# ProMIS Neurosciences Inc.: Form 10-Q for the period ended Jun 30, 2024

- Company: [ProMIS Neurosciences Inc.](/companies/pmn.md) (CIK 1374339)
- Form: 10-Q
- Filed: 2024-08-08
- Accepted by EDGAR: Aug 8, 2024, 08:05 ET
- Period: 2024-06-30
- Accession: 0001558370-24-011476
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1374339/000155837024011476/pmn-20240630x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1374339/000155837024011476/

## 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 | $1.6m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2024-01-01 to 2024-06-30 | $3.7m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | −$2.7m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-01-01 to 2024-06-30 | −$6.4m | us-gaap:OperatingIncomeLoss |
| Interest expense | 6 months, 2024-01-01 to 2024-06-30 | $76.8k | us-gaap:InterestExpense |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | −$2.6m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | −$6.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.13 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | −$0.32 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | −$0.13 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | −$0.32 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 19,770,739 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-01-01 to 2024-06-30 | 19,544,908 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | −$11.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2024-06-30 | $992.5k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $1.4m | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $1.4m | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $3.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-30 | $3.7m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-06-30 | −$2.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 43,801 characters.

*All references in this management’s discussion and analysis of financial condition and results of operations, or MD&A, to the “Company”, “ProMIS”, “we”, “us”, or “our” refer to ProMIS Neurosciences Inc., unless otherwise indicated or the context requires otherwise. The following MD&A is prepared as of August 8, 2024 for the three and six months ended June 30, 2024 and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023 and 2022 included in the Company’s Annual Report on Form 10-K and the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2024 and 2023 included in this Quarterly Report on Form 10-Q (collectively, the “****Financial Statements”****), which have been prepared by management in accordance with GAAP as issued by the FASB. All dollar amounts refer to United States dollars, except as stated otherwise.*

### Overview

We are applying our patented technology platform to build a portfolio of antibody therapies and therapeutic vaccines in neurodegenerative diseases and other protein-misfolding diseases, with a focus on Alzheimer’s disease (AD), multiple system atrophy (MSA), and amyotrophic lateral sclerosis (ALS). We believe these diseases share a common biologic cause — misfolded versions of proteins, that otherwise perform a normal function, becoming toxic and killing neurons, resulting in disease. ProMIS’ technology platform enables drug discovery through a combination of protein biology, physics and supercomputing. We believe this platform provides a potential advantage in selectively targeting the toxic misfolded proteins with therapeutics or detecting them with diagnostics.

We are developing a pipeline of antibodies aimed at selectively targeting misfolded toxic forms of proteins that drive neurodegenerative diseases without interfering with the essential functions of the same properly folded proteins. Our product candidates are PMN310, PMN267, and PMN442. Our lead product candidate is PMN310, a monoclonal antibody designed to treat AD by selectively targeting toxic, misfolded oligomers of amyloid-beta. PMN267 is our second lead product candidate targeting ALS. It has been shown in preclinical studies to selectively recognize misfolded, cytoplasmic TDP-43 aggregates without interacting with normal TDP-43. Misfolded TDP-43 is believed to play an important role in the development of ALS. In light of research suggesting that misfolded toxic a-syn is a primary driver of disease in synucleinopathies such as MSA and Parkinson’s disease, our third lead product candidate, PMN442 has shown robust binding to pathogenic a-syn oligomers and seeding fibrils in preclinical studies, with negligible binding to a-syn monomers and physiologic tetramers which are required for normal neuronal function. We also have earlier stage preclinical programs and a project to refine our discovery algorithm using machine learning as highlighted in the “Other Key Projects” section below.

We were incorporated on January 23, 2004 under the Canada Business Corporations Act (CBCA). On July 13, 2023, we continued our existence from a corporation incorporated under the CBCA into the Province of Ontario under the Business Corporations Act (Ontario) (the OBCA) (the Continuance). The Continuance was approved by our shareholders at the our 2023 Annual Meeting of Shareholders held on June 29, 2023. We have a wholly-owned U.S. subsidiary, ProMIS USA, which was incorporated in January 2016 in the State of Delaware. ProMIS USA has had no material activity and has no material financial impact on our Financial Statements. Since our inception, we have devoted substantially all of our resources to developing our platform technologies and the resultant antibody product candidates, building our intellectual property portfolio, business planning, raising capital and providing general and administrative support for these operations. We have principally financed our operations through public and private placements of Common Shares and warrants and convertible debt.

