InMed Pharmaceuticals Inc 10-Q for FY2024 Q3
InMed Pharmaceuticals Inc. (MTRI)
About this 10-Q
InMed Pharmaceuticals Inc filed this 10-Q on May 14, 2024, covering the quarter ended March 31, 2024 (FY2024 Q3).
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period
ended
or
For the transition period from __________ to __________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act): Yes ☐ No
As of May 9, 2024, the registrant had
INDEX
i
PART I
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
Unaudited Condensed Consolidated Financial Statements of
InMed Pharmaceuticals Inc.
For the Three and Nine Months Ended March 31, 2024 and 2023
1
InMed Pharmaceuticals Inc.
(Expressed in U.S. Dollars)
March 31, 2024
| INDEX | Page | ||
| Financial Statements (Unaudited) | |||
| ● | Condensed Consolidated Balance Sheets | 3 | |
| ● | Condensed Consolidated Statements of Operations | 4 | |
| ● | Condensed Consolidated Statements of Shareholders’ Equity | 5 | |
| ● | Condensed Consolidated Statements of Cash Flows | 6 | |
| ● | Notes to the Condensed Consolidated Financial Statements | 7-19 | |
2
InMed Pharmaceuticals Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
Expressed in U.S. Dollars
| March 31, | ||||||||
| 2024 | June 30, | |||||||
| (unaudited) | 2023 | |||||||
| $ | $ | |||||||
| ASSETS | ||||||||
| Current | ||||||||
| Cash and cash equivalents | ||||||||
| Short-term investments | ||||||||
| Accounts receivable, net of allowance for credit losses of $ | ||||||||
| Inventories | ||||||||
| Prepaids and other current assets | ||||||||
| Total current assets | ||||||||
| Non-Current | ||||||||
| Property, equipment and ROU assets, net | ||||||||
| Intangible assets, net | ||||||||
| Other assets | ||||||||
| Total Assets | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Current portion of lease obligations | ||||||||
| Deferred rent | ||||||||
| Total current liabilities | ||||||||
| Non-current | ||||||||
| Lease obligations, net of current portion | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 11) | ||||||||
| Shareholders’ Equity | ||||||||
| Common shares, par value, unlimited authorized shares: | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Total Shareholders’ Equity | ||||||||
| Total Liabilities and Shareholders’ Equity | ||||||||
| Related Party Transactions (Note 12) | ||||||||
| Subsequent Events (Note 13) | ||||||||
The accompanying notes form an integral part of these condensed consolidated financial statements.
3
InMed Pharmaceuticals Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Expressed in U.S. Dollars
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| March 31 | March 31 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Sales | ||||||||||||||||
| Cost of sales | ||||||||||||||||
| Inventory write-down | ||||||||||||||||
| Gross profit | ( | ) | ||||||||||||||
| Operating Expenses | ||||||||||||||||
| Research and development and patents | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Amortization and depreciation | ||||||||||||||||
| Foreign exchange loss | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest and other income | ||||||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Tax expense | ( | ) | ( | ) | ||||||||||||
| Net loss for the period | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss per share for the period | ||||||||||||||||
| ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| Weighted average outstanding common shares | ||||||||||||||||
The accompanying notes form an integral part of these condensed consolidated financial statements.
4
InMed Pharmaceuticals Inc.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2024 AND 2023 (unaudited)
Expressed in U.S. Dollars
| Additional | Accumulated Other | |||||||||||||||||||||||
| Common Shares | Paid-in Capital | Accumulated Deficit | Comprehensive Income | Total | ||||||||||||||||||||
| # | $ | $ | $ | $ | $ | |||||||||||||||||||
| Balance June 30, 2023 | ( | ) | ||||||||||||||||||||||
| Loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||
| Balance September 30, 2023 | ( | ) | ||||||||||||||||||||||
| Proceeds from private placement net of issuance costs | ||||||||||||||||||||||||
| Loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||
| Balance December 31, 2023 | ( | ) | ||||||||||||||||||||||
| Proceeds from private placement net insurance costs | ( | ) | ||||||||||||||||||||||
| Loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||
| Balance March 31, 2024 | ( | ) | ||||||||||||||||||||||
| Additional | Accumulated Other | |||||||||||||||||||||||
| Common Shares | Paid-in Capital | Accumulated Deficit | Comprehensive Income | Total | ||||||||||||||||||||
| # | $ | $ | $ | $ | $ | |||||||||||||||||||
| Balance June 30, 2022 | ( | ) | ||||||||||||||||||||||
| Proceeds from private placement net of issuance costs | ||||||||||||||||||||||||
| Exercise of pre-funded warrants | ( | ) | ||||||||||||||||||||||
| Loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||
| Balance September 30, 2022 | ( | ) | ||||||||||||||||||||||
| Proceeds from private placement net of issuance costs | ||||||||||||||||||||||||
| Exercise of pre-funded warrants | ( | ) | ||||||||||||||||||||||
| Loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||
| Balance December 31, 2022 | ( | ) | ||||||||||||||||||||||
| Exercise of pre-funded warrants | ( | ) | - | - | ||||||||||||||||||||
| Loss for the period | - | ( | ) | - | ( | ) | ||||||||||||||||||
| Share-based compensation | - | - | - | |||||||||||||||||||||
| Balance March 31, 2023 | ( | ) | ||||||||||||||||||||||
The accompanying notes form an integral part of these condensed consolidated financial statements.
5
InMed Pharmaceuticals Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Expressed in U.S. Dollars
| March
31, 2024 | March
31, 2023 | |||||||
| $ | $ | |||||||
| Cash provided by (used in): | ||||||||
| Operating Activities | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Items not requiring cash: | ||||||||
| Amortization and depreciation | ||||||||
| Share-based compensation | ||||||||
| Amortization of right-of-use assets | ||||||||
| Interest income on short-term investments | ( | ) | ( | ) | ||||
| Unrealized foreign exchange loss | ||||||||
| Inventory write-down | ||||||||
| Bad debts | - | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Inventories | ||||||||
| Prepaids and other current assets | ( | ) | ||||||
| Other non-current assets | ||||||||
| Accounts receivable | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ( | ) | ||||
| Deferred rent | ( | ) | ||||||
| Lease obligations | ( | ) | ( | ) | ||||
| Total cash used in operating activities | ( | ) | ( | ) | ||||
| Investing Activities | ||||||||
| Payment of acquisition consideration | - | ( | ) | |||||
| Sale of short-term investments | - | |||||||
| Purchase of short-term investments | ( | ) | - | |||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Total cash used in investing activities | ( | ) | ( | ) | ||||
| Financing Activities | ||||||||
| Proceeds from private placement | ||||||||
| Total cash provided by financing activities | ||||||||
| (Decrease) increase in cash and cash equivalents during the period | ( | ) | ||||||
| Cash and cash equivalents beginning of the period | ||||||||
| Cash and cash equivalents end of the period | ||||||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||
| Cash Paid During the Year for: | ||||||||
| Income taxes | $ | - | $ | |||||
| Interest | $ | - | $ | |||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Fair value of warrant modification recorded as equity issuance costs | $ | $ | - | |||||
| Preferred investment options to its placement agent | $ | $ | ||||||
| Recognition of Right-of-use asset and corresponding operating lease liability | $ | $ | - | |||||
The accompanying notes form an integral part of these condensed consolidated financial statements.
6
InMed Pharmaceuticals Inc.
Notes to the Condensed Consolidated Financial Statements
| 1. | CORPORATE INFORMATION AND CONTINUING OPERATIONS |
Business
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 proprietary small molecule drug candidates, targeting the treatment of diseases with high unmet medical needs as well as developing proprietary manufacturing technologies to produce bulk rare cannabinoids for sale as ingredients 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 office and principal place of business is located at #310 – 815 West Hastings Street, Vancouver, B.C., Canada, V6C 1B4.
Going Concern
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 consolidated financial statements are issued.
Through March
31, 2024, 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 approximately $
As of the issuance
date of these condensed consolidated financial statements, the Company expects its cash, cash equivalents and short-term investments of
$
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 shareholders.
In connection with the Company’s assessment of going concern considerations in accordance with Subtopic 205-40, management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern, which is considered to be for a period of one year from the issuance of these financial statements. These condensed consolidated financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts of classification of liabilities that might result from the outcome of this uncertainty. Such adjustments could be material.
7
| 2. | SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
These unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles as applied in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for 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 fiscal year ended June 30, 2023.
These condensed consolidated 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 months and nine months ended March 31, 2024 and 2023 are not necessarily indicative of results that can be expected for a full year. These condensed consolidated 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 fiscal year ended June 30, 2023.
Reclassifications
Certain prior year amounts in the condensed consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. During the three months and nine months ended March 31, 2024, we adopted a change in presentation on our condensed consolidated statements of operations in order to include foreign exchange loss in operating expenses. The Company has adopted ASU 2023-07 - Improvements to Reportable Segment Disclosures which has required prior period to reflect the change in presentation. Refer to discussion on Recent Accounting Pronouncements below.
