InMed Pharmaceuticals Inc

Previous wording

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 our Annual Report on Form 10-K, dated September 23, 2023 and other filings with the Security and Exchange Commission. 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.

Current wording

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.

Previous wording

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated interim financial statements for the three and six months ended December 31, 2023, 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 our Form 10-K filing. Throughout this discussion, unless the context specifies or implies otherwise the terms “InMed,” “Company,” “we,” “us,” and “our” refer to InMed Pharmaceuticals Inc.

Current wording

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.

Previous wording

Since our acquisition of Biogen Sciences Inc., a privately held British Columbia pharmaceutical company focused on drug discovery and development of cannabinoids in 2014, our operations have 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 transaction, BayMedica became a wholly-owned subsidiary of InMed. To date, we have funded our operations primarily through the issuance of common shares.

Current wording

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.

Previous wording

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 $4.0 million and $5.6 million for the six months ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $105.4 million, which includes all losses since our inception in 1981. We expect our expenses will remain steady as we:

Current wording

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:

Previous wording

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, or 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.

Current wording

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.

Previous wording

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 continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

Current wording

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.

Previous wording

Our revenue consists of manufacturing and distribution sales of bulk 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.

Current wording

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.

Previous wording

Cost of sales consist primarily of the purchase price of goods and cost of services rendered, freight costs, warehousing costs, and purchasing costs. Cost of sales also includes production and labor costs for our manufacturing business.

Current wording

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.

Previous wording

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 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.

Current wording

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.

Previous wording

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 expense. We do not track our internal research and development expenses on a program-by-program basis as the resources are deployed across multiple projects.

Current wording

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.

Previous wording

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 necessary 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 development, including the uncertainty related to:

Current wording

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:

Previous wording

A change in the outcome of any of these variables with respect to the development of any of our Products or Product Candidates would significantly change the costs and timing associated with the development of those Products or Product Candidates.

Current wording

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.

Previous wording

Research and development activities account for a significant portion of our operating expenses. Research and development expenses decreased in the three and six months ended December 31, 2023 as compared to the three and six months ended December 31, 2022, 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.

Current wording

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.

Previous wording

General and administrative expenses consist of 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, investor relations activities, legal fees related to corporate matters, fees paid for accounting and tax services, consulting fees and facility-related costs.

Current wording

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.

Previous wording

Intangible assets are comprised of intellectual property that we acquired in 2014 and 2015 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.

Current wording

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.

Previous wording

Research and development and patents expenses decreased by $0.3 million in our InMed segment, or 59%, for the three months ended December 31, 2023 compared to the three months ended December 31, 2022. The decrease in research and development and patents expenses was due to the Company no longer being engaged in clinical trials, lower research supplies, external contractor fees, and stock-based compensation. However, we expect our research and development expenses to increase significantly in future periods as we continue to implement our business strategy.

Current wording

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.

Previous wording

General and administrative expenses decreased by $0.1 million in our InMed segment, or 10%, for the three months ended December 31, 2023 compared to the three months ended December 31, 2022. The decrease results primarily from a combination of changes including lower office and admin fees, salaries and benefits, stock-based compensation expenses, and interest expense on lease obligations. This was offset by an increase in accounting and legal, investor relations, and consulting fees.

Current wording

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.

Previous wording

Comparison of the three months ended December 31, 2023 and 2022 for BayMedica Segment

Current wording

Comparison of the three months ended March 31, 2024 and 2023 for BayMedica Commercial Segment

Previous wording

Sales increased by $0.8 million from an increase in sales volume to $1.2 million in our BayMedica segment, or 164%, for the three months ended December 31, 2023 compared to the three months ended December 31, 2022. 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 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.* *

Current wording

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.* *

Previous wording

Cost of goods sold increased by $0.4 million in our BayMedica segment, or 120%, for the three months ended December 31, 2023 compared to the three months ended December, 2022. The increase in cost of goods sold is a result from the increase in sales mentioned above.

Current wording

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.

Previous wording

Research and development and patents expenses increased by $0.1 million in our BayMedica segment, or 38%, for the three months ended December 31, 2023 compared to the three months ended December 31, 2022. The increase in research and development and patents expenses was primarily due to external contractor fees and personnel expenses. This was offset by lower research supplies.

Current wording

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.

