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Published: 2020-11-13










		Unaudited Condensed Consolidated Interim Financial Statements of

InMed Pharmaceuticals Inc.

			For the Three Months Ended September 30, 2020














Suite 310 – 815 West Hastings Street
Vancouver, BC, Canada, V6C 1B4
	Tel: +1-604-669-7207








	InMed Pharmaceuticals Inc.
	(Expressed in Canadian Dollars)
	September 30, 2020

	INDEX
		Page

	Financial Statements (Unaudited)


	•		Condensed Consolidated Interim Statements of Financial Position	3
	•		Condensed Consolidated Interim Statements of Operations and Comprehensive Loss	4
	•		Condensed Consolidated Interim Statements of Changes in Equity	5
	•		Condensed Consolidated Interim Statements of Cash Flows	6
	•		Notes to the Condensed Consolidated Interim Financial Statements	7-22

2



		InMed Pharmaceuticals Inc.
		CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (unaudited)As at September 30, 2020 and June 30, 2020Expressed in Canadian Dollars
				September 30,	June 30,
				2020	2020
		ASSETSCurrent
		Cash and cash equivalents				$	5,998,943				$
		Short-term investments	15				57,574
		Accounts receivable			69,193
		Prepaids and other assets			699,225
		Total current assets					6,824,935
		Non-Current
		Property and equipment	4				512,923
		Intangible assets	5					1,068,981
		Other assets			18,659
		Total Assets				$	8,425,498				$	10,244,127
		LIABILITIES AND SHAREHOLDERS' EQUITYCurrent
		Accounts payables and accrued liabilities				$	2,404,526				$
		Current portion of lease obligations	12				95,243
		Total current liabilities					2,499,769
		Non-current
		Lease obligations	12				314,264
							2,814,033
		SHAREHOLDERS' EQUITY
		Share capital	6			68,579,890					68,579,890
		Contributed surplus		15,599,115					15,468,817
		Accumulated deficit		(78,567,540)					(76,426,987)
							5,611,465
						$	8,425,498				$	10,244,127

		Commitments and Contingencies (Note 15) Subsequent Event (Note 18)

		Approved on behalf of the Board of Directors by:


				/s/ Eric A. Adams								/s/ Adam Cutler
		Eric A. Adams, Director								Adam Cutler, Director

	The accompanying notes form an integral part of these condensed consolidated interim financial statements.

3



	InMed Pharmaceuticals Inc.
	CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited)For the three months ended September 30, 2020 and September 30, 2019Expressed in Canadian Dollars

		2020

	Research and development	8			$	1,163,721			$	2,331,788
	General and administrative	9	740,929			958,331
	Amortization and depreciation	4, 5	59,607			43,284
	Share-based payments	7	130,298			151,567
	Total operating expenses			2,094,555				3,484,970

	Interest income	6,618		77,119
	Foreign exchange (loss) gain	(52,616)		21,036

			$	(2,140,553)			$	(3,386,815)

11			$	(0.41)				$	(0.65)


		InMed Pharmaceuticals Inc.
		CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (unaudited)For the three months ended September 30, 2020 and September 30, 2019Expressed in Canadian Dollars
					Contributed		Accumulated
			Share Capital		Surplus		Deficit	Total
		Balance June 30, 2019		$14,216,224		($64,570,114)			$18,226,000
		Net loss for the period	-							-	(3,386,815)
		Share-based payments	7	-				151,567			-	151,567
		Balance September 30, 2019		$14,367,791		($67,956,929)			$14,990,752
					Contributed		Accumulated
			Share Capital		Surplus		Deficit	Total
		Balance June 30, 2020		$15,468,817		($76,426,987)			$7,621,720
		Net loss for the period	-							-	(2,140,553)
		Share-based payments	7	-				130,298			-	130,298
		Balance September 30, 2020		$15,599,115		($78,567,540)			$5,611,465





	The accompanying notes form an integral part of these condensed consolidated interim financial statements.
5


		InMed Pharmaceuticals Inc.
		CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (unaudited)For the three months ended September 30, 2020 and September 30, 2019Expressed in Canadian Dollars
			2020	2019
		OPERATING ACTIVITIESCash Flows From Operating Activities
		Net loss for the period			$	(2,140,553)	(3,386,815)
		Adjustments to reconcile loss to net cash used in operating activities Amortization and depreciation
			4, 5	59,607			43,284
		Share-based payments	7	130,298			151,567
		Loss on sale of assets		-			1,070
		Other		(830)			-
		Changes in non-cash working capital balances: Prepaids and other assets
				(42,202)			111,053
		Interest income accrued on short-term investments		187			107,168
		Other non-current assets		(18,659)			-
		Accounts receivable		(7,399)			44,899
		Accounts payable and accrued liabilities		214,094			(194,997)
		Total cash used in operating activities				(1,805,457)		(3,122,771)
		Cash Flows From Investing Activities
		Maturity of short-term investments		-				5,034,500
		Purchase of short-term investments		-			(34,500)
		Purchase of property and equipment	4	-			(42,953)
		Proceeds on disposal of property and equipment		-			726
		Total cash provided by investing activities		-				4,957,773
		Cash Flows From Financing Activities
		Payments on lease obligations	12	(21,639)			-
		Deferred financing costs		(86,117)			-
		Total cash used in financing activities				(107,756)	-
		Decrease in cash during the period				(1,913,213)		1,835,002
		Cash and cash equivalents beginning of the period
						7,912,156		12,873,961
		Cash and cash equivalents end of the period			$	5,998,943	14,708,963
		See note 14 for Non-Cash Transactions
	The accompanying notes form an integral part of these condensed consolidated interim financial statements.
6

