UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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
(Exact name of Registrant as specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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(The Nasdaq Global Select 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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
As of October 28, 2024, the registrant had
Table of Contents
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Page |
PART I |
4 |
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Item 1. |
4 |
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4 |
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Condensed Consolidated Statements of Operations and Comprehensive Loss |
5 |
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6 |
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7 |
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8 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 |
Item 3. |
26 |
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Item 4. |
26 |
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PART II |
28 |
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Item 1. |
28 |
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Item 1A. |
28 |
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Item 2. |
28 |
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Item 3. |
28 |
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Item 4. |
28 |
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Item 5. |
28 |
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Item 6. |
29 |
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30 |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) 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, 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:
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 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 U.S. Securities and Exchange Commission ("SEC") on February 28, 2024 (the “2023 Annual Report”) and in Part II, Item 1A in this Quarterly Report. 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. 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. 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 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 to reflect events or circumstances after the date of this Quarterly Report 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://ir.mindmed.co/). We therefore encourage investors and others interested in our company to review the information that we make available on our website, in addition to following our filings with the SEC, webcasts, press releases and conference calls. Our website and information included in or linked to our website are not part of this Quarterly Report. Unless otherwise noted or the context indicates otherwise, references in this Quarterly Report to the “Company,” “MindMed,” “we,” “us,” and “our” refer to Mind Medicine (MindMed) Inc. and its consolidated subsidiaries.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Mind Medicine (MindMed) Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
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September 30, 2024 (Unaudited) |
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December 31, 2023 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Prepaid and other current assets |
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Total current assets |
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Goodwill |
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Intangible assets, net |
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— |
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Other non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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2022 USD Financing Warrants |
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Total current liabilities |
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Credit facility, long-term |
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Other liabilities, long-term |
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— |
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Total liabilities |
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(Note 9) |
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Shareholders' Equity: |
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Common shares, |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Accumulated deficit |
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( |
) |
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( |
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Total shareholders' equity |
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Total liabilities and shareholders' equity |
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$ |
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$ |
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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)
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Three Months Ended |
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Nine Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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$ |
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$ |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Other income/(expense): |
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Interest income |
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Interest expense |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Foreign exchange loss, net |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Change in fair value of 2022 USD Financing Warrants |
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( |
) |
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( |
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Gain on extinguishment of contribution payable |
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— |
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— |
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— |
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Other expense |
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— |
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( |
) |
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— |
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( |
) |
Total other income/(expense), net |
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( |
) |
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( |
) |
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Net loss |
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( |
) |
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( |
) |
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( |
) |
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( |
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Other comprehensive loss |
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(Loss)/gain on foreign currency translation |
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( |
) |
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Comprehensive loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
Net loss per common share, basic |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
Net loss per common share, diluted |
|
$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
Weighted-average common shares, basic |
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Weighted-average common shares, diluted |
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See accompanying notes to unaudited condensed consolidated financial statements.
5
Mind Medicine (MindMed) Inc.
(Unaudited)
(In thousands, except share amounts)
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Common Shares |
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Shares |
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Amount |
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Additional Paid-In Capital |
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Accumulated OCI |
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Accumulated Deficit |
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Total |
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Balance, December 31, 2023 |
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$ |
— |
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$ |
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$ |
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$ |
( |
) |
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$ |
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||||
Issuance of common shares and warrants, net of share issuance costs |
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— |
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— |
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— |
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Issuance of common shares upon settlement of restricted share unit awards, net of shares withheld for tax |
|
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— |
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( |
) |
|
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— |
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— |
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( |
) |
|
Exercise of 2022 USD Financing Warrants |
|
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Exercise of stock options, net of options withheld for tax |
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— |
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— |
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— |
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Net loss and comprehensive loss |
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— |
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— |
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— |
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( |
) |
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( |
) |
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||||||
Balance, September 30, 2024 |
|
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$ |
— |
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|
$ |
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|
$ |
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|
$ |
( |
) |
|
$ |
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||||
|
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||||||
Balance, December 31, 2022 |
|
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|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common shares, net of share issuance costs |
|
|
|
|
|
— |
|
|
|
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|
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— |
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|
|
— |
|
|
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|||
Exercise of 2022 USD Financing Warrants |
|
|
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|
|
— |
|
|
|
|
|
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— |
|
|
|
— |
|
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|||
Exercise of stock options |
|
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— |
|
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|
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|
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— |
|
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— |
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|||
Settlement of restricted share unit awards |
|
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— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
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||
Net loss and comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance, September 30, 2023 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
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|
$ |
( |
) |
|
$ |
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|
Common Shares |
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Shares |
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Amount |
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Additional Paid-In Capital |
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Accumulated OCI |
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Accumulated Deficit |
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Total |
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Balance, June 30, 2024 |
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$ |
— |
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|
$ |
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|
$ |
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|
$ |
( |
) |
|
$ |
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||||
Issuance of common shares and warrants, net of share issuance costs |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of common shares upon settlement of restricted share unit awards, net of shares withheld for tax |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
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||
Exercise of stock options, net of options withheld for tax |
|
|
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|
|
— |
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|
|
|
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— |
|
|
|
— |
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|||
Net loss and comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
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|
( |
) |
Balance, September 30, 2024 |
|
|
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|
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— |
|
|
|
|
|
|
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( |
) |
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||||
|
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|
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||||||
Balance, June 30, 2023 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common shares, net of share issuance costs |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
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|
|||
Settlement of restricted share unit awards |
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|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
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|
Exercise of 2022 USD Financing Warrants |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
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|||
Exercise of stock options |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
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|||
Stock-based compensation expense |
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— |
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— |
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— |
|
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— |
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|
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||
Net loss and comprehensive loss |
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|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance, September 30, 2023 |
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
See accompanying notes to unaudited condensed consolidated financial statements.
