Neuphoria Therapeutics Inc. Fair Value Disclosure
Note 3. Fair Value Measurement
The Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis. The following tables set forth the fair value of the Company’s liabilities at fair value on a recurring basis based on the three-tier fair value hierarchy:
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June 30, 2025 |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Liabilities: |
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Contingent consideration |
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$ |
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$ |
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$ |
1,169,675 |
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$ |
1,169,675 |
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Accompanying warrant liability |
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3,701,492 |
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3,701,492 |
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Total liabilities measured at fair value |
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$ |
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$ |
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$ |
4,871,167 |
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$ |
4,871,167 |
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June 30, 2024 |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Liabilities: |
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Contingent consideration |
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$ |
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$ |
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$ |
587,762 |
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$ |
587,762 |
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Accompanying warrant liability |
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4,657,832 |
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4,657,832 |
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Total liabilities measured at fair value |
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$ |
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$ |
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$ |
5,245,594 |
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$ |
5,245,594 |
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The Company has no financial assets that are measured at fair value. The liabilities measured at fair value at the end of each reporting period are contingent consideration and the accompanying warrant liability. The value of financial assets and other financial liabilities approximate their fair value. The following paragraph gives information about how the fair value of the financial liability is determined.
The accompanying warrant liability relates to the Company’s issuance of an accompanying warrant in conjunction with a Private Placement in June 2024. The fair value of the accompanying warrant liability was based on a Black-Scholes model valuation that required inputs (see Note 10) that were both significant to the fair value measurement and unobservable. This approach resulted in a classification of the accompanying warrant liability as Level 3 of the fair value hierarchy.
See Note 16 for additional disclosure related to Contingent consideration.
The following table summarizes changes in the fair value of contingent consideration and the accompanying warrant liability, for which each fair value was determined by Level 3 inputs:
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Contingent |
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Freestanding |
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Balance at June 30, 2023 |
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$ |
2,456,199 |
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$ |
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Issuance of freestanding financial instruments |
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4,996,815 |
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Change in fair value, net of foreign currency effect |
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(1,868,437 |
) |
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(338,983 |
) |
Balance at June 30, 2024 |
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$ |
587,762 |
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$ |
4,657,832 |
|
Payment of milestone obligation to Eclipse |
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(134,741 |
) |
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Change in fair value, net of foreign currency effect |
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716,654 |
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(956,340 |
) |
Balance at June 30, 2025 |
|
$ |
1,169,675 |
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|
$ |
3,701,492 |
|
The Company evaluates transfers between levels at the end of each reporting period. There were no transfers between levels during the periods presented.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Sep 29, 2025 | Showing above |
| 2024 | Sep 30, 2024 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.