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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-40360

 

Mind Medicine (MindMed) Inc.

(Exact name of Registrant as specified in its Charter)

 

 

British Columbia, Canada

98-1582538

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

One World Trade Center, Suite 8500

New York, New York

10007

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 208-2454

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Shares, no par value per share

 

MNMD

 

The Nasdaq Stock Market LLC

(The Nasdaq Capital Market)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No

As of August 3, 2022, the registrant had 427,088,145 Common Shares outstanding.

 

 


 

Table of Contents

 

 

 

Page

PART I

FINANCIAL INFORMATION

4

Item 1.

Financial Statements

4

 

Condensed Consolidated Balance Sheets

4

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

5

 

Condensed Consolidated Statements of Shareholders' Equity

6

 

Condensed Consolidated Statements of Cash Flows

8

 

Notes to Condensed Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25

Item 4.

Controls and Procedures

25

 

 

 

PART II

OTHER INFORMATION

26

 

 

 

Item 1.

Legal Proceedings

26

Item 1A.

Risk Factors

26

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

28

Item 3.

Defaults Upon Senior Securities

28

Item 4.

Mine Safety Disclosures

28

Item 5.

Other Information

28

Item 6.

Exhibits

29

Signatures

 

30

 

 

115405326v4


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

the timing, progress and results of our investigational MM-120, MM-110 and MM-402 product candidates (together, our “lead product candidates”), including statements regarding the timing of initiation and completion of trials or studies and related preparatory work, the period during which the results of the trials will become available and our research and development programs;
our reliance on the success of our investigational product candidate MM-120;
the timing, scope or likelihood of regulatory filings and approvals and ability to obtain and maintain regulatory approvals for product candidates for any indication;
our expectations regarding the size of the eligible patient populations for MM-120, MM-110 and MM-402, if approved for commercial use;
our ability to identify third-party therapy sites to conduct our trials and our ability to identify and train appropriately qualified therapists to administer our treatments;
our ability to implement our business model and our strategic plans for our business and our investigational product candidate MM-120;
our ability to identify new indications for our lead product candidates beyond our current primary focuses;
our ability to identify, develop or acquire digital technologies to enhance our administration of our lead product candidates;
our ability to achieve profitability and then sustain such profitability;
our commercialization, marketing and manufacturing capabilities and strategy;
the pricing, coverage and reimbursement of our lead product candidates, if approved;
the rate and degree of market acceptance and clinical utility of our lead product candidates, in particular, and controlled substances, in general;
future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;
our ability to establish or maintain collaborations or strategic relationships or obtain additional funding;
our expectations regarding potential benefits of our investigational lead product candidates and our therapeutic approach generally;
our ability to operate our business without infringing, misappropriating, or otherwise violating the intellectual property rights and proprietary technology of third parties;
regulatory developments in the United States, under the laws and regulations of England and Wales, and other jurisdictions;
the effectiveness of our internal control over financial reporting;
the effect of the ongoing and evolving COVID-19 pandemic, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business or operations;
our expectations regarding our revenue, expenses and other operating results;

 

115405326v4


 

the costs and success of our marketing efforts, and our ability to promote our brand;
our reliance on key personnel and our ability to identify, recruit and retain skilled personnel;
our ability to effectively manage our growth; and
our ability to compete effectively with existing competitors and new market entrants.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” previously disclosed in Part I, Item 1A. in our Annual Report on Form 10-K, as filed with the SEC on March 28, 2022 Part II, Item 1A. in our Quarterly Report on Form 10-Q, as filed with the SEC on May 16, 2022 and in Part II, Item 1A in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

We may announce material business and financial information to our investors using our investor relations website (https://mindmed.co/investor-resources/). We therefore encourage investors and others interested in our company to review the information that we make available on our website.