We have incurred significant operating losses since inception. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual licensing and/or commercialization of our product candidates and any future product candidates. Our net losses were $2.6 million and $2.3 million for the three months ended June 30, 2024 and 2023, respectively, and $6.3 million and $7.3 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $99.7 million. We expect to continue to incur net losses for the foreseeable future and, if able to raise additional funding, would expect our research and development expenses, general and administrative expenses and capital expenditures to increase. In particular, if we are able to raise additional funding, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our product candidates, as well as initiate clinical trials, hire additional personnel, pay fees to outside consultants, lawyers and accountants, and incur other increased costs associated with being a clinical-stage public company. In addition, if we obtain marketing approval for any product candidates, we may incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. We may also incur expenses should we in-license or acquire additional product candidates.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, including our at-the-market offering agreement we entered into in January 2024 to sell up to $25.0 million of Common Shares, debt financings, or other capital sources, which may include 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, reduce or eliminate the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. 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.

In July 2024, we entered into a Unit Purchase Agreement with certain institutional and accredited investors to sell $30.3 million of Common Share Units and Pre-funded Warrant Units in a private placement, before deducting an estimated $2.5 million in placement agent fees and offering costs. Management believes that the net proceeds from the private placement will provide sufficient cash, based on our current operating plan, to enable us to fund our operating expenses into 2026. We are subject to all the risks inherent in the development of new biopharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may harm our business. Refer to additional discussion related to our capital requirements in “*Liquidity and Capital Resources.”*

### Program Updates

### ProMIS lead program PMN310: Potential Next Generation Therapy for Alzheimer’s Disease

PMN310, a monoclonal antibody selective for toxic amyloid-beta oligomers in AD, is our lead product candidate. In the beginning of 2024, we made significant progress on the program elements.

A first-in-human Phase 1a clinical trial of PMN310 in normal human volunteers was initiated in November 2023. Enrollment of the 5 single ascending dose (SAD) cohorts (2.5, 5, 10, 20, 40 mg/kg) was completed in May 2024. Topline data from the first 4 cohorts were released in July 2024. PMN310 was generally well-tolerated through the first four SAD cohorts with no treatment-emergent serious adverse events (SAEs) observed after administration of PMN310. Cerebrospinal fluid (CSF) collection was done on days 3 and 29 after PMN310 administration. Tests showed that the levels of PMN310 in the CSF increased proportionally with the dosage on both days 3 and 29. Even at the lowest dose, PMN310 appeared present at over 100 times the concentration of the oligomers in the CNS. The half-life of PMN310 in CSF was approximately 25 days, which appears supportive of once per month dosing. We expect to present the full dataset at an upcoming medical meeting in the 2H 2024.

A Phase 1b proof of concept trial in Alzheimer’s disease patients is expected to initiate in the second half of 2024. This randomized, placebo controlled, double blind clinical trial is expected to enroll 100 patients and will not only look at critical biomarkers and incidence of ARIA but will also extend for 12 months to enable us to measure important clinical endpoints.

Expenditures for PMN310 in the three months ended June 30, 2024 were approximately $1.1 million, not including allocations of senior management time.

### ALS Portfolio, including TAR-DNA binding protein 43 (TDP-43) – PMN267

PMN267 has been humanized in a human IgG1 framework and is ready to progress to IND-enabling studies, subject to sufficient available resources, to support the systemic, extracellular administration form. Additionally, in conjunction with a partner having expertise with vectorization, the development of an intrabody form could progress.

### Multiple system atrophy (MSA) – PMN442

ProMIS has selected a novel monoclonal antibody (PMN442) as a lead candidate for MSA based on its selective binding and protective activity against pathogenic forms of alpha-synuclein. PMN442 has been humanized in a human IgG1 framework and is ready to progress to IND-enabling studies, subject to availability of sufficient resources.

### Other key projects

We continue to progress with other key projects, in addition to our top priorities PMN310, PMN267, and PMN442. With respect to the amyloid vaccine program, mouse studies have provided data guiding the development of an AD vaccine containing our oligomer peptide antigens conjugated to a carrier protein in formulation with an adjuvant. Mouse vaccination studies with a-syn vaccine candidates utilizing our peptide antigens to target pathogenic a-syn enabled the selection of our lead vaccine candidate, PMN400, against multiple synucleinopathies including MSA, Parkinson’s disease and Lewy body dementia.

