What changed in this filing

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Item 1. Financial Statements

2026-05-14 compared with 2026-02-13 · 195 added, 142 removed, 466 unchanged (42% of the section changed)

2 unchanged sentences

Condensed Interim Consolidated Balance Sheets

December 31, 2025

March 31, 2026

September 30, 2025

26 unchanged sentences

Edesa Biotech, Inc.

Condensed Interim Consolidated Statements of Operations

Condensed Interim Consolidated Statements of Operations and Comprehensive Loss

Three Months Ended

December 31, 2025

December 31, 2024

Six Months Ended

March 31, 2026

March 31, 2025

March 31, 2026

March 31, 2025

Research and development

4 unchanged sentences

Interest income

Foreign exchange (loss)

Foreign exchange gain (loss)

Loss before income taxes

Income tax expense

Exchange differences on translation

5 unchanged sentences

Condensed Interim Consolidated Statements of Cash Flows

Three Months Ended

December 31, 2025

December 31, 2024

Six Months Ended

March 31, 2026

March 31, 2025

Cash flows from operating activities:

8 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of common shares

Proceeds from issuance of common shares and warrants

Proceeds from issuance of Series A-1 preferred shares and warrants

Payments for issuance costs of common shares

Proceeds from issuance of Series B-1 preferred shares

Payments for issuance costs of common shares and warrants

Payment for issuance costs of preferred shares

Payment for issuance costs of warrants

Net cash provided by financing activities

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Total Shareholders' Equity

Three Months Ended December 31, 2025

Three Months Ended March 31, 2026

Balance - December 31, 2025

Issuance of common shares upon exercise of restricted share units

Issuance of common shares upon exercise of Series B-1 Preferred shares, net of issuance cost

Issuance costs

Preferred return on Series A-1 preferred shares

Share-based compensation

Net loss and comprehensive loss

Balance - March 31, 2026

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 Series A-1 preferred shares

Share-based compensation

Net loss and comprehensive loss

Balance - March 31, 2025

Six Months Ended March 31, 2026

Balance - September 30, 2025

1 unchanged sentence

Issuance of common shares upon exercise of restricted share units

Issuance of common shares upon exercise of Series B-1 Preferred shares, net of issuance cost

Issuance costs

2 unchanged sentences

Net loss and comprehensive loss

Balance - December 31, 2025

Three Months Ended December 31, 2024

Balance - March 31, 2026

Six Months Ended March 31, 2025

Balance - September 30, 2024

Issuance of common shares

Issuance of Class A preferred shares and warrants

Issuance of Series A-1 preferred shares and warrants

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

Preferred return on Series A-1 preferred shares

Share-based compensation

Net loss and comprehensive loss

Balance - December 31, 2024

Balance - March 31, 2025

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

9 unchanged sentences

These condensed interim 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 three months ended December 31, 2025, the Company incurred a comprehensive loss of $ 2.3 million resulting in an accumulated deficit of $ 68.2 million.

For the three months ended December 31, 2025, the Company had a net cash outflow from operating activities of $ 2.1 million and ended the quarter with $ 12.1 million in cash and cash equivalents and a net working capital surplus of $ 12.0 million.

For the six months ended March 31, 2026, the Company incurred a comprehensive loss of $ 6.5 million resulting in an accumulated deficit of $ 72.5 million.

For the six months ended March 31, 2026, the Company had a net cash outflow from operating activities of $ 4.1 million and ended the period with $ 10.0 million in cash and cash equivalents and a net working capital surplus of $ 8.2 million.

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.

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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 months ended December 31, 2025 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ending September 30, 2026.

Operating results for the three and six months ended March 31, 2026 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ending September 30, 2026.

Use of estimates

25 unchanged sentences

Intangible assets, net consisted of the following:

March 31, 2026

September 30, 2025

2 unchanged sentences

Total intangible assets, net

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

Amortization expense amounted to $ 0.03 million for each of the three months ended March 31, 2026 and March 31, 2025 and $ 0.05 million for each of the six months ended March 31, 2026 and March 31, 2025.

