What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-12-12 compared with 2024-12-13 · 61 added, 48 removed, 150 unchanged (42% of the section changed)

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Our present policy is to retain future earnings, if any, for use in our operations and the expansion of our business.

Any future determination to pay dividends will be made at the discretion of our board of directors.

Any future determination to pay dividends will be made at the discretion of our Board.

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

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Food and Drug Administration (“FDA”) for the same study.

Subject to regulatory approval, we anticipate initiating enrollment by midyear 2026.

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.

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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.

In October 2025, we reported that paridiprubart met primary and secondary endpoints with statistical significance, providing clinically meaningful improvement in survival and recovery, in a truncated Phase 3 clinical study of hospitalized patients with Acute Respiratory Distress Syndrome (“ARDS”), a life-threatening form of respiratory failure.

Paridiprubart is also being evaluated in an ongoing U.S.

government-funded platform study investigating three novel threat-agnostic HDTs in hospitalized patients with ARDS.

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.

Operating and Financial Review and Prospects

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and Edesa Biotech USA, Inc.

Our operations have been funded primarily through issuances of common shares, exercises of common share purchase warrants, convertible preferred shares, convertible loans, government grants and tax incentives.

Our operations have been funded primarily through issuances of common shares and preferred shares, exercises of common share purchase warrants, convertible preferred shares, convertible loans, government grants and tax incentives.

We have devoted substantially all of our efforts to research and development, including clinical trials, and have not completed the development of any of our drug candidates.

We expect that our cash and cash equivalents, at September 30, 2024, together with the proceeds from the sale of Preferred Shares to PN MPC, net proceeds from the HCW ATM and reimbursements of eligible R&D expenses under the 2023 SIF Agreement will not be sufficient to fund our operating expenses for one year after the date of this filing and therefore management has concluded that substantial doubt exists about our ability to continue as a going concern.

We expect that our cash and cash equivalents at September 30, 2025, which include proceeds from our 2025 equity financings, together with net proceeds from the HCW ATM (as defined below) and reimbursements of eligible R&D expenses under the 2023 SIF Agreement may not be sufficient to fund our operating expenses for one year after the date of this filing, unless the Company raises additional capital or delays its current EB06 development program.

Accordingly, management has concluded that substantial doubt exists about our ability to continue as a going concern.

We will need to raise additional capital and/or reduce our operating expenses to support the Company’s operations for at least the next 12 months.

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Fiscal Year Ended September 30, 2025 Compared to the Fiscal Year Ended September 30, 2024

Our total operating expenses decreased by $2.2 million to $7.0 million for the year ended September 30, 2024 compared to $9.2 million for the prior year:

Research and development (R&D) expenses decreased by $1.9 million to $2.9 million for the year ended September 30, 2024 compared to $4.8 million for the prior year primarily due to decreased external research expenses related to the company’s completed dermatitis study and a reduction in labor costs and noncash share-based compensation, which were partially offset by an increase in expenses related to manufacturing of paridiprubart.

Our total operating expenses increased by $0.9 million to $7.9 million for the year ended September 30, 2025 compared to $7.0 million for the prior year.

The following table summarizes our R&D expenses incurred for the years ended September 30, 2025 and 2024, together with the dollar increase or decrease in those items:

Fiscal Year End

September 30, 2025

September 30, 2024

Program-specific external costs:

Other development and discovery programs

Total program-specific costs

Unallocated internal costs

Non-program specific external costs

Unallocated internal costs

Total unallocated internal costs

Total research and development costs

Research and development (“R&D”) expenses increased by $0.8 million to $3.7 million for the year ended September 30, 2025 compared to $2.9 million for the prior year primarily due to increased expenses for manufacturing-related activities and other preparations for the planned Phase 2 clinical study of EB06 in vitiligo patients, as well as increased research expenses related to the completion of the Phase 3 study of paridiprubart (EB05) and supply costs for the ongoing United States government-funded study of paridiprubart, partially offset by lower spend on other development programs.

