PBM

Business Context and Reporting Period

Company: Psyence Biomedical Ltd. (PBM)
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal year ended March 31, 2026
Business Overview: Psyence is a clinical-stage biopharmaceutical company focused on developing nature-derived psilocybin and ibogaine-based therapeutics. The Company is currently conducting a Phase IIb clinical trial in Australia for NPX-5 (25mg naturally sourced psilocybin) to treat Adjustment Disorder (AjD) in palliative care patients. The Company has no approved products and has not generated any revenue from product sales.

Key Financial Metrics

Note: The 2025 net profit was primarily driven by non-cash fair value gains on the conversion of debt into equity and warrant liability remeasurement.

Material Changes vs. Prior Period

• Net Loss vs. Profit: The Company reported a net loss of approximately $6.9 million in 2026, compared to a net profit of $1.0 million in 2025. The 2025 profit was an anomaly driven by a $3.36 million net fair value gain on convertible notes and promissory notes extinguishment, which did not recur in 2026.
• Operating Expenses: Total operating expenses increased by approximately 70% year-over-year.
  • Research & Development (R&D): Increased from $342,168 to $1,466,653, reflecting accelerated activity in the Phase IIb clinical trial (site costs, patient enrollment).
  • Professional & Consulting Fees: Increased from $1.62 million to $3.65 million, driven by a $1.5 million settlement expense related to a shareholder dispute (KAOS Group) and elevated legal costs.
  • General & Administrative (G&A): Decreased from $1.21 million to $892,264 due to the reduction of one-time costs associated with establishing public company infrastructure in the prior year.
• Investment in Associate: In February 2026, the Company increased its ownership in PsyLabs Ltd. to 27.93%, gaining significant influence. The investment is now accounted for under the equity method with a carrying amount of $8.06 million, compared to a fair value asset of $745,000 in 2025.
• Settlement Expense: A one-time net settlement expense of $1.5 million was recognized in 2026 to resolve a shareholder dispute, which is not expected to recur.

Guidance, Outlook, and Risks

• Clinical Outlook: The Company is focused on completing its Phase IIb study in Australia, with enrollment estimated to commence in the second half of 2025. Positive results could lead to a Phase III pivotal study program. The Company anticipates R&D expenditures will continue to increase as the trial advances.
• Liquidity and Capital Resources: As of March 31, 2026, the Company held approximately $7.5 million in cash. Management believes this is sufficient to fund operations beyond 12 months. The Company maintains an Equity Line of Credit (ELOC) with White Lion Capital, LLC, with a commitment increased to $100 million in November 2025.
• Regulatory Environment: The Company notes recent U.S. federal actions (April 2026 Executive Order) to accelerate psychedelic therapy research. However, psilocybin remains a Schedule I controlled substance in the U.S., and regulatory approval is not guaranteed. The Company relies on data from trials conducted outside the U.S., which may not be accepted by the FDA without an Investigational New Drug (IND) application.
• Key Risks:
  • Going Concern: The Company is pre-revenue and expects to incur significant losses for the foreseeable future. Continued operations depend on raising additional capital.
  • Listing Compliance: The Company has undergone multiple reverse stock splits to maintain Nasdaq listing requirements. Failure to maintain compliance could result in delisting.
  • Supply Chain: The Company is dependent on PsyLabs for the supply of NPX-5. Interruptions in PsyLabs' supply chain could delay clinical trials.
  • Intellectual Property: The Company does not own patents on naturally occurring psilocybin and relies on licensed IP from PsyLabs and patents on formulations/methods of use.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $7.5 million cash balance against the projected burn rate for the Phase IIb trial completion and potential Phase III initiation.
• Settlement Details: Review the terms of the $1.5 million KAOS Group settlement to ensure no further contingent liabilities exist.
• PsyLabs Relationship: Assess the stability of the supply agreement with PsyLabs and the implications of the 27.93% equity stake on future funding requirements.
• Nasdaq Compliance: Monitor the Company's ability to maintain the $1.00 minimum bid price and other listing standards following recent reverse stock splits.
• Regulatory Pathway: Confirm the status of the Pre-IND meeting with the FDA and the likelihood of U.S. acceptance of Australian clinical trial data.