edsa20250331

edsa20250331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-37619

EDESA BIOTECH, INC.

(Exact name of registrant as specified in its charter)

British Columbia, Canada	N/A
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 Spy Court, Markham, ON, Canada L3R 5H6	(289) 800-9600
(Address of principal executive offices and zip code)	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Shares, without par value		EDSA		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of May 14, 2025, the registrant had 7,022,678 common shares issued and outstanding.

EDESA BIOTECH, INC.

QUARTERLY REPORT ON FORM 10-Q

Quarter Ended March 31, 2025

Table of Contents

		Page
PART I	FINANCIAL STATEMENTS

Item 1.	Financial Statements (Unaudited)	3
	Condensed Interim Consolidated Balance Sheets – March 31, 2025 and September 30, 2024	3
	Condensed Interim Consolidated Statements of Operations – Three and Six Months Ended March 31, 2025 and 2024	4
	Condensed Interim Consolidated Statements of Cash Flows – Six Months Ended March 31, 2025 and 2024	5
	Condensed Interim Consolidated Statements of Changes in Shareholders' Equity – Three and Six Months Ended March 31, 2025 and 2024	6
	Notes to Condensed Interim Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	24

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	26

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements

Edesa Biotech, Inc.

Condensed Interim Consolidated Balance Sheets

				September 30, 2024
	March 31, 2025			Audited

Assets:

Current assets:
Cash and cash equivalents	$	13,896,650		$	1,037,320
Accounts and other receivable		382,440			270,908
Prepaid expenses and other current assets		108,199			367,394

Total current assets		14,387,289			1,675,622

Non-current assets:
Long-term deposits		38,748			41,151
Intangible asset, net		2,028,262			2,078,848
Right-of-use assets		-			18,361

Total assets	$	16,454,299		$	3,813,982


Liabilities and shareholders' equity:

Current liabilities:
Accounts payable and accrued liabilities	$	914,701		$	1,812,960
Short-term right-of-use lease liabilities		-			19,867

Total current liabilities		914,701			1,832,827


Shareholders' equity:
Capital shares
Authorized unlimited common shares without par value
Issued and outstanding:
7,022,678 common shares (September 30, 2024 - 3,247,389)		54,271,112			47,236,024
Authorized preferred shares issued and outstanding
150 Series A-1 preferred shares (September 30, 2024 - 0)		1,017,750			-
834 Series B-1 preferred shares (September 30, 2024 - 0)		8,168,063			-
Additional paid-in capital		14,229,130			13,576,757
Accumulated other comprehensive loss		(287,688	)		(242,613	)
Accumulated deficit		(61,858,769	)		(58,589,013	)

Total shareholders' equity		15,539,598			1,981,155

Total liabilities and shareholders' equity	$	16,454,299		$	3,813,982

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

Edesa Biotech, Inc.

Condensed Interim Consolidated Statements of Operations

	Three Months Ended						Six Months Ended
	March 31, 2025			March 31, 2024			March 31, 2025			March 31, 2024

Expenses:
Research and development	$	484,306		$	1,176,337		$	1,504,124		$	1,880,795
General and administrative		1,154,580			1,044,137			2,033,451			2,197,108

Loss from operations		(1,638,886	)		(2,220,474	)		(3,537,575	)		(4,077,903	)

Other income:
Reimbursement grant income		52,268			304,002			353,463			424,836
Interest income		265			43,193			1,931			104,159
Misc other income		-			14,766			-			14,766
Foreign exchange (loss)		(3,295	)		(2,018	)		(24,720	)		(4,840	)

		49,238			359,943			330,674			538,921

Loss before income taxes		(1,589,648	)		(1,860,531	)		(3,206,901	)		(3,538,982	)

Income tax expense		800			800			800			800

Net loss		(1,590,448	)		(1,861,331	)		(3,207,701	)		(3,539,782	)

Exchange differences on translation		(63,731	)		(11,183	)		(45,075	)		(11,755	)

Net comprehensive loss	$	(1,654,179	)	$	(1,872,514	)	$	(3,252,776	)	$	(3,551,537	)

Weighted average number of common shares		5,305,763			3,192,688			4,314,676			3,160,179

Loss per common share - basic and diluted	$	(0.30	)	$	(0.58	)	$	(0.74	)	$	(1.12	)

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

Edesa Biotech, Inc.

