MYMD PHARMACEUTICALS, INC. This quarterly report on Form 10-Q and other reports filed by
Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance, or achievements. Except as required by
applicable law, including the securities laws of
Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include, but are not limited to:
? fluctuation and volatility in market price of our common stock due to market
and industry factors, as well as general economic, political and market
conditions;
? the impact of dilution on our shareholders;
? our ability to realize the intended benefits of the Merger (as defined below)
and the Contribution Transaction (as defined below);
? the impact of our ability to realize the anticipated tax impact of the Merger;
? the outcome of litigation or other proceedings we may become subject to in the
future;
? delisting of our common stock from the Nasdaq;
? our availability and ability to continue to obtain sufficient funding to
conduct planned research and development efforts and realize potential
profits;
? our ability to develop and commercialize our product candidates, including
MyMD-1, Supera-CBD and other future product candidates;
? the impact of the complexity of the regulatory landscape on our ability to
seek and obtain regulatory approval for our product candidates, both within
and outside of the U.S. ;
? the required investment of substantial time, resources and effort for
successful clinical development and marketization of our product candidates;
? challenges we may face with maintaining regulatory approval, if achieved;
? the potential impact of changes in the legal and regulatory landscape, both
within and outside of the U.S. ;
? the impact of the ongoing COVID-19 pandemic on the administration, funding and
policies of regulatory authorities, both within and outside of the U.S. ;
? our dependence on third parties to conduct pre-clinical and clinical trials
and manufacture its product candidates;
? the impact of the ongoing COVID-19 pandemic on our results of operations,
business plan and the global economy;
? challenges we may face with respect to our product candidates achieving market
acceptance by providers, patients, patient advocacy groups, third party payors
and the general medical community;
? the impact of pricing, insurance coverage and reimbursement status of our
product candidates;
? emerging competition and rapidly advancing technology in our industry;
? our ability to obtain, maintain and protect our trade secrets or other
proprietary rights, operate without infringing upon the proprietary rights of
others and prevent others from infringing on its proprietary rights;
? our ability to maintain adequate cyber security and information systems;
? our ability to achieve the expected benefits and costs of the transactions
related to the acquisition of Supera Pharmaceuticals, Inc. ("Supera");
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? our ability to effectively execute and deliver our plans related to
commercialization, marketing and manufacturing capabilities and strategy;
? emerging competition and rapidly advancing technology in our industry;
? our ability to obtain adequate financing in the future on reasonable terms, as
and when we need it;
? challenges we may face in identifying, acquiring and operating new business
opportunities;
? our ability to retain and attract senior management and other key employees;
? our ability to quickly and effectively respond to new technological
developments;
? changes in political, economic or regulatory conditions generally and in the
markets in which we operate; and
? our compliance with all laws, rules, and regulations applicable to our
business.
Our financial statements are prepared in accordance with accounting principles
generally accepted in
Overview
Following closing of the Merger and the Contribution Transaction described below
that occurred on
? MyMD-1 is a clinical stage small molecule that regulates the immunometabolic
system to treat autoimmune disease, including (but not limited to) multiple
sclerosis, diabetes, rheumatoid arthritis, and inflammatory bowel disease.
MyMD-1 is being developed to treat age-related illnesses such as frailty and
sarcopenia. MyMD-1 works by regulating the release of numerous
pro-inflammatory cytokines, such as TNF-?, interleukin 6 ("IL-6") and
interleukin 17 ("IL-17"). MyMD-1 will be evaluated in patients with depression
due to COVID-19 related to the release of cytokines. The company has
significant intellectual property coverage to protect these autoimmune
indications, as well as therapy as an anti-aging product;
? Supera-CBD is a synthetic derivative of cannabidiol ("CBD") being developed to
treat various conditions, including, but not limited to, epilepsy, pain, and
anxiety/depression, through its effects on the CB2 receptor, and a monoamine
oxidase enzyme ("MAO") type B. Supera-CBD has shown tremendous promise in
treating neuroinflammatory and neurodegenerative diseases, and will be a major
focus as the Company moves forward.