Use of Estimates
The preparation of financial statements in compliance with U.S. 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 financial statements are the application of the going concern assumption, and determining the fair value of share-based payments, income tax provisions, write-down of inventories to net realizable value, and warrant valuations.
Actual results could differ from those estimates.
8
Basis of Consolidation
These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, including subsidiaries: InMed Pharmaceutical Ltd., BayMedica, LLC, Biogen Sciences Inc., and Sweetnam Consulting Inc. 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 financial statements.
Foreign Currency
The functional currency of the Company and its subsidiaries is the U.S. Dollar. These consolidated 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.
Accounts Receivable
Accounts receivable are recorded at invoiced amounts, net of any allowance for credit losses. The allowance for credit losses 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.
Inventories
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 the purchase price of goods and cost of services rendered, freight costs, warehousing costs, purchasing costs and production and labor costs related to manufacturing.
Cost of Sales
Cost of sales consists 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.
Concentration of Credit Risk and Other Risks and Uncertainties
At times, the Company’s
cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) or Canadian Deposit Insurance Corporation (“CDIC”)
insurable limits. To date, the Company has not experienced any losses related to these balances. The uninsured cash balance as of March
31, 2024 and June 30, 2023, was $
9
The Company’s customers are primarily concentrated in the U.S.
As of March 31, 2024, the Company had four customers with an accounts
receivable balance representing
For the three months ended March 31, 2024, the Company had four customers
that accounted for
For the nine
months ended March 31, 2024, the Company had four customers that accounted for
Financial Assets and Liabilities
Financial Assets
Financial assets are initially recognized at fair value, plus transaction costs that are directly attributable to their acquisition or issue and subsequently carried at amortized cost, using the effective interest rate method, less any impairment losses. No financial assets are or elected to be carried at fair value through profit or loss or where changes in fair value are recognized in the consolidated statements of operations and comprehensive loss in other comprehensive loss.
Short-term investments are subsequently recorded at cost plus accrued interest, which approximates fair value due to short term nature. Accounts receivable are reported at outstanding amounts, net of provisions for uncollectable amounts.
Financial Liabilities
To determine the fair value of financial instruments, the Company uses the fair value hierarchy for inputs used to measure the fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority).
| Level 1 – | Unadjusted quoted prices in active markets for identical instruments. |
| Level 2 – | Inputs other than quoted prices included within Level 1 are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). |
| Level 3 – | Inputs are unobservable and reflect the Company’s assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. |
The carrying value of cash and cash equivalents, short-term investments, accounts receivable, and accounts payable and accrued liabilities, approximate their carrying values as of March 31, 2024 and June 30, 2023 due to their immediate or short-term maturities.
10
Earnings (Loss) Per Share
Basic earnings
(loss) per common share (“EPS”) is computed by dividing the net income or loss applicable to common shares of the Company
by the weighted average number of common shares outstanding for the relevant period. The Company has
| As of March 31, | ||||||||
| 2024 | 2023 | |||||||
| Options | ||||||||
| Warrants | ||||||||
Recent Accounting Pronouncements
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.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances reportable segment disclosure requirements primarily through expanded disclosures around significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company has early adopted this accounting pronouncement.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of specific categories meeting a quantitative threshold within the income tax rate reconciliation, as well as disaggregation of income taxes paid by jurisdiction. This ASU, which can be applied either prospectively or retrospectively, is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the ASU and expects to include updated income tax disclosures.
| 3. | INVENTORIES |
| March 31, 2024 | June 30, 2023 | |||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Inventories | $ | $ | ||||||
In determining any valuation allowances, the Company reviews inventory
for obsolete, redundant, and slow-moving goods. As of March 31, 2024 and June 30, 2023, the Company has $
11
| 4. | PROPERTY, EQUIPMENT AND RIGHT OF USE (‘ROU’) ASSETS, NET |
| March 31, 2024 | June 30, 2023 | |||||||
| Right-of-use assets (leases) | $ | $ | ||||||
| Equipment | ||||||||
| Furnishing | ||||||||
| Property and equipment | $ | $ | ||||||
| Less: accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Property, equipment and ROU assets, net | $ | $ | ||||||
Depreciation
expense on computer equipment, lab equipment and furnishing for the three months ended March 31, 2024 and 2023, was $
Depreciation expense on computer equipment, lab equipment and furnishing
for the nine months ended March 31, 2024 and 2023, was $
| 5. | INTANGIBLE ASSETS |
| March 31, 2024 | June 30, 2023 | |||||||
| Intellectual property | $ | $ | ||||||
| Patents | ||||||||
| Intangible assets | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
Acquired intellectual
property is recorded at cost and is amortized on a straight-line basis over
Amortization
expense on intangible assets for the three months ended March 31, 2024 and 2023 was $
| Twelve months ending March 31, | ||||
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Thereafter | ||||
| Total | $ | |||
12
| 6. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
| March 31, 2024 | June 30, 2023 | |||||||
| Trade payables | $ | $ | ||||||
| Accrued research and development expenses | ||||||||
| Inventory purchase accruals | ||||||||
| Employee compensation, benefits and related accruals | ||||||||
| Accrued general and administrative expenses | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| 7. | SHARE CAPITAL AND RESERVES |
| Authorized |
As of March 31, 2024, 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 of March 31, 2024 and June 30, 2023.
The Company may, from time to time, issue preferred shares and may, at the time of issuance, determine the rights, preferences 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.
On October 24, 2023, the Company entered into a securities purchase
agreement (the “2023 Securities Purchase Agreement”) with two accredited institutional investors (the “Accredited Institutional
Investors”) for the sale (the “2023 Private Placement”) of
Concurrently
with the Company’s entry into the 2023 Securities Purchase Agreement, the Company also entered into an inducement offer letter
agreement (the “Inducement Offer Letter”) with the holders of existing preferred investment options (the “Existing
Holders”) to purchase up to an aggregate of
The inducement
contemplated by the Inducement Offer Letter (the “Inducement”) is considered a warrant modification due to the changing of
the terms of the warrants. The modification had a fair value of $
On October 26,
2023, the parties consummated the 2023 Private Placement and the other transactions contemplated by the 2023 Securities Purchase Agreement.
In connection with such transactions, the Company (i) received gross proceeds of approximately $
13
Common Share Warrants
| 2024 | ||||
| Exercise price | $ | |||
| Risk-free interest rate | % | |||
| Volatility | % | |||
| Expected life (years) | ||||
| Dividend yield | $ | % | ||
| 2024 | ||||
| Exercise price | $ | |||
| Risk-free interest rate | % | |||
| Volatility | % | |||
| Expected life (years) | ||||
| Dividend yield | $ | % | ||
| Number of Shares Under Warrants | Weighted Average Exercise Price | |||||||
| Warrants Outstanding at July 1, 2023 | $ | |||||||
| Warrants Granted | ||||||||
| Exercised | ( | ) | ||||||
| Expire/Cancelled | ( | ) | ||||||
| Warrants Outstanding at March 31, 2024 | $ | |||||||
| Warrants Exercisable at March 31, 2024 | $ | |||||||
As of March 31,
2024, the warrants exercisable and outstanding have an intrinsic value of $
14
| 8. | SHARE-BASED PAYMENTS |
| a) | Option Plan Details |
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 Company’s Board
of Directors may, from time to time, in its discretion and in accordance with applicable 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 (
As of March 31,
2024 and June 30, 2023, there were
Stock options granted prior to May 2021 were granted with Canadian dollar exercise prices (U.S. dollar amounts for weighted average exercise prices and aggregate intrinsic value are calculated using prevailing rates as at June 30, 2022). Commencing in May 2021, stock options are granted with U.S. dollar exercise prices.
