What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-14 · 152 added, 139 removed, 562 unchanged (34% of the section changed)

2 unchanged sentences

Condensed Interim Consolidated Balance Sheets

June 30, 2025

September 30, 2024

March 31, 2025

Current assets:

29 unchanged sentences

Three Months Ended

Six Months Ended

March 31, 2025

March 31, 2024

March 31, 2025

March 31, 2024

Nine Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Research and development

15 unchanged sentences

Condensed Interim Consolidated Statements of Cash Flows

Six Months Ended

March 31, 2025

March 31, 2024

Nine Months Ended

June 30, 2025

June 30, 2024

Cash flows from operating activities:

31 unchanged sentences

Total Shareholders' Equity

Three Months Ended March 31, 2025

Balance - December 31, 2024

Issuance of common shares

Issuance of Series B-1 preferred shares

Issuance of common shares upon exercise of restricted share units

Issuance costs

Preferred return on Class A preferred shares

Three Months Ended June 30, 2025

Balance - March 31, 2025

Preferred return on Series A-1 preferred shares

Share-based compensation

Net loss and comprehensive loss

Balance - June 30, 2025

Three Months Ended June 30, 2024

Balance - March 31, 2024

Three Months Ended March 31, 2024

Balance - December 31, 2023

Issuance of common shares

2 unchanged sentences

Net loss and comprehensive loss

Balance - March 31, 2024

Six Months Ended March 31, 2025

Balance - June 30, 2024

Nine Months Ended June 30, 2025

Balance - September 30, 2024

7 unchanged sentences

Net loss and comprehensive loss

Balance - March 31, 2025

Six Months Ended March 31, 2024

Balance - June 30, 2025

Nine Months Ended June 30, 2024

Balance - September 30, 2023

3 unchanged sentences

Net loss and comprehensive loss

Balance - March 31, 2024

Balance - June 30, 2024

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

9 unchanged sentences

These unaudited condensed consolidated financial statements have been prepared on a going concern basis which presumes the realization of assets and the discharge of liabilities in the normal course of operations for at least the next twelve months.

For the six months ended March 31, 2025, the Company incurred a comprehensive loss of $ 3.3 million resulting in an accumulated deficit of $ 61.9 million.

For the six months ended March 31, 2025, the Company had a net cash outflow from operating activities of $ 3.9 million and ended the period with $ 13.9 million in cash and cash equivalents and a working capital of $ 13.5 million.

During the six month period ended March 31, 2025, the Company received gross proceeds of $ 15.0 million from the sale of preferred shares and common shares in a private placement and $ 1.5 million from the sale of preferred shares to an entity controlled by the Company’s CEO, as described below.

For the nine months ended June 30, 2025, the Company incurred a comprehensive loss of $ 4.8 million resulting in an accumulated deficit of $ 63.6 million.

For the nine months ended June 30, 2025, the Company had a net cash outflow from operating activities of $ 5.6 million and ended the period with $ 12.4 million in cash and cash equivalents and a working capital of $ 12.1 million.

During the nine month period ended June 30, 2025, the Company received gross proceeds of $ 15.0 million from the sale of preferred shares and common shares in a private placement and $ 1.5 million from the sale of preferred shares to an entity controlled by the Company’s CEO, as described below.

The Company’s ability to continue as a going concern is dependent on obtaining additional funding through financings, other strategic activities as well as via grants, to fund the development of its drug candidates.

12 unchanged sentences

All adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included in the interim periods.

Operating results for the three and six months ended March 31, 2025 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ending September 30, 2025.

Operating results for the three and nine months ended June 30, 2025 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ending September 30, 2025.

Use of estimates

26 unchanged sentences

Intangible assets, net consisted of the following:

March 31, 2025

September 30,

2 unchanged sentences

Total intangible assets, net

Amortization expense amounted to $ 0.03 million for each of the three months ended March 31, 2025 and March 31, 2024 and $ 0.05 million for each of the six months ended March 31, 2025 and March 31, 2024.

Amortization expense amounted to $ 0.03 million for each of the three months ended June 30, 2025 and June 30, 2024 and $ 0.08 million for each of the nine months ended June 30, 2025 and June 30, 2024.

Total estimated future amortization of intangible assets for each fiscal year is as follows:

10 unchanged sentences

Three Months Ended

Six Months Ended

March 31, 2025

March 31, 2024

March 31, 2025

March 31, 2024

Nine Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Right-of-use lease cost, included in general and administrative on the Statements of Operations

Lease terms and discount rates were as follows:

March 31, 2025

June 30, 2025

September 30, 2024

2 unchanged sentences

Cash flow information was as follows:

Six Months Ended

March 31, 2025

March 31, 2024

Nine Months Ended

June 30, 2025

June 30, 2024

Cash paid for amounts included in the measurement of right-of-use lease liabilities, included in accounts payable and accrued liabilities on the Statements of Cash Flow.

