Expressed in U.S. Dollars
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 1. | CORPORATE INFORMATION AND CONTINUING OPERATIONS |
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 developing a pipeline of prescription-based
products, including rare cannabinoids and novel cannabinoid analogs, targeting the treatment of diseases with high unmet medical needs
as well as developing proprietary manufacturing technologies to produce rare cannabinoids for sale in the health and wellness industry.
The Company’s
shares are listed on the Nasdaq Capital Market (“Nasdaq”) under the trading symbol “INM”. InMed’s corporate
office and principal place of business is located at #310 – 815 West Hastings Street, Vancouver, B.C., Canada, V6C 1B4.
In accordance with
the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties
about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions
and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern
within one year after the date that the condensed consolidated interim financial statements are issued.
Through March 31, 2022, 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 $10.7 million and $6.9 million for the nine months ended March
31, 2022 and 2021, respectively. In addition, the Company had an accumulated deficit of $85.6 million as of March 31, 2022 (June 30, 2021
- $74.9 million). 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
$5.9 million as of March 31, 2022 will be sufficient to fund its operating expenses and capital expenditure requirements into the
second quarter of fiscal 2023 (being the fourth calendar quarter of 2022). The future viability of the Company beyond that point is dependent on its ability to raise
additional capital to finance its operations. As a result, the Company has concluded that there is substantial doubt about its
ability to continue as a going concern within one year after the date that the condensed consolidated interim financial statements
are issued.
The Company expects to continue 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.
The terms of any financing may adversely affect the holdings or the rights of the Company’s existing stockholders.
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 in the normal course. 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 and such adjustments could be material.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 2. | SIGNIFICANT AND NEW ACCOUNTING POLICIES |
These unaudited
condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles as
applied in the United States (“US GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange
Commission (“SEC”) for interim financial information. Accordingly, these financial statements do not include all the information
and footnotes required for complete financial statements and should be read in conjunction with the audited consolidated financial statements
of the Company and the accompanying notes thereto for the year ended June 30, 2021.
These unaudited condensed consolidated
interim financial statements reflect all adjustments, consisting solely of normal recurring adjustments, which, in the opinion of management,
are necessary for a fair presentation of results for the interim periods presented. The results of operations for the three and nine months
ended March 31, 2022 and 2021 are not necessarily indicative of results that can be expected for a full year. These unaudited condensed
consolidated interim financial statements follow the same significant accounting policies as those described in the notes to the audited
consolidated financial statements of the Company for the year ended June 30, 2021, except for the new accounting guidance adopted during
the period.
The functional currency of the
Company and its subsidiaries is the U.S. Dollar. These condensed consolidated interim financial statements are presented in U.S. Dollars.
References to “$” and “US$” are to United States (“U.S.”) dollars and references to “C$”
are to Canadian dollars.
The preparation
of financial statements in compliance with US GAAP requires management to make estimates and assumptions that affect the reported amount
of assets and liabilities as of the balance sheet date, and the corresponding revenues and expenses for the periods reported. It also
requires management to exercise judgment in applying the Company’s accounting policies. In the future, actual experience may differ
from these estimates and assumptions. 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 the estimated fair values of the assets acquired and
liabilities assumed in acquisitions, the estimate of useful life of intangible assets, the application of the going concern assumption,
the impairment assessment for long-lived assets, and determining the fair value of share-based payments and warrants.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 2. | SIGNIFICANT AND NEW ACCOUNTING POLICIES (cont’d) |
On March 11, 2020 the COVID-19 outbreak
was declared a pandemic by the World Health Organization. The full extent to which the COVID-19 pandemic may directly or indirectly impact
the Company’s business, results of operations and financial condition, including expenses, research and development costs and employee-related
amounts, will depend on future developments that are evolving and highly uncertain, such as the duration and severity of outbreaks, including
potential future waves or cycles, and the effectiveness of actions taken to contain and treat COVID-19. The Company considered the potential
impact of COVID-19 when making certain estimates and judgments relating to the preparation of these condensed consolidated interim financial
statements. While there was no material impact to the Company’s condensed consolidated interim financial statements as of and for
the three and nine months ended March 31, 2022, the Company’s future assessment of the magnitude and duration of COVID-19, as well
as other factors, could result in a material impact to the Company’s consolidated financial statements in future reporting periods.
Business combinations are accounted
for using the acquisition method. The fair value of total purchase consideration is allocated to the fair values of identifiable tangible
and intangible assets acquired and liabilities assumed, with the remaining amount being classified as goodwill. All assets, liabilities
and contingent liabilities acquired or assumed in a business combination are recorded at their fair values at the date of acquisition.
If the Company’s interest in the fair value of the acquiree’s net identifiable assets exceeds the cost of the acquisition,
the excess is recognized in earnings or loss immediately. Transaction costs that are incurred in connection with a business combination,
other than costs associated with the issuance of debt or equity securities, are expensed as incurred.
Accounts receivable are recorded at
invoiced amounts, net of any allowance for doubtful accounts. The allowance for doubtful accounts is the Company’s best estimate
of the amount of probable credit losses in existing accounts receivable.
