ITEM 7. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information and financial data discussed
below is derived from the consolidated financial statements of Relmada for the years ended December 31, 2025 and 2024. The consolidated
financial statements of Relmada were prepared and presented in accordance with generally accepted accounting principles in the United
States. The information and financial data discussed below is only a summary and should be read in conjunction with the historical financial
statements and related notes of Relmada contained elsewhere in this Annual Report. The consolidated financial statements contained elsewhere
in this Report fully represent Relmada’s financial condition and operations; however, they are not indicative of the Company’s
future performance. See “Cautionary Note Regarding Forward Looking Statements” above for a discussion of forward-looking
statements and the significance of such statements in the context of this Annual Report.
This discussion contains forward-looking statements
reflecting our current expectations that involve risks and uncertainties. Actual results may differ materially from those discussed in
these forward-looking statements due to a number of factors, including those set forth in the section entitled “Risk Factors”
and elsewhere herein. The information and financial data discussed below is only a summary and should be read in conjunction with the
historical financial statements and related notes of Relmada Therapeutics, Inc. contained elsewhere in this document. Relmada’s
current consolidated financial position and consolidated results of operations; are not necessarily indicative of the Company’s
future performance. See “Cautionary Note Regarding Forward Looking Statements” above for a discussion of forward-looking
statements and the significance of such statements in the context of this document.
Our Corporate History and Background
Relmada Therapeutics, Inc. (Relmada, the Company,
we or us) (a Nevada corporation), is a publicly traded, clinical-stage biotechnology company developing NCEs and novel versions of drug
products that potentially address areas of high unmet medical need in the treatment of cancer, neurological disorders, and other diseases.
Currently, none of our product candidates has
been approved for sale in the United States or elsewhere. We have no commercial products nor do we have a sales or marketing infrastructure.
In order to market and sell our products we must conduct clinical trials on patients and obtain regulatory approvals from appropriate
regulatory agencies, like the FDA in the United States, and similar organizations elsewhere in the world.
We have not generated revenues and do not anticipate generating revenues
for the foreseeable future. We had a net loss of approximately $57,385,200 for the year ended December 31, 2025. At December 31, 2025,
we had an accumulated deficit of approximately $698,267,200.
Progress in Strategic Execution
On February 6, 2025, Relmada announced the acquisition from Asarina
Pharma AB (Asarina) of sepranolone, a Phase 2b ready neurosteroid being developed for the potential treatment of PWS, TS, essential tremor
and other diseases related to the excessive GABAergic activity.
On March 25, 2025, Relmada announced the in-license
agreement from Trigone Pharma Ltd. (Trigone) of NDV-01, a novel delivery formulation of a widely used chemotherapeutic regimen used to
treat NMIBC.
40
Results of Operations
For the Year Ended December 31, 2025 vs the Year Ended December
31, 2024
Research and Development Expense
Total research and development expense for the year ended December
31, 2025 was approximately $26,879,100, as compared to $46,175,500 for the same period of 2024, a decrease of $19,296,400. The decrease
in research and development expense was primarily due to:
● Decrease in stock-based compensation expense of $3,616,100;
● Decrease in pre-clinical and toxicology expenses of $328,900;
General and Administrative Expense
Total general and administrative expense for the
year ended December 31, 2025 was approximately $32,221,100, as compared to $37,715,500 for the same period of 2024, a decrease of $5,494,400.
The decrease in general and administrative expenses was primarily due to:
Other Income, Net
Interest/investment income was approximately
$1,396,000 for the year ended December 31, 2025 compared to approximately $3,530,000 for the same period of 2024, a decrease of $2,134,000.
The decrease was primarily related to lower average investment balance during 2025 as compared to 2024.
Realized loss on short-term investments was
approximately $79,200 for the year ended December 31, 2025 compared to a realized gain of approximately $374,900 for the year ended
December 31, 2024, a decrease of $454,100. The decrease was related to the timing of the sales of short-term investments along with
market conditions.
Unrealized gain on short-term investments
was approximately $398,300 for the year ended December 31, 2025 compared to approximately $6,700 for the year ended December 31, 2024, an increase of $391,600. The increase was related to the market conditions.
Income Taxes
The Company did not provide for income taxes
for the years ended December 31, 2025 and 2024, since there was a loss and a full valuation allowance against all deferred tax assets.
