 10, 2024, the Company delivered a 90-day notice of termination to EyeCRO LLC with respect to the Technology Licensing Agreement, specifying an effective date of termination of August 8, 2024.

BayMedica entered into a patent license agreement (“Patent License Agreement”) with a third party (the “Licensor”) on February 15, 2021. The Company was required to begin making royalty payments to the Licensor based on net sales of licensed products in 2021 in order to maintain an exclusive license. In December 2021, the Company amended the Patent License Agreement, which amendment included the deferral of the 2021 minimum payments to 2022. As of June 30, 2023, the Company had paid $300,000 for the minimum payments due and payable under the Patent License Agreement. On February 10, 2023, BayMedica received a letter from the Licensor alleging a breach of the Patent License Agreement and asserting a right to monies due thereunder. On April 6, 2023, BayMedica sent a letter to the Licensor disputing the Licensor’s interpretation of the Patent License Agreement and asserted that the counterparty’s only remedy under the Patent License Agreement to be either (a) the conversion of an exclusive technology license into a non-exclusive license or (b) the termination of the Patent License Agreement.

On July 18, 2024, BayMedica received a letter from the Licensor alleging breach of the Patent License Agreement and asserting monies due thereunder. On August 7, 2024, BayMedica responded asserting that the counterparty’s interpretation of the Patent License Agreement was again incorrect and that BayMedica, therefore, does not owe any funds under the Patent License Agreement.

Subsequent to March 31, 2025, BayMedica received a letter from the Licensor, on April 29, 2025, of its intention to commence arbitration proceedings pursuant to section 8.9 of the Patent License Agreement together with a Notice of Arbitration (the “Patent License Matter”). Such arbitration proceedings will be subject to final, binding and non-appealable arbitration under the Arbitration Act, 1991 (Ontario) and determined pursuant to Ontario law. BayMedica intends to vigorously defend its position. At this time, it is not possible to reasonably estimate a potential loss due to the terms of the Patent License Agreement and the ultimate outcome of any such proceedings (including the interpretation by the arbitrator with respect to applicable requirements under Ontario law regarding contract formation).

12.

RELATED PARTY TRANSACTIONS

On February 11, 2022, the Board of Directors appointed Janet Grove as a director of the Company, a position she held until February 10, 2025, at which time the Company’s Board of Directors (the “Board”), upon the outcome of the Nominating & Governance Committee’s determination and recommendation, elected to accept her resignation from the Board. Ms. Grove is a Partner of Norton Rose Fulbright Canada LLP (“NRFC”). During the three and nine months ended March 31, 2024, NRFC and Norton Rose Fulbright US LLP (“NRFUS” and together with NRFC, “NRF”) rendered legal services in the amount of $66,000 and $197,155, respectively, to the Company. During the period from July 1, 2024 to February 10, 2025, NRF rendered legal services in the amount of $316,977, to the Company. These transactions were in the normal course of operations and were measured at the exchange amount which represented the amount of consideration established and agreed to by NRF. No legal services rendered by NRF were provided by Ms. Grove directly.

13.

SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of the filing of this Quarterly Report and determined that there have been no events that have occurred that would require adjustments to our disclosures in the unaudited condensed consolidated financial statements except for the matters described below.

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

This discussion and analysis contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, and is subject to the safe harbor created by those sections. For more information, see “Special Note Regarding Forward-Looking Statements.” When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that impact our business. In particular, we strongly encourage you to review the risks and uncertainties described in “Risk Factors” in the 2024 Annual Report, the “Risk Factors” identified in Item 1A. of this Quarterly Report, and other filings we make from time to time with the SEC. These risks and uncertainties could cause actual results to differ materially from those projected or implied by our forward-looking statements contained in this Quarterly Report. These forward-looking statements are made as of the date of this Quarterly Report, and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law.

The following discussion and analysis should be read in conjunction with our audited consolidated financial statements for the year ended June 30, 2024, and the related notes thereto, which have been prepared in accordance with U.S. GAAP. Additionally, the following discussion and analysis should be read in conjunction with our audited consolidated financial statements included in our Annual Report. Throughout this discussion, unless the context specifies or implies otherwise the terms “InMed,” “Company,” “we,” “us,” and “our” refer to InMed Pharmaceuticals Inc.

All dollar amounts stated herein are in U.S. dollars unless specified otherwise.

Overview

We are a pharmaceutical company developing a pipeline of proprietary small molecule drug candidates that are preferential signaling ligands of the endogenous CB1 and CB2 receptors as well as other receptor targets linked to human disease. CB1 and CB2 receptors are each part of the endocannabinoid system that is found throughout the human body and is responsible for many homeostatic functions. CB1 receptors are primarily located in the brain and central nervous system, while CB2 receptors are involved in modulating neuroinflammation and immune responses. Our research efforts target the treatment of diseases with high unmet medical needs. Together with BayMedica, we also have significant know-how in developing proprietary manufacturing approaches to produce and sell bulk rare cannabinoids as ingredients for various market sectors.