The Company evaluates the collectability
of accounts receivable on a regular basis based upon various factors including the financial condition and payment history of customers,
an overall review of collections experience on other accounts and economic factors or events expected to affect future collections experience.
Expected credit losses on our accounts receivable were immaterial as at March 31, 2022 and June 30, 2021.
Inventories are initially valued at
weighted average cost and subsequently valued at the lower of weighted average cost and net realizable value. Costs included in inventories
are raw materials, work-in-progress, and finished goods.
In determining any valuation allowances,
the Company reviews inventory for obsolete, redundant, and slow-moving goods. At March 31, 2022, no amounts had been charged to the valuation
allowance.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 2. | SIGNIFICANT AND NEW ACCOUNTING POLICIES (cont’d) |
The Company recognizes revenue when
the Company satisfies the performance obligations under the terms of a contract and control of its products and services is transferred
to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those
products and services. ASC 606, Revenue from Contracts with Customers defines a five-step process to recognize revenue that requires
judgment and estimates, including identifying the contract with the customer, identifying the performance obligations in the contract,
determining the transaction price, allocating the transaction price to the performance obligations in the contract, and recognizing revenue
when or as the performance obligation is satisfied.
Revenue consists of manufacturing
and distribution sales of bulk rare cannabinoids, which are generally recognized at a point in time when control over the products have
been transferred to the customer. Control of the products are considered transferred to the customer once they have been shipped to the
customer and title and risk of loss have been transferred to the customer and the Company has a present right to payment. Sales and other
taxes that are required to be remitted to regulatory authorities are recorded as liabilities and excluded from sales. Limited rights of
return, for claims of damaged or non-compliant products, exist with the Company’s customers.
The Company has elected the practical
expedient that allows it to recognize the incremental costs of obtaining a contract as an expense, when incurred, if the amortization
period of the asset that the Company otherwise would have recognized is one year or less.
Revenues within the scope of ASC 606
do not include material amounts of variable consideration. Customer payments are generally due in advance of when control is transferred
to the customer. The time between invoicing and when payment is due is not significant.
Contract liabilities consist of fees
invoiced or paid by the Company’s customers for which the associated services have not been performed and revenues have not been
recognized based on the Company’s revenue recognition criteria described above. Such amounts are reported as deferred revenue on
the consolidated balance sheet. Deferred revenue that is expected to be recognized during the following twelve months is recorded as a
current liability.
Cost of sales consist primarily of
the purchase price of goods and cost of services rendered, freight costs, warehousing costs, and purchasing costs. Cost of sales also
includes production and labor costs for the Company’s manufacturing business.
The Company records freight billed
to customers within Net sales. Shipping and handling costs associated with inbound freight and goods shipped to customers are recorded
in cost of sales. Other shipping and handling costs, such as for quality assurance, are recorded in operating expenses.
| (j) | Recent Accounting Pronouncements Not Yet Adopted |
The Company has reviewed recent
accounting pronouncements and concluded that they are either not applicable to the Company or that there was no material impact or no
material impact is expected in the consolidated financial statements as a result of future adoption.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
The Company had two customers during
the three month period ended March 31, 2022, and three customers during the nine month period ended March 31, 2022, which individually
generated 10% or more of the Company’s net sales. These customers accounted for 73% and 65% of the Company’s sales for the
three and nine month period ended March 31, 2022, respectively. As of March 31, 2022, these customers represented 43% of the Company’s
outstanding accounts receivable.
Inventories consisted of the following:
| | |
March
31,
2022 | | |
June
30,
2021 | |
| | |
$ | | |
$ | |
| Work in process | |
| 1,138,566 | | |
| - | |
| Finished
goods | |
| 281,816 | | |
| - | |
| Inventories | |
| 1,420,382 | | |
| - | |
During the three and nine months ended
March 31, 2022, inventory expensed to cost of goods sold was $127,308 and $280,845 (2021 - $Nil and $Nil), respectively.
| 5. | PROPERTY AND EQUIPMENT, NET |
Property and equipment consisted of the following:
| | |
March 31,
2022 | | |
June 30,
2021 | |
| | |
$ | | |
$ | |
| | |
| | |
| |
| Right of Use Asset (leases) | |
| 1,167,436 | | |
| 439,321 | |
| Equipment | |
| 212,877 | | |
| 66,888 | |
| Leasehold Improvements | |
| 40,409 | | |
| 42,986 | |
| Property and equipment | |
| 1,420,722 | | |
| 549,195 | |
| Less: accumulated depreciation | |
| (417,876 | ) | |
| (222,600 | ) |
| Property and equipment, net | |
| 1,002,846 | | |
| 326,595 | |
Depreciation expense on property, equipment
and leasehold improvements for the three and nine months ended March 31, 2022 was $7,908 and $18,371 (2021 - $3,633 and $16,546). Depreciation
expense related to the Right-of-Use Asset for the three and nine months ended March 31, 2022 was $89,450 and $199,058 (2021 - $22,327
and $65,506) and was recorded in general and administrative expenses.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 6. | INTANGIBLE ASSETS, IPR&D AND GOODWILL |
Intangible assets consist of:
| | |
March
31,
2022 | | |
June
30,
2021 | |
| | |
$ | | |
$ | |
| Intellectual property | |
| 1,736,420 | | |
| 1,736,420 | |
| Patents | |
| 1,191,000 | | |
| - | |
| Trademark | |
| 216,000 | | |
| - | |
| Intangible
assets | |
| 3,143,420 | | |
| 1,736,420 | |
| Less: accumulated
depreciation | |
| (788,019 | ) | |
| (674,723 | ) |
| Intangible assets, net | |
| 2,355,401 | | |
| 1,061,697 | |
Acquired intellectual property is recorded
at cost and is amortized on a straight-line basis over 18 years.
