Company: EDSA
Filing Date: 2025-12-12
Form Type: 10-K
Source: 0001171843-25-007914
Chunk: 314

Company: Edesa Biotech, Inc.
Filing Date: 2025-12-12
Form: 10-K
Item: Item 1A
Chunk 314
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 for the planned Phase 2 study of EB06 (vitiligo) and manufacturing support and wind-down activities for paridiprubart (EB05), including BARDA-related work, partially offset by lower spend on other discovery programs.

47

Foreign Exchange Risk

Our exposure to foreign exchange risk is primarily related to fluctuations between the Canadian dollar and the U.S. dollar. We have balances in Canadian dollars that are subject to foreign currency fluctuations when translated to U.S. dollars for financial statement presentation. We also periodically exchange U.S. dollars for Canadian dollars since most operating expenses are incurred in Canadian dollars. The fluctuation of the U.S. dollar in relation to the Canadian dollar impacts our profitability and may also affect the value of our assets and the amount of shareholders’ equity. We have not entered into any agreements or purchased any instruments to hedge possible currency risks. At September 30, 2025, we had assets denominated in Canadian dollars of approximately C$3.0 million and the U.S. dollar exchange rate as of this date was equal to 1.3918 Canadian dollars. Based on this exposure at September 30, 2025, a 10% annual change in the Canadian/U.S. exchange rate would impact our net loss and other comprehensive loss by approximately $0.2 million.

Concentration of Credit Risk

We are potentially subject to financial instrument concentration of credit risk through our cash and cash equivalents and accounts and other receivables. We place our cash and cash equivalents in money market mutual funds of U.S. government securities or with financial institutions believed to be creditworthy and perform periodic evaluations of their relative credit standing.

Accounts and other receivables primarily include Harmonized Sales Tax (“HST”) refunds receivable from the Canada Revenue Agency, reimbursements receivable from the Canadian government’s SIF and other miscellaneous receivables. We assess the collectability of our accounts and other receivables through a review of our current aging and payment terms, as well as an analysis of our historical collection rate, general economic conditions and the credit status of the relevant counterparties. As of September 30, 2025 and 2024, all outstanding accounts and other receivables were deemed to be fully collectible, and therefore, no allowance for doubtful accounts was recorded.

Significant Accounting Policies and Estimates

Our consolidated financial statements, which are indexed under Item 15 of this Annual Report on Form 10-K, have been prepared in accordance with accounting principles generally accepted in the United States, which require