The rights to Supera-CBD were previously owned by Supera and were acquired by MyMD Florida (as defined below) immediately prior to the closing of the Merger.
27
Closing of the Merger and Reverse Stock Split
On
Effective as of
In connection with the closing of the Merger, the Company changed its name to
Closing of Contribution and Assignment Agreement
The Company acquired 100% of the membership interests of
As of
28
On
Impact of the COVID-19 Pandemic on Our Business
The ultimate impact of the ongoing global COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to future developments. These include but are not limited to the duration of the COVID-19 pandemic, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that regulators, or our board of directors or management of the Company, may determine are needed. We do not yet know the full extent of potential delays or impacts on our business, healthcare systems or the global economy. We will continue to monitor the COVID-19 situation closely.
In response to public health directives and orders, we have implemented work-from-home policies for many of our employees and temporarily modified our operations to comply with applicable social distancing recommendations. The effects of the orders and our related adjustments in our business have in the past and may continue to negatively impact productivity, disrupt our business and delay our timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. Similar health directives and orders are affecting third parties with whom we do business. Further, restrictions on our ability to travel, stay-at-home orders and other similar restrictions on our business have limited our ability to support our operations.
Severe and/or long-term disruptions in our operations will negatively impact our business, operating results and financial condition in other ways, as well. Specifically, we anticipate that the stress of COVID-19 on healthcare systems generally around the globe will negatively impact regulatory authorities and the third parties that we may engage in connection with the development and testing of our therapeutic targets.
To date, the Company has encountered delays in receiving critical clinical
supplies from our manufacturer in
In addition, while the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, it has significantly disrupted global financial markets, and may limit our ability to access capital, which could in the future negatively affect our liquidity. A recession or market correction resulting from the continuation of the COVID-19 pandemic could materially affect our business and the value of our common stock.
29 RESULTS OF OPERATIONS
Summary of Statements of Operations for the Three Months Ended
The Company is focused on developing and commercializing two therapeutic platforms based on well-defined therapeutic targets, MyMD-1 and Supera-CBD.
Revenue
We had no revenue from operations during the three months ended
Research and Development Expenses
Research and development expenses for the three months ended
The table below summarizes our research and development expenses for the three months endedJune 30, 2021 and 2020 as well as the percentage of change year-over-year: For the Three Months Ended June 30, Percent Description 2021 2020 Change Salaries and Wages $ 3,733$ 3,733 - % Development Programs 1,339,627 265,754 404 % Professional Services 13,730 5,832 135 % Regulatory Expenses 150,325 90,200 67 % Other Research and Development Expenses (17,526 ) - - %Total Research and Development Expenses$ 1,489,889 $ 365,519 308 %
Research and Development Expenses totaled
The increased costs in our clinical development programs include costs for active pharmaceutical ingredients, optimization and pre-clinical toxicology studies.
Professional services are primarily related to legal and patent related fees associated with protecting our intellectual property.
Regulatory expenses include clinical research organizations (CRO) and regulatory consulting fees associated with Phase 2 clinical study designs, protocol preparations and the maintenance of the investigator brochures.
