# Mira Pharmaceuticals, Inc.: Form 10-Q/A for the period ended Jun 30, 2024

- Company: [Mira Pharmaceuticals, Inc.](/companies/mira.md) (CIK 1904286)
- Form: 10-Q/A
- Filed: 2024-08-16
- Accepted by EDGAR: Aug 16, 2024, 20:05 ET
- Period: 2024-06-30
- Accession: 0001493152-24-032816
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1904286/000149315224032816/form10-qa.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1904286/000149315224032816/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 3 months, 2024-04-01 to 2024-06-30 | $614.5k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2024-01-01 to 2024-06-30 | $1.4m | us-gaap:ResearchAndDevelopmentExpense |
| Interest expense | 3 months, 2024-04-01 to 2024-06-30 | −$39.4k | us-gaap:InterestExpense |
| Interest expense | 6 months, 2024-01-01 to 2024-06-30 | −$89.8k | us-gaap:InterestExpense |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | −$1.7m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | −$3.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.11 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | −$0.23 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.11 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | −$0.23 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 14,780,885 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-01-01 to 2024-06-30 | 14,780,885 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | −$1.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2024-06-30 | $2.8m | us-gaap:Cash |
| Current assets | at 2024-06-30 | $2.9m | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $3.0m | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $796.6k | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-30 | $796.6k | us-gaap:Liabilities |
| Shareholders' equity | at 2024-06-30 | $2.2m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 9,963 characters.

*The following discussion and analysis should be read in conjunction with the Condensed Financial Statements and Notes thereto included elsewhere in this Quarterly Report. This discussion contains certain forward-looking statements that involve risks and uncertainties. The Company’s actual results and the timing of certain events could differ materially from those discussed in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth herein and elsewhere in this Quarterly Report and in the Company’s other filings with the SEC. See “Cautionary Note Regarding Forward Looking Statements” above.*

*As used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, unless otherwise indicated, the terms “the Company”, “we”, “us”, “our” and similar terminology refer to MIRA Pharmaceuticals, Inc.*

### Background of the Company

We are a pre-clinical-stage pharmaceutical development company with two neuroscience programs targeting a broad range of neurologic and neuropsychiatric disorders. We hold exclusive license rights in the U.S., Canada and Mexico for ***Ketamir-2***, a novel, patent pending oral ketamine analog under pre-clinical investigation to potentially deliver ultra-rapid antidepressant effects, providing hope for individuals battling TRD, MDSI and potentially PTSD.

Additionally, our novel oral pharmaceutical marijuana molecule, ***MIRA-55***, is being studied for its potential to alleviate neuropathic pain, as well as anxiety and cognitive decline, symptoms commonly associated with early-stage dementia. MIRA-55, if approved by the FDA, could mark a significant advancement in addressing various neuropsychiatric, inflammatory, and neurologic diseases and disorders.

The DEA’s scientific review of Ketamir-2 and MIRA-55 concluded that both would not be considered a controlled substance or listed chemical under the CSA and its governing regulations.

We were incorporated under the laws of the State of Florida in September 2020 and commenced substantive operations, including our pharmaceutical development program, in late 2020.

### Critical Accounting Estimates

See Note 1 of the Notes to Condensed Financial Statements included in Item 1 of this Report for a summary of significant accounting policies and information on recently issued accounting pronouncements.

### Results of Operations

### For the three months ended June 30, 2024 compared to the three months ended June 30, 2024

*Research and Development Expenses.* During the three months ended June 30, 2024, we incurred $0.6 million in research and development expenses, which were primarily related to initial payments for pre-clinical research projects for Ketamir. We incurred $0.3 million in research and development expenses during the three months ended June 30, 2023, which were offset by $0.4 million in research and development credits. The credits were primarily related to toxicology expenses for projects and milestones that were not performed by our vendors.

*General and Administrative Expenses*. We incurred $1.1 million and $1.0 million in general and administrative expenses during the three months ended June 30, 2024 and June 30, 2023, respectively. General and administrative expenses are composed primarily of compensation, insurance, professional fees, stock-based compensation, administration and other related costs. The decrease is due primarily to a decrease in stock-based compensation expense in 2023.