Our proprietary technology employs algorithmic prediction of protein misfolding to identify disease-specific epitopes (DSEs) to which selective antibodies can be raised. An effort is underway to update the algorithms with machine learning capabilities to accelerate our ability to identify and patent DSEs and antibodies, across neurodegenerative diseases as well as other therapeutic areas.

### Recent Corporate Highlights

- In July 2024, topline data from the first four cohorts were released. PMN310 was generally well-tolerated with no treatment-emergent SAEs observed after administration of PMN310, and, importantly, showed that PMN310 crossed into the central nervous system in quantities suggesting we may see potential target engagement in the upcoming Phase 1b clinical study. Tests showed that the levels of PMN310 in the CSF increased proportionally with the dosage on both days 3 and 29. Even at the lowest dose, PMN310 appeared present at over 100 times the concentration of the oligomers in the CNS. The half-life of PMN310 in CSF was approximately 25 days, which appears supportive of once per month dosing. We expect to present the full dataset at an upcoming medical meeting in the second half of 2024. A Phase 1b proof of concept trial in Alzheimer’s disease patients is expected to initiate in the second half of 2024. This randomized, placebo controlled, double blind clinical trial is expected to enroll 100 patients and will not only look at critical biomarkers and incidence of ARIA but will also extend for 12 months to enable us to measure important clinical endpoints.
- In July 2024, we announced a Private Placement for gross proceeds of $30.3 million upfront with up to an additional $92.4 million tied to exercise of warrants, with certain of the warrants subject to shareholder approval, before deducting an estimated $2.5 million in placement agent fees and other offering costs. For more information on the Private Placement, refer to “*Liquidity and Capital Resources.”*
- In June 2024, the manuscript titled “Seeding activity of human superoxide dismutase 1 aggregates in familial and sporadic amyotrophic lateral sclerosis postmortem neural tissues by real-time quaking-induced conversion” was published in the Acta Neuropathologica journal.
- In June 2024, the manuscript titled “Amyloidogenic regions in beta-strands II and III modulate the aggregation and toxicity of SOD1 in living cells” was published in the Open Biology journal.
- In July 2024, the poster titled “Novel approach to optimization of Alzheimer’s vaccine configuration for maximal targeting of toxic amyloid beta oligomers” was presented at AAIC 2024.

### Components of Operating Results

### Revenue

We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of our products in the near future, if at all. If our product candidates are successful and result in marketing approval or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from such collaboration or license agreements.

### Operating Expenses

#### Research and Development Expenses

Research and development expenses consist primarily of costs incurred in connection with the development and research of our platform technologies, as well as unrelated discovery program expenses. We expense research and development costs in the periods in which they are incurred. These expenses include:

- employee-related expenses, including salaries, related benefits and share-based compensation expense, for employees engaged in research and development activities;
- external research and development expenses incurred under arrangements with third parties, such as contract research organizations or contract research organizations (“**CROs”**), and consultants;
- the cost of acquiring, developing, and manufacturing clinical study materials; and
- costs associated with preclinical and clinical activities and regulatory operations.

We enter into consulting, research, and other agreements with commercial entities, researchers, universities, and others for the provision of goods and services. Such arrangements are generally cancelable upon reasonable notice and payment of costs incurred. Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided by the respective vendors, including our clinical sites. These costs consist of direct and indirect costs associated with our platform technologies, as well as fees paid to various entities that perform certain research on our behalf. Depending upon the timing of payments to the service providers, we recognize prepaid expenses or accrued expenses related to these costs. These accrued or prepaid expenses are based on management’s estimates of the work performed under service agreements, milestones achieved, and experience with similar contracts. We monitor each of these factors and adjust estimates accordingly.

Research and development activities account for a significant portion of our operating expenses. If we are able to obtain additional funding, we expect our research and development expenses to increase substantially for the foreseeable future as we continue to implement our business strategy, which includes advancing our platform technologies through clinical development as well as other product candidates into clinical development, expanding our research and development efforts, including hiring additional personnel to support our research efforts, our clinical and product development efforts, and seeking regulatory approvals for our product candidates that successfully complete clinical trials.

We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying and developing product candidates. Our direct research and development expenses consist primarily of external costs, including fees paid to consultants, contractors and CROs in connection with our development activities and the cost of acquiring, developing, and manufacturing clinical study materials.

#### General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs including salary, bonus, employee-benefits and share-based compensation, costs incurred in development and protection of intellectual property, professional service fees, and other general overhead and facility costs, (including rent) depreciation and amortization. If we are able to obtain additional funding, we expect our general and administrative expenses to increase substantially for the foreseeable future as we increase our administrative function to support the growth of the business and its continued research and development activities.

