ESSA Pharma (US:EPIX)2025-05-08 11:00markdown [FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) [Registrant Details](index=1&type=page&id=Registrant%20Details) ESSA Pharma Inc. filed its Quarterly Report on Form 10-Q for the period ended March 31, 2025, with the SEC. The company is incorporated in British Columbia, Canada, and its common shares trade on the Nasdaq Capital Market under the symbol EPIX - Registrant: ESSA Pharma Inc[2](index=2&type=chunk) - Filing Period: Quarterly period ended March 31, 2025[2](index=2&type=chunk) - Trading Symbol: **EPIX** on Nasdaq Capital Market[3](index=3&type=chunk) [Filer Status and Compliance](index=1&type=page&id=Filer%20Status%20and%20Compliance) The registrant confirmed compliance with Section 13 or 15(d) of the Securities Exchange Act of 1934 for the preceding 12 months and electronic submission of Interactive Data Files. ESSA Pharma Inc. is classified as a non-accelerated filer and a smaller reporting company, and is not a shell company - Compliance: Filed all required reports and submitted Interactive Data Files electronically during the preceding **12 months**[3](index=3&type=chunk) - Filer Status: Non-accelerated filer and smaller reporting company[4](index=4&type=chunk) - Shell Company Status: Not a shell company[4](index=4&type=chunk) [Outstanding Common Shares](index=1&type=page&id=Outstanding%20Common%20Shares) As of May 7, 2025, ESSA Pharma Inc. had 44,388,550 common shares outstanding - Outstanding Common Shares (as of May 7, 2025): **44,388,550**[4](index=4&type=chunk) [Table of Contents](index=2&type=page&id=Table%20of%20Contents) [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Nature of Forward-Looking Statements](index=3&type=page&id=Nature%20of%20Forward-Looking%20Statements) This section outlines the nature of forward-looking statements included in the Form 10-Q, emphasizing that they involve known and unknown risks and uncertainties that could cause actual results to differ materially from projections. Key areas for such statements include strategic alternatives, clinical trial discontinuation costs, funding, intellectual property, profitability, and future financial performance - Forward-looking statements relate to plans, objectives, goals, strategies, future events, revenue, performance, capital expenditures, and financing needs[7](index=7&type=chunk) - Statements are subject to significant medical, scientific, business, economic, competitive, political, and social uncertainties and contingencies[8](index=8&type=chunk) - Examples include assessment of strategic alternatives, costs of discontinuing clinical trials, ability to obtain funding, intellectual property protection, and future financial performance[9](index=9&type=chunk) [RISK FACTOR SUMMARY](index=5&type=page&id=RISK%20FACTOR%20SUMMARY) This summary highlights material factors that make an investment in ESSA Pharma Inc. speculative or risky, including the availability of financing, intellectual property protection, ability to out-license/in-license products, absence of adverse industry changes, key personnel retention, compliance with license terms, and market competition. It also specifically mentions risks related to the discontinuation of masofaniten (EPI-7386) development and the ongoing strategic review - Key risks include: availability of sufficient financing, ability to protect patents, successful out-licensing/in-licensing, absence of material adverse changes, and ability to attract/retain key personnel[13](index=13&type=chunk) - Specific risks related to masofaniten (EPI-7386) discontinuation, potential for unsuccessful strategic transactions, and the incurrence of significant losses since inception[14](index=14&type=chunk) - Other risks include intellectual property claims, computer system failures, competition, foreign currency fluctuations, product liability lawsuits, and operating as a public company[17](index=17&type=chunk) [PART I. FINANCIAL INFORMATION](index=9&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements and Supplementary Data](index=9&type=section&id=Item%201.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents ESSA Pharma Inc.'s unaudited condensed consolidated interim financial statements for the periods ended March 31, 2025, and September 30, 2024, including balance sheets, statements of operations and comprehensive loss, cash flows, and changes in shareholders' equity, along with detailed notes explaining the company's operations, accounting policies, and financial instrument details [Condensed Consolidated Interim Balance Sheets](index=10&type=page&id=Condensed%20Consolidated%20Interim%20Balance%20Sheets) The balance sheets show a decrease in total assets and shareholders' equity from September 30, 2024, to March 31, 2025, primarily driven by a reduction in cash and cash equivalents | Metric | March 31, 2025 | September 30, 2024 | | :--------------------------------- | :------------- | :----------------- | | Cash and cash equivalents | $86,308,345 | $103,709,537 | | Short-term investments | $27,564,067 | $23,050,582 | | Total assets | $115,415,420 | $128,112,003 | | Total liabilities | $1,868,916 | $3,506,233 | | Total shareholders' equity | $113,546,504 | $124,605,770 | - Cash and cash equivalents decreased by **$17.4 million** from September 30, 2024, to March 31, 2025[21](index=21&type=chunk) - Total liabilities decreased by approximately **$1.6 million**, while total shareholders' equity decreased by approximately **$11 million**[21](index=21&type=chunk) [Condensed Consolidated Interim Statements of Operations and Comprehensive Loss](index=12&type=page&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) ESSA Pharma Inc. reported a net loss and comprehensive loss for both the three and six months ended March 31, 2025 and 2024, with a reduction in operating expenses in the current period compared to the prior year | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Six months ended March 31, 2025 | Six months ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Research and development | $(3,484,442) | $(6,177,987) | $(8,958,589) | $(11,554,751) | | General and administration | $(3,897,235) | $(4,315,502) | $(8,107,954) | $(6,533,370) | | Total operating expenses | $(7,381,677) | $(10,493,489) | $(17,066,543) | $(18,088,121) | | Net loss for the period | $(6,374,787) | $(8,989,535) | $(14,906,718) | $(14,953,857) | | Loss and comprehensive loss for period| $(6,392,609) | $(8,990,284) | $(14,933,306) | $(14,934,482) | | Basic and diluted loss per common share| $(0.14) | $(0.20) | $(0.34) | $(0.34) | - Net loss for the three months ended March 31, 2025, decreased to **$6.37 million** from **$8.99 million** in the prior year, primarily due to lower R&D expenses[22](index=22&type=chunk) - Research and development expenses decreased by approximately **43.6%** for the three months ended March 31, 2025, compared to the same period in 2024[22](index=22&type=chunk) [Condensed Consolidated Interim