InMed has sought to focus on the research and development of preferential signaling ligands of CB1 and CB2, and has produced a library of novel, proprietary drug candidates (“Product Candidates”). These Product Candidates are patentable new chemical entities (“NCEs”) for pharmaceutical development, aimed at targeting diverse clinical indications. Our current pharmaceutical pipeline consists of three programs, with drug candidates targeting Alzheimer’s disease, dry age-related macular degeneration, and Epidermolysis Bullosa.

InMed’s INM-901 is a proprietary small molecule, disease modifying drug candidate being developed as a potential treatment for Alzheimer’s disease. INM-901 has multiple potential mechanisms of action as a preferential signaling agonist for both CB1 and CB2 receptors, as well as impacting the peroxisome proliferator-activated receptor (“PPAR”) signaling pathway. Combined, these mechanisms of action may offer a unique treatment approach targeting several biological pathways associated with Alzheimer’s disease.

Outcomes from our ocular research, based on the proprietary small molecule INM-089, indicates potentially promising neuroprotective effects in the back of the eye, which may lead to the preservation of the retinal function. Neuroprotection in dry Aged-related Macular Degeneration (“dry AMD”) remains an unmet medical need and a new treatment option may help solve this multifactorial disease.

InMed has completed a Phase 2 clinical trial of INM-755 (cannabinol) cream studying its safety and efficacy in treating symptoms related to Epidermolysis Bullosa (“EB”). Results from the Phase 2 clinical trial showed a positive indication of enhanced anti-itch activity for INM-755 cream versus the control cream alone in an exploratory clinical evaluation. The Company is also pursuing strategic partnership opportunities for INM-755 in epidermolysis bullosa and other itch-related skin conditions.

Together with our wholly owned subsidiary BayMedica, our manufacturing capabilities include traditional approaches such as chemical synthesis and biosynthesis, as well as a proprietary, integrated manufacturing approach called IntegraSyn. With multiple manufacturing approaches, InMed has sought to maintain enhanced flexibility to select the most cost-effective method to deliver high quality, high purity Products and Product Candidates fit for their intended use. BayMedica’s commercial business specializes in the B2B commercialization of bulk rare, non-intoxicating cannabinoids as raw materials for the Health and Wellness sector that are bioidentical to those found in nature.

Recent Developments

Standby Equity Purchase Agreement

On December 13, 2024, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, LTD (the “Investor”) to sell up to $10 million in the aggregate of our Common Shares at any time during the 36-month period following the effective date of the SEPA (the “Effective Date”). The total number of Common Shares under the terms of the SEPA is limited to a number equivalent to 19.99% of the outstanding Common Shares as of the Effective Date unless certain pricing conditions are met, which could have the effect of limiting the total proceeds made available to the Company under the SEPA. In addition, the issuance of our Common Shares under the SEPA is subject to further limitations, including that the Common Shares beneficially owned by the Investor and its affiliates will not exceed 9.99% in the aggregate of our Common Shares issued and outstanding. The Common Shares issued and sold to the Investor will be priced at 97% of the Market Price (as defined in the SEPA) during a specified three-day pricing period.) The Company reserves the right to set a minimum acceptable price for the Common Share issuances made under the SEPA. The Company did not issue any Common Shares under the SEPA as at March 31, 2025. Certain terms of the SEPA, including with respect to the specified three-day pricing period discussed above, may be modified or waived, as mutually agreed upon by the Investor, on the one hand, and the Company, on the other, in accordance with Section 12.02 and the other provisions of the SEPA. The foregoing description of the terms of the SEPA does not purport to be complete and is qualified in its entirety by reference to the full text of the SEPA.

As of the date of this Quarterly Report, the Company has issued 413,336 Common Shares for gross proceeds of $2,455,600 pursuant to the terms of the SEPA.

Special Meeting of the Company’s Shareholders

On April 4, 2025, the Company announced the meeting, record date and certain other information relating to a special meeting of the Company’s shareholders to be held on June 13, 2025 (the “June Special Meeting”), pursuant to a filing submitted to the System for Electronic Document Analysis and Retrieval (“SEDAR”) in Canada. On April 29, 2025, the Company filed a Notice of Special Meeting and Information Circular on the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) as the preliminary proxy statement required under Section 14A of the United States Securities Exchange Act of 1934, as amended (the “Preliminary Proxy Statement”). The Company expects to file the definitive proxy statement on or about May 12, 2025, and will thereafter mail copies of the definitive proxy statement and proxy card and accompanying materials to holders of our Common Shares. At the June Special Meeting, holders of the Common Shares will be asked to approve the potential issuance of 20% or more of the Company’s issued and outstanding Common Shares under the SEPA pursuant to Nasdaq Listing Rules 5635(d) and 5635(b). The Company encourages its holders of Common Shares to review the entirety of the Preliminary Proxy Statement made available on EDGAR (as well as the definitive proxy statement, once filed, on EDGAR), as it contains important information concerning the SEPA and related considerations, as well as the June Special Meeting, including instructions as to how to vote such holder’s Common Shares.