Condensed Interim Consolidated Statements of Cash Flows

	Six Months Ended
	March 31, 2025			March 31, 2024

Cash flows from operating activities:
Net loss	$	(3,207,701	)	$	(3,539,782	)
Adjustments for:
Depreciation and amortization		67,618			90,428
Share-based compensation		147,836			334,053
Gain on loan forgiveness		-			(14,766	)
Changes in working capital items:
Accounts and other receivable		(128,563	)		(484,110	)
Prepaid expenses and other current assets		76,727			237,967
Accounts payable and accrued liabilities		(856,418	)		309,523

Net cash used in operating activities		(3,900,501	)		(3,066,687	)

Cash flows from financing activities:
Proceeds from issuance of common shares and warrants		7,497,133			590,966
Proceeds from issuance of Series A-1 preferred shares and warrants		1,540,820			-
Proceeds from issuance of Series B-1 preferred shares		8,340,000			-
Payments for issuance costs of common shares and warrants		(294,935	)		(43,993	)
Payment for issuance costs of preferred shares		(215,157	)		-
Payment for issuance costs of warrants		(23,446	)		-
Repayment of debt		-			(29,532	)

Net cash provided by financing activities		16,844,415			517,441

Effect of exchange rate changes on cash and cash equivalents		(84,584	)		(12,520	)

Net change in cash and cash equivalents		12,859,330			(2,561,766	)
Cash and cash equivalents, beginning of period		1,037,320			5,361,397

Cash and cash equivalents, end of period	$	13,896,650		$	2,799,631

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

Edesa Biotech, Inc.

Condensed Interim Consolidated Statements of Changes in Shareholders' Equity

	Shares #		Common Shares			Series A-1 Preferred Shares		Series B-1 Preferred Shares			Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Shareholders' Equity
Three Months Ended March 31, 2025
Balance - December 31, 2024		3,467,658	$	47,562,091		$	981,174	$	-		$	14,176,399		$	(223,957	)	$	(60,231,745	)	$	2,263,962

Issuance of common shares		3,552,534		6,870,373			-		-			-			-			-			6,870,373
Issuance of Series B-1 preferred shares		-		-			-		8,340,000			-			-			-			8,340,000
Issuance of common shares upon exercise of restricted share units		2,486		13,922			-		-			(13,922	)		-			-			-
Issuance costs		-		(175,274	)		-		(171,937	)		-			-			-			(347,211	)
Preferred return on Class A preferred shares		-		-			36,576		-			-			-			(36,576	)		-
Share-based compensation		-		-			-		-			66,653			-						66,653
Net loss and comprehensive loss		-		-			-		-			-			(63,731	)		(1,590,448	)		(1,654,179	)

Balance - March 31, 2025		7,022,678	$	54,271,112		$	1,017,750	$	8,168,063		$	14,229,130		$	(287,688	)	$	(61,858,769	)	$	15,539,598

Three Months Ended March 31, 2024
Balance - December 31, 2023		3,164,722	$	46,933,895		$	-	$	-		$	13,223,622		$	(215,220	)	$	(54,097,419	)	$	5,844,878

Issuance of common shares		51,246		275,765			-		-			-			-			-			275,765
Issuance costs		-		(73,492	)		-		-			-			-			-			(73,492	)
Share-based compensation		-		-			-		-			149,696			-			-			149,696
Net loss and comprehensive loss		-		-			-		-			-			(11,183	)		(1,861,331	)		(1,872,514	)

Balance - March 31, 2024		3,215,968	$	47,136,168		$	-	$	-		$	13,373,318		$	(226,403	)	$	(55,958,750	)	$	4,324,333


Six Months Ended March 31, 2025
Balance - September 30, 2024		3,247,389	$	47,236,024		$	-	$	-		$	13,576,757		$	(242,613	)	$	(58,589,013	)	$	1,981,155

Issuance of common shares		3,772,803		7,497,133			-		-

SEC Form 10-Q filed by Edesa Biotech Inc.