Statements of Cash Flows](index=13&type=page&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) The cash flow statement for the six months ended March 31, 2025, shows a significant decrease in cash and cash equivalents, primarily due to net cash used in operating and investing activities, contrasting with a net cash increase in the prior year | Metric | Six months ended March 31, 2025 | Six months ended March 31, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(13,318,653) | $(13,604,966) | | Net cash provided by (used in) investing activities | $(4,082,539) | $70,741,345 | | Net cash provided by financing activities | $0 | $840,262 | | Change in cash and cash equivalents | $(17,401,192) | $57,981,162 | | Cash and cash equivalents, end of period | $86,308,345 | $91,683,074 | - Net cash used in operating activities remained relatively stable year-over-year[24](index=24&type=chunk) - Investing activities shifted from providing **$70.7 million** in cash in 2024 to using **$4.08 million** in 2025, largely due to changes in short-term investment purchases and proceeds[24](index=24&type=chunk) [Condensed Consolidated Interim Statement of Changes in Shareholders' Equity](index=14&type=page&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Shareholders'%20Equity) The statement of changes in shareholders' equity shows a decrease in total equity from September 30, 2024, to March 31, 2025, primarily due to the accumulated deficit from net losses, partially offset by share-based payments | Metric | September 30, 2024 | March 31, 2025 | | :------------------------------------ | :----------------- | :------------- | | Common shares | $279,862,420 | $279,862,420 | | Additional paid-in capital | $54,810,797 | $58,684,837 | | Accumulated other comprehensive loss | $(2,063,267) | $(2,089,855) | | Accumulated deficit | $(208,004,180) | $(222,910,898) | | Total Shareholders' Equity | $124,605,770 | $113,546,504 | - Accumulated deficit increased by approximately **$14.9 million** from September 30, 2024, to March 31, 2025, reflecting the net loss for the period[25](index=25&type=chunk) - Additional paid-in capital increased by **$3.87 million**, mainly due to share-based payments[25](index=25&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=15&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) These notes provide essential context and detail for the condensed consolidated interim financial statements, covering the company's nature of operations, accounting policies, recent pronouncements, and specific financial instrument breakdowns, including short-term investments, prepaids, liabilities, shareholders' equity, and financial risks [1. NATURE OF OPERATIONS](index=15&type=page&id=1.%20NATURE%20OF%20OPERATIONS) ESSA Pharma Inc. was incorporated in British Columbia in 2009 and has historically focused on developing small molecule drugs for prostate cancer. However, as of March 31, 2025, the company has terminated its clinical trial of masofaniten (EPI-7386) and is evaluating future operations, with no products currently in commercial production - Company focus: Development of small molecule drugs for prostate cancer[28](index=28&type=chunk) - Clinical Trial Status: Termination of masofaniten (EPI-7386) clinical trial announced[29](index=29&type=chunk) - Commercial Production: No products in commercial production or use as of **March 31, 2025**[28](index=28&type=chunk) [2. BASIS OF PRESENTATION](index=15&type=page&id=2.%20BASIS%20OF%20PRESENTATION) The unaudited condensed consolidated interim financial statements are prepared in accordance with U.S. GAAP and SEC rules for interim financial information, reflecting normal recurring adjustments. They include the accounts of the Company and its wholly-owned subsidiaries, with all amounts expressed in U.S. dollars - Preparation Standard: U.S. GAAP and SEC rules for interim financial information[30](index=30&type=chunk) - Consolidation: Includes accounts of the Company and its wholly-owned subsidiaries[32](index=32&type=chunk) - Currency: All amounts expressed in United States dollars[33](index=33&type=chunk) [3. RECENT ACCOUNTING PRONOUNCEMENTS](index=17&type=page&id=3.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) The company is evaluating the impact of recently issued FASB ASUs, including ASU No. 2023-09 on Income Taxes (effective after December 31, 2024) and new guidance on expense category disclosures (effective after December 15, 2026), on its consolidated financial statements - ASU 2023-09 (Income Taxes): Enhances transparency of income tax disclosures, effective for annual periods after **December 31, 2024**. Company is evaluating impact[36](index=36&type=chunk) - New FASB guidance (Expense Categories): Requires additional disclosures for specific expense categories, effective for fiscal years after **December 15, 2026**. Company is evaluating impact[37](index=37&type=chunk) [4. SHORT-TERM INVESTMENTS](index=18&type=page&id=4.%20SHORT-TERM%20INVESTMENTS) Short-term investments primarily consist of U.S. treasury securities and guaranteed investment certificates (GICs), classified as available-for-sale and carried at fair value. As of March 31, 2025, these investments had an aggregate fair market value of $27.6 million, with a gross unrealized loss of $15,304 - Composition: Includes GICs (**4.50%** interest, matures within **12 months**) and U.S. treasury securities[40](index=40&type=chunk)[41](index=41&type=chunk) - Classification: Available-for-sale, carried at fair value with unrealized gains/losses in accumulated other comprehensive loss[41](index=41&type=chunk) | Metric | March 31, 2025 | | :-------------------- | :------------- | | Estimated Fair Value | $27,564,067 | | Gross Unrealized Loss | $(15,304) | [5. PREPAIDS](index=18&type=page&id=5.%20PREPAIDS) Prepaid expenses increased from $636,463 at September 30, 2024, to $879,477 at March 31, 2025, primarily due to a significant rise in prepaid insurance, while prepaid CMC and clinical expenses decreased | Category | March 31, 2025 | September 30, 2024 | | :------------------------------------ | :------------- | :----------------- | | Prepaid insurance | $649,121 | $75,841 | | Prepaid CMC and clinical expenses and deposits | $7,500 | $226,005 | | Other deposits and prepaid expenses | $222,856 | $334,617 | | **Balance, end of period** | **$879,477** | **$636,463** | - Prepaid insurance saw a substantial increase from **$75,841** to **$649,121**[43](index=43&type=chunk) - Prepaid CMC and clinical expenses and deposits decreased significantly from **$226,005** to **$7,500**[43](index=43&type=chunk) [6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES](index=18&type=page&id=6.