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Item 7. Management’s Discussion and Analysis

2026-03-19 compared with 2025-03-27 · 128 added, 179 removed, 72 unchanged (81% of the section changed)

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

information and financial data discussed below is derived from the consolidated financial statements of Relmada for the years ended December

31, 2024 and 2023.

The consolidated financial statements of Relmada were prepared and presented in accordance with generally accepted

accounting principles in the United States.

The information and financial data discussed below is only a summary and should be read in

conjunction with the historical financial statements and related notes of Relmada contained elsewhere in this Annual Report.

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information and financial data discussed

below is derived from the consolidated financial statements of Relmada for the years ended December 31, 2025 and 2024.

The consolidated

financial statements contained elsewhere in this Report fully represent Relmada’s financial condition and operations;

they are not indicative of the Company’s future performance.

See “Cautionary Note Regarding Forward Looking Statements”

above for a discussion of forward-looking statements and the significance of such statements in the context of this Annual Report.

discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties.

Actual results

may differ materially from those discussed in these forward-looking statements due to a number of factors, including those set forth

in the section entitled “ Risk Factors ” and elsewhere herein.

The information and financial data discussed below is

only a summary and should be read in conjunction with the historical financial statements and related notes of Relmada Therapeutics,

financial statements of Relmada were prepared and presented in accordance with generally accepted accounting principles in the United

The information and financial data discussed below is only a summary and should be read in conjunction with the historical financial

statements and related notes of Relmada contained elsewhere in this Annual Report.

The consolidated financial statements contained elsewhere

in this Report fully represent Relmada’s financial condition and operations;

however, they are not indicative of the Company’s

future performance.

See “Cautionary Note Regarding Forward Looking Statements” above for a discussion of forward-looking

statements and the significance of such statements in the context of this Annual Report.

This discussion contains forward-looking statements

reflecting our current expectations that involve risks and uncertainties.

Actual results may differ materially from those discussed in

these forward-looking statements due to a number of factors, including those set forth in the section entitled “ Risk Factors ”

and elsewhere herein.

The information and financial data discussed below is only a summary and should be read in conjunction with the

historical financial statements and related notes of Relmada Therapeutics, Inc.

contained elsewhere in this document.

Relmada’s current consolidated financial position and consolidated results of operations;

are not necessarily indicative of the Company’s future performance.

See “Cautionary Note Regarding Forward Looking Statements”

above for a discussion of forward-looking statements and the significance of such statements in the context of this document.

Corporate History and Background

current consolidated financial position and consolidated results of operations;

are not necessarily indicative of the Company’s

future performance.

See “Cautionary Note Regarding Forward Looking Statements” above for a discussion of forward-looking

statements and the significance of such statements in the context of this document.

Our Corporate History and Background

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 occasioned by disappointing interim analysis results in December 2024 indicating that

our then lead development candidate, esmethadone (d-methadone, dextromethadone, or REL-1017) for the adjunctive treatment of Major Depressive

Disorder (MDD), was unlikely to succeed in its pivotal trial.

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 REL-1017.

Hence we accelerated ongoing efforts to augment our development pipeline while diversifying its

risk, which culminated in the recently announced licensing of NDV-01, a novel delivery formulation of a widely used chemotheraphy

regimen 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.

We also had been developing REL-P11, a modified-release

formulation of psilocybin, as an investigational agent for the treatment of metabolic disease.

The REL-P11 program has successfully completed

a Phase 1 safety study.

However, in light of an ongoing strategic review of this business opportunity, the changing regulatory landscape

for psychedelics, its early stage of development and the acquisition of new, more advanced product candidates, this program has also been

REL-1017 Program Update

Since 2013, we had been developing esmethadone

as our lead product candidate as an oral agent for the treatment of depression and other potential indications.

In December 2024,

we reported that the pre-planned interim analysis, conducted by the Independent Data Monitoring Committee (DMC), of Reliance II, our Phase

3 study of esmethadone as a potential adjunctive treatment for MDD, indicated that the study was futile and unlikely to meet the primary

efficacy endpoint with statistical significance, and that we would pause the Reliance II and Relight Phase 3 studies of esmethadone.