ATM Program

As previously reported by the Company on the Company’s Current Report on Form 8-K filed on June 28, 2024, on June 27, 2024, the Company entered into an amendment (the “ATM Amendment”) to its At-the-Market Offering Agreement, dated April 7, 2022 (the “Original ATM Agreement” and together with the ATM Amendment, the “Amended ATM Agreement”), by and between the Company and H.C. Wainwright & Co., LLC (the “Agent”), as sales agent, pursuant to which the Company may offer and sell shares of our Common Shares, from time to time, in “at the market” offerings through the Agent. The Original ATM Agreement was previously filed with the Securities and Exchange Commission on April 7, 2022 on the Company’s Current Report on Form 8-K. The ATM Amendment amends the Original ATM Agreement to reflect, among other provisions, updates to certain sales settlement provisions and reimbursement terms, and to supplement the representations being made by the Company to the Agent. Our Common Shares sold under the Amended ATM Agreement will be offered and sold pursuant to the Company’s shelf registration statement on Form S-3, which was initially filed on February 4, 2022 and amended on February 9, 2022, and was declared effective by the SEC on February 11, 2022. The foregoing description of the terms of the ATM Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the ATM Amendment.

As of the date of this Quarterly Report, the Company has issued a total of 313,245 Common Shares for gross proceeds of $1.9 million, pursuant to the terms of the Amended ATM Agreement. The Company’s Registration Statement on Form S-3 which was previously filed with the SEC in connection with the transactions contemplated by the Amended ATM Agreement expired on February 10, 2025. The Company may, in management’s sole discretion and based on its assessment of, among other things, existing market factors, elect to file a new registration with the SEC in connection with the Amended ATM Agreement.

Advancements to the INM-901 program

On January 21, 2025, we announced positive results from a long-term in vivo preclinical Alzheimer’s Disease (“AD”) study. In the study, INM-901 demonstrated a reduction in several plasma and brain markers of neuroinflammation, a recognized contributor to Alzheimer’s disease development and progression. Results from the long-term study of INM-901 in a well-characterized Alzheimer’s disease model demonstrated the following:

●

Improved cytokine profile – INM-901 treated groups showed a dose-dependent and statistically significant reduction in plasma pro-inflammatory cytokines such as TNF-α, IL-1ß and INF-γ. Cytokine networks, when deregulated, may contribute to tissue inflammation.

●

Reduction in neurodegeneration biomarker – INM-901 demonstrated a dose-dependent and statistically significant reduction in neurofilament light chain (“NfL”) in the plasma for the high dose treated group. NfL is a protein that is released from neurons in response to injury or disease. NfL levels are used to assess cellular damage in neurodegenerative disease.

●

Study supported by mRNA data – mRNA assessments showed a reduction of several key neuroinflammatory genes in the brain, such as GFAP, CD-33 and TLR-2, further supporting the overall results from the study.

Advancements to the INM-089 program

On February 3, 2025, we announced the selection of an intravitreal formulation for INM-089 as a drug candidate to be utilized in the Company’s ongoing development program targeting the treatment of Age-related Macular Degeneration (“AMD”). The Company’s proprietary IVT formulation, combined with the INM-089 active pharmaceutical ingredient (“API”), has been successfully delivered to the targeted area of the eye in preclinical studies in doses of up to 10 times the calculated safety margin relative to the therapeutic dose level. This INM-089 IVT formulation will be used in the next stages of preclinical studies, including GLP-enabling studies and subsequent stages of clinical development. Additionally, the Company has recently completed a series of dose-ranging in vivo studies, which will help guide the Company in selecting the appropriate doses for the pivotal preclinical toxicology studies.

Economic and Trade Policy Uncertainty

The Company continues to monitor the potential impact of evolving trade policies, including the threat of additional tariffs imposed by the U.S. and other jurisdictions. While no specific tariffs have been implemented during the reporting period covered by this Quarterly Report that directly and materially affect the Company’s operations, the potential for future changes in cross-border trade arrangements and import/export duties contributes to broader economic uncertainty and could impact the counterparties with whom we commercially engage. As of March 31, 2025, the Company’s management has not identified any material and adverse effects on the Company’s financial position, results of operations, or estimates related to credit losses or asset impairments as a result of the implementation of such tariffs and trade policies; however, the ultimate outcome and impact of such trade policies are not fully ascertainable as of the date hereof. See Item 1A. “Risk Factors—The threat or actual adoption of tariffs, retaliatory tariffs and duties, trade barriers and restrictions, and related international trade conflicts, including by the United States, Canada or other jurisdictions, could materially impact the macroeconomic framework in which we operate” discussed below.