Acquired patents consist of patents
related to the development of cannabinoid analogs. This intangible asset is being amortized over an estimated useful life of 18 years.
The
acquired trademark represents the trade name ProDiol® and is being amortized over 10 years.
As at March 31, 2022, the definite-lived
intangible assets had a weighted average estimated remaining useful life of approximately 13 years.
Amortization expense on intangible
assets for the three and nine months ended March 31, 2022 was $45,430 and $113,296 (2021 - $23,788 and $75,672). The Company expects amortization
expense to be incurred over the next five years as follows:
| | |
$ | |
| | |
| |
| 2022 | |
| 186,062 | |
| 2023 | |
| 186,062 | |
| 2024 | |
| 186,062 | |
| 2025 | |
| 186,062 | |
| 2026 | |
| 186,062 | |
| | |
| 930,310 | |
Acquired in-process research and development
(IPR&D) are related identifiable intangible assets associated with cannabinoid manufacturing processes and includes $1,249,000 (2021
– nil) of knowhow and trade secrets acquired in the BayMedica acquisition (see Note 7). Acquired IPR&D represent the fair value
assigned to research and development assets that have not reached technological feasibility. IPR&D is classified as an indefinite-lived
intangible asset and is not amortized. All research and development costs incurred subsequent to the acquisition of IPR&D are expensed
as incurred.
Goodwill of $2,023,039 (2021 –
nil) arose from the acquisition of BayMedica (see Note 7). The Company performs its annual goodwill impairment assessment on June 30,
or more frequently if impairment indicators exist. In the event management determines that the value of goodwill has been impaired, the
Company will incur an impairment charge during the period in which the determination is made. As of March 31, 2022, there were no indicators
of impairment.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
On
October 13, 2021, the Company completed the acquisition of BayMedica, a private company based in the U.S. that specializes in the manufacturing
and commercialization of rare cannabinoids. The Company acquired 100% of BayMedica in exchange for i) 2,050,000 common shares issued
to BayMedica’s equity and convertible debt holders, subject to a six-month contractual hold period and ii) $1 million to be held
in escrow, subject to reduction for certain post-closing adjustments or satisfaction of indemnification claims under the definitive agreement
(the “BayMedica Agreement”) in the six- and twelve-month periods following the closing.
Total
consideration for the acquisition of BayMedica is summarized as follows:
| | |
Purchase
Price | |
| | |
Consideration | |
| | |
($) | |
| Estimated
fair value of common shares issued | |
| 3,013,500 | |
| Cash | |
| 1,000,000 | |
| Less:
Post-closing adjustments | |
| (199,543 | ) |
| Estimated
fair value of consideration transferred | |
| 3,813,957 | |
The
2,050,000 common shares were valued at $1.47, being the closing price of the Company’s common shares on Nasdaq on October 12, 2021.
The cash component is subject to reduction for certain post-closing adjustments or satisfaction of indemnification claims and therefore
is subject to further changes.
In
accordance with the acquisition method of accounting, the purchase price of BayMedica has been allocated to the acquired assets and assumed
liabilities based on their estimated acquisition date fair values. The fair value estimates were based on income, estimates and other
analyses. The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets
acquired and liabilities assumed has been recorded as goodwill, which is not deductible for income tax purposes. The goodwill balance
represents the assembled workforce acquired, the combined company’s expectations of the strategic opportunities available as a
result of the acquisition, and other synergies that will be derived from the acquisition.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
The
following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:
| | |
Purchase Price | |
| | |
Allocation | |
| | |
($) | |
| Assets acquired: | |
| | |
| Cash
and cash equivalents | |
| 91,566 | |
| Accounts receivable,
net of allowance for doubtful accounts | |
| 36,100 | |
| Inventories | |
| 487,122 | |
| Prepaid expenses
and deposits | |
| 131,674 | |
| Property and equipment | |
| 133,911 | |
| IPR&D | |
| 1,249,000 | |
| Patents | |
| 1,191,000 | |
| Trademark | |
| 216,000 | |
| Goodwill | |
| 2,023,039 | |
| Total assets acquired | |
| 5,559,412 | |
| | |
| | |
| Liabilities assumed: | |
| | |
| Accounts payable
and accrued liabilities | |
| 1,024,487 | |
| Other short-term
liabilities | |
| 598,245 | |
| Long-term debt | |
| 122,723 | |
| Total liabilities
acquired | |
| 1,745,455 | |
| Estimated fair
value of net assets acquired | |
| 3,813,957 | |
Tangible
assets and liabilities were valued at their respective carrying amounts as management believes that these amounts approximated their
acquisition-date fair values.
