Item 2. Management’s Discussion and Analysis
ITEM 2. MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
FORWARD-LOOKING STATEMENT NOTICE
This Quarterly Report on Form 10-Q (this Report) contains forward looking
statements that involve risks and uncertainties, principally in the sections entitled “Risk Factors,” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” All statements other than statements of historical fact
contained in this Quarterly Report, including statements regarding future events, our future financial performance, business strategy
and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking
statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,”
“estimates,” “expects,” “intends,” “may,” “plans,” “potential,”
“predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although
we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.
These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined
under “Risk Factors” or elsewhere in this Quarterly Report, which may cause our or our industry’s actual results, levels
of activity, performance or achievements expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive
and rapidly changing environment. New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can
we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual
results to differ materially from those contained in any forward-looking statements. All forward-looking statements included in this document
are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements.
You should not place undue reliance on any forward-looking
statement, each of which applies only as of the date of this Quarterly Report on Form-10-Q. Before you invest in our securities, you
should be aware that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this
Quarterly Report could negatively affect our business, operating results, financial condition and stock price. Except as required by
law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this Quarterly Report
on Form-10-Q to conform our statements to actual results or changed expectations.
Business Overview
Relmada Therapeutics, Inc. (Relmada, the Company,
we or us) (a Nevada corporation), is a publicly traded, clinical-stage biotechnology company. We substantially redesigned our development
programs following a comprehensive strategic review in late 2024 and early 2025. We concluded in our review that the most promising path
to create shareholder value was to lever our extensive drug development expertise and clinical operations capabilities by acquiring new
development candidates, while pausing further work on esmethadone (d-methadone, dextromethadone or REL-1017). Hence we accelerated ongoing
efforts to augment our development pipeline while diversifying its risk, which culminated in the licensing of NDV-01, a novel delivery
formulation of a chemotherapy regimen widely used to treat non muscle-invasive bladder cancer (NMIBC) that is currently in Phase 2, and
the acquisition of Sepranolone, a Phase 2b-ready neurosteroid with potential applications in Prader-Willi syndrome (PWS), Tourette Syndrome
(TS), essential tremor and other diseases related to excessive GABAergic activity.
Following the 2024 REL-1017 setback and subsequent post hoc analyses,
the program was terminated effective July 7, 2025.
We also had been developing REL-P11, a modified-release formulation
of psilocybin, as an investigational agent for the treatment of metabolic disease. Effective May 12, 2025, this program was terminated.
Currently, our lead product, NDV-01 is a novel, controlled-release
intravesical formulation of gemcitabine and docetaxel. NDV-01 is currently in a Phase 2 clinical trial to assess its safety and efficacy
in patients with aggressive forms of non-muscle invasive bladder cancer (NMIBC). We intend to develop NDV-01 for the treatment of high-risk,
2nd line Bacillus Calmette-Guérin (BCG)*-unresponsive NMIBC and also in intermediate risk patients in the adjuvant setting. We
expect to initiate Phase III programs for each indication in the first-half of 2026.
Our second product, Sepranolone is a novel neurosteroid
epimer of allopregnanolone. Sepranolone is being developed for the potential treatment of Prader-Willi Syndrome, Tourette Syndrome, excessive
tremor and other diseases related to excessive GABAergic activity. We expect to initiate a Phase IIb study in Prader-Willi Syndrome in
the first-half of 2026.
16
Progress in Strategic Execution
On February 6, 2025, Relmada announced the acquisition
from Asarina Pharma AB (Asarina) of Sepranolone, a Phase 2b ready neurosteroid being developed for the potential treatment of PWS, TS,
essential tremor and other diseases related to the excessive GABAergic activity.
On March 25, 2025, Relmada announced the in-license
agreement from Trigone Pharma Ltd. (Trigone) of NDV-01, a novel delivery formulation of a widely used chemotherapeutic regimen used to
treat NMIBC.