1 unchanged sentence

The Company has commitments for contracted research organizations who perform clinical trials for the Company’s ongoing clinical studies and other service providers.

Approximate aggregate future contractual payments at March 31, 2025 are as follows:

Approximate aggregate future contractual payments at June 30, 2025 are as follows:

September 30, 2025

9 unchanged sentences

The Company also has a commitment to pay royalties based on any net sales of products containing the Constructs in the countries where the Company directly commercializes the products containing the Constructs and a percentage of any sublicensing revenue received by the Company and its affiliates in the countries where it does not directly commercialize the products containing the Constructs.

No milestone, royalty or sublicensing payments were made to the third party during the three and six months ended March 31, 2025 and 2024.

No milestone, royalty or sublicensing payments were made to the third party during the three and nine months ended June 30, 2025 and 2024.

In 2016, through its Ontario subsidiary, the Company entered into a license agreement with a third party to obtain exclusive rights to certain know-how, patents and data relating to a pharmaceutical product.

7 unchanged sentences

In addition, if the Company fails to file an investigational new drug application or foreign equivalent (IND) for the product within a certain period of time following the date of the agreement, the Company is required to remit to the inventor a fixed license fee quarterly as long as the requirement to file an IND remains unfulfilled.

For the three and six months ended March 31, 2025, the Company recorded an expense of $ 25,000 and $ 50,000 as a result of meeting milestones outlined in the 2021 license agreement.

There were no milestones achieved in the three and six months ended March 31, 2025 and no additional expenses were incurred.

For the three and nine months ended June 30, 2024, the Company recorded an expense of $ 25,000 and $ 75,000 for the fixed quarterly license fee as outlined in the 2021 license agreement.

There were no milestones achieved in the three and nine months ended June 30, 2025 and no additional expenses were incurred.

In June 2024, the Company’s drug candidate, EB05, was selected by the Biomedical Advanced Research and Development Authority (BARDA), part of the Administration for Strategic Preparedness and Response within the U.S.

15 unchanged sentences

The Series B-1 Preferred Shares did not exist in the comparative period; therefore, no prior-period disclosure is presented.

Issues and Outstanding Series B-1 Preferred Shares

Series B-1 Preferred Shares (#)

Series B-1 Preferred Shares

Six Months Ended March 31, 2025

Issued and Outstanding Series B-1 convertible preferred shares

Series B-1 Convertible

Preferred Shares (#)

Series B-1 Convertible

Preferred Shares

Nine Months Ended June 30, 2025

Balance - September 30, 2024

1 unchanged sentence

Series B-1 Preferred Shares issuance costs

Balance - March 31, 2025

Balance - June 30, 2025

Series A-1 Preferred Shares Offering

17 unchanged sentences

Issued and Outstanding Series A-1 convertible preferred shares

Series A-1 Preferred Shares (#)

Series A-1 Preferred Shares

Six Months Ended March 31, 2025

Series A-1 Convertible

Preferred Shares (#)

Series A-1 Convertible

Preferred Shares

Nine Months Ended June 30, 2025

Balance - September 30, 2024

2 unchanged sentences

Preferred return on Series A-1 Preferred Shares

Balance - March 31, 2025

Equity distribution agreements

Balance - June 30, 2025

Equity distribution agreement

In October 2024, the Company entered into an At The Market Offering Agreement with H.C.

1 unchanged sentence

The Company has no obligation to sell any of the Common Shares and may at any time suspend sales or terminate the equity distribution agreement in accordance with its terms.

For the six months ended March 31, 2025, the Company sold a total of 304,057 Common Shares pursuant to the agreement for net proceeds of $ 0.8 million after deducting sales agent commissions of $ 25,000 .

The Company has not sold any Common Shares pursuant to the HCW ATM subsequent to March 31, 2025.

For the nine months ended June 30, 2025, the Company sold a total of 304,057 Common Shares pursuant to the agreement for net proceeds of $ 0.8 million after deducting sales agent commissions of $ 25,000 .

The Company has not sold any Common Shares pursuant to the HCW ATM subsequent to June 30, 2025.

Black-Scholes option valuation model

12 unchanged sentences

Weighted Average Exercise Price

Six Months Ended March 31, 2025

Nine Months Ended June 30, 2025

Balance - September 30, 2024

Balance - March 31, 2025

Six Months Ended March 31, 2024

Balance - June 30, 2025

Nine Months Ended June 30, 2024

Balance - September 30, 2023

Balance - March 31, 2024

The weighted average contractual life remaining on the outstanding warrants at March 31, 2025 is 34 months.