On December 23,
2023, the Company issued
On December 23,
2023, the Company additionally issued
On February
20, 2024, the Company issued
| 2024 | ||||
| Exercise price | $ | |||
| Risk-free interest rate | % | |||
| Volatility | % | |||
| Expected life (years) | ||||
| Dividend yield | $ | % | ||
15
| Number | Weighted Average Exercise Price | |||||||
| Balance at July 1, 2023 | $ | |||||||
| Granted | ||||||||
| Expired/Forfeited | ( | ) | ||||||
| Balance at March 31, 2024 | $ | |||||||
| March 31, 2024: | ||||||||
| Vested and exercisable | $ | |||||||
| Unvested | $ | |||||||
| ii) | Expenses Arising from Share-based Payment Transactions: |
Total expenses arising
from share-based payment transactions recognized during the three months ended March 31, 2024 and 2023 were $
Total expenses arising from share-based payment transactions recognized
during the nine months ended March 31, 2024 and 2023 were $
Unrecognized
compensation cost at March 31, 2024 related to unvested options was $
| 9. | LEASE OBLIGATIONS |
| Maturity Analysis | March 31, 2024 | |||
| Year 1 | $ | |||
| Year 2 | ||||
| Year 3 | ||||
| Year 4 | ||||
| Year 5 | ||||
| More than five years | ||||
| Total undiscounted lease liabilities(1) | ||||
| Less: imputed interest | ( | ) | ||
| Present value of lease liabilities | ||||
| Less: Current portion of lease liabilities | ( | ) | ||
| Non-current portion of lease liabilities | ||||
| (1) |
On October 5,
2023, BayMedica amended its lease located at 458 Carlton Court, Suite C, South San Francisco, California, in order to extend its lease
to May 14, 2027. The Company is obligated to pay $
16
| 10. | SEGMENT INFORMATION |
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 and the senior management team, 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 Pharmaceuticals (‘InMed Pharma’) and BayMedica Commercial 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 Pharma segment is largely organized around the research and development
of small molecule pharmaceuticals drug candidates and the BayMedica Commercial segment is largely organized around manufacturing
technologies to produce and commercialize bulk rare cannabinoids for sale as ingredients in the health and wellness industry. Total assets
held in the InMed Pharma segment as of March 31, 2024 and June 30, 2023 are $
| For the three months ended | ||||||||||||||||||||||||
| March 31, 2024 | March 31, 2023 | |||||||||||||||||||||||
| InMed Pharma | BayMedica Commercial | Total | InMed Pharma | BayMedica Commercial | Total | |||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Sales | ||||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||
| Research and development and patents | ||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||
| Amortization and depreciation | ||||||||||||||||||||||||
| Other expense | ||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||
| Other income (expense) | ( | ) | ||||||||||||||||||||||
| Tax expense | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Net Income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Unrestricted cash | ||||||||||||||||||||||||
| For the nine months ended | ||||||||||||||||||||||||
| March 31, 2024 | March 31, 2023 | |||||||||||||||||||||||
| InMed Pharma | BayMedica Commercial | Total | InMed Pharma | BayMedica Commercial | Total | |||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Sales | ||||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||
| Inventory write-down | ||||||||||||||||||||||||
| Gross profit | ( | ) | ( | ) | ||||||||||||||||||||
| Research and development and patents | ||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||
| Amortization and depreciation | ||||||||||||||||||||||||
| Other expense | ||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||
| Other income (expense) | ( | ) | ( | ) | ||||||||||||||||||||
| Tax expense | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Net Income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Unrestricted cash | ||||||||||||||||||||||||
Other Income (expense) includes interest income earned on cash and short-term investments, interest expense, and sublease income.
17
| 11. | COMMITMENTS AND CONTINGENCIES |
Pursuant to the
terms of agreements with various contract research organizations, as of March 31, 2024, the Company is committed for contract research
services and materials at a cost of approximately $
Pursuant to the
terms of agreements with various vendors, as of March 31, 2024, the Company is committed for contract materials and equipment at a cost
of approximately $
Pursuant to the terms of a certain Technology Assignment Agreement, dated as of May 31, 2017 (the “Technology 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 Technology Agreement. To date, no payments have been required to be made.
Pursuant to the terms of a certain Collaborative Research Agreement, dated as of December 13, 2018, between the Company and UBC, pursuant to 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 certain Contribution Agreement, dated as of November 1, 2018, between the Company and 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 one-year terms of $
In addition to the foregoing, 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 may limit the Company’s overall 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 certain Technology Licensing Agreement, dated as of March
11, 2021, the Company is committed to issue, subject to regulatory approval, up to
18
BayMedica entered
into a patent license agreement (“Patent License Agreement”) with a third party (the “Licensor”) on February
15, 2021. The Company was required to begin making royalty payments to the Licensor based on net sales of licensed products in 2021 in
order to maintain an exclusive license. In December 2021, the Company amended the Patent License Agreement, which amendment included
the deferral of the 2021 minimum payments to 2022. As of June 30, 2023, the Company has paid $
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.
| 12. | RELATED PARTY TRANSACTIONS |
On February
11, 2022, the Board of Directors appointed Janet Grove as a director of the Company. Ms. Grove is a Partner of Norton Rose Fulbright
Canada LLP (“NRF”). During the three months ended March 31, 2024 and 2023, NRF rendered legal services in the amount of
$
| 13. | SUBSEQUENT EVENTS |
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than as disclosed in Note 7, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements.
On May 10, 2024, the Company delivered a 90-day notice of termination to EyeCRO LLC with respect to the Technology Licensing Agreement, specifying an effective date of termination of August 8, 2024, 2024 (see Note 11 – Commitments and Contingencies).
19
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) 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” “InMed”, “we”, “our”, or “us”) 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”, “budget”, “possible”, “should”, “future”, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. These forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. You should not place undue reliance on these forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements. Among the factors that could cause actual results to differ materially are the risks and uncertainties described under “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended June 30, 2023, which was filed with the Securities and Exchange Commission (the “SEC”) on September 29, 2023 (the “2023 Annual Report”), “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report, and the following:
| ● | The Company’s ability to stem operating losses and the Company’s ability to obtain additional financing to fund its operations; |
| ● | The revenues of BayMedica, LLC (“BayMedica”) and the commercial viability of the products in its portfolio; |
| ● | The Company’s ability to effectively research, develop, manufacture and commercialize pharmaceutical drug candidates that will treat diseases with high unmet medical needs; |
| ● | The continued optimization of key, proprietary manufacturing approaches and technologies; |
| ● | Our ability to commercialize and, where required, register products in the pharmaceutical R&D programs (“Product Candidates”) and those targeted to the health and wellness sector (“Products”) in the United States and other jurisdictions; |
| ● | Our success in initiating discussions with potential partners for licensing various aspects of our Product Candidates; |
| ● | Our ability to successfully access existing manufacturing capacity via leases with third-parties or to transfer our manufacturing processes to contract manufacturing organizations; |
| ● | Our belief that our manufacturing approaches that we are developing are robust and effective and will result in commercially viable yields of cannabinoids and will be a significant improvement upon existing manufacturing platforms; |
| ● | The ability of the IntegraSyn approach to introduce a revenue stream to us before the expected commercial approval of our therapeutic programs; |
| ● | Our ability to successfully scale up our IntegraSyn or other cost-effective approaches so that it will be commercial-scale ready after Phase 2 clinical trials are completed, after which time we may no longer need to source active pharmaceutical ingredients (“APIs”) from API manufacturers; |
| ● | The success of the key next steps in our manufacturing approaches, including continuing efforts to diversify the number of cannabinoids produced, scaling-up the processes to larger vessels and identifying external vendors to assist in the commercial scale-up of the process; |
| ● | Our ability to successfully make determinations as to which research and development programs to continue and pursue, including the ability to adequately assess the underlying strategic factors; |
| ● | Our ability to monetize our IntegraSyn manufacturing approach to the broader pharmaceutical industry; |
| ● | Our ability to outsource the majority of our research and development activities through scientific collaboration agreements and arrangements with various scientific collaborators, academic institutions and their personnel; |
| ● | The success of work to be conducted under the research and development collaboration between us and various contract development and manufacturing organizations (“CDMOs”); |
| ● | Our ability to develop our therapies through early human testing; |
20
| ● | Our ability to evaluate the financial returns on various commercialization approaches for our Product Candidates, such as a ‘go-it-alone’ commercialization effort, out-licensing to third parties, or co-promotion agreements with strategic collaborators; |
| ● | Our ability to find a partnership early in the development process for our various programs; |
| ● | Our ability to explore our manufacturing technologies as processes which may confer certain benefits, either cost, yield, speed, or all of the above, when pursuing specific types of cannabinoids, and filing a provisional patent application for same; |
| ● | Plans regarding our next steps, options, and targeted benefits of our manufacturing technologies; |
| ● | Our IntegraSyn- or BayMedica-derived products being bio-identical to the naturally occurring cannabinoids, and offering superior ease, control and quality of manufacturing when compared to alternative methods; |
| ● | Our ability to potentially earn revenue from our IntegraSyn approach by (i) becoming a supplier of APIs to the pharmaceutical industry and/or (ii) providing pharmaceutical-grade ingredients to the non-pharmaceutical market; |
| ● | U.S. Food and Drug Administration (“FDA”) regulatory acceptance of synthesizing Product Candidates for potential use in the pharmaceutical industry; |
| ● | Our ability to successfully file, prosecute and defend patent applications; |
| ● | The potential for any of our patent applications to provide intellectual property protection for us; |
| ● | The termination or renegotiation of our supplier, technology and other material contracts, including the invoking of force majeure or termination clauses, and actual or threatened claims of our failure to comply with any obligations set forth under such contracts; |
| ● | The adequacy of, or gaps in, insurance coverage upon the occurrence of a catastrophic or other material adverse event, as well as our ability to (i) expand our insurance coverage to include the commercial sale of Products and Product Candidates and (ii) secure insurance coverage for shipping and storage of Product Candidates, and clinical trial insurance; |
| ● | Developing patentable New Chemical Entities (“NCE”) which, if issued, will confer market exclusivity to us for the potential development into pharmaceutical Product Candidates, license, partner or sell to interested external parties; |
| ● | Our ability to initiate discussions and conclude strategic partnerships to assist with development of certain programs; |
| ● | Our ability to position ourselves to achieve value-driving, near term milestones for our Product Candidates with limited investment; |
| ● | Our ability to effectively execute our business strategy; |