Components of Results of Operations

Revenue

Our revenue consists of manufacturing and distribution sales of bulk rare cannabinoid Products, which are generally recognized at a point in time. The Company recognizes revenue when control over the products has been transferred to the customer and the Company has a present right to payment.

Cost of Sales

Operating Expenses

Research and Development and Patent Expenses

Research and development and patent expenses represent costs incurred by us for the discovery, development, and manufacture of our Products and Product Candidates, and include:

●

external research and development expenses incurred under agreements with contract research organizations (“CROs”), CDMOs and consultants;

	●	salaries, payroll taxes, employee benefits expenses for individuals involved in research and development efforts;

	●	research supplies; and

	●	legal and patent office fees related to patent and intellectual property matters.

We expense research and development costs as incurred. We recognize expenses for certain development activities, such as preclinical studies and manufacturing, based on an evaluation of the progress to completion of specific tasks using data or other information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of expenses incurred. Non-refundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. These amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered.

External costs represent a significant portion of our research and development expenses, which we track on a program-by-program basis following the nomination of a development candidate. Our internal research and development expenses consist primarily of personnel-related expenses, including salaries, benefits, and stock-based compensation expenses. We do not track our internal research and development expenses on a program-by-program basis as the resources are deployed across multiple projects.

The successful development of our Products and Product Candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the remainder of the development of our Product Candidates or to develop and commercialize additional Products. We are also unable to predict when, if ever, material net cash inflows will commence from our Product Candidates, if approved. This is due to the numerous risks and uncertainties associated with development, including the uncertainty related to:

●

the timing and progress of preclinical and clinical development activities;

●

the number and scope of preclinical and clinical programs we decide to pursue;

●

our ability to raise additional funds necessary to complete preclinical and clinical development and commercialization of our Product Candidates, to further advance the development of our manufacturing technologies, and to develop and commercialize additional Products, if any;

●

our ability to maintain our current research and development programs and to establish new ones;

●

our ability to establish sales, licensing or collaboration arrangements;

●

the progress of the development efforts of parties with whom we may enter into collaboration arrangements;

●

the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;

●

the receipt and related terms of regulatory approvals from applicable regulatory authorities;

●

the availability of materials for use in production of our Products and Product Candidates;

●

our ability to secure manufacturing supply through relationships with third parties or establish and operate a manufacturing facility;

●

our ability to consistently manufacture our Product Candidates in quantities sufficient for use in clinical trials;

●

our ability to obtain and maintain intellectual property protection and regulatory exclusivity, both in the United States and internationally;

●

our ability to maintain, enforce, defend and protect our rights in our intellectual property portfolio;

●

the commercialization of our Product Candidates, if and when approved, and of new Products;

●

our ability to obtain and maintain third-party payor coverage and adequate reimbursement for our Product Candidates, if approved;

●

the acceptance of our Product Candidates, if approved, by patients, the medical community and third-party payors;

●

competition with other products; and

●

a continued acceptable safety profile of our Product Candidates following receipt of any regulatory approvals.

A change in the outcome of any of these variables with respect to the development of any of our Products or Product Candidates would significantly change the costs and timing associated with the development of those Products or Product Candidates.

Research and development activities account for a significant portion of our operating expenses. Research and development expenses increased in the nine months ended March 31, 2025, as compared to the nine months ended March 31, 2024, primarily due to an increased level of work in support of our current programs. As products advance through the research and development phases towards human clinical trials, we generally expect that our R&D expenses will correspondingly increase. We intend to continue to implement our business strategy, which includes advancing our drug candidates and our manufacturing technologies into and through clinical development, expanding our research and development efforts, including hiring additional personnel to support our research and development efforts, ultimately seeking regulatory approvals for our drug candidates that successfully complete clinical trials, and further developing selected research and development and commercial BayMedica activities. Accordingly, although we expect our research and development expenses to increase as our drug candidates advance into later stages of clinical development, we do not believe that it is possible, at this time, to accurately project total program-specific expenses through to commercialization. There are numerous factors associated with the successful commercialization of any of our Product Candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.

General and Administrative Expenses

General and administrative expenses consist of personnel-related costs, including salaries, benefits and stock-based compensation expense, for our personnel in executive, finance and accounting, human resources, business operations and other administrative functions, investor relations activities, legal fees related to corporate matters, fees paid for accounting and tax services, consulting fees and facility-related costs.

Amortization and Depreciation

Intangible assets are comprised of intellectual property that we acquired in 2014 and 2015 and trade secrets, product formulation knowledge, patents that we acquired in October 2021. The acquired intellectual property and patents are amortized on a straight-line basis based on their estimated useful lives. Equipment and leasehold improvements are depreciated using the straight-line method based on their estimated useful lives.