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;

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and clinical trials and activities related to regulatory filings for our product candidates, including regulatory consultants.

General and administrative (G&A) expenses decreased by $0.3 million to $4.1 million for the year ended September 30, 2024 compared to $4.4 million for the prior year primarily due to a decrease in noncash share-based compensation, which was partially offset by an increase in salaries and related costs.

General and administrative (“G&A”) expenses increased by $0.1 million to $4.2 million for the year ended September 30, 2025 compared to $4.1 million for the prior year primarily due to an increase in noncash share-based compensation, which was partially offset by a decrease in professional 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 was unchanged at $0.8 million for the years ended September 30, 2024 and September 30, 2023 and was composed of the following:

Total other income decreased by $0.1 million to $0.7 million for the year ended September 30, 2025 compared to $0.8 million for the prior year, and was composed of the following:

Grant income increased by $0.1 million to $0.8 million for the year ended September 30, 2025 compared to $0.7 million for the year ended September 30, 2024, reflecting an increase in grant income associated with reimbursable expenses under the 2023 SIF Agreement.

Interest income decreased by $0.1 million to $0.2 million for the year ended September 30, 2024 compared to $0.3 million for the prior year primarily due to lower cash balances.

Miscellaneous other income was $15,000 for the year ended September 30, 2024 related to loan forgiveness on the CEBA loan that was repaid in the year.

Foreign exchange loss was unchanged at $21,000 for both the year ended September 30, 2024 and September 30, 2023.

Interest income decreased to $3,000 for the year ended September 30, 2025 from $0.2 million for the prior year, primarily due to lower interest earned on cash balances.

No miscellaneous other income was recorded in the year ended September 30, 2025 compared to $15,000 in the year ended September 30, 2024 related to loan forgiveness on the Canada Emergency Business Account (“CEBA”) loan that was repaid during the year.

Foreign exchange loss increased to $59,000 in the year ended September 30, 2025 compared to $21,000 in the year ended September 30, 2024.

For the year ended September 30, 2025, our net loss was $7.2 million, or $1.27 per common share, compared to a net loss of $6.2 million, or $1.93 per common share, for the year ended September 30, 2024.

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We incurred net losses of $7.2 million and $6.2 million for those same years.

We ended fiscal 2025 with $10.8 million in cash and cash equivalents and working capital of $10.4 million, compared to $1.0 million in cash and cash equivalents and a working capital deficit of approximately $0.2 million as of September 30, 2024.

On February 12, 2025, we entered into a Securities Purchase Agreement (the “Series B-1 Purchase Agreement”) with a lead investor and several additional investors signatory thereto (the “Series B-1 Investors”), pursuant to which we sold to the Series B-1 Investors in a private placement, an aggregate of (i) 834 Series B-1 Preferred Shares, each of which is initially convertible into approximately 5,208 common shares (the “Series B-1 Conversion Shares”) at a conversion price of $1.92 per Series B-1 Conversion Share, and (ii) 3,468,746 common shares.

The purchase price per Series B-1 Preferred Share was $10,000 and the purchase price per common share was $1.92.

The gross proceeds were approximately $15.0 million, prior to deducting offering expenses payable by us.

A holder of Series B-1 Preferred Shares will not have the right to convert any portion of its Series B-1 Preferred Shares if, together with its affiliates, it would beneficially own in excess of 4.99% (or, at the option of the holder, 9.99%) of the number of common shares outstanding immediately after giving effect to such conversion, provided, however, that a holder may increase or decrease the beneficial ownership limitation by giving 61 days’ notice to the Company, but not to any percentage in excess of 19.99%.

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

Wainwright & Co., LLC as a sales agent (“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 $4.0 million in gross proceeds.

Subsequent to September 30, 2024, we sold a total of 220,269 common shares pursuant to the agreement for net proceeds of $0.6 million after deducting sales agent commissions.