Following this 2024 REL-1017 setback, which we believe most likely

resulted from an overwhelming placebo response—a trend that has become more common than exceptional in central nervous system (CNS)

clinical trials—the program has been paused pending a comprehensive data review, after which we will make a decision regarding the

future of this program.

Strategic Business Review and New Approach

Following a comprehensive evaluation of the Company’s

business strategy and growth opportunities, management and the Board of Directors have implemented a revised approach aimed at maximizing

shareholder value.

This refined strategy remains focused on:

– Advancing novel and differentiated therapeutic solutions

Unmet Medical Needs – Targeting areas with significant gaps in treatment

Market Opportunities – Prioritizing programs with substantial commercial potential

● Intellectual

Property Protection – Strengthen and extending patent coverage to safeguard long-term value

Key Strategic Priorities

Under this updated approach, we will continue

to emphasize:

Development Expertise – Focusing on high-value therapeutic areas while rigorously assessing development risks, market viability,

and success probabilities

Diversification – Expanding and balancing our portfolio to mitigate risk and enhance growth potential

● Prioritizing

Mid- to Late-Stage Programs – Concentrating resources on assets with clear path to commercialization

● Accelerating

Market Entry – Streamline development timelines to bring therapies to patients faster

Cost-Effective Development Paths – Optimizing resource allocation and strategic partnerships

Commercialization Strategy – Focusing on opportunities that require minimal sales and marketing infrastructure

This strategic framework positions the Company for long-term growth

while maintaining execution and financial prudence.

we or us) (a Nevada corporation), is a publicly traded, clinical-stage 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 $57,385,200 for the year ended December 31, 2025.

At December 31, 2025,

we had an accumulated deficit of approximately $698,267,200.

Progress in Strategic Execution

We commenced a strategic review in December 2024

of our then existing development pipeline and the opportunities open to us given our core strengths in every aspect of drug development,

with particular expertise in CNS.

That process recently resulted in a series of transactions that have considerably expanded and strengthened

Relmada’s potential to create shareholder value.

Over the past three months, we have successfully closed two important transactions,

NDV-01 in-licensing and Sepranolone acquisition, which align with our new strategy.

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 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

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(Trigone) of NDV-01, a novel delivery formulation of a widely used chemotherapeutic regimen used to

We have not generated revenues and do not anticipate

generating revenues for the foreseeable future.

We had a net loss of approximately $79,979,400 and $98,791,700 for the years ended December

31, 2024 and 2023, respectively.

At December 31, 2024, we have an accumulated deficit of approximately $640,882,000.

Results of Operations

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Research and Development Expense

Total research and development expense for the

year ended December 31, 2024 was approximately $46,175,500, as compared to $54,807,400 for the same period of 2023, a decrease of $8,631,900.

The decrease in research and development expense was primarily due to:

Decrease in study costs

of $8,667,500 associated with the completion of two Phase 3 trials and the long-term, open-label, safety study (Study 310) during

Decrease in stock-based

compensation expense of $1,286,400;

Decrease in compensation

expense of $280,700 due to lower employee-related costs;

Increase in other research

expenses of $1,248,700 primarily associated with additional consultants contracted to assist in the execution of our Phase 3 trials;

Increase in pre-clinical

and toxicology expenses of $328,900;

Increase in manufacturing

and drug storage costs of $25,100 related to materials needed to complete the Phase 3 program.

Total research and development expense for the year ended December

31, 2025 was approximately $26,879,100, as compared to $46,175,500 for the same period of 2024, a decrease of $19,296,400.

in research and development expense was primarily due to:

Decrease in other research expenses of $19,011,500 primarily associated

with reduced consultants contracted to assist in the execution of our Phase 3 trials;

Decrease in stock-based compensation expense of $3,616,100;

Decrease in pre-clinical and toxicology expenses of $328,900;

Increase in manufacturing and drug storage costs of $1,964,500 related

to the startup of the Phase III NDV-01 study and the Phase 2b sepranolone studies;

Increase in compensation expense of $1,282,200 due to an increase in research and development employees and their related bonuses;

Increase in study costs of $413,400 associated with the acquisition of sepranolone of approximately $2.9 million and the license agreement of NDV-01 for approximately $3.5 million in the first quarter of 2025 offset with a decrease of 302 and 304 study expenses due to the wind-down of these studies.