The
Purchase Price allocation includes certain identifiable intangible assets with an estimated fair value of approximately $2,656,000. These
intangible assets include trade secrets, product formulation knowledge, patents and trademarks. Patents and trademarks are expected to
have a finite life and are being amortized using the straight-line method over the respective lives of each asset.
Acquired
IPR&D are related identifiable intangible assets associated with cannabinoid manufacturing processes and includes knowhow and trade
secrets. The multi-period excess earnings method was used to determine the fair value of these assets as at the date of acquisition.
IPR&D is classified as an indefinite-lived intangible asset and is not amortized. All research and development costs incurred subsequent
to the acquisition of IPR&D are expensed as incurred.
The
acquired trademark represents the trade name ProDiol®. The fair value of the trademark, which was determined using the relief from
royalty method, was capitalized as of the acquisition date and is subsequently being amortized over 10 years.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
Acquired
patents consist of patents related to the development of cannabinoid analogs, the fair value of which was determined using the income
approach. This intangible asset is being amortized over an estimated useful life of 18 years.
As
of March 31, 2022, the Company had not yet fully completed the analysis to assign fair values to all assets acquired and liabilities
assumed, and therefore the purchase price allocation is preliminary. The remaining items include the finalization of working capital,
income taxes and resulting impacts to goodwill. The preliminary purchase price allocation will be subject to further refinement as the
Company continues to refine its estimates and assumptions based on information available at the acquisition date. The purchase price
allocation adjustments can be made throughout the end of the Company’s measurement period, which is not to exceed one year from
the acquisition date.
Following
the acquisition date, the operating results of BayMedica have been included in the unaudited condensed consolidated financial statements.
For the period from the October 13, 2021 acquisition date through March 31, 2022, sales attributable to BayMedica were $0.6 million and
operating losses attributable to BayMedica were $1.8 million. Acquisition-related expenses, which were comprised primarily of regulatory,
financial advisory and legal fees, totaled $0.2 million for the nine months ended March 31, 2022 and were included in general and administrative
expenses in the condensed consolidated statements of operations and comprehensive loss.
The
following table presents the pro forma consolidated results of the Company assuming the BayMedica acquisition had been completed on July
1, 2020:
| | |
Three Months Ended | | |
Nine Months Ended | |
| | |
March 31 | | |
March 31 | |
| | |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| | |
$ | | |
$ | | |
$ | | |
$ | |
| Sales | |
| 309,585 | | |
| 437,309 | | |
| 574,677 | | |
| 1,023,379 | |
| Net loss | |
| (3,390,440 | ) | |
| (3,600,787 | ) | |
| (10,468,072 | ) | |
| (8,653,636 | ) |
| 8. | ACCOUNTS
PAYABLE AND ACCRUED LIABILITIES |
Accounts
payable and accrued liabilities consist of the following:
| | |
March 31,
2022 | | |
June 30,
2021 | |
| | |
$ | | |
$ | |
| Trade payables | |
| 1,676,179 | | |
| 775,129 | |
| Accrued research and development expenses | |
| 364,207 | | |
| 309,901 | |
| Employee compensation, benefits and related accruals | |
| 711,421 | | |
| 880,207 | |
| Accrued general and administrative expenses | |
| 115,120 | | |
| 169,641 | |
| Accounts payable and accrued liabilities | |
| 2,866,927 | | |
| 2,134,878 | |
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 9. | SHARE
CAPITAL AND RESERVES |
As
at March 31, 2022, the Company’s authorized share structure consisted of: (i) an unlimited number of common shares without par
value; and (ii) an unlimited number of preferred shares without par value. No preferred shares were issued and outstanding as at March
31, 2022 and June 30, 2021.
The
Company may issue preferred shares and may, at the time of issuance, determine the rights, preference and limitations pertaining to these
shares. Holders of preferred shares may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding
up of the Company before any payment is made to the holders of common shares.
During
the nine months ended March 31, 2022, the Company completed the following private placement:
| Transaction Description | |
Number | | |
Issue
Price | | |
Total | |
| Private placement - Shares | |
| 890,000 | | |
$ | 2.973 | | |
$ | 2,645,970 | |
| Private
placement - Pre-funded warrants | |
| 3,146,327 | | |
$ | 2.9729 | | |
| 9,353,716 | |
| Gross Proceeds | |
| | | |
| | | |
$ | 11,999,686 | |
| Allocated
to Additional Paid-in Capital | |
| | | |
| | | |
| (10,540,635 | ) |
| | |
| | | |
| | | |
$ | 1,459,051 | |
| Share issuance costs | |
| | | |
| | | |
$ | (247,336 | ) |
On
July 2, 2021, the Company closed a private placement of its common shares and issued an aggregate of 890,000 common shares and 3,146,327
pre-funded warrants, for gross proceeds of $11,999,686. The pre-funded warrants were determined to be common stock equivalents. Each
common share and each pre-funded warrant was sold in the offering with a warrant to purchase a common share. Transaction costs were allocated
proportionally between common shares and warrants with $247,336 allocated to common shares and the balance of $1,786,831 allocated to
additional paid-in capital and recorded as a component of shareholders’ equity in the consolidated balance sheet. The 3,146,327
pre-funded warrants were fully exercised for 3,146,327 common shares during the nine months ended March 31, 2022 resulting in a $4,283,654
reclassification from additional paid-in capital to common shares.
