S-1: InMed Pharmaceuticals Files S-1 for Resale of Shares Following Private Placement Amidst Continued Losses

InMed Pharmaceuticals Inc. has filed an S-1 registration statement to allow a selling shareholder to resell up to 3,904,726 common shares, stemming from a recent private placement that provided the company with potential proceeds of approximately $4.76 million from warrant and option exercises, while the company continues to face significant operating losses and a substantial accumulated deficit.

Summary

• The S-1 registration statement facilitates the resale of up to 3,904,726 common shares by a selling shareholder, comprising 1,952,363 common shares issuable upon exercise of pre-funded warrants and 1,952,363 common shares issuable upon exercise of preferred investment options.
• The company will not receive proceeds from the sale of common shares by the selling shareholder, but expects to receive approximately $195 from the cash exercise of pre-funded warrants and approximately $4.76 million from the cash exercise of preferred investment options.
• InMed Pharmaceuticals Inc. reported net losses of $7.7 million for the year ended June 30, 2024, and $7.9 million for the year ended June 30, 2023, with an accumulated deficit of $109.1 million as of June 30, 2024.
• The company is developing a pipeline of small molecule drug candidates targeting Alzheimer's disease (INM-901), dry Age-Related Macular Degeneration (INM-089), and Epidermolysis Bullosa (INM-755).
• Recent preclinical data for INM-901 demonstrated significant reduction in neuroinflammation in ex vivo models, supporting its potential for Alzheimer's disease.
• Phase 2 clinical trial results for INM-755 cream showed a positive indication of enhanced anti-itch activity in Epidermolysis Bullosa.
• Through its wholly-owned subsidiary, BayMedica, LLC, the company also specializes in the B2B commercialization of bulk rare, non-intoxicating cannabinoids as raw materials for the Health and Wellness sector.
• The company's manufacturing capabilities include traditional approaches and a proprietary integrated manufacturing approach called IntegraSyn, aiming for commercial-scale readiness after Phase 2 clinical trials.
• As of June 30, 2025, there were 2,002,186 common shares outstanding, with the total potentially increasing to 5,906,912 common shares assuming full exercise of the registered pre-funded warrants and preferred investment options.
• The company entered into a private placement on June 24, 2025, with the Selling Shareholder, involving the sale of common shares (or pre-funded warrants) at $2.561 per share and preferred investment options at an exercise price of $2.436 per share.
• An existing 199,115 preferred investment options held by the Selling Shareholder were amended to reduce their exercise price from $16.60 to $2.436 per share in consideration for participation in the new private placement.
• H.C. Wainwright & Co., LLC served as the exclusive agent for the private placement, receiving a 7.5% cash fee, a 1.0% management fee, and warrants to purchase 126,904 common shares at an exercise price of $3.2013 per share.
• The company is an emerging growth company and a smaller reporting company, benefiting from reduced public company reporting requirements.
• The last reported sale price of the company's common shares on the Nasdaq Capital Market was $2.73 per share on July 7, 2025.

Sentiment

Score: 3

Explanation: The sentiment is low due to significant recurring operating losses, a substantial accumulated deficit, and an explicit 'going concern' warning from the auditor. While the company has a drug pipeline and recently secured some funding through a private placement, the overall financial health and the need for continuous external financing present a high degree of risk and uncertainty for its future operations and profitability.

Positives

• New preclinical data for INM-901 demonstrated significant reduction in neuroinflammation, supporting its potential as a therapeutic candidate for Alzheimer's disease.
• Phase 2 clinical trial of INM-755 cream showed a positive indication of enhanced anti-itch activity for Epidermolysis Bullosa.
• The company possesses significant know-how in developing proprietary manufacturing approaches, including IntegraSyn, for producing bulk rare cannabinoids.
• BayMedica's commercial business specializes in the B2B commercialization of bulk rare, non-intoxicating cannabinoids, providing a revenue-generating segment.
• The recent private placement provides potential cash proceeds of approximately $4.76 million upon exercise of preferred investment options, contributing to funding for pipeline development and commercial operations.

