Financial Analysis

Note 9. 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, 2025 there were 908,789 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 i …

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Note 3. 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, 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 June 30, 2024 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration $ - $ - $ 587,762 $ 587,762 Accompanying warrant liability - - 4,657,832 4,657,832 Total liabilities measured at fair value $ - $ - $ 5,245,594 $ 5,245,594 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 10) that were bot …

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"Note 13. Income Taxes The components of loss before income taxes for the years ended June 30, 2025 and 2024 are as follows: June 30, 2025 2024 U.S. $ ( 7,111,507 ) $ ( 1,819,496 ) Non - U.S. 6,273,509 ( 13,759,990 ) Total $ ( 837,998 ) $ ( 15,579,486 ) The components of income tax benefit for the years ended June 30, 2025 and 2024 are as follows: June 30, 2025 2024 Current: Current - Non - U.S. $ ( 61 ) $ ( 51,853 ) Total current $ ( 61 ) $ ( 51,853 ) Deferred: Deferred - U.S. $ 532,004 $ 118,946 Deferred - state 113,698 20,227 Deferred - Non - U.S. ( 925,293 ) 3,999,422 Less: Change in valuation allowance 748,018 ( 3,999,422 ) Total deferred $ 468,427 $ 139,173 Total income tax benefit $ 468,366 $ 87,320 A reconciliation between income tax benefit and the expected tax benefit at the statutory rate for the years ended June 30, 2025 and 2024 are as follows: For the Year Ended June 30, 2025 2024 Loss before taxes: $ ( 837,998 ) $ ( 15,579,486 ) Income tax rate reconciliation: Benefit at statutory rate $ 175,980 21.0 % $ 3,894,872 25.0 % State tax expense 113,698 13.6 % - - Fair value adjustment on warrant liability 200,831 24.0 % - - Global intangible low-taxed income inclusion ( 508,437 ) ( 60.7 )% - - Exempt income from government assistance (R&D) 76,615 9.1 % 23,804 0.2 % Net (loss) gain arising on changes in fair value of contingent consideration ( 183,079 ) ( 21.8 )% 460,297 3.0 % Share-based compensation ( 11,463 ) ( 1.4 )% ( 104,757 ) ( 0.7 )% Research & develop …

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Note 5. 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 initial term of the lease expires in May 2026. The Greenhill Lease requires monthly lease payments that are subject to annual increases of 3 % throughout the lease term. The lease also includes two renewal options, at the election of the Company, to renew or extend the lease for additional terms of one year each. These optional periods have not been considered in the determination of the right-of-use assets or lease liabilities associated with these leases as the Company did not consider it reasonably certain it would exercise the options. Variable lease expense for the premises primarily consists of common area maintenance and other operating costs. The following table summarizes the Companys recognition of the Greenhill lease: June 30, 2025 2026 $ 119,593 Less: effect of discounting ( 3,279 ) Present value of lease liability $ 116,314 Current operating lease liabilities $ 116,314 Non-current operating lease liabilities Total $ 116,314 The discount rate associated with the Greenhill lease is 3.5 % and the weighted average remaining lease term is approximately one year . The following table summarizes the effect of lease costs in the Company's consolidated statements of operations and other comprehensive income (loss): Year Ended June 30, 2025 2024 Operating lease costs Research and development $ 45,902 $ 61, …

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"Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07) . ASU 2023-07 is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses, including for single reportable segment entities. The standard is effective for the Companys fiscal year ended June 30, 2025 . The amendments should be applied retrospectively to all prior periods presented in the financial statements. Since the Company has one reportable segment, adoption of this new standard did not have a material impact on the Company's consolidated financial statements (See Note 18)."

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Note 15. Related Party Transactions Share Options Issued to Directors and Other Key Management Personnel During the twelve months ended June 30, 2025, 27,000 stock options were granted to Dr. Spyros Papapetropoulos, CEO, and 33,915 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 the Chief Financial Officer services of Mr. Cunningham 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 fiscal years ended June 30, 2025 and 2024, t he Company paid Danforth Advisors $ 378,631 and $ 734,648 , respectively. We believe that this agreement is on an arms-length basis. WG Partners LLP In December 2023, we entered into an engagement letter with WG Partners LLP to provide financial advisory services to Neuphoria. David Wilson, a director of Neuphoria, is the Chief Executive Officer of WG Partners. Under the agreement, Neuphoria must pay to WG Partners a monthly fee of $ 15,000 plus any applicable commission. The agreement will continue until such time as a …

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"Note 18. Segment Reporting The Company operates through a single operating and reportable 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 most important asset is its personnel who are located both in the U.S. and in Australia. The Company manages all business activities on a consolidated basis. The Company's Chief Operating Decision Maker (""CODM"") is the 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 ( …

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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. Cash Equivalents and Restricted Cash Cash equivalents consist of highly liquid investments purchased with original maturities of three months or less. The Company separately classified $ 0.1 million of its cash as restricted cash in current assets at June 30, 2025 as the underlying facility lease expires in less than 12 months from the reporting date. These funds were previously classified as non-current at June 30, 2024 . These amounts represent the security deposit associated with the Companys Australian facility. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Companys cash and cash equivalents and restricted cash are held by financial institutions that management believes are of high credit quality. Amounts on dep …

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Note 19. Subsequent Events The Company has evaluated subsequent events through September 29, 2025 and has concluded that no events or transactions have occurred that require disclosure in the accompanying consolidated financial statements, except as follows: Between July 1, 2025 and September 30, 2025, an aggregate of $ 3.3 million of our common stock was sold under our ATM Sales Agreement with H.C. Wainwright, as our sales agent. On August 27, 2025 the Company granted 34,559 non-qualified stock options to Spyros Papapetropoulos at an exercise price of $ 8.27 . The options vest on a monthly basis over a four-year period commencing August 1, 2025. There are no other matters or circumstances that have arisen since the end of the financial year which significantly affect or may significantly affect the results of the operations of the Company.

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