Anebulo Pharmaceuticals(ANEB) - 2026 Q1 - Quarterly Report

Cannabis Treatment Development - The company is developing selonabant, a cannabinoid receptor antagonist, to treat cannabis-induced toxicity, with both oral and intravenous formulations anticipated to reverse symptoms effectively [66]. - In 2024, there was a 21.5% increase in cannabis-related emergency department visits, highlighting the urgent need for effective treatments for cannabis toxicity [68]. - The Netherlands Trial for oral selonabant involved 134 subjects, with results indicating safety and tolerability, and further studies are planned to support a new drug application [69]. - The company is prioritizing the intravenous formulation of selonabant for pediatric patients, aiming for a faster approval timeline compared to the adult oral product [70]. - A cooperative grant of approximately $1.9 million from the National Institute on Drug Abuse was awarded to support the development of intravenous selonabant for emergency treatment of acute cannabis-induced toxicities [77]. - The FDA has acknowledged the unmet need for treatments for children exposed to cannabis toxicity and proposed collaboration to advance the intravenous selonabant program [70]. Financial Performance - Total operating expenses for the three months ended September 30, 2025, were $2,260,260, a decrease of $151,864 compared to $2,412,124 in 2024 [87]. - Research and development expenses decreased by $504,868 to $809,991 for the three months ended September 30, 2025, primarily due to a reduction in pre-clinical and clinical study costs [89]. - General and administrative expenses increased by $353,004 to $1,450,269 for the three months ended September 30, 2025, driven by higher professional and consultant fees [92]. - The net loss for the three months ended September 30, 2025, was $2,158,354, a slight improvement of $42,382 compared to a net loss of $2,200,736 in 2024 [87]. - Cash and cash equivalents as of September 30, 2025, were approximately $10.4 million, expected to fund operations for at least the next 12 months [96]. - Net cash used in operating activities for the three months ended September 30, 2025, was $1,273,076, compared to $1,689,989 in 2024 [99]. - The company has incurred significant operating losses since inception and expects to continue doing so as it advances clinical development [96]. Funding and Agreements - The company completed its IPO in May 2021, raising approximately $19.8 million, and has since raised additional funds through private placements totaling approximately $21.2 million [96]. - The company entered into a Loan Agreement allowing it to borrow up to $3 million to fund future operations, with no balance drawn since inception [97]. - The company has a manufacturing agreement with a third-party CMO costing approximately $3.0 million, with substantial completion expected by June 30, 2024 [107]. - A contract with a third-party CRO for a Phase 1 SAD study is valued at approximately $3.4 million, expected to be substantially completed by Q3 2026 [108]. - The company has extended the License Agreement for selonabant by an additional 12 months for a nominal fee, with obligations to dose patients in clinical trials [105]. Stock and Incentives - A reverse stock split is proposed as part of a going private transaction, with a ratio between 1-for-2,500 and 1-for-7,500, pending stockholder approval [79]. - The 2020 Stock Incentive Plan allows for the grant of up to 6,150,000 shares of common stock, with stock options generally vesting over a four-year period [114]. - The fair value of stock options is estimated using the Black Scholes model, with no significant changes in assumptions during Q3 2025 [116][117]. Operational Management - The company manages business operations from a leased space in Lakeway, Texas, at a cost of approximately $400 per month [106]. - Contracts with clinical trial sites and service providers are generally cancellable after a notice period, allowing flexibility in operations [109]. - The company incurs accrued research and development expenses based on estimates from open contracts and purchase orders, impacting financial statement accuracy [112]. - The stability study aspect of the manufacturing contract is expected to be fully incurred during calendar 2026 [107]. - The company is utilizing the JOBS Act provisions for emerging growth companies, which may affect comparability with other public companies [118].