Net Loss
The Company recorded a net loss of approximately $57,385,200 and $79,979,400
or $1.45 and $2.65 per common share, basic and diluted, during the years ended December 31, 2025 and 2024, respectively, based on the
factors described above.
41
Liquidity
As shown in the accompanying audited consolidated financial statements,
the Company has incurred losses and negative cash flows from operations since inception and expects to incur additional losses until such
time that it can generate significant revenue from the commercialization of its product candidates. During the twelve months ended December
31, 2025, the Company incurred a net loss of $57,385,163 and had negative operating cash flows of $45,786,988.
On November 5, 2025, the Company announced the
closing of its underwritten offering of 40,142,000 shares of its common stock and, in lieu of common stock to certain investors, pre-funded
warrants to purchase up to 5,315,000 shares of common stock. The shares of common stock were sold at an offering price of $2.20 per share,
and the pre-funded warrants were sold at an offering price of $2.199 per pre-funded warrant, which represents the per share offering
price for the common stock less the $0.001 per share exercise price for each such pre-funded warrant. The net proceeds to Relmada from
the offering, before deducting other expenses payable by Relmada, and excluding the exercise of any pre-funded warrants, were approximately
$94 million.
On March 9, 2026 the Company entered into a Private
Investment in a Public Entity (PIPE) Purchase Agreement, the Purchasers agreed to purchase, for an aggregate purchase price of approximately
$160.0 million, an aggregate of (i) 29,474,569 shares of the Company’s common stock, par value $0.001 per share, at a price of $4.75
per Share and (ii) pre-funded warrants to purchase up to 4,210,527 shares of common stock at a price of $4.749 per pre-funded warrant,
which represents the per share purchase price for the common stock less the $0.001 per share exercise price for each such Pre-Funded Warrant.
As of the date of this report, Management believes that the Company’s
existing cash and cash equivalents and short-term investments will enable it to fund operating expenses and capital expenditure requirements
for at least 12 months from the issuance of its audited consolidated financial statements. Beyond that point management will evaluate
the size and scope of any subsequent trials that will affect the timing of additional financings through public or private sales of equity
or debt securities or from bank or other loans or through strategic collaboration and/or licensing agreements. Any such expenditures related
to any subsequent clinical trials will not be incurred until such additional financing is raised. As a result, the Company concluded that
management’s plans alleviated substantial doubt about the Company’s ability to continue as a going concern as of December
31, 2025 and the Company has sufficient funds to maintain operations for at least 12 months from the issuance of these audited consolidated
financial statements.
Cash Flows from Operating, Investing and Financing Activities
The following table sets forth selected cash flow information for
the periods indicated below:
For the Year Ended For the Year Ended
December 31, December 31,
Cash provided by/(used in) financing activities 93,564,808 (40,341 )
Net decrease in cash and cash equivalents $ (360,486 ) $ (234,542 )
For the year ended December 31, 2025, net cash used in operating activities
was $45,786,988 primarily due to the net loss of $57,385,163. This was offset by non-cash expenses which primarily consisted of stock-based
compensation of $14,810,407 and stock appreciation rights compensation of $1,056,464. There were realized losses and unrealized gains
on short term investments of $79,207 and $398,255, respectively. In addition, there were decreases in operating assets and liabilities
for the year ended December 31, 2025 of $3,949,648.
For the year ended December 31, 2024, net cash
used in operating activities was $51,755,798 primarily due to the net loss of $79,979,354. This was offset by non-cash expenses which
primarily consisted of stock-based compensation of $30,184,414 and stock appreciation rights compensation of $4,467. There were realized
and unrealized gains on short term investments of $374,926 and $6,735, respectively. In addition, there were decreases in operating assets
and liabilities for the year ended December 31, 2024 of $1,583,664.
For the year ended December 31, 2025, net cash
used in investing activities was $48,138,306, due to $83,828,576 of purchases of short term investments offset by $35,690,270 of sales
of short term investments.
For the year ended December 31, 2024, net cash
provided by investing activities was $51,561,598, due to $12,079,628 of purchases of short term investments offset by $63,641,225 of sales
of short term investments.
Net cash provided by financing activities for the year ended December
31, 2025, was $93,564,808 due to proceeds from the issuance of common stock for $93,637,829 offset by ATM fees of $73,021.