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

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Research and other commitments

The Company has commitments for contract manufacturing and other service providers for chemistry, manufacturing and controls and related development activities associated with its product candidates.

Aggregate future contractual payments at December 31, 2025 are as follows:

The Company has commitments for contract manufacturing and other service providers for chemistry, contract research organizations, manufacturing and controls and related development activities associated with its product candidates.

Aggregate future contractual payments at March 31, 2026 are as follows:

September 30, 2026

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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 months ended December 31, 2025 and 2024.

No milestone, royalty or sublicensing payments were made to the third party during the three and six months ended March 31, 2026 and 2025.

In connection with this license agreement and pursuant to a purchase agreement entered into in April 2020, the Company acquired drug substance of one of the Constructs for an aggregate purchase price of $ 5.0 million.

No expense was recorded during the three months ended December 31, 2025 and December 31, 2024.

No expense was recorded during the three and six months ended March 31, 2026 and 2025.

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.

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The Company also has a commitment to pay the third party a royalty based on net sales of the product in countries where the Company, or an affiliate, directly commercializes the product and a percentage of sublicensing revenue received by the Company and its affiliates in the countries where it does not directly commercialize the product.

No license or royalty payments were made to the third party during the three months ended December 31, 2025 and 2024, respectively.

No license or royalty payments were made to the third party during the three and six months ended March 31, 2026 and 2025.

In March 2021, through its Ontario subsidiary, the Company entered into a license agreement with the inventor of the same pharmaceutical product to acquire global rights for all fields of use beyond those named under the 2016 license agreement.

1 unchanged sentence

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 each of the three months ended December 31, 2025, and December 31, 2024, the Company recorded an expense of $ 25,000 as a result of meeting milestones outlined in the 2021 license agreement.

For the three and six months ended March 31, 2026 and March 31, 2025, the Company recorded an expense of $ 25,000 and $ 50,000 , respectively, related to the quarterly fixed license fee under the 2021 license agreement.

Capital Shares

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The Series B-1 Preferred Shares are presented as permanent shareholders’ equity.

The Series B-1 Preferred Shares did not exist in the comparative period;

therefore, no prior-period disclosure is presented.

Series B-1 Convertible

Preferred Shares (#)

Series B-1 Convertible

Preferred Shares

Three Months Ended December 31, 2025

During the six months ended March 31, 2026, 98 Series B-1 Preferred Shares were converted into 510,415 Common Shares.

The Series B-1 Preferred Shares were issued on February 12, 2025 and were outstanding during the comparative period.

Series B-1 Convertible Preferred Shares (#)

Series B-1 Convertible Preferred Shares

Six Months Ended March 31, 2026

Balance - September 30, 2025

Balance - December 31, 2025

Issuance costs relieved upon conversion

Balance - March 31, 2026

Series A-1 Preferred Shares Offering

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The fair value of the Series A-1 Preferred Shares was determined as a reference to the fair value of Common Shares on the issuance date and the fair value of the warrants was determined using Black-Scholes option pricing model as detailed below.

The Series A-1 Convertible Preferred Shares did not exist in the comparative period;

therefore, no prior-period disclosure is presented.

Series A-1 Convertible

Preferred Shares (#)

Series A-1 Convertible

Preferred Shares

Three Months Ended December 31, 2025

The Series A-1 Convertible Preferred Shares were issued on October 30, 2024 and were outstanding during the comparative period.

Series A-1 Convertible Preferred Shares (#)

Series A-1 Convertible Preferred Shares

Six Months Ended March 31, 2026

Balance - September 30, 2025

Preferred return on Series A-1 Preferred Shares

Balance - December 31, 2025

Balance - March 31, 2026

At The Market offering agreement

2 unchanged sentences

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 three months ended December 31, 2025, the Company sold 1,177,568 common shares pursuant to the ATM Agreement under the prospectus supplement filed on September 9, 2025 for net proceeds of approximately $ 3.4 million, after deducting sales agent commissions.