#### Other (Expense) Income

Other (expense) income consists primarily of interest expense on deferred accounts payable with a vendor, changes in the fair value of our financial instruments and interest income.

### Six Months Ended June 30, 2024 and 2023

#### Results of Operations

The following table summarizes our results of operations for the periods presented:

| ​ ​ ​ Operating expenses | ​ ​ | ​ ​ Six Months Ended June 30, 2024 ​ | ​ | ​ ​ 2023 ​ | ​ ​ | ​ ​ ​ ​ Change ​ | ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- |
| Research and development | ​ | $3,749,599 | ​ | $4,515,967 | ​ | $(766,368) | ​ |
| General and administrative | ​ | 2,640,758 | ​ | 3,354,588 | ​ | (713,830) | ​ |
| Total operating expenses | ​ | 6,390,357 | ​ | 7,870,555 | ​ | (1,480,198) | ​ |
| Loss from operations | ​ | (6,390,357) | ​ | (7,870,555) | ​ | 1,480,198 | ​ |
| Other income (expense) | ​ | 131,612 | ​ | 599,150 | ​ | (467,538) | ​ |
| Net loss | ​ | $(6,258,745) | ​ | $(7,271,405) | ​ | $1,012,660 | ​ |

### Research and Development Expenses

The following table summarizes the period-over-period changes in research and development expenses for the periods presented:

| ​ ​ ​ Direct research and development expenses by program | ​ ​ | ​ ​ Six Months Ended June 30, 2024 ​ | ​ | ​ ​ 2023 ​ | ​ ​ | ​ ​ ​ ​ Change ​ | ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- |
| PMN310 | ​ | $2,623,174 | ​ | $2,603,786 | ​ | $19,388 | ​ |
| ALS | ​ | — | ​ | — | ​ | — | ​ |
| Platform and other programs | ​ | 358,772 | ​ | 298,915 | ​ | 59,857 | ​ |
| Indirect research and development expenses: | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ |
| Employee salaries and benefits | ​ | 699,829 | ​ | 734,842 | ​ | (35,013) | ​ |
| Share-based compensation | ​ | ​ 7,625 | ​ | ​ 78,018 | ​ | ​ (70,393) | ​ |
| Consulting expense | ​ | 41,492 | ​ | 769,300 | ​ | (727,808) | ​ |
| Other operating costs | ​ | 18,707 | ​ | 31,106 | ​ | (12,399) | ​ |
| Total research and development expenses | ​ | $3,749,599 | ​ | $4,515,967 | ​ | $(766,368) | ​ |

Research and development expenses decreased by $0.8 million, or 17%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This decrease is attributable to a $0.7 million decrease in consulting expenses as we focused resources primarily on the submission of the PMN310 IND application, which was completed in April 2023 and cleared in May 2023. Employee salaries and share-based compensation decreased by $0.1 million, offset by a $0.1 million increase in platform and other program costs.

### General and Administrative Expenses

The following table summarizes the period-over-period changes in general and administrative expenses for the periods presented:

| ​ ​ ​ | ​ ​ | ​ ​ Six Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ ​ | ​ ​ ​ ​ Change | ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- |
| Employee salaries and benefits | ​ | $335,620 | ​ | $421,933 | ​ | $(86,313) | ​ |
| Share-based compensation | ​ | ​ 73,958 | ​ | ​ 188,683 | ​ | ​ (114,725) | ​ |
| Professional and consulting fees | ​ | 1,999,394 | ​ | 2,573,814 | ​ | (574,420) | ​ |
| Patent expense | ​ | 162,330 | ​ | 142,143 | ​ | 20,187 | ​ |
| Facility-related and other | ​ | 69,456 | ​ | 28,015 | ​ | 41,441 | ​ |
| Total general and administrative expenses | ​ | $2,640,758 | ​ | $3,354,588 | ​ | $(713,830) | ​ |

General and administrative expenses decreased by $0.7 million, or 21%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Employee salaries and share-based compensation costs decreased by $0.1 million. Professional and consulting fees decreased by $0.6 million. Professional and consulting fees during the six months ended June 30, 2023 included one-time costs of $0.8 million related to expensing previously deferred financing costs after abandoning planned offerings. Excluding one-time costs, professional and consulting fees were $1.8 million for the six months ended June 30, 2023, reflecting an increase in 2024 professional and consulting fees of $0.2 million. This was comprised of an increase of $0.4 million in legal costs, $0.1 million in investor relations and audit and tax fees, offset by a decrease of $0.1 million in insurance and other consulting costs.