Negatives

• The company has incurred significant operating losses since its inception, with net losses of $7.7 million in 2024 and $7.9 million in 2023.
• An accumulated deficit of $109.1 million as of June 30, 2024, indicates a substantial history of losses.
• The company expects to continue incurring significant operating losses for the foreseeable future.
• There is a need for substantial additional funding to support continuing operations and growth strategy, with no guarantee of raising funds on favorable terms.
• The auditor's report for the consolidated financial statements contains an explanatory paragraph raising substantial doubt about the company's ability to continue as a going concern.
• The resale of a substantial number of shares (3,904,726 common shares) by the selling shareholder could depress the market price of the common shares.
• The private placement and associated warrants/options are dilutive to existing shareholders, with the potential to increase outstanding shares from 2,002,186 to 5,906,912 upon full exercise of the registered securities.

Risks

• Inability to stem operating losses and obtain additional financing to fund operations.
• Failure to satisfy Nasdaq listing standards, including compliance with the Minimum Bid Price Rule, and potential delisting of securities.
• The impact of the Reverse Stock Split effected on November 14, 2024, on liquidity and trading price.
• Uncertainty regarding the commercial viability of BayMedica's products and its revenues.
• Challenges in effectively researching, developing, manufacturing, and commercializing pharmaceutical drug candidates.
• Difficulties in optimizing key, proprietary, manufacturing approaches and technologies.
• Inability to commercialize and register products in pharmaceutical R&D programs and the health and wellness sector.
• Failure to successfully initiate discussions with potential partners for licensing various aspects of products and product candidates.
• Inability to successfully access existing manufacturing capacity or transfer manufacturing processes to contract manufacturing organizations.
• Uncertainty that manufacturing approaches will result in commercially viable yields of cannabinoids or be a significant improvement upon existing platforms.
• Risks associated with the success of key next steps in manufacturing, including diversifying cannabinoids, scaling-up processes, and identifying external vendors.
• Challenges in making successful determinations as to which research and development programs to continue.
• Inability to successfully scale up the IntegraSyn approach to cannabinoid manufacturing.
• Reliance on outsourcing research and development activities through scientific collaboration agreements.
• Uncertainty in developing therapies through early human testing.
• Challenges in evaluating financial returns on various commercialization approaches for Product Candidates.
• Inability to find partnerships early in the development process for various programs.
• Uncertainty regarding U.S. Food and Drug Administration regulatory acceptance of synthesizing Product Candidates for pharmaceutical use.
• Inability to successfully file, prosecute, and defend patent applications, or for patents to provide intellectual property protection.
• Potential termination or renegotiation of supplier, technology, and other material contracts.
• Inadequacy of, or gaps in, insurance coverage, and ability to expand coverage for commercial sales and secure clinical trial insurance.
• Impact of epidemics, pandemics, global health crises, or other public health events.
• Consolidation of competitors and suppliers.
• Effects of new products and new technology on the market, including through the use of artificial intelligence.
• Impact of geopolitical, global, regional, or local economic and financial market risks and challenges, and foreign currency exchange rate risk.
• Political disturbances, geopolitical instability and tensions, or terrorist attacks, and associated changes in global trade policies and economic sanctions.
• Sales by the Selling Shareholder of the common shares covered by this prospectus could adversely affect the market price of the common shares.
• The large number of shares registered for resale (approximately 195% of total outstanding common shares as of June 30, 2025) could depress the market price and impair the company's ability to raise future capital.

Future Outlook

The company expects its expenses to remain steady in the nearand long-term as it continues to advance its drug programs (INM-755, INM-901, INM-089), investigate additional uses for product candidates, pursue new drug discovery, seek regulatory approvals, scale up manufacturing, support BayMedica's commercial operations, execute business development initiatives, and build internal infrastructure. The company anticipates needing substantial additional funding to support these operations and growth strategy, expecting to finance through product sales, equity, debt, or strategic collaborations. It is unable to predict the timing or amount of increased expenses or when profitability will be achieved.

