ESSA Pharma Inc._December 31, 2024

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended December 31, 2024

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

For the transition period fromto

Commission file number: 001-37410

ESSA Pharma Inc.

(Exact name of registrant as specified in its charter)


British Columbia, Canada	98-1250703
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)
Suite 720, 999 West Broadway
Vancouver, BC V5Z 1K5
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (778) 331-0962
Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	EPIX	Nasdaq Capital Market

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 Securities Exchange Act of 1934). Yes ☐ No ☒

The number of outstanding Common Shares of the registrant, no par value per share, as of February 10, 2025 was 44,388,550.

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ESSA PHARMA INC.

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended December 31, 2024

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	PART I. FINANCIAL INFORMATION	6

Item 1.	Financial Statements and Supplementary Data	6

	Condensed Consolidated Interim Balance Sheets as of December 31, 2024 and September 30, 2024	7

	Condensed Consolidated Interim Statements of Operations and Comprehensive Loss for the three and three months ended December 31, 2024 and 2023	8

	Condensed Consolidated Interim Statements of Cash Flows for the three months ended December 31, 2024 and 2023	9

	Condensed Consolidated Interim Statement of Changes in Shareholders’ Equity for the three and three months ended December 31, 2024 and 2023	10

	Notes to the Condensed Consolidated Interim Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	44
Item 4.	Controls and Procedures	44

	PART II. OTHER INFORMATION	45

Item 1.	Legal Proceedings	45

Item 1A.	Risk Factors	45

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45

Item 3.	Defaults Upon Senior Securities	45

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits, Financial Statement Schedules	46

	SIGNATURES	47

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of Canadian securities laws, or collectively, forward-looking statements. Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs and other information that is not historical information. Many of these statements appear, in particular, under the headings “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements can often be identified by the use of terminology such as “subject to,” “believe,” “anticipate,” “plan,” “expect,” “intend,” “estimate,” “project,” “may,” “might,” “will,” “should,” “would,” “could,” “hope,” “can,” the negatives thereof, variations thereon and similar expressions, or by discussions of strategy. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Examples of such forward looking statements include, but are not limited to statements related to:

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our assessment of strategic alternatives and our ability to identify and execute any strategic transaction;

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anticipated costs and effort associated with the discontinuation of our clinical trials;

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anticipated cost savings in connection with the discontinuation of our clinical trials;

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ability to recruit sufficient numbers of patients for future clinical trials, if any, and the benefits expected therefrom;

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our ability to obtain funding and the timing and potential sources of such funding;

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our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;

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our ability to achieve profitability;

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the grant (“CPRIT Grant”) under the Cancer Prevention and Research Institute of Texas (“CPRIT”) and payments thereunder, including any residual obligations;

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sales of our Common Shares, no par value (the “Common Shares”) under the Open Market Sale Agreement between the Company and Jefferies LLC, effective November 3, 2023 (the “ATM Sales Agreement”);

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our intended use of proceeds from past and future offerings of our securities;

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the implementation of our business model and strategic plans, including our evaluation of strategic alternatives;

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our expectations regarding federal, state, provincial and foreign regulatory requirements, including our plans with respect to anticipated regulatory filings;

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our ability to maintain operations, raise capital and pursue strategic alternatives in light of global macroeconomic factors including inflation, supply chain issues and any current or future impact related to widespread health concerns, pandemics, or epidemics, and other outbreaks of illness;

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the timing of, and our ability and our collaborators’ ability, if any, to obtain and maintain regulatory approvals;

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our expectations regarding market risk, including inflation, interest rate changes and foreign currency fluctuations;

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our ability to engage and retain the employees required to operate our business and conclude or wind-up our clinical and pre-clinical work;

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the compensation that is expected to be paid to our employees;

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our future financial performance and projected expenditures; and

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estimates of our financial condition, expenses, capital requirements and our need for additional financing and potential sources of capital and funding.

Such statements reflect our current views with respect to future events, are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that are inherently subject to significant medical, scientific, business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including those described under “Risk Factors” in our

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Annual Report on Form 10-K. All forward-looking statements included in this Quarterly Report on Form 10-Q, are based upon our current expectations and various assumptions. Certain assumptions made in preparing the forward-looking statements include, but are not limited to:

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the availability of sufficient financing on reasonable terms;

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our ability to protect patents and proprietary rights;

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our ability to successfully out-license our products, if any, and in-license and develop new products;

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the absence of material adverse changes in our industry or the global economy;

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our ability to attract and retain key personnel;

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our continued compliance with third-party license terms and non-infringement of third-party intellectual property rights;

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our ability to maintain good business relationships with our strategic partners; and

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our ability to understand and predict market competition.

We believe there is a reasonable basis for our current expectations, views and assumptions, but they are inherently uncertain. We may not realize our expectations, and our views and assumptions may not prove correct. Actual results could differ materially from those described or implied by such forward-looking statements. In evaluating forward-looking statements, investors should specifically consider the following uncertainties and factors, among others (including those set forth under the heading “Risk Factors” in our Annual Report on Form 10-K), that could affect future performance and cause actual results to differ materially from those matters expressed in or implied by forward-looking statements.

RISK FACTOR SUMMARY

Below is a summary of material factors that make an investment in our Common Shares speculative or risky. Importantly, this summary does not address all of the risks and uncertainties that we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, as well as other risks and uncertainties that we face, can be found under “Cautionary Note Regarding Forward-Looking Statements” and Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K. The below summary is qualified in its entirety by those more complete discussions of such risks and uncertainties. You should consider carefully the risks and uncertainties described under Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K as part of your evaluation of an investment in our Common Shares. Important factors that could cause such differences include, among other things, the following:

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risks related to our ability to identify and execute any strategic transaction, and any strategic transactions that we may consummate in the future may not be successful;

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risks related to our decision to discontinue development of masofaniten (formerly known as EPI 7386) and any related reduction in our workforce or change in operations may not result in anticipated savings and could disrupt our business;

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risks related to our license agreement with third parties;

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risks related to the possibility that any product candidates, may have undesirable side effects when used alone or in combination with other drugs;

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risks related to our ongoing obligations and continued regulatory review;

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risks related to potential administrative or judicial sanctions;

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the risk of increased costs associated with prolonged, delayed or terminated clinical trials;

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the risk that third parties may not carry out their contractual duties or terminate the relationship;

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uncertainty as to our ability to raise additional funding;

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risks related to our ability to raise additional capital on favorable terms and the impact of dilution from incremental financing;

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risks of a deemed default on any residual obligations of the agreement providing for the CPRIT Grant and having to reimburse all of the CPRIT Grant, if such deemed default is not waived by CPRIT;

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risks related to our incurrence of significant losses in every quarter since inception and our anticipation that it will continue to incur significant losses in the future;

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risks related to our limited operating history;

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risks related to our reliance on proprietary technology;

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risks related to our ability to protect our intellectual property rights throughout the world;

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risks related to claims by third parties asserting that we, or our employees, contractors or consultants have misappropriated their intellectual property, or claiming ownership of what we regard as our intellectual property;

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risks related to our ability to comply with governmental patent agency requirements in order to maintain patent protection;

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risks related to computer system failures or security breaches and increasing cyber threats;

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risks related to business disruptions that could seriously harm our future revenues and financial condition and increase our costs and expenses;

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risks related to potential conflicts of interest between us and our directors and officers;

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risks related to competition from other biotechnology and pharmaceutical companies;

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risks related to movements in foreign currency exchange rates, interest rates and rate of inflation;

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risks related to our ability to realize benefits from acquired businesses or products or form strategic alliances in the future;

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risks related to collaborations with third parties;

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risks that employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation;

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risks related to product liability lawsuits;

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risks related to the costs of and management time devoted to operating as a public company;

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risks related to being a smaller reporting company;

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risks related to laws that govern fraud and abuse and patients’ rights;

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risks related to our ability to comply with environmental, health and safety laws and regulations;

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risks related to us being a “passive foreign investment company”;

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risks related to United States investors’ ability to effect service of process or enforcement of actions against us;

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risks related to market price and trading volume volatility;

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risks related to securities class action litigation;

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risks related to the potential impact of shareholder activism on our business;

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risks related to our dividend policy;

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risks associated with future sales of our securities;

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risks related to our ability to maintain an active trading market for the Company's Common Shares;

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risks related to widespread health concerns, pandemics, or epidemics and other outbreaks of illness;

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risks related to our ability to implement and maintain effective internal controls;

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risks related to provisions in our charter documents and Canadian law affecting corporate governance; and

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risks related to analyst coverage.

If one or more of these risks or uncertainties or a risk that is not currently known to us, materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from those expressed or implied by forward-looking statements. The forward-looking statements represent our expectations, plans, estimates and views as of the date of this document. We do not undertake and specifically decline any obligation to update, republish or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events, except as required by law. Investors are cautioned that we cannot guarantee future results, events, levels of activity, performance or achievements and that forward-looking statements are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward-looking statements. We advise you that these cautionary remarks expressly qualify in their entirely all forward-looking statements attributable to us or persons acting on our behalf.

We express all amounts in this Quarterly Report on Form 10-Q in U.S. dollars, except where otherwise indicated. References to “$” and “US$” are to U.S. dollars and references to “C$” are to Canadian dollars. Except as otherwise indicated, references in this Quarterly Report on Form 10-Q to “ESSA,” “the Company,” “we,” “us” and “our” refer to ESSA Pharma Inc. and its subsidiary.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements and Supplementary Data

ESSA Pharma Inc.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

(Expressed in United States dollars)

FOR THE THREE MONTHS ENDED DECEMBER 31, 2024

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ESSA PHARMA INC.

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

(Unaudited)

(Expressed in United States dollars)

AS OF


		December 31,		September 30,
	2024		2024

ASSETS

Current
Cash and cash equivalents	$	93,310,889	$	103,709,537
Short-term investments (Note 4)		27,242,430		23,050,582
Receivables		154,351		162,973
Prepaids (Note 5)		1,397,636		636,463

		122,105,306		127,559,555

Deposits		256,977		256,977
Operating lease right-of-use asset (Note 7)		272,057		295,471

Total assets	$	122,634,340	$	128,112,003

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current
Accounts payable and accrued liabilities (Note 6)	$	3,562,293	$	3,176,973
Current portion of operating lease liability (Note 7)		124,971		124,054

		3,687,264		3,301,027

Operating lease liability (Note 7)		180,072		205,206

Total liabilities		3,867,336		3,506,233

Shareholders’ equity
Authorized
Unlimited common shares, without par value
Unlimited preferred shares, without par value
Common shares 44,388,550 issued and outstanding (September 30, 2024 – 44,388,550) (Note 8)		279,862,420		279,862,420
Additional paid-in capital (Note 8)		57,512,728		54,810,797
Accumulated other comprehensive loss		(2,072,033)		(2,063,267)
Accumulated deficit		(216,536,111)		(208,004,180)

		118,767,004		124,605,770

Total liabilities and shareholders’ equity	$	122,634,340	$	128,112,003

Nature of operations (Note 1)

Subsequent Event (Note 12)

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

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ESSA PHARMA INC.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(Expressed in United States dollars)

FOR THE THREE MONTHS ENDED DECEMBER 31,


	2024			2023

OPERATING EXPENSES
Research and development	$	5,474,147	<

SEC Form 10-Q filed by ESSA Pharma Inc.