Key Upcoming Anticipated Milestones
We expect multiple key milestones over the next
12 months. These include:
●
NDV-01 Twelve-month data from ongoing Phase 2 NMBIC Study – Early 2026
●
NDV-01 United States Investigative New Drug clearance – 1st Half 2026
●
NDV-01 High-risk, 2nd line BCG-unresponsive NMIBC Phase III Trial Initiation - 1st Half 2026
●
NDV-01 Intermediate Risk in the Adjuvant Setting Phase III Trial Initiation – 1 st Half 2026
●
Sepranolone - Initiation of clinical trial in PWS – 1st Half 2026
Our Development Programs
Sepranolone Program
The GABAergic system is the primary inhibitory
neurotransmitter pathway. It consists of two types of receptors, GABA A and GABA B . GABA A receptors are
a major target for neuropsychiatric drugs, including benzodiazepines, barbiturates and anesthetic agents. The GABAergic system regulates
a host of physiological and neurological functions and their related moods and behaviors. The principal positive physiologic modulators
of the GABAergic system are the neurotransmitter GABA (γ-aminobutyric acid) and the positive allosteric modulator Allopregnanolone.
GABA generally inhibits nervous system excitability and thereby produces a calming effect that reduces anxiety and compulsive behavior,
among other manifestations. While Allopregnanolone typically enhances GABA’s calming effects, in some individuals it paradoxically
exacerbates anxiety and compulsive behavior.
Sepranolone is a synthetic version of Isoallopregnanolone,
a naturally occurring neurosteroid that counteracts the effects of Allopregnanolone. Sepranolone is designed to normalize GABA A receptor
activity by targeting two specific receptor subtypes (alpha-2 and alpha-4) without directly interfering with GABA signaling, making it
a novel and selective treatment approach for diseases such as PWS and TS and other disorders that feature compulsive behavior.
17
Data from an open-label Phase 2a randomized study
demonstrated that Sepranolone has the potential to improve TS symptoms versus standard of care alone, as measured by changes in the YGTSS
scoring system (the world-standard Yale Global Tic Severity Scale) compared to baseline. In the 12-week, dual-center, parallel-group
study, 26 subjects were treated with Sepranolone (10 mg, administered by subcutaneous injection twice weekly in addition to standard
of care (SOC) versus standard of care alone.
The Phase 2a results showed competitive tic reduction
and improved quality of life while displaying no CNS off-target effects. Sepranolone not only reduced tic severity in its primary clinical
endpoint as measured by YGTSS by 28% (p=0.051) – but also achieved positive results in four key secondary endpoints compared with
standard of care:
●
69% greater increase of Quality of Life (using the Gilles de la Tourette Syndrome Quality of Life total score (GTS-QOL)
●
50% greater reduction in impairment (YGTSS)
●
44% greater reduction of the premonitory urge to tic (PUTS – the Premonitory Urge to Tic scale)
Importantly, no off-target CNS effects or systemic
side effects were observed in this study. Further, Sepranolone has been evaluated in multiple clinical neuro/hormonal studies involving
over 335 participants and has demonstrated a favorable safety profile.
Relmada expects to initiate a Phase II pilot study of Sepranolone
in Prader Willi Syndrome in the 1 st half of 2026.
NDV-01 Program
NDV-01, our lead program, was in-licensed on March 24, 2025, NDV-01,
is a novel intravesicular delivery technology designed for the long-acting, controlled release of gemcitabine and docetaxel. This combination
therapy has gained significant interest as an alternative to BCG for treating NMIBC, especially given the global BCG shortage since 2019.
Clinical studies have shown that gemcitabine and docetaxel achieve response rates and Recurrence-Free Survival comparable to or better
than BCG. However, conventional administration is cumbersome, requiring sequential drug delivery over three to four hours, with limited
tumor exposure time.
NDV-01 potentially addresses these limitations
by enabling a single administration in less than 10 minutes, delivering sustained, localized chemotherapy for up to 10 days. This extended
exposure enhances the therapeutic effect while improving patient convenience.
NDV-01 is formulated as a controlled-release intravesical
therapy containing gemcitabine and docetaxel. By maintaining continuous drug exposure within the bladder, NDV-01 may optimize local efficacy
while minimizing systemic absorption and associated side effects. Unlike conventional intravesical instillations, which result in fluctuating
drug levels, NDV-01 provides a continuous release of both agents over 10 days. This sustained delivery may improve cancer cell eradication
and reduce recurrence risk while lowering the frequency of administration.
