[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section cautions readers about forward-looking statements, which involve substantial risks and uncertainties that could cause actual results to differ materially - This Annual Report contains forward-looking statements subject to 'safe harbor' provisions, which involve substantial risks and uncertainties that could cause actual results to differ materially[12](index=12&type=chunk) - Key areas of forward-looking statements include capital requirements, regulatory submissions, clinical trial timing and results, intellectual property, commercial potential, and the impact of economic/political events[15](index=15&type=chunk) - Readers are cautioned not to place undue reliance on these statements and to review the 'Risk Factors' section, as the company undertakes no obligation to update or revise them[14](index=14&type=chunk) [Summary of Risk Factors](index=4&type=section&id=SUMMARY%20OF%20RISK%20FACTORS) The business faces numerous risks and uncertainties across various categories, including financial, intellectual property, product development, and regulatory aspects - The business is subject to numerous risks and uncertainties, categorized into several key areas[17](index=17&type=chunk) - Risk categories include those related to business, financial condition, capital requirements, intellectual property, product development, regulatory approval, manufacturing, commercialization, reliance on third parties, government regulation, and common stock ownership[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - Specific risks highlighted include no revenue generation, future losses, need for additional capital, reliance on key personnel, challenges in obtaining and maintaining patent protection, and delays in clinical trials or regulatory approvals for selonabant[18](index=18&type=chunk) [Part I](index=6&type=section&id=PART%20I) This part provides a comprehensive overview of Anebulo Pharmaceuticals' business, including its product candidate, market, strategy, and regulatory environment [Item 1. Business](index=6&type=section&id=Item%201.%20Business) Anebulo Pharmaceuticals is a clinical-stage company developing selonabant, a CB1 antagonist, to treat cannabis-induced toxicity, prioritizing an IV formulation for pediatric patients [Overview](index=6&type=section&id=Overview) Anebulo Pharmaceuticals is a clinical-stage company developing selonabant to rapidly reverse cannabis-induced toxicity, prioritizing an IV formulation for pediatric patients - Anebulo Pharmaceuticals is a clinical-stage company developing selonabant (formerly ANEB-001) for cannabis-induced toxicity, including ACI in adults and unintentional cannabis poisoning in children[22](index=22&type=chunk) - There are no approved medical treatments specifically for cannabis-induced toxicity, and selonabant is positioned as a potential first-in-class treatment[22](index=22&type=chunk) - The company is prioritizing the development of an intravenous (IV) selonabant formulation for pediatric patients, anticipating a faster timeline to approval compared to the adult oral product, and has initiated a SAD study in healthy adults[26](index=26&type=chunk)[27](index=27&type=chunk) [Our Lead Product Candidate](index=7&type=section&id=Our%20Lead%20Product%20Candidate) Selonabant, a potent CB1 receptor antagonist, is Anebulo's lead product candidate, available in oral and IV formulations, protected by multiple patents - Selonabant is a potent, small molecule antagonist of the cannabinoid receptor type-1 (CB1), the primary receptor for cannabinoids' psychotropic effects[28](index=28&type=chunk) - It is orally bioavailable, rapidly absorbed, and has also been formulated for intravenous treatment, with both forms designed to rapidly reverse cannabis toxicity symptoms[28](index=28&type=chunk) - The company's proprietary position is protected by three issued US patents and rights to six additional patent applications, two pending PCT applications, and other international patent applications[28](index=28&type=chunk) [Our Market Opportunity](index=8&type=section&id=Our%20Market%20Opportunity) The market for cannabis toxicity treatments is growing significantly in the U.S. due to increasing legalization, with edibles and synthetic cannabinoids driving emergency visits - Cannabis-induced toxicity is a widespread health issue in the U.S., with emergency department visits increasing from an estimated **1.1 million** in 2014 to approximately **1.8 million** in 2021[24](index=24&type=chunk)[32](index=32&type=chunk) - Edible products, often mistaken for regular consumer items, are a major cause of THC-related emergency room visits, especially for children, due to their high potency and delayed onset of effects[23](index=23&type=chunk)[37](index=37&type=chunk) - Intoxication from synthetic cannabinoids represents a high unmet medical need, as synthetics can be up to **85 times more potent** than THC and cause more severe and longer-lasting negative effects[39](index=39&type=chunk) [Our Growth Strategy](index=10&type=section&id=Our%20Growth%20Strategy) Anebulo's growth strategy focuses on developing and commercializing selonabant in the U.S., prioritizing the IV formulation for pediatric use and leveraging outsourcing for capital efficiency - The company's primary goal is to develop and commercialize selonabant in the U.S., prioritizing the IV formulation for pediatric unintentional cannabis poisoning due to its potential for a faster approval timeline[40](index=40&type=chunk) - Strategic principles include capital efficiency through outsourcing R&D, manufacturing, and data management, and exploring collaborations for commercialization[46](index=46&type=chunk) - The strategy also involves introducing promising product candidate extensions, such as the developed IV selonabant formulation and investigating additional routes of administration[46](index=46&type=chunk) [Our Clinical Trials and Milestones](index=11&type=section&id=Our%20Clinical%20Trials%20and%20Milestones) Anebulo is developing selonabant for acute cannabis toxicity, with positive Phase 2 data showing rapid symptom reduction and ongoing studies for pediatric applications [Preclinical Data](index=11&type=section&id=Preclinical%20Data) - Preclinical characterization of selonabant by Vernalis (2003-2006) showed high affinity (**0.55 nM**) and **>1000x selectivity** for the human CB1 receptor over other receptors[42](index=42&type=chunk) - Oral selonabant (**30 mg/kg**) significantly reversed THC-induced hypolocomotion in mice after **30 minutes**, demonstrating effective central CB1 antagonism[42](index=42&type=chunk) [Historical Clinical Studies](index=11&type=section&id=Historical%20Clinical%20Studies) - Two Phase 1 studies for obesity (2006-2007) and a third 4-week daily dosing study were conducted by Vernalis, showing selonabant was well tolerated at doses between **1 mg** and **150 mg**[43](index=43&type=chunk)[49](index=49&type=chunk) - Pharmacokinetic measurements showed rapid absorption and blood concentrations sufficient to block the CB1 receptor, with statistically significant decreases in body weight observed[47](index=47&type=chunk)[50](index=50&type=chunk) - No serious adverse events were reported; the most common adverse event was gastrointestinal discomfort, also seen in placebo groups[44](index=44&type=chunk)[47](index=47&type=chunk)[52](index=52&type=chunk) [Anebulo Clinical Studies](index=13&type=section&id=Anebulo%20Clinical%20Studies) - The Netherlands Trial (Phase 2 THC Challenge Study) in healthy volunteers (**134 subjects** in Parts A and B, **20** in Part C) evaluated safety, tolerability, pharmacokinetics, and effectiveness of oral selonabant[54](index=54&type=chunk)[55](index=55&type=chunk) - Part A showed significant, robust, and sustained reduction in 'feeling high' (**p < 0.0001**) and improvement in alertness (**p < 0.01**) with **50 or 100 mg** selonabant co-administered with THC[56](index=56&type=chunk) - Part B demonstrated that a single **10 mg** oral dose of selonabant, administered **1 hour** after THC challenge (up to **30 mg**), rapidly and significantly reversed psychotropic effects, including reduced 'feeling high' (**p=<0.0001**), improved alertness (**p=0.0042**), and reduced body sway (**p=0.0196**)[60](index=60&type=chunk) [Vernalis License Agreement](index=15&type=section&id=Vernalis%20License%20Agreement) Anebulo holds an exclusive worldwide license for selonabant from Vernalis, involving milestone payments and royalties, with Anebulo responsible for development and commercialization - Anebulo entered an exclusive worldwide royalty-bearing license agreement with Vernalis Development Limited on May 26, 2020, for selonabant[66](index=66&type=chunk) Vernalis License Agreement Payments | Payment Type | Amount ($) | | :------------- | :----- | | Signature Fee | $0.2 million | | Development Milestones (potential) | Up to $29.9 million | | Development Milestones (paid) | $0.4 million | | Sales Milestones (potential) | Up to $35.0 million | | Royalties | Low to mid-single digit on net sales | - Anebulo has sole discretion and responsibility for selonabant's development and commercialization, including regulatory approvals, and is obligated to use commercially reasonable efforts in the U.S. and certain European countries[67](index=67&type=chunk) [Competition](index=15&type=section&id=Competition) Anebulo faces intense competition from larger biotechnology and pharmaceutical companies developing treatments for cannabis use disorders and acute overdose - The clinical biotechnology industry is highly competitive, with Anebulo facing larger and better-funded competitors including other biotechnology and pharmaceutical companies, academic institutions, and research institutions[70](index=70&type=chunk) - Potential current competitors include Aelis Farma (developing a pregnenolone derivative for cannabis use disorders) and Indivior PLC (developing drinabant injection for acute cannabis overdose)[70](index=70&type=chunk)[228](index=228&type=chunk) - The company's ability to keep pace with technological developments and other market factors is a significant competitive challenge[70](index=70&type=chunk) [Research and Development](index=16&type=section&id=Research%20and%20Development) Anebulo incurs substantial R&D expenditures for selonabant's preclinical and clinical development, with expenses increasing to $4.3 million in FY2025 - Anebulo incurs substantial expenditures for proprietary R&D of selonabant, including preclinical testing and clinical trials, with efforts advanced by its R&D team and a third-party CRO[72](index=72&type=chunk) Research and Development Expenses | Fiscal Year Ended June 30, | Amount (approx.) | | :------------------------- | :--------------- | | 2025 | $4.3 million | | 2024 | $3.5 million | [Regulation](index=16&type=section&id=Regulation) Anebulo operates in a highly regulated industry, with selonabant subject to extensive governmental regulations covering all aspects from research to commercialization and post-approval oversight [Government Regulation and Product Approval](index=16&type=section&id=Government%20Regulation%20and%20Product%20Approval) - The pharmaceutical industry is extensively regulated by governmental authorities in the U.S. and other countries, covering all aspects from research and testing to marketing and sales[73](index=73&type=chunk) - Selonabant is subject to FDA regulation under the FDCA, requiring rigorous preclinical and clinical testing, and substantial time and financial resources for approval[74](index=74&type=chunk) - Failure to comply with regulatory processes can lead to delays, adverse commercialization effects, and sanctions such as refusal of approval, product recalls, or fines[74](index=74&type=chunk)[75](index=75&type=chunk) [U.S. Review and Approval Processes](index=18&type=section&id=U.S.%20Review%20and%20Approval%20Processes) - After successful clinical testing, an NDA is submitted to the FDA, requiring substantial user fees and potentially a Risk Evaluation and Mitigation Strategy (REMS)[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) - The FDA conducts an in-depth review, may consult advisory committees, and inspect manufacturing facilities for CGMP compliance before issuing an approval or complete response letter[86](index=86&type=chunk)[87](index=87&type=chunk)[90](index=90&type=chunk) - Post-approval, products are subject to ongoing FDA oversight, including reporting, record-keeping, and compliance with CGMP, with potential sanctions for non-compliance[93](index=93&type=chunk)[94](index=94&type=chunk)[99](index=99&type=chunk) [Pharmaceutical Coverage, Pricing and Reimbursement](index=20&type=section&id=Pharmaceutical%20Coverage%2C%20Pricing%20and%20Reimbursement) - Commercial sales of pharmaceutical products depend on third-party payor coverage and reimbursement, which is highly uncertain and varies widely[100](index=100&type=chunk)[101](index=101&type=chunk) - Payors may limit coverage to specific formularies, impose restrictions, or challenge product prices and cost-effectiveness, potentially requiring expensive pharmacoeconomic studies[102](index=102&type=chunk) - Federal and state governments are increasingly implementing cost containment programs, which could limit or exclude coverage for Anebulo's products[103](index=103&type=chunk)[104](index=104&type=chunk) [Current Legislation](index=20&type=section&id=Current%20Legislation) - Anebulo's business arrangements are subject to federal and state healthcare fraud and abuse laws, including the Anti-Kickback Statute and False Claims Act, which broadly regulate interactions with healthcare professionals and payors[105](index=105&type=chunk)[106](index=106&type=chunk) - Compliance with these laws involves substantial ongoing costs, and violations could lead to significant penalties, including civil, criminal, and administrative sanctions, and exclusion from government healthcare programs[107](index=107&type=chunk) - Other relevant laws include the FDCA (prohibiting adulteration/misbranding), HIPAA (privacy/security of health information), and the Physician Payments Sunshine Act (reporting payments to healthcare professionals)[106](index=106&type=chunk) [Healthcare Reform](index=22&type=section&id=Healthcare%20Reform) - The Affordable Care Act (ACA) introduced significant healthcare reform provisions, including annual fees on drug manufacturers, changes to Medicaid rebates, and a Medicare Part D discount program[109](index=109&type=chunk) - The Inflation Reduction Act of 2022 (IRA) further impacts the pharmaceutical industry by directing HHS to negotiate drug prices under Medicare and imposing rebates for price increases exceeding inflation[110](index=110&type=chunk)[112](index=112&type=chunk) - Future legislative changes, including potential new models from the CMS Innovation Center and the Biden administration's initiative on march-in rights, could limit government payments for healthcare products and reduce profitability[112](index=112&type=chunk) [Data Privacy](index=23&type=section&id=Data%20Privacy) - Anebulo's data processing activities, including sensitive information from clinical trials, are subject to stringent and evolving U.S. and foreign data privacy and security laws (e.g., HIPAA, CCPA, GDPR)[113](index=113&type=chunk)[114](index=114&type=chunk)[116](index=116&type=chunk) - Non-compliance can lead to significant consequences, including regulatory investigations, litigation (including class actions), substantial fines (e.g., up to **20 million Euros** or **4% of global revenue** under GDPR), and reputational harm[116](index=116&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) - Cross-border data transfer restrictions, particularly from Europe to the U.S., pose significant challenges and risks, potentially leading to operational disruptions or relocation expenses[119](index=119&type=chunk) [Environmental, Health, and Safety Regulation](index=24&type=section&id=Environmental%2C%20Health%2C%20and%20Safety%20Regulation) - The company is subject to federal, state, and local EHS laws and regulations concerning safe working conditions, environmental protection, and handling of hazardous materials and medical waste[124](index=124&type=chunk) - Compliance requires licenses and permits, and failure to comply could result in substantial fines, permit revocation, or operational limitations[124](index=124&type=chunk) - EHS laws are complex and frequently change, making future compliance costs and impacts uncertain[124](index=124&type=chunk) [Protection of Intellectual Property](index=25&type=section&id=Protection%20of%20Intellectual%20Property) Anebulo protects its intellectual property through patents, regulatory exclusivity, a license agreement, trademarks, trade secrets, and confidentiality agreements - Anebulo protects its intellectual property through patents, regulatory exclusivity, a license agreement, trademarks, trade secrets, and confidentiality agreements[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) - The company holds three issued U.S. patents for selonabant, covering formulations and methods for treating acute cannabinoid overdose (through **2040**) and crystalline forms of the CB1 modulator (through **2042**)[126](index=126&type=chunk) - Regulatory exclusivity options include **five years** for New Chemical Entities (NCE), **seven years** for Orphan Drug designation, and a **six-month** extension for Pediatric Drug designation[127](index=127&type=chunk) [Employees and Human Capital Resources](index=26&type=section&id=Employees%20and%20Human%20Capital%20Resources) Anebulo maintains a small team of employees and consultants, focusing on attracting and retaining talent through competitive compensation and benefits - As of June 30, 2025, Anebulo had **two full-time** and **one part-time** employee, with additional outside consultants for scientific R&D[132](index=132&type=chunk) - Human capital objectives include identifying, recruiting, retaining, incentivizing, and integrating employees through competitive pay, company-paid benefits, and long-term incentives like stock-based and cash bonus awards[132](index=132&type=chunk) [Implications of Being an Emerging Growth Company and a Smaller Reporting Company](index=26&type=section&id=Implications%20of%20Being%20an%20Emerging%20Growth%20Company%20and%20a%20Smaller%20Reporting%20Company) Anebulo benefits from reduced SEC disclosure requirements as an emerging growth and smaller reporting company, potentially affecting financial statement comparability - Anebulo qualifies as an 'emerging growth company' and 'smaller reporting company,' enabling it to use reduced disclosure obligations[133](index=133&type=chunk)[135](index=135&type=chunk) - Exemptions include presenting only **two years** of audited financial statements, reduced executive compensation disclosures, and delaying adoption of new accounting standards[133](index=133&type=chunk) - The election to use extended transition periods for accounting standards may make financial statements less comparable to other public companies, potentially affecting investor attractiveness[133](index=133&type=chunk)[134](index=134&type=chunk) [Corporate Information](index=26&type=section&id=Corporate%20Information) Anebulo Pharmaceuticals, Inc. was incorporated in Delaware in April 2020, with its principal executive offices located in Lakeway, Texas - Anebulo Pharmaceuticals, Inc. was incorporated in Delaware in April 2020[136](index=136&type=chunk) - The principal executive offices are located at 1017 Ranch Road 620 South, Suite 107, Lakeway, Texas 78734[136](index=136&type=chunk) [Available Information](index=26&type=section&id=Available%20Information) Anebulo provides public access to its SEC filings, including Annual and Quarterly Reports, free of charge on its investor relations website - Anebulo's website (www.anebulo.com) provides free access to its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments[137](index=137&type=chunk) - All electronic filings are also available on the SEC's website (http://www.sec.gov)[137](index=137&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks and uncertainties that could materially affect Anebulo's business, financial condition, operations, and future growth [Risks Related to our Business, Financial Condition and Capital Requirements](index=26&type=section&id=Risks%20Related%20to%20our%20Business%2C%20Financial%20Condition%20and%20Capital%20Requirements) Anebulo faces risks related to its lack of revenue, accumulated deficit, need for additional capital, and reliance on key personnel for future success - Anebulo has not generated revenue since inception, has an accumulated deficit of **$73.9 million** as of June 30, 2025, and expects to incur future losses, potentially never achieving profitability[140](index=140&type=chunk) - The company will need to raise additional capital in the future, which may not be available on acceptable terms or could cause significant dilution to existing stockholders[144](index=144&type=chunk)[146](index=146&type=chunk) - Success is highly dependent on the continued service of its Founder and CEO, Joseph F. Lawler and Richard Anthony Cunningham, and the ability to attract and retain other key personnel[150](index=150&type=chunk) [Risks Related to Our Intellectual Property](index=30&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Commercial success depends on robust patent protection for selonabant, with risks including patent challenges, lack of exclusivity, and compliance with license agreements - Commercial success depends on obtaining and maintaining broad patent protection for selonabant, but