For the six months ended March 31, 2026, the Company sold 1,177,568 common shares pursuant to the ATM Agreement under the prospectus supplement filed on September 9, 2025 for net proceeds of approximately $ 3.4 million, after deducting sales agent commissions.

For the three months ended March 31, 2026, the Company did not sell any common shares pursuant to the ATM Agreement.

On December 12, 2025, the Company filed a prospectus supplement with the SEC authorizing the offer and sale of up to approximately $ 2.26 million of common shares pursuant to the ATM Agreement.

The Company did not sell any common shares under the December 12, 2025 prospectus supplement.

The Company has not sold any common shares under the December 12, 2025 prospectus supplement.

Black-Scholes option valuation model

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Number of Warrant Shares (#)

Weighted Average Exercise

Three Months Ended December 31, 2025

Weighted Average Exercise Price

Six Months Ended March 31, 2026

Balance - September 30, 2025

Balance - December 31, 2025

Three Months Ended December 31, 2024

Balance - March 31, 2026

Six Months Ended March 31, 2025

Balance - September 30, 2024

Balance - December 31, 2024

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

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

Balance - March 31, 2025

The weighted average contractual life remaining on the outstanding warrants at March 31, 2026 is 29 months.

The following table summarizes information about the warrants outstanding at March 31, 2026:

Number of Warrants (#)

Exercise Prices

February 2026

September 2027

The fair value of warrants issued during the three months ended December 31, 2024 were estimated using the Black-Scholes option valuation model using the following assumptions:

Three Months Ended

December 31,2024

No warrants were issued during the six months ended March 31, 2026.

The fair value of warrants issued 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

Class A Pref Share

Risk free interest rate

Expected life

Expected life (in years)

Expected share price volatility

4 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 December 31, 2025 is 690,309 .

The remaining number of shares available to grant at March 31, 2026 is 624,099 .

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

2 unchanged sentences

Number of Options (#)

Weighted Average

Exercise Price

Weighted Average Grant

Date Fair Value

Three Months Ended December 31, 2025

Weighted Average Exercise Price

Weighted Average Grant Date Fair Value

Six Months Ended March 31, 2026

Balance - September 30, 2025

Balance - December 31, 2025

Three Months Ended December 31, 2024

Balance - March 31, 2026

Six Months Ended March 31, 2025

Balance - September 30, 2024

Balance - December 31, 2024

There were no options exercised during each of the three months ended December 31, 2025 and 2024.

The intrinsic value of options outstanding at December 31, 2025 was $ 0.00 .

The weighted average contractual life remaining on the outstanding options at December 31, 2025 is 65 months.

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

Balance - March 31, 2025

There were no options exercised during each of the three and six months ended March 31, 2026 and 2025.

The intrinsic value of options outstanding at March 31, 2026 was $ 344 .

The weighted average contractual life remaining on the outstanding options at March 31, 2026 is 63 months.

The following table summarizes information about the options under the 2019 Plan outstanding and exercisable at March 31, 2026:

Number of Options (#)

Exercisable at

December 31, 2025 (#)

March 31, 2026 (#)

Range of Exercise Prices

6 unchanged sentences

August 2026 - July 2033

The options exercisable at December 31, 2025 had a weighted average exercise price of $ 25.21 and an intrinsic value of $ 0.00 and a weighted average remaining life of 65 months.

There were 10,157 options at December 31 2025 that had not vested with a weighted average exercise price of $ 6.21 and an intrinsic value of $ 0.00 and a weighted average remaining life of 89 months.

As of December 31, 2025, the Company had approximately $ 3,644 of unrecognized share-based compensation expense, which is expected to be recognized over a period of 12 months.

The options exercisable at March 31, 2026 had a weighted average exercise price of $ 24.93 and an intrinsic value of $ 249 and a weighted average remaining life of 63 months.

There were 4,572 options at March 31, 2026 that had not vested with a weighted average exercise price of $ 5.76 and an intrinsic value of $ 95 and a weighted average remaining life of 86 months.

