MyMD Pharmaceuticals, Inc. — FY2023 Form 10-K
Reporting period: Year ended December 31, 2023; the filing was signed April 1, 2024. This is an annual report, not a standalone fourth-quarter report. MyMD is a clinical-stage pharmaceutical company developing MYMD-1 and Supera-CBD and has generated no product revenue.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Product revenue | $0 | $0 |
| Operating expenses | $17.12 million | $15.28 million |
| Operating loss | $17.12 million | $15.28 million |
| Net loss | $4.00 million | $15.20 million |
| Net loss attributable to common shareholders | $8.22 million | $15.20 million |
| Cash used in operating activities | $12.98 million | $12.27 million |
- Research and development expense was $7.87 million, down 13.2%; general and administrative expense was $5.44 million, down 1.4%. Stock-based compensation rose to $3.05 million from $0.70 million.
- FY2023 net income was helped by $12.84 million of noncash fair-value gains on warrant and derivative liabilities. These gains substantially reduced reported net loss; they did not represent operating revenue or cash generated.
- At year-end, cash and cash equivalents were $2.68 million and marketable securities were $2.24 million. Working capital was $0.83 million; total liabilities were $5.09 million and stockholders’ equity was $12.37 million. The filing does not present a conventional debt balance as a key financing metric; Series F preferred stock carries redemption, dividend, and conversion obligations.
- Cash provided by financing was $13.07 million, primarily from the February 2023 Series F preferred stock offering. The company reported $6.83 million stated value of Series F shares outstanding at year-end, with a 10% compounded annual dividend rate, scheduled installments, and possible cash or stock settlement.
- The company reported that available liquidity was insufficient to fund operations for the next 12 months and that substantial doubt existed about its ability to continue as a going concern. Management was evaluating debt and equity financing; no financing outcome was assured.
Changes versus FY2022
- Operating loss increased by about 12%, while net loss decreased by about 74%, primarily because of the noncash fair-value gains on Series F-related liabilities. Preferred-stock dividends of $4.22 million increased the loss attributable to common shareholders to $8.22 million.
- R&D expense declined overall, but development-program costs increased as the sarcopenia trial was completed and analyzed; regulatory costs fell substantially because certain work had been completed in 2022.
- Operating cash use increased to $12.98 million from $12.27 million. The company funded operations through the Series F offering and reported lower year-end marketable securities than in 2022.
Business, outlook, risks, and unusual items
- MYMD-1: The Phase 2 sarcopenia/frailty study was completed, with the last patient visit in June 2023; the clinical safety report was still being prepared. The company expected to submit end-of-Phase 2 materials to the FDA in early Q2 2024 and anticipated reviewing final efficacy data in 2024. The FDA cleared an IND for a Phase 2 rheumatoid arthritis study in August 2023. A Hashimoto’s thyroiditis Phase 2 protocol was in development, with submission planned for Q4 2024.
- Supera-CBD: Remained in preclinical development. The company planned further enabling studies before seeking an IND and human trials. The DEA determined in March 2023 that Supera-CBD was not a controlled substance or listed chemical under the Controlled Substances Act; FDA approval is still required for any drug marketing.
- Neither candidate is approved, and future clinical results, regulatory approval, commercialization, reimbursement, and revenue are uncertain. The company relies on third parties for research, clinical trials, and manufacturing and had no sales and marketing infrastructure.
- Financing and dilution: Series F preferred shares and warrants include high-rate dividends, redemption features, and full-ratchet anti-dilution provisions. Settlement in common shares could substantially dilute existing holders; cash settlement could strain liquidity. Additional capital may not be available on acceptable terms.
- Other notable items: MyMD recorded a $178,198 FY2023 loss from wire fraud involving altered payment instructions; it also disclosed an earlier cybersecurity-related wire-fraud loss of $1,260,864, net of recoveries. A workforce reduction eliminated three of ten employees in October 2023. A New Jersey whistleblower-related lawsuit remained in discovery.
- After year-end, the company effected a 1-for-30 reverse stock split on February 14, 2024 and reincorporated in Delaware on March 4, 2024. Nasdaq notified the company on March 4 that it had regained listing compliance. Share and per-share figures in the report are retroactively adjusted for the split.
- Management reported effective disclosure controls and internal control over financial reporting as of year-end; the auditor did not provide an internal-control attestation. The auditor’s financial-statement opinion was unqualified and highlighted going concern, derivative valuation, and the Oravax investment impairment assessment as critical audit matters.
Important facts for investors to verify
- Current cash runway, operating burn, financing plans, and whether funding sufficient for at least 12 months has been secured.
- Current Series F preferred stock and warrant balances, redemption and dividend obligations, anti-dilution terms, and fully diluted share count after the reverse split.
- Status and timing of the MYMD-1 sarcopenia safety report and FDA discussions, the rheumatoid arthritis trial, and the Hashimoto’s protocol.
- Whether Supera-CBD has completed required preclinical work and is ready for an IND submission; DEA status alone is not FDA authorization.
- Resolution and potential financial exposure from litigation, wire-fraud matters, and any other commitments or contingencies disclosed in the complete financial statement notes.
- Any subsequent financing, changes in Nasdaq compliance, and the impact of stock issuances on existing shareholders.