Net cash used in financing activities for the
year ended December 31, 2024, was $40,341 due to proceeds from cash exercises of options of $246,747 offset by ATM reactivation fees
of $287,088.
42
Effects of Inflation
Our assets are primarily monetary, consisting
of cash and cash equivalents and short-term investments. Because of their liquidity, these assets are not directly affected by inflation.
However, the rate of inflation affects our expenses, such as those for employee compensation and contract services, which could increase
our level of expenses and the rate at which we use our resources.
Lease Obligations
The Company is obligated to pay approximately
$96,900 under 2 leases for office space over the next year.
Seasonality
We do not have a seasonal business cycle.
Critical Accounting Policies and Use of Estimates
A critical accounting policy is one that is both
important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult,
subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses for the reporting period. Management bases its estimates on historical experience
and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. On a continual basis,
management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience,
and reasonable assumptions. After such reviews, and if deemed appropriate, management’s estimates are adjusted accordingly. Actual
results could differ from those estimates and assumptions under different and/or future circumstances. Management considers an accounting
estimate to be critical if:
We evaluate our estimates and assumptions on
an ongoing basis and none of the Company’s estimates and assumptions used within the consolidated financial statements involve
a high level of estimation uncertainty. For additional discussion regarding the application of the significant accounting policies, see
Note 3 to the Company’s consolidated financial statements included in this report.
Recent Accounting Pronouncements
The Company lists material recent accounting
pronouncements in Note 3 of the consolidated financial statements.
43
ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
Interest rate risk
Our cash and cash equivalents include all highly
liquid investments with an original maturity of three months or less. Our cash equivalents are in a money market account. Because of
the short-term maturities of our cash and cash equivalents, we do not believe that an increase in market rates would have a significant
impact on the realized value of our investments. We place our cash and cash equivalents on deposit with financial institutions in the
United States. The Federal Deposit Insurance Corporation limits coverage for all depository accounts. Our cash and cash equivalents at
times may exceed covered limits.
Foreign currency exchange risk
We currently have limited, but may in the future
have increased, clinical and commercial manufacturing agreements which are denominated in Euros or other foreign currencies. As a result,
our financial results could be affected by factors such as a change in the foreign currency exchange rate between the U.S. dollar and
the Euro or other applicable currencies, or by weak economic conditions in Europe or elsewhere in the world. We are not currently engaged
in any foreign currency hedging activities.
Market indexed security risk
We have issued warrants to various holders underlying
shares of our common stock. These warrants are re-measured to their fair value at each reporting period with changes in their fair value
recorded as derivative gain (loss) in the accompanying consolidated statement of operations. We use the Black-Scholes model for valuation
of the warrants.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
Our audited consolidated financial statements
as of December 31, 2025 and 2024 for the years then ended are included beginning on Page F-1 immediately following the signature page
to this report. See Item 15 for a list of the financial statements included herein.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation
of our management, including our Chief Executive Officer and Chief Financial Officer, we carried out an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2025, such
disclosure controls and procedures were effective.
Disclosure controls and procedures are controls
and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed
or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial
Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
This Annual Report does not include an attestation
report from our registered public accounting firm regarding internal control over financial reporting. Our internal control over financial
reporting was not subject to such attestation as we are a non-accelerated filer.
44
Limitations on the Effectiveness of Controls
Our disclosure controls and procedures are designed
to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have
been detected. Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the
period covered by this Annual Report that our disclosure controls and procedures were effective to provide reasonable assurance that
the objectives of our disclosure control system were met.
Changes in Internal Control Over Financial
Reporting
There were no changes in the Company’s
internal controls over financial reporting that occurred during the fourth quarter of the fiscal year covered by this Annual Report that
have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Management’s Report on Internal Control
Over Financial Reporting
As required by the SEC rules and regulations
for the implementation of Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external reporting
purposes in accordance with United States Generally Accepted Accounting Principles (GAAP). Our internal control over financial reporting
includes those policies and procedures that:
Because of its inherent limitations, internal
control over financial reporting may not prevent or detect errors or misstatements in our consolidated financial statements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of
our internal control over financial reporting as of December 31, 2025. In making these assessments, management used the criteria set
forth by the Committee of Sponsoring Organizations of the Treadway Commission COSO (2013 framework). Based on our assessments and those
criteria, management determined that we did maintain effective internal control over financial reporting as of December 31, 2025.