patent applications may not issue, or issued patents may be challenged, narrowed, or invalidated[153](index=153&type=chunk)[156](index=156&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) - Failure to obtain patent term extension and data exclusivity for selonabant could materially harm the business by allowing competitors to enter the market sooner[167](index=167&type=chunk)[168](index=168&type=chunk) - Reliance on the Vernalis license agreement means failure to comply with obligations or disruptions in the relationship could lead to loss of intellectual property rights critical to selonabant's development[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) [Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization](index=35&type=section&id=Risks%20Related%20to%20Product%20Development%2C%20Regulatory%20Approval%2C%20Manufacturing%20and%20Commercialization) Anebulo faces risks from clinical trial delays, failure to obtain regulatory approvals, manufacturing challenges, and uncertain market acceptance for selonabant - Delays or termination of clinical trials for selonabant, which are expensive and unpredictable, could adversely affect the business by increasing costs, shortening patent protection, and allowing competitors to market products first[188](index=188&type=chunk) - Failure to obtain regulatory approvals for selonabant will prevent commercialization and limit revenue generation, as success in early trials does not guarantee later success or approval[190](index=190&type=chunk)[191](index=191&type=chunk) - Even with regulatory approval, successful commercialization depends on market acceptance by physicians, patients, and payors, which is influenced by factors like clinical safety, efficacy, pricing, and competition[196](index=196&type=chunk)[197](index=197&type=chunk) [Risks Related to Our Reliance on Third Parties](index=45&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) Anebulo's reliance on third parties for R&D, manufacturing, and collaborations introduces risks of delays, increased costs, and loss of critical intellectual property rights - Anebulo depends on third parties (CROs, CMOs) for preclinical testing, clinical trials, and manufacturing, which reduces control and can lead to delays, increased costs, or rejection of data if they fail to perform[233](index=233&type=chunk)[234](index=234&type=chunk) - Complete reliance on third parties for selonabant manufacturing means commercialization could be halted or delayed if manufacturers fail to obtain/maintain FDA approval, provide sufficient quantities, or meet quality/price standards[237](index=237&type=chunk)[239](index=239&type=chunk) - Reliance on collaborations, including the Vernalis license, carries risks such as termination rights, reduced payments, and loss of control, which could delay product development and reduce profitability[246](index=246&type=chunk)[248](index=248&type=chunk)[251](index=251&type=chunk) [Risks Related to Government Regulation of our Industry](index=48&type=section&id=Risks%20Related%20to%20Government%20Regulation%20of%20our%20Industry) Legislative and regulatory reforms, including healthcare and FDA approval processes, pose significant risks to Anebulo's product profitability and market access - Legislative and regulatory reforms in healthcare, such as the ACA and IRA, can significantly impact Anebulo's ability to sell products profitably, affecting pricing, coverage, and compliance costs[254](index=254&type=chunk)[255](index=255&type=chunk)[258](index=258&type=chunk) - Clinical trials conducted outside the U.S. and not under an IND may not be accepted by the FDA, potentially requiring additional costly and time-consuming trials[260](index=260&type=chunk) - Increased scrutiny by the U.S. Congress of the FDA's approval process could delay or prevent marketing approval and impose more stringent product labeling and post-marketing requirements[254](index=254&type=chunk) [Risks Related to Ownership of Our Common Stock](index=49&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Risks include potential stock value decrease from a reverse stock split and delisting, volatile trading prices, and significant control by principal stockholders - Anebulo intends to seek stockholder approval for a reverse stock split as part of a plan to go private, delist from Nasdaq, and deregister with the SEC, which would significantly reduce public information and liquidity, potentially decreasing stock value[262](index=262&type=chunk)[263](index=263&type=chunk) - The trading price and volume of common stock are volatile due to various factors, including operational results, analyst expectations, and general economic conditions, potentially leading to investment losses[264](index=264&type=chunk)[265](index=265&type=chunk) - Principal stockholders and management own a substantial majority of the stock, enabling them to exert significant control over stockholder approval matters, potentially discouraging acquisition proposals[267](index=267&type=chunk) [General Risk Factors](index=52&type=section&id=General%20Risk%20Factors) General risks include ineffective internal controls, increased public company costs, and evolving data privacy and security obligations with potential for significant penalties - Failure to establish and maintain effective internal control over financial reporting could harm operating results and business operations, leading to inaccurate financial statements and potential sanctions[277](index=277&type=chunk)[278](index=278&type=chunk) - Operating as a public company incurs significantly increased costs and requires substantial management time for compliance with SEC and Nasdaq requirements, diverting resources from business management[279](index=279&type=chunk) - The company is subject to stringent and evolving data privacy and security obligations (e.g., HIPAA, GDPR, CCPA), with actual or perceived failures to comply potentially leading to regulatory actions, litigation, fines, and business disruptions[297](index=297&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk) [Item 1B. Unresolved Staff Comments](index=60&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) Anebulo Pharmaceuticals, Inc. has no unresolved staff comments from the SEC - There are no unresolved staff comments[321](index=321&type=chunk) [Item 1C. Cybersecurity](index=60&type=section&id=Item%201C.%20Cybersecurity) Anebulo Pharmaceuticals manages cybersecurity risks through a structured strategy and governance framework. Management identifies, assesses, and manages threats to sensitive data and IT systems, relying on third-party vendor diligence and threat intelligence. The Audit Committee oversees cybersecurity risks, receiving annual briefings and updates on material incidents. As of the report date, no material cybersecurity incidents have occurred [Risk Management Strategy](index=60&type=section&id=Risk%20Management%20Strategy) - Anebulo collects, processes, transmits, and stores sensitive data, including intellectual property and personal data, relying on third-party service providers like CROs and cloud vendors[322](index=322&type=chunk)[323](index=323&type=chunk) - The company's risk management strategy includes vendor diligence, ongoing monitoring (e.g., SOC-1 reports), and leveraging threat intelligence from governmental, public, or private sources[323](index=323&type=chunk) - Processes are in place to identify, assess, and manage material cybersecurity risks, including internal/external threats to data security, confidentiality, integrity, and availability[324](index=324&type=chunk) [Governance](index=60&type=section&id=Governance) - Management is responsible for day-to-day cybersecurity risk management, while the board of directors, specifically the audit committee, provides oversight[325](index=325&type=chunk) - The audit committee is briefed on cybersecurity risks at least annually and after any material incidents, with periodic updates provided to the full board[325](index=325&type=chunk) - As of the report date, Anebulo has not experienced a cybersecurity incident with a material effect on its business strategy, operations, or financial condition[326](index=326&type=chunk) [Item 2. Properties](index=60&type=section&id=Item%202.%20Properties) Anebulo Pharmaceuticals operates from a principal executive office in Lakeway, Texas, under a sublease with JFL Capital Management LLC, a related party. The monthly rent is approximately $400, and the company believes the current space is adequate for its present and near-term operations - Anebulo manages its business from a principal executive office in Lakeway, Texas, leased under a sublease with JFL Capital Management LLC, a company controlled by its founder[327](index=327&type=chunk) - The company pays approximately **$400** per month in rent and considers its current office space adequate for present and near-term expansion[327](index=327&type=chunk) [Item 3. Legal Proceedings](index=61&type=section&id=Item%203.%20Legal%20Proceedings) Anebulo Pharmaceuticals is not currently a party to any material legal proceedings. While litigation can arise in the ordinary course of business, management believes no pending claims would have a material adverse effect on its financial condition or results of operations - Anebulo is not currently a party to any material legal proceedings[329](index=329&type=chunk) - Management believes no pending claims would have a material adverse effect on the company's results of operations or financial condition[329](index=329&type=chunk) [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Anebulo Pharmaceuticals, Inc - This item is not applicable[330](index=330&type=chunk) [Part II](index=61&type=section&id=PART%20II) This part covers Anebulo's market for common equity, related stockholder matters, management's discussion and analysis, and financial statements [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=61&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Anebulo's common stock trades on the Nasdaq Capital Market under 'ANEB'. As of September 25, 2025, there were approximately 15 record holders. The company has not paid cash dividends since inception and does not anticipate doing so in the foreseeable future, intending to retain earnings for business operations and expansion. No issuer purchases of equity securities or unregistered sales occurred [Market Information](index=61&type=section&id=Market%20Information) - Anebulo's common stock is traded on the Nasdaq Capital Market under the symbol 'ANEB'[331](index=331&type=chunk) Common Stock Closing Price | Date | Closing Price | | :--- | :------------ | | September 26, 2025 | $2.40 per share | [Holders of Record](index=61&type=section&id=Holders%20of%20Record) - As of September 25, 2025, there were approximately **15** holders of record of the company's common stock[332](index=332&type=chunk) [Dividends](index=61&type=section&id=Dividends) - Anebulo has not declared or paid any cash dividends on its capital stock since inception[333](index=333&type=chunk) - The company intends to retain future earnings for business operations and expansion and does not anticipate paying cash dividends in the foreseeable future[333](index=333&type=chunk) [Equity Compensation Plan Information](index=61&type=section&id=Equity%20Compensation%20Plan%20Information) - Information on securities authorized for issuance under equity compensation plans is incorporated by reference from Part III – Item 12[334](index=334&type=chunk) [Unregistered Sales of Equity Securities](index=61&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) - There were no unregistered sales of equity securities[335](index=335&type=chunk) [Issuer Purchases of Equity Securities](index=61&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) - There were no issuer purchases of equity securities[336](index=336&type=chunk) [Item 6. [Reserved]](index=61&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=62&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section reviews Anebulo's financial condition and operational results, highlighting significant losses, liquidity, and strategic developments for selonabant [Overview](index=62&type=section&id=Overview) - Anebulo is a clinical-stage pharmaceutical company developing selonabant for cannabis-induced toxicity, prioritizing an IV formulation for pediatric patients due to unmet medical need and potential for faster approval[339](index=339&type=chunk)[344](index=344&type=chunk)[345](index=345&type=chunk) - The company received a **$0.9 million** first tranche of a two-year cooperative grant from NIDA (up to **$1.9 million** total) to support IV selonabant development[351](index=351&type=chunk) - A proposed reverse stock split (**1-for-2,500 to 1-for-7,500**) is planned to facilitate going private, delisting from Nasdaq, and deregistering with the SEC, aiming to keep record holders below **300**[352](index=352&type=chunk)[353](index=353&type=chunk) [Components of Results of Operations](index=64&type=section&id=Components%20of%20Results%20of%20Operations) - Anebulo has not generated any revenue since inception and expects future revenue from product sales or collaboration/license agreements, if development is successful[356](index=356&type=chunk) - Research and development expenses are significant and expensed as incurred, primarily covering third-party CRO/CMO costs, clinical trials, and consultant expenses for selonabant[357](index=357&type=chunk)[359](index=359&type=chunk) - General and administrative expenses mainly consist of professional fees, insurance, personnel costs, stock-based compensation, and rent[361](index=361&type=chunk) [Results of Operations](index=65&type=section&id=Results%20of%20Operations) Summary of Results of Operations (Years Ended June 30) | | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------- | :----------- | :----------- | :----------- | | Research and development | $4,299,941 | $3,548,937 | $751,004 | | General and administrative | $4,923,540 | $4,759,818 | $163,722 | | Total operating expenses | $9,223,481 | $8,308,755 | $914,726 | | Loss from operations | $(9,223,481) | $(8,308,755) | $(914,726) | | Interest expense | $382,014 | $151,230 | $230,784 | | Interest income | $(257,913) | $(249,022) | $(8,891) | | Grant income | $(864,014) | $- | $(864,014) | | Other income, net | $(738,718) | $(107,052) | $(631,666) | | Net loss | $(8,484,763) | $(8,201,703) | $(283,060) | | Weighted average common shares outstanding, basic and diluted | 33,820,306 | 25,822,258 | 7,998,048 | | Net loss per share, basic and diluted | $(0.25) | $(0.32) | $0.07 | - Research and development expenses increased by **$0.8 million** in FY2025, primarily due to increased pre-clinical and clinical studies and contract manufacturing for IV selonabant development[364](index=364&type=chunk) - General and administrative expenses increased by **$0.2 million** in FY2025, driven by a **$0.7 million** increase in stock-based compensation, partially offset by decreases in compensation and professional fees[365](index=365&type=chunk) [Liquidity and Capital Resources](index=67&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, Anebulo had cash and cash equivalents of approximately **$11.6 million**, an increase of **$8.5 million** from the prior year, primarily from a **$14.9 million** private placement[369](index=369&type=chunk)[372](index=372&type=chunk) - The company expects current cash and a **$3 million** loan facility to fund operations for at least **12 months** but will need additional funding for development and commercialization[369](index=369&type=chunk)[370](index=370&type=chunk)[375](index=375&type=chunk)[553](index=553&type=chunk) - Future funding may come from equity/debt financings or collaboration agreements, with potential for dilution or unfavorable terms[376](index=376&type=chunk)[554](index=554&type=chunk) [Contractual Obligations and Commitments](index=68&type=section&id=Contractual%20Obligations%20and%20Commitments) - Anebulo has an exclusive license agreement with Vernalis, requiring potential development milestone payments up to **$29.9 million** (**$0.4 million** paid) and sales milestones up to **$35.0 million**, plus low to mid-single digit royalties[377](index=377&type=chunk) - The company has a manufacturing agreement with a third-party CMO for approximately **$3.0 million**, substantially completed as of June 30, 2024, with stability studies extending into 2026[381](index=381&type=chunk) - An agreement with a third-party CRO for the Phase 1 SAD study totals approximately **$3.5 million**, expected to be substantially completed by Q3 2026[382](index=382&type=chunk) [Critical Accounting Estimates](index=69&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates include accrued research and development expenses, which involve estimating services performed by CROs, investigative sites, and manufacturers when invoices are not yet received[386](index=386&type=chunk) - Stock-based compensation expense is estimated using the Black-Scholes option pricing model, requiring subjective assumptions for volatility, expected term, risk-free rate, and dividends[388](index=388&type=chunk) - As an 'emerging growth company,' Anebulo utilizes extended transition periods for new accounting standards, which may affect comparability of its financial statements[390](index=390&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for Anebulo Pharmaceuticals as it qualifies as a smaller reporting company - This item is not required for smaller reporting companies[392](index=392&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=71&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The financial statements and supplementary data are appended to this Annual Report under Item 15, Exhibits and Financial Statement Schedules, and are incorporated by reference - The financial statements and supplementary data are appended under Item 15 and incorporated by reference[393](index=393&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=71&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) Anebulo Pharmaceuticals, Inc. reports no changes in or disagreements with accountants on accounting and financial disclosure matters - There are no changes in or disagreements with accountants on accounting and financial disclosure[394](index=394&type=chunk) [Item 9A. Controls and Procedures](index=71&type=section&id=Item%209A.%20Controls%20and%20Procedures) Anebulo's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures as of June 30, 2025, concluding they were effective at a reasonable assurance level. Management also concluded that internal control over financial reporting was effective as of the same date, based on the COSO framework. As an emerging growth company, the independent registered public accounting firm's attestation report on internal control over financial reporting is not included [Evaluation of Disclosure Controls and Procedures](index=71&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, with the CEO and CFO, evaluated disclosure controls and procedures as of June 30, 2025[395](index=395&type=chunk) - They concluded that disclosure controls and procedures were effective at the reasonable assurance level[396](index=396&type=chunk) [Management's Annual Report on Internal Control over Financial Reporting](index=71&type=section&id=Management%27s%20Annual%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) - Management is responsible for establishing and maintaining adequate internal control over financial reporting[397](index=397&type=chunk) - Based on the COSO framework, management concluded that internal control over financial reporting was effective as of June 30, 2025[397](index=397&type=chunk) - As an emerging growth company, the independent registered public accounting firm's attestation report on internal control over financial reporting is not included[399](index=399&type=chunk) [Changes in Internal Control over Financial Reporting](index=72&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[400](index=400&type=chunk) [Item 9B. Other Information](index=72&type=section&id=Item%209B.