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



1. CORPORATION INFORMATION
	InMed Pharmaceuticals Inc. (“InMed” or the “Company”) was incorporated in the Province of British Columbia on May 19, 1981 under the
			Business Corporations Act of British Columbia. InMed is a clinical
stage pharmaceutical company specializing in the research and development of novel, cannabinoid-
based therapies and an integrated system for the manufacturing of pharmaceutical-grade
cannabinoids.

	The Company’s shares are listed on the Toronto Stock Exchange (“TSX”) under the trading symbol
“IN”, and under the trading symbol “INM” on the Nasdaq Capital Market (“Nasdaq”).

InMed’s corporate office and principal place of business is located at #310 – 815 West Hastings Street,
Vancouver, B.C., Canada, V6C 1B4.

2. BASIS OF PREPARATION AND SUMMARY OF SIGNFICANT ACCOUNTING POLICIES

	These condensed consolidated interim financial statements for the three-month period ended
September 30, 2020 have been prepared in accordance with IAS 34 Interim Financial Reporting. They
do not include all disclosures that would otherwise be required in a complete set of financial
statements and should be read in conjunction with the Company’s June 30, 2020 annual financial
statements which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and
Interpretations of the International Financial Reporting Interpretations Committee.

	These condensed consolidated interim financial statements have been prepared using accounting policies consistent with those used in the Company’s 2020 annual financial statements.

	These condensed consolidated interim financial statements were authorized for issue by the Board
of Directors on November 12, 2020.
These condensed consolidated interim financial statements have been prepared on the historical cost
basis as modified, when applicable, by the revaluation of financial assets recorded at fair value, if any.

These condensed consolidated interim financial statements are presented in Canadian Dollars, which is also the Company’s functional currency.

The preparation of financial statements in compliance with IFRS requires management to make
certain critical accounting estimates. It also requires management to exercise judgment in applying
the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to these condensed consolidated interim
financial statements are disclosed in Note 3.

	Basis of Consolidation

	These condensed consolidated interim financial statements include the accounts of the Company and
its subsidiaries, including inactive subsidiaries: Biogen Sciences Inc., Sweetnam Consulting Inc., and
InMed Pharmaceutical Ltd. The Company’s former inactive subsidiary, Meridex Network Corporation,
was wound up into InMed effective April 17, 2019. A subsidiary is an entity that the Company controls, either directly or indirectly, where control is defined as the power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities. All inter-company
transactions and balances including unrealized income and expenses arising from intercompany
transactions are eliminated in preparing these condensed consolidated interim financial statements.
		7

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



Continuing Operations
These condensed consolidated interim financial statements have been prepared on a going concern
basis, which assumes that the Company will be able to meet its commitments, realize its assets and
discharge its liabilities. The Company has a history of operating losses and negative cash flows from
operations and has no current sources of revenue. The Company’s ability to continue its operations on a going concern basis over the next twelve months after the period end date is supported by its
available cash and cash equivalents to meet its obligations. Until such time as the Company can
generate substantial product revenue and achieve profitable operations, continuing operations are
dependent upon its ability to raise additional financing through issuing equity or debt and ultimately
achieving profitable operations.
Through September 30, 2020, the Company has funded its operations primarily with proceeds from
the sale of common stock. The Company has incurred recurring losses and negative cash flows from
operations since its inception, including net losses of $2.1 million and $3.4 million for the three month periods ended September 30, 2020 and 2019, respectively. In addition, the Company had an
accumulated deficit of $78.6 million as of September 30, 2020. The Company expects to continue to
generate operating losses for the foreseeable future.

As of the issuance date of these condensed consolidated interim financial statements, the Company expects its cash and cash equivalents of $6.0 million as of September 30, 2020 will be sufficient to
fund its operating expenses and capital expenditure requirements into the first quarter of fiscal 2022.
The future viability of the Company beyond that point is dependent on its ability to raise additional
capital to finance its operations. These factors may cast significant doubt about the Company’s ability to continue as a going concern for the future, which the Company defines as within one year from the
reporting date of these condensed consolidated interim financial statements.

On November 12, 2020, the Company announced it had entered into an underwriting agreement (the
“Underwriting Agreement”) with respect to an offering for gross proceeds of US$8 million which is expected to close on November 16, 2020, subject to customary closing conditions. The Company
expects in the future to seek additional funding through equity financings, debt financings or other
capital sources, including collaborations with other companies, government contracts or other
strategic transactions. The Company may not be able to obtain financing on acceptable terms, or at
all.
	These condensed consolidated interim financial statements do not reflect adjustments to the carrying
values of assets and liabilities that would be necessary if the Company was unable to continue as a
going concern, which adjustments could be material.

3. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

	The Company makes estimates and assumptions about the future that affect the reported amounts of
assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. In the future, actual experience may differ from these estimates
and assumptions.