ITEM 9B. OTHER INFORMATION
Insider Trading Arrangements
No officers, as defined in Rule 16a-1(f), or
directors adopted and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,”
as defined in Item 408 of Regulation S-K, during the fourth fiscal quarter of 2025.
In connection with the execution of the Company’s
strategic plan, significantly strengthening its pipeline and financial position, the Compensation Committee approved the payment of one-time
discretionary bonuses to certain executive officers, and one-time special fees to members of the Board of Directors. The aggregate amount
of such bonuses is $4.8 million, allocated as follows: $1.625 million to Sergio Traversa, Chief Executive Officer; $1.625 million to Maged
Shenouda, Chief Financial Officer; $525,000 to Chuck Ence, Chief Accounting and Compliance Officer; $525,000 to Paul Kelly, Chief Operating
Officer; $200,000 to Charles Casamento, Chairman of the Board; $150,000 to John Glasspool, member of the Board of Directors; and $150,000
to Fabiana Fedeli, member of the Board of Directors.
ITEM 9C. DISCLOSURE REGARDING FOREIGN
JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
45
PART III
The information required for the Items contained
in Part III is incorporated herein by reference from our definitive proxy statement for our 2026 Annual Meeting of Stockholders
(the “Proxy Statement”), which will be filed with the SEC no later than 120 days after December 31, 2025.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS,
AND CORPORATE GOVERNANCE
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Securities Authorized for Issuance under Equity
Compensation Plans
Relmada has a 2014 Option and Equity Incentive Plan, as amended (the
2014 Plan) in which its directors, officers, employees and consultants shall be eligible to participate. The 2014 Plan allows for the
granting of common stock awards, stock appreciation rights, and incentive and nonqualified stock options to purchase shares of the Company.
On May 20, 2021, at the annual shareholders meeting, our shareholders approved our 2021 Equity Incentive Plan (the 2021 Plan) which allows
for the granting of incentive and nonqualified stock options, stock appreciation rights, restricted stock awards, performance share awards
and other equity-based awards for up to 1,500,000 options or stock awards. At the annual shareholders meeting on May 25, 2022, our shareholders
approved an amendment to the 2021 Plan to increase the shares of the Company’s common stock available for issuance thereunder by
3,900,000 shares. At the annual shareholders meeting on May 25, 2023, our shareholders approved an amendment to the 2021 Plan to increase
the shares of the Company’s common stock available for issuance thereunder by 2,500,000 shares. At the annual shareholders meeting
on May 23, 2025, our shareholders approved an amendment to the 2021 Plan to increase the shares of the Company’s common stock available
for issuance thereunder by 2,000,000. At the annual shareholders meeting (currently anticipated for May 27, 2026), our shareholders will
vote on a management proposal to increase the shares authorized for awards under the 2021 Plan by an additional 3,000,000 shares, but
there can be no assurance such amendment will be approved. As of December 31, 2025, the Company had 32,338, shares available to be issued
pursuant to awards under the 2014 and 2021 Plan.
The following table summarizes our equity compensation
plan information as of December 31, 2025:
Equity Compensation Plan Information
(a) (b) (c)
Equity compensation plans not approved by security holders - - -
The additional information required by this item
will be included in the Proxy Statement, which will be filed with the SEC no later than 120 days after the end of our fiscal year ended
December 31, 2025 and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
46
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Financial Statement Schedules
Our consolidated financial statements are listed
on the Index to Financial Statements on this Annual Report on Form 10-K beginning on page F-1.
All financial statement schedules are omitted
because they are not applicable or the required information is shown in the financial statements or notes thereto.
Our independent registered public accounting firm is CBIZ CPAs P.C. (PCAOB
ID #199) of Houston, Texas.
47
RELMADA THERAPEUTICS, INC.
(INDEX TO FINANCIAL STATEMENTS)
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID #199) F-2
Report of Independent Registered Public Accounting Firm (PCAOB ID #688) F-3
Consolidated Balance Sheets as of December 31, 2025 and 2024 F-4
Notes to Consolidated Financial Statements F-8
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Stockholders and Board of Directors of
Relmada Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying
consolidated balance sheet of Relmada Therapeutics, Inc. (the “Company”) as of December 31, 2025, the related
consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2025,
and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results
of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally
accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required
to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements
and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ CBIZ
CPAs P.C.