Management Comments

• "We have incurred significant operating losses since our inception, and we expect to continue to incur significant operating losses for the foreseeable future."
• "Our ability to generate product revenue that is sufficient to achieve profitability will depend heavily on our ability to eventually generate revenues from our products in the health and wellness sector, on the successful development and eventual commercialization of one or more of our Product Candidates and/or the success of our manufacturing technologies."
• "We expect to finance our operations through product sales, the sale of equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions."
• "If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our Products and Product Candidates or grant rights to external entities to develop and market our Products and Product Candidates, even if we would otherwise prefer to develop and market such Products and Product Candidates ourselves."

Industry Context

This filing highlights the capital-intensive nature of the pharmaceutical and biotechnology industry, particularly for companies in the drug development phase with multiple clinical programs. The focus on the endocannabinoid system and rare cannabinoids positions InMed within the emerging cannabinoid therapeutics and health & wellness sectors. The need for continuous funding and the 'going concern' warning are common challenges for early-stage biotech companies, emphasizing the high risk and long development cycles inherent in bringing new drugs to market. The company's dual approach of pharmaceutical development and B2B commercialization of raw materials reflects a strategy to diversify revenue streams within the broader cannabinoid industry.

Management Changes

Corporate Governance

Related Party Transactions

• Legal services rendered by Norton Rose Fulbright Canada LLP (NRFC) to the company amounted to $226,793 during the year ended June 30, 2024. Janet Grove, a former director until February 10, 2025, is a Partner of NRFC.
• Legal services rendered by NRFC and Norton Rose Fulbright US LLP (NRF) to the company amounted to $316,977 during the period from July 1, 2024, to February 10, 2025. These transactions were in the normal course of operations and measured at exchange amount.

Stakeholder Impact

• Shareholders: Face significant dilution from the recent private placement and potential future capital raises. The large number of shares registered for resale by the Selling Shareholder (approximately 195% of current outstanding shares) could depress the market price, impacting shareholder value. Investing involves a high degree of risk, and there is substantial doubt about the company's ability to continue as a going concern.
• Company: The private placement provides much-needed capital (potential $4.76 million) to continue pipeline development, support commercial sales, and cover general working capital, which is critical given recurring losses and accumulated deficit. However, the company remains reliant on external funding.
• Employees: Continued operations and job security are dependent on the company's ability to secure ongoing funding and achieve profitability, which is uncertain given the 'going concern' warning.
• Creditors: The 'going concern' warning and significant accumulated deficit indicate increased financial risk, potentially affecting the company's ability to meet its obligations.

Next Steps

• Seek partnership(s) to advance the INM-755 program for dermatological conditions, including chronic itch.
• Continue research with proprietary drug candidates, including the INM-901 program for neurodegenerative diseases like Alzheimer's and the INM-089 program for dry AMD.
• Investigate Product Candidates for additional uses beyond their initial target indications.
• Pursue the discovery of additional small molecule drug candidates for other diseases with high unmet medical needs.
• Seek regulatory approvals for any Product Candidates that successfully complete clinical trials.
• Scale-up manufacturing processes and capabilities, or arrange for a third party to do so.
• Continue to support commercial operations and revenue-generating Products at BayMedica.
• Execute on business development initiatives, including strategic transactions, mergers, acquisitions, divestitures, and inor out-licensing of technologies or business units.
• Maintain, expand, enforce, defend, and protect intellectual property.
• Continue advancing the research and development of various manufacturing technologies.
• Build internal infrastructure, including personnel, to meet target milestones.
• Add operational, financial, and management information systems and personnel to support product development and potential future commercialization efforts and public company operations.

Key Dates

Recommendation

Keywords

Pharmaceuticals, Drug Development, Cannabinoids, Alzheimer's Disease, Dry Age-Related Macular Degeneration, Epidermolysis Bullosa, Neuroinflammation, CB1 Receptors, CB2 Receptors, IntegraSyn, BayMedica, SEC Filing, S-1 Registration Statement, Private Placement, Warrants, Options, Nasdaq Capital Market, Biotechnology, Clinical Trials, Intellectual Property, Capital Raise, Going Concern