The effect of a change in an accounting estimate is recognized prospectively by including it in the
statement of operations and comprehensive loss in the period of the change, if the change affects that
period only, or in the period of the change and future periods, if the change affects both.

	Information about critical judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the
condensed consolidated financial statements within the next financial period are discussed below:
		8

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



Application of going concern assumption
The assessment of whether the going concern assumption is appropriate requires management to
take into account all available information about the future, which is at least, but is not limited to, 12
months from the end of the reporting period.
Estimate of useful life of intangible assets


In the determination of the estimated useful life for intangible assets, which include the Company’s in-
licensed intellectual property and certain patents, management assesses a variety of internal and
external factors such as the expected usage of the intangible assets by the Company, technical or commercial obsolescence and expected actions by competitors or potential competitors.

Assets’ impairment
Management uses judgment to determine if there has been a triggering event, indicating a potential
impairment of intangible assets. In the determination of potential impairment charges, management
looks at the higher of value in use or fair value less costs to sell in the case of assets and at significant
or prolonged decline of fair value on financial assets indicating impairment. These determinations and
their individual assumptions require that management make a decision based on the best available information at each reporting period.

Share-based payments and warrants
Management determines costs for share-based payments and warrants using market-based valuation
techniques. The fair value of the market-based and performance-based share awards are determined
at the date of grant using generally accepted valuation techniques. Assumptions are made and
judgment used in applying valuation techniques. These assumptions and judgments include
estimating the future volatility of the stock price, expected dividend yield, forfeiture rates and future employee stock option exercise behaviors and corporate performance. Such judgments and
assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates.

Research and development costs
Research and development costs is a critical accounting estimate due to the magnitude of and the
assumptions that are required to calculate third-party accrued and prepaid research and
development expenses. Research and development costs are charged to expense as incurred and
include, but are not limited to, personnel compensation, including salaries and benefits, services provided by contract research organizations that conduct preclinical studies, costs of filing and
prosecuting patent applications, and lab supplies.

The amount of expenses recognized in a period related to service agreements is based on estimates
of the work performed using an accrual basis of accounting. These estimates are based on services provided and goods delivered, contractual terms and experience with similar contracts. We monitor
these factors and adjust our estimates accordingly.

COVID-19 impacts
On March 11, 2020 the COVID-19 outbreak was declared a pandemic by the World Health
Organization. The situation is dynamic and the ultimate duration and magnitude of the impact on the
economy and our business are not known at this time. Management uses judgment to assess the
impact of the pandemic on the Company’s ability to obtain debt and equity financing in the future, and impairment in the value of its long-lived assets.
				9

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



4. PROPERTY AND EQUIPMENT

						Leasehold		Right of Use
	Equipment					Improvements		Asset	Total
				Cost
				Balance at June 30, 2019	$					74,385		$	51,468			$	-				$	125,853
				Disposition of assets	(6,070)			(36,561)		-								(42,631)
				Assets acquired	17,341			39,822		-								57,163
				Adoption of IFRS 16	-			-				568,840		568,840
				Balance at June 30, 2020	$					85,656		$	54,729			$	568,840		$	709,225
				Balance, September 30, 2020	$					85,656		$	54,729			$	568,840		$	709,225
				Depreciation and impairment losses
				Balance at June 30, 2019	$					36,564		$	33,460			$	-				$	70,024
				Disposition of assets	(2,247)			(36,561)		-								(38,808)
				Depreciation for the period	21,111			12,222				94,807		128,140
				Balance at June 30, 2020	$					55,428		$	9,121			$	94,807		$	159,356
				Depreciation for the period	5,768			2,736				28,442		36,946
				Balance, September 30, 2020	$					61,196		$	11,857			$	123,249		$	196,302
				Carrying amounts
				Carrying value at June 30, 2020	$					30,228		$	45,608			$	474,033		$	549,869
				Carrying value at September 30, 2020 $	24,460		$	42,872			$	445,591		$	512,923

5. INTANGIBLE ASSETS

		Intellectual
		Property
				Costs
				Balance at June 30, 2019 and 2020					$	1,636,000
				Balance, September 30, 2020					$	1,636,000
				Accumulated amortization
				Balance at June 30, 2019					$	451,280
				Amortization	93,078
				Balance at June 30, 2020					$	544,358
				Amortization	22,661
				Balance, September 30, 2020					$	567,019
				Carrying amounts
				Carrying value at June 30, 2020					$	1,091,642
				Carrying value at September 30, 2020					$	1,068,981


The acquired intellectual property is recorded at cost and is amortized on a straight-line basis over an estimated useful life of 18 years net of any accumulated impairment losses. At September 30, 2020,
the acquired intellectual property has an estimated remaining useful life of approximately 12 years.



			10

INMED PHARMACEUTICALS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)

6. SHARE CAPITAL AND RESERVES

On June 30, 2020, the Company effected a one-for-33 reverse stock split of its issued and outstanding

common shares. Accordingly, all common share, stock option, per common share and warrant

amounts for all periods presented in the condensed consolidated financial statements and notes

thereto have been adjusted retrospectively to reflect this reverse stock split.