 

115405326v4


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

 

Mind Medicine (MindMed) Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

June 30, 2022

 

 

December 31, 2021

 

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

105,741

 

 

$

133,539

 

 

Prepaid and other current assets

 

 

3,172

 

 

 

3,676

 

 

Right of use asset

 

 

177

 

 

 

 

 

Total current assets

 

 

109,090

 

 

 

137,215

 

 

Goodwill

 

 

19,918

 

 

 

19,918

 

 

Intangible assets, net

 

 

5,269

 

 

 

6,869

 

 

Total assets

 

$

134,277

 

 

$

164,002

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

732

 

 

$

4,178

 

 

Accrued expenses

 

 

7,139

 

 

 

6,230

 

 

Total current liabilities

 

 

7,871

 

 

 

10,408

 

 

Other liabilities, long-term

 

 

1,902

 

 

 

1,930

 

 

Total liabilities

 

 

9,773

 

 

 

12,338

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

Shareholders' Equity:

 

 

 

 

 

 

 

Common shares, no par value, unlimited authorized as of
   June 30, 2022 and December 31, 2021;
426,689,225 and 421,896,217 issued and
   outstanding as of June 30, 2022 and December 2021, respectively

 

 

 

 

 

 

 

Additional paid-in capital

 

 

296,734

 

 

 

288,290

 

 

Accumulated other comprehensive income

 

 

850

 

 

 

1,046

 

 

Accumulated deficit

 

 

(173,080

)

 

 

(137,672

)

 

Total shareholders' equity

 

 

124,504

 

 

 

151,664

 

 

Total liabilities and shareholders' equity

 

$

134,277

 

 

$

164,002

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

4


 

Mind Medicine (MindMed) Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share amounts)

 

 

 

For the Three Months
Ended June 30,

 

 

For the Six Months
Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

9,326

 

 

$

8,074

 

 

$

19,567

 

 

$

14,887

 

General and administrative

 

 

7,617

 

 

 

37,146

 

 

 

15,881

 

 

 

44,182

 

Total operating expenses

 

 

16,943

 

 

 

45,220

 

 

 

35,448

 

 

 

59,069

 

Loss from operations

 

 

(16,943

)

 

 

(45,220

)

 

 

(35,448

)

 

 

(59,069

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income/(expense), net

 

 

82

 

 

 

(69

)

 

 

83

 

 

 

(156

)

Foreign exchange gain/(loss), net

 

 

(89

)

 

 

(35

)

 

 

(44

)

 

 

134

 

Other income/(expense)

 

 

(7

)

 

 

72

 

 

 

1

 

 

 

80

 

Total other income (expense), net

 

 

(14

)

 

 

(32

)

 

 

40

 

 

 

58

 

Loss before income taxes

 

 

(16,957

)

 

 

(45,252

)

 

 

(35,408

)

 

 

(59,011

)

Income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(16,957

)

 

 

(45,252

)

 

 

(35,408

)

 

 

(59,011

)

Other comprehensive gain/(loss):

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/gain on foreign currency translation

 

 

(147

)

 

 

704

 

 

 

(196

)

 

 

763

 

Comprehensive loss

 

$

(17,104

)

 

$

(44,548

)

 

$

(35,604

)

 

$

(58,248

)

Net loss per common share, basic and diluted

 

$

(0.04

)

 

$

(0.11

)

 

$

(0.08

)

 

$

(0.15

)

Weighted-average common shares, basic and diluted

 

 

423,630,395

 

 

 

410,823,106

 

 

 

422,951,839

 

 

 

400,322,562

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

5


 

Mind Medicine (MindMed) Inc.

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)

(In thousands, except share amounts)

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional Paid-In Capital

 

 

Accumulated OCI

 

 

Accumulated Deficit

 

 

Total

 

Balance, December 31, 2021

 

 

421,896,217

 

 

$

-

 

 

$

288,290

 

 

$

1,046

 

 

$

(137,672

)

 

$

151,664

 

Exercise of warrants

 

 

1,140,313

 

 

 

 

 

 

708

 

 

 

 

 

 

 

 

 

708

 

Exercise of stock options

 

 

442,708

 

 

 

 

 

 

164

 

 

 

 

 

 

 

 

 

164

 

Settlement of restricted share unit awards

 

 

3,209,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding taxes paid on vested restricted share units

 

 

 

 

 

 

 

 

(407

)

 

 

 

 

 

 

 

 

(407

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

7,979

 

 

 

 

 

 

 

 

 

7,979

 

Net loss and Comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(196

)

