Financial Analysis

Note 10. Share-Based Compensation In December 2024, Neuphoria adopted its 2024 Equity Incentive Plan (2024 Plan). The maximum number of shares of common stock of the Company that are available for issuance under the 2024 Plan is 1,000,000 shares. On December 24, 2024, our predecessor entity, Bionomics Limited, effected a redomiciliation through a scheme of arrangement under Australian law whereby and following which Neuphoria became the successor entity to Bionomics. As a result of the redomiciliation, Neuphoria issued certain options to acquire shares of common stock in Neuphoria to holders of options to acquire shares in Bionomics (Bionomics Options) in exchange for their Bionomics Options. The structure of equity awards is under the active review of the Compensation Committee to ensure it meets good corporate practice for a company of our size, nature and company lifecycle. The Committee may, from time to time, grant Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Stock Bonus Awards and/or Performance Awards to one or more Eligible Persons. At June 30, 2026, there were 807,491 shares available for grant under the 2024 Plan. Equity awards for executives and employees were previously provided by a combination of equity plans that may include the: Employee Share Option Plan (ESOP); and Employee Equity Plan (EEP). Participation in these plans was at our board of directors discretion and no individual has an ongoing contractual right to participate …

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Note 4. Fair Value Measurement The Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis. The following tables set forth the fair value of the Companys liabilities at fair value on a recurring basis based on the three-tier fair value hierarchy: June 30, 2026 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration $ - $ - $ 1,025,301 $ 1,025,301 Accompanying warrant liability - - 1,971,172 1,971,172 Total liabilities measured at fair value $ - $ - $ 2,996,473 $ 2,996,473 June 30, 2025 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration $ - $ - $ 1,169,675 $ 1,169,675 Accompanying warrant liability - - 3,701,492 3,701,492 Total liabilities measured at fair value $ - $ - $ 4,871,167 $ 4,871,167 The Company has no financial assets that are measured at fair value. The liabilities measured at fair value at the end of each reporting period are contingent consideration and the accompanying warrant liability. The value of financial assets and other financial liabilities approximate their fair value. The following paragraph gives information about how the fair value of the financial liability is determined. The accompanying warrant liability relates to the Companys issuance of an accompanying warrant in conjunction with a Private Placement in June 2024. The fair value of the accompanying warrant liability was based on a Black-Scholes model valuation that required inputs (see Note 12) that were …

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"Note 14. Income Taxes The components of loss before income taxes for the years ended June 30, 2026 and 2025 are as follows: June 30, 2026 2025 U.S. $ ( 8,254,064 ) $ ( 7,111,507 ) Non - U.S. ( 5,337,040 ) 6,273,509 Total $ ( 13,591,104 ) $ ( 837,998 ) The components of income tax benefit for the years ended June 30, 2026 and 2025 are as follows: June 30, 2026 2025 Current: Current, Non - U.S. $ - $ ( 61 ) Total current $ - $ ( 61 ) Deferred: Deferred, U.S. $ 1,533,035 $ 532,004 Deferred, state 474,651 113,698 Deferred, Non - U.S. 1,084,443 ( 925,293 ) Less: Change in valuation allowance ( 2,952,956 ) 748,018 Total deferred $ 139,173 $ 468,427 Total income tax benefit $ 139,173 $ 468,366 Effective income tax rate 1.0 % 55.9 % The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and our effective rate for the year ended June 30, 2026, pursuant to the requirements of ASU 2023-09, are as follows: For the Year Ended June 30, 2026 Federal statutory tax rate $ 2,854,131 21.0 % Effect of: State and local income tax, net of federal income tax effect (1) 474,652 3.5 % Foreign tax effects (Australia): Statutory tax rate difference 97,967 0.7 % Exempt income from government assistance (R&D) 202,695 1.5 % Net gain arising on changes in fair value of contingent consideration 50,335 0.4 % Research & development expenditures ( 465,964 ) ( 3.4 )% Project costs 230,030 1.7 % Temporary difference not recorded as an asset 455,162 3.3 % …