Authorized

As at September 30, 2020, the Company’s authorized share structure consisted of: (i) an unlimited

number of common shares without par value; and (ii) unlimited number of preferred shares without par value.

Common Shares

Num b er

Is s ue Price

T otal

Balance at June 30, 2019 andJune 30, 2020

5,220,707

68,579,890

Balance at Sep tem b er 30, 2020

5,220,707

68,579,890

Share Purchase Warrants

On July 1, 2019, there were 910,297 share purchase warrants outstanding with a weighted

average share price of $41.25. All share purchase warrants expired on June 21, 2020. Each warrant entitled the holders thereof the right to purchase one common share.

Agents’ Warrants

On July 1, 2019, there were 46,665 agents’ warrants outstanding with a weighted average share price of $36.63. All agents’ warrants expired on June 21, 2020. Each warrant entitled the holders

thereof the right to purchase one common share.

7. SHARE-BASED PAYMENTS

a) Option Plan Details

On March 24, 2017, the Company’s shareholders approved: (i) the adoption of a new stock option plan (the “Plan”) pursuant to which the board of directors may, from time to time, in its discretion,

grant to directors, officers, employees and consultants of the Company, non-transferable options

to purchase common shares, provided that the number of common shares reserved for issuance

will not exceed twenty percent (20%) of the issued and outstanding common shares at the date the options are granted (on a non-diluted and rolling basis); and (ii) the application of the new

stock option plan to all outstanding stock options of the Company that were granted prior to March

24, 2017 under the terms of the Company’s previous stock option plan.

As at September 30, 2020, there was 487,326 (June 30, 2020 – 455,508) options available for future allocation pursuant to the terms of the Plan. The option price under each option shall be not be

less than the closing price on the day prior to the date of grant. All options vest upon terms as set

by the Board of Directors, either over time, typically 12 to 36 months, and/or upon the achievement

of certain corporate milestones.

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



			The following is a summary of changes in outstanding options from July 1, 2019 to September 30, 2020:

					Weighted Average
				Number
					Exercise Price
			Balance as at June 30, 2019GrantedExpired/ForfeitedBalance as at June 30, 2020Expired/Forfeited	599,090	$17.64
				52,728	$8.78
	$37.39			(63,183)
				588,635	$14.73
				(31,818)	$8.19
			Balance as at September 30, 2020	556,817	$14.96


		12

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



The following is a summary of changes in options from July 1, 2020 to September 30, 2020:
			Grant	Expiry	Exercise	Opening	Expired/	Clos ing					Vested and
			Date	Date	Price	Balance					Granted	Exercised	Forfeited	Balance		Exercisable	Unvested
			25-Aug-15	25-Aug-20	$6.930				1,515						-			-		(1,515)						-			-			-
			23-Nov-15	23-Nov-20	$4.785				6,061						-			-		-						6,061			6,061			-
			27-Nov-15	27-Nov-20	$4.620				1,515						-			-		-						1,515			1,515			-
			16-May-16	16-May-21	$2.640				60,606						-			-		-						60,606			60,606			-
			10-Jun-16	10-Jun-21	$4.290				24,242						-			-		-						24,242			24,242			-
			15-Jun-16	15-Jun-21	$3.630				60,606						-			-		-						60,606			60,606			-
			26-Jul-16	26-Jul-21	$3.630				22,727						-			-		-						22,727			22,727			-
			12-Sep-16	12-Sep-21	$3.630				30,303						-			-		-						30,303			30,303			-
			28-Oct-16	28-Oct-21	$6.435				12,121						-			-		-						12,121			12,121			-
			12-Dec-16	12-Dec-21	$4.620				4,848						-			-		-						4,848			4,848			-
			13-Jan-17	13-Jan-22	$8.250				30,303						-			-		(30,303)						-			-			-
			20-Feb-17	20-Feb-22	$12.210				3,030						-			-		-						3,030			3,030			-
			22-Feb-17	22-Feb-22	$13.530				1,515						-			-		-						1,515			1,515			-
			2-Jun-17	2-Jun-22	$14.850				21,667						-			-		-						21,667			21,667			-
			10-Jul-17	10-Jul-22	$10.890				10,758						-			-		-						10,758			10,758			-
			8-Mar-18	8-Mar-23	$51.150				36,363						-			-		-						36,363			36,363			-
			16-May-18	16-May-23	$33.660				77,728						-			-		-						77,728			77,728			-
			31-Aug-18	31-Aug-23	$27.060				8,182						-			-		-						8,182			8,182			-
			20-Sep-18	20-Sep-23	$26.400				4,545						-			-		-						4,545			4,545			-
			5-Dec-18	5-Dec-23	$14.850				21,212						-			-		-						21,212			15,909			5,303
			14-Jan-19	14-Jan-24	$16.500				3,183						-			-		-						3,183			3,183			-
			21-Jan-19	21-Jan-24	$16.830				3,030						-			-		-						3,030			2,272			758
			4-Feb-19	4-Feb-24	$26.070				4,545						-			-		-						4,545			3,409			1,136
			4-Mar-19	4-Mar-24	$19.800				10,757						-			-		-						10,757			8,067			2,690
			27-May-19	27-May-24	$14.355				74,545						-			-		-						74,545			37,272			37,273
			1-Jul-19	1-Jul-24	$10.890				3,030						-			-		-						3,030			1,180			1,850
			9-Aug-19	9-Aug-24	$8.910				30,303						-			-		-						30,303			7,576			22,727
			3-Dec-19	3-Dec-24	$8.250				9,091						-			-		-						9,091			-			9,091
			12-Jan-20	11-Jan-25	$8.250				10,304						-			-		-						10,304			758			9,546
									588,635						-			-		(31,818)		556,817	466,443	90,374
Weighted Average Exercise Price									14.73	$					-	$		-	$	8.19	$					14.96	$		15.70	$		12.01	$
	Weighted Average Life Remaining									2.32						-			-		-				2.12			1.80			3.79
		13