Share-based Payments

Share-based payments are the stock-based compensation expense related to our granting of stock options to employees and others. The fair value, at the grant date, of equity-settled share awards is charged to our loss over the period for which the benefits of employees and others providing similar services are expected to be received. The vesting components of graded vesting employee awards are measured separately and expensed over the related tranche’s vesting period. The amount recognized as an expense is adjusted to reflect the number of share options expected to vest. The fair value of awards is calculated using the Black-Scholes option pricing model, which considers the exercise price, current market price of the underlying shares, expected life of the award, risk-free interest rate, expected volatility and the dividend yield.

Other Income

Other income consists primarily of interest income earned on our cash, cash equivalents and short-term investments.

Results of Operations

The Company has two operating and reportable segments based on the management approach which designates the internal reporting used by the CODM, the Company’s Chief Executive Officer and the senior management team, for making decisions and assessing performance as the source of the Company’s reportable segments. The CODM allocates resources and assesses the performance of each operating segment based on potential licensing opportunities, historical and potential future product sales, operating expenses, and operating income (loss) before interest and taxes. The Company has determined its reportable segments to be ‘InMed Pharma’ and ‘BayMedica Commercial’ based on the information used by the CODM.

Comparison of the three months ended March 31, 2025 and 2024 for the InMed Pharma Segment

	Three Months Ended March 31,
	2025			2024			Change			% Change
	(in thousands)
Operating expenses:
Research and development and patents	$	896		$	620		$	276			45	%
General and administrative		1,113			1,172			(59	)		(5	)%
Amortization and depreciation		52			54			(2	)		(4	)%
Foreign exchange (gain) loss		22			48			(26	)		(54	)%
Total operating expenses		2,083			1,894			(189	)		(10	)%
Interest and other income		17			103			(86	)		(83	)%
Net loss	$	(2,066	)	$	(1,791	)	$	(275	)		15	%

Research and Development and Patents Expenses

Research and development and patents expenses increased by $276,000 in our InMed Pharma segment, or 45%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase in research and development and patents expenses primarily resulted from an increase in external contractors relating to our INM-901 and INM-089 programs and patent fees, offset by a decrease in compensation expense. However, we expect our research and development expenses to increase significantly in future periods as we move closer to conducting clinical trials for the INM-901 and INM-089 programs which will result in higher costs related to studies, and drug supplies, and increased regulatory requirements, as we continue to implement our business strategy.

General and administrative expenses

General and administrative expenses decreased by $59,000 in our InMed Pharma segment, or 5%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease resulted primarily from a combination of changes, including lower accounting fees, share-based payments, and shareholder communication fees. This amount was offset by an increase in regulatory fees and consulting fees.

Foreign exchange loss

The Company’s functional currency is the US dollar and our foreign exchange loss is predominantly due to transactions with foreign currency. Foreign exchange loss decreased by $26,000 in our ‘InMed Pharma’ segment, or 54%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, as a consequence of the Company holding non-US denominated assets and liabilities combined with fluctuations in foreign exchange rates.

Comparison of the three months ended March 31, 2025 and 2024 for the BayMedica Commercial Segment

	Three Months Ended March 31 ,
	2025			2024		Change			% Change
	(in thousands)
Sales	$	1,262		$	1,173	$	89			8	%
Cost of sales		1,086			883		203			23	%
Gross profit		176			290		(114	)		(39	)%

Operating expenses:
Research and development and patents		13			37		(24	)		(65	)%
General and administrative		216			202		14			7	%
Amortization and depreciation		1			1		-			-	%
Total operating expenses		230			240		(11	)		(4	)%
Interest and other income		-			18		(18	)		(100	)%
Tax expense		-			-		-			-	%
Net Income	$	(54	)	$	68	$	(122	)		(179	)%

Sales

Sales increased by $89,000 in our BayMedica Commercial segment, or 8%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase in sales resulted from expanded marketing efforts and increased demand for certain cannabinoid products. While market demand increased, the need to remain price competitive impacted overall profitability for the period. BayMedica will continue to evaluate opportunities for potential structured supply arrangements and collaborations for the commercial business. Sales and marketing efforts will remain focused on products that are expected to contribute to the highest margins, where BayMedica continues to hold a strong competitive position.

Cost of Sales

Cost of goods sold increased by $203,000 in our ‘BayMedica Commercial’ segment, or 23%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase in cost of goods sold was primarily the result of an increase in sales of lower margin products.

General and administrative expenses

General and administrative expenses increased by $13,000 in our BayMedica segment, or 6%, for the period ended March 31, 2025 as compared to the period ended March 31, 2024. The increase results primarily from a combination of changes including higher personnel expenses, accounting and legal fees, and marketing expenses.