As of March 31, 2026, the Company had approximately $ 935 of unrecognized share-based compensation expense, which is expected to be recognized through June 30, 2026.

Restricted share units

2 unchanged sentences

The fair value of RSUs is determined based on the market price of the Company’s common shares on the grant date.

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

The following is a summary of changes in the status of RSUs from October 1, 2025 through March 31, 2026:

Number of RSU (#)

Weighted Average Grant

Date Fair Value

Three Months Ended December 31, 2025

Weighted Average Grant Date Fair Value

Six Months Ended March 31, 2026

Balance - September 30, 2025

Balance - December 31, 2025

Three Months Ended December 31, 2024

Balance - March 31, 2026

Six Months Ended March 31, 2025

Balance - September 30, 2024

Balance - December 31, 2024

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

Balance - March 31, 2025

The following table summarizes information about the RSUs under the 2019 Plan outstanding and exercisable at March 31, 2026:

Number of RSU (#)

Exercisable at

December 31, 2025 (#)

March 31, 2026 (#)

Fully-vested RSUs

August 2033 - December 2035

August 2033 - March 2036

Vesting in the next 12 months

2 unchanged sentences

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.

Certain RSUs 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 December 31, 2025, the Company had approximately $ 1.5 million of unrecognized restricted share unit compensation expense, which is expected to be recognized over a period of 29 months.

The Company recorded $ 0.40 million and $ 0.08 million of share-based compensation expenses for the three months ended December 31, 2025 and 2024, respectively.

As of March 31, 2026, the Company had approximately $ 1.1 million of unrecognized restricted share unit compensation expense, which is expected to be recognized over a period of 26 months.

The Company recorded $ 0.48 million and $ 0.07 million of share-based compensation expenses for the three months ended March 31, 2026 and 2025, respectively, and $ 0.88 million and $ 0.15 million for the six months ended March 31, 2026 and 2025, respectively.

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

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The 2023 SRF Agreement will expire on the later of December 31, 2045 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.

Under the 2023 SRF Agreement the Company recorded grant income of $ 0.1 million and $ 0.3 million for the three months ended December 31, 2025 and December 31, 2024, respectively.

Under the 2023 SRF Agreement the Company recorded grant income of $ 0.1 million and $ 0.1 million for the three months ended March 31, 2026 and March 31, 2025, respectively, and $ 0.2 million and $ 0.4 million for the six months ended March 31, 2026 and March 31, 2025, respectively.

Financial Instruments

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The Company does not believe that the results of operations or cash flows would be affected to any significant degree by a significant change in market interest rates, relative to interest rates on cash and cash equivalents due to the short-term nature of these balances.

The Company is also exposed to credit risk at year end from the carrying value of its cash and cash equivalents and accounts and other receivable.

The Company is also exposed to credit risk at period end from the carrying value of its cash and cash equivalents and accounts and other receivable.

The Company manages this risk by maintaining bank accounts with Canadian Chartered Banks, U.S.

banks believed to be credit worthy and money market mutual funds of U.S.

banks believed to be creditworthy and money market mutual funds of U.S.

government securities.

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

At December 31, 2025, the Company and its Canadian subsidiary had assets denominated in Canadian dollars of approximately C$ 2.1 million and the U.S.

At March 31, 2026, the Company and its Canadian subsidiary had assets denominated in Canadian dollars of approximately C$ 3.4 million and the U.S.

dollar exchange rate at this date was equal to 1.3933 Canadian dollars.

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

Based on the exposure at March 31, 2026, a 10% annual change in the Canadian/U.S.

exchange rate would impact the Company’s loss and other comprehensive loss by approximately $ 0.2 million.

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In connection with the Series B-1 Purchase Agreement, on February 12, 2025, the Company also entered into an Investor Rights Agreement (“IRA”) with the Series B-1 Investors, whereby the Company agreed to provide the Series B-1 Investors with certain registration and other rights.

The IRA provides that the board of directors, following the Company’s annual meeting to be held on May 28, 2025, shall consist of seven members, one of whom shall be a director nominated by the lead investor (the “Lead Investor Nominee”), who shall serve on the board effective as of the Closing Date, until the earlier of such time as (i) the lead investor no longer holds at least 51% of the Common Shares (calculated on an as-converted-to-Common Shares basis), subject to appropriate adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization with respect to the Common Shares issued in the private placement, or (ii) the lead investor beneficially owns less than 5% of the outstanding Common Shares as a result of a disposition of shares (such period, the “Lead Investor Rights Period”).

The Company also agreed to use its reasonable best efforts to solicit shareholder approval of the Lead Investor Nominee at each general or special meeting of shareholders of the Company at which an election of directors is held during the Lead Investor Right Period.

The IRA provides that the board of directors, following the Company’s annual meeting held on May 28, 2025, shall consist of seven members, one of whom shall be a director nominated by the lead investor (the “Lead Investor Nominee”), who shall serve on the board effective as of the Closing Date, until the earlier of such time as (i) the lead investor no longer holds at least 51% of the Common Shares (calculated on an as-converted-to-Common Shares basis), subject to appropriate adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization with respect to the Common Shares issued in the private placement, or (ii) the lead investor beneficially owns less than 5% of the outstanding Common Shares as a result of a disposition of shares (such period, the “Lead Investor Rights Period”).

Additionally, the IRA includes certain protective provisions that restrict the Company’s ability to, among other things, (i) amend, modify, alter or repeal any provision of the Company’s governing documents in a manner adverse to the holders of Series B-1 Preferred Shares, (ii) alter or change the special rights and restrictions of the Series B-1 Preferred Shares and (iii) increase or decrease the authorized number of Series B-1 Preferred Shares, in each case, without the written consent of the lead investor.

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See Note 5 – Series A-1 Convertible Preferred Shares offering.

During each of the three months ended December 31, 2025 and 2024, the Company paid cash of $ 19,000 and $ 18,000 , respectively, for a month to month lease from a company controlled by the Company's CEO.

During the three and six months ended March 31, 2026 and 2025, the Company paid cash of approximately $ 19,000 and $ 39,000 in 2026, and $ 18,000 and $ 37,000 in 2025, 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.

No rent was payable at December 31, 2025, while approximately $ 7,000 was payable at December 31, 2024.

During the three months ended December 31, 2025 and 2024, the Company incurred standby charges of $ 0 and $ 4,000 , respectively, related to the Credit Agreement.

The Company extended the lease beyond its December 31, 2024 expiration to November 30, 2025 and upon expiry the lease is month to month and either party will have the right to terminate on 30 days’ notice.

Approximately $ 6,000 of rent was payable at March 31, 2026, while approximately $ 13,000 was payable at March 31, 2025.

During the three and six months ended March 31, 2026 and 2025, the Company did not incur any standby charges related to the Credit Agreement.

The Credit Agreement was terminated in October 2024.

Prior to its termination, the Company had not borrowed any funds under the agreement and incurred no termination penalties.

At September 30, 2025, accounts and other receivable included immaterial balance due from certain executive officers related to foreign exchange payroll adjustments recorded during fiscal 2025.

These amounts were fully recovered through scheduled deductions during the three months ended December 31, 2025.

As of December 31, 2025, the Company did not have any loans or other receivables outstanding from its directors or executive officers.

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 December 31, 2025 and our audited consolidated financial statements for the year ended September 30, 2025 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or the SEC, on December 12, 2025.

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, 2026 and our audited consolidated financial statements for the year ended September 30, 2025 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or the SEC, on December 12, 2025.

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

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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 December 31, 2025 and September 30, 2025 and for the three months ended December 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 March 31, 2026 and September 30, 2025 and for the three and six months ended March 31, 2026 and 2025 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.

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

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

Subject to regulatory approval, we anticipate initiating siteactivation and patient 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.

This asset is at the partnering stage.

Our most advanced Respiratory drug candidate is EB05 (“paridiprubart”).

Our most advanced Respiratory drug candidate is paridiprubart.

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.

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.

We are currently evaluating subgroup data for additional efficacy signals among subjects with certain comorbidities.

We subsequently reported positive additional data from the same study.

These results represent a broader, 278-patient population, which includes both previously reported 104 patients requiring invasive mechanical ventilation (“IMV”) as well as 174 non-IMV patients.

Across this full population, paridiprubart demonstrated a statistically significant reduction in 28-day mortality.

Treatment benefits were consistent across severity groups and in patients with serious comorbidities.

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

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We are also pursuing additional uses for paridiprubart in chronic diseases.

Recent Developments

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.

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 three months ended December 31, 2025, we sold 1,177,568 common shares pursuant to the HCW ATM under the prospectus supplement filed on September 9, 2025 for net proceeds of approximately $3.4 million, after deducting sales agent commissions.

On December 12, 2025, we filed a prospectus supplement with the SEC authorizing the offer and sale of up to approximately $2.26 million of common shares pursuant to the HCW ATM.

We did not sell any common shares under the December 12, 2025 prospectus supplement.

Significant Accounting Policies and Estimates

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Results of Operations

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

Total operating expenses increased by $0.4 million to $2.3 million for the three months ended December 31, 2025 compared to $1.9 million for the same period last year.

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

Three Months Ended December 31, 2025

December 31, 2025

December 31, 2024

Comparison of the Three Months Ended March 31, 2026 and 2025

Total operating expenses increased by $2.7 million to $4.3 million for the three months ended March 31, 2026 compared to $1.6 million for the same period last year.

The following table summarizes our R&D expenses incurred during the three months ended March 31, 2026 and 2025, together with the dollar increase or decrease in those items:

Three Months Ended

March 31, 2026

March 31, 2025

Program-specific external costs:

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Total research and development costs

Research and development (“R&D”) expenses increased by $0.1 million to $1.1 million for the three months ended December 31, 2025 compared to $1.0 million for the same period last 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 unallocated research costs, which were offset by decreased expenses related to the completion of the Phase 3 study of paridiprubart (“EB05”).

Research and development (“R&D”) expenses increased by $2.3 million to $2.8 million for the three months ended March 31, 2026 compared to $0.5 million for the same period last 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;

increased expenses related to regulatory and manufacturing readiness for paridiprubart, and increased unallocated research costs.

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;

2 unchanged sentences

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

General and administrative (“G&A”) expenses increased by $0.3 million to $1.2 million for the three months ended December 31, 2025 compared to $0.9 million for the same period last year primarily due to an increase in noncash share-based compensation.

General and administrative (“G&A”) expenses increased by $0.3 million to $1.5 million for the three months ended March 31, 2026 compared to $1.2 million for the same period last year primarily due to an increase in salaries and related costs, and 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 decreased by approximately $0.2 million to $0.1 million for the three months ended December 31, 2025 compared to $0.3 million 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 December 31, 2025 compared to $0.3 million for the same period last year, reflecting a decrease in grant income associated with reimbursable expenses under the 2023 SRF Agreement.

Interest income was nominal for the three months ended December 31, 2025 and 2024, primarily due to minimal interest earned on cash balances and lower average interest rates.

Foreign exchange loss decreased to $9,000 for the three months ended December 31, 2025 compared to $21,000 for the same period in 2024.

For the three months ended December 31, 2025, our net loss was $2.2 million, or $0.28 per common share, compared to a net loss of $1.6 million, or $0.48 per common share for the three months ended December 31, 2024.

Total other income increased by approximately $30,000 to $79,000 for the three months ended March 31, 2026 compared to $49,000 for the same period last year and was composed of the following:

Grant income increased by $14,000 to $66,000 for the three months ended March 31, 2026 compared to $52,000 for the same period last year, reflecting an increase in grant income associated with reimbursable expenses under the 2023 SRF Agreement.