| ● | The sufficiency of our internal controls, including any exposure arising from the failure to (i) establish and maintain effective internal control over financial reporting in accordance with applicable regulatory requirements, and (ii) fully remediate any material weaknesses identified with respect to such internal controls; |
| ● | Epidemics, pandemics, global health crises, or other public health events and concerns, including any future resurgence of COVID-19, and the effectiveness of associated vaccinations and treatments; |
| ● | Consolidation of our competitors and suppliers; |
| ● | Effects of new products and new technology on the market, including through the use of artificial intelligence; |
| ● | The impact of geopolitical, global, regional or local economic and financial market risks and challenges, applicability of foreign laws, including foreign labor and employment laws, foreign tax and customs regimes, and foreign currency exchange rate risk; |
| ● | Political disturbances, geopolitical instability and tensions, or terrorist attacks, and associated changes in global trade policies and economic sanctions, including, but not limited to, in connection with (i) the Russo-Ukrainian war and (ii) any impact, effect, damage, destruction and/or bodily harm directly or indirectly relating to the ongoing hostilities in the Middle East; |
21
| ● | Changes in the status of pending, or the initiation of new litigation, claims, disputes or proceedings, including those involving our contractual counterparties, as well as our ability to prevail in the defense of any claim, dispute, proceedings, appeal or counterclaim; |
| ● | Changes in legislation removing or increasing current applicable limitations of liability; |
| ● | Governmental, tax and environmental regulations and related actions and legal matters, including the actions taken by governments in response to any global health events and crises, as well as the results and effects of legal proceedings and governmental audits, assessments, orders and investigations; |
| ● | Our ability to incur indebtedness in the near- and long-term; |
| ● | Our dependence on key personnel, the availability of such personnel and the related labor costs; · |
| ● | Our ability to identify and complete strategic and/or transformational transactions, including acquisitions, dispositions, joint ventures and mergers, as well as the impact that such transactions may have on our operations and financial condition; |
| ● | Adverse macroeconomic conditions, including (i) inflationary pressures and potential recessionary conditions, as well as actions taken by central banks and regulators across the world in an attempt to reduce, curtail and address such pressures and conditions, and (ii) developments at financial institutions, including bank failures, that impact general sentiment regarding the stability and liquidity of banks and the global economy, and the resulting impact on the stability of the global financial markets at large; |
| ● | The fact that (i) the Company may not be able to meet the requirements for continued listing under the Nasdaq Listing Rules, (ii) the Company may not meet the Minimum Bid Price Rule (as defined below) during the Extended Compliance Period (as defined below) or any other compliance period in the future, (iii) Nasdaq Capital Market (“Nasdaq”) may not grant the Company relief from delisting, if necessary, and (iv) the Company may not ultimately meet applicable Nasdaq requirements if any such relief is necessary, among other risks and uncertainties; |
| ● | The occurrence of cybersecurity incidents, attacks, intrusions or other breaches to our information technology systems, and our ability to effectively and expeditiously remediate any such matters; |
| ● | Increased costs resulting from supply chain constraints, delays and impediments, including, but not limited to, increases in the costs of obtaining supplies; |
| ● | The Company’s incurrence of significant operating losses, both in the near- and long-term; |
| ● | Critical accounting estimates; |
| ● | Management’s assessment of future plans and operations; |
| ● | The outlook of our business and the global economic and geopolitical conditions; and |
| ● | Competition within our industry, and the competitive environment in which we and our business units operate. |
This list is not exhaustive of the factors, events, conditions and circumstances that may affect the “forward-looking statements” and “forward-looking information” contained in this Quarterly 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.
22
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
InMed Pharmaceuticals Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
Three and Nine Months Ended March 31, 2023
This discussion and analysis contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is subject to the safe harbor created by those sections. For more information, see “Cautionary Note Regarding Forward-Looking Statements.” When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that impact our business. In particular, we encourage you to review the risks and uncertainties described in “Risk Factors” in the 2023 Annual Report, and other filings we make from time to time with the SEC. These risks and uncertainties could cause actual results to differ materially from those projected or implied by our forward-looking statements contained in this report. These forward-looking statements are made as of the date of this report, and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law.
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements for the three and nine months ended March 31, 2024, and the related notes thereto, which have been prepared in accordance with U.S. GAAP. Additionally, the following discussion and analysis should be read in conjunction with our audited consolidated financial statements included in the 2023 Annual Report. Throughout this discussion, unless the context specifies or implies otherwise the terms “InMed,” “Company,” “we,” “us,” and “our” refer to InMed Pharmaceuticals Inc.
All dollar amounts stated herein are in U.S. dollars unless specified otherwise.
Overview
We are a clinical stage pharmaceutical company developing a pipeline of proprietary small molecule drug candidates that are preferential signaling ligands of the endogenous cannabinoid 1 (“CB1”) and cannabinoid 2 (“CB2”) receptors as well as other receptor targets linked to human disease. CB1 and CB2 receptors are each part of the endocannabinoid system that is found throughout the human body and is responsible for many homeostatic functions. CB1 receptors are primarily located in the brain and central nervous system, while CB2 receptors are involved in modulating neuroinflammation and immune responses. Our research efforts target the treatment of diseases with high unmet medical needs. Together with our wholly-owned subsidiary, BayMedica, we also have significant know-how in developing proprietary manufacturing approaches to produce and sell bulk rare cannabinoids as ingredients for various market sectors.
23
InMed has sought to focus on the research and development of preferential signaling ligands of CB1/CB2 and has produced a library of novel, proprietary drug candidates. These candidates are patentable new chemical entities (“NCEs”) for pharmaceutical development, aimed at targeting diverse clinical indications. Our current pharmaceutical pipeline consists of three programs, with drug candidates targeting Alzheimer’s disease, dry age-related macular degeneration, and Epidermolysis Bullosa. InMed’s INM-901 is a proprietary drug candidate being developed as a potential treatment for Alzheimer’s disease. INM-901 has multiple potential mechanisms of action as a preferential signaling agonist for both CB1 and CB2 receptors, as well as impacting the peroxisome proliferator-activated receptor (“PPAR”) signaling pathway. Combined, these mechanisms of action may offer a unique treatment approach targeting several biological pathways associated with Alzheimer’s disease. Our ocular research, based on a proprietary small molecule, INM-089 indicates potentially promising neuroprotective effects in the back of the eye, which may lead to the preservation of the retinal function. Neuroprotection in dry Aged-related Macular Degeneration (“dry AMD”) remains an unmet medical need and a new treatment option may help solve this multifactorial disease.
InMed has also completed a Phase 2 clinical trial of INM-755 (cannabinol) cream studying its safety and efficacy in Epidermolysis Bullosa (“EB”). Results from the Phase 2 clinical trial showed a positive indication of enhanced anti-itch activity for INM-755 cannabinol cream versus the control cream alone in an exploratory clinical evaluation. The results for non-wound itch were not statistically significant in this small trial due, in part, to the clinically important anti-itch effect of the underlying control cream.
Together with our wholly-owned subsidiary BayMedica, our manufacturing capabilities include traditional approaches such as chemical synthesis and biosynthesis, as well as a proprietary, integrated manufacturing approach called IntegraSyn. With multiple manufacturing approaches, InMed has sought to maintain enhanced flexibility to select the most cost-effective method to deliver high quality, pure cannabinoids fit for their intended use. BayMedica’s commercial business specializes in the B2B supply of bulk rare cannabinoids as raw materials for the Health and Wellness sector that are bioidentical to those found in nature.
Since our acquisition of Biogen Sciences Inc., a privately held British Columbia pharmaceutical company focused on drug discovery and development in 2014, our operations have primarily focused on conducting research and development for our Product Candidates and for our integrated, biosynthesis-based manufacturing technology, establishing our intellectual property, organizing and staffing our Company, business planning and capital raising. On October 13, 2021, we acquired BayMedica, Inc., now named BayMedica, LLC. Upon closing of the acquisition of BayMedica, BayMedica became a wholly-owned subsidiary of InMed. To date, we have funded our operations primarily through the issuance of our common shares.
We have incurred significant operating losses since our inception and we expect to continue to incur significant operating losses for the foreseeable future. Our ability to generate product revenue that is sufficient to achieve profitability will depend heavily on the revenues generated from our products in the health and wellness sector, on the successful development and eventual commercialization of one or more of our Product Candidates and/or the success of our manufacturing technologies. Our net loss was $5.7 million and $7.6 million for the nine months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 we had an accumulated deficit of $107.1 million, which includes all losses since our inception in 1981. We expect our expenses will remain steady in the near- and long-term as we:
| ● | seek partnership(s) to advance the INM-755 program for the treatment of EB and/or other dermatological conditions including chronic itch; |
| ● | continue to advance research with proprietary drug candidates in the INM-901 program targeting treatment of neurodegenerative diseases such as Alzheimer’s and in the INM-089 program to treat dry AMD; |
| ● | investigate our Product Candidates for additional uses beyond their initial target indications; |
24
| ● | pursue the discovery of additional small molecule drug candidates for other diseases with high unmet medical needs and the subsequent development of any resulting new Product Candidates; |
| ● | seek regulatory approvals for any Product Candidates that successfully complete clinical trials; |
| ● | scale-up our manufacturing processes and capabilities, or arrange for a third party to do so on our behalf; |
| ● | continue to support our commercial operations and revenue-generating Products at BayMedica; |
| ● | execute on business development activities, including but not limited through strategic transactions, mergers, acquisitions and/or divestitures as well as in- or out-licensing of technologies or business units; |
| ● | maintain, expand, enforce, defend and protect our intellectual property; |
| ● | continue to further advance the research and development of various manufacturing technologies; |
| ● | build internal infrastructure, including personnel, to meet our milestones; and |
| ● | add operational, financial and management information systems and personnel, including personnel to support product development and potential future commercialization efforts and our operations as a public company. |
As a result of these activities as well as our working capital requirements, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. We expect 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. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, if at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our Products and Product Candidates or grant rights to external entities to develop and market our Product Candidates, even if we would otherwise prefer to develop and market such Products and Product Candidates ourselves.