General and Administrative Expense

Total general and administrative expense for

the year ended December 31, 2024 was approximately $37,715,500, as compared to $48,894,900 for the same period of 2023, a decrease of

Total general and administrative expense for the

year ended December 31, 2025 was approximately $32,221,100, as compared to $37,715,500 for the same period of 2024, a decrease of $5,494,400.

The decrease in general and administrative expenses was primarily due to:

Decrease in stock-based compensation

expense of $12,335,900 which can be attributed to two key factors.

First, equity grants from four

years ago have dropped off the amortization schedule, as they reached the end of their vesting period.

Second, the Company granted significantly fewer options this past year due to the lack of shareholder

approval to increase the 2021 Equity Incentive Plan.

Without this approval, the company was unable

to issue a substantial number of new stock options, further contributing to the reduction in stock-based

compensation expenses for the current period.

These two factors combined have led to the notable

decrease in these expenses;

Increase in other general

and administrative expenses of $1,006,000 due to increases in professional fees and consulting expenses during 2024;

Increase in compensation

expense of $150,500 due to higher employee-related costs.

Decrease in stock-based compensation expense of $10,705,800 which can be attributed to two key factors.

First, equity grants from four years ago have dropped off the amortization schedule, as they reached the end of their vesting period.

Second, the Company granted significantly fewer options this past year due to the lack of shareholder approval to increase the 2021 Equity Incentive Plan.

Without this approval, the Company was unable to issue a substantial number of new stock options, further contributing to the reduction in stock-based compensation expenses for the current period.

These two factors combined have led to the notable decrease in these expenses;

Decrease in other general and administrative expenses of $1,852,900

due to decreases in professional fees and consulting expenses during 2025;

Increase in compensation expense of $7,064,300 related to an increase

of general and administrative employees and their related bonuses.

Other Income, Net

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The decrease was primarily related to lower average investment balance during 2025 as compared to 2024.

Realized gain on short-term investments was approximately

$374,900 compared to a realized loss of approximately $4,064,400 for the same period of 2023, an increase of $4,439,300.

was related to the timing of the sales of short-term investments along with market conditions.

Unrealized gain on short-term investments was

approximately $6,700 compared to approximately $3,823,200 for the same period of 2023, a decrease of $3,816,500.

The decrease was related

to the market conditions.

Realized loss on short-term investments was

approximately $79,200 for the year ended December 31, 2025 compared to a realized gain of approximately $374,900 for the year ended

December 31, 2024, a decrease of $454,100.

The decrease was related to the timing of the sales of short-term investments along with

market conditions.

Unrealized gain on short-term investments

was approximately $398,300 for the year ended December 31, 2025 compared to approximately $6,700 for the year ended December 31, 2024, an increase of $391,600.

The increase was related to the market conditions.

The Company did not provide for income taxes

for the years ended December 31, 2025 and 2024, since there was a loss and a full valuation allowance against all deferred tax assets.

The Company recorded a net loss of approximately

$79,979,400 and $98,791,700 or $2.65 and $3.28 per common share, basic and diluted, during the years ended December 31, 2024 and 2023,

respectively, based on the factors described above.

shown in the accompanying audited 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 twelve months ended December 31, 2024, the Company

incurred a net loss of $79,979,354 and had negative operating cash flows of $51,755,798.

Given the Company’s projected operating requirements and its existing cash and cash

equivalents and short-term investments, the Company is projecting insufficient liquidity

to sustain its operations through one year following the date that the financial statements

These conditions and events raise substantial doubt about the Company’s

ability to continue as a going concern.

In response to these conditions, management is

currently evaluating the size and scope of any subsequent operations and clinical trials that will affect the timing to obtain the required

funding of future operations.

Financing strategies may include, but are not limited to, the public or private sale of equity or debt

securities or from bank or other loans or through strategic collaboration and/or licensing agreements.

There can be no assurances that

the Company will be able to secure additional financing, or if available, that it will be sufficient to meet its needs or on favorable

Because management’s plans have not yet been finalized and are not within the Company’s control, the implementation

of such plans cannot be considered probable.