In October 2024, we entered into a Securities Purchase Agreement with Pardeep Nijhawan Medicine Professional Corporation (PN MPC), an entity controlled by Pardeep Nijhawan, the Company’s Chief Executive Officer, Secretary and member of the board of directors of the Company, pursuant to which the Company agreed to issue and sell to PN MPC in a private placement, up to $5 million of shares (Preferred Shares) of the Company’s newly designated Series A-1 Convertible Preferred Shares, stated value $10,000 per share, each of which is initially convertible into approximately 2,903 common shares (Conversion Shares), at a conversion price of $3.445 per Conversion Share, and warrants (Warrants) to purchase common shares (Warrant Shares) at an exercise price of $3.445 per Warrant Share.

The Preferred Shares and the Warrants were being sold together in a fixed combination of one Preferred Share and a Warrant to purchase a number of common shares equal to 75% of the underlying Conversion Shares at a combined purchase price of $10,272.13 per Preferred Share and related Warrants.

Under the Purchase Agreement, PN MPC has purchased 150 Preferred Shares initially convertible into an aggregate of 435,414 Conversion Shares and Warrants to purchase up to an aggregate of 326,560 Warrant Shares for an aggregate purchase price of $1,540,819.

For the year ended September 30, 2025, the Company sold 394,057 Common Shares pursuant to the HCW ATM for net proceeds of approximately $1.0 million after deducting sales agent commissions.

Subsequent to September 30, 2025, we sold an additional 1,177,568 common shares under the HCW ATM for net proceeds of approximately $3.4 million after deducting sales agent commissions.

A new shelf registration statement on Form S-3, allowing for the offer and sale of up to $4.0 million of securities, was filed and declared effective by the SEC on September 9, 2025.

In October 2024, we entered into a Securities Purchase Agreement (the “Series A-1 Purchase Agreement”) with Pardeep Nijhawan Medicine Professional Corporation (the “Series A-1 Purchaser”), an entity controlled by Pardeep Nijhawan, our Chief Executive Officer, Secretary and member of our Board, 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 common shares (the “Series A-1 Conversion Shares”), at a conversion price of $3.445 per Series A-1 Conversion Share, and warrants (the “Warrants”) to purchase common shares (the “Warrant Shares”) at an exercise price of $3.445 per Warrant Share.

The Series A-1 Preferred Shares and the Warrants were being sold together in a fixed combination of one Series A-1 Preferred Share and a Warrant to purchase a number of common shares equal to 75% of the underlying Series A-1 Conversion Shares at a combined purchase price of $10,272.13 per Series A-1 Preferred Share and related Warrants.

Under the Series A-1 Purchase Agreement, the Series A-1 Purchaser has purchased 150 Series A-1 Preferred Shares initially convertible into an aggregate of 435,414 Series A-1 Conversion Shares and Warrants to purchase up to an aggregate of 326,560 Warrant Shares for an aggregate purchase price of $1,540,819.

The Warrants expire five years from the issuance date.

We have the right to require PN MPC to purchase additional Preferred Shares and Warrants (up to an aggregate investment of $5.0 million);

provided however, no more than an aggregate of $2.0 million of Preferred Shares and Warrants may be issued and sold pursuant to the Purchase Agreement without shareholder approval in accordance with applicable Canadian securities laws.

We have the right to require the Series A-1 Purchaser to purchase additional Series A-1 Preferred Shares and Warrants (up to an aggregate investment of $5.0 million); provided however, no more than an aggregate of $2.0 million of Series A-1 Preferred Shares and Warrants may be issued and sold pursuant to the Series A-1 Purchase Agreement without shareholder approval in accordance with applicable Canadian securities laws.

In October 2023, we entered into the 2023 SIF Agreement with the Canadian Government’s SIF.

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The remaining C$17.2 million is conditionally repayable starting in 2032 only if and when we earn gross revenue.

In February 2021, we entered into the 2021 SIF Agreement, pursuant to which we were eligible to receive cash reimbursements up to C$14.1 million in the aggregate for certain R&D expenses related to our EB05 clinical development program.

All potential funding available under the 2021 SIF Agreement has been received.