### Other (Expense) Income

Other income decreased by $0.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily due to a decrease on the gain on change in fair value of financial instruments of $0.5 million.

### Three Months Ended June 30, 2024 and 2023

### Results of Operations

The following table summarizes our results of operations for the periods presented:

| ​ ​ ​ Operating expenses | ​ ​ | ​ ​ Three Months Ended June 30, 2024 ​ | ​ | ​ ​ 2023 ​ | ​ ​ | ​ ​ ​ ​ Change ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Research and development | ​ | $1,625,821 | ​ | $1,005,715 | ​ | $620,106 |
| General and administrative | ​ | 1,087,885 | ​ | 1,894,169 | ​ | (806,284) |
| Total operating expenses | ​ | 2,713,706 | ​ | 2,899,884 | ​ | (186,178) |
| Loss from operations | ​ | (2,713,706) | ​ | (2,899,884) | ​ | 186,178 |
| Other income/(expense) | ​ | 90,049 | ​ | 587,910 | ​ | 497,861 |
| Net loss | ​ | $(2,623,657) | ​ | $(2,311,974) | ​ | $(311,683) |

### Research and Development Expenses

The following table summarizes the period-over-period changes in research and development expenses for the periods presented:

| ​ ​ ​ Direct research and development expenses by program | ​ ​ | ​ ​ Three Months Ended June 30, 2024 ​ | ​ | ​ ​ 2023 ​ | ​ ​ | ​ ​ ​ ​ Change ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| PMN310 | ​ | $1,073,864 | ​ | $219,155 | ​ | $854,709 |
| Platform and other programs | ​ | 162,910 | ​ | 148,762 | ​ | 14,148 |
| Indirect research and development expenses: | ​ | ​ | ​ | ​ | ​ | ​ |
| Employee salaries and benefits | ​ | 353,525 | ​ | 365,004 | ​ | (11,479) |
| Share-based compensation | ​ | ​ 3,812 | ​ | ​ 39,109 | ​ | ​ (35,297) |
| Consulting expense | ​ | 28,167 | ​ | 226,607 | ​ | (198,440) |
| Other operating costs | ​ | 3,543 | ​ | 7,078 | ​ | (3,535) |
| Total research and development expenses | ​ | $1,625,821 | ​ | $1,005,715 | ​ | $620,106 |

Research and development expenses increased by $0.6 million, or 62%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase is attributable to a $0.9 million increase in direct research and development expenses related to PMN310 phase 1a clinical trial costs in the three months ended June 30, 2024, offset by a decrease of $0.2 million in consulting expenses.

### General and Administrative Expenses

The following table summarizes the period-over-period changes in general and administrative expenses for the periods presented:

| ​ ​ ​ | ​ ​ | ​ ​ Three Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ ​ | ​ ​ ​ ​ Change |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Employee salaries and benefits | ​ | $164,498 | ​ | $222,823 | ​ | $(58,325) |
| Share-based compensation | ​ | ​ 14,186 | ​ | ​ 95,082 | ​ | ​ (80,896) |
| Professional and consulting fees | ​ | 746,908 | ​ | 1,630,132 | ​ | (883,224) |
| Patent expense | ​ | 104,668 | ​ | 44,219 | ​ | 60,449 |
| Facility-related and other | ​ | 57,625 | ​ | (98,087) | ​ | 155,712 |
| Total general and administrative expenses | ​ | $1,087,885 | ​ | $1,894,169 | ​ | $(806,284) |

26

General and administrative expenses decreased by $0.8 million, or 43%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Employee salaries and share-based compensation decreased by $0.1 million. Professional and consulting fees during the six months ended June 30, 2023 included one-time costs of $0.8 million related to expensing previously deferred financing costs after abandoning planned offerings. Excluding one-time costs, professional and consulting fees were $0.8 million for the six months ended June 30, 2023, representing a modest decrease of $0.1 million compared to $0.7 million in professional and consulting fees during the three months ended June 30, 2024, primarily driven by an increase of $0.2 million in legal and board costs, offset by a decrease of $0.1 million in insurance and other consulting costs. Facility-related and other costs increased by $0.2 million primarily due to realized foreign currency exchange gain impacts in the three months ended June 30, 2023.