Comparison of the nine months ended March 31, 2025 and 2024 for the InMed Pharma Segment

	Nine Months Ended March 31,
	2025			2024			Change			% Change
	(in thousands)
Operating expenses:
Research and development and patents	$	2,715		$	2,459		$	256			10	%
General and administrative		3,684			3,435			249			7	%
Amortization and depreciation		158			163			(5	)		(3	)%
Foreign exchange (gain) loss		51			37			14			38	%
Total operating expenses		6,608			6,094			514			8	%
Interest and other income		104			424			(320	)		(75	)%
Finance expense		(352	)		-			(352	)
Net loss	$	(6,856	)		(5,670	)	$	(1,186	)		21	%

Research and development expenses

Research and development expenses increased by $256,000 in our InMed Pharma segment, or 10%, for the nine months ended March 31, 2025, as compared to the nine months ended March 31, 2024. The increase resulted primarily from a combination of changes including external contractors and research supplies. This increase was offset by a decrease in lower personnel compensation.

Comparison of the nine months ended March 31, 2025 and 2024 for the BayMedica Commercial Segment

	Nine Months Ended March 31,
	2025		2024			Change			% Change
	(in thousands)
Sales	$	3,638	$	3,315		$	323			10	%
Cost of sales		2,508		2,680			(172	)		(6	)%
Gross profit		1,130		635			495			78	%

Operating expenses:
Research and development and patents		26		100			(74	)		(74	)%
General and administrative		620		602			18			3	%
Amortization and depreciation		2		2			-			-	%
Total operating expenses		648		704			(56	)		(8	)%
Interest and other income		-		-			-			-	%
Tax expense		-		-			-			-
Net Income	$	482	$	(69	)	$	551			(799	)%

Sales

Sales increased by $323,000 in our BayMedica Commercial segment, or 10%, for the nine months ended March 31, 2025, as compared to the nine months ended March 31, 2024. The increase in sales resulted from expanded marketing efforts and increased demand for certain cannabinoid products. While market demand increased, the need to remain price competitive impacted overall profitability for the period. BayMedica will continue to evaluate opportunities for potential structured supply arrangements and collaborations for the commercial business. Sales and marketing efforts will remain focused on products that are expected to the contribute highest margins, where BayMedica continues to hold a strong competitive position.

Cost of sales

Cost of goods sold decreased by $172,000 in our ‘BayMedica Commercial’ segment, or 6%, for the nine months ended March 31, 2025, as compared to the nine months ended March 31, 2024. The decrease in cost of goods sold is primarily the result of a decrease in write-down of inventories to net realizable value during the nine months ended March 31, 2025.

Liquidity and Capital Resources

Since our inception, we have incurred significant operating losses, generated limited revenue from product sales, and no sales from any other sources, and have negative cash flows from our operations. We have not yet commercialized any of our Product Candidates and we do not expect to generate revenue from sales of any Product Candidates for several years, if at all. We have funded our operations to date primarily with proceeds from the sale of our Common Shares.

As of March 31, 2025, we had cash, cash equivalents and short-term investments of $4.7 million.

The following table summarizes our cash flows for each of the periods presented:

(in thousands)	Nine Months Ended March 31, 2025			Nine Months Ended March 31, 2024
Net cash used in operating activities	$	(5,988	)	$	(5,957	)
Net cash used in investing activities		-			(9	)
Net cash provided by financing activities		4,097			4,654
Net (decrease) increase in cash and cash equivalents	$	(1,891	)	$	(1,312	)

Operating Activities

During the nine months ended March 31, 2025, we used cash in operating activities of $6.0 million, primarily resulting from our net loss of $6.4 million combined with a $141,000 decrease in changes in our non-cash working capital, partially offset by non-cash expenses contributing to net cash using in operating activities.

During the nine months ended March 31, 2024, we used cash in operating activities of $5.9 million, primarily resulting from our net loss of $5.7 million combined with changes in our working capital and non-cash expenses contributing to net cash used in operating activities.

Investing Activities

During the nine months ended March 31, 2025, there was no change in investing activities as a result of the purchases and sale of short-term investments.

During the nine months ended March 31, 2024, cash used in investing activities of $10 thousand resulted from the purchases and sale of short-term investments, as well as the purchase of property and equipment.

Financing Activities

During the nine months ended March 31, 2025, cash provided by financing activities of $4.1 million consisted of $4.4 million in gross proceeds from the sale of Common Shares under the Amended ATM Agreement and SEPA, offset by total transaction costs of approximately $0.3 million.

During the nine months ended March 31, 2024, cash provided by financing activities of $4.7 million consisted of $5.2 million of gross proceeds from private placements of our Common Shares, offset by total transaction costs of approximately $0.5 million.

Funding Requirements

We expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we continue the research and development of and the clinical trials for our Product Candidates. In addition, we expect to incur additional costs associated with any required investment into BayMedica’s research and development efforts targeting cannabinoid analogs. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.

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), we have 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 March 31, 2025, we funded our operations primarily with proceeds from the sale of our Common Shares. We have incurred recurring losses and negative cash flows from operations since its inception, including net losses of $6.4 million and $5.7 million for the nine months ended March 31, 2025 and 2024, respectively. In addition, we have an accumulated deficit of $115.5 million as of March 31, 2025. The Company expects to continue to generate operating losses for the foreseeable future.