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



The following is a summary of changes in options from July 1, 2019 to June 30, 2020:
		Grant	Expiry	Exercise	Opening	Expired/	Clos ing					Vested and
		Date	Date	Price	Balance					Granted	Exercised	Forfeited	Balance			Exercisable	Unvested
		4-Mar-15	4-Mar-20	$11.880				6,061							-						-		(6,061)						-				-				-
		25-Aug-15	25-Aug-20	$6.930				1,515							-						-		-						1,515				1,515				-
		23-Nov-15	23-Nov-20	$4.785				6,061							-						-		-						6,061				6,061				-
		27-Nov-15	27-Nov-20	$4.620				1,515							-						-		-						1,515				1,515				-
		16-May-16	16-May-21	$2.640				60,606							-						-		-						60,606				60,606				-
		10-Jun-16	10-Jun-21	$4.290				24,242							-						-		-						24,242				24,242				-
		15-Jun-16	15-Jun-21	$3.630				60,606							-						-		-						60,606				60,606				-
		21-Jul-16	26-Jul-21	$3.630				22,727							-						-		-						22,727				22,727				-
		12-Sep-16	12-Sep-21	$3.630				30,303							-						-		-						30,303				30,303				-
		28-Oct-16	28-Oct-21	$6.435				12,121							-						-		-						12,121				12,121				-
		12-Dec-16	12-Dec-21	$4.620				4,848							-						-		-						4,848				4,848				-
		13-Jan-17	13-Jan-22	$8.250				30,303							-						-		-						30,303				30,303				-
		20-Feb-17	20-Feb-22	$12.210				3,030							-						-		-						3,030				3,030				-
		22-Feb-17	22-Feb-22	$13.530				1,515							-						-		-						1,515				1,515				-
		2-Jun-17	2-Jun-22	$14.850				21,667							-						-		-						21,667				21,667				-
		10-Jul-17	10-Jul-22	$10.890				10,758							-						-		-						10,758				10,758				-
		8-Mar-18	8-Mar-23	$51.150				74,242							-						-		(37,879)						36,363				36,363				-
		16-May-18	16-May-23	$33.660				81,516							-						-		(3,788)						77,728				77,728				-
		31-Aug-18	31-Aug-23	$27.060				8,182							-						-		-						8,182				6,137				2,045
		20-Sep-18	20-Sep-23	$26.400				4,545							-						-		-						4,545				3,409				1,136
		5-Dec-18	5-Dec-23	$14.850				23,485							-						-		(2,273)						21,212				15,909				5,303
		14-Jan-19	14-Jan-24	$16.500				4,244							-						-		(1,061)						3,183				3,183				-
		21-Jan-19	21-Jan-24	$16.830				3,030							-						-		-						3,030				1,515				1,515
		4-Feb-19	4-Feb-24	$26.070				4,545							-						-		-						4,545				2,272				2,273
		4-Mar-19	4-Mar-24	$19.800				10,757							-						-		-						10,757				5,378				5,379
		27-May-19	27-May-24	$14.355				86,666							-						-		(12,121)						74,545				37,272				37,273
		1-Jul-19	1-Jul-24	$10.890				-							3,030	-		-										3,030				926			2,104
		9-Aug-19	9-Aug-24	$8.910				-							30,303	-		-										30,303				-			30,303
		3-Dec-19	3-Dec-24	$8.250				-							9,091	-		-										9,091				-			9,091
		12-Jan-20	11-Jan-25	$8.250				-							10,304	-		-										10,304				-			10,304
								599,090						52,728			-		(63,183)		588,635					481,909	106,726
Weighted Average Exercise Price								17.64	$						8.78	$					-	$	37.39	$					14.73	$			15.20	$			12.59	$
		Weighted Average Life Remaining										3.19								4.24					-	-					2.32					1.95			4.01


	14

INMED PHARMACEUTICALS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)

b) Fair Value of Options Issued During the Period

There were no options granted during the three months ended September 30, 2020.

The weighted average fair value at grant date of options granted during the three months

ended September 30, 2019 was $9.24 per option. Assumptions used for options granted during the three months ended September 30, 2019 included a weighted average risk-free

interest rate of 1.20%, weighted average expected life of 5 years, weighted average volatility

factor of 107.85%, weighted average dividend yield of 0% and a 5% forfeiture rate.

ii)

Expenses Arising from Share-based Payment Transactions

Total expenses arising from share-based payment transactions recognized during the three

months ended September 30, 2020 were $130,298 (September 30, 2019 - $151,567) which is

net of reversals for a reserve for anticipated forfeitures totaling $6,858. For the three months ended September 30, 2019, expenses arising from share-based payment transactions is net

of reversals for actual forfeitures of $500,000 and a reserve for anticipated forfeitures

totaling $34,403.

iii) Weighted average remaining contractual life of stock options

The weighted average remaining contractual life of stock options at September 30, 2020 was

2.12 years (June 30, 2020 – 2.32 years).