### Other Income (Expense)

Other income (expense) decreased by $0.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily due to a decrease on the gain on change in fair value of financial instruments of $0.5 million.

### Liquidity and Capital Resources

### Sources of Liquidity

We are a development stage company as we have not generated revenues to date and do not expect to have significant revenues until we are able to sell a product candidate after obtaining applicable regulatory approvals or we establish collaborations that provide funding, such as licensing fees, milestone payments, royalties, research funding or otherwise. Operations have been financed since inception, through the sale of equity and debt securities and the conversion of Common Share purchase warrants and share options. Our objectives, when managing capital, are to ensure there are sufficient funds available to carry out our research, development and eventual commercialization programs. When we have excess funds, we manage our liquidity risk by investing in highly liquid corporate and government bonds with staggered maturities to provide regular cash flow for current operations. We do not hold any asset-backed commercial paper and our cash is not subject to any external restrictions. We also manage liquidity risk by frequently monitoring actual and projected cash flows. The Board of Directors reviews and approves the Company’s operating and capital budgets, as well as any material transactions not in the ordinary course of business. The majority of our accounts payable and accrued liabilities have maturities of less than three months. We are dependent on our ability to generate revenues from our products or secure additional financing in order to continue our research and development activities and meet our ongoing obligations and existing liabilities. In May 2023, we entered into an agreement with a vendor, which provided for the option to defer payment on approximately $5.5 million of current accounts payable and accrued liabilities until March 31, 2024. We repaid the entirety of the $5.9 million outstanding in March 2024, which terminated the agreement.

In August 2023, we completed a private placement of 9,945,969 Common Shares and, in lieu of Common Shares, 954,725 pre-funded warrants, each attached to a Common Share warrant exercisable at a price of $1.75 for gross proceeds of $20.4 million before deducting issuance costs of $2.7 million. Proceeds from the private placement are being used to advance the clinical development of PMN310, ProMIS’ lead therapeutic candidate, as well as for working capital and other general corporate expenses.

On September 22, 2023, we filed a registration statement on Form S-3 (File No. 333-274658) with the SEC, which was declared effective on September 29, 2023 (Shelf Registration Statement), in relation to the registration of Common Shares, preferred shares, subscription receipts, debt securities, warrants and/or units of any combination thereof for the purposes of selling, from time to time, our Common Shares, debt securities or other equity securities in one or more offerings. On January 5, 2024, we entered into an At The Market Offering Agreement with BTIG, LLC to provide for the offering, issuance and sale of up to an aggregate amount of $25.0 million of our Common Shares from time to time in “at-the-market” offerings under the Shelf Registration Statement and subject to the limitations thereof. During the six months ended June 30, 2024, we sold 75,862 shares for net proceeds of approximately $0.2 million.

In July 2024, we completed a private placement for aggregate gross proceeds of $30.3 million to sell an aggregate of (a) 9,757,669 common share units (the “**Common Share Units”**) sold at $2.15 per Common Share Unit, each consisting of one Common Share and certain accompanying warrants to purchase Common Shares (Tranche A, B and C) and, for certain investors, (b) 4,371,027 pre-funded units (the “**Pre-Funded Units”** and together with the Common Share Units, the “**Units”**) sold at $2.14 per Pre-Funded Unit, each consisting of one Pre-Funded Warrant to purchase one Common Share and certain accompanying warrants to purchase Common Shares (Tranche A, B and C).

The Pre-Funded Warrants have an exercise price of $0.01 per Warrant Share, are immediately exercisable and will expire when exercised in full. The Tranche A Common Share purchase warrants have an exercise price of $2.02, , are exercisable immediately upon Shareholder

Approval (as defined below) and will expire upon the earlier of (i) 18 months or (ii) within 60 days of the public announcement via press release or the filing of a Current Report on Form 8-K of 6-month data from the cohorts treated with multiple ascending doses of PMN310 . The Tranche B Common Share purchase warrants have an exercise price of $2.02, are exercisable immediately upon Shareholder Approval (as defined below) and will expire upon the earlier of (i) 30 months or (ii) within 60 days of the public announcement via press release or the filing of a Current Report on Form 8-K of 12-month data from the cohorts treated with multiple ascending doses of PMN310. The Tranche C Common Share purchase warrants have an exercise price of $2.50, are immediately exercisable and will expire July 31, 2029. . Pursuant to Nasdaq Listing Rule 5635(d), the exercise of the Tranche A and Tranche B Common Share purchase warrants is subject to shareholder approval (the “**Shareholder Approval”**). There is an additional $92.4 million available tied to exercise of warrants. Proceeds from the private placement are expected to be used to advance the clinical development of PMN310, our lead therapeutic candidate, as well as for working capital and other general corporate expenses.