Administrative Expenses
Administrative expenses for the three months ended
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The table below summarizes our administrative expenses for the three months
ended
For the Three Months Ended
June 30, Percent
Description 2021 2020 Change
Personnel Costs $ 417,563 $ 151,971 175 %
Professional Service Costs 458,488 99,075 363 %
Stock Market & Investor Relations Costs 294,076 - - %
Other Administrative Costs 541,644 233,875 132 %
Total Administrative Expense $ 1,711,771 $ 484,921 253 %
Administration expenses totaled
Interest Expense and Debt Discount
Interest Expense and Debt Discount for the three months ended
Amortization of Intangible Assets
Amortization of Intangible Assets includes the amortization of the website for
the three months ended
Stock Option Modification Expenses
During the three months ended
Other Income
Other income, net of expenses, for the three months ended
The table below summarizes our other income and expenses for the three months endedJune 30, 2021 and 2020, as well as the percentage of change year-over-year: For the Three Months Ended June 30, Percent Description 2021 2020 Change Realized Gains on Investments $ (41,447 ) $ - - % Equity Investments Losses 41,447 - - % Interest and Dividend Income (5,641 ) - - % Gain on Debt Forgiveness (180,257 ) - - % Total Other Income, Net of Expenses $ (185,898 ) $ - - % 31
Other Income, net of expenses, totaled
Summary of Statements of Operations for the Six Months Ended
Revenue
We had no revenue from operations during the six months ended
Research and Development Expenses
Research and development expenses for the six months ended
The table below summarizes our research and development expenses for the six months endedJune 30, 2021 and 2020 as well as the percentage of change year-over-year: For the Six Months Ended June 30, Percent Description 2021 2020 Change Salaries and Wages$ 7,503 $ 7,491 - % Development Programs 2,271,497 207,774 993 % Professional Services 24,265 20,245 20 % Regulatory Expenses 343,315 238,942 44 % Other Research and Development Expenses 22,904 53,125 (57 )%Total Research and Development Expenses$ 2,669,484 $ 527,577 406 %
Research and Development expenses totaled
The increased costs in our clinical development program include costs for active pharmaceutical ingredients, optimization, pre-clinical toxicology studies and a Phase 1 Multiple Ascending Dose / Single Ascending Dose study.
Professional services are primarily related to legal and patent related fees associated with the protection of our intellectual property.
The increased costs in regulatory expenses include clinical research organizations (CRO) and regulatory consulting fees associated with Phase 2 clinical study design, protocol preparation and updating of the investigator brochure.
Administrative Expenses
Administrative expenses for the six months ended
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The table below summarizes our administrative expenses for the six months ended
For the Six Months Ended
June 30, Percent
Description 2021 2020 Change
Personnel Costs $ 751,757 $ 296,541 154 %
Professional Service Costs 922,002 314,058 194 %
Stock Market & Investor Relations Costs 339,971 - - %
Other Administrative Costs 947,583 550,294 72 %
Total Administrative Expense $ 2,961,313 $ 1,160,893 155 %
Administration expenses totaled
Interest Expense and Debt Discount
Interest Expense and Debt Discount for the six months ended
Amortization of Intangible Assets
Amortization of Intangible Assets includes the amortization of the website for
the six months ended
Stock Option Modification Expenses
During the six months ended
Other Income and Expense
Other income, net of expenses, for the six months ended
The table below summarizes our other income and expenses for the six months endedJune 30, 2021 and 2020, as well as the percentage of change year-over-year: For the Six Months Ended June 30, Percent Description 2021 2020 Change
Realized Gains on Investments
41,447 - - %
Interest and Dividend Income (5,641 ) (6 ) 93,917 %
Gain on Debt Forgiveness (180,257 ) - - %
Total Other Income, net of expenses
Other Income, net of expenses, totaled
Liquidity and Capital Resources
As of
Concurrently with the Merger Agreement, on
We believe that that our current financial resources as of the date of the issuance of these condensed consolidated financial statements are sufficient to fund our current twelve-month operating budget, and satisfying our estimated liquidity needs for twelve months from the issuance of these condensed consolidated financial statements.
Operating Activities
Our net cash used by operating activities totaled
Our net cash used by operating activities totaled
33 Investing Activities
Our net cash provided by investing activities totaled 11,353,891 for the six
months ended
Financing Activities
Net cash consumed by financing activities during the six months ended
Critical Accounting Policies
See accounting policies in Note 2 of the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report.
Off-Balance Sheet Arrangements
We have no significant known off-balance sheet arrangements.
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