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"Note 6. Leases In June 2021, the Company entered into a 5-year lease agreement (the Greenhill Lease) for its Australian facility located in Dulwich, South Australia. The lease expired according to its terms in May 2026. The Company accounted for the Greenhill Lease under ASC 842, recognizing a right-of-use (""ROU"") asset and a corresponding lease liability representing future rent payment obligations. The ROU asset was initially measured based on the present value of future lease payments and subsequently amortized over the lease term. In October 2025, the Company committed to a plan to exit its Australian facility as part of a restructuring plan as approved by the Company's board of directors. The leased facility ceased being used for any business purpose and the Company did not sublease the space during the remainder of the lease term. Accordingly, under ASC 360, Property, Plant, and Equipment , and ASC 842, the carrying value of the associated right-of-use asset was evaluated for abandonment, and the remaining carrying amount of less than $ 0.1 million was derecognized. The lease liability of approximately $ 0.1 million was also derecognized. The resulting write-off of the right-of-use asset is recorded in restructuring costs in the consolidated statements of operations and other comprehensive income (loss) for the twelve months ended June 30, 2026. Variable lease expense for the premises primarily consisted of common area maintenance and other operating costs. The follo …

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"Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (""ASU 2023-09""). ASU 2023-09 requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The Company adopted ASU 2023-09 prospectively in 2026 and it did not have a material impact on the Company's consolidated financial statements (see Note 14)."

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"Note 16. Related Party Transactions Share Options Issued to Directors and Other Key Management Personnel During the twelve months ended June 30, 2026 , 34,559 stock options were granted to Dr. Spyros Papapetropoulos, Interim CEO, and 42,684 RSUs were issued to members of the board of directors. Danforth Advisors In July 2021, we entered into a consulting agreement with Danforth Advisors LLC (Danforth) to provide consulting services to the Company. The Danforth agreement was amended in May 2023, and further amended in August 2023. Pursuant to the agreement, Danforth provides us with financial accounting, reporting, and Chief Financial Officer (""CFO"") services in exchange for fees payable to Danforth. The Danforth agreement will continue until such time as either party to it has given notice of termination pursuant thereto with cause upon 30 days prior written notice to the other party; or without cause upon 60 days prior written notice. During the twelve months ended June 30, 2026 , the Company paid Danforth a total of $ 843,714 , of which $ 325,894 was for the service of Mr. Cunningham as our CFO. During the twelve months ended June 30, 2025 , the Company paid Danforth a total of $ 734,648 , of which $ 254,363 was for the service of Mr. Cunningham as our CFO. WG Partners LLP In December 2023, we entered into an engagement letter with WG Partners LLP to provide financial advisory services to the Company. David Wilson, a director of the Company, is the Chairman and Chief Exe …

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Note 3. Restructuring Costs In October 2025, Management committed to a plan to discontinue or pause, with respect to BNC210 in SAD and PTSD, its research and development activities while it seeks to identify a partner with which to execute a strategic merger and/or such other transaction(s), if any, for the benefit of existing shareholders of Neuphoria. As part of the restructuring initiative, the Company terminated its facility leases, wrote off the remaining carrying value of the right-of-use asset, derecognized the associated operating lease liability, and terminated substantially all of its employees. A liability equivalent to the derecognized lease liability has been included in Accrued restructuring expenses. The write-offs are included in restructuring costs in the consolidated statements of operations and other comprehensive income (loss) for the twelve months ended June 30, 2026. Included in total restructuring costs are the following expenses: Twelve Months Ended June 30, 2026 Employee termination costs $ 1,411,955 Impairment of right-of-use asset 47,608 Other restructuring costs 437,994 Refundable credits on contract terminations ( 618,971 ) Total restructuring costs $ 1,278,586 Restructuring reserves included in accrued expenses and other current liabilities on the consolidated balance sheet are as follows: Restructuring Costs Restructuring liability at June 30, 2025 $ - Restructuring costs 1,278,586 Restructuring payments ( 1,220,255 ) Restructuring liability at …

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"Note 13. Revenue Cancer Therapeutics Cooperative Research Centre The Company became a multi-party participant via agreement (the ""Participants Agreement"") in the Australian Government-supported Cancer Therapeutics Cooperative Research Centre (CTx CRC or ""CRC"") in 2007. The CRC collaborative arrangement was established to support oncology research, development, and commercialization activities. Approximately seventeen participants contributed cash, personnel, intellectual property, and in-kind resources during the initial phases of CRCs existence. The Company holds an approximate 4.65 % participation interest in CRC. Beginning in 2016, the CRC became self-funding through licensing and commercialization activities with third-party customers. The CRC, rather than the Company, contracts with those third-party customers and recognizes revenue from those arrangements. Under the Participants Agreement and related commercialization agreements, participants retain contractual rights to participate in future commercialization proceeds generated from CRC-developed technologies in accordance with their participation interests. Accordingly, although the Company no longer contributes cash to CRC, it retains continuing contractual rights to receive distributions arising from successful commercialization activities. The Company is now a passive participant whose contractual rights are limited to receiving distributions based upon its participation interest. The Company accounts for its …