CBIZ CPAs P.C.
We have served as the Company’s
auditor since 2014 through (such date takes into account the acquisition of the attest business of Marcum LLP by CBIZ CPAs P.C.,
effective November 1, 2024).
Houston, Texas
March 19, 2026
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Stockholders and Board of Directors of
Relmada Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying
consolidated balance sheet of Relmada Therapeutics, Inc. (the “Company”) as of December 31, 2024, the related
consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2024,
and the related notes (collectively referred to as the “financial statements”). In our opinion, the 2024 financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results
of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally
accepted in the United States of America.
Explanatory Paragraph – Going Concern
The 2024 financial statements have been prepared
assuming that the Company would continue as a going concern. As of December 31, 2024, the Company had incurred significant losses and
negative cash flows from operations since inception, expected to incur additional losses until such time that it could generate revenue,
and was projecting insufficient liquidity to sustain its operations through one year following the date that the 2024 financial statements
were issued. These conditions raised substantial doubt about the Company's ability to continue as a going concern. The 2024 financial
statements did not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum LLP
Marcum LLP
We have served as the Company’s auditor from 2014 through 2025.
Houston, Texas
March 27, 2025
F-3
Relmada Therapeutics, Inc.
Consolidated Balance Sheets
As of As of
December 31, December 31,
Assets
Current assets:
Liabilities and Stockholders’ Equity
Current liabilities:
Commitments and Contingencies (Note 10)
Stockholders’ Equity:
The accompanying notes are an integral part of
these consolidated financial statements.
F-4
Relmada Therapeutics, Inc.
Consolidated Statements of Operations
For the Years Ended December 31, 2025 and 2024
Operating expenses:
Other income (expenses):
Realized (loss) gain on short-term investments (79,207 ) 374,926
Unrealized gain on short-term investments 398,255 6,735
Net loss per common share – basic and diluted $ (1.45 ) $ (2.65 )
The accompanying notes are an integral part of
these consolidated financial statements.
F-5
Relmada Therapeutics, Inc.
Consolidated Statements of Changes in Stockholders’
Equity
For the Years Ended December 31, 2025 and 2024
Common Stock Additional Paid-in Accumulated
Shares Par Value Capital Deficit Total
The accompanying notes are an integral part of
these consolidated financial statements.
F-6
Relmada Therapeutics, Inc.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2025 and 2024
Cash flows from operating activities
Adjustments to reconcile net loss to net cash used in operating activities:
Issuance of restricted common stock 905,226 -
Realized (gain) loss on short-term investments 79,207 (374,926 )
Unrealized gain on short-term investments (398,255 ) (6,735 )
Change in operating assets and liabilities:
Cash flows from investing activities
Cash flows from financing activities
Proceeds from issuance of common stock, net 93,637,829 -
Proceeds from options exercised for common stock - 246,747
Net cash provided by/(used in) financing activities 93,564,808 (40,341 )
Net decrease in cash and cash equivalents (360,486 ) (234,542 )
The accompanying notes are an integral part of
these consolidated financial statements.
F-7
Relmada Therapeutics, Inc.
Notes to Consolidated Financial Statements
NOTE 1 - BUSINESS
Relmada Therapeutics Inc. (“Relmada”
or the “Company”) (a Nevada corporation), is a clinical-stage, publicly traded biotechnology company focused on the development
of NDV-01 and sepranolone.
NDV-01 is a novel, controlled-release intravesical formulation of gemcitabine
and docetaxel. NDV-01 is currently in a Phase 2 clinical trial in Isreal to assess its safety and efficacy in patients with aggressive
forms of non-muscle invasive bladder cancer (NMIBC).
Sepranolone is a novel neurosteroid epimer of
allopregnanolone. sepranolone is being developed for the potential treatment of Prader-Willi Syndrome, Tourette Syndrome, excessive tremor
and other diseases related to excessive GABAergic activity.
The Esmethadone (d-methadone, dextromethadone, REL-1017) program was
terminated effective July 7, 2025.
Relmada was also developing a proprietary, modified-release
formulation of psilocybin (REL-P11) for metabolic indications. This program was terminated effective May 12, 2025.