The following table summarizes information about the warrants outstanding at March 31, 2025:

Balance - June 30, 2024

The weighted average contractual life remaining on the outstanding warrants at June 30, 2025 is 31 months.

The following table summarizes information about the warrants outstanding at June 30, 2025:

Number of Warrants (#)

3 unchanged sentences

September 2027

The fair value of warrants granted during the six months ended March 31, 2025 was estimated using the Black-Scholes option valuation model using the following assumptions:

Six Months Ended March 31, 2025

The fair value of warrants granted during the nine months ended June 30, 2024 was estimated using the Black-Scholes option valuation model using the following assumptions:

Nine Months Ended June 30, 2025

Class A Pref Share

7 unchanged sentences

The total number of shares available for issuance under the terms of the 2019 Plan is 2,367,737 .

The remaining number of shares available to grant at March 31, 2025 is 85,329 .

The remaining number of shares available to grant at June 30, 2025 is 668,398 .

The Company’s 2019 Plan allows options to be granted to directors, officers, employees and certain external consultants and advisers.

4 unchanged sentences

Weighted Average Grant Date Fair Value

Six Months Ended March 31, 2025

Nine Months Ended June 30, 2025

Balance - September 30, 2024

Balance - March 31, 2025

Six Months Ended March 31, 2024

Balance - June 30, 2025

Nine Months Ended June 30, 2024

Balance - September 30, 2023

Balance - March 31, 2024

During the three and six months ended March 31, 2025, there were no employee or director options granted.

During the three and six months ended March 31, 2024, there were 500 employee options granted and no director options granted.

Balance - June 30, 2024

During the three and nine months ended June 30, 2025, there were no employee or director options granted.

During the three and nine months ended June 30, 2024, there were 500 employee options granted and no director options granted.

The options have a term of 10 years and an exercise price equal to the Nasdaq closing price on the grant date.

The weighted average contractual life remaining on the outstanding options at March 31, 2025 is 74 months.

The following table summarizes information about the options under the 2019 Plan outstanding and exercisable at March 31, 2025:

The weighted average contractual life remaining on the outstanding options at June 30, 2025 is 72 months.

The following table summarizes information about the options under the 2019 Plan outstanding and exercisable at June 30, 2025:

Number of Options (#)

Exercisable at

March 31, 2025 (#)

June 30, 2025 (#)

Range of Exercise Prices

6 unchanged sentences

March 2025 - Oct 2033

The options exercisable at March 31, 2025 had a weighted average exercise price of $ 24.66 , no intrinsic value and a weighted average remaining life of 72 months.

There were 33,354 options at March 31, 2025 that had not vested with a weighted average exercise price of $ 7.12 , no intrinsic value and a weighted average remaining life of 98 months.

The fair value of options granted during the six months ended March 31, 2025 and 2024 was estimated using the Black-Scholes option valuation model using the following assumptions:

Six Months Ended March 31, 2024

The options exercisable at June 30, 2025 had a weighted average exercise price of $ 25.93 , no intrinsic value and a weighted average remaining life of 72 months.

There were 25,617 options at June 30, 2025 that had not vested with a weighted average exercise price of $ 7.00 , no intrinsic value and a weighted average remaining life of 95 months.

The fair value of options granted during the nine months ended June 30, 2025 and 2024 was estimated using the Black-Scholes option valuation model using the following assumptions:

Nine Months Ended June 30, 2024

Risk free interest rate

2 unchanged sentences

Expected dividend yield

The Company recorded $ 0.1 million and $ 0.1 million of share-based compensation expenses for the three months ended March 31, 2025 and 2024, respectively and $ 0.1 million and $ 0.3 million for the six months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, the Company had approximately $ 0.1 million of unrecognized share-based compensation expense, which is expected to be recognized over a period of 18 months.

As of June 30, 2025, the Company had approximately $ 0.01 million of unrecognized share-based compensation expense, which is expected to be recognized over a period of 15 months.

Restricted share units (RSU)

2 unchanged sentences

The fair value is based on the 5-day VWAP of the Company’s Common Shares up to the date of grant.

The following is a summary of changes in the status of RSUs from October 1, 2024 through March 31, 2025:

The following is a summary of changes in the status of RSUs from October 1, 2024 through June 30, 2025:

Number of RSU (#)

Weighted Average Grant Date Fair Value

Six Months Ended March 31, 2025

Nine Months Ended June 30, 2025

Balance - September 30, 2024

Balance - March 31, 2025

Six Months Ended March 31, 2024

Balance - June 30, 2025

Nine Months Ended June 30, 2024

Balance - September 30, 2023

Balance - March 31, 2024

The following table summarizes information about the RSUs under the 2019 Plan outstanding and exercisable at March 31, 2025:

Balance - June 30, 2024

The following table summarizes information about the RSUs under the 2019 Plan outstanding and exercisable at June 30, 2025:

Number of RSU (#)

Exercisable at

June 30, 2025 (#)

Fully-vested RSUs

August 2033 - March 2035

All RSUs that were granted vested immediately upon the grant date.