Management believes that the net proceeds from the July 2024 private placement will provide sufficient cash, based on our current operating plan, to enable us to fund our operating expenses into 2026. We are subject to all the risks inherent in the development of new biopharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may harm our business.

Future capital requirements will depend upon many factors, including the timing and extent of spending on research and development and market acceptance of our products, if approved for commercial sale. We will require additional funding to conduct future clinical activities. We expect to seek additional funding through public and private financings, debt financings, collaboration agreements, strategic alliances and licensing agreements. Although we have been successful in raising capital in the past, there is no assurance of success in obtaining such additional financing on terms acceptable to us, if at all, and there is no assurance that we will be able to enter into collaborations or other arrangements. If we are unable to obtain funding, it could force delays, reduce or eliminate research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect future business prospects, and the ability to continue our operations.

Our sources of funding for both the three months ended June 30, 2024 and 2023 are further evaluated in the cash flow section below. We have no current indebtedness and no ongoing material financial commitments that may affect our liquidity over the next five years.

### Future Funding Requirements

We do not expect to generate any product revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates, and we do not know when, or if, that will occur. Until we can generate significant revenue from product sales, if ever, we will continue to require substantial additional capital to develop our current and future product candidates and fund operations for the foreseeable future. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and studies and initiate additional clinical trials. We are subject to all the risks incident in the development of new biopharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may harm our business.

In order to complete the development of PMN310, PMN442, PMN267, or any future product candidates, we will require substantial additional capital. Accordingly, we expect to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation, voting or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, including restricting our operations and limiting our ability to incur liens, issue additional debt, pay dividends, repurchase our common stock, make certain investments or engage in merger, consolidation, licensing, or asset sale transactions. If we raise capital through collaborations, partnerships, and other similar arrangements with third parties, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional capital from these sources on favorable terms, or at all.

Our present and future funding requirements will depend on many factors, including the following:

- the scope, timing, progress, results, and costs of researching and developing PMN310, PMN442, PMN267, and conducting clinical trials, including larger and later-stage trials;
- the scope, timing, progress, results, and costs of preclinical studies and clinical trials for any other current and future programs;
- the time and costs involved in obtaining regulatory approval for our other pipeline product candidates and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of these product candidates;
- terms and timing of any acquisitions, collaborations or other arrangements;
- the cost and timing of attracting, hiring, and retaining skilled personnel to support our operations;
- the number of potential new products we identify and decide to develop;
- the costs involved in filing and prosecuting patent applications and obtaining, maintaining and enforcing patents or defending against claims or infringements raised by third parties, and license royalties or other amounts we may be required to pay to obtain rights to third party intellectual property rights; and
- the costs associated with operating as a public company.

A change in the outcome of any of these or other factors with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. In addition, we based projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect.

### Cash Flows

The following table summarizes our sources and uses of cash for the periods presented:

| ​ ​ ​ | ​ ​ | ​ ​ Six Months Ended June 30, 2024 | ​ | ​ ​ 2023 | ​ ​ | ​ ​ ​ ​ Change | ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- |
| Net cash used in operating activities | ​ | $(11,795,957) | ​ | $(4,708,976) | ​ | $(7,086,981) | ​ |
| Net cash provided by financing activities | ​ | 190,274 | ​ | — | ​ | 190,274 | ​ |
| Effect of exchange rates on cash | ​ | — | ​ | 55,840 | ​ | (55,840) | ​ |
| Net increase (decrease) in cash | ​ | $(11,605,683) | ​ | $(4,653,136) | ​ | $(6,952,547) | ​ |

#### Cash Flows from Operating Activities

Cash used in operating activities was $11.8 million for the six months ended June 30, 2024, which consisted of a net loss of $6.3 million, increased by a net change of $5.6 million in our operating assets and liabilities. Changes in cash flows related to operating assets and liabilities primarily consisted of a decrease of $5.8 million of accounts payable, including a repayment of $5.9 million on previously deferred accounts payable and a $0.3 million decrease in accrued liabilities, offset by a $0.6 million increase in prepaid expenses and other current assets.