Previous wording

Research and development and patents expenses decreased by $0.4 million in our InMed segment, or 24%, for the six months ended December 31, 2023 compared to the period ended December 31, 2022. The decrease in research and development and patents expenses was due to the Company no longer being engaged in clinical trials, lower research supplies, stock-based compensation expenses, and external contractor fees.

Current wording

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.

Previous wording

General and administrative expenses decreased by $0.4 million in our InMed segment, or 20%, for the six months ended December 31, 2023 compared to the six months ended December 31, 2022. The decrease results primarily from a combination of changes including lower office and admin fees, accounting and legal fees, stock-based compensation expenses, regulatory fees, consulting fees, and interest expense on lease obligations. This was offset by an increase in investor relations.

Current wording

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

Previous wording

Sales increased by $1.3 million from an increase in sales volume to $2.1 million in our BayMedica segment, or 171%, for the six months ended December 31, 2023 compared to the six months ended December 31, 2022. 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 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.

Current wording

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.

Previous wording

Cost of goods sold increased by $1.0 million in our BayMedica segment, or 167%, for the six months ended December 31, 2023 compared to the six months ended December, 2022. The increase in cost of goods sold is a result from the increase in sales mentioned above.

Current wording

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.

Previous wording

The write-down of inventories to net realizable value was $0.3 million in our BayMedica segment for the six months ended December 31, 2023, with expenses of $0.6 million for the six months ended December 31, 2022. 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.

Current wording

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.

Previous wording

General and administrative expenses increased by $0.09 million in our BayMedica segment, or 10%, for the six months ended December 31, 2023 compared to the six months ended December 31, 2022. The increase results primarily from a combination of changes including higher accounting and legal fees, and marketing expenses. This was offset by lower personnel expenses.

Current wording

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.

Previous wording

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 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 common shares.

Current wording

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.

Previous wording

As of December 31, 2023, we had cash, cash equivalents and short-term investments of $9.6 million.

Current wording

As of March 31, 2024, we had cash, cash equivalents and short-term investments of $7.6 million.

Previous wording

During the period ended December 31, 2023, we used cash in operating activities of $4.0 million, primarily resulting from our net loss of $4.0 million combined with changes in working capital and non-cash expenses contributed to net cash used in operating activities.

Current wording

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.

Previous wording

During the period ended December 31, 2022, we used cash in operating activities of $4.9 million, primarily resulting from our net loss of $5.6 million combined with changes in working capital and non-cash expenses contributed to net cash used in operating activities.

Current wording

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.

Previous wording

During the six months ended December 31, 2023, cash provided by financing activities of $4.7 million consisted of $5.2 million of gross proceeds from private placements of our common shares, offset by total transaction costs of $0.5 million.

Current wording

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.

Previous wording

During the six months ended December 31, 2022, cash provided by financing activities of $10.7 million consisted of $12.0 million of gross proceeds from private placements of our common shares, offset by total transaction costs of $1.3 million.

Current wording

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.

Previous wording

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 BayMedica’s R&D efforts targeting cannabinoid analogs. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.

Current wording

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.

Previous wording

Through December 31, 2023, we have funded our operations primarily with proceeds from the sale of common stock. We have incurred recurring losses and negative cash flows from operations since its inception, including net losses of $4.0 million and $5.6 million for the period ended December 31, 2023 and 2022, respectively. In addition, we have an accumulated deficit of $105.4 million as of December 31, 2023.

Current wording

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.

Previous wording

As of the issuance date of the consolidated interim financial statements, we expect our cash, cash equivalents, and short-term investments of $9.5 million as of December 31, 2023, will be sufficient to fund our operating expenses and capital expenditure requirements into the third 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.

Current wording

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.

Previous wording

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, or at all. The terms of any financing may adversely affect the holdings or the rights of our existing stockholders.

Current wording

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.

Previous wording

Our funding requirements and timing and amount of our operating expenditures will depend largely on:

Current wording

Our funding requirements, and the timing and amount of our operating expenditures will depend largely on:

Previous wording

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 change the costs and timing associated with their development. We will need to continue to rely on additional financing to achieve our business objectives.

Current wording

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.

Previous wording

In addition to the variables described 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 our intellectual property rights, and regulatory protection, in addition to other commercial costs. We cannot reasonably estimate these costs at this time.

Current wording

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.