InMed Pharmaceuticals Inc.

ITEM 1A. RISK FACTORS.

ThWe adoptiore winding down of H.R. 5371, the Cour only revenue-generating business segment, which creates substantinuing Approprial uncertainty regarding our liquidity, results of operations, Agriculture, Legislative Branch, Military Constructioprospects, and ability to continue as a going concern.

On March 4, 2026, our board of directors ratified BayMedicas decision to wind down and Veterans, and Exexit its commercial operations. We intensions Actd to substantially complete the wind down prior to June 30, 2026 could mater, while continuing limited commercially imp act ivities in the operations of the Companys subsidiary, BayMedica.

Recently, U.S. congressiinterim. The wind down may take longer or cost more than anticipated, and we may not realize expected savings, proceeds or strategic benefits. We expect to incur approximately $550,000 in severance and other employee-related costs and approximately $120,000 in additional legislation H.R. 5371, the Continuing Appropriations, Agricrelated expenditures through the end of the fiscal year, partially offset by profits from product sales prior to completion; we may also incur other charges and may be unable to exit or assign contracts on acceptable terms. As a resulture, Legislative Branch, Military Construction, our liquidity, cash flows, results of operations, and financial condition are subject to significant uncertainty, and Veterans Affairs, athere can be no assurance that we will be able to fund Extensoperations Act, 2026 (or meet obligations as the Act) was signed into law. The Act, in its current formy come due.

Because BayMedicas commercial operations is our only revenue-generating business segment, our ability to comply with debt covenants and other financial maintenance requirements may be adversely affected, and we may be unable to monetize assets on terms and without further amendment, will have a matertiming that support our liquidity needs. The wind down may negatively affect our workforce and internal controls, and our reduced revenues and potential negative impact on BayMedica, a subsidiary of the Company. Specifically, certain aspects of BayMedicas commercial losses could affect our access to capital. Execution of the wind down and the corresponding transition depends on numerous assumptions and external factors, and delays or shortfalls could further increase costs, reduce liquidity, and adversely affect our ability to pursue strategic opportunities. There can be no assurance that we will successfully transition to a new business and its inmodel or generate sustainable reventory of rare, non-intoxicating cannabinoids wues or profitability in the future; if we cannot, our business, financial condition, results of operations, and prospects would be materially and adversely affected, and we may need to undertake additional restructuring or other actions that could be prohibited under the Adilutive or otherwise detrimental to investors.

Any actual or threatened delisting of our securities by Nasdaq could have a material and adverse effect if it comes into force on November 12on our business, operations and financial condition, and could, among other things, limit investors ability to make transactions in our securities and subject us to additional trading restrictions.

As previously reported, on March 27, 2026, in its current form. It is unknown towe received a written notice from the Listing Qualifications Department of Nasdaq, notifying us that the Company whethclosing bid price of our common shares over the a period of 30 consections ofutive trading days was below the Act that would impact BayMedica will ultimately go into effect on November 12minimum $1.00 per share requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2), during the February 11, 2026, or at all, or if those sections will be replaced, to March 26, 2026 period.

In accordance with applicable Nasdaq procedures, we have a period of 180 calendar days following the receipt of the written notice mentioned above to cure the deficiency and regain compliance. The notice has no immediate impacted or amended by  on the listing of our common shares, which will continue to trade on The Nasdaq Capital Market subsequent acts ject to our continued compliance with the other listing requirements of U.S. policymakers.

BayMedica is evaluating alternative options, but has not set a timetable for tThe Nasdaq Capital Market. Our common shares will continue to trade under the symbol INM. We intend to monitor the closing share price for our common shares and explore available options to regain compliance.

34

In the event we do not evidence compliance with the minimum bid price rule during the 180-day grace period, we may be eligible for an additional 180 calendar day grace period. To qualify, we will be required to meet the conclusion of its etinued listing requirement for market valuation, ne of publicly held shares and all other listing standards for has it made any definitive decisions related to any potential alternative options The Nasdaq Capital Market, with the exception of the minimum bid price rule, and will need to provide written notice of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary, to Nasdaq. If it appears to the staff of Nasdaq that we will not be able to cure the deficiency, or if we are otherwise not eligible, we will not be entitled to an additional 180 calendar days grace period and Nasdaq will provide notice to us that this timeour securities will be subject to delisting. In the meantime, BayMedica is continuf we do not regain compliance within the allotted compliance period(s), including to sell its inventory of rany extensions that may be granted by Nasdaq, it is expected that Nasdaq would notify us that our common shares are, non-intoxicating cannabinoids. Witho subject to delisting. If we are notified by Nasdaq that our securities are subject to delisting, we may appeal such determination to the Panel, but timely, meanour securities would be automatically suspended from trading on The Nasdaq Capital Market pendingful changes to the Act, the completion of the appeal process. There can be no assurance that any such appeal would be successful or that we would needbe able to write-offevidence compliance with the terms of any inventorextension that may be granted by that BayMedica is unablee Panel.

Delisting from The Nasdaq Capital Market could materially and adversely affect our ability to sell prior toraise additional financing through the Act becoming epublic or private sale of equity securities, would significantly affective a the ability of investors to trade our securities and take owould negatively affect ther action value and liquidity of our securities, which could include divesting BayMedicas commerciincluding our common shares. The actual or threatened delisting of our securities could also have other material and adverse consequences, including the potential loss of confidence by employees and other stakeholders, the loss of institutional investor interest and fewer business, if possible, pivot development opportunities, limited availability of market quotations for our securities, reduced liquidity with respect to our securities, a determination that our common shares is penny stock, which will require brokers trading to otin our common shares to adher manufacture to more stringent rules, possibly resulting in a reduced level of trading techniquactivity in the secondary trading market for our common shares, if commercially viable, or discontinuing BayMedicas and limited amount of news and analyst coverage of us. To the extent that our common shares became eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, an investor may find it more difficult to dispose of their commercial business, all on shares or obtain accurate quotations as to the market value of our common shares.

Furthermore, the National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which would have a materiare referred to as covered securities. Because our common shares are currently listed on The Nasdaq Capital Market, such securities will be deemed covered securities. Although the states will be preempted from regulating the sale of our securities, the federal adverse effect statute does allow states to investigate companies if there is a suspicion our business, resultsf fraud and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of operationscovered securities in a particular case. Additionally, if we were no longer listed on The Nasdaq Capital Market, our securities would not be covered securities and financial condition.

30

we would be subject to regulations in each state in which we offer our securities. Upon a delisting of our common shares, this offering would immediately terminate.