During
the nine months ended March 31, 2022, in accordance with the BayMedica Agreement, the Company issued 2,050,000 common shares to BayMedica’s
historical equity and convertible debt holders (See Note 7).
| c) | Share
Purchase Warrants |
On
November 16, 2020, 1,780,000 warrants were issued with an exercise price of $5.11 per share, were immediately exercisable upon issuance,
and expire 6 years following the date of issuance.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 9. | SHARE
CAPITAL AND RESERVES (cont’d) |
| (c) | Share
Purchase Warrants (cont’d) |
On
February 12, 2021, 693,000 warrants were issued with an exercise price of $4.85 per share, were exercisable 6 months following issuance,
and expire 5.5 years following the date of issuance. On March 21, 2022, the Company amended the warrants to re-price them to $0.45 per
share with an expiry date of March 31, 2023. Between March 21, 2022 and March 31, 2022, 369,600 of the warrants were exercised on a cashless
basis resulting in the issuance of 146,814 common shares.
On
July 2, 2021, 4,036,327 warrants were issued with an exercise price of $2.848 per share, were immediately exercisable upon issuance,
and expire 5 years following the date of issuance. The pre-funded and common warrants did not meet the criteria to be classified as a
liability award and therefore were treated as an equity award and recorded as a component of shareholders’ equity in the consolidated
balance sheet.
The
following is a summary of changes in share purchase warrants from July 1, 2021 to March 31, 2022:
| | |
Number | | |
Weighted
Average
Share Price | | |
Aggregate
Intrinsic
Value | |
| Balance as at June 30, 2021 | |
| 2,473,000 | | |
$ | 3.80 | | |
| - | |
| Granted | |
| 4,036,327 | | |
$ | 2.848 | | |
| - | |
| Exercised | |
| (369,600 | ) | |
$ | 0.45 | | |
| 114,716 | |
| Balance as at March 31, 2022 | |
| 6,139,727 | | |
$ | 3.38 | | |
| - | |
The
total intrinsic value of warrants exercised during the quarter ended March 31, 2022 was $114,716 (2021 - $Nil).
On
July 2, 2021, 302,725 warrants were issued for services with an exercise price of $3.7163 per share, were immediately exercisable upon
issuance, and expire 5 years following the date of issuance. The agents’ warrants did not meet the criteria to be classified as
a liability award and therefore were treated as an equity award and recorded as a component of shareholders’ equity in the consolidated
balance sheet.
The
following is a summary of changes in agents’ warrants from July 1, 2021 to March 31, 2022:
| | |
Number | | |
Weighted
Average
Share Price | | |
Aggregate
Intrinsic
Value | |
| Balance as at June 30, 2021 | |
| - | | |
| - | | |
| - | |
| Granted | |
| 302,725 | | |
$ | 3.7163 | | |
| - | |
| Balance as at March 31, 2022 | |
| 302,725 | | |
$ | 3.7163 | | |
| - | |
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
On
March 24, 2017, and as amended on November 20, 2020, 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 and in accordance with
regulatory requirements, 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 March 31, 2022, there were 420,165 (June 30, 2021 – 493,387) 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, or upon the achievement of certain corporate
milestones.
Stock
options granted prior to May 2021 were granted with Canadian dollar exercise prices (United States dollar amounts for weighted average
exercise prices and aggregate intrinsic value are calculated using prevailing rates as at March 31, 2022). Commencing in May 2021, stock
options are granted with United States dollar exercise prices.
The
following is a summary of changes in outstanding options from July 1, 2021 to March 31, 2022:
| | |
Number | | |
Weighted
Average
Exercise
Price
$ | |
| | |
| | |
| |
| Balance as at June 30, 2021 | |
| 912,006 | | |
| 8.61 | |
| Granted | |
| 765,000 | | |
| 1.38 | |
| Expired/Forfeited | |
| (267,463 | ) | |
| 4.24 | |
| Balance as at March 31, 2022 | |
| 1,409,543 | | |
| 5.40 | |
| | |
| | | |
| | |
| March 31, 2022: | |
| | | |
| | |
| Vested and exercisable | |
| 479,249 | | |
| 12.57 | |
| Unvested | |
| 930,294 | | |
| 1.71 | |
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 10. | SHARE-BASED
PAYMENTS (cont’d) |
| b) | Fair
Value of Options Issued During the Period |
| i) | Weighted
Average Fair Value at Grant Date of Options Granted: |
The
weighted average fair value at grant date of options granted during the nine months ended March 31, 2022, was $1.38 per option (year
ended June 30, 2021 - $1.96). Assumptions used for options granted during the nine months ended March 31, 2022 included a weighted average
risk-free interest rate of 1.14% (year ended June 30, 2021 – 0.27%), weighted average expected life of 3.1 years calculated using
the Simplified Method for directors, officers and employees and the contractual life for consultants, weighted average volatility factor
of 97.26% (year ended June 30, 2021 – 105.88%), weighted average dividend yield of 0% (year ended June 30, 2021 – 0%) and
a 5% forfeiture rate (year ended June 30, 2021 – 5%).