The outstanding RSUs can be converted to Common Shares by the holder at any time prior to the expiry date.

There is no future unrecorded compensation expense for the RSUs.

August 2033 - June 2035

Vesting in the next 12 months

Vesting from 13–24 months

Vesting in 24 months or greater

The Company has granted RSUs with varying vesting schedules.

Certain RSU’s vest immediately upon the grant date, while others vest over a period ranging from 12 to 36 months.

Outstanding RSUs can be converted to Common Shares by the holder at any time after vesting and before the expiry date.

As of June 30, 2025, the Company had approximately $ 2.2 million of unrecognized restricted share unit compensation expense, which is expected to be recognized over a period of 35 months.

The Company recorded $ 0.2 million and $ 0.1 million of share-based compensation expenses for the three months ended June 30, 2025 and 2024, respectively and $ 0.3 million and $ 0.4 million for the nine months ended June 30, 2025 and 2024, respectively.

These amounts include expenses related to both stock options and restricted share units (RSUs) granted to employees and directors under the Company’s equity compensation plans.

Government Contributions

12 unchanged sentences

The Agreement will expire on the later of December 31, 2042 or the date of the last repayment, unless earlier terminated, subject to certain provisions that extend three ( 3 ) years beyond the term or early termination of the 2023 SIF Agreement.

Under the October 2023 SIF Agreement the Company recorded grant income of $ 0.1 million and $ 0.3 million for the three months ended March 31, 2025 and March 31, 2024, respectively, and $ 0.4 million for each of the six months ended March 31, 2025 and March 31, 2024 bringing the total recorded under the agreement to $ 1.1 million.

Under the October 2023 SIF Agreement the Company recorded grant income of $ 0.2 million and $ 0.2 million for the three months ended June 30, 2025 and June 30, 2024, respectively, and $ 0.5 million and $ 0.7 million for the nine months ended June 30, 2025 and June 30, 2024, respectively, bringing the total recorded under the agreement to $ 1.8 million.

Financial Instruments

27 unchanged sentences

The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks.

At March 31, 2025, the Company and its Canadian subsidiary had assets denominated in Canadian dollars of approximately C$ 5.7 million and the U.S.

At June 30, 2025, the Company and its Canadian subsidiary had assets denominated in Canadian dollars of approximately C$ 3.5 million and the U.S.

dollar exchange rate at this date was equal to 1.3654 Canadian dollars.

Based on the exposure at March 31, 2025, a 10% annual change in the Canadian/U.S.

Based on the exposure at June 30, 2025, a 10% annual change in the Canadian/U.S.

exchange rate would impact the Company’s loss and other comprehensive loss by approximately $ 0.3 million.

23 unchanged sentences

See Note 6 – Series A-1 Convertible Preferred Shares offering.

During the three and six months ended March 31, 2025 and 2024, the Company paid cash of $ 0 and $ 18,000 in 2025, and $ 20,000 and $ 40,000 in 2024, respectively, for a ROU lease from a company controlled by the Company’s CEO.

During the three and nine months ended June 30, 2025 and 2024, the Company paid cash of $ 20,000 and $ 60,000 in 2025, and $ 20,000 and $ 60,000 in 2024, respectively, for a lease from a company controlled by the Company’s CEO.

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by both parties.

4 unchanged sentences

At no time shall the aggregate principal amount of all advances outstanding exceed the lesser of (i) the Credit Limit and (ii) an amount equal to 85 % of the Borrowing Base.

During the three and six months ended March 31, 2025 and 2024, the Company incurred standby charges of $ 0 and $ 13,000 in 2025 and $ 4,000 and $ 25,000 in 2024, respectively.

During the three and nine months ended June 30, 2025 and 2024, the Company incurred standby charges of $ 0 and $ 13,000 in 2025 and $ 4,000 and $ 38,000 in 2024, respectively.

The Credit Agreement was terminated in October 2024.

2 unchanged sentences

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

The following management ’ s discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed interim consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q as of March 31, 2025 and our audited consolidated financial statements for the year ended September 30, 2024 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or the SEC, on December 13, 2024, as amended.

The following management ’ s discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed interim consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q as of June 30, 2025 and our audited consolidated financial statements for the year ended September 30, 2024 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or the SEC, on December 13, 2024, as amended.