%20ACCOUNTS%20PAYABLE%20AND%20ACCRUED%20LIABILITIES) Total accounts payable and accrued liabilities decreased from $3,176,973 at September 30, 2024, to $1,588,715 at March 31, 2025, mainly driven by a reduction in accounts payable | Category | March 31, 2025 | September 30, 2024 | | :------------------------------------ | :------------- | :----------------- | | Accounts payable | $864,155 | $2,403,519 | | Accrued expenses | $266,520 | $171,690 | | Employee compensation and vacation accruals | $458,040 | $601,764 | | **Balance, end of period** | **$1,588,715** | **$3,176,973** | - Accounts payable decreased by over **$1.5 million**, reflecting reduced operational expenditures[44](index=44&type=chunk) - Employee compensation and vacation accruals also decreased by approximately **$143,000**[44](index=44&type=chunk) [7. OPERATING LEASE](index=20&type=page&id=7.%20OPERATING%20LEASE) The company's operating lease right-of-use asset and liability decreased from September 30, 2024, to March 31, 2025, with a remaining lease term of 28 months for its South San Francisco office and an incremental borrowing rate of 10.25% | Metric | September 30, 2024 | March 31, 2025 | | :------------------------------------ | :----------------- | :------------- | | Operating lease right-of-use asset | $295,471 | $248,017 | | Operating lease liability | $329,260 | $280,201 | - Remaining lease term for South San Francisco office: **28 months**[45](index=45&type=chunk) - Incremental borrowing rate applied to lease liability: **10.25%**[45](index=45&type=chunk) [8. SHAREHOLDERS' EQUITY](index=20&type=section&id=8.%20SHAREHOLDERS'%20EQUITY) This section details the components of shareholders' equity, including authorized shares, omnibus incentive plan, employee share purchase plan, stock options, and warrants. It highlights the mechanisms for equity compensation and the status of outstanding equity instruments [Omnibus Incentive Plan](index=20&type=page&id=Omnibus%20Incentive%20Plan) The Company adopted an Omnibus Incentive Plan in February 2021, allowing for various share-based awards, though only stock options have been issued under it to date. The plan reserves a maximum of 10,810,907 common shares for issuance - Plan Adoption: **February 25, 2021**[49](index=49&type=chunk) - Awards Issued: Only stock options have been issued under the Omnibus Plan[49](index=49&type=chunk) - Maximum Reserved Shares: **10,810,907** common shares[51](index=51&type=chunk) [Employee Share Purchase Plan](index=22&type=page&id=Employee%20Share%20Purchase%20Plan) The Employee Share Purchase Plan (ESPP) allows eligible employees to purchase common shares at a discount, with offerings typically over six-month periods. During the six months ended March 31, 2025, no shares were issued under the ESPP as all participants withdrew - Purchase Rights: Employees can buy shares at not less than **85%** of market price[52](index=52&type=chunk) - Shares Reserved: Maximum of **192,142** common shares[52](index=52&type=chunk) - Activity (6 months ended March 31, 2025): Nil shares issued; all participants withdrew[54](index=54&type=chunk) [Stock Options](index=24&type=page&id=Stock%20Options) Stock options are granted under the Legacy Option Plan and Omnibus Plan with terms up to 10 years. As of March 31, 2025, 9,022,151 options were outstanding with a weighted average exercise price of $5.43, and 7,841,219 were exercisable | Metric | March 31, 2025 | | :------------------------------------ | :------------- | | Balance outstanding | 9,022,151 | | Weighted Average Exercise Price | $5.43 | | Balance exercisable | 7,841,219 | - Share-based payments expense for options was **$1,172,109** for the three months ended March 31, 2025, and **$3,879,760** for the six months ended March 31, 2025[59](index=59&type=chunk) - Options have varying exercise prices, with a weighted average remaining contractual life of **5.72 years**[58](index=58&type=chunk) [Warrants](index=25&type=page&id=Warrants) As of March 31, 2025, 2,920,000 warrants were outstanding, enabling holders to acquire common shares at an exercise price of $0.0001, following an amendment in FY2024 to remove the expiry date - Outstanding Warrants: **2,920,000**[61](index=61&type=chunk) - Exercise Price: **$0.0001**[61](index=61&type=chunk) - Amendment: Expiry date removed in FY2024[61](index=61&type=chunk) [9. RELATED PARTY TRANSACTIONS](index=25&type=page&id=9.%20RELATED%20PARTY%20TRANSACTIONS) As of March 31, 2025, the Company had $177,746 due to related parties for key management personnel compensation and expense reimbursements. These amounts are non-interest bearing with no fixed repayment terms - Amount Due to Related Parties (March 31, 2025): **$177,746**[62](index=62&type=chunk) - Purpose: Key management personnel compensation and expense reimbursements[62](index=62&type=chunk) - Terms: Non-interest bearing, no fixed repayment terms[62](index=62&type=chunk) [10. SEGMENTED INFORMATION](index=25&type=page&id=10.%20SEGMENTED%20INFORMATION) The Company operates in a single industry segment: the development of small molecule drugs for prostate cancer. Its right-of-use assets are located in the USA - Industry Segment: Development of small molecule drugs for prostate cancer[63](index=63&type=chunk) - Asset Location: Right-of-use assets are located in the USA[63](index=63&type=chunk) [11. FINANCIAL INSTRUMENTS AND RISK](index=25&type=section&id=11.%20FINANCIAL%20INSTRUMENTS%20AND%20RISK) This section outlines the Company's financial instruments and associated risks, including credit risk, liquidity risk, and market risk (interest rate and foreign currency). The fair values of most instruments approximate their carrying values due to short maturities, with U.S. treasury securities and money market funds measured using Level 2 inputs [Credit Risk](index=26&type=page&id=Credit%20Risk) The Company manages credit risk by placing cash and short-term investments with major financial institutions and maintaining an investment policy with minimum investment grades. Cash balances exceed insured limits in Canada and the U.S - Credit Risk Management: Places cash in segregated funds with major financial institutions and adheres to an investment policy with minimum investment grades[66](index=66&type=chunk) - Exposure: Cash balances exceed insured limits by Canada Deposit Insurance Corporation (C**$100,000**) and Federal Deposit Insurance Corporation (**$250,000**)[67](index=67&type=chunk) [Liquidity Risk](index=26&type=page&id=Liquidity%20Risk) As of March 31, 2025, the Company had working capital of $113,452,776. However, as it does not generate revenue, it relies on external financing, which may not always be available on favorable terms - Working Capital (March 31, 2025): **$113,452,776**[68](index=68&type=chunk) - Revenue Generation: The Company does not generate revenue[68](index=68&type=chunk) - Reliance: Dependent on external financing, which is subject to market conditions[68](index=68&type=chunk) [Market Risk](index=26&type=page&id=Market%20Risk) The Company's market risk exposure primarily relates to interest rate fluctuations on its cash and short-term investments, and foreign currency risk from Canadian dollar and Euro denominated assets. Neither is currently considered significant, and the Company does not engage in hedging activities - Interest Rate Risk: Not significant, as interest income is not central to capital management[70](index=70&type=chunk) - Foreign Currency Risk: Exposure to Canadian dollars and Euro is not currently significant; no hedging activities are undertaken[71](index=71&type=chunk) [12. CONTINGENT LIABILITY](index=27&type=page&id=12.