| ii) | Expenses
Arising from Share-based Payment Transactions: |
Total
expenses arising from share-based payment transactions recognized during the three months ended March 31, 2022, were $195,085 (2021 -
$207,302). $103,401 was allocated to general and administrative expenses (2021 - $138,880) and the remaining $91,684 was allocated to
research and development expenses (2021 - $68,422). Total expenses arising from share-based payment transactions recognized during the
nine months ended March 31, 2022, were $521,006 (2021 - $389,343). $307,885 was allocated to general and administrative expenses (2021
- $248,836) and the remaining $213,121 was allocated to research and development expenses (2021 - $140,507). Unrecognized compensation
cost at March 31, 2022 related to unvested options was $431,558 which will be recognized over a weighted-average vesting period of 1.2
years.
On
commencement of a lease on July 1, 2019, the Company recognized right-of-use assets of $434,660 and a lease liability of $385,057 with
no net impact on accumulated deficit.
In
conjunction with the acquisition of BayMedica (Note 7), the Company acquired an operating lease for a corporate office with a remaining
term of 2.1 years as at March 31, 2022. On the date of acquisition of BayMedica, the Company recognized right-of-use assets of $728,115
and a lease liability of $825,427, utilizing the remaining term on acquisition and a 4.0% discount rate.
The
Company is committed to minimum lease payments as follows:
| Maturity Analysis | |
March 31,
2022 | |
| Less than one year | |
$ | 431,680 | |
| One to five years | |
| 845,291 | |
| More than five years | |
| - | |
| Total undiscounted lease liabilities | |
$ | 1,276,971 | (1) |
| (1) | Excludes
estimated variable operating costs of $92,677 and $62,824 on an annual basis through to April 30, 2024 and August 31, 2024, respectively. |
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 12. | 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. The pre-funded warrants were determined to be common stock equivalents and have been included in the weighted average
number of shares outstanding for calculation of the basic earnings per share number. As the outstanding stock options and warrants are
anti-dilutive, they are excluded from the weighted average number of common shares in the table below.
| | |
Three Months Ended | | |
Nine Months Ended | |
| | |
March 31, | | |
March 31, | |
| | |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| | |
$ | | |
$ | | |
$ | | |
$ | |
| Net loss for the period | |
| (3,475,665 | ) | |
| (3,101,475 | ) | |
| (10,730,094 | ) | |
| (6,944,336 | ) |
| Basic and diluted loss per share | |
| (0.25 | ) | |
| (0.41 | ) | |
| (0.81 | ) | |
| (1.11 | ) |
| Weighted average number of common shares - basic and diluted | |
| 14,151,544 | | |
| 7,549,040 | | |
| 13,326,754 | | |
| 6,277,824 | |
As
of the closing of the BayMedica acquisition, the Company aligned into two operating and reportable segments, InMed Pharmaceuticals (the
“InMed” segment) and BayMedica (the “BayMedica” segment). The Company reports segment information based on the
management approach which designates the internal reporting used by the Chief Operating Decision Maker (“CODM”), which is
the Company’s Chief Executive Officer, for making decisions and assessing performance as the source of the Company’s reportable
segments. The CODM allocates resources and assesses the performance of each operating segment based on potential licensing opportunities,
historical and potential future product sales, operating expenses, and operating income (loss) before interest and taxes. The Company
has determined its reportable segments to be InMed and BayMedica based on the information used by the CODM. Other than cash, cash equivalents
and short-term investments (“Unrestricted cash”) balances, the CODM does not regularly review asset information by reportable
segment and therefore, the Company does not report asset information by reportable segment.