6
Mind Medicine (MindMed) Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
|
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Nine Months Ended |
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|||||
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2024 |
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2023 |
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||
Cash flows from operating activities |
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||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation |
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Amortization of intangible assets |
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Change in fair value of 2022 USD Financing Warrants |
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Gain on extinguishment of contribution payable |
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( |
) |
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Unrealized foreign exchange |
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Other non-cash adjustments |
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||
Changes in operating assets and liabilities: |
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||
Prepaid and other current assets |
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( |
) |
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Other noncurrent assets |
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||
Accounts payable |
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( |
) |
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|
Accrued expenses |
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( |
) |
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|
Other liabilities, long-term |
|
|
( |
) |
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( |
) |
Net cash used in operating activities |
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( |
) |
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( |
) |
Cash flows from financing activities |
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Proceeds from the August Offering |
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Payment of issuance costs from the August Offering |
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( |
) |
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Proceeds from the March Offering and Private Placement |
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Payment of issuance costs from the March Offering and Private Placement |
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( |
) |
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Proceeds from credit facility |
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Payment of credit facility issuance costs |
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( |
) |
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( |
) |
Proceeds from the 2022 ATM net of issuance costs |
|
|
|
|
|
|
||
Payment of deferred financing fees related to 2024 ATM |
|
|
( |
) |
|
|
|
|
Proceeds from exercise of 2022 USD Financing Warrants |
|
|
|
|
|
|
||
Proceeds from exercise of options |
|
|
|
|
|
|
||
Withholding taxes paid on vested RSUs |
|
|
( |
) |
|
|
|
|
Net cash provided by financing activities |
|
|
|
|
|
|
||
Effect of exchange rate changes on cash |
|
|
( |
) |
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
|
|
|
|
( |
) |
|
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental Cash Flow Information |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Supplemental Noncash Disclosures |
|
|
|
|
|
|
||
Conversion of 2022 USD Financing Warrants to common shares upon exercise of warrants |
|
$ |
|
|
$ |
|
||
Deferred financing fees related to 2024 ATM included in accrued expenses |
|
$ |
|
|
$ |
|
||
Reclass of deferred financing fees related to 2022 ATM to additional paid-in capital |
|
$ |
|
|
$ |
|
||
Unpaid issuance costs for credit facility |
|
$ |
|
|
$ |
|
||
Proceeds from exercise of options in prepaid and other current assets |
|
$ |
|
|
$ |
|
See accompanying notes to unaudited condensed consolidated financial statements.
7
Mind Medicine (MindMed) Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(In thousands, except share and per share amounts)
Mind Medicine (MindMed) Inc. (the “Company” or “MindMed”) is incorporated under the laws of the Province of British Columbia. Its wholly owned subsidiaries, Mind Medicine, Inc. (“MindMed US”), HealthMode, Inc., MindMed Pty Ltd., and MindMed GmbH are incorporated in Delaware, Delaware, Australia and Switzerland respectively. MindMed US was incorporated on May 30, 2019.