This Quarterly Report on Form 10-Q contains forward-looking statements.

4 unchanged sentences

We do not intend to update any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.

The discussion and analysis of our financial condition and results of operations are based on our unaudited condensed interim consolidated financial statements as of March 31, 2025 and September 30, 2024 and for the three and six months ended March 31, 2025 and 2024 included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which we have prepared in accordance with U.S.

The discussion and analysis of our financial condition and results of operations are based on our unaudited condensed interim consolidated financial statements as of June 30, 2025 and September 30, 2024 and for the three and nine months ended June 30, 2025 and 2024 included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which we have prepared in accordance with U.S.

generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q.

45 unchanged sentences

Preparation for the manufacturing campaign began in our fiscal second quarter, and we have evaluated multiple development and manufacturing pathways to produce our drug.

We anticipate data to be submitted to the FDA during the second half of calendar 2025, from previous guidance of middle of the 2025 calendar year, based on the current availability of manufacturing slots at third party service providers.

We anticipate data to be submitted to the FDA by the end of calendar 2025 based on the current availability of manufacturing slots at third party service providers.

Our medical dermatology assets also include EB01 (1.0% daniluromer cream), a Phase 3-ready asset developed for use as a potential therapy for moderate-to-severe chronic Allergic Contact Dermatitis (ACD), a common occupational skin condition.

2 unchanged sentences

Paridiprubart represents a new class of emerging therapies called Host-Directed Therapeutics (HDTs) that are designed to modulate the body’s own immune response when confronted with infectious diseases or even chemical agents.

EB05 is currently being evaluated in a U.S.

government-funded platform study investigating three novel threat-agnostic HDTs in hospitalized adult patients with Acute Respiratory Distress Syndrome (ARDS), a life-threatening form of respiratory failure.

EB05 is currently being evaluated in the U.S.

government-funded “Just Breathe” study investigating three novel threat-agnostic HDTs in hospitalized adult patients with Acute Respiratory Distress Syndrome (ARDS), a life-threatening form of respiratory failure.

During the third fiscal quarter, the U.S.

government announced that the first randomizations of EB05 and other host directed therapeutics were completed.

Certain development expenses, including manufacturing scale-up, for our EB05 program are also eligible for reimbursement from the Government of Canada under a 2023 grant and funding award.

In addition to EB05, we are also preparing an investigational new drug application (IND) in the United States to conduct a future Phase 2 study for EB07 (paridiprubart) in patients with pulmonary fibrosis.

We are also pursuing additional uses for paridiprubart in chronic diseases, such as pulmonary fibrosis (EB07 program).

In light of our other development priorities, we are evaluating the timing for the next steps in our EB07 program.

Recent Developments

2 unchanged sentences

We have no obligation to sell any of the common shares and may at any time suspend sales or terminate the equity distribution agreement in accordance with its terms.

For the six months ended March 31, 2025, we sold a total of 304,057 common shares pursuant to the agreement for net proceeds of $0.8 million after deducting sales agent commissions of $25,000.

We have not sold any common shares pursuant to the HCW ATM subsequent to March 31, 2025.

For the nine months ended June 30, 2025, we sold a total of 304,057 common shares pursuant to the agreement for net proceeds of $0.8 million after deducting sales agent commissions of $25,000.

We have not sold any common shares pursuant to the HCW ATM subsequent to June 30, 2025.

Amended Articles

18 unchanged sentences

Results of Operations

Comparison of the Three Months Ended March 31, 2025 and 2024

Total operating expenses decreased to $1.6 million for the three months ended March 31, 2025 compared to $2.2 million for the three months ended March 31, 2024.

The following table summarizes our R&D expenses incurred during the three months ended March 31, 2025 and 2024, together with the dollar increase or decrease in those items:

Three Months Ended March 31, 2025

Comparison of the Three Months Ended June 30, 2025 and 2024

Total operating expenses for each of the three months ended June 30, 2025 and June 30, 2024 were $1.9 million.

The following table summarizes our R&D expenses incurred during the three months ended June 30, 2025 and 2024, together with the dollar increase or decrease in those items:

Three Months Ended June 30, 2025

June 30, 2025

June 30, 2024

Program-specific external costs:

6 unchanged sentences

Total research and development costs

Research and development (R&D) expenses decreased by $0.7 million to $0.5 million for the three months ended March 31, 2025 compared to $1.2 million for the same period last year primarily due to decreased external research expenses related to EB05 (paridiprubart) in the comparative period, offset partially by an increase in EB06 related expense as we prepare for the Phase 2 clinical study.