Because of the numerous risks and uncertainties associated with drug development and commercial growth, we are unable to predict the timing or amount of increased expenses and working capital requirements or the timing of when or if we will be able to achieve or maintain profitability. If we fail to become profitable or are unable to sustain profitability on a continual basis, then we may be unable to continue our operations at current or planned levels and be forced to reduce or terminate our operations.
Recent Developments
Appointment of Dr. David G. Morgan to the Scientific Advisory Board
On April 18, 2024, the Company announced the addition of Dr. David G. Morgan, a renowned leader in neurodegenerative disease, to its Scientific Advisory Board (“SAB”) reinforcing the Company’s commitment to advancing it’s INM-901 program in the treatment of Alzheimer’s disease.
Ocular Research Program
On April 16, 2024, the Company announced additional preclinical data for INM-089 further demonstrating positive pharmacological effects targeting dry AMD. In vivo preclinical studies in AMD disease models demonstrated significant outcomes for INM-089 including neuroprotection of photoreceptors as well as improved photoreceptor’s function, improved integrity of retinal pigment epithelium and reduction in extracellular autofluorescent deposits, a hallmark of dry AMD. Additionally, data indicates that INM-089 may be more effective as a therapeutic treatment for dry AMD compared to neovascular, or wet, AMD. More specifically, data suggests INM-089 may be an important candidate for geographic atrophy (“GA”) which is common in more advanced cases of dry AMD, affecting the center of the macula.
The Company has strategically prioritized the utilization of its proprietary small molecule drug candidates in its drug development initiatives, resulting in the advancement of the INM-089 program in the treatment of dry AMD taking precedence over the INM-088 program in the treatment of glaucoma. Therefore, the Company will not be advancing INM-088 in the immediate future. Notably, the initial research and data from the INM-088 program have played an instrumental role in shaping the development of INM-089 program.
25
Additional Preclinical Data for INM-901’s Pharmacological Effects
On April 4, 2024, the Company announced additional preclinical data demonstrating INM-901’s positive pharmacological effects in the potential treatment of Alzheimer’s disease. Several preclinical studies were conducted in well-characterized in vivo Alzheimer’s disease models demonstrating that INM-901 is a preferential signaling agonist of the CB1/CB2 receptors and impacts the PPAR signaling pathway, reduces neuroinflammation and improves neuronal function. Analysis of mRNA data supports the observations made in the previously released behavioral studies results showing improvement of locomotor activity, cognition and memory in diseased animals.
Extension of Compliance Period for Minimum Bid Price Rule Compliance
On March 19, 2024, the Company received written notification from the Listing Qualifications Department of Nasdaq that the Company has been granted an additional 180-day compliance period, or until September 16, 2024 (the “Extended Compliance Period”), to regain compliance with Nasdaq’s minimum bid price requirement for the continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”). Nasdaq’s determination is based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market, with the exception of the bid price requirement, and the Company’s written notice of its intention to consider all available options to regain compliance during the Extended Compliance Period, including, if necessary, effecting a reverse stock split. If at any time prior to September 16, 2024, the closing bid price of the Company’s listed shares on Nasdaq (the “Listed Shares”) is at least $1.00 per share for at least a minimum of 10 consecutive business days, the Company will regain compliance with the Minimum Bid Price Rule and this matter will be closed. If the Company does not regain compliance with the Minimum Bid Price Rule during the Extended Compliance Period, Nasdaq will provide written notification to the Company that the Listed Shares will be delisted. At that time, the Company may appeal the relevant delisting determination to a hearings panel (the “Hearings Panel”) pursuant to the procedures set forth in the Nasdaq Listing Rules. However, if the Company does appeal Nasdaq’s delisting determination to the Hearings Panel, there can be no assurance that such appeal would be successful.
Other Personnel Matters
On February 20, 2024, Ms. Netta Jagpal joined the Company as Chief Financial Officer and Corporate Secretary. In conjunction with this appointment, Mr. Jonathan Tegge stepped down as interim Chief Financial Officer.
On May 10, 2024, Ms. Alexandra D.J. Mancini, Senior Vice President, Clinical & Regulatory Affairs, provided notice to the Company and the Company’s Board of Directors of her intention to retire from her position, effective June 30, 2024. In connection with Ms. Mancini’s retirement and eventual departure, and to ensure a smooth transition, the Company intends to retain Ms. Mancini under the terms of a Consulting Agreement (the “Consulting Agreement”), pursuant to which Ms. Mancini will provide certain consulting services to the Company for a period to be mutually agreed upon by both the Company, on the one hand, and Ms. Mancini, on the other. The foregoing description of the Consulting Agreement does not purport to be complete and is subject, and qualified by reference, to the full text of the Consulting Agreement, which the Company intends to file with its Annual Report on Form 10-K for the year ending June 30, 2024.
Notice of Termination with Respect to the Technology Licensing Agreement
On May 10, 2024, the Company delivered a 90-day notice of termination to EyeCRO LLC with respect to the Technology Licensing Agreement, specifying an effective date of termination of August 8, 2024 (see Note 11 – Commitments and Contingencies to the unaudited condensed consolidated interim financial statements included in this Quarterly Report, which is incorporated by reference in this Part I, Item 2 of this Quarterly Report).
Components of Results of Operations
Revenue
Our revenue consists of manufacturing and distribution sales of rare cannabinoid products, which are generally recognized at a point in time. We recognize revenue when control over the products has been transferred to the customer and to which we have a present right to payment.
Cost of Sales
Cost of sales consists 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 our manufacturing business.
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Operating Expenses
Research and Development and Patent Expenses
Research and development and patent expenses represent costs incurred by us for the discovery, development, and manufacture of our Products and Product Candidates and include:
| ● | external research and development expenses incurred under agreements with contract research organizations, or “CROs”, contract development and manufacturing organization, or “CDMOs”, and consultants; |
| ● | salaries, payroll taxes, employee benefits expenses for individuals involved in research and development efforts; |
| ● | research supplies; and |
| ● | legal and patent office fees related to patent and intellectual property matters. |
We expense research and development costs as incurred. We recognize expenses for certain development activities, such as preclinical studies and manufacturing, based on an evaluation of the progress to completion of specific tasks using data or other information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of expenses historically incurred. Non-refundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. These amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered.
External costs represent a significant portion of our research and development expenses, which we track on a program-by-program basis following the nomination of a development candidate. Our internal research and development expenses consist primarily of personnel-related expenses, including salaries, benefits and stock-based compensation expenses. We do not track our internal research and development expenses on a program-by-program basis as the resources are deployed across multiple projects.
The successful development of our Products and Product Candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be needed to complete the remainder of the development of our Product Candidates or to develop and commercialize additional Products. We are also unable to predict when, if ever, material net cash inflows will commence from our Product Candidates, if approved. This is due to the numerous risks and uncertainties associated with the development of our products, including the uncertainties related to:
| ● | the timing and progress of preclinical and clinical development activities; |
| ● | the number and scope of preclinical and clinical programs we decide to pursue; |
| ● | our ability to raise additional funds necessary to complete preclinical and clinical development and commercialization of our Product Candidates, to further advance the development of our manufacturing technologies, and to develop and commercialize additional Products, if any; |
| ● | our ability to maintain and expand our current research and development programs and to establish new ones; |
| ● | our ability to establish sales, licensing or collaboration arrangements; |
| ● | the progress of the development efforts of parties with whom we may enter into collaboration arrangements; |
| ● | the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; |
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| ● | the receipt and related terms of regulatory approvals from applicable regulatory authorities; |
| ● | the availability of materials for use in production of our Products and Product Candidates; |
| ● | our ability to secure manufacturing supply through relationships with third parties or establish and operate a manufacturing facility; |
| ● | our ability to consistently manufacture our Product Candidates in quantities sufficient for use in clinical trials; |
| ● | our ability to obtain and maintain intellectual property protection and regulatory exclusivity, both in the United States and internationally; |
| ● | our ability to maintain, enforce, defend and protect our rights in our intellectual property portfolio; |
| ● | the commercialization of our Product Candidates, if and when approved, and of new Products; |
| ● | our ability to obtain and maintain third-party payor coverage and adequate reimbursement for our Product Candidates, if approved; |
| ● | the acceptance of our Product Candidates, if approved, by patients, the medical community and third-party payors; |
| ● | competition with other products and within our industry at large; and |
| ● | a continued acceptable safety profile of our Product Candidates following receipt of any regulatory approvals. |
A change in the outcome of any of these variables with respect to the development of any of our Products or Product Candidates could significantly and materially change the costs and timing associated with the development of those Products or Product Candidates.