%20CONTINGENT%20LIABILITY) A putative class action lawsuit was filed on January 24, 2025, against the Company and its officers, alleging violations of the Exchange Act due to material misstatements regarding masofaniten (EPI-7386) clinical trials. The Company intends to vigorously defend the lawsuit, and the outcome and potential losses are not estimable or probable at this early stage - Lawsuit Date: **January 24, 2025**[72](index=72&type=chunk) - Allegations: Violations of Sections **10(b)** and **20(a)** of the Exchange Act due to alleged material misstatements/omissions regarding masofaniten (EPI-7386) clinical trials[72](index=72&type=chunk) - Company Stance: Believes it has valid defenses and intends to defend vigorously; outcome and potential losses are not estimable or probable[72](index=72&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on ESSA Pharma Inc.'s financial condition and results of operations, including an overview of its strategic review, the history of its prostate cancer drug development, the termination of clinical trials for masofaniten (EPI-7386), recent developments, competition, intellectual property, regulatory environment, and a detailed analysis of financial performance and liquidity [Overview](index=28&type=page&id=Overview) ESSA Pharma Inc. is undergoing a comprehensive strategic review to maximize shareholder value, following the termination of its masofaniten (EPI-7386) clinical trials due to a lack of clear efficacy benefit. The review may include various strategic transactions, which are expected to be costly and time-consuming - Strategic Review: Initiated to maximize shareholder value, exploring options like merger, asset sale, or liquidation[75](index=75&type=chunk)[129](index=129&type=chunk) - Clinical Trial Termination: Masofaniten (EPI-7386) trials terminated in **October 2024** due to higher-than-expected PSA90 response in enzalutamide monotherapy and no clear efficacy benefit for the combination[78](index=78&type=chunk) - Costs and Risks: The strategic review process is expected to be costly, time-consuming, and complex, with no assurance of anticipated benefits or successful consummation of any transaction[76](index=76&type=chunk)[130](index=130&type=chunk) [Background and History of Prostate Cancer Drug Development](index=30&type=page&id=Background%20and%20History%20of%20Prostate%20Cancer%20Drug%20Development) ESSA's historical focus was on developing novel small molecule inhibitors targeting the N-terminal domain (NTD) of the androgen receptor (AR) for prostate cancer, aiming to bypass resistance mechanisms to existing antiandrogens. The company developed the 'Aniten' series, including first-generation EPI-506 and next-generation masofaniten (EPI-7386), based on preclinical data suggesting efficacy in AR-dependent tumors - Historical Focus: Developing small molecule inhibitors of the N-terminal domain (NTD) of the androgen receptor (AR) for prostate cancer[81](index=81&type=chunk) - Mechanism of Action: Designed to disrupt AR signaling by binding to the NTD, aiming to bypass resistance to classical antiandrogens[81](index=81&type=chunk)[86](index=86&type=chunk) - Previous Compounds: First-generation EPI-506 showed PSA declines but lacked sustained clinical benefit; next-generation masofaniten (EPI-7386) was developed for greater potency and improved properties[82](index=82&type=chunk)[96](index=96&type=chunk) [Our Strategy](index=35&type=page&id=Our%20Strategy) Following the termination of all masofaniten (EPI-7386) clinical trials and withdrawal of IND/CTAs in October 2024, ESSA is now focused on a comprehensive review of strategic options to maximize shareholder value, discontinuing its previous strategy of combining Aniten compounds with second-generation antiandrogens - Current Strategy: Comprehensive review of strategic options to maximize shareholder value[98](index=98&type=chunk) - Discontinued Activities: Termination of all masofaniten (EPI-7386) clinical trials and withdrawal of IND/CTAs[98](index=98&type=chunk) - Previous Strategic Approach: Combined Aniten compounds with second-generation antiandrogens in earlier lines of therapy for prostate cancer[99](index=99&type=chunk) [Identification and Characteristics of Masofaniten (EPI-7386)](index=35&type=page&id=Identification%20and%20Characteristics%20of%20Masofaniten%20(EPI-7386)) Masofaniten (EPI-7386) was selected as ESSA's lead clinical candidate due to its increased potency, reduced metabolic susceptibility, and superior pharmaceutical properties compared to first-generation compounds. It demonstrated activity in AR-dependent prostate cancer models and a favorable tolerability profile in preclinical studies, leading to IND submission in March 2020 before its eventual clinical trial termination - Selection Criteria: Increased potency (**20x** higher than EPI-506), reduced metabolic susceptibility, and superior pharmaceutical properties[97](index=97&type=chunk)[102](index=102&type=chunk) - Preclinical Activity: Active in AR-dependent prostate cancer models, including those resistant to second-generation antiandrogens[102](index=102&type=chunk) - Regulatory Filings: IND submitted to FDA on **March 30, 2020**, and CTA filed with Health Canada in **April 2020**, both subsequently withdrawn[103](index=103&type=chunk) [Advancing Masofaniten (EPI-7386) Through Clinical Development](index=38&type=section&id=Advancing%20Masofaniten%20(EPI-7386)%20Through%20Clinical%20Development) Prior to October 2024, ESSA was advancing masofaniten (EPI-7386) through two main clinical trials (EPI-7386-CS-001 and EPI-7386-CS-010), exploring monotherapy and combination treatments with other antiandrogens for various prostate cancer stages. All these clinical trials were subsequently terminated - Clinical Trials: EPI-7386-CS-001 (monotherapy and combination with abiraterone/apalutamide) and EPI-7386-CS-010 (combination with enzalutamide)[105](index=105&type=chunk)[108](index=108&type=chunk) - Target Patient Populations: mCRPC, mHSPC, nmCRPC, and neo-adjuvant prostate cancer[99](index=99&type=chunk) - Termination: All clinical trials evaluating masofaniten (EPI-7386) were terminated in **October 2024**[105](index=105&type=chunk) [Phase 1 Clinical Trial - EPI-7386-CS-001 (Monotherapy & Combination)](index=39&type=page&id=Phase%201%20Clinical%20Trial%20-%20EPI-7386-CS-001%20(Monotherapy%20%26%20Combination)) The EPI-7386-CS-001 trial included a Phase 1a dose escalation and Phase 1b dose expansion for monotherapy, and a Part B for combination with abiraterone acetate/prednisone or apalutamide. The monotherapy phase