Note 11. Research and Development Grant

On July 16, 2024, we were awarded the first tranche of $0.9 million of a 2 two-year cooperative grant of up to a total of approximately $1.9 million from the National Institute on Drug Abuse (“NIDA”), part of the National Institutes of Health (“NIH”), to support the development of intravenous selonabant, for the potential use as an emergency treatment of acute cannabis-induced toxicities, including cannabis-induced CNS depression in children. With the support of NIDA, Anebulo completed IND-enabling activities and the scale up of its formulation of intravenous selonabant during fiscal 2025. We initiated a SAD study of IV selonabant in healthy adults in the third quarter of calendar 2025. The grant comes in the form of two tranches with the initial award of $0.9 million in the first year and subsequent funding of approximately $1.0 million subject to certain conditions and milestones in the second year, specifically that the Investigational New Drug Application to the FDA for a Phase 1 SAD study of IV selonabant in healthy adults is permitted to proceed or an FDA clinical hold is imposed that cannot be successfully addressed with available time and resources. The grant was awarded under NIH award number 1U01DA059995-01. All conditions and milestones were met, and we received a notice of award from NIDA on September 2, 2025 for the Year 2 grant. The second year award is approximately $1.0 million and the grant award number for year 2 is 5U01DA059995-02.

As the granting agency does not meet the definition of a customer under ASC 606, the Company accounts for qualifying grant receipts as other income within the Company’s condensed statements of operations. The Company earns income for performing tasks under the grant agreement. Income is derived from the reimbursement of direct out-of-pocket expenses (including amounts to subrecipients), salaries and fringe benefits, and certain direct materials costs associated with grant activities.

The Company recorded $10 thousand and $0.2 million of grant income for the three months ended September 30, 2025 and 2024, respectively. Collection is deemed probable, and therefore no allowance for credit losses has been established.