In addition to the normal risks associated with
a new business venture, there can be no assurance that the Company’s research and development will be successfully completed or
that any product will be approved or commercially viable. The Company is subject to risks common to companies in the biotechnology industry
including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological
innovations, dependence on key personnel, protection of proprietary technology, and compliance with the Food and Drug Administration
(FDA) and other governmental regulations and approval requirements.
On February 3, 2025, the Company entered into an Asset Purchase Agreement
(the Purchase Agreement) with Asarina Pharma AB (Asarina), a Swedish corporation, pursuant to which the Company has agreed, subject to
the terms and conditions set forth therein, to purchase from Asarina all right, title, and interest in sepranolone, a Phase 2b ready neurosteroid
being developed for the potential treatment of Prader-Willi Syndrome, Tourette Syndrome, essential tremor and other diseases related to
excessive GABAergic activity. The total purchase price for sepranolone is €3,000,000. The Company paid Asarina $2,756,000 on
February 5, 2025, which includes a credit of $250,000 for a previous payment made by the Company to Asarina pursuant to an exclusivity
agreement dated October 25, 2024.
On March 24, 2025, the Company entered into an
Exclusive License Agreement with Trigone, a privately held Israeli company. The license agreement is for Trigone’s NDV-01 product,
which is a novel, sustained-release, intravesical gemcitabine/docetaxel, ready-for-use product candidate for the treatment of NMIBC. Under
the terms of the agreement, the Company made a $3,500,000 upfront payment on March 25, 2025, and issued 3,017,420 shares
of common stock, which represented 10% of the Company’s outstanding shares on such date, for exclusive worldwide rights to
NDV-01, excluding Israel, India and South Africa.
In addition, the Company will pay up to approximately
$200 million in development, regulatory and commercial milestones pending successful commercialization. The Company will also pay
a royalty of 3% on any net sales.
F-8
Relmada Therapeutics, Inc.
Notes to Consolidated Financial Statements
NOTE 2 - GOING CONCERN
These audited consolidated financial statements
have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business.
As shown in the accompanying audited consolidated
financial statements, the Company has incurred losses and negative cash flows from operations since inception and expects to incur additional
losses until such time that it can generate significant revenue from the commercialization of its product candidates. During the twelve
months ended December 31, 2025, the Company incurred a net loss of $57,385,163 and had negative operating cash flows of $45,786,988.
On November 5, 2025, the Company announced the
closing of its underwritten offering of 40,142,000 shares of its common stock and, in lieu of common stock to certain investors, pre-funded
warrants to purchase up to 5,315,000 shares of common stock. The shares of common stock were sold at an offering price of $2.20 per share,
and the pre-funded warrants were sold at an offering price of $2.199 per pre-funded warrant, which represents the per share offering
price for the common stock less the $0.001 per share exercise price for each such pre-funded warrant. The net proceeds to Relmada from
the offering, before deducting other expenses payable by Relmada, and excluding the exercise of any pre-funded warrants, were approximately
$94 million.
On March 9, 2026, the Company entered into a Securities
Purchase Agreement for a private placement with certain institutional and accredited investors (collectively, the Purchasers). The closing
of the Private Placement (the Closing) occurred on March 11, 2026.
Pursuant to the Purchase Agreement, the Purchasers
purchased, for an aggregate purchase price of approximately $160.0 million, an aggregate of (i) 29,474,569 shares of the Company’s
common stock, par value $0.001 per share, at a price of $4.75 per Share and (ii) pre-funded warrants to purchase up to 4,210,527 shares
of common stock at a price of $4.749 per pre-funded warrant, which represents the per share purchase price for the common stock less the
$0.001 per share exercise price for each such Pre-Funded Warrant. The proceeds from the Purchase Agreement, before deducting fees, other
expenses payable by Relmada, and excluding the exercise of any pre-funded warrants, were approximately $160 million.
As of the date of this report, Management believes
that the Company’s existing cash and cash equivalents and short-term investments will enable it to fund operating expenses and
capital expenditure requirements for at least 12 months from the issuance of these, audited consolidated financial statements. Beyond
that point management will evaluate the size and scope of any subsequent trials that will affect the timing of additional financings
through public or private sales of equity or debt securities or from bank or other loans or through strategic collaboration and/or licensing
agreements. Any such expenditures related to any subsequent clinical trials will not be incurred until such additional financing is raised.