%20Other%20Information) During Q2 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement. Daniel George resigned as CFO, Principal Financial Officer, and Principal Accounting Officer effective September 30, 2025, to pursue another opportunity, with no disagreements with the company. Richard Anthony Cunningham, the current CEO, was appointed Interim CFO, Principal Financial Officer, and Principal Accounting Officer, effective September 30, 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[401](index=401&type=chunk) - Daniel George resigned as CFO, Principal Financial Officer, and Principal Accounting Officer, effective September 30, 2025, with no disagreements with the company[402](index=402&type=chunk) - Richard Anthony Cunningham, the current CEO, was appointed Interim CFO, Principal Financial Officer, and Principal Accounting Officer, effective September 30, 2025[403](index=403&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevents Inspections](index=72&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevents%20Inspections) This item is not applicable to Anebulo Pharmaceuticals, Inc - This item is not applicable[406](index=406&type=chunk) [Part III](index=72&type=section&id=PART%20III) This part details Anebulo's directors, executive officers, corporate governance, executive compensation, security ownership, and related party transactions [Item 10. Directors, Executive Officers and Corporate Governance](index=72&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides information on Anebulo's directors and executive officers, their qualifications, and the company's corporate governance structure. The Board of Directors has determined that all non-employee directors are independent. The Board operates with three committees: Audit, Compensation, and Nominating and Corporate Governance, each composed of independent directors. The company also maintains a Code of Ethics and an Insider Trading Policy [Information Regarding Our Board of Directors and Corporate Governance](index=75&type=section&id=INFORMATION%20REGARDING%20OUR%20BOARD%20OF%20DIRECTORS%20AND%20CORPORATE%20GOVERNANCE) [Independence of The Board of Directors](index=75&type=section&id=Independence%20of%20The%20Board%20of%20Directors) - A majority of Anebulo's board members qualify as 'independent' under Nasdaq listing standards[411](index=411&type=chunk) - All current directors, except Mr. Cunningham (CEO), have been affirmatively determined to be independent, having no material or disqualifying relationship with the company[412](index=412&type=chunk) [Information Regarding Committees of the Board of Directors](index=75&type=section&id=Information%20Regarding%20Committees%20of%20the%20Board%20of%20Directors) - The Board has three committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee[413](index=413&type=chunk) - Each committee member meets Nasdaq's independence rules and has authority to engage legal counsel or other experts[414](index=414&type=chunk) [Audit Committee](index=76&type=section&id=Audit%20Committee) - The Audit Committee oversees corporate accounting, financial reporting, and audits, including evaluating independent auditors, reviewing financial statements, and overseeing cybersecurity risk[416](index=416&type=chunk) - It is composed of Mr. Shah (Chair), Mr. Aryeh, and Dr. Lin, all determined to be independent under Nasdaq rules[416](index=416&type=chunk)[417](index=417&type=chunk) - Mr. Shah and Mr. Aryeh qualify as 'audit committee financial experts' as defined by SEC rules[418](index=418&type=chunk) [Compensation Committee](index=76&type=section&id=Compensation%20Committee) - The Compensation Committee reviews and recommends compensation strategy, policies, plans, and programs, including executive and director compensation[420](index=420&type=chunk)[421](index=421&type=chunk) - It is composed of Ms. Kupchyk (Chair), Mr. Calloway, and Mr. Shah, all of whom are independent[419](index=419&type=chunk) [Compensation Committee Processes and Procedures](index=77&type=section&id=Compensation%20Committee%20Processes%20and%20Procedures) - The Compensation Committee typically meets annually and acts by written consent, with agendas developed by the Chair in consultation with the CEO[422](index=422&type=chunk) - It has full access to company books, records, facilities, and personnel, and can engage compensation consultants and other advisors at the company's expense[422](index=422&type=chunk) - Compensation decisions, including bonuses, are based on achievement of performance goals, individual contributions, retention risk, industry trends, and financial performance, rather than specific quantitative formulas[423](index=423&type=chunk) [Nominating and Corporate Governance Committee](index=77&type=section&id=Nominating%20and%20Corporate%20Governance%20Committee) - The Nominating and Corporate Governance Committee identifies, reviews, and evaluates director candidates, assesses board and committee performance, and discusses ESG matters[424](index=424&type=chunk) - It is composed of Mr. Aryeh (Chair), Mr. English, and Ms. Kupchyk, all of whom are independent[425](index=425&type=chunk) [Shareholder Communications with the Board of Directors](index=77&type=section&id=Shareholder%20communications%20with%20the%20board%20of%20directors) - Stockholders can communicate with the Board in writing by sending a letter to the Corporate Secretary at the company's principal executive office[426](index=426&type=chunk) [Code of Ethics](index=77&type=section&id=Code%20of%20Ethics) - Anebulo has adopted a written Code of Business Conduct and Ethics that applies to all directors, officers, and employees[427](index=427&type=chunk) - The Code of Ethics is available on the investor section of the company's website, and amendments or waivers will be disclosed there[427](index=427&type=chunk) [Insider Trading Policy](index=77&type=section&id=INSIDER%20TRADING%20POLICY) - Anebulo maintains an Insider Trading Policy prohibiting officers, directors, and employees from trading securities while in possession of material, non-public information[428](index=428&type=chunk) - Executives and directors are permitted to enter into Rule 10b5-1 trading plans[428](index=428&type=chunk) [Item 11. Executive Compensation](index=77&type=section&id=Item%2011.%20Executive%20Compensation) This section details executive and director compensation, including salaries, bonuses, equity awards, employment agreements, and potential termination payments [Summary Compensation Table](index=78&type=section&id=Summary%20Compensation%20Table) Summary Compensation Table for Fiscal 2025 | Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | | :-------------------------- | :---------- | :--------- | :-------- | :--------------- | :---------------- | :------------------------- | :-------- | | Richard Anthony Cunningham Chief Executive Officer | 2025 | 461,250 | — | — | 532,146 | — | 993,396 | | | 2024 | 332,885 | — | — | 1,367,325 | — | 1,700,210 | | Kenneth C. Cundy Chief Scientific Officer | 2025 | 395,997 | 116,470 | — | 90,169 | — | 602,636 | | | 2024 | 380,766 | 111,990 | — | 119,395 | — | 612,151 | | Daniel George Part time Chief Financial Officer | 2025 | 208,755 | — | — | — | — | 208,755 | | | 2024 | 147,268 | — | — | — | — | 147,268 | - Dollar amounts for stock and option awards reflect aggregate grant date fair value, not actual economic value realized[437](index=437&type=chunk) [Narrative to Summary Compensation Table](index=80&type=section&id=Narrative%20to%20Summary%20Compensation%20Table) [Annual Base Salary](index=80&type=section&id=Annual%20Base%20Salary) Fiscal 2025 Annual Base Salaries | NAME | 2025 BASE ($) | | :-------------------------- | :------------ | | Richard Anthony Cunningham | 472,500 | | Kenneth C. Cundy | 403,761 | | Daniel George | — | - Mr. Cunningham's annual base salary increased from **$450,000** to **$472,500** effective January 1, 2025[439](index=439&type=chunk) - Dr. Cundy's annual base salary increased from **$388,232** to **$403,761** effective January 1, 2025[443](index=443&type=chunk) [Discretionary Bonuses](index=80&type=section&id=Discretionary%20Bonuses) - In January 2025, Dr. Cundy received a one-time discretionary cash bonus of **$116,470**[440](index=440&type=chunk) - Bonuses were determined by the Compensation Committee based on subjective evaluations of product advancement, responsibilities, retention risk, industry trends, and financial performance, not specific quantitative formulas[441](index=441&type=chunk) [Equity-Based Incentive Awards](index=80&type=section&id=Equity-Based%20Incentive%20Awards) - Equity awards are designed to align executive interests with stockholders and for long-term retention, generally vesting over continuous service[442](index=442&type=chunk) - In April 2025, Dr. Cundy was granted an option to purchase **115,037 shares** at **$1.02**, vesting quarterly over **15 installments** after an initial vesting[444](index=444&type=chunk) - Mr. Cunningham received an option for **316,352 shares** at **$1.02** in April 2025 (similar vesting) and a fully vested option for **254,433 shares** at **$1.56** in December 2024[445](index=445&type=chunk)[446](index=446&type=chunk) [Employment Agreements with our Named Executive Officers](index=81&type=section&id=Employment%20Agreements%20with%20our%20Named%20Executive%20Officers) - Employment for named executive officers is 'at will,' with agreements outlining initial base salaries, target bonuses, and equity awards[447](index=447&type=chunk) - Dr. Cundy's agreement (May 2022) includes an initial **$350,000** base salary, **30%** target bonus, and time-based (**233,446 shares**) and performance-based (**116,723 shares**) options[448](index=448&type=chunk) - Mr. Cunningham's agreement (October 2023) includes an initial **$450,000** base salary, a time-based option for **600,000 shares**, and a performance-based option for **140,000 shares**[450](index=450&type=chunk) [Potential Payments Upon Termination or Change in Control](index=83&type=section&id=Potential%20Payments%20Upon%20Termination%20or%20Change%20in%20Control) - Upon termination without 'Cause' or resignation for 'Good Reason,' Mr. Cunningham is entitled to **12 months** of base compensation and COBRA reimbursement for up to **12 months**[452](index=452&type=chunk) - Dr. Cundy is entitled to **6 months** of base compensation and COBRA premiums for up to **6 months**, plus immediate vesting of options that would have vested in the **6 months** post-termination[453](index=453&type=chunk) - Both Mr. Cunningham and Dr. Cundy are eligible for **100% accelerated vesting** of outstanding stock-based awards upon a 'Change in Control,' provided they are employed on that date[455](index=455&type=chunk)[456](index=456&type=chunk) [Outstanding Equity Awards at Fiscal Year End](index=84&type=section&id=Outstanding%20Equity%20Awards%20at%20Fiscal%20year%20end) Outstanding Equity Awards at June 30, 2025 | Name | Vesting Commencement Date | Number of Securities Underlying Unexercised Options Exercisable () | Number of Securities Underlying Unexercised Options Unexercisable () | Number of Securities Underlying Unexercised Unearned Options () | Option Exercise Price ($) | Option Expiration Date | | :-------------------------- | :------------------------ | :---------------------------------------------------------------- | :------------------------------------------------------------------ | :---------------------------------------------------------------- | :----------------------- | :--------------------- | | Richard Anthony Cunningham | 10/6/2023 | 225,000 | 375,000 | — | 3.03 | 10/5/2033 | | | 10/6/2023 | 50,000 | — | 90,000 | 3.03 | 10/5/2033 | | | 12/9/2024 | 254,433 | — | — | 1.56 | 12/8/2034 | | | 4/4/2025 | 19,772 | 296,580 | — | 1.02 | 4/3/2035 | | Kenneth C. Cundy | 6/1/2022 | 175,085 | 58,361 | — | 2.91 | 6/30/2027 | | | 6/1/2022 | — | — | 116,723 | 2.91 | 6/30/2027 | | | 12/9/2022 | 21,880 | 13,137 | — | 3.37 | 12/08/2032 | | | 4/1/2024 | 22,690 | 49,923 | — | 2.72 | 2/28/2034 | | | 4/4/2025 | 7,190 | 107,847 | — | 1.02 | 4/3/2035 | | Daniel George | — | — | — | — | — | — | [Perquisites, Health, Welfare and Retirement Benefits](index=85&type=section&id=Perquisites%2C%20health%2C%20welfare%20and%20retirement%20benefits) - Named executive officers are eligible for employee benefit plans, including family health, dental, and vision policies, on the same basis as other employees[467](index=467&type=chunk) - No perquisites or personal benefits are provided to executive officers that are not generally available to other employees[467](index=467&type=chunk) [2020 Stock Incentive Plan](index=85&type=section&id=2020%20Stock%20Incentive%20Plan) - The 2020 Stock Incentive Plan, adopted in June 2020, aims to attract, retain, and motivate employees, officers, directors, consultants, and advisors by providing equity ownership opportunities[468](index=468&type=chunk) - The total authorized shares for issuance under the Plan increased from **1,650,000** to **3,650,000** in October 2021, and further to **6,150,000** in April 2025[468](index=468&type=chunk)[472](index=472&type=chunk) - As of June 30, 2025, **3,218,255 shares** were issuable upon option exercise, and **1,925,245 shares** were available for future issuance[468](index=468&type=chunk)[472](index=472&type=chunk) [Clawback Policy](index=87&type=section&id=Clawback%20Policy) - The Board adopted a clawback policy to recover performance-based compensation (cash or equity) from current or former executive officers in the event of an Accounting Restatement[487](index=487&type=chunk) - An Accounting Restatement is defined as a restatement of financial statements due to material noncompliance with securities laws' financial reporting requirements[487](index=487&type=chunk) - The Board has sole discretion over the form and timing of recovery, which can include repayment, forfeiture, or adjustments to future compensation[488](index=488&type=chunk) [Company Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information](index=88&type=section&id=Company%20Policies%20and%20Practices%20Related%20to%20the%20Grant%20of%20Certain%20Equity%20Awards%20Close%20in%20Time%20to%20the%20Release%20of%20Material%20Nonpublic%20Information) - Anebulo does not have a formal policy on timing equity awards in relation to material nonpublic information disclosure, nor does it seek to time grants to take advantage of such information[489](index=489&type=chunk) - Option grants are effective on the award determination date, with exercise prices equal to the closing market price of common stock on that date (or prior business day for weekends/holidays)[489](index=489&type=chunk) - During FY2025, two option awards were granted to named executive officers on April 4, 2025, with a **1.0% decrease** in stock price between the trading day prior to and following the disclosure of material nonpublic information[490](index=490&type=chunk) [Director Compensation](index=88&type=section&id=Director%20Compensation) Director Compensation for Fiscal 2025 (Non-Employee Directors) | Name | Fees Earned or Paid in Cash ($) | Option Awards ($) | Total ($) | | :---------------- | :------------------------------ | :---------------- | :-------- | | Joseph F. Lawler | 11,000 | 28,750 | 39,750 | | Aron R. English | 1,000 | 20,788 | 21,788 | | Jason M. Aryeh | 11,000 | 22,531 | 33,531 | | Areta Kupchyk | 11,000 | 20,788 | 31,788 | | Kenneth Lin | 1,000 | 22,531 | 23,531 | | Nathaniel Calloway | 1,000 | 21,286 | 22,286 | | Bimal Shah | 11,000 | 23,774 | 34,774 | Aggregate Option Awards Outstanding at June 30, 2025 (Non-Employee Directors) | Name | Number of Shares Subject to Outstanding Options | | :---------------- | :---------------------------------------------- | | Joseph F. Lawler | 199,236 | | Aron R. English | 183,353 | | Jason M. Aryeh | 186,828 | | Areta Kupchyk | 183,353 | | Kenneth Lin | 186,828 | | Nathaniel Calloway | 130,780 | | Bimal Shah | 102,691 | [Non-Employee Director Compensation Policy](index=89&type=section&id=Non-Employee%20Director%20Compensation%20Policy) - The non-employee director compensation policy, amended June 13, 2024, provides an annual cash retainer of **$1,000**, with additional retainers for Board Chair (**$10,000**) and Committee Chairs (**$10,000**)[495](index=495&type=chunk)[497](index=497&type=chunk) - Directors receive an initial grant of options to acquire **50,000 shares** (vesting monthly over **three years**) and an annual grant of options to purchase **25,000 shares** (vesting on the earlier of **one year** or next annual meeting)[497](index=497&type=chunk) - In lieu of increased cash compensation, non-employee directors received options to purchase an aggregate of **19,194 shares** in June 2024 and **38,385 shares** on the date of the 2024 annual meeting[496](index=496&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=90&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details the ownership of Anebulo's common stock by principal stockholders, executive officers, and directors as of September 26, 2025. Certain individuals and entities hold significant stakes, with Aron R. English and 22NW Fund, LP, along with Joseph F. Lawler, being major beneficial owners. All current executive officers and directors collectively own 79.9% of the total outstanding shares [Securities Authorized for Issuance Under Equity Compensation Plans](index=90&type=section&id=Securities%20authorized%20for%20issuance%20under%20equity%20compensation%20plans) Equity Compensation Plan Information as of June 30, 2025 | Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | :------------------------------------------ | :-------------------------------------------------------------------------------- | :-------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------------------------------------------ | | Equity compensation plans approved by security holders | 3,218,255 | $2.49 | 1,925,245 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 3,218,255 | $2.49 | 1,925,245 | [Security Ownership of Certain Beneficial Owners and Management](index=90&type=section&id=SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT) Beneficial Ownership as of September 26, 2025 | Name of Beneficial Owner | Number of Shares | Percent of Total | | :------------------------------------------ | :--------------- | :--------------- | | **5% or Greater Stockholders** | | | | Joseph F. Lawler | 12,158,464 | 29.5% | | Aron R. English | 21,978,575 | 51.2% | | 22NW Fund, LP | 17,170,877 | 40.1% | | Pharma Investors, LLC | 4,654,528 | 11.3% | | Nantahala Capital Partners Limited Partnership and related entities | 3,547,398 | 8.5% | | The Mangrove Partners Master Fund, Ltd. | 2,525,252 | 6.1% | | **Named Executive Officers and Directors** | | | | Richard Anthony Cunningham | 613,749 | 1.5% | | Kenneth C. Cundy | 269,261 | * | | Joseph F. Lawler | 12,158,464 | 29.5% | | Aron R. English | 21,978,575 | 51.2% | | Jason M. Aryeh | 154,328 | * | | Nathaniel Calloway | 87,683 | * | | Areta Kupchyk | 153,170 | * | | Kenneth Lin | 154,328 | * | | Daniel George | — | — | | Bimal Shah | 58,568 | * | | All current executive officers and directors as a group (10 persons) | 35,628,126 | 79.9% | - Aron R. English and 22NW Fund, LP are significant beneficial owners, with Mr. English controlling **51.2%** of total shares, including those held by 22NW Fund, LP and Pharma Investors, LLC[504](index=504&type=chunk)[507](index=507&type=chunk) - Joseph F. Lawler beneficially owns **29.5%** of the common stock, including shares held in grantor retained annuity trusts and exercisable options[504](index=504&type=chunk)[507](index=507&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=92&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Tr

[Executive Summary & Recent Developments](index=1&type=section&id=Executive%20Summary%20%26%20Recent%20Developments) Anebulo Pharmaceuticals is advancing an IV selonabant formulation for pediatric acute cannabis toxicity, supported by FDA and NIDA, alongside a proposed reverse stock split [Fourth Quarter Fiscal Year 2025 and Subsequent Highlights](index=1&type=section&id=Fourth%20Quarter%20Fiscal%20Year%202025%20and%20Subsequent%20Highlights) Anebulo Pharmaceuticals made significant progress in Q4 FY2025 and subsequently, focusing on the development of an intravenous (IV) selonabant formulation for pediatric acute cannabis-induced toxicity, supported by FDA collaboration and NIDA grants. The company also announced a proposed reverse stock split as part of a potential going private transaction - Prioritized advancement of selonabant IV formulation as a potential treatment for pediatric patients with acute cannabis-induced toxicity, believing it offers a **faster timeline to approval** relative to the adult oral product[4](index=4&type=chunk) - FDA has suggested close collaboration with Anebulo to facilitate the development of selonabant for pediatric cannabis toxicity, confirming a **significant and growing unmet need**[4](index=4&type=chunk) - Initiated a **Phase 1 single ascending dose (SAD) study** of an intravenous (IV) formulation of selonabant in healthy adult subjects aged 18 to 25 years on September 25, 2025[5](index=5&type=chunk) - Awarded the second-year tranche (**$994,300**) of an ongoing collaborative grant from the National Institute on Drug Abuse (NIDA) to support the SAD study[5](index=5&type=chunk) - A Special Committee recommended, and the Board approved, a **reverse stock split** as part of a proposed **going private transaction**, aiming to maintain **fewer than 300 record holders** to avoid SEC public reporting requirements[4](index=4&type=chunk) [Product and Company Overview](index=2&type=section&id=Product%20and%20Company%20Overview) Anebulo Pharmaceuticals develops selonabant, a CB1 receptor antagonist, focusing on an IV formulation for pediatric acute cannabis toxicity [About Selonabant](index=2&type=section&id=About%20Selonabant) Selonabant (ANEB-001) is Anebulo's lead product candidate, a potent CB1 receptor antagonist designed to reverse acute cannabis-induced toxicity. While an oral formulation showed promise in adult Phase 2 studies, the company is now prioritizing an IV formulation for pediatric patients, with an observational study also being amended to focus on this population - Selonabant (ANEB-001) is a **potent, small molecule antagonist of the cannabinoid receptor type-1 (CB1)**, under development as a **specific antidote** for acute cannabis-induced toxicity[8](index=8&type=chunk) - Successfully formulated for **oral administration** in clinical studies and as a potential **intravenous treatment** for clinical testing[8](index=8&type=chunk) - A **Phase 2 proof-of-concept study** in adults challenged with oral THC demonstrated that oral selonabant **blocked or reversed key CNS effects of THC** and was well tolerated[8](index=8&type=chunk) - An **observational study** in patients presenting to Emergency Departments with cannabis toxicity is ongoing and being **amended to focus on pediatric patients**[8](index=8&type=chunk) [About Anebulo Pharmaceuticals, Inc.](index=3&type=section&id=About%20Anebulo%20Pharmaceuticals%2C%20Inc.) Anebulo Pharmaceuticals is a clinical-stage company focused on developing selonabant for cannabis-induced toxicity. Following successful Phase 2 oral trials in adults, the company has shifted its strategic focus to an intravenous formulation for pediatric patients, initiating a Phase 1 SAD study in September 2025 - Anebulo Pharmaceuticals, Inc. is a **clinical-stage pharmaceutical company** developing **novel solutions** for people suffering from cannabis-induced toxicity[10](index=10&type=chunk) - Prioritizing the advancement of a **selonabant IV formulation** as a potential treatment for pediatric patients with acute cannabis-induced toxicity, believing it offers the potential for a **faster timeline to approval**[10](index=10&type=chunk) - Initiated a **Phase 1 SAD study** of IV selonabant in September 2025[10](index=10&type=chunk) [Financial Results](index=2&type=section&id=Financial%20Results) Anebulo reported increased operating expenses and net losses for Q4 and FY2025, driven by R&D, while cash and equivalents significantly improved [Fourth Quarter Fiscal Year 2025 Financial Summary](index=2&type=section&id=Financial%20Results%20for%20the%20three%20months%20ended%20June%2030%2C%202025) For the fourth quarter of fiscal year 2025, Anebulo reported a significant increase in operating expenses and a higher net loss compared to the same period in fiscal year 2024. Cash and cash equivalents stood at $11.6 million as of June 30, 2025 **Fourth Quarter Fiscal Year 2025 Financial Highlights:** | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :----------------------- | :---------- | :---------- | :---------- | | Operating Expenses | $2.3 million | $1.3 million | +$1.0 million | | Net Loss | $2.1 million | $1.3 million | +$0.8 million | | Net Loss Per Share | $(0.05) | $(0.05) | 0 | - Cash and cash equivalents were **$11.6 million** as of June 30, 2025, with access to an additional **$3 million** through a Loan Agreement[9](index=9&type=chunk) [Fiscal Year 2025 Financial Summary](index=2&type=section&id=Financial%20Results%20for%20the%20twelve%20months%20ended%20June%2030%2C%202025) Anebulo's fiscal year 2025 saw an increase in operating expenses, primarily driven by higher research and development costs for pre-clinical and clinical studies of the IV selonabant formulation. This resulted in a higher net loss, partially mitigated by $0.9 million in grant income from NIDA **Fiscal Year 2025 Financial Highlights:** | Metric | FY2025 | FY2024 | Change | | :----------------------- | :---------- | :---------- | :---------- | | Operating Expenses | $9.2 million | $8.3 million | +$0.9 million | | Net Loss | $8.5 million | $8.2 million | +$0.3 million | | Net Loss Per Share | $(0.25) | $(0.32) | +$0.07 | - Research and development expenses increased by approximately **$0.9 million**, primarily due to increased activities for pre-clinical and clinical studies and direct third-party costs for selonabant[9](index=9&type=chunk) - Grant income of **$0.9 million** was recognized in connection with the research and development grant with NIDA[9](index=9&type=chunk) [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, Anebulo's cash and cash equivalents significantly increased to $11.6 million from $3.1 million in the prior year, leading to a substantial rise in total assets and stockholders' equity **Condensed Balance Sheet Data (as of June 30):** | Metric | 2025 | 2024 | | :----------------------- | :---------- | :---------- | | Cash and cash equivalents | $11,627,849 | $3,094,200 | | Total assets | $12,145,616 | $4,073,114 | | Total liabilities | $487,688 | $260,583 | | Total stockholders' equity | $11,657,928 | $3,812,531 | [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) The condensed statements of operations show a net loss of $2.1 million for Q4 FY2025 and $8.5 million for FY2025, driven by increased research and development and general and administrative expenses, partially offset by grant income **Condensed Statements of Operations Data:** | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Year ended June 30, 2025 | Year ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------- | :----------------------- | | Research and development | $1,126,223 | $467,706 | $4,299,941 | $3,548,937 | | General and administrative | $1,204,661 | $872,661 | $4,923,540 | $4,759,818 | | Total operating expenses | $2,330,884 | $1,340,367 | $9,223,481 | $8,308,755 | | Loss from operations | $(2,330,884) | $(1,340,367) | $(9,223,481) | $(8,308,755) | | Grant income | $(81,343) | - | $(864,014) | - | | Net loss | $(2,144,828) | $(1,349,969) | $(8,484,763) | $(8,201,703) | | Net loss per share | $(0.05) | $(0.05) | $(0.25) | $(0.32) | [Other Information](index=3&type=section&id=Other%20Information) This section details cautionary forward-looking statements on drug development and regulatory processes, and provides company contact information [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding Anebulo's drug development, regulatory strategy, and potential market for selonabant, particularly for pediatric acute cannabis-induced toxicity. It highlights the inherent risks and uncertainties associated with clinical trials, regulatory approvals, funding, and market acceptance, cautioning that these statements are not guarantees of future performance - Forward-looking statements include intentions, beliefs, projections, and expectations regarding selonabant as an emergency antidote for acute cannabis-induced toxicity in children and its potential for **faster approval**[11](index=11&type=chunk) - Cautionary statements emphasize **risks and uncertainties**, including the ability to pursue regulatory strategy, obtain approvals, secure funding, complete trials, and achieve desired results[11](index=11&type=chunk) - Anebulo undertakes **no obligation to update or revise** forward-looking statements to reflect new information, future events, or changed conditions, except as required by law[11](index=11&type=chunk) [Contacts](index=3&type=section&id=CONTACTS) This section provides the contact information for Anebulo Pharmaceuticals, Inc. for inquiries - Contact information for Anebulo Pharmaceuticals, Inc. is provided: **(512) 598-0931**, **ir@anebulo.com**[12](index=12&type=chunk)

Group 1 - Anebulo Pharmaceuticals, Inc. has initiated its Phase 1 single ascending dose study of intravenous selonabant in healthy young adults [1] - The study is supported by a collaborative grant from the National Institute on Drug Abuse (NIDA) [1] - This development focuses on providing novel solutions for individuals suffering from acute cannabinoid-induced toxicities [1]

Market Overview - U.S. stock index futures are showing mixed performance as investors react to a recent Federal Reserve interest rate cut and anticipate upcoming economic data [1][2] - Major indexes closed at record highs on Thursday, with the Dow Jones Industrial Average up 0.27%, S&P 500 rising 0.48%, and Nasdaq Composite increasing by 0.94% [3] Economic Indicators - The 10-year Treasury yield rose by 2 basis points to 4.13%, while the 2-year yield increased by 1 basis point to 3.58% [2] - Strong labor market data indicated a drop in U.S. Weekly Initial Jobless Claims to 231K for the week ending September 13, below expectations, which reassured investors about economic stability [3] Upcoming Economic Data - Key economic data releases include Flash Purchasing Managers' Index (PMI) surveys and the U.S. core Personal Consumption Expenditures (PCE) price index, scheduled for September 26, 2025 [5] - Other significant upcoming data includes revised GDP numbers, consumer confidence data, home sales figures, durable goods orders, and inventories [5] Corporate Earnings - Several companies are set to report earnings, including MoneyHero Limited, IperionX Limited ADR, and FedEx, which reported better-than-expected FQ1 earnings and projected 4%-6% revenue growth for fiscal year 2026 [6][11] - 22nd Century Group's shares surged 31% after announcing it is now debt-free, while 89bio's shares skyrocketed 85% following Roche's agreement to acquire the biotech firm for $14.50 per share [11] Key Corporate News - Nvidia shares advanced 3.5% after announcing a $5 billion investment in Intel, which saw its stock surge over 23% [7] - CoreWeave's shares rose 0.3% after Loop Capital initiated coverage with a "Buy" rating, highlighting its growing prominence among chip giants and AI labs [11] - FedEx's strong results positively impacted UPS, which saw its stock increase by 2% [11] Stock Movements - Red Cat Holdings' shares fell 12% after pricing an offering of 15.6 million shares at $9.60 each [11] - Nucor's shares slipped 4% after guiding its Q3 EPS to $2.05-$2.15, below the consensus estimate of $2.56 [11]

Group 1 - Anebulo Pharmaceuticals has announced an update regarding its going private transaction and strategic alternatives [1] - The company is exploring various strategic options to enhance shareholder value [1] - The update indicates ongoing discussions with potential investors and stakeholders [1]

[Special Note Regarding Forward-Looking Statements](index=4&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions readers that forward-looking statements are subject to risks and uncertainties, advising against undue reliance and referring to risk factors [Forward-Looking Statements Disclosure](index=4&type=section&id=Forward-Looking%20Statements%20Disclosure) This disclosure details the nature of forward-looking statements, their inherent risks, and the company's policy of not updating them, urging review of risk factors - The report contains forward-looking statements regarding future financial condition, business strategy, and operational objectives, identifiable by terms like 'believe,' 'may,' 'could,' 'will,' 'estimate,' 'continue,' 'anticipate,' 'intend,' 'seek,' 'plan,' 'expect,' 'should,' 'would,' 'potentially' or their negatives[9](index=9&type=chunk) - Key areas covered by forward-looking statements include capital requirements, regulatory submissions, clinical trial timing and conduct, clinical utility and approval likelihood of selonabant, future growth, intellectual property, licensing arrangements, commercial potential, supplier performance, competitive ability, economic/political impacts, and governmental regulations[12](index=12&type=chunk) - Readers are cautioned not to place undue reliance on these statements, as actual results may differ materially due to various factors, including those detailed in the 'Risk Factors' section[9](index=9&type=chunk)[11](index=11&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Balance Sheet Highlights | Metric | March 31, 2025 | June 30, 2024 | | :-------------------------- | :------------- | :------------ | | Cash and cash equivalents | $13,279,901 | $3,094,200 | | Total current assets | $13,807,935 | $3,507,990 | | Total assets | $14,008,484 | $4,073,114 | | Total liabilities | $546,032 | $260,583 | | Total stockholders' equity | $13,462,452 | $3,812,531 | - Cash and cash equivalents significantly increased to **$13.3 million** as of March 31, 2025, from **$3.1 million** as of June 30, 2024, primarily due to financing activities[14](index=14&type=chunk) - Total assets grew from **$4.1 million** to **$14.0 million**, while total liabilities increased from **$0.3 million** to **$0.5 million** over the same period[14](index=14&type=chunk) - Stockholders' equity saw a substantial increase from **$3.8 million** to **$13.5 million**, reflecting new capital infusions[14](index=14&type=chunk) [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) This section presents the company's financial performance over specific periods, detailing revenues, expenses, and net loss Condensed Statements of Operations Highlights | Metric | 3 Months Ended Mar 31, 2025 | 3 Months Ended Mar 31, 2024 | 9 Months Ended Mar 31, 2025 | 9 Months Ended Mar 31, 2024 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $638,324 | $748,339 | $3,173,718 | $3,081,231 | | General and administrative | $1,253,998 | $915,912 | $3,718,879 | $3,887,157 | | Total operating expenses | $1,892,322 | $1,664,251 | $6,892,597 | $6,968,388 | | Net loss | $(1,676,169) | $(1,653,542) | $(6,339,935) | $(6,851,734) | | Net loss per share (basic & diluted) | $(0.04) | $(0.06) | $(0.20) | $(0.27) | - Net loss for the three months ended March 31, 2025, was **$(1.7) million**, a slight increase from **$(1.7) million** in the prior-year period[17](index=17&type=chunk) - For the nine months, net loss improved to **$(6.3) million** from **$(6.9) million**[17](index=17&type=chunk) - Research and development expenses decreased by **$0.11 million** for the three months ended March 31, 2025, but increased by **$0.09 million** for the nine months ended March 31, 2025, compared to the respective prior periods[17](index=17&type=chunk) - Grant income of **$0.36 million** and **$0.78 million** was recognized for the three and nine months ended March 31, 2025, respectively, with no comparable income in the prior year[17](index=17&type=chunk) [Condensed Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in the company's equity accounts, reflecting capital transactions and net income or loss over time Stockholders' Equity Changes (Nine Months Ended March 31, 2025) | Item | Change in Shares | Change in Amount (Common Stock) | Change in Additional Paid-in Capital | Change in Accumulated Deficit | Change in Total Stockholders' Equity | | :---------------------------------- | :--------------- | :------------------------------ | :----------------------------------- | :---------------------------- | :----------------------------------- | | Balance at June 30, 2024 | 25,933,217 | $25,934 | $69,190,341 | $(65,403,744) | $3,812,531 | | Stock-based compensation expense | - | - | $1,106,520 | - | $1,106,520 | | Issuance of common stock, net | 15,151,514 | $15,152 | $14,947,251 | - | $14,962,403 | | Common stock offering costs | - | - | $(79,067) | - | $(79,067) | | Net loss | - | - | - | $(6,339,935) | $(6,339,935) | | Balance at March 31, 2025 | 41,084,731 | $41,086 | $85,165,045 | $(71,743,679) | $13,462,452 | - Total stockholders' equity increased from **$3.8 million** at June 30, 2024, to **$13.5 million** at March 31, 2025[20](index=20&type=chunk) - The increase was primarily driven by the issuance of **15,151,514 shares** of common stock, resulting in net proceeds of approximately **$14.9 million**, and stock-based compensation expense of **$1.1 million**, partially offset by a net loss of **$6.3 million**[20](index=20&type=chunk) - The accumulated deficit grew to **$(71.7) million** as of March 31, 2025, from **$(65.4) million** at June 30, 2024[20](index=20&type=chunk) [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section details the sources and uses of cash across operating, investing, and financing activities over specific periods Condensed Statements of Cash Flows Highlights (Nine Months Ended March 31) | Cash Flow Activity | 2025 | 2024 | | :----------------- | :------------ | :------------ | | Operating | $(4,697,635) | $(6,037,910) | | Financing | $14,883,336 | $(62,354) | | Net increase (decrease) in cash | $10,185,701 | $(6,100,264) | | Cash, end of period | $13,279,901 | $5,147,139 | - Net cash used in operating activities decreased to **$4.7 million** for the nine months ended March 31, 2025, from **$6.0 million** in the prior-year period[23](index=23&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - Net cash provided by financing activities was **$14.9 million** for the nine months ended March 31, 2025, primarily from the issuance of common stock, a significant increase from net cash used of **$62,354** in the prior-year period[23](index=23&type=chunk)[106](index=106&type=chunk) - The company experienced a net increase in cash of **$10.2 million** for the nine months ended March 31, 2025, compared to a net decrease of **$6.1 million** in the prior-year period, resulting in cash and cash equivalents of **$13.3 million** at period end[23](index=23&type=chunk)[106](index=106&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed explanations and additional information supporting the unaudited condensed financial statements [Note 1. Nature of business and basis of presentation](index=9&type=section&id=Note%201.%20Nature%20of%20business%20and%20basis%20of%20presentation) This note describes the company's core business, its focus on drug development, and the basis for preparing the financial statements - Anebulo Pharmaceuticals, Inc. is a clinical-stage pharmaceutical company focused on developing treatments for cannabis-induced toxicity, including acute cannabis-induced toxicity in children and acute cannabinoid intoxication (ACI) in adults[26](index=26&type=chunk) - The company has incurred significant losses since inception, with a net loss of approximately **$6.3 million** for the nine-month period ended March 31, 2025, and an accumulated deficit of **$71.7 million**[27](index=27&type=chunk) - Management expects current cash and cash equivalents, along with available funding from the Loan Agreement, to be sufficient for operating expenses and capital expenditures for at least 12 months from the financial statements' issuance date[28](index=28&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements, including recent pronouncements - The company's significant accounting policies remain largely unchanged from the June 30, 2024, Annual Report on Form 10-K, except for the policy on accounting for research and development grants[35](index=35&type=chunk) - New accounting pronouncements include ASU No. 2023-07 (Segment Reporting), effective July 1, 2024, requiring incremental qualitative segment disclosures, and ASU 2023-09 (Income Taxes), effective for fiscal 2026, which is expected to be disclosure-only[36](index=36&type=chunk)[37](index=37&type=chunk) - ASU No. 2024-03 (Disaggregation of Income Statement Expenses), effective for annual periods beginning after December 15, 2026, is currently being evaluated for its impact[38](index=38&type=chunk) [Note 3. Prepaid Expenses](index=11&type=section&id=Note%203.%20Prepaid%20Expenses) This note details the composition and changes in the company's prepaid expenses, including insurance and research and development Prepaid Expenses Breakdown | Category | March 31, 2025 | June 30, 2024 | | :------------------------ | :------------- | :------------ | | Prepaid insurance | $54,197 | $95,871 | | Prepaid research and development | $332,899 | $274,879 | | Prepaid other | $140,938 | $43,040 | | Total prepaid expenses | $528,034 | $413,790 | - Total prepaid expenses increased to **$528,034** as of March 31, 2025, from **$413,790** as of June 30, 2024[39](index=39&type=chunk) - The increase was primarily driven by higher prepaid research and development (**$332,899** vs **$274,879**) and prepaid other expenses (**$140,938** vs **$43,040**), partially offset by a decrease in prepaid insurance[39](index=39&type=chunk) [Note 4. Accrued Expenses](index=11&type=section&id=Note%204.%20Accrued%20Expenses) This note provides a breakdown of accrued expenses, including payroll, research and development, and professional fees Accrued Expenses Breakdown | Category | March 31, 2025 | June 30, 2024 | | :------------------------ | :------------- | :------------ | | Accrued payroll related expenses | $18,658 | $29,512 | | Accrued research and development | $45,445 | $47,554 | | Accrued professional fees | $54,351 | $27,091 | | Total accrued expenses | $118,454 | $104,157 | - Total accrued expenses increased to **$118,454** as of March 31, 2025, from **$104,157** as of June 30, 2024[40](index=40&type=chunk) - This increase was mainly due to a rise in accrued professional fees (**$54,351** vs **$27,091**), partially offset by decreases in accrued payroll-related expenses and accrued research and development[40](index=40&type=chunk) [Note 5. Other Assets](index=11&type=section&id=Note%205.%20Other%20Assets) This note explains the nature of other assets, primarily loan commitment fees, and their amortization - Other assets primarily consist of loan commitment fees, which decreased from **$0.6 million** at June 30, 2024, to **$0.2 million** at March 31, 2025[41](index=41&type=chunk) - In connection with the refinancing of the Loan Agreement, approximately **$0.2 million** of unamortized loan commitment fees were written off and recognized as incremental interest expense[41](index=41&type=chunk) - Interest expense related to the amortization of loan commitment fees was **$36 thousand** for the three months and **$0.2 million** for the nine months ended March 31, 2025[41](index=41&type=chunk) [Note 6. License Agreement](index=11&type=section&id=Note%206.%20License%20Agreement) This note describes the company's licensing agreement for selonabant, including milestone payments and royalty obligations - In May 2020, the Company licensed intellectual property, know-how, and clinical trial data from Vernalis Development Limited for selonabant, with initial consideration of **$0.15 million** recorded as R&D expense[42](index=42&type=chunk) - The agreement includes potential development milestone payments up to **$29.9 million** and sales milestone payments of **$10.0 million** and **$25.0 million**, plus annual single-digit royalties on net product sales[42](index=42&type=chunk) - As of March 31, 2025, no further milestone payments are considered probable, and no liability has been recorded, partly due to the issuance of **192,857 common shares** to Vernalis in lieu of future milestone payments of approximately **$1.4 million** during the IPO[43](index=43&type=chunk) [Note 7. Stockholders' Equity](index=12&type=section&id=Note%207.%20Stockholders'%20Equity) This note details changes in stockholders' equity, including authorized shares, stock issuances, and private placement activities - On November 20, 2023, the Company increased its authorized common stock from **40,000,000** to **50,000,000 shares**[44](index=44&type=chunk) - On December 22, 2024, the Company completed a private placement, issuing **15,151,514 shares** of common stock at **$0.99 per share**, generating approximately **$15.0 million** in gross proceeds (net **$14.9 million** after offering expenses)[47](index=47&type=chunk) - The private placement involved 22NW Fund, LP, a greater than 5% stockholder controlled by a director, and other institutional accredited investors[47](index=47&type=chunk) [Note 8. Stock-Based Compensation](index=12&type=section&id=Note%208.%20Stock-Based%20Compensation) This note explains the company's stock incentive plan, stock option activity, and the related compensation expense recognized - The 2020 Stock Incentive Plan, as amended, authorizes the grant of up to **3,650,000 shares** (increased to **6,150,000** post-March 31, 2025) for stock options and other awards to employees, officers, directors, advisors, and consultants[48](index=48&type=chunk)[65](index=65&type=chunk) - Stock-based compensation expense was approximately **$0.3 million** for the three months and **$1.1 million** for the nine months ended March 31, 2025, compared to **$0.2 million** and **$0.6 million** for the respective prior-year periods[55](index=55&type=chunk) Stock Option Activity (Nine Months Ended March 31, 2025) | Metric | Number of Shares | Weighted Average Exercise Price | | :------------------------ | :--------------- | :------------------------------ | | Outstanding at June 30, 2024 | 2,319,048 | $3.00 | | Granted | 254,433 | $1.56 | | Outstanding at March 31, 2025 | 2,573,481 | $2.85 | | Options exercisable at March 31, 2025 | 1,369,960 | $2.83 | - As of March 31, 2025, unrecognized stock-based compensation expense related to unvested stock options totaled approximately **$1.6 million**, to be recognized over a weighted average period of **2.1 years**[53](index=53&type=chunk) [Note 9. Net Loss Per Share Attributable to Common Stockholders](index=14&type=section&id=Note%209.%20Net%20Loss%20Per%20Share%20Attributable%20to%20Common%20Stockholders) This note details the calculation of net loss per share and identifies anti-dilutive common stock equivalents Anti-Dilutive Common Stock Equivalents | Item | March 31, 2025 | March 31, 2024 | | :------------------------ | :------------- | :------------- | | Stock options outstanding | 2,573,481 | 2,008,185 | | Warrants outstanding | 2,264,650 | 2,264,650 | | Total | 4,838,131 | 4,272,835 | - Stock options and warrants totaling **4,838,131 shares** as of March 31, 2025, were excluded from the net loss per share calculation due to their anti-dilutive effect[56](index=56&type=chunk) [Note 10. Loan Agreement](index=14&type=section&id=Note%2010.%20Loan%20Agreement) This note describes the company's loan and security agreement, including its terms, modifications, and outstanding balance - On November 13, 2023, the Company entered into a Loan and Security Agreement (LSA) with 22NW and JFL Capital Management LLC, allowing it to draw up to **$10 million**[57](index=57&type=chunk) - The LSA was modified on February 10, 2025, reducing the maximum loan advance to **$3 million**, removing securitization provisions, and assigning 22NW's rights to 22NW Fund, LP[59](index=59&type=chunk) - The Loan Agreement accrues interest at **0.25% per annum**, terminates on February 10, 2028, and requires the issuance of **0.03 shares** of common stock per dollar loaned, up to a maximum of **90,000 shares**[59](index=59&type=chunk) - No balance was outstanding under the Loan Agreement as of March 31, 2025, or under the LSA as of June 30, 2024[59](index=59&type=chunk) [Note 11. Research and Development Grant](index=14&type=section&id=Note%2011.%20Research%20and%20Development%20Grant) This note details the NIDA cooperative grant awarded to the company and the recognition of grant income for R&D activities - On July 16, 2024, the Company was awarded the first tranche of **$0.9 million** from a two-year cooperative grant of up to **$1.9 million** from the National Institute on Drug Abuse (NIDA) to support the development of intravenous selonabant for acute cannabis-induced toxicities in children[61](index=61&type=chunk) - The grant income is recognized as other income in the condensed statements of operations, derived from reimbursement of direct out-of-pocket expenses, salaries, fringe benefits, and direct materials costs[62](index=62&type=chunk)[63](index=63&type=chunk) - The Company recognized **$0.4 million** and **$0.8 million** in grant income for the three and nine months ended March 31, 2025, respectively, with no comparable income in the prior year[64](index=64&type=chunk) [Note 12. Subsequent Events](index=15&type=section&id=Note%2012.%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date, such as changes in authorized shares - On April 4, 2025, stockholders approved an amendment to increase authorized common stock from **50,000,000** to **75,000,000 shares**[65](index=65&type=chunk) - Stockholders also approved an amendment to the 2020 Stock Incentive Plan, increasing shares available for awards from **3,650,000** to **6,150,000 shares**[65](index=65&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, and liquidity, highlighting the strategic focus on IV selonabant and recent financing [Overview](index=16&type=section&id=Overview) This section provides a high-level summary of the company's business, drug development focus, and strategic priorities for selonabant - Anebulo is a clinical-stage pharmaceutical company developing selonabant (formerly ANEB-001) to rapidly reverse cannabis-induced toxicity, including acute cannabis-induced toxicity in children and acute cannabinoid intoxication (ACI) in adults[67](index=67&type=chunk) - The company is prioritizing the advancement of an intravenous (IV) selonabant formulation for pediatric patients with cannabis-induced CNS depression, believing it offers a faster timeline to approval compared to the adult oral product[71](index=71&type=chunk)[72](index=72&type=chunk) - The decision to prioritize the pediatric IV formulation is driven by the recent development of a suitable IV formulation, prior discussions with the FDA highlighting the unmet need in a vulnerable population, and the potential for initial pediatric approval to facilitate adult ACI treatment approval[72](index=72&type=chunk) - The company was awarded a **$1.9 million** cooperative grant from NIDA to support the development of IV selonabant and plans to initiate a single ascending dose (SAD) study in healthy adults in Q3 calendar 2025[61](index=61&type=chunk)[79](index=79&type=chunk) [Components of Results of Operations](index=19&type=section&id=Components%20of%20Results%20of%20Operations) This section explains the key elements contributing to the company's financial performance, including revenue, R&D, and G&A expenses - The company has not generated any revenue since inception and expects to incur significant operating losses and negative cash flows in the future[84](index=84&type=chunk) - Research and development expenses are expected to remain significant and increase as the company advances selonabant's clinical development, including direct third-party costs, consultant fees, and manufacturing costs[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - General and administrative expenses primarily consist of professional fees, insurance, personnel costs (including stock-based compensation), and rent[89](index=89&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance over specific periods, comparing operating expenses and net loss Operating Expenses and Net Loss Comparison | Metric | 3 Months Ended Mar 31, 2025 | 3 Months Ended Mar 31, 2024 | Period to Period Change | 9 Months Ended Mar 31, 2025 | 9 Months Ended Mar 31, 2024 | Period to Period Change | | :-------------------------- | :-------------------------- | :-------------------------- | :---------------------- | :-------------------------- | :-------------------------- | :---------------------- | | Research and development | $638,324 | $748,339 | $(110,015) | $3,173,718 | $3,081,231 | $92,487 | | General and administrative | $1,253,998 | $915,912 | $338,086 | $3,718,879 | $3,887,157 | $(168,278) | | Total operating expenses | $1,892,322 | $1,664,251 | $228,071 | $6,892,597 | $6,968,388 | $(75,791) | | Net loss | $(1,676,169) | $(1,653,542) | $(22,627) | $(6,339,935) | $(6,851,734) | $511,799 | - Research and development expenses decreased by **$0.1 million** for the three months ended March 31, 2025, primarily due to timing of clinical studies, but increased by **$0.1 million** for the nine months, driven by contract manufacturing for the IV selonabant Phase I SAD study[93](index=93&type=chunk)[94](index=94&type=chunk) - General and administrative expenses increased by **$0.3 million** for the three months ended March 31, 2025, due to higher professional fees (debt refinancing, registration statement, proxy filing) and stock-based compensation[96](index=96&type=chunk) - For the nine months, G&A decreased by **$0.2 million** due to strategic cost reductions and lower compensation, partially offset by increased stock-based compensation[97](index=97&type=chunk) - Grant income of **$0.4 million** and **$0.8 million** was recognized for the three and nine months ended March 31, 2025, respectively, from the NIDA grant, with no comparable income in the prior year[100](index=100&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its financial obligations and fund future operations, including cash position and financing needs - As of March 31, 2025, the company had **$13.3 million** in cash and cash equivalents, expecting this, along with the Loan Agreement, to fund operations for at least the next 12 months[101](index=101&type=chunk) - The company received net proceeds of approximately **$14.9 million** from a private placement offering on December 23, 2024[101](index=101&type=chunk) - Net cash used in operating activities was **$4.7 million** for the nine months ended March 31, 2025, a decrease from **$6.0 million** in the prior-year period[106](index=106&type=chunk) - The company will need to raise additional funding in the future through equity, debt, or collaboration agreements to support its development and commercialization objectives[102](index=102&type=chunk)[109](index=109&type=chunk) [Critical Accounting Estimates](index=27&type=section&id=Critical%20Accounting%20Estimates) This section discusses accounting estimates that require significant judgment and could materially impact the financial statements - Critical accounting estimates include accrued research and development expenses, which involve estimating services performed by CROs, investigative sites, vendors, and manufacturers when invoices are not yet received[119](index=119&type=chunk) - Stock-based compensation expense is estimated using the Black-Scholes option pricing model, relying on subjective assumptions such as expected stock price volatility, expected term, risk-free rate, and expected dividends[122](index=122&type=chunk) - The company, as an 'emerging growth company' under the JOBS Act, takes advantage of extended transition periods for new accounting standards, which may affect comparability with other public companies[124](index=124&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for smaller reporting companies, and therefore, no disclosures are provided - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[125](index=125&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, with the participation of the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2025, concluding they were effective at a reasonable assurance level. No material changes in internal control over financial reporting occurred during the quarter - As of March 31, 2025, the CEO and CFO concluded that the design and operation of the company's disclosure controls and procedures were effective at a reasonable assurance level[126](index=126&type=chunk)[127](index=127&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the three months ended March 31, 2025[128](index=128&type=chunk) [PART II. OTHER INFORMATION](index=30&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, and management believes no pending claims could have a material adverse effect on its operations or financial condition - The company is not currently a party to any material legal proceedings[130](index=130&type=chunk) - Management believes there are no claims or actions pending that could have a material adverse effect on the company's results of operations or financial condition[130](index=130&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section details various risks that could materially impact the company's financial position, including lack of revenue, capital needs, and policy changes - The company has not generated any revenue since inception, has an accumulated deficit of **$71.7 million** as of March 31, 2025, and expects to incur future losses, with no assurance of profitability[132](index=132&type=chunk) - The company will need to raise additional capital beyond its current resources and the Loan Agreement, which may result in substantial dilution for existing stockholders through equity issuances or involve restrictive covenants if debt financing is obtained[135](index=135&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - Changes in U.S. government policies, such as limitations on NIH grant funding or trade policies, could adversely affect the company's business, reputation, financial condition, and results of operations[140](index=140&type=chunk)[141](index=141&type=chunk) - The company faces risks related to maintaining its Nasdaq Capital Market listing standards, as evidenced by a recent non-compliance issue regarding a private placement, which was subsequently resolved[142](index=142&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or issuer purchases/repurchases of equity securities during the quarter ended March 31, 2025, that were not previously disclosed - No unregistered sales of equity securities occurred during the quarter ended March 31, 2025, that were not previously disclosed[143](index=143&type=chunk) - There were no issuer purchases or repurchases of equity securities during the quarter[144](index=144&type=chunk)[145](index=145&type=chunk) [Item 3. Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities[146](index=146&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine safety disclosures are not applicable to the company[147](index=147&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended March 31, 2025 - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended March 31, 2025[148](index=148&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents and certifications - Exhibits include various amendments to the company's Certificate of Incorporation and Amended and Restated Bylaws, reflecting changes such as the increase in authorized common stock and board declassification[150](index=150&type=chunk)[152](index=152&type=chunk) - A Lock-Up Agreement and Irrevocable Instruction Letter, both dated February 24, 2025, related to 22NW Fund, LP, are filed as exhibits[152](index=152&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer, pursuant to the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002, are included[152](index=152&type=chunk) [Signatures](index=36&type=section&id=Signatures) [Report Signatures](index=36&type=section&id=Report%20Signatures) The report is duly signed on behalf of Anebulo Pharmaceuticals, Inc. by Richard Anthony Cunningham, Chief Executive Officer, and Daniel George, Chief Financial Officer, on May 13, 2025 - The report was signed by Richard Anthony Cunningham, Chief Executive Officer (Principal Executive Officer), and Daniel George, Chief Financial Officer (Principal Financial and Accounting Officer), on May 13, 2025[155](index=155&type=chunk)

[FORM 8-K Filing Information](index=1&type=section&id=FORM%208-K%20Filing%20Information) This section provides essential details about Anebulo Pharmaceuticals, Inc. as the registrant and specifics of the Form 8-K filing [Registrant Information](index=1&type=section&id=Registrant%20Information) This section identifies Anebulo Pharmaceuticals, Inc. as the registrant, detailing its state of incorporation, principal executive offices, and contact information - Registrant: **Anebulo Pharmaceuticals, Inc.**, incorporated in Delaware[2](index=2&type=chunk) - Principal Executive Offices: 1017 Ranch Road 620 South, Suite 107, Lakeway, TX 78734[2](index=2&type=chunk) - Registrant's Telephone Number: (512) 598-0931[3](index=3&type=chunk) [Filing Details](index=1&type=section&id=Filing%20Details) This subsection specifies the filing date of the Form 8-K, lists the company's registered securities, and confirms its status as an emerging growth company - Date of Report (Date of earliest event reported): May 13, 2025[2](index=2&type=chunk) Securities Registered | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, $.0.001 par value per share | ANEB | The Nasdaq Stock Market LLC | - **Anebulo Pharmaceuticals, Inc.** is an emerging growth company[4](index=4&type=chunk) [Item 2.02 Results of Operations and Financial Condition](index=3&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) This section details the announcement of Anebulo Pharmaceuticals, Inc.'s financial results and business update for the quarter ended March 31, 2025 [Financial Results Announcement](index=3&type=section&id=Financial%20Results%20Announcement) Anebulo Pharmaceuticals, Inc. announced its financial results for the quarter ended March 31, 2025, and provided a business update through a press release issued on May 13, 2025, which is furnished as Exhibit 99.1 - **Anebulo Pharmaceuticals, Inc.** issued a press release on May 13, 2025[5](index=5&type=chunk) - The press release announced financial results for the quarter ended March 31, 2025, and provided a business update[5](index=5&type=chunk) - The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K[5](index=5&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=3&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section provides a comprehensive list of all exhibits included in the Form 8-K filing, such as the press release and interactive data file [Exhibits List](index=3&type=section&id=Exhibits%20List) This section lists the exhibits accompanying the Form 8-K filing, including the press release detailing financial results and the interactive data file cover page List of Exhibits | Exhibit Number | Description | | :------------- | :---------- | | 99.1 | Press Release dated May 13, 2025 | | 104 | Cover Page of Interactive Data File (embedded within the Inline XBRL document). | [Signatures](index=4&type=section&id=SIGNATURES) This section formally documents the authorization and signing of the Form 8-K report by the Chief Executive Officer [Authorization and Signatory](index=4&type=section&id=Authorization%20and%20Signatory) This section confirms the official signing of the Form 8-K report by Richard Anthony Cunningham, Chief Executive Officer of Anebulo Pharmaceuticals, Inc., on May 13, 2025 - The report was signed on behalf of **Anebulo Pharmaceuticals, Inc.** on May 13, 2025[11](index=11&type=chunk) - Signed by **Richard Anthony Cunningham**, Chief Executive Officer (Principal Executive Officer)[11](index=11&type=chunk)

[Special Note Regarding Forward-Looking Statements](index=4&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section highlights forward-looking statements in the report, subject to risks and uncertainties that could cause actual results to differ materially - This section highlights that the Quarterly Report contains forward-looking statements subject to 'safe harbor' provisions, which involve substantial risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these statements and to review the 'Risk Factors' section[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) - Forward-looking statements include expectations regarding capital requirements, regulatory submissions, clinical trial timing and conduct, clinical utility and approval likelihood of selonabant, future growth, intellectual property, licensing arrangements, commercial potential, supplier performance, competition, economic/political impacts, and governmental regulations[12](index=12&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed financial statements and management's discussion and analysis for the reported periods [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents Anebulo Pharmaceuticals, Inc.'s unaudited condensed financial statements for periods ended December 31, 2024, and June 30, 2024 [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific points in time Condensed Balance Sheets Data | Metric | December 31, 2024 ($) | June 30, 2024 ($) | Change ($) | % Change | | :-------------------------- | :------------------ | :---------------- | :------- | :------- | | Cash and cash equivalents | $14,998,467 | $3,094,200 | $11,904,267 | 384.7% | | Total current assets | $15,395,489 | $3,507,990 | $11,887,499 | 338.9% | | Total assets | $15,841,220 | $4,073,114 | $11,768,106 | 289.0% | | Total liabilities | $878,799 | $260,583 | $618,216 | 237.2% | | Total stockholders' equity | $14,962,421 | $3,812,531 | $11,149,890 | 292.4% | - The **significant increase** in **cash and cash equivalents**, total assets, and total stockholders' equity is **primarily due to** net proceeds of approximately **$15.0 million** from a **private placement offering** in **December 2024**[14](index=14&type=chunk)[27](index=27&type=chunk)[95](index=95&type=chunk) [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) This statement reports the company's revenues, expenses, and net loss over specific reporting periods, reflecting operational performance Condensed Statements of Operations Data | Metric | Three Months Ended Dec 31, 2024 ($) | Three Months Ended Dec 31, 2023 ($) | Change (YoY) ($) | Six Months Ended Dec 31, 2024 ($) | Six Months Ended Dec 31, 2023 ($) | Change (YoY) ($) | | :-------------------------- | :------------------------------ | :------------------------------ | :----------- | :---------------------------- | :---------------------------- | :----------- | | Research and development | $1,220,535 | $1,062,672 | $157,863 | $2,535,394 | $2,332,892 | $202,502 | | General and administrative | $1,367,616 | $1,697,787 | $(330,171) | $2,464,881 | $2,971,245 | $(506,364) | | Total operating expenses | $2,588,151 | $2,760,459 | $(172,308) | $5,000,275 | $5,304,137 | $(303,862) | | Net loss | $(2,463,030) | $(2,717,369) | $254,339 | $(4,663,766) | $(5,198,192) | $534,426 | | Net loss per share (basic & diluted) | $(0.09) | $(0.11) | $0.02 | $(0.17) | $(0.20) | $0.03 | | Grant income | $(177,703) | $- | $(177,703) | $(423,065) | $- | $(423,065) | - Net loss **decreased by** **$254,339** for the three months and **$534,426** for the six months ended **December 31, 2024**, **primarily due to a decrease** in general and administrative expenses and the **recognition of grant income**, **partially offset by increased** research and development expenses[17](index=17&type=chunk)[86](index=86&type=chunk)[91](index=91&type=chunk)[94](index=94&type=chunk) [Condensed Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Statements%20of%20Stockholders%27%20Equity) This statement details changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit, over the reporting period Condensed Statements of Stockholders' Equity Data | Metric | Balance at June 30, 2024 ($) | Balance at December 31, 2024 ($) | Change ($) | | :-------------------------- | :----------------------- | :--------------------------- | :----- | | Common Stock Shares | 25,933,217 | 41,084,731 | 15,151,514 | | Common Stock Amount | $25,934 | $41,086 | $15,152 | | Additional Paid-in Capital | $69,190,341 | $84,988,845 | $15,798,504 | | Accumulated Deficit | $(65,403,744) | $(70,067,510) | $(4,663,766) | | Total Stockholders' Equity | $3,812,531 | $14,962,421 | $11,149,890 | - The **significant increase** in **common stock shares** and additional paid-in capital is **primarily due to** the issuance of **15,151,514 shares** in a private placement in **December 2024**, **generating approximately** **$15.0 million** in gross proceeds[20](index=20&type=chunk)[47](index=47&type=chunk) - Stock-based compensation expense recognized during the six months ended **December 31, 2024**, was **$851,253**, **contributing to the increase** in additional paid-in capital[20](index=20&type=chunk)[54](index=54&type=chunk) [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities for the reporting periods Condensed Statements of Cash Flows Data | Cash Flow Activity ($) | Six Months Ended Dec 31, 2024 ($) | Six Months Ended Dec 31, 2023 ($) | Change ($) | | :-------------------------- | :---------------------------- | :---------------------------- | :----- | | Net cash used in operating activities | $(3,095,733) | $(4,540,532) | $1,444,799 | | Net cash provided by (used in) financing activities | $15,000,000 | $(62,354) | $15,062,354 | | Net increase (decrease) in cash | $11,904,267 | $(4,602,886) | $16,507,153 | | Cash, end of the period | $14,998,467 | $6,644,517 | $8,353,950 | - The company experienced a **significant net increase in cash** during the six months ended **December 31, 2024**, **primarily driven by** **$15.0 million** in proceeds from the **issuance of common stock** through a private placement[23](index=23&type=chunk)[100](index=100&type=chunk) - Net cash used in operating activities **decreased by approximately** **$1.4 million** compared to the prior year period, mainly due to a **lower net loss and favorable changes** in operating assets and liabilities[23](index=23&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) These notes provide essential context for the condensed financial statements, covering business nature, liquidity, accounting policies, and specific financial line items - Anebulo Pharmaceuticals, Inc. is a clinical-stage pharmaceutical company developing treatments for cannabis-induced toxicity, with its principal operations in Lakeway, Texas[26](index=26&type=chunk) - The company has incurred an accumulated deficit of **$70.1 million** as of **December 31, 2024**, and **expects to continue generating operating losses**, **necessitating additional funding** for its development and commercialization objectives[27](index=27&type=chunk)[29](index=29&type=chunk)[127](index=127&type=chunk) - In **December 2024**, the company completed a private placement, issuing **15,151,514 shares of common stock** for **approximately $15.0 million** in gross proceeds, **significantly boosting its cash and cash equivalents**[47](index=47&type=chunk)[79](index=79&type=chunk) - The company was **awarded a two-year cooperative grant** of up to **$1.9 million** from NIDA in **July 2024** to **support the development of intravenous selonabant** for pediatric cannabis-induced toxicities, **recognizing** **$0.4 million** in grant income for the six months ended **December 31, 2024**[59](index=59&type=chunk)[61](index=61&type=chunk)[78](index=78&type=chunk)[94](index=94&type=chunk) - The **Loan and Security Agreement (LSA)** with 22NW, LP and JFL Capital Management LLC, initially allowing up to **$10 million**, was **modified in February 2025** to **reduce the maximum advance to** **$3 million**, **remove securitization provisions**, and **assign 22NW's interest to** 22NW Fund, LP. **No balance was outstanding** as of **December 31, 2024**, or **February 14, 2025**[56](index=56&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk)[77](index=77&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - Stock-based compensation expense for the six months ended **December 31, 2024**, was **approximately $0.9 million**, an **increase from $0.4 million** in the prior year, due to grants of options with immediate vesting terms in June and **December 2024**[54](index=54&type=chunk)[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, results of operations, business developments, liquidity, and critical accounting estimates [Overview](index=16&type=section&id=Overview) This overview introduces Anebulo Pharmaceuticals, Inc.'s focus on developing selonabant for cannabis-induced toxicity, prioritizing an intravenous formulation for pediatric patients - Anebulo is a clinical-stage pharmaceutical company focused on developing selonabant (formerly ANEB-001) to rapidly reverse cannabis-induced toxicity, including unintentional poisoning in children and acute cannabinoid intoxication (ACI) in adults[65](index=65&type=chunk)[73](index=73&type=chunk) - The company is **prioritizing the advancement** of an intravenous (IV) selonabant formulation for pediatric patients with cannabis-induced CNS depression, believing it offers a **faster path to approval** compared to the adult oral product[70](index=70&type=chunk)[71](index=71&type=chunk)[89](index=89&type=chunk) - The FDA has acknowledged the **unmet need** for pediatric cannabis toxicity treatment and proposed close collaboration. A Phase I single ascending dose (SAD) study of IV selonabant in healthy adults is planned for 1H25[70](index=70&type=chunk) - The company holds U.S. Patent No. **11,795,146** for crystalline forms of selonabant and methods of use, providing **patent protection through** **2042**[75](index=75&type=chunk)[76](index=76&type=chunk) [Components of Results of Operations](index=19&type=section&id=Components%20of%20Results%20of%20Operations) This section describes primary components influencing financial performance, including R&D, G&A expenses, and the absence of revenue - The company has **not generated any revenue since inception** and **expects to continue generating operating losses** and negative cash flows as it advances clinical development[80](index=80&type=chunk) - Research and development expenses, which are expensed as incurred, are **expected to significantly increase** as the company develops selonabant and conducts clinical trials, particularly for the IV formulation[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)[89](index=89&type=chunk) - General and administrative expenses primarily consist of professional fees, insurance, personnel costs (including stock-based compensation), and rent[85](index=85&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance for the reported periods, focusing on changes in operating expenses, grant income, and net loss Results of Operations Data | Metric | Three Months Ended Dec 31, 2024 ($) | Three Months Ended Dec 31, 2023 ($) | Change (YoY) ($) | Six Months Ended Dec 31, 2024 ($) | Six Months Ended Dec 31, 2023 ($) | Change (YoY) ($) | | :-------------------------- | :------------------------------ | :------------------------------ | :----------- | :---------------------------- | :---------------------------- | :----------- | | Research and development | $1,220,535 | $1,062,672 | $157,863 | $2,535,394 | $2,332,892 | $202,502 | | General and administrative | $1,367,616 | $1,697,787 | $(330,171) | $2,464,881 | $2,971,245 | $(506,364) | | Net loss | $(2,463,030) | $(2,717,369) | $254,339 | $(4,663,766) | $(5,198,192) | $534,426 | | Grant income | $(177,703) | $- | $(177,703) | $(423,065) | $- | $(423,065) | - Research and development expenses **increased by** **$0.2 million** for the six months ended **December 31, 2024**, driven by increased pre-clinical, nonclinical, and clinical studies expenses as the company **prioritizes the IV selonabant formulation**[89](index=89&type=chunk) - General and administrative expenses **decreased by** **$0.5 million** for the six months ended **December 31, 2024**, **primarily due to** reduced compensation and professional/consultant fees, **partially offset by higher** stock-based compensation[91](index=91&type=chunk) - The company **recognized** **$0.4 million** in grant income for the six months ended **December 31, 2024**, from the NIDA grant, with no comparable income in the prior year[94](index=94&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet financial obligations, detailing cash position, funding sources, and future capital requirements - As of **December 31, 2024**, the company had **$15.0 million** in **cash and cash equivalents**, **significantly bolstered by a $15.0 million private placement offering** in **December 2024**[95](index=95&type=chunk) - The company **expects its current cash** and available funding under the Loan Agreement to **fund operations and capital expenditures for at least the next 12 months** from the filing date[102](index=102&type=chunk) - Future funding will be required through equity/debt financings or collaboration agreements, with **potential risks of dilution** for existing stockholders and restrictions from debt financing[103](index=103&type=chunk)[130](index=130&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) Liquidity and Capital Resources Data | Cash Flow Activity ($) | Six Months Ended Dec 31, 2024 ($) | Six Months Ended Dec 31, 2023 ($) | Change ($) | | :-------------------------- | :---------------------------- | :---------------------------- | :----- | | Net cash used in operating activities | $(3,095,733) | $(4,540,532) | $1,444,799 | | Net cash provided by (used in) financing activities | $15,000,000 | $(62,354) | $15,062,354 | | Net increase (decrease) in cash | $11,904,267 | $(4,602,886) | $16,507,153 | [Contractual Obligations and Commitments](index=24&type=section&id=Contractual%20Obligations%20and%20Commitments) This section outlines the company's significant contractual obligations, including licensing agreements and manufacturing commitments, and their potential financial impact - The company has an exclusive worldwide royalty-bearing license agreement with Vernalis Development Limited for selonabant, involving **potential development milestone payments** up to **$29.9 million** (of which **$0.4 million** paid) and **sales milestone payments** up to **$35.0 million**, plus **single-digit royalties**[106](index=106&type=chunk) - A manufacturing agreement with a third-party CMO for **approximately $3.0 million** was **substantially completed** as of **June 30, 2024**, with the stability study aspect expected to be incurred during calendar **2026**[109](index=109&type=chunk) [Critical Accounting Estimates](index=26&type=section&id=Critical%20Accounting%20Estimates) This section describes accounting policies requiring management's most difficult judgments and estimates, such as accrued R&D and stock-based compensation - Key accounting estimates include **accrued research and development expenses**, which involve estimating services performed by CROs, investigative sites, and vendors when invoices are not yet received[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - **Stock-based compensation expense is estimated** using the Black-Scholes option pricing model, relying on subjective assumptions such as expected stock price volatility, expected term, risk-free rate, and expected dividends[117](index=117&type=chunk) - The company, as an 'emerging growth company' under the JOBS Act, **elects to use extended transition periods** for new or revised accounting standards, which **may affect comparability** with other public companies[119](index=119&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for smaller reporting companies, thus no disclosures regarding quantitative and qualitative market risk are provided - The company is a smaller reporting company and is **not required to provide** quantitative and qualitative disclosures about market risk[120](index=120&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=28&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section presents management's conclusion on the effectiveness of the company's disclosure controls and procedures as of the reporting period - As of **December 31, 2024**, management, including the CEO and CFO, concluded that the design and operation of the company's disclosure controls and procedures were **effective at a reasonable assurance level**[121](index=121&type=chunk)[122](index=122&type=chunk) [Changes in Internal Control over Financial Reporting](index=28&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting during the most recent fiscal quarter - There were **no changes in internal control over financial reporting** during the three months ended **December 31, 2024**, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[123](index=123&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides additional non-financial information, including legal proceedings, risk factors, equity sales, and other material disclosures [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms the company is not currently a party to any material legal proceedings that could adversely affect its financial condition - The company is **not currently a party to any material legal proceedings**, and management believes there are no claims or actions pending that could have a material adverse effect on its results of operations or financial condition[125](index=125&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) This section outlines various risks that could materially impact the company's financial position, results of operations, or cash flows - The company has **not generated any revenue since inception** and has an accumulated deficit of **$70.1 million** as of **December 31, 2024**, **expecting to incur significant future operating losses and negative cash flows**[127](index=127&type=chunk) - The company **will need to raise additional capital** to fund operations and development, which may not be available on acceptable terms or at all, potentially leading to **substantial dilution** for existing stockholders through equity issuances[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - Changes in U.S. government policies, including **potential limits on NIH research funding** for 'indirect costs' and **trade policies, could adversely affect** the company's ability to realize grant benefits and obtain future funding[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - The **future success of the business is uncertain**, with **challenges including inadequate financial resources**, **inability to manufacture commercially**, **delays in clinical testing**, and **difficulties in obtaining regulatory approval and market acceptance** for its product candidates[128](index=128&type=chunk)[129](index=129&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the company's unregistered sales of equity securities and any issuer purchases or repurchases during the quarter - The company **did not sell any equity securities in unregistered transactions** during the quarter ended **December 31, 2024**, other than previously disclosed filings[138](index=138&type=chunk) - There were **no issuer purchases or repurchases of equity securities** during the reported period[139](index=139&type=chunk)[140](index=140&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item confirms that the company has not defaulted on any senior securities during the reported period - The company reported **no defaults upon senior securities**[141](index=141&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is **not applicable to the company**[142](index=142&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) This section discloses material events not otherwise reported, specifically a modification to the Loan and Security Agreement and insider trading arrangements - On **February 10, 2025**, the **Loan and Security Agreement (LSA)** was **modified**, **reducing the maximum loan advance to** **$3 million**, **removing all securitization provisions**, and **assigning 22NW's interest to** 22NW Fund, LP. The loan will accrue interest at **0.25%** per annum and is due **February 10, 2028**[143](index=143&type=chunk) - As of **December 31, 2024**, and **February 14, 2025**, there was **no balance outstanding** under the LSA or the **amended Loan Agreement**[143](index=143&type=chunk) - **No director or officer adopted or terminated** a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended **December 31, 2024**[144](index=144&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, material agreements, and certifications - The exhibits include corporate documents (e.g., Certificate of Incorporation, Bylaws), material agreements (e.g., Securities Purchase Agreement, Amended and Restated Loan Agreement), and **certifications pursuant to Sarbanes-Oxley Act**[146](index=146&type=chunk) [Signatures](index=35&type=section&id=Signatures) This section contains the required signatures of the registrant's authorized officers, certifying the filing of the report - The report is **signed by Richard Anthony Cunningham, Chief Executive Officer, and Daniel George, Chief Financial Officer**, on **February 14, 2025**, **certifying its submission**[149](index=149&type=chunk)[150](index=150&type=chunk)