completed enrollment, and two dose levels (600 mg QD and 600 mg BID) were advanced to Phase 1b before the study's termination - Trial Design: Part A (Monotherapy - Phase 1a Dose Escalation & Phase 1b Dose Expansion) and Part B (Combination with abiraterone acetate/prednisone or apalutamide)[110](index=110&type=chunk) - Monotherapy Enrollment: Completed enrollment in Part A, with **600 mg QD** and **600 mg BID** advanced to Phase 1b dose expansion[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - Objectives: Assess safety, tolerability, pharmacokinetics, and preliminary anti-tumor activity[111](index=111&type=chunk)[115](index=115&type=chunk) [Clinical Trial - EPI-7386-CS-010 – Combination Treatment with Enzalutamide](index=41&type=page&id=Clinical%20Trial%20-%20EPI-7386-CS-010%20%E2%80%93%20Combination%20Treatment%20with%20Enzalutamide) This Phase 1/2 study evaluated masofaniten (EPI-7386) in combination with enzalutamide for mCRPC patients. Phase 1 completed enrollment, recommending 600 mg BID masofaniten with 160 mg enzalutamide for Phase 2. The Phase 2 study was enrolling patients globally before its termination - Collaboration: With Astellas Pharma Inc. for enzalutamide supply[121](index=121&type=chunk) - Phase 1 Outcome: Completed enrollment, recommended **600 mg BID** masofaniten with **160 mg** enzalutamide for Phase 2[121](index=121&type=chunk) - Phase 2 Status: Was enrolling **120 patients** globally (U.S., Canada, Europe, Australia) before termination[121](index=121&type=chunk) [Clinical Trial - EPI-7386-CS-001 – Combination Treatments with Abiraterone and with Apalutamide](index=41&type=page&id=Clinical%20Trial%20-%20EPI-7386-CS-001%20%E2%80%93%20Combination%20Treatments%20with%20Abiraterone%20and%20with%20Apalutamide) ESSA collaborated with Janssen to study masofaniten (EPI-7386) in combination with abiraterone acetate/prednisone and apalutamide. The amended protocol included a Part B for these combinations in mHSPC or mCRPC patients, and a 'window of opportunity' cohort for nmCRPC. This trial, along with a planned collaboration with Bayer for darolutamide, was terminated - Collaboration: With Janssen Research & Development, LLC for abiraterone acetate/prednisone and apalutamide supply[122](index=122&type=chunk) - Trial Design: Part B included Cohort 1 (combination with AAP for mHSPC/mCRPC) and Cohort 2 (single agent masofaniten for nmCRPC, followed by combination with apalutamide)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - Termination: All planned and ongoing combination trials, including a potential one with Bayer for darolutamide, were terminated[126](index=126&type=chunk) [Preclinical Development of Anitens and Other Indications](index=43&type=page&id=Preclinical%20Development%20of%20Anitens%20and%20Other%20Indications) ESSA has decided to terminate its preclinical development programs, including work on other Aniten molecules and AR ANITAC NTD degraders, during its strategic options review - Termination: Preclinical development programs and related work have been terminated[127](index=127&type=chunk) - Previous Work: Included research on other Aniten molecules and AR ANITAC NTD degraders[127](index=127&type=chunk) [Recent Developments](index=43&type=section&id=Recent%20Developments) Recent developments include the termination of all masofaniten (EPI-7386) clinical studies and the initiation of a strategic review process in October 2024. Prior to this, the company presented updated dose escalation data from its Phase 1/2 study in 2024 and 2023, showing favorable safety and efficacy signals, but these were ultimately superseded by the futility analysis [Termination of Clinical Studies and Evaluation of Strategic Options](index=43&type=page&id=Termination%20of%20Clinical%20Studies%20and%20Evaluation%20of%20Strategic%20Options) On October 31, 2024, ESSA terminated its Phase 2 clinical trial for masofaniten (EPI-7386) due to a futility analysis showing no clear efficacy benefit compared to enzalutamide monotherapy. Consequently, all other masofaniten clinical and preclinical studies were terminated, and the company initiated a comprehensive strategic review - Termination Date: **October 31, 2024**[128](index=128&type=chunk) - Reason: Futility analysis showed no clear efficacy benefit of masofaniten (EPI-7386) plus enzalutamide over enzalutamide monotherapy[128](index=128&type=chunk) - Consequence: All remaining company-sponsored and investigator-sponsored clinical and preclinical studies for masofaniten (EPI-7386) were terminated, and a strategic review was initiated[129](index=129&type=chunk) [2024 Clinical Updates](index=45&type=page&id=2024%20Clinical%20Updates) In 2024, ESSA presented updated Phase 1/2 study data for masofaniten (EPI-7386) combined with enzalutamide, showing it was well-tolerated with rapid, deep, and durable PSA reductions in evaluable patients. The recommended Phase 2 combination doses were identified as masofaniten 600 mg BID with enzalutamide 160 mg QD - Safety: Masofaniten combined with enzalutamide was well-tolerated, with most frequent adverse events being Grade **1** and **2**[132](index=132&type=chunk)[136](index=136&type=chunk) - Efficacy (n=16): **88%** achieved PSA50, **81-88%** achieved PSA90, and **63%** achieved PSA <0.2ng/mL[133](index=133&type=chunk)[137](index=137&type=chunk) - Recommended Phase 2 Doses: Masofaniten **600 mg BID** with enzalutamide **160 mg QD**[132](index=132&type=chunk)[136](index=136&type=chunk) [2023 Clinical Updates and Corporate Actions](index=46&type=page&id=2023%20Clinical%20Updates%20and%20Corporate%20Actions) In 2023, ESSA provided updates on the Phase 1/2 study of masofaniten (EPI-7386) with enzalutamide, noting no effect on enzalutamide exposure but a reduction in masofaniten exposure, mitigated by BID dosing. Corporate actions included filing a prospectus supplement for an ATM Sales Agreement of up to $50.0 million, initiating the Phase 2 portion of the study, and appointing a new board member - Drug Interaction: Masofaniten had no effect on enzalutamide exposure, but enzalutamide reduced masofaniten exposure (mitigated by BID dosing)[140](index=140&type=chunk) - Efficacy (n=16): **88%** achieved PSA50, **69-81%** achieved PSA90, and **56-70%** achieved PSA <0.2ng/mL[142](index=142&type=chunk)[145](index=145&type=chunk) - Corporate Actions: Entered ATM Sales Agreement for up to **$50.0 million**, initiated Phase 2 of the masofaniten/enzalutamide study, and appointed Lauren Merendino to the Board[146](index=146&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk) [Future Clinical Development Program](index=50&type=page&id=Future%20Clinical%20Development%20Program) Prior to October 2024, ESSA planned further clinical development involving randomized trials in earlier prostate cancer patient populations. However, following the termination of all masofaniten (EPI-7386) clinical studies and withdrawal of IND/CTAs, the company is now focused on a comprehensive review of strategic