*Interest income (expense)*. We earned $0.04 million in interest income related to money market accounts in the three months ended June 30, 2024 and incurred $0.3 million in interest expense during the three months ended June 30, 2023. Interest expense during 2023 included $0.3 million of debt issuance costs.

### For the six months ended June 30, 2024 compared to the six months ended June 30, 2023

*Research and Development Expenses.* During the six months ended June 30, 2024, we incurred $1.4 million in research and development expenses, which were primarily related to the initial payments for pre-clinical research projects for Ketamir. We incurred $0.6 million in research and development expenses during the six months ended June 30, 2023, which were offset by $0.4 million in research and development credits. The credits were primarily related to toxicology expenses for projects and milestones that were not performed by our vendors.

*General and Administrative Expenses.* We incurred general and administrative expenses of $2.1 million and $1.7 million during the six months ended June 30, 2024 and June 30, 2023, respectively. General and administrative expenses consists of payroll, consulting fees, IT-related costs, legal and accounting costs, office and rent expenses, investor relations and stock-based compensation expenses. The increase is primarily related to stock compensation expense.

*Related Party Travel Costs*. We incurred $0.0 million and $0.5 million in related party travel costs during the six months ended June 30, 2024 and June 30, 2023, respectively. Related party travel costs consisted of a lease and use of an airplane with an entity under common control. The decrease in related party travel costs is due to the termination of the lease in March 2023.

*Interest income (expense)*. We recognized $0.09 million in interest income from money market accounts and $0.3 million in interest expense during the six months ended June 30, 2024 and June 30, 2023, respectively. Interest expense during 2023 included $0.3 million of debt issuance costs.

### Liquidity and Capital Resources

### Sources of Liquidity and Going Concern

Since our inception in September 2020, we have financed our operations primarily through an unsecured line of credit with a major shareholder and an affiliated company, through a private placement of shares of our common stock that occurred during the fourth quarter 2021 and during 2022, and by the proceeds from our completed initial public offering in August 2023. We intend to finance our clinical development programs and working capital needs from existing cash, and potentially new sources of debt and equity financing. We may enter into new licensing and commercial partnership agreements.

Historically, we have been primarily engaged in developing MIRA-55 and, more recently, have also been focusing on the development of Ketamir-2. During these activities, we have sustained substantial losses. Our ability to fund ongoing operations and future pre-clinical and clinical trials required for FDA approval is dependent on our ability to obtain significant additional external funding in the near term. We expect to be able to fund operations through the fourth quarter of 2024, with available borrowings from the related-party loan described in Note 5 in the accompanying financial statements. We will require additional financing and equity raises to fund our operations, to continue and complete pre-clinical and clinical development activities and to commercially develop and ultimately launch our product candidates. However, and particularly given our early-stage nature and the significant time and capital required to implement our business plan, there can be no assurance that any fundraising will be achieved on commercially reasonable terms, if at all.

On August 12, 2024, the Company filed a shelf registration statement on Form S-3 with the SEC. The terms of any offering under the shelf registration statement will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to completion of any such offering

We expect to continue to generate losses in the foreseeable future. Our liquidity needs will be determined largely by the budgeted operational expenditure incurred in regard to the progression of our product candidates. We do not have sufficient cash and cash equivalents as of the date of filing this Report to support our operations for at least the 12 months. These conditions raise substantial doubt about our ability to continue as a going concern through 12 months after the date the financial statements included in this Report are issued.

#### Cash Flows

The following table provides information regarding our cash flows for the periods presented:

| Net cash flows from: | Six months Ended June 30, 2024 | 2023 |
| --- | ---: | ---: |
| Operating activities | $(1,913,465) | $(1,736,119) |
| Financing activities | 134,690 | 1,409,964 |
| Net change in cash | $(1,788,785) | $(326,155) |

13

#### Net Cash Flows from Operating Activities

For the six months ended June 30, 2024, operating activities used $1.9 million of cash, primarily due to a net loss of $3.4 million, offset by $1.1 million in stock-based compensation expense and $0.3 million in accounts payable, accrued and prepaid expenses. Accounts payable, accrued and prepaid expenses were primarily composed of research and development payables, consultant costs, and insurance costs.