Research and development activities account for a significant portion of our operating expenses. Research and development expenses decreased in the three and nine months ended March 31, 2024 as compared to the three and nine months ended March 31, 2023, largely due to high start-up costs associated with the multicenter Phase 2 clinical trial in our INM-755 program during the prior year. However, we expect our research and development expenses to increase significantly in future periods as we continue to implement our business strategy, which includes advancing our drug candidates and our manufacturing technologies into and through clinical development, expanding our research and development efforts, including hiring additional personnel to support our research and development efforts, ultimately seeking regulatory approvals for our drug candidates that successfully complete clinical trials, and further developing selected R&D and commercial BayMedica activities. In addition, drug candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Accordingly, although we expect our research and development expenses to increase as our drug candidates advance into later stages of clinical development, we do not believe that it is possible, at this time, to accurately project total program-specific expenses through to commercialization. There are numerous factors associated with the successful commercialization of any of our Product Candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.
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General and Administrative Expenses
General and administrative expenses consist of (i) personnel-related costs, including salaries, benefits and stock-based compensation expense, for our personnel in executive, finance and accounting, human resources, business operations and other administrative functions, (ii) investor relations activities, (iii) legal fees related to corporate matters, (iv) fees paid for accounting and tax services, (v) consulting fees and (vi) facility-related costs.
Amortization and Depreciation
Intangible assets are comprised of intellectual property that we acquired in May of 2014 and trade secrets, product formulation knowledge, and patents that we acquired in October 2021. The acquired intellectual property and patents are amortized on a straight-line basis based on their estimated useful lives. Equipment and leasehold improvements are depreciated using the straight-line method based on their estimated useful lives.
Share-based Payments
Share-based payments is the stock-based compensation expense related to our granting of stock options to employees and others. The fair value, at the grant date, of equity-settled share awards is charged to our loss over the period for which the benefits of employees and others providing similar services are expected to be received. The vesting components of graded vesting employee awards are measured separately and expensed over the related tranche’s vesting period. The amount recognized as an expense is adjusted to reflect the number of share options expected to vest. The fair value of awards is calculated using the Black-Scholes option pricing model, which considers the exercise price, current market price of the underlying shares, expected life of the award, risk-free interest rate, expected volatility and the dividend yield.
Other Income
Other income consists primarily of interest income earned on our cash, cash equivalents and short-term investments.
Results of Operations
The Company has two operating and reportable segments 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 and the senior management team, 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 Pharmaceuticals (‘InMed Pharma’) and BayMedica Commercial based on the information used by the CODM.
Comparison of the three months ended March 31, 2024 and 2023 for the InMed Pharma Segment
| Three months ended | ||||||||||||||||
| March 2024 | March 2023 | Change | % Change | |||||||||||||
| (in thousands) | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development and patents | $ | 620 | $ | 871 | $ | (251 | ) | (29 | )% | |||||||
| General and administrative | 1,172 | 1,213 | (41 | ) | (3 | )% | ||||||||||
| Amortization and depreciation | 54 | 50 | 4 | 8 | % | |||||||||||
| Foreign exchange loss | 48 | 3 | 45 | 1,500 | % | |||||||||||
| Total operating expenses | 1,894 | 2,137 | (243 | ) | (11 | )% | ||||||||||
| Interest and other income | 103 | 156 | (53 | ) | 34 | % | ||||||||||
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Research and Development and Patents Expenses
Research and development and patents expenses decreased by $0.3 million in the InMed Pharma segment, or 29%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The decrease in research and development and patents expenses was due to the Company no longer being engaged in clinical trials resulting in lower research supplies and external contractor fees, as well as lower personnel costs. However, we expect our research and development expenses to increase significantly in future periods as we continue to implement our business strategy.
General and administrative expenses
General and administrative expenses decreased by $0.04 million in our InMed Pharma segment, or 3%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 The decrease results primarily from a combination of changes including lower office and admin fees, and salaries and benefits. This was offset by an increase in accounting and legal, investor relations, and consulting fees.
Comparison of the three months ended March 31, 2024 and 2023 for BayMedica Commercial Segment
| Three months ended March 31, | ||||||||||||||||
| 2024 | 2023 | Change | % Change | |||||||||||||
| (in thousands) | ||||||||||||||||
| Sales | $ | 1,173 | $ | 1,034 | $ | 139 | 13 | % | ||||||||
| Cost of sales | 883 | 841 | 42 | 5 | % | |||||||||||
| Gross profit | 290 | 193 | 97 | 50 | % | |||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development and patents | 37 | 7 | 30 | 429 | % | |||||||||||
| General and administrative | 202 | 201 | 1 | - | % | |||||||||||
| Amortization and depreciation | 1 | - | 1 | 100 | % | |||||||||||
| Total operating expenses | 240 | 208 | 32 | 15 | % | |||||||||||
| Interest and other income | 18 | - | 18 | 100 | % | |||||||||||
Sales
Sales increased by $0.1 million, or 13%, to $1.2 million in the BayMedica Commercial segment for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. While sales increased year over year, revenue tends to fluctuate from quarter to quarter. The changes in revenue can be attributed mainly to distributor order patterns. While we are generally optimistic about the long-term growth potential in the rare cannabinoids sector, we expect revenue fluctuations to continue in future quarters. BayMedica Commercial will continue to evaluate opportunities for potential structured supply arrangements and collaborations for the commercial business. Sales and marketing efforts will remain focused on products that contribute higher margins, where BayMedica Commercial continues to hold a strong competitive position.
Cost of Sales
Cost of goods sold increased by $0.04 million, or 5%, to $0.9 million in our BayMedica Commercial segment for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase in cost of goods sold is the direct result of an increase in BayMedica Commercial sales.
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Research and Development and Patents Expenses
Research and development and patents expenses increased by $0.03 million in our BayMedica Commercial segment to $0.4 million, or 429%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase in research and development and patents expenses was primarily due to external contractor fees for testing and new product development.
Comparison of the nine months ended March 31, 2024 and 2023 for the InMed Pharma Segment
| Nine months ended | ||||||||||||||||
| March 2024 | March 2023 | Change | % Change | |||||||||||||
| (in thousands) | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development and patents | $ | 2,459 | $ | 2,992 | $ | (533 | ) | (18 | )% | |||||||
| General and administrative | 3,434 | 3,854 | (420 | ) | (11 | )% | ||||||||||
| Amortization and depreciation | 163 | 148 | 15 | 10 | % | |||||||||||
| Foreign exchange loss | 37 | 79 | (42 | ) | 53 | % | ||||||||||
| Total operating expenses | 6,093 | 7,073 | (980 | ) | (14 | )% | ||||||||||
| Interest and other income | 424 | 344 | 80 | 23 | % | |||||||||||
Research and Development and Patents Expenses
Research and development and patents expenses decreased by $0.5 million to $2.5 million in our InMed Pharma segment, or 18%, for the nine months ended March 31, 2024, as compared to the period ended March 31, 2023. The decrease in research and development and patents expenses was due primarily to the Company no longer being engaged in clinical trials which resulted in lower external contractor fees and research supplies. Furthermore, the decrease is the result of lower personnel costs.
General and administrative expenses
General and administrative expenses decreased by $0.4 million to $3.4 million in the InMed Pharma segment, or 11%, for the nine months ended March 31, 2024, as compared to the nine months ended March 31, 2023. The decrease resulted primarily from a combination of changes including lower office and admin fees, personnel costs, regulatory fees, and interest expense on lease obligations. This was offset by an increase in investor relations, accounting and legal fees, and consulting fees
Comparison of the nine months ended March 31, 2024 and 2023 for the BayMedica Commercial Segment
| Nine months ended March 31, | ||||||||||||||||
| 2024 | 2023 | Change | % Change | |||||||||||||
| (in thousands) | ||||||||||||||||
| Sales | $ | 3,315 | $ | 1,824 | $ | 1,491 | 82 | % | ||||||||
| Cost of sales | 2,416 | 1,415 | 1,001 | 70 | % | |||||||||||
| Inventory write-down | 263 | 577 | (314 | ) | (54 | )% | ||||||||||
| Gross profit | 636 | (168 | ) | 804 | (479 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development and patents | 100 | 116 | (16 | ) | (14 | )% | ||||||||||
| General and administrative | 603 | 584 | 19 | 3 | % | |||||||||||
| Amortization and depreciation | 2 | 1 | 1 | 100 | % | |||||||||||
| Total operating expenses | 705 | 701 | 4 | 1 | % | |||||||||||
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Sales
Sales increased by $1.5 million, or 82%, to $3.3 million in the BayMedica Commercial segment for the nine months ended March 31, 2024, as compared to the nine months ended March 31, 2023, which was primarily the result of an increase in sales volume. While sales increased year over year, revenue generally fluctuates from quarter to quarter. The changes in revenue can be attributed mainly to distributor order patterns. While we are optimistic about the long-term growth potential in the rare cannabinoids sector, we expect revenue fluctuations to continue in future quarters. BayMedica will continue to evaluate opportunities for potential structured supply arrangements and collaborations for the commercial business. Sales and marketing efforts will remain focused on products that contribute highest margins, where BayMedica continues to hold a strong competitive position.
