MIRA Pharmaceuticals, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; financial statements are unaudited. MIRA is a preclinical-stage pharmaceutical company with programs for Ketamir-2 and MIRA-55. The company reported that it had not filed all required Exchange Act reports during the preceding 12 months.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating costs | $1.77 million | $1.34 million |
| Net loss | $1.72 million | $1.34 million |
| Basic and diluted loss per share | $0.12 | $0.10 |
| Cash used in operating activities | $1.05 million | $1.08 million |
| Net change in cash | $(1.07) million | $(0.35) million |
- Q1 2024 R&D expense was $762,276, up from $271,606, primarily reflecting initial payments for Ketamir-2 preclinical research. G&A expense rose to $1,005,911 from $614,235, mainly due to increased stock-based compensation.
- Related-party travel expense fell from $453,550 to zero after the airplane lease ended in March 2023. Net interest income was $50,416 in 2024, compared with net interest expense of $1,653 in 2023. With no revenue, gross margin is not applicable.
- Cash was $3.53 million at March 31, 2024, down from $4.60 million at year-end 2023. Total assets were $3.81 million, total liabilities $652,006, and stockholders’ equity $3.16 million. Current assets were $3.71 million versus current liabilities of $652,006.
- The filing reports no borrowings under MIRALOGX’s related-party loan facility as of March 31. The facility permits up to $3 million at 8% interest, subject to specified Ketamir-2 IND-preparation budget limits, and matures November 15, 2024. Accrued related-party interest was $14,472. No other material debt balance is reported.
Material changes and business developments
- In early 2024, the company discovered a novel version of its MIRA1a molecule, designated MIRA-55, and reported that preclinical studies previously attributed to MIRA1a had in fact used MIRA-55. It filed a provisional patent in March and now plans to advance MIRA-55 as its lead oral pharmaceutical marijuana candidate, while retaining rights to MIRA1a. The company describes MIRA-55 as potentially more potent, but says further testing is required.
- Ketamir-2 is being developed under an exclusive U.S., Canada and Mexico license from related party MIRALOGX. The agreement includes an 8% royalty on net sales and certain other revenue and a warrant for up to 700,000 shares at $2.00 per share.
- The company granted 725,000 stock options in Q1; stock-based compensation expense was $500,210. Approximately $1.6 million of compensation costs remained unrecognized at quarter-end.
Outlook, risks and other notable disclosures
- Management expects available resources, including potential borrowings under the related-party facility, to fund operations through Q4 2024. It says additional financing will be needed and that cash on hand as of the filing date is insufficient for at least 12 months after issuance of the financial statements. The filing therefore identifies substantial doubt about the company’s ability to continue as a going concern.
- Potential equity offerings, strategic alliances and product collaborations are under consideration but are not committed. The company expects continuing losses; there is no assurance it can raise sufficient capital on acceptable terms.
- The DEA concluded Ketamir-2 would not be considered a controlled substance or listed chemical under the Controlled Substances Act. MIRA-55 has been submitted for DEA evaluation. Both programs remain in development; the filing provides no specific clinical or financial guidance.
- Management concluded disclosure controls and procedures were not effective as of March 31, 2024. It reported no material change in internal control over financial reporting during the quarter. No material legal proceedings were reported.
Important facts for investors to verify
- Whether the company can secure adequate financing before its stated runway ends, and the availability and permitted use of the MIRALOGX facility.
- The status of MIRA-55’s provisional patent, the investigation into the molecule used in prior studies, and the further testing needed to support management’s preliminary efficacy claims.
- The filing reports 14,780,885 shares issued and outstanding at March 31, but weighted-average shares of 19,707,847 for Q1 2024. Investors may wish to verify this discrepancy.
- The company’s “No” response to whether it filed all required reports in the preceding 12 months, and the remediation status of ineffective disclosure controls.