MIRA Pharmaceuticals(MIRA) - 2024 Q4 - Annual Report

Part I Business Description MIRA Pharmaceuticals develops neuroscience drug candidates Ketamir-2 and MIRA-55, and is acquiring SKNY Pharmaceuticals - The company's two lead candidates, Ketamir-2 and MIRA-55, have been reviewed by the DEA and are not classified as controlled substances, which is a significant regulatory and commercial advantage[24] - On March 19, 2025, MIRA entered into a binding letter of intent to acquire SKNY Pharmaceuticals, which includes SKNY-1, a drug candidate for weight loss and smoking cessation, and a $5 million capital infusion from SKNY[33] - MIRA holds exclusive rights in the U.S., Canada, and Mexico for Ketamir-2 and MIRA-55, targeting conditions like diabetic neuropathy, depression, PTSD, and cognitive decline[19] Drug Pipeline and Development MIRA's pipeline features Ketamir-2 in Phase I for diabetic neuropathy and preclinical MIRA-55 for cognitive function - Ketamir-2 is in an ongoing Phase I clinical trial in Israel for diabetic neuropathy, with Phase IIa studies planned to start in Q4 2025[20][42] - An Investigational New Drug (IND) application for Ketamir-2 was submitted to the FDA in December 2024; human dosing in the U.S. is pending completion of a neurotoxicity study expected by May 2025[41] - MIRA-55 is a preclinical THC analog that acts as a partial agonist at the CB1 receptor, potentially avoiding the negative effects of high-dose THC, and is 8-fold more potent than THC at the CB2 receptor[53][87][88] Market Opportunity and Strategy MIRA targets the growing North American neuropathic pain market with Ketamir-2, focusing on proof-of-concept and strategic exits - The North American neuropathic pain market is projected to reach $5.20 billion by 2030, growing at a 9.0% CAGR, representing a significant opportunity for Ketamir-2[68] - Ketamir-2's competitive advantages include oral bioavailability, a selective receptor profile reducing side effects and abuse potential, and potential superiority over current treatments like gabapentinoids and opioids[71][75] - The company's strategy for Ketamir-2 involves establishing proof-of-concept in human trials and then pursuing a strategic exit via partnership, licensing, or acquisition[74][76] Intellectual Property MIRA licenses Ketamir-2 patents from MIRALOGX with an 8% royalty, and has a pending patent for MIRA-55 - The company licenses Ketamir-2 patents for the U.S., Canada, and Mexico from MIRALOGX and is obligated to pay an 8% royalty on net sales and other revenue[119][120] - A provisional patent application has been filed for MIRA-55, covering its structure and methods of use[122] - MIRA owns a U.S. patent for the MIRA1a compound but has no current plans for its development[123][125] Risk Factors The company faces substantial financial, operational, and drug development risks, including going concern issues and third-party reliance - The company is a development-stage entity with no revenue, an accumulated deficit of $29.1 million as of December 31, 2024, and its financial condition raises substantial doubt about its ability to continue as a going concern[152] - The independent auditor's report includes an explanatory paragraph regarding the company's ability to continue as a going concern, which could make it difficult to obtain future financing[155][514][522] - The business is entirely dependent on the successful clinical development, regulatory approval, and commercialization of its two lead candidates, Ketamir-2 and MIRA-55[141][173] - MIRA relies on third parties for manufacturing and conducting clinical trials, and its rights to Ketamir-2 are licensed from MIRALOGX, a related party, creating operational dependencies and potential conflicts of interest[150][168][267] Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - None[322] Cybersecurity The company integrates cybersecurity into risk management, using third-party platforms, with CFO oversight and no material incidents - The company uses the Coalition Control platform, a third-party service, to proactively detect, assess, and mitigate cyber risks across its digital footprint[327] - The Chief Financial Officer (CFO) is responsible for daily oversight of cybersecurity risks and keeps the Board informed[328] - As of the report date, the company has not identified any cybersecurity threats or incidents that have materially impacted its operations, strategy, or financial results[326] Properties The company's principal executive office is a virtual office in Miami, Florida - The company