NDV-01 is currently in a Phase 2 clinical trial
evaluating its safety and efficacy in patients with aggressive NMIBC. The Phase 2 study is a single-arm, single-center study evaluating
the safety and efficacy of NDV-01 in patients with High Grade-NMIBC. Patients are treated with NDV-01 in a biweekly induction phase, follow
by monthly maintenance for up to one year, with regular assessments via cystoscopy, cytology, and biopsy, as indicated. The primary efficacy
endpoints are safety and complete response rate (Complete Response Rate at 12 months), and secondary efficacy endpoints are duration of
response (DOR) and event free survival (EFS).
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Nine-Month Safety and Efficacy Data
We obtained nine-month safety and efficacy data
for our Phase II study of NDV-01 in high-risk NMIBC. Among 36 enrolled patients who received at least one dose, no new safety signals
were observed with respect to the type, frequency or severity of adverse events. No patients experienced Grade ≥3 treatment-related
adverse events, and no patients discontinued treatment due to adverse events. Of the 36 patients, 22 (61%) experienced a treatment-related
adverse event. Among treatment-related adverse events, 62% were transient uncomfortable urination (dysuria), 9% were asymptomatic positive
urine culture and 7% were hematuria. The below table summarizes the efficacy data from the study.
Complete Response (CR)
% (n/N)
Anytime
92% (23/25)
3 months
84% (21/25)
6 months
87% (20/23)*
9 months
85% (17/20)*
*
Includes patients with CR after re-induction. 60% CR rate after re-induction.
Two patients have reached the 12-month assessment,
and both have a CR. No patient has progressed to muscle-invasive disease and no patient has undergone radical cystectomy. 11 patients
are awaiting the three-month response assessment.
The Company also recently announced the successful completion and receipt
of written minutes from a Type B pre-IND meeting with the U.S. Food and Drug Administration (FDA) regarding the planned Phase 3 program
for NDV-01 in non-muscle invasive bladder cancer (NMIBC) patients. Relmada secured FDA alignment on certain key elements of the planned
Phase 3 pivotal program for NDV-01, expected to begin in H1 2026, and incorporating two studies in:
●
High-risk, 2nd line BCG-unresponsive NMIBC patients
● Intermediate risk NMIBC in the adjuvant setting
Following are the key outcomes from the FDA
Type B pre-IND meeting (specific study design details to be further discussed with the agency):
FDA Feedback on proposed NDV-01 Phase III
Trials
The FDA indicated that
in the BCG-unresponsive setting, a single arm trial may be acceptable in a patient population refractory to other therapies, with the
details of such a design to be discussed further with the FDA. The FDA also indicated that, a randomized, post-transurethral resection
of the bladder tumor (“TURBT”) adjuvant study comparing NDV-01 to observation in intermediate risk NMIBC patients with a time-to-event
primary endpoint is generally acceptable, subject to submission of the intended trial design and endpoint definition to the FDA in a meeting
package. In addition, the FDA agreed with our proposal to rely on FDA’s prior findings of safety for Gemzar and Taxotere and published
literature for the nonclinical safety assessment of NDV-01 because this is a proposed 505(b)(2) approval.
Based on this feedback, we requested Type B meetings with the FDA for
the randomized intermediate-risk NMIBC trial and for the BCG-unresponsive trial. We have protocols in active development for both the
single-arm study in BCG-unresponsive NMIBC with carcinoma in situ (CIS) who are refractory to other therapies, which would enroll approximately
100 patients, and the randomized intermediate-risk NMIBC trial, which would enroll approximately 266 patients.
We intend to develop NDV-01 for the treatment
of high-risk, 2nd line BCG-unresponsive NMIBC and also in intermediate risk patients in the adjuvant setting. We expect to initiate
Phase III programs for each indication in the first-half of 2026.
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Our Corporate History and Background
We are a clinical-stage, publicly traded biotechnology company developing
NCEs and novel versions of drug products that potentially address areas of high unmet medical need in the treatment of cancer, neurological
disorders, and other diseases.
Currently, none of our product candidates has
been approved for sale in the United States or elsewhere. We have no commercial products nor do we have a sales or marketing infrastructure.
In order to market and sell our products we must conduct clinical trials on patients and obtain regulatory approvals from appropriate
regulatory agencies, like the FDA in the United States, and similar organizations elsewhere in the world.