options - Previous Plans: Conduct randomized clinical trials in earlier prostate cancer patient populations[154](index=154&type=chunk) - Current Status: All company-sponsored and investigator-sponsored clinical studies for masofaniten (EPI-7386) have been terminated[155](index=155&type=chunk) - Focus: Comprehensive review of strategic options to maximize shareholder value[155](index=155&type=chunk) [Competition](index=50&type=page&id=Competition) The prostate cancer market is highly competitive, with numerous companies possessing greater resources and many approved therapies. ESSA previously believed its NTD inhibitor approach offered a unique, differentiated mechanism to bypass resistance to current AR LBD-targeting therapies, but currently, no other AR-NTD antagonists are in clinical trials - Market Competition: Very high, with many companies having greater financial resources and expertise[156](index=156&type=chunk) - Approved Therapies: Numerous marketed drugs, including Xtandi, Zytiga, Erleada, Nubeqa, Keytruda, Lynparza, and Pluvicto[157](index=157&type=chunk) - Unique Approach: ESSA's Aniten compounds aimed to directly bind to AR-NTD, potentially bypassing AR-dependent resistance pathways[159](index=159&type=chunk) [Collaborative Agreements](index=52&type=page&id=Collaborative%20Agreements) ESSA has discontinued all clinical studies related to collaborative agreements for masofaniten (EPI-7386) and is not currently engaged in any clinical development collaborations. Future collaborative agreements are dependent on the outcome of its ongoing strategic evaluation - Discontinuation: All clinical studies related to collaborative agreements for masofaniten (EPI-7386) have been discontinued[162](index=162&type=chunk) - Current Status: Not currently engaged in any collaborations for clinical development[162](index=162&type=chunk) - Future Plans: Dependent on the results of ESSA's ongoing strategic evaluation[162](index=162&type=chunk) [Patents and Proprietary Rights](index=52&type=section&id=Patents%20and%20Proprietary%20Rights) ESSA has historically licensed intellectual property from UBC and BCCA and developed its own patent portfolio for its Aniten series. However, the license agreement with the Licensors was terminated effective December 12, 2024. As of December 2024, ESSA owns rights to 83 issued patents, including 23 U.S. patents, covering its compounds [License Agreement with UBC and the BCCA](index=52&type=page&id=License%20Agreement%20with%20UBC%20and%20the%20BCCA) ESSA had an exclusive worldwide license agreement with the British Columbia Cancer Agency and the University of British Columbia for intellectual property related to AR activity modulating compounds. This agreement, which involved annual royalties and milestone payments, was terminated by ESSA effective December 12, 2024 - Agreement: Exclusive worldwide rights to develop and commercialize products based on Licensed IP[164](index=164&type=chunk) - Financial Obligations: Minimum annual royalty of C**$85,000**, and potential milestone payments up to C**$2.4 million** for the first drug product[165](index=165&type=chunk)[166](index=166&type=chunk) - Termination: ESSA provided notice of termination effective **December 12, 2024**[167](index=167&type=chunk) [ESSA's Intellectual Property Strategy](index=52&type=page&id=ESSA's%20Intellectual%20Property%20Strategy) ESSA retains commercial rights for its Aniten series and has developed a strong patent portfolio, including 83 issued patents (23 U.S. patents) covering its compounds, with expected expiration dates between 2036 and 2044. The company emphasizes the importance of patents for new technologies and will continue to seek patents where appropriate - Commercial Rights: Retains all commercial rights for its Aniten series drug portfolio[168](index=168&type=chunk) - Patent Portfolio (as of December 2024): Includes **83** issued patents (**23** U.S. patents) covering multiple EPI- and Aniten structural classes[170](index=170&type=chunk) - Patent Protection: Masofaniten (EPI-7386) compound patents are expected to provide protection until **2036-2043**[171](index=171&type=chunk) [Regulatory Environment](index=54&type=section&id=Regulatory%20Environment) With the decision to close INDs and CTAs for masofaniten, ESSA's current focus is on compliant clinical trial shutdown. If ESSA pursues future product development, it will be subject to extensive regulation by governmental authorities worldwide, including the FDA in the U.S. and TPD in Canada, covering R&D, manufacturing, and marketing [Drug Products Development Process](index=55&type=page&id=Drug%20Products%20Development%20Process) The drug development process involves preclinical studies, IND submission, IRB approval, and multi-phase clinical trials (Phase 1, 2, 3) to establish safety and efficacy. Successful completion leads to an NDA/NDS submission, followed by regulatory review, facility inspections, and potential approval, which is a lengthy and costly process - Stages: Preclinical studies, IND submission, IRB approval, Phase **1**, **2**, and **3** clinical trials[175](index=175&type=chunk)[176](index=176&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - Regulatory Submissions: IND/CTA must be accepted before human trials; NDA/NDS submitted for marketing approval[176](index=176&type=chunk)[183](index=183&type=chunk) - Approval Process: Involves FDA review, facility inspections (cGMP, GCP), and substantial application user fees (currently over **$2.5 million**)[186](index=186&type=chunk)[187](index=187&type=chunk) [Post-Approval Requirements](index=59&type=page&id=Post-Approval%20Requirements) After FDA approval, drug products are subject to continuous regulation, including recordkeeping, periodic reporting, advertising restrictions, and adverse event reporting. Manufacturers must comply with cGMP, and the FDA can impose sanctions, including product withdrawal, if regulatory standards are not maintained - Ongoing Regulation: Recordkeeping, periodic reporting, product sampling, distribution, advertising, and adverse event reporting[190](index=190&type=chunk) - Manufacturing Compliance: Establishments must register with FDA and state agencies and comply with cGMP requirements[191](index=191&type=chunk) - Sanctions: Non-compliance can lead to product withdrawal, fines, clinical holds, refusal of new approvals, or civil/criminal penalties[192](index=192&type=chunk)[197](index=197&type=chunk) [Orphan Designation and Exclusivity](index=61&type=page&id=Orphan%20Designation%20and%20Exclusivity) The FDA may grant orphan drug designation for products treating rare diseases (fewer than 200,000 U.S. patients). If approved, this designation provides seven years of market exclusivity for the specific indication, preventing approval of other applications for the same product, with limited exceptions - Definition: Drug intended to treat a rare disease or condition (fewer than **200,000** individuals in the U.S.)