Cost of Sales
Cost of goods sold increased by $1.0 million, or 34%, to $2.4 million in our BayMedica Commercial segment for the nine months ended March 31, 2024 compared to the nine months ended March 31, 2023. The increase in cost of goods sold is primarily a result of the increase in sales.
Inventory Write-Down
The write-down of inventories to net realizable value was $0.3 million, or a decrease of 54%, in the BayMedica Commercial segment for the nine months ended March 31, 2024, as compared to expenses of $0.6 million for the nine months ended March 31, 2023. Contributing factors to the decrease in net realizable value included lower demand, downward pricing pressure, and changes in the manufacturing processes that required the write-down of raw materials. BayMedica continues to evaluate new manufacturing approaches for certain products to increase its competitive position in the marketplace.
Research and Development and Patents Expenses
Research and development and patents expenses decreased by $0.02 million, or 14%, to $0.01 million in the BayMedica Commercial segment for the nine months ended March 31, 2024 compared to the nine months ended March 31, 2024. The decrease in research and development and patents expenses was due to a decrease in . expenses for new product development and patent related expenses.
General and\Administrative Expenses
General and administrative expenses increased by $0.02 million, or 3%, to $0.6 million in the BayMedica Commercial segment, for the nine months ended March 31, 2024, as compared to the nine months ended March 31, 2023. The increase primarily relates to a combination of changes including higher accounting, legal fees, and marketing expenses. This was offset by lower personnel expenses.
Liquidity and Capital Resources
Since our inception, we have only generated limited revenue from product sales, no sales from any other sources and have incurred significant operating losses and negative cash flows from our operations. We have only commenced commercial sales with the acquisition of BayMedica and have not yet commercialized any of our Product Candidates and we do not expect to generate revenue from sales of any Product Candidates for several years, if at all. We have funded our operations to date primarily with proceeds from the sale of our common shares.
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As of March 31, 2024, we had cash, cash equivalents and short-term investments of $7.6 million.
The following table summarizes our cash flows for each of the periods presented:
| (in thousands) | Nine Months Ended March 31, 2024 |
Nine Months Ended March 31, 2023 |
||||||
| Net cash used in operating activities | $ | (5,957 | ) | $ | (6,625 | ) | ||
| Net cash used in investing activities | (9 | ) | (628 | ) | ||||
| Net cash provided by financing activities | 4,654 | 10,680 | ||||||
| Net decrease in cash and cash equivalents | $ | (1,312 | ) | $ | (3,427 | ) | ||
Operating Activities
During the nine months ended March 31, 2024, we used cash in operating activities of $5.9 million, primarily resulting from our net loss of $5.7 million combined with changes in working capital and non-cash expenses contributed to net cash used in operating activities.
During the nine months ended March 31, 2023 we used cash in operating activities of $6.6 million, primarily resulting from our net loss of $7.6 million combined with changes in working capital and non-cash expenses contributed to net cash used in operating activities.
Investing Activities
During the nine months ended March 31, 2024, cash provided by investing activities of less than $0.01 million resulted from the purchases of property and equipment.
During the nine months ended March 31, 2023, cash used in investing activities of $0.6 million resulted from escrow payments made to BayMedica’s historical equity and convertible debt holders, and the payment of a deposit on equipment.
Financing Activities
During the nine months ended March 31, 2024, cash provided by financing activities of $4.7 million consisted of $5.2 million in gross proceeds derived from the 2023 Private Placement, offset by total transaction costs of $0.5 million.
During the nine months ended March 31, 2023, cash provided by financing activities of $10.7 million consisted of $12.0 million in gross proceeds from private placements of our common shares consummated in September 2022 and November 2022, offset by total transaction costs of $1.3 million.
Going Concern
We expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we continue the research and development of and the clinical trials for our Product Candidates. In addition, we expect to incur additional costs associated with operating as a US-listed public company and associated with any required investment into the Company’s research and development efforts targeting small molecule drug candidates. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.
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), we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
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Through March 31, 2024, we have funded our operations primarily with proceeds from the sale of our common shares. We have incurred recurring losses and negative cash flows from operations since its inception, including net losses of $5.7 million for the nine months ended March 31, 2024. In addition, we have an accumulated deficit of $107.1 million as of March 31, 2024.
As of the issuance date of the condensed consolidated financial statements, we expect our cash, cash equivalents, and short-term investments of $7.6 million as of March 31, 2024, will be sufficient to fund our operating expenses and capital expenditure requirements into the fourth quarter of calendar year 2024 depending on the level and timing of realizing BayMedica revenues from the sale of Products in the Health & Wellness sector as well as the level and timing of our operating expenses. Our future viability is dependent on our ability to raise additional capital to finance our operations. In addition, there are a number of uncertainties in estimating our operating expenses and capital expenditure requirements, including the impact of potential acquisitions.
As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
We expect 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. We may not be able to obtain financing on acceptable terms, if at all. The terms of any financing may materially and adversely affect the holdings or the rights of our existing equityholders.
Our funding requirements, and the timing and amount of our operating expenditures will depend largely on:
| ● | the scope, progress, results and costs of discovery research, preclinical development, laboratory testing and clinical trials for our Product Candidates; |
| ● | the scope, progress, results and costs of development of our manufacturing technologies; |
| ● | the number of and development requirements for other Products and Product Candidates that we pursue; |
| ● | the costs, timing and outcome of regulatory review of our Product Candidates; |
| ● | our ability to enter into contract manufacturing arrangements for supply of materials and manufacture of our Products and Product Candidates and the terms of such arrangements; |
| ● | the impact of any acquired, or in-licensed, externally developed product(s) and/or technologies; |
| ● | our ability to establish and maintain strategic collaborations, licensing or other arrangements, including sales arrangements, and the financial terms of such arrangements; |
| ● | the sales, costs and timing of future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our Products and for Product Candidates for which we may receive marketing approval; |
| ● | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property- related claims; |
| ● | expansion costs of our operational, financial and management systems and increases to our personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a dual listed company; |
| ● | the costs to obtain, maintain, expand and protect our intellectual property portfolio; and |
| ● | the level and timing of realizing revenues from the BayMedica commercial operations. |
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A change in the outcome of any of these, or other variables with respect to the development of any of our Products and Product Candidates, could significantly and materially change the costs and timing associated with their development. We anticipate that we will need to continue to rely on additional financings to achieve our business objectives.
In addition to the variables described immediately above, if and when any of our Product Candidates successfully complete development, we will incur substantial additional costs associated with regulatory filings, marketing approval, post-marketing requirements, maintaining and safeguarding our intellectual property rights, and regulatory protection, in addition to other commercial-related costs. We cannot reasonably estimate these costs at this time.
Until such time, if ever, we expect to finance our cash needs through a combination of equity or debt financings and collaboration arrangements. We currently have no credit facility or committed sources of capital. To the extent that we raise additional capital through the future sale of our equity securities, the equity of our common shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that could materially and adversely affect the rights of our existing common shareholders. If we raise additional funds through the issuance of debt securities, these securities could contain covenants that would restrict our operations. We may require additional capital beyond our currently anticipated amounts, and additional capital may not be available on reasonable terms, or at all. If we raise additional funds through collaboration arrangements or other strategic transactions in the future, we may have to relinquish valuable rights to our technologies, future revenue streams, Products or Product Candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, if at all, we may be required to materially delay, limit, reduce or terminate development or future commercialization efforts or grant rights to develop and market Products or Product Candidates that we would otherwise prefer to develop and market ourselves.
Off-Balance Sheet Arrangements
During the periods presented in this Quarterly Report, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations promulgated by the SEC.
Critical Accounting Policies and Significant Judgments and Estimates
Our significant accounting policies are described in Note 2 of the unaudited condensed consolidated financial statements included in this Quarterly Report. The estimates will require us to rely upon assumptions that were highly uncertain at the time the accounting estimates are made, and changes in them are reasonably likely to occur from period to period. Changes in estimates used in these and other items could have a material impact on our financial statements in the future. Our estimates will be based on our experience and our interpretation of economic, political, regulatory, and other factors that affect our business prospects. Actual results may differ significantly from our estimates. For detailed information regarding our critical accounting policies and estimates, see our financial statements and notes thereto included in this Quarterly Report and in the 2023 Annual Report. There have been no material changes to our critical accounting policies and estimates from those disclosed in the 2023 Annual Report.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. As of March 31, 2024, the Chief Executive Officer and the Chief Financial Officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based upon the evaluation, they have concluded that, as of March 31, 2024, our disclosure controls and procedures were not effective at a reasonable assurance level due to a material weakness that existed in our internal controls over financial reporting, primarily the result around a lack of personnel and inadequate controls around segregation of duties in the accounting department from employee turnover, as previously disclosed in the 2023 Annual Report.
