InMed Pharmaceuticals (INM) risk factors, FY2025 10-K

Risks Related to our Business and Industry

1. 01Our prospects depend on the success of our Product Candidates which are at early stages of development with a statistically high probability of failure
2. 02Even if our Product Candidates advance through preclinical studies and clinical trials, we may experience difficulties in managing our growth and expanding our operations
3. 03The threat or actual adoption of tariffs, retaliatory tariffs and duties, trade barriers and restrictions, and related international trade conflicts, including by the United States, Canada or other jurisdictions, could materially impact the macroeconomic framework in which we operateNew
4. 04Any actual or threatened delisting of our securities by Nasdaq could have a material and adverse effect on our business, operations and financial condition, and could, among other things, limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions60% rewritten
5. 05If we have difficulty enrolling patients in clinical trials, the completion of the trials may be delayed or cancelled
6. 06If we experience delays in clinical testing, we will be delayed in commercializing our Product Candidates, and our business may be substantially harmed
7. 07Our IntegraSyn manufacturing approach may prove unsuccessful in achieving yields and/or cost levels required to be economically competitive with alternative methods of manufacturing
8. 08Negative results from clinical trials or studies of others and adverse safety events involving the targets of our products may have an adverse impact on our future commercialization efforts
9. 09We intend to expend our limited resources to pursue our Product Candidates for certain indications and may fail to capitalize on other Product Candidates or other indications for our Product Candidates that may be more profitable or for which there is a greater likelihood of success90% rewritten
10. 10We intend to conduct clinical trials for our Product Candidates in several international jurisdictions, and acceptance by all regulatory authorities for such “international” data is not certain
11. 11Our Product Candidates contain compounds that may be classified as “controlled substances”, the use of which may generate public controversy and restrict their development or commercialization
12. 12If any of our Product Candidates receives marketing approval and we or others later identify undesirable side effects caused by the Product Candidate, our ability to market and derive revenue from the product candidates could be compromised
13. 13Research restrictions, product shipment delays or prohibitions could have a material adverse effect on our business, results of operations and financial condition
14. 14Healthcare legislation, including potentially unfavorable pricing regulations or other healthcare reform initiatives, may increase the difficulty and cost for us to obtain marketing approval of and commercialize our Product Candidates
15. 15Any Product Candidates we develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, thereby materially and adversely impacting our business
16. 16Increased scrutiny on drug pricing or changes in pricing regulations could restrict the amount that we are able to charge for our Product Candidates, which could adversely affect our revenue and results of operations
17. 17Negative publicity may adversely affect us and our business
18. 18Even if we are able to commercialize our Product Candidates, they may not receive coverage and adequate reimbursement from third-party payors, which could harm our business
19. 19Failure to comply with the FCPA, the CFPOA, and other global anti-corruption and anti-bribery laws could subject us to penalties and other adverse consequences64% rewritten
20. 20Federal legislation and actions by state and local governments may permit reimportation of drugs from/to foreign countries where the drugs are sold at lower prices than in the country of origination, which could materially adversely affect our business and financial condition
21. 21We are dependent upon our key personnel to achieve our business objectives
22. 22Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could subject us to significant liability and harm our reputation
23. 23Our internal computer systems, or those of our contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs
24. 24Our insurance may be insufficient to cover losses that may occur as a result of our operations
25. 25Our insurance costs may increase significantly, we may be unable to obtain the same level of insurance coverage and our insurance coverage may not be adequate to cover all possible losses we may suffer
26. 26There may be changes in laws, regulations and guidelines which are material and detrimental to our business
27. 27If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected
28. 28Our proprietary information, or that of our customers, suppliers and business partners, may be lost or we may suffer security breaches
29. 29We expect to face intense competition, often from companies with greater resources and experience than we have
30. 30Industry consolidation may lead to increased competition and costs, and may harm our operating results
31. 31If we receive regulatory approvals, we intend to market our Product Candidates in multiple jurisdictions where we have limited or no operating experience and may be subject to increased business and economic risks that could affect our financial results
32. 32Controlled substance legislation may differ in other jurisdictions and could restrict our ability to market our products internationally, which would result in increased business and economic risks that could affect our financial results
33. 33Product liability lawsuits against us could cause us to incur substantial liabilities
34. 34Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results
35. 35Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results
36. 36Our results of operations could be materially and adversely affected if we cannot keep pace with technological changes impacting the development of our products and implementation of our business needs, including with respect to automation and the use of AI
37. 37Climate change may have an impact on our business21% rewritten
38. 38Our success depends on our ability to continue to innovate and create new products and enhancements to our existing products