MindMed is a clinical stage biopharmaceutical company developing novel product candidates to treat brain health disorders. The Company’s mission is to be the global leader in the development and delivery of treatments for brain health disorders that unlock new opportunities to improve patient outcomes. The Company is developing a pipeline of innovative product candidates, with and without acute perceptual effects, targeting neurotransmitter pathways that play key roles in brain health disorders. This specifically includes pharmaceutically optimized product candidates derived from the psychedelic and empathogen drug classes, including MM120 and MM402, the Company’s lead product candidates.
As of September 30, 2024, the Company had an accumulated deficit of $
As the Company continues its expansion, it may seek additional financing and/or strategic investments; however, there can be no assurance that any additional financing or strategic investments will be available to the Company on acceptable terms, if at all. If events or circumstances occur such that the Company does not obtain additional funding, it will most likely be required to reduce its plans and/or certain discretionary spending, which could have a material adverse effect on the Company’s ability to achieve its intended business objectives. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if it were unable to continue as a going concern. Management believes that it has sufficient working capital on hand to fund operations through at least the next twelve months from the date of the issuance of these financial statements.
Emerging Growth Company Status
The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (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. The Company has elected to use the extended transition period for complying with new or revised accounting standards, and as a result of this election, the unaudited condensed consolidated financial statements may not be comparable to companies that comply with public company Financial Accounting Standards Board (“FASB”) standards’ effective dates. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the first sale of its common equity securities under an effective Securities Act of 1933 (the "Securities Act") registration statement or such earlier time that it is no longer an emerging growth company.
In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of our financial position and results of operations and cash flows for the periods presented.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2023, which are included in the Company’s 2023 Annual Report on Form 10-K filed with the SEC on February 28, 2024 (the “2023 Annual Report”). The Company’s significant accounting policies are disclosed in the audited financial statements for the periods ended December 31, 2023 and 2022, included in the 2023 Annual Report. Since the date of those financial statements, there have been no changes to the Company's significant accounting policies.
8
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification and as amended by Accounting Standards Updates of FASB.
The preparation of financial statements in conformity with U.S. GAAP requires management to make a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates under different assumptions or conditions.
Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the unaudited condensed consolidated financial statements.
Foreign Currency
Prior to April 1, 2024, the Company’s functional currency was the Canadian dollar (“CAD”). Translation gains and losses from the application of the U.S. dollar (“USD”) as the reporting currency during the period that the Canadian dollar was the functional currency were included as part of cumulative currency translation adjustment, which is reported as a component of shareholders’ equity as accumulated other comprehensive income.
Following the Company’s voluntary delisting from Cboe Canada in April 2024, the Company reassessed its functional currency and determined that, as of April 1, 2024, its functional currency had changed from the CAD to the USD. The Company's analysis included various factors, including: the Company’s cash flows and expenses denominated primarily in USD, and the primary market for the Company’s Common Shares trading in USD. The change in functional currency was accounted for prospectively from April 1, 2024, and the unaudited condensed consolidated financial statements prior to and including the period ended March 31, 2024 were not restated for the change in functional currency.
For periods commencing April 1, 2024, monetary assets and liabilities denominated in currencies other than USD are remeasured at period-end using the period-end exchange rate. Opening balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets acquired, and non-monetary liabilities incurred after April 1, 2024, are translated at the approximate exchange rate prevailing at the date of the transaction. Income and expense accounts are translated at the average rates in effect during the fiscal year. Foreign exchange gains and losses are included in the unaudited condensed consolidated statements of operations and comprehensive loss.
Cash and Cash Equivalents
The Company considers all investments with an original maturity date at the time of purchase of three months or less to be cash and cash equivalents. As of September 30, 2024, the Company’s cash equivalents consisted of U.S. government money market funds at a high-credit quality and federally insured financial institution. The Company’s accounts, at times, may exceed federally insured limits. The Company had cash equivalents of $
9
Net Loss per Share
For the three-month period ended September 30, 2024, the Company determined that the 2022 USD Financing Warrants had a dilutive impact to the calculation of net loss per share. As a result, the Company calculated diluted net loss per Common Share for the three months ended September 30, 2024 as follows:
|
|
Three Months Ended |
|
|
|
|
2024 |
|
|
Numerator: |
|
|
|
|
Net loss attributable to common shareholders, basic |
|
$ |
( |
) |
Change in fair value of 2022 USD Financing Warrants |
|
|
( |
) |
Net loss attributable to common shareholders, diluted |
|
$ |
( |
) |
|
|
|
|
|
Denominator: |
|
|
|
|
Weighted-average shares used in computing net loss per share attributable |
|
|
|
|
Incremental shares from 2022 USD Financing Warrants |
|
|
|
|
Weighted-average shares used in computing net loss per share attributable |
|
|
|
The following potentially dilutive securities have been excluded from the calculation of diluted net loss per share due to their anti-dilutive effect:
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Options issued and outstanding under stock option plan |
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted Share Units |
|
|
|
|
|
|
|
|
|
|
|
||||
CAD Compensation Warrants |
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
CAD Financing Warrants |
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Conversion Shares |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
2022 USD Financing Warrants |
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Estimated shares issuable under the ESPP |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total |
|
|
|
|
|
|
|
|
|
|
|
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position, results of operations, or cash flows upon adoption.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within the segment measure of profit or loss. This guidance will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024. The Company does not expect implementation of the new guidance to have a material impact on its consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09"). ASU 2023-09 requires annual disclosures of specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold and a disaggregation of income taxes paid, net of refunds. ASU 2023-09 also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. ASU 2023-09 is effective for the annual reporting periods in fiscal years beginning after December 31, 2024. Early adoption is permitted. ASU 2023-09 should be applied prospectively. Retrospective adoption is permitted. The Company is currently assessing the impact this standard will have on the Company’s consolidated financial statements.