As a result, the Company has concluded that management’s plans do not alleviate substantial

doubt about the Company’s ability to continue as a going concern.

The Company recorded a net loss of approximately $57,385,200 and $79,979,400

or $1.45 and $2.65 per common share, basic and diluted, during the years ended December 31, 2025 and 2024, respectively, based on the

factors described above.

As shown in the accompanying audited 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 twelve months ended December

31, 2025, the Company incurred a net loss of $57,385,163 and had negative operating cash flows of $45,786,988.

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, were approximately

On March 9, 2026 the Company entered into a Private

Investment in a Public Entity (PIPE) Purchase Agreement, the Purchasers agreed to purchase, for an aggregate purchase price of approximately

$160.0 million, an aggregate of (i) 29,474,569 shares of the Company’s common stock, par value $0.001 per share, at a price of $4.75

per Share and (ii) pre-funded warrants to purchase up to 4,210,527 shares of common stock at a price of $4.749 per pre-funded warrant,

which represents the per share purchase price for the common stock less the $0.001 per share exercise price for each such Pre-Funded Warrant.

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 its audited consolidated 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 December

31, 2025 and the Company has sufficient funds to maintain operations for at least 12 months from the issuance of these audited consolidated

financial statements.

Cash Flows from Operating, Investing and Financing Activities

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$ (51,755,798 )

Cash provided by investing activities

Cash used in financing activities

Net decrease in cash and cash equivalents

Cash provided by/(used in) investing activities

(48,138,306 )

Cash provided by/(used in) financing activities

Net decrease in cash and cash equivalents

For the year ended December 31, 2025, net cash used in operating activities

was $45,786,988 primarily due to the net loss of $57,385,163.

This was offset by non-cash expenses which primarily consisted of stock-based

compensation of $14,810,407 and stock appreciation rights compensation of $1,056,464.

There were realized losses and unrealized gains

on short term investments of $79,207 and $398,255, respectively.

In addition, there were decreases in operating assets and liabilities

for the year ended December 31, 2025 of $3,949,648.

For the year ended December 31, 2024, net cash

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For the year ended December 31, 2025, net cash

used in operating activities was $51,659,206 primarily due to the net loss of $98,791,746.

This was offset by non-cash expenses which

primarily consisted of stock-based compensation of $43,811,149.

There were realized losses and unrealized gains on short term investments

of $4,064,391 and $3,823,234, respectively.

In addition, there were increases in operating assets and liabilities for the year ended

December 31, 2023 of $3,080,234.

For the year ended December 31, 2024, net cash

provided by investing activities was $51,561,597, due to $12,079,628 of purchases of short term investments offset by $63,641,225 of

sales of short term investments.

used in investing activities was $48,138,306, due to $83,828,576 of purchases of short term investments offset by $35,690,270 of sales

of short term investments.

For the year ended December 31, 2024, net cash

provided by investing activities was $50,453,332, due to $90,463,532 of purchases of short term investments offset by $140,916,864 of

sales of short term investments.

cash used in financing activities for the year ended December 31, 2024, was $40,341 due to

proceeds from cash exercises of options of $246,747 offset by ATM reactivation fees of $287,088.

provided by investing activities was $51,561,598, due to $12,079,628 of purchases of short term investments offset by $63,641,225 of sales

of short term investments.

Net cash provided by financing activities for the year ended December

31, 2025, was $93,564,808 due to proceeds from the issuance of common stock for $93,637,829 offset by ATM fees of $73,021.

Net cash used in financing activities for the

year ended December 31, 2023, was $98,463 due to ATM reactivation fees.

year ended December 31, 2024, was $40,341 due to proceeds from cash exercises of options of $246,747 offset by ATM reactivation fees

Effects of Inflation

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Lease Obligations

Company is obligated to pay approximately $105,000 under 2 leases for office space over the

The Company is obligated to pay approximately

$96,900 under 2 leases for office space over the next year.

We do not have a seasonal business cycle.

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and reasonable assumptions.

After such reviews, and if deemed appropriate, managements 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:

After such reviews, and if deemed appropriate, management’s estimates are adjusted accordingly.

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

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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-K

Item 7. Management’s Discussion and Analysis