Research and development (R&D) expenses were $0.9 million for each of the three months ended June 30, 2025 and June 30, 2024, as an increase in EB06-related expenses associated with preparations for the Phase 2 clinical study was offset by a decrease in external research expenses related to EB05.

Our R&D expenses consist primarily of employee-related expenses, including salaries, benefits, taxes, travel, and share-based compensation expense for personnel in R&D functions; expenses related to process development and production of product candidates paid to contract manufacturing organizations, including the cost of acquiring, developing, and manufacturing research material; costs associated with clinical activities, including expenses for contract research organizations; and clinical trials and activities related to regulatory filings for our product candidates, including regulatory consultants.

General and administrative (G&A) expenses increased by $0.2 million to $1.2 million for the three months ended March 31, 2025 compared to $1.0 million for the same period last year primarily due to an increase in salaries and related costs, partially offset by a decrease in noncash share-based compensation and professional service fees.

General and administrative (G&A) expenses were $1.0 million for each of the three months ended June 30, 2025 and June 30, 2024, as a decrease in salaries and related costs was offset by an increase in noncash share-based compensation and professional service fees.

Our G&A expenses consist primarily of salaries and related costs for our employees in administrative, executive and finance functions.

G&A expenses also include professional fees for legal, accounting, audit, tax and consulting services, insurance, office, and travel expenses.

Total other income decreased by $311,000 to $49,000 for the three months ended March 31, 2025 compared to $360,000 for the same period last year and was composed of the following:

Grant income decreased by $0.2 million to $0.1 million for the three months ended March 31, 2025 compared to $0.3 million for the three months ended March 31, 2024.

Total other income decreased by $110,000 to $154,000 for the three months ended June 30, 2025 compared to $264,000 for the same period last year and was composed of the following:

Grant income decreased by $53,000 to $183,000 for the three months ended June 30, 2025 compared to $236,000 for the three months ended June 30, 2024.

The decrease is related to the grant income associated with the activities under the 2023 SIF Agreement.

Interest income decreased by $42,000 to $265 for the three months ended March 31, 2025 compared to $43,000 for the same period last year primarily due to lower cash balances.

Foreign exchange loss was $3,000 for the three months ended March 31, 2025 compared to a loss of $2,000 for the three months ended March 31, 2024.

For the three months ended March 31, 2025, our net loss was $1.6 million, or $0.30 per common share, compared to a net loss of $1.9 million, or $0.58 per common share for the three months ended March 31, 2024.

Comparison of the Six Months Ended March 31, 2025 and 2024

Total operating expenses decreased to $3.5 million for the six months ended March 31, 2025 compared to $4.1 million for the six months ended March 31, 2024.

The following table summarizes our R&D expenses incurred during the six months ended March 31, 2025 and 2024, together with the dollar increase or decrease in those items:

Six Months Ended March 31, 2025

Interest income decreased to $600 for the three months ended June 30, 2025 compared to $33,000 for the same period last year primarily due to lower cash balances.

Foreign exchange loss was $30,000 for the three months ended June 30, 2025 compared to a loss of $5,000 for the same period last year.

For the three months ended June 30, 2025, our net loss was $1.7 million, or $0.25 per common share, compared to a net loss of $1.7 million, or $0.52 per common share for the three months ended June 30, 2024.

Comparison of the Nine Months Ended June 30, 2025 and 2024

Total operating expenses decreased by $0.6 million to $5.4 million for the nine months ended June 30, 2025 compared to $6.0 million for the nine months ended June 30, 2024.

The following table summarizes our R&D expenses incurred during the nine months ended June 30, 2025 and 2024, together with the dollar increase or decrease in those items:

Nine Months Ended June 30, 2025

June 30, 2025

June 30, 2024

Program-specific external costs:

6 unchanged sentences

Total research and development costs

R&D expenses decreased by $0.4 million to $1.5 million for the six months ended March 31, 2025 compared to $1.9 million for the same period last year primarily due to a decrease in external research expenses related to EB05 (paridiprubart), partially offset by an increase in costs related to EB06 as we prepare for the Phase 2 clinical study.

R&D expenses decreased by $0.4 million to $2.4 million for the nine months ended June 30, 2025 compared to $2.8 million for the same period last year primarily due to a decrease in external research expenses related to EB05 (paridiprubart), which was partially offset by an increase in costs related to EB06 associated with preparations for the Phase 2 clinical study.

General and administrative (G&A) expenses decreased by $0.2 million to $2.0 million for the six months ended March 31, 2025 compared to $2.2 million for the same period last year primarily due to a decrease in noncash share-based compensation and professional service fees, which were partially offset by an increase in salaries and related costs.