Interest income was nominal for the three months ended March 31, 2026 and 2025, primarily due to minimal interest earned on cash balances and lower average interest rates.

Foreign exchange gain increased to approximately $13,000 for the three months ended March 31, 2026 compared to a foreign exchange loss of approximately $3,000 for the same period in 2025.

For the three months ended March 31, 2026, our net loss was $4.2 million, or $0.49 per common share, compared to a net loss of $1.6 million, or $0.30 per common share for the three months ended March 31, 2025.

Comparison of the Six Months Ended March 31, 2026 and 2025

Total operating expenses increased by $3.1 million to $6.6 million for the six months ended March 31, 2026 compared to $3.5 million for the same period last year.

The following table summarizes our R&D expenses incurred for the six months ended March 31, 2026 and 2025, together with the dollar increase or decrease in those items:

Six Months Ended

March 31, 2026

March 31, 2025

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

R&D expenses increased by $2.4 million to $3.9 million for the six months ended March 31, 2026 compared to $1.5 million for the same period last 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 unallocated research costs, which were partially offset by decreased expenses related to the completion of the Phase 3 study of paridiprubart.

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.

G&A expenses increased by $0.7 million to $2.7 million for the six months ended March 31, 2026 compared to $2.0 million for the same period last year primarily due to an increase in salaries and related costs, and 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 decreased by approximately $158,000 to $173,000 for the six months ended March 31, 2026 compared to $331,000 for the same period last year and was composed of the following:

Grant income decreased by $184,000 to $169,000 for the six months ended March 31, 2026 compared to $353,000 for the same period last year, reflecting a decrease in grant income associated with reimbursable expenses under the 2023 SRF Agreement.

Interest income was nominal for the six months ended March 31, 2026 and 2025, primarily due to minimal interest earned on cash balances and lower average interest rates.

Foreign exchange gain increased to $4,000 for the six months ended March 31, 2026 compared to a foreign exchange loss of $25,000 for the same period in 2025.

For the six months ended March 31, 2026, our net loss was $6.5 million, or $0.78 per common share, compared to a net loss of $3.2 million, or $0.74 per common share for the six months ended March 31, 2025.

Capital Expenditures

Our capital expenditures primarily consist of computer and office equipment.

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

There were no significant capital expenditures for the three and six months ended March 31, 2026 and 2025.

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 $2.1 million for the three months ended December 31, 2025, compared to $1.5 million for the same period in 2024.

We incurred net losses of $2.2 million for the three months ended December 31, 2025, compared to $1.6 million for the same period in 2024.

We ended the quarter with $12.1 million in cash and cash equivalents and working capital of $12.0 million, compared to $10.8 million in cash and cash equivalents and working capital of approximately $10.4 million as of September 30, 2025.

Net cash used in operating activities was $4.1 million for the six months ended March 31, 2026, compared to $3.9 million for the same period in 2025.

We incurred net losses of $6.5 million for the six months ended March 31, 2026, compared to $3.2 million for the same period in 2025.

We ended the period with $10.0 million in cash and cash equivalents and working capital of $8.2 million, compared to $10.8 million in cash and cash equivalents and working capital of approximately $10.4 million as of September 30, 2025.

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.

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

During the six months ended March 31, 2026, 98 Series B-1 Preferred Shares were converted into 510,415 common shares.

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%.

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Such registration statement replaced our previous shelf registration statement that expired in August 2025.

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 the three months ended December 31, 2025, we sold a total of 1,177,568 common shares pursuant to the HCW ATM agreement for net proceeds of approximately $3.4 million.

For the three months ended December 31, 2024, we sold 220,269 common shares for net proceeds of approximately $0.6 million pursuant to the HCW ATM .

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

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 the six months ended March 31, 2026, we sold a total of 1,177,568 common shares pursuant to the HCW ATM agreement for net proceeds of approximately $3.4 million.

For the six months ended March 31, 2025, we sold 3,772,803 common shares for net proceeds of approximately $7.2 million pursuant to the HCW ATM.