[195](index=195&type=chunk) - Exclusivity: **Seven years** of market exclusivity if it receives the first FDA approval for the designated indication[196](index=196&type=chunk) - Limitations: Does not shorten regulatory review, and competitors can get approval for different products or indications[195](index=195&type=chunk)[196](index=196&type=chunk) [Selected Quarterly Financial Information](index=62&type=page&id=Selected%20Quarterly%20Financial%20Information) ESSA Pharma Inc. has consistently incurred net losses since inception and expects this trend to continue as it winds down programs and evaluates strategic options. The company's comprehensive losses and cash/short-term investments have fluctuated over the past eight quarters | Metric | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------------------ | :------------- | :---------------- | :----------------- | :------------ | | Research and development expense | $3,484,442 | $5,474,147 | $4,187,950 | $5,464,123 | | General and administration | $3,897,235 | $4,210,719 | $3,506,628 | $3,174,195 | | Comprehensive loss | $(6,392,609) | $(8,540,697) | $(6,318,117) | $(7,233,091) | | Basic and diluted loss per share | $(0.14) | $(0.19) | $(0.14) | $(0.16) | | Cash and cash equivalents | $86,308,345 | $93,310,889 | $103,709,537 | $85,985,140 | | Short-term investments | $27,564,067 | $27,242,430 | $23,050,582 | $44,709,312 | | Total assets | $115,415,420 | $122,634,340 | $128,112,003 | $132,666,307 | | Working capital | $113,452,776 | $118,418,042 | $124,258,528 | $128,515,998 | - The company has never been profitable and expects to incur losses for the foreseeable future[198](index=198&type=chunk) - Comprehensive loss for Q1 2025 was **$(6.39) million**, an improvement from **$(8.99) million** in Q1 2024[198](index=198&type=chunk) [Results of Operations for the Six Months Ended March 31, 2025 and 2024](index=63&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20March%2031,%202025%20and%202024) For the six months ended March 31, 2025, ESSA reported a comprehensive loss of $6.37 million, an improvement from $8.99 million in the prior year, primarily due to reduced research and development expenses following the wind-down of clinical trials and preclinical work - No revenue generated in either period[199](index=199&type=chunk) - Comprehensive loss for six months ended March 31, 2025: **$(6,374,787)** vs. **$(8,989,535)** in 2024[199](index=199&type=chunk) - Variations in expenses and net loss primarily resulted from the wind-down of clinical trials and cessation of preclinical work[199](index=199&type=chunk) [Research and Development Expenditures](index=63&type=page&id=Research%20and%20Development%20Expenditures) Research and development expenses decreased to $8.96 million for the six months ended March 31, 2025, from $11.55 million in the prior year, reflecting the wind-down of masofaniten (EPI-7386) clinical trials and cessation of preclinical work. Clinical costs increased in the short term due to site closures, while preclinical costs, manufacturing, and legal patent fees declined | Expense Category | Six months ended March 31, 2025 | Six months ended March 31, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Clinical | $4,977,449 | $4,840,408 | | Salaries and benefits | $1,482,507 | $1,453,212 | | Share-based payments | $1,281,213 | $985,382 | | Manufacturing | $570,749 | $755,888 | | Legal patents and license fees | $273,888 | $520,219 | | Preclinical and data analysis | $172,820 | $2,399,556 | | **Total R&D Expense** | **$8,958,589** | **$11,554,751** | - Overall R&D expense decreased by **$2.59 million** (**22.4%**) year-over-year[199](index=199&type=chunk) - Preclinical and data analysis costs significantly decreased from **$2.4 million** to **$0.17 million** due to discontinuation of work[201](index=201&type=chunk) [General and Administration Expenditures](index=65&type=page&id=General%20and%20Administration%20Expenditures) General and administration expenses increased to $8.11 million for the six months ended March 31, 2025, from $6.53 million in the prior year. This increase was primarily driven by higher share-based payments and professional fees, despite a decrease in salaries and benefits | Expense Category | Six months ended March 31, 2025 | Six months ended March 31, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Salaries and benefits | $2,756,432 | $3,214,310 | | Share-based payments | $2,592,827 | $950,637 | | Professional fees | $1,213,972 | $873,993 | | Insurance | $710,773 | $696,009 | | Director fees | $369,373 | $208,000 | | **Total G&A Expense** | **$8,107,954** | **$6,533,370** | - Share-based payments, a non-cash expense, increased significantly from **$0.95 million** to **$2.59 million**[206](index=206&type=chunk) - Professional fees increased by **$0.34 million** due to legal and accounting services, including costs for a shareholder lawsuit[207](index=207&type=chunk) - Salaries and benefits decreased by **$0.46 million** due to reduced executive compensation and headcount[207](index=207&type=chunk) [Three months ended March 31, 2025 and 2024](index=67&type=page&id=Three%20months%20ended%20March%2031,%202025%20and%202024) For the three months ended March 31, 2025, the comprehensive loss was $6.39 million, an improvement from $8.99 million in the prior year. This was driven by a significant reduction in R&D expenses, particularly clinical and preclinical costs, while general and administration expenses remained relatively stable - Comprehensive loss for Q1 2025: **$(6,392,609)** vs. **$(8,990,284)** for Q1 2024[210](index=210&type=chunk) - R&D expenses decreased to **$3.48 million** in Q1 2025 from **$6.18 million** in Q1 2024, reflecting the wind-down of masofaniten (EPI-7386) studies[211](index=211&type=chunk) - G&A expenses were **$1.97 million** in Q1 2025, slightly up from **$1.87 million** in Q1 2024, with increases in professional fees and director fees offset by lower salaries and benefits[212](index=212&type=chunk) [Liquidity and Capital Resources](index=67&type=page&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, ESSA had working capital of $113.45 million and available cash reserves and short-term investments of $113.87 million, which management believes is sufficient for over twelve months of planned expenditures. Future cash requirements may vary due to strategic opportunities or costs associated with discontinuing clinical trials, potentially requiring additional financing | Metric | March 31, 2025 | September 30, 2024 | | :------------------------------------ | :------------- | :----------------- | | Working capital | $113,452,776 | $124,258,528 | | Cash reserves and short-term investments | $113,872,412 | $126,760,119 | | Current liabilities | $1,714,627 | $3,301,027 | - Management believes current capital is sufficient for over **twelve months**[213](index=213&type=chunk) - Future cash requirements are uncertain and may necessitate additional financing through