As of the issuance date of this Quarterly Report, the Company expects its cash, cash equivalents and short-term investments of $4.7 million as of March 31, 2025, to be sufficient to fund its operating expenses and capital expenditure requirements into the third 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 has concluded that there is substantial doubt about its ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued.

We expect 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. We 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 our existing shareholders.

Our funding requirements and timing and amount of our operating expenditures will depend largely on:

●

the scope, progress, results and costs of discovery research, preclinical development, laboratory testing and clinical trials for our Product Candidates;

●

the scope, progress, results and costs of development of our manufacturing technologies;

●

the number of and development requirements for other Products and Product Candidates that we pursue;

●

the costs, timing and outcome of regulatory review of our Product Candidates;

●

our ability to enter into contract manufacturing arrangements for supply of materials and manufacture of our Products and Product Candidates and the terms of such arrangements;

●

the impact of any acquired, or in-licensed, externally developed product(s) and/or technologies;

●

our ability to establish and maintain strategic collaborations, licensing or other arrangements, including sales arrangements, and the financial terms of such arrangements;

●

the sales, costs and timing of future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our Products and for Product Candidates for which we may receive marketing approval;

●

the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property- related claims;

●

expansion costs of our operational, financial and management systems and increases to our personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a dual listed company;

●

the costs to obtain, maintain, expand and protect our intellectual property portfolio;

●

the level and timing of realizing revenues from the BayMedica commercial operations; and

●

the impact of adverse macroeconomic factors and considerations, including the implementation and consequence of tariffs and other fiscal policies.

A change in the outcome of any of these factors, or other variables with respect to the development of any of our Products and Product Candidates, could significantly change the costs and timing associated with their development. We will need to continue to rely on additional financing to achieve our business objectives.

In addition to the variables described above, if and when any of our Product Candidates successfully complete development, we will incur substantial additional costs associated with regulatory filings, marketing approval, post-marketing requirements, maintaining our intellectual property rights, and regulatory protection, in addition to other commercial costs. We cannot reasonably estimate these costs at this time.

Until such time, if ever, as we can generate substantial revenues from either our Products or Product Candidates, we expect to finance our cash needs through a combination of equity or debt financings and collaboration arrangements. We currently have no credit facility or committed sources of capital. To the extent that we raise additional capital through the future sale of equity securities, the ownership interests of our shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing common shareholders. If we raise additional funds through the issuance of debt securities, these securities could contain covenants that would restrict our operations. We may require additional capital beyond our currently anticipated amounts, and additional capital may not be available on reasonable terms, or at all. If we raise additional funds through collaboration arrangements or other strategic transactions in the future, we may have to relinquish valuable rights to our technologies, future revenue streams, Products or Product Candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate 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.

Off-Balance Sheet Arrangements

During the periods presented, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations promulgated by the SEC.

Critical Accounting Policies and Significant Judgments and Estimates

Our significant accounting policies are described in Note 2 of the Financial Statements. The estimates will require us to rely upon assumptions that were highly uncertain at the time the accounting estimates are made, and changes in them are reasonably likely to occur from period to period. Changes in estimates used in these and other items could have a material impact on our financial statements in the future. Our estimates will be based on our experience and our interpretation of economic, political, regulatory, and other factors that affect our business prospects. Actual results may differ significantly from our estimates. For detailed information regarding our critical accounting policies and estimates, see our financial statements and notes thereto included in this Report and in our 2024 Annual Report. There have been no material changes to our critical accounting policies and estimates from those disclosed in our 2024 Annual Report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to its management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2025, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the nine-month period ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS.

Except for the matters discussed in Note 11 of the unaudited condensed consolidated financial statements included in this Quarterly Report, the disclosure of which is incorporated in this Item 1. Part II of this Quarterly Report by reference, we are not presently involved in any active legal proceedings that we believe to be material to the Company. From time to time, we may be subject to various pending or threatened legal actions, claims and proceedings, including those that arise in the ordinary course of our business.

ITEM 1A. RISK FACTORS.

Reference is made to Part I, Item 1A, “Risk Factors” included in the 2024 Annual Report for information concerning risk factors, which should be read in conjunction with the factors set forth in “Cautionary Statement Regarding Forward-Looking Statements” of this Report. There have been no material changes with respect to the risk factors disclosed in our 2024 Annual Report, except as set forth below and in the December 2024 Form 10-Q. You should carefully consider such factors in the 2024 Annual Report, the December 2024 Form 10-Q and below, which could materially and adversely affect our business, financial condition and future results. The risks described in our 2024 Annual Report, the December 2024 Form 10-Q and below, are not exhaustive and therefore, there are additional risks facing the Company that could adversely affect its business, financial condition and future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

We will require additional financing, and a failure to obtain this necessary capital when needed could force us to delay, limit, or reduce our investments in marketing and other strategic initiatives planned for future growth.