The
InMed segment is largely organized around the research and development of cannabinoid-based pharmaceuticals products and the BayMedica
segment is largely organized around developing proprietary manufacturing technologies to produce rare cannabinoids for sale in the health
and wellness industry.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 13. | SEGMENT
INFORMATION (cont’d) |
The
following table presents information about the Company’s reportable segments for the three and nine months ended March 31, 2022
and 2021:
| | |
Three Months Ended March 31, | |
| | |
2022 | | |
2021 | |
| | |
InMed | | |
BayMedica | | |
Total | | |
InMed | | |
BayMedica | | |
Total | |
| | |
| | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
| Sales | |
| - | | |
| 309,585 | | |
| 309,585 | | |
| - | | |
| - | | |
| - | |
| Operating expenses | |
| 2,940,961 | | |
| 844,289 | | |
| 3,785,250 | | |
| 3,101,475 | | |
| - | | |
| 3,101,475 | |
| Net loss | |
| (2,940,961 | ) | |
| (534,704 | ) | |
| (3,475,665 | ) | |
| (3,101,475 | ) | |
| - | | |
| (3,101,475 | ) |
| Unrestricted cash | |
| 5,386,206 | | |
| 512,107 | | |
| 5,898,313 | | |
| 9,454,113 | | |
| - | | |
| 9,454,113 | |
| | |
Nine Months Ended March 31, | |
| | |
2022 | | |
2021 | |
| | |
InMed | | |
BayMedica | | |
Total | | |
InMed | | |
BayMedica | | |
Total | |
| | |
| | |
$ | | |
$ | | |
$ | | |
$ | | |
$ | |
| Sales | |
| - | | |
| 574,677 | | |
| 574,677 | | |
| - | | |
| - | | |
| - | |
| Operating expenses | |
| 9,477,441 | | |
| 1,827,330 | | |
| 11,304,771 | | |
| 6,944,336 | | |
| - | | |
| 6,944,336 | |
| Net loss | |
| (9,477,441 | ) | |
| (1,252,653 | ) | |
| (10,730,094 | ) | |
| (6,944,336 | ) | |
| - | | |
| (6,944,336 | ) |
| Unrestricted cash | |
| 5,386,206 | | |
| 512,107 | | |
| 5,898,313 | | |
| 9,454,113 | | |
| - | | |
| 9,454,113 | |
Investing
and financing activities that do not have a direct impact on cash flows are excluded from the statements of cash flows. During the nine
months ended March 31, 2022, the following transactions were excluded from the statement of cash flows:
| i) | On
July 2, 2021, the Company issued warrants to its placement agent. The fair value of these warrants was $739,920 and was included in share
issuance costs related to the July 2021 private placement. |
| ii) | On October 13, 2021, the Company issued 2,050,000 common shares to BayMedica’s equity and convertible debt holders, pursuant to the BayMedica Agreement. The estimated fair value of these common shares was $3,013,500 and was included in the total consideration for the acquisition of BayMedica (see Note 7). |
| iii) | 369,600 warrants were exercised on a cashless basis resulting in the issuance of 146,814 common shares. |
During
the nine months ended March 31, 2021, the following transaction was excluded from the statement of cash flows:
| i) | As
at March 31, 2021, the Company has unpaid financing costs of $138,927. |
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 15. | COMMITMENTS
AND CONTINGENCIES |
Pursuant
to the terms of agreements with various contract research organizations, as at March 31, 2022, the Company is committed for contract
research services and materials at a cost of approximately $3,319,699. A total of $3,209,699 of these expenditures are expected to occur
in the twelve months following March 31, 2022 and the balance of $110,000 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 rights, title and interests
in and to any intellectual property, in addition to funding research at UBC, the Company is committed to make a one-time payment upon
filing of any PCT patent application arising from the research. To date, one such payment has been made to UBC.
Pursuant
to the terms of a November 1, 2018 Contribution Agreement with National Research 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 $46,017 (June 30, 2021 - $46,391) that are pledged as security
for a corporate credit card.
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.
Pursuant
to a technology licensing agreement, the Company is committed to issue, subject to regulatory approval, up to 17,500 warrants to purchase
17,500 common shares upon the achievement of certain milestones. The exercise price of the warrants will be equal to the five-day VWAP
of the common shares prior to each milestone achievement and the warrants will be exercisable for a period of three years for issuance
date.
The
Company entered into a patent license agreement with a third party (the “Licensor”) in an agreement dated February 15, 2021.
The Company is required to make future royalty payments to Licensor based on net sales of licensed products, with minimum payments required
starting in 2021. In December 2021, the Company amended the License Agreement including the deferral of the 2021 minimum payments to
2022. As at March 31, 2022, the Company has accrued $300,000 for the minimum payments under the agreement.
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.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 16. | FINANCIAL
RISK MANAGEMENT |
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.
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 (U.S. dollar) 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 Canadian dollars.
Accordingly,
the Company is exposed to fluctuations in exchange rates, primarily against the Canadian dollar.
As
at March 31, 2022, the Company has a net excess of Canadian dollar denominated cash and cash equivalents in excess of Canadian dollar
denominated accounts payable and accrued liabilities of C$1,572,337 which is equivalent to US$1,258,342 at the March 31, 2022 exchange
rate. The Canadian dollar financial assets generally result from holding Canadian dollar cash to settle anticipated near-term accounts
payable and accrued liabilities denominated in Canadian dollars. The Canadian dollar financial liabilities generally result from purchases
of supplies and services from suppliers in Canada.
Each
change of 1% in the Canadian dollar in relation to the U.S. dollar results in a gain or loss, with a corresponding effect on cash flows,
of $12,583 based on the March 31, 2022 net Canadian dollar assets (liabilities) position. During the nine months ended March 31, 2022,
the Company recorded foreign exchange loss of $35,228 (2021 – $30,385) related to Canadian dollars.
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 March 31, 2022, holdings
of cash and cash equivalents of $4,483,590 (June 30, 2021 - $7,053,329) are subject to floating interest rates. The balance of the Company’s
cash holdings of $1,414,723 (June 30, 2021 - $309,796) are non-interest bearing.
As
at March 31, 2022, the Company held variable rate guaranteed investment certificates, with one-year terms, of $46,098 (June 30, 2021
- $46,462).
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.
INMED PHARMACEUTICALS INC.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MARCH, 2022 AND 2021
(Expressed in U.S. Dollars)
| 16. | FINANCIAL
RISK MANAGEMENT (cont’d) |
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,
short-term investments and loan receivable. Cash and cash equivalents and short-term investments are maintained with financial institutions
of reputable credit and may be redeemed upon demand. In the normal course of business, the Company does not provide third party loans.