We have not generated revenues and do not anticipate generating revenues
for the foreseeable future. We had a net loss of approximately $37,517,400 for the nine months ended September 30, 2025. At September
30, 2025, we had an accumulated deficit of approximately $678,399,400.
Business Strategy
Our strategy is to leverage our considerable industry
experience, understanding of pharmaceutical markets and development expertise to identify, develop and commercialize product candidates
with significant market potential that can fulfill unmet medical needs. We have assembled a management team along with both scientific
advisors, and business advisors with significant industry and regulatory experience to lead and execute the development and commercialization
of our product candidates.
Intellectual Property Portfolio and Market
Exclusivity
We have more than 40 issued patents and pending
patent applications related to Sepranolone for multiple uses, including diseases and disorders exhibiting compulsive behaviors such as
PWS, TS, obsessive-compulsive disorder, and gambling disorder, potentially providing coverage beyond 2030.
We have more than 10 issued patents and pending
patent applications related to NDV-01 for multiple uses, including formulations and methods for controlled release of therapeutics for
treatment of diseases such as bladder cancer, potentially providing coverage beyond 2038.
Key Strengths
We believe that the key elements for our market success include:
●
Compelling lead product opportunities in NDV-01 and Sepranolone.
●
Experienced management team with considerable drug development expertise;
●
Multiple potential bladder cancer related indications for NDV-01.
●
Extensive safety database for Sepranolone as well as promising signal of efficacy in Tourette Syndrome
●
Substantial and growing IP portfolio for both Sepranolone and NDV-01
●
Scientific support of leading experts: Our scientific advisors include clinicians and scientists who are affiliated with a number of highly regarded medical institutions.
Available Information
Reports we file with the Securities and Exchange
Commission (SEC) pursuant to the Exchange Act of 1934, as amended (the Exchange Act), including annual and quarterly reports, and other
reports we file, can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street NE, Washington,
D.C. 20549.
20
Results of Operations
For the Three Months Ended September 30, 2025 versus September 30,
2024:
Three Months
Ended
Three Months
Ended
September 30,
2025
September 30,
2024
Increase
(Decrease)
Operating Expenses
Research and development
$ 4,036,267
$ 11,149,136
$ (7,112,869 )
General and administrative
6,291,079
11,859,702
(5,568,623 )
Total
$ 10,327,346
$ 23,008,838
$ (12,681,492 )
Research and Development Expense
Research and development expense for the three months ended September
30, 2025 was approximately $4,036,300 compared to $11,149,100 for the three months ended September 30, 2024, a decrease of approximately
$7,112,800. The change was primarily driven by:
●
Decrease in other research expenses of $5,103,600 primarily associated
with the winding down of the REL-1017 302 and 304 studies in 2025;
●
Decrease in stock-based compensation expense of $1,382,700;
●
Decrease in study costs of $1,262,200 associated with the winding down
of the REL-1017 studies;
●
Increase in manufacturing and drug storage costs of $450,600; and
●
Increase in compensation expense of $185,100 due to an increase in
research and development employees and their related bonus.
General and Administrative Expense
General and administrative expense for the three months ended September
30, 2025 was approximately $6,291,100 compared to $11,859,700 for the three months ended September 30, 2024, a decrease of approximately
$5,568,600. The change was primarily due to:
●
Decrease in stock-based compensation expense of $2,782,500;
●
Decrease in compensation expense of $1,850,800 due to an decrease of
general and administrative employees and their related bonuses; and
●
Decrease in other general and administrative expenses of $935,300 primarily
due to an decrease in consulting services.
Other Income
Interest/investment income was approximately $247,000
and $856,500 for the three months ended September 30, 2025 and 2024, respectively. The decrease was due to lower average investment balance.
Realized loss on short-term investments was approximately $81,400 for the three months ended September 30, 2025 compared to a realized
gain on short term investments of approximately $147,800 for the three months ended September 30, 2024. Unrealized gain on short-term
investments was approximately $70,300 and $278,600 for the three months ended September 30, 2025 and 2024.
Net Loss
The net loss for the Company for the three months ended September 30,
2025 and 2024 was approximately $10,091,500 and $21,726,000, respectively. The Company had loss per share basic and diluted of $0.30 and
$0.72 for the three months ended September 30, 2025 and 2024, respectively.