Risks Related to our Securities

1. 39The market prices for our Common Shares are volatile and will fluctuate
2. 40Raising additional capital may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our technologies or Product Candidates
3. 41Future offerings of debt or equity securities may rank senior to our Common Shares
4. 42Future sales of Common Shares by our officers, directors and affiliates may negatively impact the market price for our Common Shares
5. 43We do not currently pay dividends on our Common Shares and have no intention to pay dividends on our Common Shares for the foreseeable future
6. 44We are exposed to risks related to currency exchange rates
7. 45There remains increased focus from lawmakers and regulators on corporate Environmental, Social and Governance (“ESG”) practices, including climate change and related ESG disclosure requirementsNew
8. 46If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our Common Shares
9. 47Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
10. 48Deficiencies in disclosure controls and procedures and internal control over financial reporting could result in a material misstatement in our financial statements
11. 49We have incurred, and will continue to incur, increased costs as a result of operating as a public company, and our management has been required, and will continue to be required, to devote substantial time to new compliance initiatives
12. 50Future sales and issuances of our Common Shares or rights to purchase Common Shares pursuant to our equity incentive plan could result in additional dilution of the percentage ownership of our shareholders and may cause our share price to fall
13. 51Provisions in our corporate charter documents and certain Canadian laws could delay or deter a change of control
14. 52If securities or industry analysts publish inaccurate or unfavorable research about our business, our share price and trading volume may decline
15. 53We are incorporated in Canada, with our assets and officers primarily located in Canada, with the result that it may be difficult for investors to enforce judgments obtained against us or some of our officers

Risks Related to our Financial Position and Capital Needs

1. 54Our operating losses have raised substantial doubt regarding our ability to continue as a going concern28% rewritten
2. 55We have incurred significant losses since our inception and anticipate that we will continue to incur losses in the future
3. 56We will require additional capital to fund our operations and if we fail to obtain necessary financing, we will not be able to complete the development and commercialization of our Product Candidates
4. 57We may have difficulties identifying, successfully completing or integrating acquisitions, or maintaining or growing our acquired businesses
5. 58In addition to the limited revenues from our BayMedica Products, our ability to generate revenue and become profitable depends upon our ability to obtain regulatory approval for, and successfully commercialize, our Product Candidates that we may develop, in-license or acquire in the future
6. 59Changes in tax laws and unanticipated tax liabilities could adversely affect our effective income tax rate and ability to achieve profitability
7. 60As of June 30, 2025, we had net operating loss (“NOL”) carryforwards of approximately $97.3 million available to offset future taxable income in Canada and the United States. These NOL carry-forwards begin to expire in 2026
8. 61Natural disasters, public health crises, political crises, or other catastrophic events may adversely affect our business affairs, results of operations, financial condition, liquidity, availability of credit and foreign exchange exposure24% rewritten
9. 62The ongoing Russo-Ukraine War and the Israel-Hamas conflict, including the actual or perceived threat of an exacerbation of such conflicts, could have a material and adverse effect on our business, operations and financial condition45% rewritten
10. 63High rates of global inflation, the occurrence of a recession and higher interest rates could have a material and adverse impact on our business, results of operations and financial condition29% rewritten

Risks Related to our Intellectual Property

1. 64Our success is largely dependent upon our patents, proprietary technology, and other intellectual property
2. 65Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
3. 66We may become subject to claims by third parties asserting that we or our employees have misappropriated their intellectual property or claiming ownership of what we regard as our own intellectual property
4. 67We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful and have a material adverse effect on the success of our business
5. 68If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished
6. 69We may not be able to protect our intellectual property rights throughout the world
7. 70Patent terms may be inadequate to protect our competitive position on our Product Candidates for an adequate amount of time
8. 71Intellectual property rights do not necessarily address all potential threats to our competitive advantage

Risks Related to our Third Parties

1. 72We rely heavily on contract manufacturers over whom we have limited control. If we are subject to quality, cost or delivery issues with the preclinical and clinical grade materials supplied by contract manufacturers, our business operations could suffer significant harm
2. 73Our existing collaboration agreements and any that we may enter into in the future may not be successful