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.
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 March 31, 2022,
the Company has cash and cash equivalents and short-term investments of $5,944,411 (June 30, 2021 - $7,409,588), current liabilities
of $4,105,502 (June 30, 2021 - $2,215,361) and a working capital surplus of $4,641,384 (June 30, 2021 - $6,162,908).
| 17. | RELATED
PARTY TRANSACTIONS |
On
February 11, 2022, the Board of Directors appointed Janet Grove as a director of the Company. There were no arrangements nor understandings
with Ms. Grove pursuant to which she was selected as a director of the Company, and there were no family relationship between Ms. Grove
and any of the Company’s other directors or executive officers. Ms. Grove is a Partner of Norton Rose Fulbright Canada LLP
(“NRF”). From February 11, 2022 to March 31, 2022, NRF rendered legal services in the amount of $27,770 (2021 - $Nil) to
the Company. These transactions were in the normal course of operations and were measured at the exchange amount which represented the
amount of consideration established and agreed to by NRF.
On
April 21, 2022, 20,556 of the February 2021 warrants were exercised on a cashless basis resulting in the issuance of 10,556 common shares.
On
April 13, 2022, in accordance with the BayMedica Agreement, $300,457 of escrow payments were made to BayMedica’s historical equity
and convertible debt holders reflecting $199,543 of post-closing reductions from the escrow. The remaining $500,000 escrow payment, subject
to any additional post-closing adjustments, is payable on the twelve-month anniversary following the closing.
On
April 7, 2022, the Company filed a prospectus supplement to its S-3 universal shelf filing to incorporate an At The Market Offering Agreement
following which the Company sold 268,985 common shares under the agreement with net proceeds of $0.3 million.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking
statements” within the meaning of United States Private Securities Litigation Reform Act of 1995 and “forward-looking information”
within the meaning of applicable Canadian securities law, which are included but are not limited to statements with respect to InMed Pharmaceuticals
Inc.’s (the “Company” or “InMed”) anticipated results and progress of the Company’s operations, research
and development in future periods, plans related to its business strategy, and other matters that may occur in the future. These statements
relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and
assumptions of management. We may, in some cases, use words such as “anticipate”, “believe”, “could”,
“estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”,
“will”, “would”, and similar expressions that convey uncertainty of future events or outcomes to identify these
forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking
statements. Forward-looking statements in this Form 10-Q include, but are not limited to, statements about:
| |
● |
Our researching, developing, manufacturing and commercializing cannabinoid-based biopharmaceutical products will treat diseases with high unmet medical needs; |
| |
● |
Bringing strict scientific discipline to the field of cannabinoid medicine; |
| |
|
|
| |
● |
Serving as a business-to-business (B2B) supplier to wholesalers and end-product manufacturers / marketers in the health and wellness sector; |
| |
● |
Our ability to register and commercialize Product Candidates in the United States and other jurisdictions; |
| |
● |
The future timing of INM-755 and INM-088 studies and research into potential new uses; |
| |
● |
Our ability to source required materials from third-party manufacturers; |
| |
● |
Our ability to successfully integrate and develop
BayMedica’s operations and expand the BayMedica Product portfolio;
|
| |
● |
Our ability to successfully develop and scale-up our manufacturing approaches including our ability transfer to a contract development and manufacturing organization, or “CDMO; |
| |
● |
Our ability to transfer our integrative biosynthesis-based manufacturing approach”; |
| |
● |
Our ability to deliver our rare cannabinoid pharmaceuticals through various topical formulations (cream for dermatology, eye drops for ocular diseases); |
| |
● |
Our ability to minimize systemic exposure and any related unwanted systemic side effects, including any drug-drug interactions and any metabolism of the active pharmaceutical ingredient by the liver; |
| |
● |
Our ability to continue development of INM-755, our lead drug candidate for the treatment of EB, and the development of INM-088, our drug candidate for the treatment of glaucoma; |
| |
● |
Our ability to pursue the discovery of drug targets for other diseases with high unmet medical needs and the subsequent development of any resulting Product Candidates; |
| |
● |
Our ability to seek regulatory approvals for any Product Candidates that successfully complete clinical trials; |
| |
● |
Our ability to scale-up our manufacturing processes and capabilities, or arrange for a third party to do so on our behalf; |
| |
● |
Acquiring or in-licensing externally developed products and/or technologies; |
| |
● |
Maintaining, expanding, enforcing, defending and protecting our intellectual property; |
| |
● |
Our ability to hire additional clinical, quality control, sales and scientific personnel; |
| |
● |
Our ability to add operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts and our operations as a public company; and |
| |
● |
Our ability to finance our operations through product sales, the sale of equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. |
This list is not exhaustive of the factors that
may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements
are described further under the section heading: Item 2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations of this report. Although we have attempted to identify important factors that could cause actual results to differ materially
from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated
or intended. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those anticipated, believed, estimated, or expected. We caution readers not to place undue reliance
on any such forward-looking statements, which speak only as of the date made and are based only on the information available to us at
that time. Except as required by law, we disclaim any obligation to subsequently revise any forward-looking statements to reflect events
or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.