8. RESEARCH AND DEVELOPMENT EXPENSES

T hree Months End ed

Sep tem b er 30,

2020

2019

External contractors

720,764

1,590,151

Other

1,051

5,259

Patents

56,373

64,258

Research supplies

12,828

267,507

Salaries & benefits

428,293

442,292

Gross research and development expenses

1,219,309

2,369,467

Less research grant revenue

(55,588)

(37,679)

Net R es earch and Dev elop m ent Exp ens es

1,163,721

2,331,788

Effective November 1, 2018, the Company entered into a contribution agreement with the National

Research Council Canada Industrial Research Assistance Program ("NRC IRAP") to receive funding

of up to $500,000 to support its ongoing R&D efforts in cannabinoid biosynthesis. It is expected that this funding will be earned over the period commencing November 1, 2018 through the end of

calendar 2020. Research grant revenue is recognized as a recovery of research and development

expenditures when earned.

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



9. GENERAL AND ADMINISTRATIVE EXPENSES

				Three Months Ended
							September 30,
				2020	2019
		Accounting and legal			$	141,424		$	254,179
		Consulting		36,682		1,250
		Investor relations and marketing		88,248		101,639
		Office and administration fees		48,743		83,865
		Regulatory fees		20,789		20,880
		Rent		19,746		37,118
		Salaries & benefits		368,823		405,833
		Shareholder communcation					4,731		28,202
		Transfer agent fees		11,743		2,708
		Travel and conferences					-		22,657
		Total General and Administrative Expenses			$	740,929		$	958,331

			10. RELATED PARTY TRANSACTIONS

		Key management personnel are those persons having authority and responsibility for planning,
		directing and controlling our activities as a whole. We have determined that key management
		personnel consists of the members of the Board of Directors along with senior officers of the
		Company. The table below presents data for the three months ending September 30, 2020 as
		compared to the same period ending September 30, 2019.
				T hree Months End ed
							Sep tem b er 30,
						2020	2019
		Key management personnel compensation comprised : Share based payments
							94,173	$	(18,303)	$
		Salaries and consulting fees					576,373		666,483
							670,546	$	648,180	$


11. BASIC AND DILUTED LOSS PER SHARE

		Basic loss per share amounts are calculated by dividing the net loss for the period by the weighted
		average number of ordinary shares outstanding during the period. As the outstanding warrants and
		stock options are all anti-dilutive, they are excluded from the weighted average number of common
		shares in the table below.

							Three Months Ended
							September 30,
						2020	2019
		Loss attributable to common shareholders		($2,140,553)	($3,386,815)
		Weighted average number of common shares					5,220,707	5,220,707
		Basic and diluted loss per share					($0.41)	($0.65)

	16

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



12. LEASE OBLIGATIONS
			Effective July 1, 2019, the Company adopted IFRS 16 Leases	using the modified retrospective
			approach.

			The following table lists the Company’s operating lease obligations recognized on commencement of the lease for the Company’s new office premises at July 1, 2019.

			Lease obligations recognized as at July 1, 2019	$503,924
			Discounted using the incremental borrowing rate at July 1, 2019	8%
			Estimated annual variable lease payments not included in lease obligations	$78,500

			The Company is committed to minimum lease payments as follows:

	Septem ber
					Maturity Analysis	30, 2020
					Less than one year	119,014
					One to five years	365,622
					More than five years	-
					Total undiscounted lease liabilities (1)	484,635

					(1)	Excludes estimated variable operating costs of $78,500 on an annual basis through to August 31, 2024.

			The components of lease expense are as follows:
				September 30,	September 30,
							2020	2019
			Finance lease expense			$	28,442			$	9,481
			Operating lease expense				15,751		-
			Variable lease expense				19,746		6,582
			Total lease expense			$	63,939			$	16,063

13. SEGMENTED INFORMATION
			The Company operates in one segment, the pharmaceutical research and development of novel,
			cannabinoid-based therapies and an integrated system for the manufacturing of pharmaceutical-
			grade cannabinoids.

14. NON-CASH TRANSACTIONS
			Investing and financing activities that do not have a direct impact on cash flows are excluded from
			the statements of cash flows. During the three months ended September 30, 2020, the following
			transaction was excluded from the statements of cash flows:

			i)		As at September 30, 2020, the Company has unpaid deferred financing costs of $171,717.

		17

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)




			During the three months ended September 30, 2019, the following transaction was excluded from the statements of cash flows:

			i)	On January 14, 2019, the Company executed a lease for new office premises (see Note 12). The
				term of this new lease is from July 1, 2019 to August 31, 2024. In accordance with IFRS 16 Leases,
				on commencement of the lease on July 1, 2019, the Company recognized right-of-use assets of $568,840 and a lease liability of $503,924.

