Note 13. Revenue

Cancer Therapeutics Cooperative Research Centre

The Company became a multi-party participant via agreement (the "Participants Agreement") in the Australian Government-supported Cancer Therapeutics Cooperative Research Centre (“CTx CRC” or "CRC") in 2007. The CRC collaborative arrangement was established to support oncology research, development, and commercialization activities. Approximately seventeen participants contributed cash, personnel, intellectual property, and in-kind resources during the initial phases of CRC’s existence. The Company holds an approximate 4.65% participation interest in CRC.

Beginning in 2016, the CRC became self-funding through licensing and commercialization activities with third-party customers. The CRC, rather than the Company, contracts with those third-party customers and recognizes revenue from those arrangements. Under the Participants Agreement and related commercialization agreements, participants retain contractual rights to participate in future commercialization proceeds generated from CRC-developed technologies in accordance with their participation interests. Accordingly, although the Company no longer contributes cash to CRC, it retains continuing contractual rights to receive distributions arising from successful commercialization activities. The Company is now a passive participant whose contractual rights are limited to receiving distributions based upon its participation interest.

The Company accounts for its participation in the CRC Participants Agreement as a collaborative arrangement under ASC 808, which provides guidance on presentation and disclosure but generally does not prescribe comprehensive recognition principles. The Company does not account for CRC distributions under ASC 606, because CRC is not a customer of the Company, the Company does not transfer goods or services to CRC in exchange for the distributions, and the Company has no performance obligations to the third-party licensees that contract with CRC.

The Company recognizes CRC distributions when its contractual right to receive the distribution becomes fixed or determinable and collection is reasonably assured. Amounts recognized from CRC distributions are presented in revenue and are separately disclosed because such amounts do not represent revenue recognized under ASC 606. Although the Company has become a passive participant in recent years, management believes the appropriate assessment is based upon the contractual arrangement as a whole. The Company's continuing distribution rights exist because of its historical participation and continuing participation interest rather than because CRC currently purchases goods or services from the Company. These activities demonstrate participation in the underlying operating activity rather than a customer-vendor relationship. This accounting policy decision to report distributions from CRC as revenue is analogous to the Company’s accounting for historical contributions to CRC which were included as costs of operations and expensed as part of research and development as incurred.

The Company recognized revenue associated with the CRC arrangement of approximately $1.2 million during the twelve months ended June 30, 2026. The Company did not receive any distributions from CRC during the twelve months ended June 30, 2025.

Carina Biotech Pty Ltd

In November 2020, the Company entered into an IP license agreement (the “Carina Biotech License”) with Carina Biotech Pty Ltd ("Carina Biotech"). Pursuant to the Carina Biotech License, the Company is eligible to receive approximately A$2.0 million and A$3.0 million in certain development and regulatory milestone payments if Carina Biotech advances the development of the therapy to a Phase 2 or Phase 3 trial, respectively. Carina Biotech is also obligated to pay royalties on its net sales of licensed products, on a country-by-country and product-by-product basis, ranging from the low single digits to the mid-single digits, subject to certain specified deductions. Royalties are payable until the later of expiration of all licensed patents covering the licensed products, or expiration of all data exclusivity with respect to the licensed product. If Carina Biotech enters into one or more sublicensing agreements relating to the licensed product, we are eligible to receive a percentage of sublicensing revenues.

During October 2024, Carina Biotech made a milestone payment to the Company in the gross amount of approximately $0.7 million under the terms of the Carina Biotech License agreement. The milestone payment was due to the Company as Carina Biotech achieved the initiation of the first Phase 1 Clinical Trial (i.e., first dosing in a human subject). The Company did not receive any milestone payments from Carina Biotech during the twelve months ended June 30, 2026.

Merck & Co., Inc.

In June 2014, the Company entered into a Research Collaboration and License Agreement with Merck & Co., Inc. (“Merck”) ("Merck Agreement") to develop α7 receptor PAMs targeting cognitive dysfunction associated with Alzheimer’s disease and other central nervous system conditions. Under the Merck Agreement, Merck funded certain research and development activities on a full-time equivalent (“FTE”) basis pursuant to a research plan. Merck funds current and future research and development activities, including clinical development and worldwide commercialization of any products developed from the license granted by the Company.

On March 19, 2025, the Company received a $15 million milestone payment from Merck. The payment was triggered by the initiation by Merck of a Phase 2 clinical trial to evaluate the safety and efficacy of MK-1167, an α7 nicotinic acetylcholine receptor positive allosteric modulator, for the treatment of the symptoms of Alzheimer’s disease dementia (NCT06721156). This $15 million payment marks the third milestone achieved in the collaboration with Merck. Under the agreement, as amended, Neuphoria is eligible to receive up to an aggregate of $450 million in milestone payments comprised of $275 million for the achievement of certain development milestones and $175 million in potential commercial milestones, plus royalties on net sales of any licensed medicines.

The Company evaluated the Merck Agreement in accordance with the provisions of ASC 606. The Company’s obligation under the Merck Agreement related to the residual variable consideration associated with the Merck Agreement are as follows: the Company granted to Merck an exclusive license (even as to Neuphoria and its Affiliates) in the Territory under the Bionomics Ltd. Patent Rights and Bionomics Ltd. Know-How, with a right to grant and authorize sublicenses, to research, develop, make, have made, use, offer to sell, sell, import and/or otherwise exploit Compounds and Products in the Field.

Regulatory milestone payments are triggered upon the achievement of certain research and commercial milestones. The commercial milestone payments and royalties are subject to the royalty recognition constraint whereby such amounts will be recognized as revenue upon the later of: (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the payment has been allocated has been satisfied, or partially satisfied, because the exclusive license is deemed to be the sole or predominant item to which the payments relate. As all performance obligations are satisfied, the Company will recognize royalty revenue at the date the sales occur.

On March 14, 2025, the Company and Merck executed the Fifth Amendment to the Research Collaboration and License Agreement which amended the patent royalty rate set out in the agreement, such that, conditioned upon achievement of net sales thresholds set forth in the Merck Agreement, as amended, the Company will be paid royalties on net sales ranging from a low single digits percentage to a low sub-teens percentage, depending on net sales volume.

The Company did not receive any milestone payments from Merck during the twelve months ended June 30, 2026.