For the years ended September 30, 2025 and 2024, we recorded grant income of $0.8 million and $0.7 million, respectively, related to the 2023 SIF Agreement.

In October 2023, we entered into $10.0 million revolving credit agreement with PN MPC, an entity controlled by Pardeep Nijhawan, our 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.

On September 30, 2025, the 2023 SIF Agreement was amended to, among other things, extend the program period to December 31, 2028 from December 31, 2025 and defer the start of the conditional repayment period from 2029 to 2032.

In October 2023, we entered into a $10.0 million revolving credit agreement with PN MPC, an entity controlled by Pardeep Nijhawan, our Chief Executive Officer and Secretary and member of our Board (“Credit Agreement”), providing an unsecured revolving credit facility, with a credit limit of $3.5 million (“Credit Limit”) which was available immediately.

The line of credit bore interest at the Canadian Imperial Bank of Commerce US Base-Interest Rate plus 3% per annum and has a maturity date of March 31, 2026, unless terminated earlier by either party with 90 days’ notice.

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We incurred no termination penalties in connection with the termination of the Credit Agreement.

In August 2022, we filed a $150.0 million shelf registration statement.

In August 2022, we filed a $150.0 million shelf registration statement that expired in August 2025.

In March 2023, we entered into an equity distribution agreement with Canaccord, as sales agent, 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 $20 million in gross proceeds, subject to certain offering limitations that currently allow us to offer and sell common shares having an aggregate gross sales price of up to $8.4 million (“Canaccord ATM”).

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The Canaccord ATM was terminated in October 2024.

In November 2022, we completed a private placement of units consisting of 384,475 common shares, 12-month warrants to purchase up to an aggregate of 192,248 common shares and 3-year warrants to purchase up to an aggregate of 192,248 common shares.

The gross proceeds from this offering were approximately $3.0 million, before offering expenses.

At September 30, 2024, we had an accumulated deficit of $58.6 million and negative working capital of $0.2 million, including $1.0 million in cash and cash equivalents.

Subsequent to the September 30, 2024, we received proceeds of $1.5 million from the sale of Preferred Shares to the PN MPC.

We expect that our cash and cash equivalents at September 30, 2024, together with the proceeds from the sale of Preferred Shares to the PN MPC, net proceeds from the HCW ATM and reimbursements of eligible R&D expenses under the 2023 SIF Agreement will not be sufficient to fund our operating expenses for one year after the date of this filing and therefore management has concluded that substantial doubt exists about our ability to continue as a going concern.

At September 30, 2025, we had an accumulated deficit of $65.9 million and working capital of $10.4 million, including $10.8 million in cash and cash equivalents.

Subsequent to September 30, 2025, we received net proceeds of $3.4 million from the sale of common shares under the HCW ATM.

We expect that our cash and cash equivalents at September 30, 2025, future sales of common shares pursuant to the HCW ATM and reimbursements of eligible R&D expenses under the 2023 SIF Agreement will not be sufficient 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 $4.9 million for the year ended September 30, 2024 compared to $6.6 million for the year ended September 30, 2023 primarily due to a decrease in R&D and G&A expenses.

Net cash used in operating activities was $7.3 million for the year ended September 30, 2025 compared to $4.9 million for the year ended September 30, 2024 primarily due to an increase in R&D and G&A expenses.

Net cash used in investing activities

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Net cash provided by financing activities was $17.0 million for the year ended September 30, 2025 as compared to $0.6 million for the year ended September 30, 2024.

In the current year, we received proceeds of $0.7 million from the Canaccord ATM, partially offset by issuance costs of $0.1 million and the repayment of debt of $29,000.

In the comparative period, we received proceeds of $3.0 million from a private placement completed in November 2022, $1.3 million from the Canaccord ATM and $0.8 million from the exercise of warrants, partially offset by issuance costs of $0.3 million.

In the current year, we received proceeds of $15.0 million from the private placement of Series B-1 Preferred Shares, $1.5 million from the private placement of Series A-1 Preferred Shares and Warrants, and approximately $1.0 million of net proceeds from sales under the HCW ATM, partially offset by approximately $0.6 million of offering costs.

In the prior year, we received approximately $0.6 million of net proceeds from sales under the Canaccord ATM.

Research and Development

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Our R&D expenses were $3.7 million and $2.9 million for the years ended September 30, 2025 and 2024, respectively.

The decrease was due primarily to lower external research expenses related to our ongoing clinical studies.

The increase primarily reflects manufacturing-related activities and other preparations for the planned Phase 2 study of EB06 (vitiligo) and manufacturing support and wind-down activities for paridiprubart (EB05), including BARDA-related work, partially offset by lower spend on other discovery programs.

Foreign Exchange Risk

Our exposure to foreign exchange risk is primarily related to fluctuations between the Canadian dollar and the U.S.

We have balances in Canadian dollars which are subject to foreign currency fluctuations relating to the impact of translating to U.S.

dollars for financial statements presentation.

We have balances in Canadian dollars that are subject to foreign currency fluctuations when translated to U.S.

dollars for financial statement presentation.

We also periodically exchange U.S.

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The fluctuation of the U.S.

dollar in relation to the Canadian dollar will have an impact upon our profitability and may also affect the value of our assets and the amount of shareholders’ equity.

dollar in relation to the Canadian dollar impacts our profitability and may also affect the value of our assets and the amount of shareholders’ equity.

We have not entered into any agreements or purchased any instruments to hedge possible currency risks.

At September 30, 2025, we had assets denominated in Canadian dollars of approximately C$3.0 million and the U.S.

dollar exchange rate as at this date was equal to 1.3517 Canadian dollars.

Based on the exposure at September 30, 2024, a 10% annual change in the Canadian/U.S.

exchange rate would have a nominal impact on our net loss and other comprehensive loss.

dollar exchange rate as of this date was equal to 1.3918 Canadian dollars.

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

exchange rate would impact our net loss and other comprehensive loss by approximately $0.2 million.

Concentration of Credit Risk

We are potentially subject to financial instrument concentration of credit risk through our cash and cash equivalents, and accounts and other receivable.

We are potentially subject to financial instrument concentration of credit risk through our cash and cash equivalents and accounts and other receivables.

We place our cash and cash equivalents in money market mutual funds of U.S.

government securities or financial institutions believed to be credit worthy and perform periodic evaluations of their relative credit standing.

Accounts and other receivable include Harmonized Sales Tax (HST) refunds receivable from the Canada Revenue Agency and reimbursements receivable from the Canadian government’s SIF.

We assess the collectability of our accounts receivable through a review of our current aging and payment terms, as well as an analysis of our historical collection rate, general economic conditions and credit status of the government agencies.

As of September 30, 2024 and 2023, all outstanding accounts and other receivable were deemed to be fully collectible, and therefore, no allowance for doubtful accounts was recorded.

government securities or with financial institutions believed to be creditworthy and perform periodic evaluations of their relative credit standing.

Accounts and other receivables primarily include Harmonized Sales Tax (“HST”) refunds receivable from the Canada Revenue Agency, reimbursements receivable from the Canadian government’s SIF and other miscellaneous receivables.

We assess the collectability of our accounts and other receivables through a review of our current aging and payment terms, as well as an analysis of our historical collection rate, general economic conditions and the credit status of the relevant counterparties.

As of September 30, 2025 and 2024, all outstanding accounts and other receivables were deemed to be fully collectible, and therefore, no allowance for doubtful accounts was recorded.

Significant Accounting Policies and Estimates

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We recognize compensation expense for all share-based awards based on the estimated grant-date fair values.

For restricted share unit awards to employees, the fair value is based on the 5-day volume weighted average price (VWAP) of our common shares up to the date of grant.

The value of the portion of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period.

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We are a smaller reporting company and are not required to provide disclosure under this item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements and related financial information required to be filed hereunder are indexed under Item 15 of this Annual Report on Form 10-K and are incorporated herein by reference.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

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-K

Item 5. Market for Registrant’s Common Equity