15. COMMITMENTS AND CONTINGENCIES

Pursuant to the terms of agreements with various contract research organizations, as at September
30, 2020, the Company is committed for contract research services and materials at a cost of
approximately $797,929. A total of $774,482 of these expenditures are expected to occur in the twelve
months following September 30, 2020 and the balance of $23,447 in the following twelve-month
period.

	Pursuant to the terms of a May 31, 2017 Technology Assignment Agreement between the Company
and the University of British Columbia (“UBC”), the Company is committed to pay royalties to UBC on
certain licensing and royalty revenues received by the Company for biosynthesis of certain drug products that are covered by the agreement. To date no payments have been required to be made.

	Pursuant to the terms of a December 13, 2018 Collaborative Research Agreement with UBC in which
the Company owns all right, title and interest in and to any intellectual property, in addition to funding
research at UBC, the Company is committed to making a one-time payment upon filing of any patent application arising from the research. To date no payments have been required to be made.

	Pursuant to the terms of a November 1, 2018 Contribution Agreement with National Resource Council
Canada, as represented by its Industrial Research Assistance Program (NRC-IRAP), under certain circumstances, contributions received, including the disposition of the underlying intellectual
property developed in part with NRC-IRAP contributions, may become repayable.

	Short-term investments include guaranteed investment certificates with a face value of $57,500 (June
30, 2020 - $57,500) that are pledged as security for a corporate credit card.

In July 2020, in connection with a proposed offering of our common shares in the United States, two
inadvertent disclosures of already publicly available information were made that may have exceeded
the scope permissible under Rule 134 of the Securities Act of 1933, and thus may not be entitled to the "safe-harbor" provided by Rule 134. As a result, either of the two inadvertent disclosures could
be determined to not be in compliance for a registered securities offering under Section 5 of the
Securities Act of 1933. If either of the two inadvertent disclosures are determined by a court to be a
violation by the Company of the Securities Act of 1933, the recipients of the inadvertent disclosures
who purchase our common shares in the Company’s planned offering may have a rescission right, which could to require the Company to repurchase those shares at their original purchase price with
interest or a claim for damages if the purchaser no longer owns the securities, for one year following
the date of the violation. The Company could also incur considerable expense if it were to contest any
such claims. Consequently, a contingent liability may arise out of this possible violation of the
Securities Act of 1933. The likelihood and magnitude of this contingent liability, if any, is not determinable at this time.
		18

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



	The Company has entered into certain agreements in the ordinary course of operations that may include indemnification provisions, which are common in such agreements. In some cases, the
maximum amount of potential future indemnification is unlimited; however, the Company currently
holds commercial general liability insurance. This insurance limits the Company’s liability and may
enable the Company to recover a portion of any future amounts paid. Historically, the Company has
not made any indemnification payments under such agreements and it believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any
liabilities relating to these obligations for any period presented.

	From time to time, the Company may be subject to various legal proceedings and claims related to
matters arising in the ordinary course of business. The Company does not believe it is currently subject to any material matters where there is at least a reasonable possibility that a material loss
may be incurred.

16. CAPITAL MANAGEMENT

	The Company considers all components of shareholders’ equity as capital. The Company’s objectives when maintaining capital are to maintain sufficient capital base in order to meet its short-term
obligations and at the same time preserve investor’s confidence required to sustain future
development of the business. The Company is not exposed to any externally imposed capital
requirements.

17. FINANCIAL RISK MANAGEMENT

	Fair value:

	Fair value measurements recognized in the statement of financial position must be categorized in
accordance with the following levels:

	Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

	Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

	Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable
inputs).

The Company’s financial instruments consist of cash and cash equivalents, short-term investments,
accounts receivable, and accounts payable and accrued liabilities.

	The fair values of short-term investments, accounts receivable, and accounts payable and accrued liabilities approximate their carrying values because of the short-term nature of these instruments.
Cash and cash equivalents are measured at fair value using Level 1 inputs.

	The following table summarizes the classification and carrying values of the Company’s financial
instruments at September 30, 2020 and June 30, 2020:
		19

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



		September 30, 2020	Level 1	Level 2	Total
		Financial assets
		Cash and cash equivalents	5,998,943		-	5,998,943
		Short-term investments				-	57,574	57,574
		Accounts receivable				-	69,193	69,193
		Total financial assets	5,998,943	126,767	6,125,710

		Financial liabilities
		Accounts payable and accrued
		liabilities				-	2,404,526	2,404,526
		Total financial liabilities				-	2,404,526	2,404,526
		June 30, 2020
			Level 1	Level 2	Total
		Financial assets
		Cash and cash equivalents	7,912,156		-	7,912,156
		Short-term investments				-	57,761	57,761
		Accounts receivable				-	61,794	61,794
		Total financial assets	7,912,156	119,555	8,031,711
		Financial liabilities

		Accounts payable and accrued
		liabilities				-	2,190,432	2,190,432
		Total financial liabilities				-	2,190,432	2,190,432

		Market Risk:

		Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
		because of changes in market prices. Market prices are comprised of four types of risk: foreign currency risk, interest rate risk, commodity price risk and equity price risk. The Company does not
		currently have significant commodity price risk or equity price risk.