For the six months ended June 30, 2023, operating activities used $1.7 million of cash, primarily due to a net loss of $2.6 million and $0.2 million change in accounts payable, offset by $0.3 million in debt issuance cost and accrued expenses and $0.9 million in stock-based compensation expense. Accounts payable, accrued and prepaid expenses were primarily composed of research and development payables, consultant costs, insurance costs and legal expenses.

#### Net Cash Flows from Financing Activities

For the six months ended June 30, 2024, financing activities used $0.1 million of cash, resulting from $0.02 million in advances to affiliates.

For the six months ended June 30, 2023, financing activities provided $1.4 million of cash, resulting primarily from $1.7 million in advances from affiliate, offset by $0.1 million of repayments under related party line of credit, offset by $0.2 million paid in deferred offering costs.

## Market risk

As filed, 189 characters.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and therefore are not required to provide the information under this item per Item 305(e) of Regulation S-K.

## Controls and procedures

As filed, 4,245 characters.

#### Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, our management, with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer) (the “Certifying Officers”), conducted evaluations of our disclosure controls and procedures. As defined under Sections 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the Certifying Officers, to allow timely decisions regarding required disclosures.

Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our control have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

During 2024, the Company has designed and implemented new and enhanced controls to strengthen the Company’s internal controls over financial reporting, including hiring additional experienced accounting personnel, among other enhancements. Management believes these enhancements will be sufficient to remediate previously identified material weaknesses. However, the new and enhanced controls have not operated for a sufficient amount of time to conclude that the Company’s disclosure controls and procedures were effective. Accordingly, based on this assessment , the Certifying Officers have concluded that our disclosure controls and procedures were not effective as of June 30, 2024

#### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, during our second quarter of 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting other than those described above.

#### Limitations on the Effectiveness of Internal Controls

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this Report that our disclosure controls and procedures were not effective to provide reasonable assurance that the objectives of our disclosure control system were met. The Company plans to remediate the ineffectiveness of its disclosure controls and procedures through implementation of additional levels of review and personnel with increased technical accounting expertise.

## Risk factors

As filed, 2,717 characters.

Our business, financial condition, results of operations and cash flows are subject to, and could be materially adversely affected by, various risks and uncertainties, including, without limitation, those set forth below, any one of which could cause our actual results to vary materially from recent results or our anticipated future results.

***We expect to rely on third parties to conduct our pre-clinical trials and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with regulatory requirements or our pre-clinical protocols.***

We currently rely on CROs to conduct our pre-clinical trials, as we currently do not plan to independently conduct pre-clinical trials of any of our product candidates. Our agreements with these CROs, and other third parties might terminate for a variety of reasons, including a failure to perform by the third parties. If we were ever to need to enter into alternative arrangements or if we were to need to change a CRO for an ongoing pre-clinical trial, we might experience delays in our pre-clinical development activities.

Our reliance on CROs for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities for how these activities are performed. Moreover, the FDA requires compliance with standards, commonly referred to as GCPs, for conducting, recording and reporting the results of pre-clinical trials to assure that data and reported results are credible and accurate. Further, these CROs may have relationships with other entities, some of which may be our peers or competitors. If the CROs with whom we work do not successfully carry out their contractual duties, or meet expected deadlines, for any reason, we may be delayed in filing our IND with our product candidates. Our failure or the failure of these third parties to comply with applicable regulatory requirements could also subject us to enforcement action. Moreover, our business may be implicated if any of these third parties violates federal or state laws, regulations and security laws.

We also currently rely on certain foreign or foreign-owned third-party vendors to conduct certain pre-clinical trials of our product candidates. Our engagement with these foreign and foreign-owned vendors may be subject to new U.S. legislation or investigations, such as the proposed BIOSECURE Act, sanctions, trade restrictions and other foreign regulatory requirements, which could cause us to need to identify alternate service providers, or delay our pre-clinical trials, which could adversely affect our financial condition and business prospects.

Filed Aug 16, 2024.
Source: SEC EDGAR, the filing index for accession 0001493152-24-032816. Last ingested by Listed: Oct 24, 2026, 15:16 ET. No prices; not investment advice.