Income Taxes
The Company did not provide for income taxes
for the three months ended September 30, 2025 and 2024, since there was a loss and a full valuation allowance against all deferred tax
assets.
21
Results of Operations
For the Nine Months Ended September 30, 2025 versus September 30, 2024:
Nine Months
Ended
Nine Months
Ended
September 30,
2025
September 30,
2024
Increase
(Decrease)
Operating Expenses
Research and development
$ 18,806,667
$ 35,175,531
$ (16,368,864 )
General and administrative
19,960,421
29,639,951
(9,679,530 )
Total
$ 38,767,088
$ 64,815,482
$ (26,048,394 )
Research and Development Expense
Research and development expense for the nine months ended September
30, 2025 was approximately $18,806,700 compared to $35,175,500 for the nine months ended September 30, 2024, a decrease of approximately
$16,368,800. The decrease was primarily due to:
●
Decrease in other research expenses of $15,910,400 primarily associated
with the wind-down of the 302 and 304 studies in 2025;
●
Decrease in stock-based compensation expense of $3,398,300;
●
Decrease in manufacturing and drug storage costs of $286,200;
●
Increase in costs of $2,717,900 associated with the acquisitions of
Sepranolone and NDV-01 in the first quarter of 2025 offset with a decrease of 302 and 304 study expenses due to the wind-down of these
studies; and
●
Increase in compensation expense of $508,200 due to an increase in
research and development employees and their related bonuses.
General and Administrative Expense
General and administrative expense for the nine months ended September
30, 2025 was approximately $19,960,400 compared to $29,640,000 for the nine months ended September 30, 2024, a decrease of approximately
$9,679,600. The decrease was primarily due to:
●
Decrease in stock-based compensation expense of $8,321,700 related
to option grants to employees and key consultants;
●
Decrease in other general and administrative expenses of $1,216,900
primarily due to a decrease in consulting services; and
●
Decrease in compensation expense of $141,000 primarily related an decrease
of general and administrative employees and their related bonuses.
Other Income
Interest / investment income was approximately
$1,008,800 and $2,875,500 for the nine months ended September 30, 2025 and 2024, respectively. The decrease was due to lower interest
rates and investment yields and a lower average balance. Realized gain on short-term investments was approximately $28,700 and $334,100
for the nine months ended September 30, 2025 and 2024, respectively. Unrealized gain on short-term investments was approximately $212,200
and $283,800 for the nine months ended September 30, 2025 and 2024, respectively.
Net Loss
The net loss for the Company for the nine months ended September 30,
2025 and 2024 was approximately $37,517,400 and $61,322,200 respectively. The Company had loss per share, basic and diluted of $1.16 and
$2.03 for the nine months ended September 30, 2025 and 2024, respectively.
Income Taxes
The Company did not provide for income taxes for
the nine months ended September 30, 2025 and 2024, since there was a loss and a full valuation allowance against all deferred tax assets.
22
Liquidity
As shown in the accompanying unaudited consolidated financial statements,
the Company has incurred losses and negative cash flows from operations since inception and expects to incur additional losses until such
time that it can generate significant revenue from the commercialization of its product candidates. During the nine months ended September
30, 2025, the Company incurred a net loss of $37,517,403 and had negative operating cash flows of $31,190,765. At September 30, 2025,
the Company was projecting insufficient liquidity to sustain its operations through one year following the date that the financial statements
are issued.
On November 5, 2025 the Company announced the
closing of its underwritten offering of 40,142,000 shares of its common stock and, in lieu of common stock to certain investors, pre-funded
warrants to purchase up to 5,315,000 shares of common stock. The shares of common stock were sold at an offering price of $2.20 per share,
and the pre-funded warrants were sold at an offering price of $2.199 per pre-funded warrant, which represents the per share offering price
for the common stock less the $0.001 per share exercise price for each such pre-funded warrant. The net proceeds to Relmada from the offering,
before deducting other expenses payable by Relmada, and excluding the exercise of any pre-funded warrants, are approximately $94 million.
As of the date of this report, Management believes
that the Company’s existing cash and cash equivalents and short-term investments will enable it to fund operating expenses and capital
expenditure requirements for at least 12 months from the issuance of these unaudited condensed consolidated quarterly financial statements.
