2023 Q3 Form 10-K Financial Statement

#000121390023080842 Filed on September 29, 2023

View on sec.gov

Income Statement

Concept 2023 Q3 2023 Q2 2023
Revenue $901.9K $2.310M $4.136M
YoY Change 181.14% 348.75% 279.61%
Cost Of Revenue $787.7K $740.0K $2.424M
YoY Change 235.14% 179.2% 343.97%
Gross Profit $21.24K $1.570M $1.403M
YoY Change -104.33% 528.7% 158.13%
Gross Profit Margin 2.36% 67.97% 33.93%
Selling, General & Admin $1.300M $1.410M $5.850M
YoY Change -16.69% -19.08% -12.25%
% of Gross Profit 6119.95% 89.81% 416.95%
Research & Development $1.292M $620.0K $3.732M
YoY Change -6.28% -58.69% -48.75%
% of Gross Profit 6082.73% 39.49% 266.0%
Depreciation & Amortization $54.83K $50.00K $202.2K
YoY Change 11.79% -7.39% 8.94%
% of Gross Profit 258.13% 3.18% 14.42%
Operating Expenses $2.694M $2.090M $9.782M
YoY Change -9.84% -36.61% -45.07%
Operating Profit -$2.537M -$520.0K -$7.948M
YoY Change -27.73% -82.94% -57.27%
Interest Expense $90.00K $180.0K $440.0K
YoY Change -471.9% -603.64% -2150.33%
% of Operating Profit
Other Income/Expense, Net $136.0K $431.2K
YoY Change 106.79% -132.81%
Pretax Income -$2.537M -$340.0K -$7.935M
YoY Change -27.59% -95.68% -57.34%
Income Tax $0.00 $13.10K
% Of Pretax Income
Net Earnings -$2.500M -$340.0K -$7.948M
YoY Change -28.78% -95.68% -57.27%
Net Earnings / Revenue -277.2% -14.72% -192.18%
Basic Earnings Per Share -$0.76 -$3.25
Diluted Earnings Per Share -$0.76 -$0.10 -$3.25
COMMON SHARES
Basic Shares Outstanding 3.328M shares 3.328M shares 2.448M shares
Diluted Shares Outstanding 3.328M shares 2.448M shares

Balance Sheet

Concept 2023 Q3 2023 Q2 2023
SHORT-TERM ASSETS
Cash & Short-Term Investments $6.780M $8.960M $8.960M
YoY Change -27.82% 44.01% 44.01%
Cash & Equivalents $6.738M $8.913M $8.910M
Short-Term Investments $40.00K $40.00K $40.00K
Other Short-Term Assets $220.0K $500.0K $500.0K
YoY Change -38.32% -37.28% -37.28%
Inventory $1.133M $1.616M $1.620M
Prepaid Expenses
Receivables $165.9K $260.4K $260.0K
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $8.295M $11.33M $11.33M
YoY Change -28.14% 18.07% 18.05%
LONG-TERM ASSETS
Property, Plant & Equipment $615.1K $723.4K $720.0K
YoY Change -23.35% -20.0% -20.38%
Goodwill
YoY Change
Intangibles $1.946M
YoY Change -7.71%
Long-Term Investments
YoY Change
Other Assets $101.8K $104.9K $100.0K
YoY Change -40.52% -40.61% -43.39%
Total Long-Term Assets $2.622M $2.775M $2.780M
YoY Change -13.79% -13.02% -12.85%
TOTAL ASSETS
Total Short-Term Assets $8.295M $11.33M $11.33M
Total Long-Term Assets $2.622M $2.775M $2.780M
Total Assets $10.92M $14.11M $14.11M
YoY Change -25.14% 10.31% 10.34%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $380.0K $540.0K $540.0K
YoY Change -65.34% -53.69% -53.69%
Accrued Expenses $960.0K $1.440M $1.440M
YoY Change -42.52% -12.91% -12.91%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $1.339M $2.001M $2.000M
YoY Change -59.19% -39.73% -39.75%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities $0.00 $20.00K $20.00K
YoY Change -100.0% -94.87% -94.87%
Total Long-Term Liabilities $0.00 $20.00K $20.00K
YoY Change -100.0% -94.87% -94.87%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.339M $2.001M $2.000M
Total Long-Term Liabilities $0.00 $20.00K $20.00K
Total Liabilities $1.339M $2.017M $2.020M
YoY Change -62.55% -45.63% -45.54%
SHAREHOLDERS EQUITY
Retained Earnings -$103.9M -$101.4M
YoY Change 7.15% 8.5%
Common Stock $113.4M $77.62M
YoY Change 56.03% 9.76%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $9.578M $12.09M $12.09M
YoY Change
Total Liabilities & Shareholders Equity $10.92M $14.11M $14.11M
YoY Change -25.14% 10.31% 10.34%

Cashflow Statement

Concept 2023 Q3 2023 Q2 2023
OPERATING ACTIVITIES
Net Income -$2.500M -$340.0K -$7.948M
YoY Change -28.78% -95.68% -57.27%
Depreciation, Depletion And Amortization $54.83K $50.00K $202.2K
YoY Change 11.79% -7.39% 8.94%
Cash From Operating Activities -$2.174M -$650.0K -$7.283M
YoY Change -3.61% -83.94% -53.26%
INVESTING ACTIVITIES
Capital Expenditures $160.0K $160.0K
YoY Change 309.16%
Acquisitions $500.0K
YoY Change
Other Investing Activities $0.00 $130.0K $1.790K
YoY Change -117.92% -100.28%
Cash From Investing Activities -$30.00K -$661.8K
YoY Change -95.86% -1.66%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $12.00M
YoY Change -30.01%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 0.000 $10.68M
YoY Change -100.0% -29.13%
NET CHANGE
Cash From Operating Activities -$2.174M -650.0K -$7.283M
Cash From Investing Activities -30.00K -$661.8K
Cash From Financing Activities 0.000 $10.68M
Net Change In Cash -$2.174M -680.0K $2.736M
YoY Change -168.51% -344.12% -330.61%
FREE CASH FLOW
Cash From Operating Activities -$2.174M -$650.0K -$7.283M
Capital Expenditures $160.0K $160.0K
Free Cash Flow -$810.0K -$7.443M
YoY Change -79.99% -52.36%