As a result, the Company concluded the Company has sufficient funds to maintain operations for at least 12 months from the issuance of
these audited consolidated financial statements.
F-9
Relmada Therapeutics, Inc.
Notes to Consolidated Financial Statements
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements
and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.
GAAP). The consolidated financial statements include the Company’s accounts and those of the Company’s wholly-owned subsidiary.
All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the
reporting period. Actual results could differ from those estimates. The significant estimates are stock-based compensation expenses, stock
appreciation rights expense, and recorded amounts related to income taxes.
Cash and Cash Equivalents
The Company considers cash deposits and all highly
liquid investments with a maturity of three months or less when purchased to be cash and cash equivalents. The Company’s cash deposits
are held at two high-credit-quality financial institutions. The Company’s cash and cash equivalents are carried at cost, which
approximates their fair value. The Company’s cash and cash equivalents of $3,496,540 and $3,857,026 at December 31, 2025 and 2024,
respectively, at these institutions exceed federally insured limits.
Short-term Investments
The Company’s investments consist entirely
of mutual funds. The securities are measured at fair value based on the net asset value “NAV”. Substantially all equity investments
in nonconsolidated entities are measured at fair value with recurring changes recognized in earnings, except for those accounted for
using equity method accounting. Changes in fair value of the securities are recorded as part of other income on the consolidated statements
of operations. Short term investment activity is presented in the investing activities section on the consolidated statements of cash
flows.
Short-term investments at December 31, 2025 and 2024 consisted
of mutual funds with a fair value of $89,509,710 and $41,052,356, respectively.
Patents
Costs related to filing and pursuing patent applications
are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain.
Leases
The Company recognizes its leases with a term
of greater than a year on the balance sheet by recording right-of-use assets and lease liabilities. Leases can be classified as either
operating leases or finance leases. Operating leases will result in straight-line lease expense, while finance leases will result in
front-loaded expense. The Company’s leases consists of operating leases for office space for terms of 12 months or less. The Company
does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes
short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that,
at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that
the lessee is reasonably certain to exercise.
F-10
Relmada Therapeutics, Inc.
Notes to Consolidated Financial Statements
Fair Value of Financial Instruments
The Company’s financial instruments primarily
include cash, short-term investments, and stock appreciation rights. Due to the short-term nature of cash and accounts payable the carrying
amounts of these assets and liabilities approximate their fair value.
Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at
the reporting date. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices
in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as
follows:
Level 1 Inputs - Unadjusted quoted
prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 Inputs - Inputs other than
quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include
quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets
that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities,
prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other
means.
Level 3 Inputs - Prices or valuation
techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market
activity).
As required by Accounting Standard Codification
(ASC) Topic No. 820 - 10 Fair Value Measurement, financial assets and liabilities are classified based on the lowest level of
input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to
the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement
within the fair value hierarchy levels.
The Company’s short-term investment instruments of $89,509,710
and $41,052,356 at December 31, 2025 and 2024, respectively, are classified using Level 1 inputs within the fair value hierarchy
because they are valued using NAV. Unrealized gains are recorded in the consolidated statement of operations as unrealized gain on short-term
investments. The Company recorded unrealized gains of $398,255 and of $6,735, included in other income (expense) for the years ended December
31, 2025 and 2024, respectively.
The Company’s stock appreciation rights
liability is a mark-to-market liability and classified within Level 3 of the fair value hierarchy as the Company is using a Black-Scholes
option pricing model. Significant unobservable inputs included expected term and volatility. The expected term was calculated using
the simplified method. The volatility is calculated based on the Company’s historical stock price over a period of time.
As of December 31, 2025 and 2024, the stock appreciation rights liability
had a fair value of $1,060,931 and $4,467, respectively. Significant inputs for Level 3 stock appreciation rights liability fair value
measurement at December 31, 2025 are disclosed in Footnote 6.
There have been no transfers in and out of level
3 during the years ended December 31, 2025 and 2024.
F-11
Relmada Therapeutics, Inc.
Notes to Consolidated Financial Statements
Income Taxes
The Company accounts for income taxes using the
asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is
recognized in income or expense in the period that the change is effective. Tax benefits are recognized when it is probable that the