Cash used in operating activities was $4.7 million for the six months ended June 30, 2023, which consisted of a net loss of $7.3 million, increased by non-cash activities of $0.3 million offset by a net change of $2.9 million in our operating assets and liabilities. Non-cash activities primarily consisted of a non-cash gain on the change in fair value of warrant liability of $0.6 million offset by charges for share-based compensation of $0.3 million. Additive changes in cash flows related to operating assets and liabilities primarily consisted of a net increase of $2.1 million of accounts payable and accrued liabilities and a $0.8 million decrease in prepaid expenses and other current assets.

#### Cash Flows from Investing Activities

There was no cash used in investing activities during the six months ended June 30, 2024 or 2023.

#### Cash Flows from Financing Activities

Cash provided by financing activities during the six months ended June 30, 2024 was $0.2 million from the sale of Common Shares under the At The Market Offering Agreement.

There was no cash provided by financing activities during the six months ended June 30, 2023.

### Critical Accounting Policies and Estimates

Our MD&A is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S GAAP and on a basis consistent with those accounting principles followed by us and disclosed in Note 2 to our audited consolidated financial statements for the year ended December 31, 2023. The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires our management to make certain judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgement about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates and judgments include, but are not limited to, accruals for research and development expenses and the valuation of warrant liabilities. Accordingly, actual results may differ from these judgments and estimates under different assumptions or conditions and any such difference may be material.

There have been no material changes to our critical accounting estimates since December 31, 2023.

### Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to the accompanying unaudited condensed consolidated financial statements.

### Emerging Growth Company Status

We are an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

We have elected to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

### Fully Diluted Share Capital

The number of issued and outstanding Common Share Equivalents as of June 30, 2024 was as follows:

| ​ ​ ​ ​ ​ | ​ ​ ​ ​ | ​ Number of Common Share Equivalents |
| --- | --- | ---: |
| Common Shares | ​ | 18,961,116 |
| Options issued and outstanding under stock option plan | ​ | 1,087,493 |
| Warrants | ​ | 13,387,994 |
| Series 2 Convertible Preferred Shares |  | 1,166,667 |
| Deferred share units |  | 1,061 |
| **Total - June 30, 2024** |  | 34,604,331 |

## Market risk

As filed, 1,784 characters.

In the normal course of business, we are exposed to a number of financial risks that can affect our operating performance. These risks are credit risk, liquidity risk and market risk. Our overall risk management program and prudent business practices seek to minimize any potential adverse effects on the Company’s financial performance.

### Credit Risk

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and short-term investments. We manage our exposure to credit losses by placing our cash with accredited financial institutions, which at times, may exceed federally insured limits, and when we have excess funds, such funds are invested in high-quality government and corporate issuers with low credit risk. Cash held is not subject to any external restrictions. As of the year ended December 31, 2023 and six months ended June 30, 2024, a hypothetical 10% relative change in interest rates would not have a material impact on our Financial Statements.

### Liquidity Risk

Our exposure to liquidity risk is dependent on purchasing obligations and raising funds to meet commitments and sustain operations. We are a pre-revenue development stage company, and we rely on external fundraising to support our operations. We also manage liquidity risk by continuously monitoring actual and projected cash flows. Our Board of Directors reviews and approves the Company’s operating budget, as well as any material transaction.

### Inflation Risk

Inflation generally affects us by increasing our cost of labor, outside consultants and CROs. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three and six months ended June 30, 2024.

## Controls and procedures

As filed, 2,059 characters.

### Evaluation of Disclosure Controls and Procedures

The Company maintains “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed 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 SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2024. Based on the evaluation of our disclosure controls and procedures, our management concluded that, as of June 30, 2024, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in this Quarterly Report on Form 10-Q was (a) reported within the time periods specified by SEC rules and regulations, and (b) communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding any required disclosure.

### Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act that occurred during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 783 characters.

We operate in a rapidly changing environment that involves a number of risks which could materially affect our business, financial condition or future results, some of which are beyond our control. In addition to the other information set forth in this Quarterly Report on Form 10-Q, the risks and uncertainties that we believe are most important for you to consider are discussed under the heading “Risk Factors Summary” and in Item 1A – “Risk Factors” in the Company’s Annual Report Form 10-K, as amended and supplemented by the information in “Part II, Item 1A. Risk Factors” in our Quarterly Reports on Form 10-Q for quarters, as applicable. There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2023.

Filed Aug 8, 2024.
Source: SEC EDGAR, the filing index for accession 0001558370-24-011476. Last ingested by Listed: Nov 6, 2026, 12:16 ET. No prices; not investment advice.