 

 

(35,408

)

 

 

(35,604

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2022

 

 

426,689,225

 

 

$

 

 

$

296,734

 

 

$

850

 

 

$

(173,080

)

 

$

124,504

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

 

361,135,160

 

 

$

-

 

 

$

120,220

 

 

$

284

 

 

$

(44,636

)

 

$

75,868

 

Issuance of Common Shares for vested director compensation

 

 

1,244,870

 

 

 

 

 

 

133

 

 

 

 

 

 

 

 

 

133

 

Vesting of restricted stock units

 

 

1,741,605

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Common Shares and warrants net of share issuance costs

 

 

26,930,000

 

 

 

 

 

 

81,928

 

 

 

 

 

 

 

 

 

81,928

 

HealthMode acquisition

 

 

8,149,700

 

 

 

 

 

 

27,159

 

 

 

 

 

 

 

 

 

27,159

 

Exercise of warrants

 

 

7,284,170

 

 

 

 

 

 

10,676

 

 

 

 

 

 

 

 

 

10,676

 

Exercise of stock options

 

 

10,828,064

 

 

 

 

 

 

5,273

 

 

 

 

 

 

 

 

 

5,273

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

28,844

 

 

 

 

 

 

 

 

 

28,844

 

Net loss and Comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

763

 

 

 

(59,011

)

 

 

(58,248

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2021

 

 

417,313,569

 

 

$

 

 

$

274,233

 

 

$

1,047

 

 

$

(103,647

)

 

$

171,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

6


 

Mind Medicine (MindMed) Inc.

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)

(In thousands, except share amounts)

 

 

 

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional Paid-In Capital

 

 

Accumulated OCI

 

 

Accumulated Deficit

 

 

Total

 

Balance, March 31, 2022

 

 

422,401,776

 

 

$

-

 

 

$

291,931

 

 

$

997

 

 

$

(156,123

)

 

$

136,805

 

Exercise of warrants

 

 

952,462

 

 

 

 

 

 

590

 

 

 

 

 

 

 

 

 

590

 

Exercise of stock options

 

 

125,000

 

 

 

 

 

 

41

 

 

 

 

 

 

 

 

 

41

 

Settlement of restricted share unit awards

 

 

3,209,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding taxes paid on vested restricted share units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,172

 

 

 

 

 

 

 

 

 

4,172

 

Net loss and Comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(147

)

 

 

(16,957

)

 

 

(17,104

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2022

 

 

426,689,225

 

 

$

 

 

$

296,734

 

 

$

850

 

 

$

(173,080

)

 

$

124,504

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2021

 

 

405,586,054

 

 

$

-

 

 

$

238,646

 

 

$

343

 

 

$

(58,395

)

 

$

180,594

 

Issuance of Common Shares for vested director compensation

 

 

622,435

 

 

 

 

 

 

68

 

 

 

 

 

 

 

 

 

68

 

Vesting of restricted stock units

 

 

1,741,605

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of share capital net of share issuance costs

 

 

 

 

 

 

 

 

(186

)

 

 

 

 

 

 

 

 

(186

)

HealthMode acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of warrants

 

 

3,055,290

 

 

 

 

 

 

3,978

 

 

 

 

 

 

 

 

 

3,978

 

Exercise of stock options

 

 

6,308,185

 

 

 

 

 

 

4,096

 

 

 

 

 

 

 

 

 

4,096

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

27,631

 

 

 

 

 

 

 

 

 

27,631

 

Net loss and Comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

704

 

 

 

(45,252

)

 

 

(44,548

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2021

 

 

417,313,569

 

 

$

 

 

$

274,233

 

 

$

1,047

 

 

$

(103,647

)

 

$

171,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

7


 

Mind Medicine (MindMed) Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

For the Six Months
Ended June 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(35,408

)

 

$

(59,011

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation

 

 

8,045

 

 

 

34,267

 

Amortization of intangible assets

 

 

1,600

 

 

 

1,039

 

Non-cash lease expense

 

 

17

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid and other current assets

 

 

541

 

 

 

56

 

Accounts payable

 

 

(3,429

)

 

 

(51

)

Accrued expenses