[Report Overview and Recent Highlights](index=1&type=section&id=Report%20Overview%20and%20Recent%20Highlights) [Introduction](index=1&type=section&id=Introduction) Anebulo Pharmaceuticals announced financial results for the second quarter of fiscal year 2025, which ended December 31, 2024, along with key recent updates regarding its clinical development and financing activities - Anebulo Pharmaceuticals, a clinical-stage company, reported Q2 FY2025 financial results and recent updates[1](index=1&type=chunk)[2](index=2&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Richie Cunningham expressed gratitude for continued investor support, highlighting confidence in the company's future, and emphasized the significant unmet medical need for an emergency antidote to acute cannabis-induced toxicity, particularly in children - CEO Richie Cunningham acknowledged strong investor confidence and the significant unmet medical need for an emergency antidote to acute cannabis-induced toxicity, especially in children[4](index=4&type=chunk)[5](index=5&type=chunk) - Research indicates children are more sensitive to cannabis toxicity, leading to more serious outcomes and higher hospitalization risk[5](index=5&type=chunk) - FDA confirmed the unmet need for pediatric cannabis toxicity treatment and suggested close collaboration for selonabant's development in this indication[6](index=6&type=chunk) [Second Quarter Fiscal Year 2025 and Subsequent Highlights](index=1&type=section&id=Second%20Quarter%20Fiscal%20Year%202025%20and%20Subsequent%20Highlights) Anebulo provided key updates including progress in clinical development for intravenous selonabant, particularly for pediatric cannabis toxicity, and significant financing activities [Clinical Development Updates](index=1&type=section&id=Clinical%20Development%20Updates) Anebulo met with the FDA to discuss the development of intravenous selonabant, receiving acknowledgment of the unmet need for pediatric cannabis toxicity treatment and a proposal for close collaboration, and plans to initiate a Phase 1 SAD study in 1H25 - In December 2024, Anebulo met with the FDA to discuss intravenous selonabant development, with the FDA acknowledging the unmet need for pediatric cannabis toxicity treatment and proposing close collaboration[7](index=7&type=chunk) - Anebulo plans to begin its Phase 1 single ascending dose (SAD) study of intravenous selonabant in healthy adults in 1H25[7](index=7&type=chunk) [Financing and Corporate Updates](index=1&type=section&id=Financing%20and%20Corporate%20Updates) The company secured $15 million in gross proceeds from a private placement offering in December 2024 and amended its Loan and Security Agreement in February 2025, reducing the maximum loan size to $3 million and removing securitization provisions - In December 2024, Anebulo completed a private placement offering, issuing **15.2 million shares** of common stock for gross proceeds of **$15 million**[7](index=7&type=chunk) - In February 2025, the Loan and Security Agreement with 22NW and JFL Capital Management was amended, reducing the maximum loan size to approximately **$3 million** and removing all securitization provisions[7](index=7&type=chunk) [Financial Results for Q2 FY2025](index=2&type=section&id=Financial%20Results%20for%20the%20three%20months%20ended%20December%2031%2C%202024) [Summary of Financial Performance](index=2&type=section&id=Summary%20of%20Financial%20Performance) For Q2 FY2025, Anebulo's operating expenses decreased slightly to $2.6 million, leading to a reduced net loss of $2.5 million, or $(0.09) per share, while cash and cash equivalents significantly increased to $15.0 million, with an additional $3 million available via a loan agreement Key Financial Highlights (Q2 FY2025 vs. Q2 FY2024) | Metric | Q2 FY2025 (3 months ended Dec 31, 2024) | Q2 FY2024 (3 months ended Dec 31, 2023) | Change | | :----------------------- | :-------------------------------------- | :-------------------------------------- | :----- | | Operating Expenses | $2.6 million | $2.8 million | -7.1% | | Net Loss | $(2.5) million | $(2.7) million | -7.4% | | Net Loss per Share | $(0.09) | $(0.11) | -18.2% | - Cash and cash equivalents were **$15.0 million** as of December 31, 2024, with an additional **$3 million** accessible through a Loan Agreement[10](index=10&type=chunk) [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) As of December 31, 2024, Anebulo's cash and cash equivalents significantly increased to nearly $15.0 million from $3.1 million at June 30, 2024, driving a substantial increase in total assets and stockholders' equity Condensed Balance Sheet Data (as of Dec 31, 2024 vs. Jun 30, 2024) | Metric | Dec 31, 2024 ($) | Jun 30, 2024 ($) | Change | | :---------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | $14,998,467 | $3,094,200 | +384.7% | | Total assets | $15,841,220 | $4,073,114 | +288.9% | | Total liabilities | $878,799 | $260,583 | +237.3% | | Total stockholders' equity | $14,962,421 | $3,812,531 | +292.5% | [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) For the three months ended December 31, 2024, Anebulo reported a net loss of $2.46 million, an improvement from $2.72 million in the prior year, primarily due to decreased general and administrative expenses and the recognition of grant income Condensed Statements of Operations (3 months ended Dec 31) | Metric | 2024 ($) | 2023 ($) | Change | | :-------------------------- | :----------- | :----------- | :----- | | Research and development | $1,220,535 | $1,062,672 | +14.8% | | General and administrative | $1,367,616 | $1,697,787 | -19.4% | | Total operating expenses | $2,588,151 | $2,760,459 | -6.2% | | Loss from operations | $(2,588,151) | $(2,760,459) | -6.2% | | Interest expense | $59,696 | $31,838 | +87.5% | | Interest income | $(7,067) | $(75,522) | -90.7% | | Grant income | $(177,703) | $- | N/A | | Total other income, net | $(125,121) | $(43,090) | +190.4% | | Net loss | $(2,463,030) | $(2,717,369) | -9.4% | | Weighted average common shares outstanding | 27,415,430 | 25,789,739 | +6.3% | | Net loss per share | $(0.09) | $(0.11) | -18.2% | [About Selonabant (ANEB-001)](index=2&type=section&id=About%20Selonabant%20%28ANEB-001%29) [Product Overview and Clinical Status](index=2&type=section&id=Product%20Overview%20and%20Clinical%20Status) Selonabant (ANEB-001) is Anebulo's lead product candidate, a CB1 receptor antagonist, being developed as an antidote for acute cannabis-induced toxicity in both adults and pediatric subjects, showing promise in Phase 2 studies for oral administration and now being developed as an intravenous treatment with a strategic focus on the pediatric indication - Selonabant (ANEB-001) is a potent, small molecule antagonist of the cannabinoid receptor type-1 (CB1), developed as an antidote for acute cannabis-induced toxicity[9](index=9&type=chunk) - Oral selonabant successfully blocked or reversed key CNS effects of THC in a Phase 2 proof-of-concept study in adults and was well tolerated[9](index=9&type=chunk) - The company is developing selonabant for intravenous administration, with a strategic focus on pediatric patients with acute cannabis-induced toxicity, believing this offers a faster timeline to approval[9](index=9&type=chunk)[11](index=11&type=chunk) - An observational study is ongoing in Emergency Departments to gather data on cannabinoid concentrations, signs/symptoms, and patient disposition[9](index=9&type=chunk) [About Anebulo Pharmaceuticals, Inc.](index=3&type=section&id=About%20Anebulo%20Pharmaceuticals%2C%20Inc.) [Company Profile and Strategic Focus](index=3&type=section&id=Company%20Profile%20and%20Strategic%20Focus) Anebulo Pharmaceuticals is a clinical-stage company focused on developing novel solutions for cannabis-induced toxicity, strategically prioritizing the development of an intravenous formulation of selonabant for pediatric patients, aiming for a faster regulatory pathway compared to the adult oral product - Anebulo Pharmaceuticals is a clinical-stage company developing solutions for cannabis-induced toxicity[11](index=11&type=chunk) - The company is prioritizing the advancement of an IV formulation of selonabant for pediatric patients with acute cannabis-induced toxicity, expecting a faster approval timeline than the adult oral product[11](index=11&type=chunk) - Selonabant is a competitive antagonist at the human CB1 receptor[11](index=11&type=chunk) [Legal and Contact Information](index=3&type=section&id=Legal%20and%20Contact%20Information) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The forward-looking statements caution investors about risks and uncertainties related to Anebulo's regulatory strategy, clinical trial success, funding, regulatory approvals, market acceptance, intellectual property, and ability to retain key employees or maintain Nasdaq listing - Statements regarding future performance are subject to risks and uncertainties, including Anebulo's ability to pursue its regulatory strategy, complete clinical trials, obtain funding, and achieve regulatory approvals[12](index=12&type=chunk) - Key risks include the ability of selonabant to rapidly reverse cannabis toxicity symptoms, the IV formulation's potential for faster approval, and maintaining license agreements and patent estate[12](index=12&type=chunk) [Contacts](index=3&type=section&id=CONTACTS) Contact information for Anebulo Pharmaceuticals' Chief Financial Officer, Daniel George, is provided for inquiries - For inquiries, contact Daniel George, Chief Financial Officer of Anebulo Pharmaceuticals, Inc[13](index=13&type=chunk)

[Special Note Regarding Forward-Looking Statements](index=4&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) The report contains forward-looking statements regarding future financial condition, business strategy, plans, and management objectives, which are subject to substantial risks and uncertainties - The report contains forward-looking statements regarding future financial condition, business strategy, plans, and management objectives, which are subject to substantial risks and uncertainties[5](index=5&type=chunk) - Key areas of forward-looking statements include capital requirements, timing/outcome of regulatory submissions, clinical trial conduct, clinical utility and approval likelihood of selonabant, future growth, intellectual property, licensing, commercial potential, supplier performance, competition, economic/political impacts, and governmental regulations[6](index=6&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed financial statements for Anebulo Pharmaceuticals, Inc., including the Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows, along with detailed notes explaining the nature of business, accounting policies, and specific financial line items [Condensed Balance Sheets as of September 30, 2024 and June 30, 2024](index=5&type=section&id=Condensed%20Balance%20Sheets%20as%20of%20September%2030,%202024%20and%20June%2030,%202024) The balance sheets show a decrease in total assets from **$4.07 million** at June 30, 2024, to **$2.47 million** at September 30, 2024, primarily driven by a reduction in cash and cash equivalents. Total liabilities increased significantly from **$0.26 million** to **$0.57 million**, while total stockholders' equity decreased from **$3.81 million** to **$1.90 million** Condensed Balance Sheet Highlights | Metric | Sep 30, 2024 | Jun 30, 2024 | Change | | :------------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | $1,404,211 | $3,094,200 | $(1,689,989) | | Total current assets | $1,962,513 | $3,507,990 | $(1,545,477) | | Total assets | $2,467,940 | $4,073,114 | $(1,605,174) | | Total liabilities | $569,225 | $260,583 | $308,642 | | Total stockholders' equity | $1,898,715 | $3,812,531 | $(1,913,816) | [Condensed Statements of Operations for the Three Months Ended September 30, 2024 and September 30, 2023](index=6&type=section&id=Condensed%20Statements%20of%20Operations%20for%20the%20Three%20Months%20Ended%20September%2030,%202024%20and%20September%2030,%202023) For the three months ended September 30, 2024, the company reported a net loss of **$2.20 million**, an improvement from **$2.48 million** in the prior year period, primarily due to decreased general and administrative expenses and increased grant income Condensed Statements of Operations Highlights | Metric | Sep 30, 2024 | Sep 30, 2023 | Change | | :---------------------------------- | :----------- | :----------- | :----- | | Research and development | $1,314,859 | $1,270,220 | $44,639 | | General and administrative | $1,097,265 | $1,273,458 | $(176,193) | | Total operating expenses | $2,412,124 | $2,543,678 | $(131,554) | | Loss from operations | $(2,412,124) | $(2,543,678) | $131,554 | | Interest expense | $59,697 | $0 | $59,697 | | Interest income | $(26,006) | $(55,198) | $29,192 | | Grant income | $(245,362) | $0 | $(245,362) | | Net loss | $(2,200,736) | $(2,480,823) | $280,087 | | Net loss per share, basic and diluted | $(0.08) | $(0.10) | $0.02 | [Condensed Statements of Stockholders' Equity for the Three Months Ended September 30, 2024 and September 30, 2023](index=6&type=section&id=Condensed%20Statements%20of%20Stockholders'%20Equity%20for%20the%20Three%20Months%20Ended%20September%2030,%202024%20and%20September%2030,%202023) Total stockholders' equity decreased from **$3.81 million** at June 30, 2024, to **$1.90 million** at September 30, 2024, primarily due to the net loss incurred, partially offset by stock-based compensation expense Condensed Statements of Stockholders' Equity Highlights | Metric | Jun 30, 2024 | Sep 30, 2024 | Change | | :--------------------------- | :----------- | :----------- | :----- | | Common Stock Amount | $25,934 | $25,934 | $0 | | Additional Paid-in Capital | $69,190,341 | $69,477,261 | $286,920 | | Accumulated Deficit | $(65,403,744) | $(67,604,480) | $(2,200,736) | | Total Stockholders' Equity | $3,812,531 | $1,898,715 | $(1,913,816) | [Condensed Statements of Cash Flows for the Three Months Ended September 30, 2024 and September 30, 2023](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20September%2030,%202024%20and%20September%2030,%202023) Net cash used in operating activities decreased significantly to **$1.69 million** for the three months ended September 30, 2024, compared to **$2.73 million** in the prior year, driven by lower net loss and favorable changes in operating assets and liabilities Condensed Statements of Cash Flows Highlights (Operating Activities) | Metric | Sep 30, 2024 | Sep 30, 2023 | Change | | :---------------------------------- | :----------- | :----------- | :----- | | Net loss | $(2,200,736) | $(2,480,823) | $280,087 | | Stock-based compensation | $286,920 | $210,797 | $76,123 | | Amortization of loan commitment fee | $59,697 | $0 | $59,697 | | Grant receivable | $(245,362) | $0 | $(245,362) | | Prepaid expenses | $100,850 | $(104,558) | $205,408 | | Accounts payable | $95,716 | $31,404 | $64,312 | | Accrued expenses | $212,926 | $(383,645) | $596,571 | | Net cash used in operating activities | $(1,689,989) | $(2,726,825) | $1,036,836 | | Cash, end of period | $1,404,211 | $8,520,578 | $(7,116,367) | [Notes to Unaudited Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) This section provides detailed explanations and disclosures for the unaudited condensed financial statements, covering the company's nature of business, accounting policies, and specific financial line items [Note 1. Nature of business and basis of presentation](index=8&type=section&id=Note%201.%20Nature%20of%20business%20and%20basis%20of%20presentation) Anebulo Pharmaceuticals, Inc. is a clinical-stage company developing treatments for cannabis toxicity, with an accumulated deficit of **$67.6 million** as of September 30, 2024, and expects to require additional funding for long-term development - Anebulo Pharmaceuticals, Inc. is a clinical-stage pharmaceutical company developing treatments for cannabis toxicity, including unintentional cannabis poisoning and acute cannabinoid intoxication (ACI)[14](index=14&type=chunk) - The company has incurred a net loss of approximately **$2.2 million** for the three months ended September 30, 2024, and an accumulated deficit of **$67.6 million** as of September 30, 2024[15](index=15&type=chunk) - The company expects its cash and cash equivalents, along with available funding under the Loan and Security Agreement (LSA), to fund operations and capital expenditures for at least **12 months** from the financial statements' issuance date[15](index=15&type=chunk) - Future funding will be sought through equity and debt financings or collaboration agreements, with risks of dilution or inability to secure funding on acceptable terms, potentially delaying or eliminating product development[16](index=16&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) The company's unaudited interim condensed financial statements are prepared in accordance with U.S. GAAP and SEC rules, with no material changes to significant accounting policies since June 30, 2024, except for research and development grants - Unaudited interim condensed financial statements are prepared in accordance with U.S. GAAP and SEC rules, with certain information and footnote disclosures omitted as permitted[19](index=19&type=chunk)[20](index=20&type=chunk) - No material changes to significant accounting policies have occurred since June 30, 2024, other than the policy for accounting for research and development grants[22](index=22&type=chunk) [Note 3. Prepaid Expenses](index=11&type=section&id=Note%203.%20Prepaid%20Expenses) Prepaid expenses decreased from **$413,790** at June 30, 2024, to **$312,940** at September 30, 2024, primarily due to a decrease in prepaid research and development, partially offset by an increase in prepaid insurance Prepaid Expenses | Category | Sep 30, 2024 | Jun 30, 2024 | | :------------------------- | :----------- | :----------- | | Prepaid insurance | $155,507 | $95,871 | | Prepaid research and development | $118,893 | $274,879 | | Prepaid other | $38,540 | $43,040 | | **Total prepaid expenses** | **$312,940** | **$413,790** | [Note 4. Accrued Expenses](index=11&type=section&id=Note%204.%20Accrued%20Expenses) Accrued expenses significantly increased from **$104,157** at June 30, 2024, to **$317,083** at September 30, 2024, primarily driven by a substantial increase in accrued research and development costs Accrued Expenses | Category | Sep 30, 2024 | Jun 30, 2024 | | :------------------------- | :----------- | :----------- | | Accrued payroll related expenses | $32,843 | $29,512 | | Accrued research and development | $248,685 | $47,554 | | Accrued professional fees | $35,555 | $27,091 | | **Total accrued expenses** | **$317,083** | **$104,157** | [Note 5. Other Assets](index=11&type=section&id=Note%205.%20Other%20Assets) Other assets, primarily loan commitment fees, decreased from **$0.6 million** at June 30, 2024, to **$0.5 million** at September 30, 2024, due to amortization, resulting in **$0.1 million** interest expense - Loan commitment fees, included in other assets, decreased from **$0.6 million** at June 30, 2024, to **$0.5 million** at September 30, 2024, due to amortization over a three-year loan term[26](index=26&type=chunk) - Interest expense related to the amortization of loan commitment fees was **$0.1 million** for the three months ended September 30, 2024, compared to zero in the prior year period[26](index=26&type=chunk) [Note 6. License Agreement](index=11&type=section&id=Note%206.%20License%20Agreement) The company licensed selonabant intellectual property from Vernalis Development Limited, involving potential development milestone payments up to **$29.9 million** and sales milestone payments up to **$35.0 million**, plus single-digit royalties - The company licensed intellectual property for selonabant from Vernalis Development Limited in May 2020, involving potential development milestone payments up to **$29.9 million** and sales milestone payments up to **$35.0 million**, plus single-digit royalties[27](index=27&type=chunk) - As part of the May 2021 IPO, **192,857 shares** of common stock were issued to Vernalis in lieu of approximately **$1.4 million** in future milestone payments, and no further milestone payments are considered probable as of September 30, 2024[28](index=28&type=chunk) [Note 7. Stockholders' Equity](index=11&type=section&id=Note%207.%20Stockholders'%20Equity) The company's authorized common stock increased to **50,000,000 shares** in November 2023, with **25,933,217 shares** issued and outstanding as of September 30, 2024, following a **$6.3 million** private placement and issuance of **300,000 shares** for a Loan and Security Agreement - The authorized common stock was increased from **40,000,000** to **50,000,000 shares** in November 2023[28](index=28&type=chunk) - As of September 30, 2024, **25,933,217 shares** of common stock were issued and outstanding[9](index=9&type=chunk)[10](index=10&type=chunk) - A private placement in September 2022 generated approximately **$6.3 million** in net proceeds from the issuance of **2,264,650 units**, each comprising one common share and a warrant[29](index=29&type=chunk) - **300,000 shares** of common stock were issued in November 2023 in connection with a Loan and Security Agreement[30](index=30&type=chunk) [Note 8. Stock-Based Compensation](index=12&type=section&id=Note%208.%20Stock-Based%20Compensation) The 2020 Stock Incentive Plan has **324,452 shares** available for future issuance, with stock-based compensation expense of approximately **$0.3 million** for the three months ended September 30, 2024, and **$2.1 million** in unrecognized expense - The 2020 Stock Incentive Plan has **324,452 shares** available for future issuance as of September 30, 2024, out of a total authorized **3,650,000 shares**[31](index=31&type=chunk) - Stock-based compensation expense was approximately **$0.3 million** for the three months ended September 30, 2024, compared to **$0.2 million** for the same period in 2023[37](index=37&type=chunk) - As of September 30, 2024, unrecognized stock-based compensation expense related to unvested stock options totaled approximately **$2.1 million**, to be recognized over a weighted average period of **2.3 years**[37](index=37&type=chunk) Stock Option Activity (Three Months Ended September 30, 2024) | Metric | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | | :-------------------------- | :--------------- | :------------------------------ | :------------------------------------------ | | Outstanding at June 30, 2024 | 2,319,048 | $3.00 | 6.0 | | Granted | - | - | - | | Exercised | - | - | - | | Forfeited/cancelled | - | - | - | | Outstanding at Sep 30, 2024 | 2,319,048 | $3.00 | 5.8 | | Options exercisable at Sep 30, 2024 | 903,994 | $3.15 | 3.0 | [Note 9. Net Loss Per Share Attributable to Common Stockholders](index=14&type=section&id=Note%209.%20Net%20Loss%20Per%20Share%20Attributable%20to%20Common%20Stockholders) Net loss per share was **$(0.08)** for the three months ended September 30, 2024, an improvement from **$(0.10)** in the prior year, with **4,583,698** common stock equivalents excluded due to anti-dilutive effect Common Stock Equivalents Excluded from EPS Calculation | Category | Sep 30, 2024 | Sep 30, 2023 | | :-------------------- | :----------- | :----------- | | Stock options outstanding | 2,319,048 | 2,054,893 | | Warrants outstanding | 2,264,650 | 2,264,650 | | **Total** | **4,583,698** | **4,319,543** | - Net loss per share, basic and diluted, was **$(0.08)** for the three months ended September 30, 2024, compared to **$(0.10)** for the same period in 2023[11](index=11&type=chunk) [Note 10. Loan and Security Agreement](index=14&type=section&id=Note%2010.