Beyond that point management will evaluate the size and scope of any subsequent trials that will affect the timing of additional financings
through public or private sales of equity or debt securities or from bank or other loans or through strategic collaboration and/or licensing
agreements. Any such expenditures related to any subsequent clinical trials will not be incurred until such additional financing is raised.
As a result, the Company concluded that management’s plans alleviated substantial doubt about the Company’s ability to continue
as a going concern as of September 30, 2025 and the Company has sufficient funds to maintain operations for at least 12 months from the
issuance of these unaudited condensed consolidated financial statements.
The following table sets forth selected cash flow information for the
periods indicated below:
Nine Months Ended
September 30,
2025
Nine Months Ended
September 30,
2024
Cash used in operating activities
$ (31,190,765 )
$ (42,956,164 )
Cash provided by investing activities
28,791,244
40,216,239
Cash (used in)/provided by financing activities
(73,021 )
132,146
Net decrease in cash and cash equivalents
$ (2,472,542 )
(2,607,779 )
For the nine months ended September 30, 2025,
cash used in operating activities was $31,190,765 primarily due to the net loss of $37,517,403 offset by non-cash stock-based compensation
charges of $11,534,002 and fair value changes on stock appreciation rights of $216,640. There were realized gains and unrealized gains
on short-term investments of $28,717 and $212,210, respectively. In addition, there was a decrease in operating assets and liabilities
of $5,183,077.
For the nine months ended September 30, 2024,
cash used in operating activities was $42,956,164 due to the net loss of $61,322,218 offset by non-cash stock-based compensation charges
of $23,458,012 and fair value changes on stock appreciation rights of $12,562. There were realized and unrealized gains on short-term
investments of $334,082 and $283,803, respectively. In addition, there was a decrease in operating assets and liabilities of $4,486,635.
For the nine months ended September 30, 2025, cash provided by investing
activities was $28,791,244, due to $1,043,307 of purchases of short-term investments offset by $29,834,551 of sales of short-term investments.
For the nine months ended September 30, 2024,
cash provided by investing activities was $40,216,239, due to $11,424,986 of purchases of short-term investments offset by $51,641,225
of sales of short-term investments.
Net cash used by financing activities for the
nine months ended September 30, 2025 was $73,021 related to ATM expenses.
Net cash provided by financing activities for the nine months ended
September 30, 2024 was $132,146, due to proceeds from options exercised for common stock of $246,747 offset by ATM expenses of $114,601.
23
Effects of Inflation
Our assets are primarily monetary, consisting
of cash and cash equivalents and short-term investments. Because of their liquidity, these assets are not directly affected by inflation.
However, the rate of inflation affects our expenses, such as those for employee compensation and contract services, which could increase
our level of expenses and the rate at which we use our resources.
Commitments and Contingencies
Please refer to Note 10 in our Annual Report on
Form 10-K for the year ended December 31, 2024 under the heading Commitments and Contingencies. To our knowledge there have been no material
changes to the risk factors that were previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December
31, 2024. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially
adversely affect our business, financial condition and/or operating results.
Critical Accounting Policies and Estimates
A critical accounting policy is one that is both
important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult,
subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Our unaudited condensed consolidated financial
statements are presented in accordance with U.S. GAAP, and all applicable U.S. GAAP accounting standards effective as of September 30,
2025 have been taken into consideration in preparing the unaudited condensed consolidated financial statements. The preparation of unaudited
condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial
statements and the reported amounts of revenues and expenses for the reporting period. Management bases its estimates on historical experience
and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. On a continual basis, management
reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable
assumptions. After such reviews, and if deemed appropriate, management’s estimates are adjusted accordingly. Actual results could
differ from those estimates and assumptions under different and/or future circumstances. Management considers an accounting estimate to
be critical if:
●
it requires assumptions to be made that were uncertain at the time the estimate was made; and
●
changes in the estimate, or the use of different estimating methods that could have been selected, could have a material impact on results of operations or financial condition.
We evaluate our estimates and assumptions on an ongoing basis and none
of the Company’s estimates and assumptions used within the unaudited condensed consolidated financial statements involve a high
level of estimation uncertainty. For additional discussion regarding the application of the significant accounting policies, see Note
3 to the Company’s unaudited condensed consolidated financial statements included in this report.
24
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