We did not sell any common shares pursuant to the HCW ATM during the three months ended March 31, 2026.

On December 12, 2025, we filed a prospectus supplement with the SEC to increase the maximum aggregate offering amount of common shares issuable under the HCW ATM by $2.26 million.

We have not sold any common shares under the December 12, 2025 prospectus supplement.

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.

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

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

For the three and six months ended March 31, 2026 and 2025, we recorded grant income of $0.1 million and $0.1 million, and $0.2 million and $0.4 million, respectively, related to the 2023 SRF Agreement.

On September 30, 2025, the 2023 SRF 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.

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

At December 31, 2025, we had an accumulated deficit of $68.2 million and working capital of $12.0 million, including $12.1 million in cash and cash equivalents.

We expect that our cash and cash equivalents at December 31, 2025, future sales of common shares pursuant to the HCW ATM and reimbursements of eligible R&D expenses under the 2023 SRF Agreement will not be sufficient to fund our operating expenses including the advancement of the vitiligo program through the end of fiscal 2026.

At March 31, 2026, we had an accumulated deficit of $72.5 million and working capital of $8.2 million, including $10.0 million in cash and cash equivalents.

We expect that our cash and cash equivalents at March 31, 2026, future sales of common shares pursuant to the HCW ATM and reimbursements of eligible R&D expenses under the 2023 SRF 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 $2.1 million for the three months ended December 31, 2025 compared to $1.5 million for the three months ended December 31, 2024, primarily due to a higher net loss and an increase in our investment in working capital of $0.3 million.

Net cash used in operating activities was $4.1 million for the six months ended March 31, 2026 compared to $3.9 million for the six months ended March 31, 2025, primarily due to a higher net loss, partially offset by higher noncash share-based compensation and favorable net changes in working capital.

Favorable net changes in working capital were driven primarily by a $0.4 million decrease in accounts and other receivable and a $1.1 million increase in accounts payable and accrued liabilities, partially offset by a $0.1 million increase in prepaid expenses and other current assets.

Net cash used in investing activities

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

There was no cash used in investing activities for the six months ended March 31, 2026 and 2025, respectively.

Net cash provided by financing activities

Net cash provided by financing activities was $3.4 million for the three months ended December 31, 2025 compared to $2.1 million for the three months ended December 31, 2024.

In the current period, we received approximately $3.5 million of net proceeds from sales under the HCW ATM, partially offset by approximately $0.1 million of offering costs.

In the comparable period, we received approximately $0.6 million of net proceeds from sales under the HCW ATM and $1.5 million from the sale of the Series A-1 Preferred Shares, partially offset by approximately $0.1 million of offering costs.

Net cash provided by financing activities was approximately $3.3 million for the six months ended March 31, 2026 compared to $16.8 million for the six months ended March 31, 2025, primarily due to lower proceeds from financing activities during the current period.

During the six months ended March 31, 2026, financing cash flows primarily related to net proceeds from issuances of common shares under the HCW ATM, net of issuance costs.

During the six months ended March 31, 2025, financing cash flows primarily related to proceeds from issuances of common shares and the Series A-1 and Series B-1 preferred share financings, net of issuance costs.

Research and Development

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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 $ 1.1 million and $1.0 million for the three months ended December 31, 2025 and 2024, respectively.

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.

Our R&D expenses were $2.8 million and $0.5 million for the three months ended March 31, 2026 and 2025, respectively, and $3.9 million and $1.5 million for the six months ended March 31, 2026 and 2025, respectively.

For the three months ended March 31, 2026, the increase was primarily due to increased expenses for manufacturing-related activities and other preparations for the planned Phase 2 clinical study of EB06 in vitiligo patients;

increased expenses related to regulatory and manufacturing readiness for paridiprubart;

and increased unallocated research costs.

For the six months ended March 31, 2026, the increase was 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 unallocated research costs, which were partially offset by decreased expenses related to the completion of the Phase 3 study of paridiprubart.

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