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"Note 19. Segment Reporting The Company operates through a single operating and reporting segment focused on the discovery and development of allosteric ion channel modulators designed to transform the lives of patients suffering from serious central nervous system (CNS) disorders with high unmet medical need. Ion channels serve as important mediators of physiological function in the CNS and the modulation of ion channels influences neurotransmission that leads to downstream signaling in the brain. The Company does not have significant tangible assets as its positioning itself for the completion of a merger transaction as announced on a. The Company manages all business activities on a consolidated basis. The Company's Chief Operating Decision Maker (""CODM"") is the Interim Chief Executive Officer . The accounting policies of the operating segment are as described in Note 2. The CODM evaluates the performance of the operating segment and allocates resources based on net income (loss) as reported on the consolidated statement of operations and other comprehensive income (loss). The measure of the operating segment assets is reported on the consolidated balance sheet as total assets. The CODM uses net income (loss) to monitor budget versus actual results and to analyze cash flows in assessing performance of the segment and allocating resources. The significant segment expenses are presented on the Companys consolidated statements of operations and other comprehensive income (l …

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"Note 2. Summary of Significant Accounting Policies Use of Estimates The preparation of the Companys consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosure of revenue, expenses, and certain assets and liabilities at the balance sheet date. Such estimates include the performance obligations under the Companys license agreements, the collectability of receivables, valuation of goodwill and intangibles, accruals, and determining the fair value of contingent consideration and the warrant liability. Actual results may differ from such estimates. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker (CODM) in deciding how to allocate resources and in assessing performance. The CODM of the Company is the Interim Chief Executive Officer . The Company operates as a single operating and reporting segment focused on the discovery and development of allosteric ion channel modulators designed to transform the lives of patients suffering from serious central nervous system disorders with high unmet medical need. The CODM evaluates the operating performance based on net income (loss) as reported on the consolidated statement of operations. The measure of the operating segment assets is reported on the consolidated balance sheet as total assets. Cash …

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Note 11. Capital Stock Under the Certificate of Incorporation, Neuphoria is authorized to issue up to 30,000,000 shares of common stock and 3,000,000 shares of preferred stock, par value $ 0.00001 per share. Common Stock Voting Rights. The holders of our common stock are entitled to one vote per share on all matters on which stockholders are generally entitled to vote; provided, however, that, except as otherwise required by law, holders of common stock, as such, are not entitled to vote on any amendment to the Certificate of Incorporation that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Certificate of Incorporation. Holders of our common stock do not have cumulative voting rights in the election of directors. Accordingly, the holders of a majority of the combined voting power of our common stock could, if they so choose, elect all the directors. Dividends. Subject to the rights of the holders of any outstanding series of preferred stock, holders of common stock are entitled to receive any dividends to the extent permitted by law when, as and if declared by our board of directors. Liquidation. Upon the dissolution, liquidation, or winding up of Neuphoria, subject to the rights of the holders of any outstanding series of preferred stock, the holders of shares of common stock ar …

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Note 20. Subsequent Events The Company has evaluated subsequent events through September 18, 2026 and has concluded that no events or transactions have occurred that require disclosure in the accompanying consolidated financial statements, except as follows: Proposed Merger with Scancell On July 23, 2026, the Company entered into an Agreement and Plan of Merger (the Merger Agreement ) with Scancell Holdings plc, a public limited company incorporated under the laws of England and Wales ( Parent ), and Scancell Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent ( Merger Sub ). Upon the terms and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into the Company, with the Company surviving the merger as an indirect wholly owned subsidiary of Parent (the Merger and, together with the other transactions contemplated by the Merger Agreement, the Transactions ). All defined terms used in this summary of the Merger Agreement that are not otherwise defined herein have the meanings ascribed to such terms in the Merger Agreement. Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the Effective Time ), each share of common stock of the Company, par value $ 0.00001 per share ( Company Common Stock ), issued and outstanding immediately prior to the Effective Time, other than excluded shares, will be converted into the right to re …

SubsequentEventsTextBlock · excerpt; the full note is in the filing