collaborations, equity issuance, or other sources[214](index=214&type=chunk) [Critical Accounting Policies and Estimates](index=67&type=page&id=Critical%20Accounting%20Policies%20and%20Estimates) The preparation of financial statements requires management to make significant estimates and assumptions, particularly regarding the valuation of equity instruments. These estimates are continually evaluated, and actual results may differ. A summary of critical accounting policies is provided in the annual consolidated financial statements - Estimates and Assumptions: Required for reported amounts of assets, liabilities, expenses, and contingencies[215](index=215&type=chunk) - Significant Area: Valuation of equity instruments issued for services[34](index=34&type=chunk) - Review: Estimates and assumptions are reviewed quarterly[35](index=35&type=chunk) [Trend Information](index=69&type=page&id=Trend%20Information) ESSA Pharma Inc. does not currently generate revenue and its financial success depends on efficiently winding down clinical trials and preclinical programs, and identifying strategic alternatives to maximize shareholder value - Revenue Status: Does not currently generate revenue[219](index=219&type=chunk) - Future Success: Dependent on efficient wind-down of programs and identification of strategic alternatives[219](index=219&type=chunk) [Off-Balance Sheet Arrangement](index=69&type=page&id=Off-Balance%20Sheet%20Arrangement) ESSA has no material undisclosed off-balance sheet arrangements that would significantly impact its financial condition or results of operations - No material undisclosed off-balance sheet arrangements[220](index=220&type=chunk) [Outstanding Share Data](index=69&type=page&id=Outstanding%20Share%20Data) As of May 7, 2025, ESSA's authorized share capital includes an unlimited number of common and preferred shares. There were 44,388,550 common shares issued and outstanding, along with 2,920,000 warrants and 9,022,151 stock options (7,887,850 exercisable) outstanding - Authorized Shares: Unlimited common and preferred shares, no par value[221](index=221&type=chunk) - Issued and Outstanding Common Shares (May 7, 2025): **44,388,550**[221](index=221&type=chunk) | Equity Instrument | Number Outstanding (May 7, 2025) | | :------------------------------------ | :------------------------------- | | Common Share Purchase Warrants | 2,920,000 | | Exercisable Stock Options | 7,887,850 | | Non-exercisable Stock Options | 1,134,301 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=70&type=page&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, ESSA Pharma Inc. is not required to provide the information typically mandated under this item - Exemption: Not required to provide this information as a smaller reporting company[223](index=223&type=chunk) [Item 4. Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, with CEO and CFO participation, evaluated the effectiveness of disclosure controls and procedures and internal control over financial reporting 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 [Evaluation of Disclosure Controls and Procedures](index=70&type=page&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) As of March 31, 2025, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level, designed to ensure timely and accurate reporting - Evaluation Date: **March 31, 2025**[224](index=224&type=chunk) - Conclusion: Disclosure controls and procedures were effective at the reasonable assurance level[225](index=225&type=chunk) - Objective: Ensure information is recorded, processed, summarized, and reported timely[224](index=224&type=chunk) [Management's Annual Report on Internal Control over Financial Reporting](index=70&type=page&id=Management's%20Annual%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) Management assessed the effectiveness of internal control over financial reporting as of March 31, 2025, using the 2013 COSO framework, and concluded that it was effective. The effectiveness of such systems is subject to inherent limitations - Assessment Date: **March 31, 2025**[227](index=227&type=chunk) - Framework: **2013 COSO framework**[227](index=227&type=chunk) - Conclusion: Internal control over financial reporting was effective[227](index=227&type=chunk) [Changes in Internal Control Over Financial Reporting](index=70&type=page&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) There were no material changes in ESSA Pharma Inc.'s internal control over financial reporting during the quarter ended March 31, 2025 - No material changes in internal control over financial reporting during the quarter ended **March 31, 2025**[228](index=228&type=chunk) [PART II. OTHER INFORMATION](index=71&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=71&type=page&id=Item%201.%20Legal%20Proceedings) A putative class action lawsuit was filed on January 24, 2025, against ESSA Pharma Inc. and its officers, alleging securities law violations related to masofaniten (EPI-7386) clinical trials. The Company intends to vigorously defend the claims, and the outcome and potential losses are currently not estimable - Lawsuit Filed: **January 24, 2025**, a putative class action lawsuit[230](index=230&type=chunk) - Allegations: Violations of Sections **10(b)** and **20(a)** of the Exchange Act regarding masofaniten (EPI-7386) clinical trials[230](index=230&type=chunk) - Company Response: Intends to vigorously defend; outcome and potential losses are not estimable or probable[230](index=230&type=chunk) [Item 1A. Risk Factors](index=71&type=page&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended September 30, 2024 - No material changes in risk factors from the Annual Report on Form 10-K for FY2024[232](index=232&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=page&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company reported no unregistered sales of equity securities or use of proceeds during the period - None reported[233](index=233&type=chunk) [Item 3. Defaults Upon Senior Securities](index=71&type=page&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities during the period - None reported[234](index=234&type=chunk) [Item 4. Mine Safety Disclosures](index=71&type=page&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to ESSA Pharma Inc - Not applicable[235](index=235&type=chunk) [Item 5. Other Information](index=71&type=page&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 Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter[236](index=236&type=chunk) [Item 6. Exhibits](index=73&type=page&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amended articles of incorporation, specimen common share certificate, certifications from the CEO and CFO, and Inline XBRL documents - Exhibits include Amended Articles of Incorporation, Specimen Common Share Certificate, CEO/CFO Certifications (Rule 13a-14(a) and 18 U.S.C. Section 1350), and Inline XBRL documents[239](index=239&type=chunk) [SIGNATURES](index=74&type=page&id=SIGNATURES)