It should be noted that any system of controls is based in part upon certain assumptions designed to obtain reasonable (and not absolute) assurance as to its effectiveness, and there can be no assurance that any design will succeed in achieving its stated goals.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except for the items discussed in remediation below.
Remediation
We have implemented a remediation plan which seeks to address the previously reported material weakness in internal control over financial reporting, described in Part II, Item 9A, “Controls and Procedures” in our 2023 Annual Report. Remediation measures include, but are not limited to, adding additional resources to our finance function, retaining the services of outside consultants, and establishing additional review procedures over the accounting for complex and non-routine transactions. The material weakness will not be considered remediated until, and to the extent, the newly designed controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. While we currently anticipate that the remediation of this material weakness should be completed by the end of our fourth quarter of this fiscal year, the elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects (including within the anticipated timeframe). Notwithstanding the material weakness, we believe the financial statements in this report fairly present, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with U.S. GAAP.
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PART II
ITEM 1. LEGAL PROCEEDINGS.
We are not presently involved in any active legal proceedings that we believe to be material to the Company. However, from time to time, we may be subject to various pending or threatened legal actions, claims and proceedings, including those that arise in the ordinary course of our business (including, but not limited to, the matters discussed in Note 11 of the unaudited condensed financial statements included in this Quarterly Report).
ITEM 1A. RISK FACTORS.
As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item. For a discussion of our potential risks and uncertainties, please review the risks and uncertainties described in “1A. Risk Factors” in the 2023 Annual Report.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURE.
None
ITEM 5. OTHER INFORMATION.
Rule 10b5-1 Plan and Non-Rule 10b5-1 Trading Arrangement Adoptions, Terminations, and Modifications
During the three months ended March 31, 2024,
none of our directors or “officers” (as defined in Rule 16a-1(f) under the Exchange Act)
Retirement of Ms. Alexandra D.J. Mancini
On May 10, 2024, Ms. Alexandra D.J. Mancini, Senior Vice President, Clinical & Regulatory Affairs, provided notice to the Company and the Company’s Board of Directors of her intention to retire from her position, effective June 10, 2024. Ms. Mancini’s retirement was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. In connection with Ms. Mancini’s retirement and eventual departure, and to ensure a smooth transition, the Company intends to retain Ms. Mancini under the terms of a consulting agreement (the “Consulting Agreement”), pursuant to which Ms. Mancini will provide certain consulting services to the Company for a period to be mutually agreed upon by both the Company, on the one hand, and Ms. Mancini, on the other. The foregoing description of the Consulting Agreement does not purport to be complete and is subject, and qualified by reference, to the full text of the Consulting Agreement, which the Company intends to file with its Annual Report on Form 10-K for the year ending June 30, 2024.
Other than (i) as disclosed in this Item 5 of this Quarterly Report and (ii) that certain executive employment agreement, dated as of March 1, 2021, between the Company and Ms. Mancini, which was previously filed as Exhibit 10.5 to the Company’s Registration Statement on Form S-1 filed with the SEC on July 13, 2021, there are no arrangements or understandings between Ms. Mancini and any other persons pursuant to which she was appointed as Senior Vice President, Clinical & Regulatory Affairs, of the Company. There are no family relationships between Ms. Mancini and any director or executive officer of the Company, and she has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.]
37
ITEM 6. EXHIBITS.
Exhibits
The following exhibits are filed as part of this report:
38
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| INMED PHARMACEUTICALS INC. | ||
| (Registrant) | ||
| Dated: May 13, 2024 | By: | /s/ Netta Jagpal |
| Chief Financial Officer | ||
39
Exhibit 10.1
 |
NASDAQ: INM
Suite 310-815 W. Hastings St. Vancouver, BC, Canada V6C 1B4 Tel: +1.604.669.7207 Email: info@inmedpharma.com www.inmedpharma.com |
InMed Appoints Dr. David G. Morgan, PhD, a Leading Alzheimer’s Expert, to the Company’s Scientific Advisory Board
Vancouver, BC – April 18, 2024 – InMed Pharmaceuticals Inc. (“InMed” or the “Company”) (Nasdaq: INM), a leader in the research, development, manufacturing, and commercialization of rare cannabinoids and proprietary cannabinoid analogs, today announced the addition of Dr. David G. Morgan, a renowned leader in neurodegenerative disease to its Scientific Advisory Board (“SAB”) reinforcing the Company’s commitment to advancing it’s INM-901 program in the treatment of Alzheimer’s disease.
Eric Hsu, InMed’s SVP of Preclinical Drug Development, commented, “We are privileged to welcome someone of Dr. Morgan’s stature to our SAB, which underscores the recent progress we’ve achieved in the INM-901 program. Dr. Morgan’s significant contributions and pioneering breakthroughs have made him a leading authority in Alzheimer’s research. His guidance and expertise will be invaluable as we advance to the next stages of development of our INM-901 program in the treatment of Alzheimer’s.”
Biography
Dr. David Morgan is Director of the Alzheimer’s Alliance and MSU Foundation Professor of Translational Neuroscience at Michigan State University. Dr. Morgan’s research interests are Alzheimer’s disease, aging and brain function. He is internationally recognized for his work on immunotherapy and gene therapy to treat the Alzheimer-related pathologies. Previously, he was CEO of the Byrd Alzheimer’s Institute at the University of South Florida. While there, Dr. Morgan oversaw development of the Community-Based Memory Screening programs and the country’s first mobile clinical trial unit for Alzheimer’s disease.
Dr. Morgan received his undergraduate and graduate degrees from Northwestern University and spent 10 years at the University of Southern California before joining the University of South Florida in 1992. He has participated in over 90 grant-years of NIH funded research and published over 200 research articles. Dr. Morgan regularly sits on grant review panels for NIH and other agencies. In addition to his research activities, he has consulted with both major pharmaceutical and small biotechnology companies and also advised capital investment organizations regarding the most promising therapeutic approaches to curing Alzheimer’s disease. He has also advocated nationally for additional Alzheimer’s research funding through his role at Researchers Against Alzheimer’s and with the Alzheimer’s Association.
David Morgan’s Publications:
https://www.ncbi.nlm.nih.gov/sites/myncbi/david.morgan.2/bibliography/41143698/public/?sort=date&direction=ascending
Learn more about InMed’s INM-901 program:
https://www.inmedpharma.com/pharmaceutical/inm-901-for-alzheimers-disease/
About InMed:
InMed Pharmaceuticals is a global leader in the manufacturing, development and commercialization of rare cannabinoids and proprietary cannabinoid analogs. We are a clinical-stage company developing a pipeline of proprietary cannabinoid-analog therapeutics and dedicated to delivering new treatment alternatives to patients that may benefit from cannabinoid-based pharmaceutical drugs. For more information, visit www.inmedpharma.com.
Investor Contact:
Colin Clancy
Vice President, Investor Relations and Corporate Communications
T: +1 604 416 0999
E: cclancy@inmedpharma.com
Cautionary Note Regarding Forward-Looking Information:
This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities laws. Forward-looking statements are frequently, but not always, identified by words such as “expects”, “anticipates”, “believes”, “intends”, “potential”, “possible”, “would” and similar expressions. Such statements, based as they are on current expectations of management, inherently involve numerous risks, uncertainties and assumptions, known and unknown, many of which are beyond our control. Forward-looking information is based on management’s current expectations and beliefs and is subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Without limiting the foregoing, forward-looking information in this news release includes, but is not limited to, statements about: the efficacy of INM-091, INM-091’s ability to treat Alzheimer’s and the further development of InMed’s INM-901 program.
Additionally, there are known and unknown risk factors which could cause InMed’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. A complete discussion of the risks and uncertainties facing InMed’s stand-alone business is disclosed in InMed’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission on www.sec.gov.
All forward-looking information herein is qualified in its entirety by this cautionary statement, and InMed disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.
Exhibit 31.1
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Eric A. Adams, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of InMed Pharmaceuticals Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2024
| /s/ Eric A. Adams | ||
| Name: | Eric A. Adams | |
| Title: | President and Chief Executive Officer | |
Exhibit 31.2
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Netta Jagpal, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of InMed Pharmaceuticals Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2024
| /s/ Netta Jagpal | ||
| Name: | Netta Jagpal | |
| Title: | Chief Financial Officer | |
Exhibit 32.1
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Eric A. Adams, the President and Chief Executive Officer of InMed Pharmaceuticals Inc. (the “Company”), hereby certify that, to my knowledge:
| 1. | The Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 13, 2024
| /s/ Eric A. Adams | ||
| Name: | Eric A. Adams | |
| Title: | President and Chief Executive Officer | |
Exhibit 32.2
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Netta Jagpal, the Chief Financial Officer of InMed Pharmaceuticals Inc. (the “Company”), hereby certify that, to my knowledge:
| 1. | The Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 13, 2024
| /s/ Netta Jagpal | ||
| Name: | Netta Jagpal | |
| Title: | Chief Financial Officer | |