G&A expenses decreased by $0.2 million to $3.0 million for the nine months ended June 30, 2025 compared to $3.2 million for the same period last year primarily due to a decrease in professional service fees and noncash share-based compensation.

Our G&A expenses consist primarily of salaries and related costs for our employees in administrative, executive and finance functions.

G&A expenses also include professional fees for legal, accounting, audit, tax and consulting services, insurance, office, and travel expenses.

Total other income decreased by $208,000 to $331,000 for the six months ended March 31, 2025 compared to $539,000 for the same period last year and was composed of the following:

Grant income remained unchanged at $0.4 million for the six months ended March 31, 2025 and the six months ended March 31, 2024, respectively.

Grant income is related to activities under the 2023 SIF Agreement.

Interest income decreased by $102,000 to $2,000 for the six months ended March 31, 2025 compared to $104,000 for the same period last year primarily due to lower cash balances.

Foreign exchange loss was $25,000 for the six months ended March 31, 2025 compared to a loss of $4,800 for the six months ended March 31, 2024.

For the six months ended March 31, 2025, our net loss was $3.2 million, or $0.74 per common share, compared to a net loss of $3.5 million, or $1.12 per common share for the six months ended March 31, 2024.

Total other income decreased by $0.3 million to $0.5 million for the nine months ended June 30, 2025 compared to $0.8 million for the same period last year and was composed of the following:

Grant income remained decreased by $0.2 million to $0.5 million for the nine months ended June 30, 2025 compared to $0.6 million for the same period last year and the nine months ended June 30, 2024, respectively.

The decrease is related to the grant income associated with the activities under the 2023 SIF Agreement.

Interest income decreased to $3,000 for the nine months ended June 30, 2025 compared to $137,000 for the same period last year primarily due to lower cash balances.

Foreign exchange loss was $54,000 for the nine months ended June 30, 2025 compared to a loss of $10,000 for the same period last year.

For the nine months ended June 30, 2025, our net loss was $5.0 million, or $0.95 per common share, compared to a net loss of $5.2 million, or $1.64 per common share for the nine months ended June 30, 2024.

Capital Expenditures

Our capital expenditures primarily consist of computer and office equipment.

There were no significant capital expenditures for the three and six months ended March 31, 2025 and 2024.

There were no significant capital expenditures for the three and nine months ended June 30, 2025 and 2024.

Liquidity and Capital Resources

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Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in accounts payable and accrued expenses.

Net cash used in operating activities was $3.9 million and $3.1 million for the six months ended March 31, 2025 and 2024, respectively.

Net cash used in operating activities was $5.6 million and $3.9 million for the nine months ended June 30, 2025 and 2024, respectively.

We incurred net losses of $5.0 million and $5.2 million, respectively, for those same periods.

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In October 2024, we entered into the HCW ATM pursuant to which we may offer and sell, from time to time, common shares through an at-the-market equity offering program for up to $3.87 million in gross proceeds.

For the three months ended March 31, 2025, we sold a total of 83,788 common shares pursuant to the agreement for net proceeds of $$0.2 million after deducting sales agent commissions of $6,000.

For the six months ended March 31, 2025, we sold a total of 304,057 common shares pursuant to the agreement for net proceeds of $0.8 million after deducting sales agent commissions of $25,000.

We have not sold any common shares pursuant to the HCW ATM subsequent to March 31, 2025.

For the three months ended June 30, 2025 there were no common shares sold pursuant to the agreement.

For the nine months ended June 30, 2025, we sold a total of 304,057 common shares pursuant to the agreement for net proceeds of $0.8 million after deducting sales agent commissions of $25,000.

We have not sold any common shares pursuant to the HCW ATM subsequent to June 30, 2025.

In October 2024, we entered into the Series A-1 Purchase Agreement with the Series A-1 Purchaser, an entity controlled by our Chief Executive Officer, Secretary and member of our board of directors, pursuant to which we agreed to issue and sell to the Series A-1 Purchaser in a private placement, up to $5 million of Series A-1 Preferred Shares, each of which is initially convertible into approximately 2,903 Series A-1 Conversion Shares, at a conversion price of $3.445 per Series A-1 Conversion Share, and Warrants to purchase the Warrant Shares at an exercise price of $3.445 per Warrant Share.

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The remaining C$17.2 million is conditionally repayable starting in 2029 only if and when we earn gross revenue.

For the three months ended March 31, 2025and 2024, we recorded grant income of $0.1 million and $$0.3 million, respectively, related to the 2023 SIF Agreement.

For the six months ended March 31, 2025 and 2024, we recorded grant income of $0.4 million and $0.4 million, respectively, related to the 2023 SIF Agreement.