10
The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 (in thousands), and the fair value hierarchy of the valuation techniques utilized. The Company classifies its assets and liabilities as either short- or long-term based on maturity and anticipated realization dates.
|
|
September 30, 2024 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Directors' Deferred Share Unit Liability |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
2022 USD Financing Warrant Liability |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
|
|
December 31, 2023 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Directors' Deferred Share Unit Liability |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
2022 USD Financing Warrant Liability |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
There were
The fair value of the warrant liability is measured at fair value on a recurring basis. The warrants to purchase Common Shares issued in our underwritten public offering that closed on September 30, 2022 (the “2022 USD Financing Warrants”) are classified as Level 3 in the fair value hierarchy and are determined using the Black-Scholes option pricing model using the following assumptions:
|
|
As of September 30, 2024 |
|
As of December 31, 2023 |
Share price |
|
$ |
|
$ |
Expected volatility |
|
|
||
Risk-free rate |
|
|
||
Expected life |
|
|
Goodwill
During the nine months ended September 30, 2024, the Company has made
Intangible assets, net
As of December 31, 2023, the Company’s developed technology intangible assets had a gross carrying value of $
Amortization expense included in research and development expense was $
11
At September 30, 2024 and December 31, 2023, accrued expenses consisted of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Accrued compensation |
|
$ |
|
|
$ |
|
||
Accrued clinical and manufacturing costs |
|
|
|
|
|
|
||
Professional services |
|
|
|
|
|
|
||
Directors' Deferred Share Unit Liability |
|
|
|
|
|
|
||
Other accruals |
|
|
|
|
|
|
||
Contribution payable |
|
|
— |
|
|
|
|
|
Total accrued expenses |
|
$ |
|
|
$ |
|
In June 2024, the Company made a lump sum payment of $
Common Shares
The Company is authorized to issue an unlimited number of Common Shares, which have
At-The-Market Facilities
2022 ATM
On May 4, 2022, the Company filed a shelf registration statement on Form S-3 (the “2022 Registration Statement”), as well as an accompanying prospectus supplement ("Prior ATM Prospectus"). In connection with the filing of the 2022 Registration Statement, the Company also entered into a sales agreement (the “Prior Sales Agreement”) with Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc. as sales agents (together, the “Prior Agents”), pursuant to which the Company could issue and sell Common Shares for an aggregate offering price of up to $
2024 ATM
On June 28, 2024, the Company filed a shelf registration statement on Form S-3 (the “2024 Registration Statement”), as well as an accompanying prospectus supplement (“New ATM Prospectus”). In connection with the filing of the 2024 Registration Statement and the New ATM Prospectus, the Company entered into a sales agreement (the "Sales Agreement") with Leerink Partners LLC (the “Agent”) pursuant to which the Company may issue and sell from time to time Common Shares for an aggregate offering price of up to $
12
The March Offering and Private Placement
On March 7, 2024, the Company entered into an underwriting agreement with Leerink Partners LLC and Cantor Fitzgerald & Co., as representatives of the underwriters named therein, in connection with the issuance and sale by the Company in an underwritten offering (the “March Offering”) of
The net proceeds to the Company from the March Offering were $
Also on March 7, 2024, the Company entered into a securities purchase agreement with certain investors, pursuant to which the investors agreed to purchase, and the Company agreed to sell
The net proceeds to the Company from the Private Placement were $
The Company intends to use the net proceeds from the March Offering and the Private Placement for (i) the research and development of the Company’s product candidates and (ii) working capital and general corporate purposes.