		Foreign Currency Risk:

		Foreign currency risk is the risk that the future cash flows or fair value of the Company’s financial
		instruments that are denominated in a currency that is not the Company’s functional currency will
		fluctuate due to changes in foreign exchange rates. Portions of the Company’s cash and cash
		equivalents and accounts payable and accrued liabilities are denominated in US dollars. Accordingly, the Company is exposed to fluctuations in the US and Canadian dollar exchange rates.

		As at September 30, 2020, the Company has a net excess of US dollar denominated cash and cash
		equivalents in excess of US dollar denominated accounts payable and accrued liabilities of US$250,293, which is equivalent to $333,866 at the September 30, 2020 exchange rate. The US dollar
		financial assets generally result from holding US dollar cash to settle anticipated near-term accounts
		payable and accrued liabilities denominated in US dollars. The US dollar financial liabilities generally
		result from purchases of supplies and services from suppliers from outside of Canada.
	20

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



		Each change of 1% in the US dollar in relation to the Canadian dollar results in a gain or loss, with a corresponding effect on cash flows, of $3,339 based on the September 30, 2020 net US dollar assets
		(liabilities) position. During the three months ended September 30, 2020, the Company recorded a
		foreign exchange loss of $103,892 (September 30, 2019 –foreign exchange gain of $21,036) related
		to US dollars.
		As at September 30, 2020, the Company has a net excess of Euros denominated accounts payable
		and accrued liabilities in excess of Euros denominated cash and cash equivalents of €23,746, which
		is equivalent to $37,117 at the September 30, 2020 exchange rate. The Euros financial assets
		generally result from holding Euros to settle anticipated near-term accounts payable and accrued
		liabilities denominated in Euros dollars. The Euros financial liabilities generally result from purchases of supplies and services from suppliers from outside of Canada.

		Each change of 1% in the Euro in relation to the Canadian dollar results in a gain or loss, with a
		corresponding effect on cash flows, of $371 based on the September 30, 2020 net Euro assets (liabilities) position. During the three months ended September 30, 2020, the Company recorded a
		foreign exchange gain of $51,276 (September 30, 2019 – $Nil) related to Euros.

		Interest Rate Risk:
		Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market
		interest rates. As at September 30, 2020, holdings of cash and cash equivalents of $4,777,516 (June
		30, 2020 - $5,870,134) are subject to floating interest rates. The balance of the Company’s cash
		holdings of $1,221,427 (June 30, 2020 - $2,042,022) are non-interest bearing.
		As at September 30, 2020, the Company held short-term investments in the form of variable rate
		guaranteed investment certificates, with one year terms, with face value of $57,500 (June 30, 2020 -
		$57,500).
		The Company’s current policy is to invest excess cash in guaranteed investment certificates or
		interest-bearing accounts of major Canadian chartered banks or credit unions with comparable
		credit ratings. The Company regularly monitors compliance to its cash management policy.

		The Company, as at September 30, 2020, does not have any borrowings. Interest rate risk is limited to potential decreases on the interest rate offered on cash and cash equivalents and short-term
		investments held with chartered Canadian financial institutions. The Company considers this risk to
		be immaterial.
		Credit Risk:

		Credit risk is the risk of financial loss to the Company if a customer or a counter party to a financial
		instrument fails to meet its contractual obligations. Financial instruments which are potentially
		subject to credit risk for the Company consist primarily of cash and cash equivalents and short-term investments. Cash and cash equivalents and short-term investments are maintained with financial
		institutions of reputable credit and may be redeemed upon demand.

		The carrying amount of financial assets represents the maximum credit exposure. Credit risk exposure is limited through maintaining cash and cash equivalents and short-term investments with
		high-credit quality financial institutions and management considers this risk to be minimal for all cash
		and cash equivalents and short-term investments assets based on changes that are reasonably
		possible at each reporting date.
	21

INMED PHARMACEUTICALS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019 (Expressed in Canadian Dollars)



		Liquidity Risk:
		Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they
		become due. The Company’s policy is to ensure that it has sufficient cash to meet its liabilities when
		they become due, under both normal and stressed conditions, without incurring unacceptable losses
		or risking damage to the Company’s reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk
		increases. As at September 30, 2020, the Company has cash and cash equivalents and short-term
		investments of $6,056,517 (June 30, 2020 - $7,969,917), current liabilities of $2,499,769 (June 30,
		2020 - $2,284,418), and a working capital surplus of $4,325,166 (June 30, 2020 - $6,318,198). (See
		Note 18).
18. SUBSEQUENT EVENT

		On November 12, 2020, the Company announced that its common shares commenced trading on the Nasdaq under the symbol “INM” and that it had entered into the Underwriting Agreement with
		respect to an offering. In accordance with the terms of the Underwriting Agreement, the Company
		has agreed to sell, and certain underwriters have agreed to purchase, an aggregate of 1,780,000
		common shares, together with accompanying warrants to purchase up to an aggregate of 1,780,000
		common shares, at a public offering price of US$4.50 per share and accompanying warrant. Each common share will be sold in the offering with one warrant to purchase one common share. The
		warrants have an exercise price of US$5.11 per share. The offering is expected to close on November
		16, 2020, subject to customary closing conditions. The underwriters have also been granted an
		option to purchase an additional 267,000 common shares and additional warrants to purchase up to an aggregate of 267,000 common shares for a period of 45 days.

	22