For the three months ended June 30, 2025 and 2024, we recorded grant income of $0.2 million and $0.2 million, respectively, related to the 2023 SIF Agreement.

For the nine months ended June 30, 2025 and 2024, we recorded grant income of $0.5 million and $0.6 million, respectively, related to the 2023 SIF Agreement.

In October 2023, we entered into $10.0 million revolving credit agreement with an entity controlled by the Company’s Chief Executive Officer and Secretary and member of our board of directors (Credit Agreement), providing an unsecured revolving credit facility, with a credit limit of $3.5 million (Credit Limit) which was available immediately.

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The Canaccord ATM was terminated in October 2024.

At March 31, 2025, we had an accumulated deficit of $61.9 million and working capital of $13.5 million, including $13.9 million in cash and cash equivalents.

In the six months ended, March 31, 2025, we received proceeds of $1.5 million from the initial sale of Series A-1 Preferred Shares to the Series A-1 Purchaser and gross proceeds of $15.0 million from the sale of common shares and Series B-1 Preferred Shares in a private placement.

We expect that our cash and cash equivalents at March 31, 2025, including the net proceeds from the Series A-1 Purchase Agreement, the $15.0 million in gross proceeds from the sale of common shares and Series B-1 Preferred Shares, HCW ATM and reimbursements of eligible R&D expenses under the 2023 SIF Agreement will be used to fund our operating expenses including the advancement of the Vitiligo program through the end of fiscal 2026.

At June 30, 2025, we had an accumulated deficit of $63.6 million and working capital of $12.1 million, including $12.4 million in cash and cash equivalents.

In the nine months ended, June 30, 2025, we received proceeds of $1.5 million from the initial sale of Series A-1 Preferred Shares to the Series A-1 Purchaser and gross proceeds of $15.0 million from the sale of common shares and Series B-1 Preferred Shares in a private placement.

We expect that our cash and cash equivalents at June 30, 2025, including the net proceeds from the Series A-1 Purchase Agreement, the $15.0 million in gross proceeds from the sale of common shares and Series B-1 Preferred Shares, HCW ATM and reimbursements of eligible R&D expenses under the 2023 SIF Agreement will be used to fund our operating expenses including the advancement of the vitiligo program through the end of fiscal 2026.

Management has flexibility to adjust this timeline by making changes to planned expenditures related to, among other factors, the size and timing of clinical trial expenditures and manufacturing campaigns, staffing levels, and the acquisition or in-licensing of new product candidates.

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Net cash used in operating activities

Net cash used in operating activities was $3.9 million for the six months ended March 31, 2025 compared to $3.1 million for the six months ended March 31, 2024, primarily due to an improvement in net loss offset by an investment in working capital of $0.9 million, compared to a recovery of working capital $63,000 in the comparable period.

Net cash used in operating activities was $5.6 million for the nine months ended June 30, 2025 compared to $3.9 million for the nine months ended June 30, 2024, primarily due to an improvement in net loss offset by an investment in working capital of $1.1 million, compared to a recovery of working capital $0.7 million in the comparable period.

Net cash used in investing activities

There was no cash used in investing activities for the six months ended March 31, 2025 and 2024, respectively.

There was no cash used in investing activities for the nine months ended June 30, 2025 and 2024, respectively.

Net cash provided by financing activities

Net cash provided by financing activities was $16.8 million for the six months ended March 31, 2025, as compared to $0.5 million for the six months ended March 31, 2024.

Net cash provided by financing activities was $16.8 million for the nine months ended June 30, 2025, as compared to $0.6 million for the nine months ended June 30, 2024.

In the current period, we received $15.0 million in proceeds from the sale of common shares and the sale of Series B-1 Preferred Shares, $1.5 million in proceeds from the sale of the Series A-1 Preferred Shares and proceeds of $0.8 million from the HCW ATM, partially offset by issuance costs of $0.5 million.

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R&D expenses, which have historically varied based on the level of activity in our clinical programs, are significantly influenced by study initiation expenses and patient recruitment rates, and as a result are expected to continue to fluctuate, sometimes substantially.

Our R&D expenses were $0.5 million and $1.5 million for the three and six months ended March 31, 2025, compared to $1.2 million and $1.9 million for the three and six months ended March 31, 2024.

The decrease was primarily related to lower clinical expenses related to EB05 (paridiprubart), partially offset by an increase in costs related to EB06 as we prepare for the Phase 2 clinical study.

Our R&D expenses were $0.9 million and $2.4 million for the three and nine months ended June 30, 2025, compared to $0.9 million and $2.8 million for the same period last year.

The decrease was primarily related to lower clinical expenses related to EB05, partially offset by an increase in costs related to EB06 as we prepare for the Phase 2 clinical study.

Off-Balance Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements