InMed Pharmaceuticals Announces $5 Million Private Placement Priced At-the-Market Under Nasdaq Rules

Rhea-AI Summary

InMed Pharmaceuticals (NASDAQ: INM) has announced a $5 million private placement with a single institutional investor. The company will issue 1,952,363 common shares (or pre-funded warrants) and short-term preferred investment options at $2.561 per share.

The offering includes short-term preferred investment options exercisable at $2.436 per share, expiring 18 months after the Resale Registration Statement's effective date. If fully exercised, these options could generate additional proceeds of $4.75 million. The company will use funds for pipeline development, supporting BayMedica LLC's commercial sales, and working capital.

Additionally, InMed will amend existing preferred investment options from October 2023, reducing the exercise price from $16.60 to $2.436 per share.

Positive

• None.

Negative

• Significant dilution for existing shareholders through new share issuance
• Substantial reduction in exercise price of existing options from $16.60 to $2.436 indicates share price deterioration
• At-the-market pricing suggests limited premium for new investors

Insights

Biotech Investment Analyst

InMed's $5M financing provides short-term runway but suggests financial pressure with significant dilution and warrant repricing.

This $5 million private placement represents a crucial capital infusion for InMed, but several concerning elements merit investor attention. The deal structure involves selling shares at $2.561 with attached warrants exercisable at $2.436, effectively providing the institutional investor with a 4.9% discount on future shares through warrants. More troubling is the amendment of existing warrants from October 2023, reducing their exercise price from $16.60 to $2.436 - an 85% reduction that signals significant share price deterioration since those warrants were issued.

The financing occurs at what appears to be an "at-the-market" price, indicating limited negotiating leverage and likely urgent capital needs. With $5 million upfront and potential for another $4.75 million if warrants are exercised, this provides essential funding for InMed's pipeline development and commercial operations through BayMedica. However, the 1.95 million new shares plus potential additional 1.95 million shares from warrant exercise suggests substantial dilution.

The company's focus on both pharmaceutical drug development (high-cost, long timeline) and commercial cannabinoid sales through BayMedica (potentially faster revenue generation) reflects a dual strategy to balance long-term R&D with near-term cash flow needs. This financing should extend InMed's runway, but the warrant repricing suggests ongoing financial challenges that investors should monitor closely.

Vancouver, British Columbia--(Newsfile Corp. - June 25, 2025) - InMed Pharmaceuticals Inc. (NASDAQ: INM) ("InMed" or the "Company"), a pharmaceutical company focused on developing a pipeline of proprietary small molecule drug candidates for diseases with high unmet medical needs, today announced that it has entered into definitive agreements with a single institutional investor for the issuance and sale of 1,952,363 of its common shares (or pre-funded warrants in lieu thereof) and short-term preferred investment options to purchase up to an aggregate of 1,952,363 common shares, at a purchase price of $2.561 per share (or pre-funded warrant in lieu thereof) and associated short-term preferred investment option in a private placement priced at-the-market under Nasdaq rules. The short-term preferred investment option to be issued in the offering will be exercisable immediately upon issuance at an exercise price of $2.436 per share and will expire eighteen months from the effective date of the Resale Registration Statement (as defined below).

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

The aggregate gross proceeds to the Company from the offering are expected to be approximately $5 million, before deducting placement agent fees and other offering expenses. The offering is expected to close on or about June 25, 2025, subject to the satisfaction of customary closing conditions. The potential additional gross proceeds to the Company from the short-term preferred investment options, if fully-exercised on a cash basis, will be approximately $4.75 million. No assurance can be given that any of such short-term preferred investment options will be exercised. The Company intends to use the net proceeds from the offering to continue pipeline development of its pharmaceutical drug candidates, support commercial sales of rare cannabinoids through its subsidiary BayMedica LLC, and for general working capital purposes.

The securities described above were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act") and Regulation D promulgated thereunder and, along with the common shares underlying the short-term preferred investment options sold in the offering, have not been registered under the Act or applicable state securities laws. Accordingly, such securities may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements. The securities were offered only to accredited investors. Pursuant to a registration rights agreement, the Company has agreed to file one or more registration statements with the SEC covering the resale of the unregistered securities to be issued in the offering (the "Resale Registration Statement").

The Company also has agreed to amend certain existing preferred investment options to purchase up to an aggregate of 199,115 common shares that were previously issued in October 2023 and have an exercise price of $16.60 per share, for $0.125 per amended preferred investment option, effective upon the closing of the offering, such that the amended preferred investment options will have a reduced exercise price of $2.436 per share.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

To learn more about INM-901, please visit the website at: https://www.inmedpharma.com/pharmaceutical/inm-901-for-alzheimers-disease/.

About InMed:

InMed Pharmaceuticals is a pharmaceutical company focused on developing a pipeline of proprietary small molecule drug candidates targeting the CB1/CB2 receptors. InMed's pipeline consists of three separate programs in the treatment of Alzheimer's, ocular and dermatological indications. For more information, visit www.inmedpharma.com.

Investor Contact:

Colin Clancy
Vice President, Investor Relations
and Corporate Communications
T: +1 604 416 0999
E: ir@inmedpharma.com

Cautionary Note Regarding Forward-Looking Information:

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "potential", "possible", "would" and similar expressions. Such statements, based as they are on current expectations of management, inherently involve numerous risks, uncertainties and assumptions, known and unknown, many of which are beyond our control. Forward-looking information is based on management's current expectations and beliefs and is subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Without limiting the foregoing, forward-looking information in this news release includes, but is not limited to, statements about: the closing of the offering; the use of the net proceeds of the offering; the filing of a registration statement by InMed with the SEC covering the resale of the unregistered securities issued in the offering and the exercise of the short-term preferred investment options prior to their expiration.

Additionally, there are known and unknown risk factors which could cause InMed's actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. A complete discussion of the risks and uncertainties facing InMed's stand-alone business is disclosed in InMed's Annual Report on Form 10-K, in Item 1A. of the Quarterly Report for the period ended March 31, 2025, and other filings with the Securities and Exchange Commission on www.sec.gov.

All forward-looking information herein is qualified in its entirety by this cautionary statement, and InMed disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/256740

FAQ

What is the size and price of InMed Pharmaceuticals (INM) private placement announced on June 25, 2025?

InMed announced a $5 million private placement priced at $2.561 per share with short-term preferred investment options.

How will InMed Pharmaceuticals use the proceeds from the June 2025 private placement?

The proceeds will be used for pipeline development of pharmaceutical drug candidates, supporting BayMedica LLC's commercial sales, and general working capital purposes.

What are the terms of INM's short-term preferred investment options in the June 2025 offering?

The options are exercisable immediately at $2.436 per share and expire 18 months from the Resale Registration Statement's effective date, potentially generating $4.75 million if fully exercised.

How are existing October 2023 preferred investment options affected by this new offering?

Existing options for 199,115 common shares will have their exercise price reduced from $16.60 to $2.436 per share for a fee of $0.125 per amended option.

Who is the placement agent for InMed's June 2025 private placement?

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.