On December 13, 2024, we entered the SEPA with the Investor, whereby we have the right, but not the obligation, to sell to the Investor Common Shares up to the Commitment Amount during the 36-month period following the Effective Date, subject to certain conditions. The Common Shares that may be issued under the SEPA may be sold by us to the Investor at our discretion from time to time and sales of Common Shares under the SEPA will depend upon market conditions and other factors. Additionally, in no event may we sell and issue the aggregate number of Common Shares that is equal to or in excess of the Exchange Cap, unless we obtain shareholder approval to issue Common Shares in excess of the Exchange Cap in accordance with applicable Nasdaq rules and comply with certain other requirements as described in the SEPA. We are unable to predict or provide assurances as of the date of this Quarterly Report that such shareholder approval would be obtained on a timely manner, if at all. As a result, unless our stock price exceeds $5.15, we will be unable to sell the full Commitment Amount to the Investor without seeking stockholder approval to issue additional Common Shares in excess of the Exchange Cap. In addition, the issuance of Common Shares under the SEPA is subject to further limitations, including that the Common Shares beneficially owned by the Investor and its affiliates will not exceed 9.99%, in the aggregate.

We may ultimately decide to sell all or some of the Common Shares that may be available for us to sell pursuant to the SEPA. Because the purchase price per share to be paid by the Investor for the Common Shares that we may elect to sell under the SEPA will fluctuate based on the market prices of our Common Shares during the applicable pricing period for each of those sales, it is not possible for us to predict, as of the date of this Quarterly Report and prior to any such sales, the number of Common Shares that we will sell under the SEPA, the purchase price per share or the aggregate gross proceeds that we will receive from those purchases under the SEPA. Further, the resale by the Investor of a significant number of Common Shares at any given time, or the perception that such sales may or are likely to occur, could cause the market price of our Common Shares to materially decline and be highly volatile.

Accordingly, due to the foregoing, we may not have access to the full Commitment Amount unless the market price of our Common Shares remains stable throughout the term of the SEPA. Any significant decrease to the price of our Common Shares could materially limit our ability to sell the full Commitment Amount to the Investor. If the aggregate selling price of our Common Shares under the SEPA is below $5.15, it is possible that we may not be permitted to draw the full amount of proceeds of the drawdown request from the Investor, which may not provide adequate funding for our planned operations and may materially decrease our liquidity. On April 4, 2025, the Company announced the meeting, record date and certain other information relating to the June Special Meeting, pursuant to a filing submitted to SEDAR. On April, 29,2025, the Company filed the Preliminary Proxy Statement on EDGAR. The Company expects to file the definitive proxy statement on or about May 12, 2025, and will subsequently mail copies of the definitive proxy statement and proxy cared and accompanying materials to the Company’s holders of Common Shares. At the June Special Meeting, holders of Common Shares will be asked to approve the potential issuance of 20% or more of the Company’s issued and outstanding Common Shares under the SEPA pursuant to the Nasdaq Listing Rules 5635(d) and 5635(b).

The threat or actual adoption of tariffs, retaliatory tariffs and duties, trade barriers and restrictions, and related international trade conflicts, including by the United States, Canada or other jurisdictions, could materially impact the macroeconomic framework in which we operate.

Since taking office in January 2025, the current U.S. presidential administration has issued numerous executive orders, including with respect to international and domestic policies, and in the first and second quarters of 2025, there were significant changes to tariffs by the U.S. and other countries. In the second quarter of 2025, new U.S. tariffs were announced, including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the EU, among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications and delays to the U.S. tariffs have been announced and further changes are expected to be made in the future, which may include additional sector-based tariffs or other measures. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. If disputes and conflicts further escalate, actions by the governments in response could be significantly more severe and restrictive. Trade disputes, tariffs, restrictions and other political tensions between the U.S. and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain. While we actively monitor these risks and manage our supply chains accordingly, prolonged economic or geopolitical disruptions could adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial conditions and prospects. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this Quarterly Report. The ultimate outcome and consequences of the implementation of tariffs or other restrictive trade measures by the U.S. and other countries (including in the form of reciprocal measures) remains highly uncertain. Any trade wars, through the implementation of tariffs or otherwise, could materially and adversely affect us, directly and indirectly, including by adversely impacting the supply chains for our operations, declining consumer confidence, inflation, lower economic expectations, and increasing the costs of services we provide and utilize.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURE.

None

ITEM 5. OTHER INFORMATION.

Rule 10b5-1 Plan and Non-Rule 10b5-1 Trading Arrangement Adoptions, Terminations, and Modifications

During the nine months ended March 31, 2025, none of our directors or “officers” (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

ITEM 6. EXHIBITS.

Exhibits

The following exhibits are filed as part of this report:

Exhibit Number		Description
31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended

31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended

32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*		Certification of Chief Financial Officer pursuant to

SEC Form 10-Q filed by InMed Pharmaceuticals Inc.