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CY2022 us-gaap Proceeds From Issuance Of Common Stock
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CY2022 us-gaap Net Cash Provided By Used In Financing Activities
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CY2022 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Including Exchange Rate Effect
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CY2022 inm Preferred Investment Options To Its Placement Agent
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CY2023 us-gaap Nature Of Operations
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<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in; text-align: left"><b>1.</b></td><td style="text-align: justify"><b>CORPORATE INFORMATION AND CONTINUING OPERATIONS</b></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify; text-indent: -21.3pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><b><i>Business</i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify; text-indent: 14.7pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">InMed Pharmaceuticals Inc. (“InMed” or the “Company”) was incorporated in the Province of British Columbia on May 19, 1981 under the <i>Business Corporations Act</i> of British Columbia. InMed is a clinical stage pharmaceutical company developing a pipeline of prescription-based products, including rare cannabinoids and novel cannabinoid analogs, targeting the treatment of diseases with high unmet medical needs as well as developing proprietary manufacturing technologies to produce rare cannabinoids for sale in the health and wellness industry.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify; text-indent: 14.7pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">The Company’s shares are listed on the Nasdaq Capital Market (“Nasdaq”) under the trading symbol “INM”. InMed’s office and principal place of business is located at #310 – 815 West Hastings Street, Vancouver, B.C., Canada, V6C 1B4.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify; text-indent: 1.2pt"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b><i>Going Concern</i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify; text-indent: 14.7pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify; text-indent: -21.3pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">Through June 30, 2023, the Company has funded its operations primarily with proceeds from the sale of common stock. The Company has incurred recurring losses and negative cash flows from operations since its inception, including net losses of approximately $7.9 million and $18.6 million for the years ended June 30, 2023 and 2022, respectively. In addition, the Company had an accumulated deficit of approximately $101.4 million at June 30, 2023. The Company expects to continue to generate operating losses for the foreseeable future.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.25in">As of the issuance date of these consolidated annual financial statements, the Company expects its cash, cash equivalents and short-term investments of $9.0 million as of June 30, 2023 will be sufficient to fund its operating expenses and capital expenditure requirements into the first quarter of calendar 2024, depending on the level and timing of realizing BayMedica revenues from the sale of bulk rare cannabinoids in the health &amp; wellness sector as well as the level and timing of the Company operating expenses. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company has concluded that there is substantial doubt about its ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.25in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">The Company expects to continue to seek additional funding through equity financings, debt financings or other capital sources, including collaborations with other companies, government contracts or other strategic transactions. The Company may not be able to obtain financing on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s existing shareholders.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.25in">These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to meet its commitments, realize its assets and discharge its liabilities in the normal course. These consolidated financial statements do not reflect adjustments to the carrying values of assets and liabilities that would be necessary if the Company was unable to continue as a going concern and such adjustments could be material.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><b><i>COVID-19 Impacts</i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">The full extent to which the COVID-19 pandemic may directly or indirectly impact the Company’s business, results of operations and financial condition, including expenses, research and development costs and employee-related amounts, will depend on future developments that are evolving and highly uncertain, such as the duration and severity of outbreaks, including potential future waves or cycles, and the effectiveness of actions taken to contain and treat COVID-19. The Company considered the potential impact of COVID-19 when making certain estimates and judgments relating to the preparation of these consolidated financial statements. While there was no material impact to the Company’s consolidated financial statements as of and for the and for the year ended June 30, 2023, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in a material impact to the Company’s consolidated financial statements in future reporting periods.</p>
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CY2022 us-gaap Profit Loss
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><b><i>Reclassifications</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">Certain prior year amounts in the consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities.</p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><b><i>Use of Estimates</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">The preparation of financial statements in compliance with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the balance sheet date, and the corresponding revenues and expenses for the periods reported. It also requires management to exercise judgment in applying the Company’s accounting policies. In the future, actual experience may differ from these estimates and assumptions. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to these consolidated financial statements are the estimate of useful life of intangible assets, the application of the going concern assumption, and determining the fair value of share-based payments, income tax provisions, write-down of inventories to net realizable value, and warrant valuations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">Actual results could differ from those estimates.</p>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0pt"><b><i>Concentration of Credit Risk and Other Risks and Uncertainties</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.25in">At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) or Canadian Deposit Insurance Corporation (CDIC) insurable limits. The Company has not experienced any losses related to these balances. The uninsured cash balance as of June 30, 2023, was $3.8 million. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">The Company’s customers are primarily concentrated in the United States.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.25in">As of June 30, 2023, we had three customers with an accounts receivable balance representing 41%, 30% and 15% of total accounts receivable.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify; text-indent: 0.25in">For the year ended June 30, 2023, the Company had four customers that accounted for 22%, 17%, 16% and 11% of revenue. For the year ended June 30, 2022, the Company had three customer that accounted for 21%, 20%, and 11% of revenue.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i> </i></b></p>
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CY2022Q2 us-gaap Inventory Finished Goods
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CY2022Q2 us-gaap Inventory Net
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