The March Offering and the Private Placement both closed on March 11, 2024.
The August Offering
On August 9, 2024, the Company entered into an underwriting agreement with Leerink Partners LLC and Evercore Group L.L.C., as representatives of the several underwriters named therein, in connection with an underwritten public offering (the “August Offering”) of (i)
The net proceeds to the Company from the August Offering were approximately $
The Company intends to use the net proceeds from the August Offering to fund the research and development of its product candidates and for working capital and general corporate purposes.
The Pre-Funded Warrants are exercisable at any time after the date of issuance. The exercise price and the number of Pre-Funded Warrant Shares are subject to appropriate adjustment in the event of certain share dividends and distributions, share splits, share combinations, reclassifications or similar events affecting the Common Shares as well as upon any distribution of assets, including cash, securities or other property, to the Company’s shareholders. The Pre-Funded Warrants will not expire and are exercisable in cash or by means of a cashless exercise. A holder of Pre-Funded Warrants may not exercise such Pre-Funded Warrants if the aggregate number of Common Shares beneficially owned by such holder, together with its affiliates, would exceed more than
CAD Financing Warrants and CAD Compensation Warrants
Between 2020 through 2021, in conjunction with equity offerings, the Company issued units at varying prices per unit in CAD, with each unit comprised of one Common Share and one-half of one Common Share financing warrant (each whole warrant, a “CAD Financing Warrant”). The Company also issued compensation warrants to its underwriters (the “CAD Compensation Warrants”). All CAD Financing Warrants and the CAD Compensation Warrants expired as of
13
2022 USD Financing Warrants
On September 30, 2022, the Company closed an underwritten public offering of
The below table represents the activity associated with the Company's 2022 USD Financing Warrants for the nine months ended September 30, 2024:
|
|
2022 USD Financing |
|
|
Balance at December 31, 2023 |
|
|
|
|
Exercised |
|
|
( |
) |
Expired |
|
|
|
|
Balance at September 30, 2024 |
|
|
|
Under the guidance in ASC 815-40, the Company's 2022 USD Financing Warrants do not meet the criteria for equity treatment. Therefore, the Company accounts for the 2022 USD Financing Warrants as liabilities and recognized them at fair value upon issuance and adjusts them to fair value at the end of each reporting period. Any change in fair value is recognized on the condensed consolidated statements of operations and comprehensive loss.
The below table summarizes the activity of the outstanding liability for the 2022 USD Financing Warrants for the nine months ended September 30, 2024 (in thousands):
|
|
As of September 30, 2024 |
|
|
Balance at December 31, 2023 |
|
$ |
|
|
Warrant exercise |
|
|
( |
) |
Change in fair value of the warrant liability |
|
|
|
|
Balance at September 30, 2024 |
|
$ |
|
Stock Incentive Plans
Effective March 7, 2023, the Company amended the definitions of “Fair Market Value” and “Market Value” under the MindMed Stock Option Plan (the “Stock Option Plan”) and the Performance and Restricted Share Unit Plan (the “RSU Plan”), respectively, to be based upon the closing price of the Company's Common Shares as traded on the Nasdaq Stock Market on the last trading day on which Common Shares traded prior to the day on which an equity award is granted (the “Amendments”). This change is only applicable for equity compensation awards granted subsequent to the Amendments. Accordingly, stock options granted after March 7, 2023 ("USD Options") are denominated in USD, and the grant date fair value of restricted share units granted after March 7, 2023 ("USD RSUs") is denominated in USD. The fair value of both USD Options and USD RSUs is based upon the closing price of the Company's Common Shares as traded on the Nasdaq Stock Market.
As of September 30, 2024, in conjunction with the voluntary Cboe Canada delisting on April 1, 2024, all of the Company's Common Shares are only traded on the Nasdaq Stock Market. All equity awards have their exercise prices denominated in USD based upon the USD value on the day on which the equity award was granted.
Stock Options
On February 27, 2020, the Company adopted the Stock Option Plan to advance the interests of the Company by providing employees, contractors and directors of the Company a performance incentive for continued and improved service with the Company. The Stock Option Plan sets out the framework for determining eligibility as well as the terms of any stock-based compensation granted.
14
The following table summarizes the Company’s stock option activity:
|
|
Number of Options |
|
|
Weighted Average Exercise Price |
|
|
Weighted Average Remaining Contractual Life (Years) |
|
|
Aggregate Intrinsic |
|
||||
Options outstanding at December 31, 2023 |
|
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
||
Issued |
|