%20Loan%20and%20Security%20Agreement) The company entered into a Loan and Security Agreement (LSA) on November 13, 2023, providing access to up to **$10 million** at **0.25%** annual interest, with **300,000 shares** issued upon signing and no outstanding balance as of September 30, 2024 - The company entered into a Loan and Security Agreement (LSA) on November 13, 2023, allowing it to draw up to **$10 million** at **0.25%** annual interest, due on November 13, 2026[39](index=39&type=chunk) - **300,000 shares** of common stock were issued to 22NW upon signing the LSA, with additional shares (**0.03** per dollar loaned, up to **300,000** aggregate) to be issued upon advances[40](index=40&type=chunk) - As of September 30, 2024, there was no outstanding balance under the LSA[40](index=40&type=chunk) [Note 11. Research and Development Grant](index=14&type=section&id=Note%2011.%20Research%20and%20Development%20Grant) The company received the first tranche of **$0.9 million** from a **$1.9 million** NIDA grant in July 2024, supporting IV selonabant development for pediatric cannabis toxicity, recognizing **$0.2 million** in grant income and a **$0.2 million** grant receivable - On July 16, 2024, the company was awarded the first tranche of **$0.9 million** from a two-year NIDA grant totaling up to **$1.9 million** to support the development of intravenous selonabant for pediatric cannabis toxicity[42](index=42&type=chunk) - The company recognized **$0.2 million** in grant income and recorded a **$0.2 million** grant receivable for the three months ended September 30, 2024, with no comparable income in the prior year[44](index=44&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting its focus on developing selonabant for cannabis toxicity, recent financial performance, liquidity, capital resources, and critical accounting estimates [Overview](index=15&type=section&id=Overview) Anebulo Pharmaceuticals is a clinical-stage company developing selonabant for cannabis toxicity, prioritizing an IV formulation for pediatric use due to faster approval, and recently secured a U.S. patent and a **$1.9 million** NIDA grant - Anebulo Pharmaceuticals is a clinical-stage company developing selonabant (formerly ANEB-001) to rapidly reverse the negative effects of cannabis toxicities, including unintentional cannabis poisoning in children and ACI in adults[46](index=46&type=chunk) - The company is prioritizing the advancement of an intravenous (IV) selonabant formulation for pediatric patients with unintentional cannabis poisoning, believing it offers a faster timeline to approval compared to the adult oral product[51](index=51&type=chunk)[52](index=52&type=chunk) - A U.S. patent (No. **11,795,146**) was issued on October 24, 2023, covering crystalline forms of selonabant and methods of use to treat acute cannabinoid overdose, providing patent protection through **2042**[56](index=56&type=chunk) - On July 16, 2024, the company was awarded the first tranche of **$0.9 million** from a two-year NIDA grant totaling up to **$1.9 million** to support the development of intravenous selonabant for emergency treatment of acute cannabis-induced toxicities in children[59](index=59&type=chunk) [Components of Results of Operations](index=18&type=section&id=Components%20of%20Results%20of%20Operations) This section outlines the company's key operational components: Revenue, Research and Development Expenses, and General and Administrative Expenses, noting no revenue generation since inception and expected significant operating losses [Revenue](index=18&type=section&id=Revenue) The company has not generated any revenue since its inception and expects to continue incurring significant operating losses and negative cash flows, with future revenue contingent on successful product development or collaboration agreements - The company has not generated any revenue since inception and expects to incur significant operating losses and negative cash flows in the future[60](index=60&type=chunk) - Future revenue is dependent on successful development and marketing approval of selonabant or other product candidates, or through collaboration/license agreements[60](index=60&type=chunk) [Research and Development Expenses](index=19&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses are a significant portion of operating costs, expensed as incurred, and are expected to increase as the company advances selonabant's clinical development and expands its pipeline - Research and development expenses are expected to significantly increase as the company continues to develop selonabant and conduct clinical trials for cannabis toxicity, and expand its product-candidate pipeline[63](index=63&type=chunk)[64](index=64&type=chunk) - R&D expenses include employee costs, third-party CRO/CMO costs, consultant fees, other direct third-party expenses, and amortization for asset purchases[63](index=63&type=chunk) [General and Administrative Expenses](index=19&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses primarily consist of professional fees, stock-based compensation, insurance, personnel costs, and rent - General and administrative expenses primarily include professional fees, stock-based compensation, insurance, personnel costs, and rent[65](index=65&type=chunk) [Results of Operations (Comparison of the Three Months Ended September 30, 2024 and 2023)](index=19&type=section&id=Results%20of%20Operations%20(Comparison%20of%20the%20Three%20Months%20Ended%20September%2030,%202024%20and%202023)) The company's net loss decreased by **$280,087** to **$2.20 million** for the three months ended September 30, 2024, compared to **$2.48 million** in the prior year, driven by decreased general and administrative expenses and recognized grant income [Research and Development Expenses](index=20&type=section&id=Research%20and%20Development%20Expenses_Results) Research and development expenses increased slightly by **$44,639** to **$1.31 million** for the three months ended September 30, 2024, mainly due to increased contract manufacturing costs, and are expected to increase further for IV selonabant formulation and clinical safety studies Research and Development Expenses | Category | Sep 30, 2024 | Sep 30, 2023 | Change | | :------------------------------------- | :----------- | :----------- | :----- | | Pre-clinical, nonclinical and clinical studies | $833,861 | $841,133 | $(7,272) | | Contract manufacturing | $215,466 | $143,302 | $72,164 | | Other research and development | $265,532 | $285,785 | $(20,253) | | **Total research and development expenses** | **$1,314,859** | **$1,270,220** | **$44,639** | - Research and development expenses are expected to increase as the company scales up the IV selonabant formulation and commences clinical safety studies, following the completion of Phase 2 oral ACI trials[68](index=68&type=chunk) [General and Administrative Expenses](index=20&type=section&id=General%20and%20Administrative%20Expenses_Results) General and administrative expenses decreased by **$176,193** to **$1.10 million** for the three months ended September 30, 2024, primarily due to strategic cost reductions in professional and consultant fees General and Administrative Expenses | Category | Sep 30, 2024 | Sep 30, 2023 | Change | | :---------------------------------- | :----------- | :----------- | :----- | | Compensation and related benefits | $306,613 | $264,710 | $41,903 | | Professional and consultant fees | $315,794 | $613,960 | $(298,166) | | Stock-based compensation expense | $286,920 | $210,797 | $76,123 | | Directors' and officers' insurance | $117,158 | $117,525 | $(367) | | Facilities, fees and other costs | $70,780 | $66,466 | $4,314 | | **Total general and administrative expenses** | **$1,097,265** | **$1,273,458** | **$(176,193)** | - The decrease in general and administrative expenses was primarily due to strategic cost reductions in professional and consultant fees[69](index=69&type=chunk) [Interest Expense](index=20&type=section&id=Interest%20Expense_Results) Interest expense was **$0.1 million** for the three months ended September 30, 2024, attributed to the amortization of loan commitment fees related to the Loan and Security Agreement, which was not in effect in the prior year - Interest expense was **$0.1 million** for the three months ended September 30, 2024, due to the amortization of loan commitment fees from the LSA, which was not in effect in the prior year period[70](index=70&type=chunk) [Interest Income](index=20&type=section&id=Interest%20Income_Results) Interest income decreased to approximately **$26,000** for the three months ended September 30, 2024, from approximately **$55,000** in the prior year, due to lower cash balances and interest rates - Interest income decreased to approximately **$26,000** for the three months ended September 30, 2024, from **$55,000** in the prior year, attributed to lower cash balances and interest rates[71](index=71&type=chunk) [Grant Income](index=20&type=section&id=Grant%20Income_Results) The company recognized **$0.2 million** in grant income for the three months ended September 30, 2024, from the NIDA research and development grant, with no comparable income in the prior year period - Grant income of **$0.2 million** was recognized for the three months ended September 30, 2024, from the NIDA research and development grant, with no comparable income in the prior year period[72](index=72&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) The company has incurred significant operating losses and expects this trend to continue, with **$1.4 million** in cash as of September 30, 2024, and anticipates needing additional funding beyond the next **12 months** despite access to a **$10 million** LSA [Overview](index=20&type=section&id=Overview_Liquidity) The company has incurred significant operating losses since inception and expects to continue doing so, with **$1.4 million** in cash as of September 30, 2024, and plans to seek additional funding through equity, debt, or collaboration agreements - The company has incurred significant operating losses since inception and expects to continue incurring significant expenses and operating losses in the future[73](index=73&type=chunk) - As of September 30, 2024, cash and cash equivalents were **$1.4 million**[73](index=73&type=chunk) - The company plans to seek additional funding through equity and debt financings or collaboration agreements, with no assurance of securing funds on acceptable terms[73](index=73&type=chunk) [Loan and Security Agreement](index=21&type=section&id=Loan%20and%20Security%20Agreement_Liquidity) The LSA, entered into on November 13, 2023, provides access to up to **$10 million** at **0.25%** annual interest until November 13, 2026, with **300,000** common shares issued upon signing and no outstanding balance as of September 30, 2024 - The LSA provides access to up to **$10 million** for future operations until November 13, 2026, with an interest rate of **0.25%** per annum[74](index=74&type=chunk) - **300,000** common shares were issued to 22NW upon signing the LSA, and **0.03 shares** per dollar loaned (up to **300,000** aggregate) will be issued upon advances[75](index=75&type=chunk) - As of September 30, 2024, there was no outstanding balance under the LSA[75](index=75&type=chunk) [Cash Flows](index=22&type=section&id=Cash%20Flows_Liquidity) Net cash used in operating activities for the three months ended September 30, 2024, was approximately **$1.7 million**, a significant decrease from **$2.7 million** in the prior year, due to lower net loss and favorable changes in operating assets and liabilities Net Cash Used in Operating Activities | Period | Net Cash Used in Operating Activities | | :------------------------- | :---------------------------------- | | Three Months Ended Sep 30, 2024 | $(1,689,989) | | Three Months Ended Sep 30, 2023 | $(2,726,825) | - The decrease in cash used in operating activities for the three months ended September 30, 2024, was primarily due to a lower net loss and favorable changes in operating assets and liabilities, partially offset by non-cash stock-based compensation and loan commitment amortization[78](index=78&type=chunk)[79](index=79&type=chunk) [Funding and Material Cash Requirements](index=22&type=section&id=Funding%20and%20Material%20Cash%20Requirements) The company expects current cash and LSA access to fund operations for at least the next **12 months**, but future funding needs are substantial and depend on clinical trial progress, regulatory approvals, and operational expansion, potentially leading to dilution or restrictive covenants - Current cash and LSA access are expected to fund operations for at least the next **12 months**, but estimates are imprecise, and capital resources may be exhausted sooner[80](index=80&type=chunk) - Future funding requirements depend on clinical trial progress, regulatory approvals, operational expansion, intellectual property costs, and new product candidates[81](index=81&type=chunk) - Additional equity or debt financing, or collaboration agreements, will be needed, potentially causing stockholder dilution, liens on assets, or relinquishing rights to products[82](index=82&type=chunk) [Contractual Obligations and Commitments](index=22&type=section&id=Contractual%20Obligations%20and%20Commitments) The company has contractual obligations including a license agreement with Vernalis for selonabant, requiring potential milestone payments and royalties, an office lease, manufacturing contract, and CRO contracts, with the **$3.0 million** manufacturing contract substantially completed by June 30, 2024 [License Agreement with Vernalis Development Limited](index=22&type=section&id=License%20Agreement%20with%20Vernalis%20Development%20Limited) The exclusive worldwide royalty-bearing license agreement with Vernalis for selonabant includes a **$0.2 million** signature fee, potential development milestone payments up to **$29.9 million**, sales milestone payments up to **$35.0 million**, and low to mid-single digit royalties - The license agreement with Vernalis for selonabant includes a **$0.2 million** signature fee, potential development milestone payments up to **$29.9 million** (**$0.4 million** paid), sales milestone payments up to **$35.0 million**, and low to mid-single digit royalties[83](index=83&type=chunk)[84](index=84&type=chunk) - The company has sole discretion and responsibility for selonabant's development and commercialization, including regulatory approvals and associated costs[86](index=86&type=chunk) [Office Lease, Manufacturing Contract and CRO Contract](index=24&type=section&id=Office%20Lease,%20Manufacturing%20Contract%20and%20CRO%20Contract) The company leases office space for approximately **$400** per month, and a **$3.0 million** manufacturing agreement was substantially completed by June 30, 2024, with stability study costs expected through **2026**, alongside cancellable CRO contracts - The company leases its principal executive office for approximately **$400** per month[87](index=87&type=chunk) - A manufacturing agreement for approximately **$3.0 million** was substantially completed by June 30, 2024, with stability study costs expected to be fully incurred during calendar **2026**[88](index=88&type=chunk) - The company enters into cancellable contracts with clinical trial sites and clinical supply manufacturers[89](index=89&type=chunk) [Critical Accounting Estimates](index=24&type=section&id=Critical%20Accounting%20Estimates) This section discusses critical accounting estimates requiring significant judgment, including accrued research and development expenses and stock-based compensation expense, and notes the company's election to use the extended transition period for new accounting standards under the JOBS Act [Accrued Research and Development Expenses](index=24&type=section&id=Accrued%20Research%20and%20Development%20Expenses) The company estimates accrued research and development expenses by reviewing contracts, communicating with personnel, and estimating service levels and costs for unbilled services, with potential adjustments for variations in service timing or effort - The company estimates accrued R&D expenses by reviewing contracts, communicating with personnel, and estimating service levels and costs for unbilled services from CROs, investigative sites, vendors, and manufacturers[92](index=92&type=chunk) - Estimates are made at each balance sheet date, and while not expected to be materially different, variations in actual service timing or effort may require adjustments[93](index=93&type=chunk) [Stock-Based Compensation Expense](index=25&type=section&id=Stock-Based%20Compensation%20Expense_Critical) Stock-based compensation expense is estimated using the Black-Scholes option pricing model, relying on subjective assumptions like expected stock price volatility and expected term, with no significant changes to these assumptions during the three months ended September 30, 2024 - The fair value of stock options is estimated using the Black-Scholes option pricing model, which depends on subjective assumptions including expected stock price volatility, expected term, risk-free rate, and expected dividends[95](index=95&type=chunk) - No significant changes to the assumptions used in the Black-Scholes model occurred during the three months ended September 30, 2024[96](index=96&type=chunk) [JOBS Act Accounting Election](index=25&type=section&id=JOBS%20Act%20Accounting%20Election) As an "emerging growth company," the company has elected to use the extended transition period for new accounting standards under the JOBS Act, which may affect comparability and investor attractiveness - As an "emerging growth company," the company has elected to use the extended transition period for complying with new or revised accounting standards under the JOBS Act[97](index=97&type=chunk) - This election may make the company's financial statements less comparable to those of other public companies and could potentially reduce investor attractiveness[97](index=97&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not required for smaller reporting companies - This item is not required for smaller reporting companies[99](index=99&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=26&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) As of September 30, 2024, management concluded that the design and operation of the company's disclosure controls and procedures were effective at a reasonable assurance level - As of September 30, 2024, management, including the CEO and CFO, concluded that the design and operation of disclosure controls and procedures were effective at a reasonable assurance level[100](index=100&type=chunk)[101](index=101&type=chunk) [Changes in Internal Control over Financial Reporting](index=26&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) There were no material changes in the company's internal control over financial reporting during the three months ended September 30, 2024 - No material changes in internal control over financial reporting occurred during the three months ended September 30, 2024[102](index=102&type=chunk) [PART II. OTHER INFORMATION](index=27&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, and management believes no pending claims could materially adversely affect its operations or financial condition - The company is not currently a party to any material legal proceedings, and management believes no pending claims could materially adversely affect its operations or financial condition[104](index=104&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The company faces various risks, including its inability to generate revenue, an accumulated deficit of **$67.6 million**, expected future losses, clinical trial delays, regulatory hurdles, competition, and the need for substantial additional capital - The company has not generated any revenue since inception and has an accumulated deficit of **$67.6 million** as of September 30, 2024, expecting to incur future losses[106](index=106&type=chunk) - Future success is uncertain due to potential clinical trial delays, regulatory challenges, competition, and the need for substantial additional capital, which may not be available on acceptable terms[106](index=106&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk) - Raising additional capital through equity or equity-linked securities may result in substantial dilution for existing stockholders, and debt financing may involve liens on assets and restrictive covenants[111](index=111&type=chunk)[112](index=112&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell any equity securities in unregistered transactions during the quarter ended September 30, 2024, and there were no issuer purchases or repurchases of equity securities - No unregistered sales of equity securities occurred during the quarter ended September 30, 2024[115](index=115&type=chunk) - There were no issuer purchases or repurchases of equity securities during the quarter[115](index=115&type=chunk) [Item 3. Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities - No defaults upon senior securities were reported[115](index=115&type=chunk) [Item 4. Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[115](index=115&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2024 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2024[115](index=115&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various certificates of incorporation, bylaws, certifications of principal executive and financial officers, and Inline XBRL documents - The exhibits include various corporate governance documents (certificates of incorporation, bylaws), officer certifications (302 and 906), and Inline XBRL documents for financial data[116](index=116&type=chunk) [Signatures](index=32&type=section&id=Signatures) - The report was signed on November 13, 2024, by Richard Anthony Cunningham (CEO) and Daniel George (CFO)[119](index=119&type=chunk)