utilizes a virtual office for its business address[125] Legal Proceedings The company is not currently involved in any legal proceedings with a material adverse effect - There are no pending legal proceedings against the company that management believes could have a material adverse effect[127] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities MIRA's common stock trades on Nasdaq since August 2023, with 55 holders, and no cash dividends paid or planned - The company's common stock has been traded on The Nasdaq Capital Market under the symbol 'MIRA' since August 3, 2023[332] - As of March 28, 2025, there were approximately 55 holders of record of the common stock[334] - The company has not paid any cash dividends and does not plan to in the foreseeable future[334] Management's Discussion and Analysis of Financial Condition and Results of Operations MIRA reported a $7.9 million net loss in 2024 with no revenue, increased R&D, and faces liquidity issues with a going concern warning Results of Operations (2024 vs. 2023) | Financial Metric | 2024 | 2023 | | :--- | :--- | :--- | | Revenues | $0 | $0 | | General and administrative expenses | $4.7 million | $6.5 million | | Research and development expenses | $3.3 million | $1.6 million | | Net Loss | ($7.9 million) | ($12.0 million) | | Basic and diluted loss per share | ($0.51) | ($0.85) | - Research and development expenses more than doubled to $3.3 million in 2024, driven by IND-enabling studies and submission work[351] - The company had cash and cash equivalents of approximately $2.8 million as of December 31, 2024, and expects this will only be sufficient to fund operations through the third quarter of 2025, raising substantial doubt about its ability to continue as a going concern[358][370] Cash Flow Summary (2024 vs. 2023) | Cash Flow | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($5.6 million) | ($4.5 million) | | Net cash provided by financing activities | $3.8 million | $8.8 million | Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, MIRA is not required to provide market risk disclosures - The company is not required to provide this information as it qualifies as a smaller reporting company[381] Financial Statements and Supplementary Data This section presents audited financial statements for 2024 and 2023, including auditor reports with 'going concern' paragraphs - The independent auditor's report for FY 2024 highlights that the company's lack of revenue, net loss of $7.9 million, and cash used in operations of $5.6 million raise substantial doubt about its ability to continue as a going concern[514] Balance Sheet Summary (as of Dec 31) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Cash | $2,832,931 | $4,602,566 | | Total Assets | $2,923,099 | $4,932,443 | | Total Liabilities | $723,349 | $558,097 | | Total Stockholders' Equity | $2,199,750 | $4,374,346 | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no changes or disagreements with its accountants on accounting and financial disclosure - None[383] Controls and Procedures Management concluded disclosure controls and internal financial reporting controls were effective as of December 31, 2024, with prior weaknesses remediated - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[384] - Management believes that previously identified material weaknesses in internal control over financial reporting were remediated in 2024[385] - The company is not required to include an auditor's attestation report on internal control over financial reporting because it is an emerging growth and smaller reporting company[387] Part III Directors, Executive Officers and Corporate Governance MIRA's governance features CEO Erez Aminov, CFO Michelle Yanez, a five-member Board with four independent directors, and three standing committees Executive Officers and Directors | Name | Position | | :--- | :--- | | Erez Aminov | Chief Executive Officer and Chairman | | Michelle Yanez | Chief Financial Officer, Secretary and Treasurer | | Matthew Pratt Whalen | Director | | Matthew Paul Del Giudice, M.D. | Director | | Denil Nanji Shekhat, M.D. | Director | | Edward MacPherson | Director | - The Board has determined that four of its five directors are independent under Nasdaq listing rules[403] - The Board has three standing committees: Audit (chaired by Matthew Whalen), Compensation (chaired by Dr. Denil Shekhat), and Nominating and Corporate Governance (chaired by Dr. Matthew Del Giudice)[406][408][412] Executive Compensation In 2024, CEO Erez Aminov's total compensation was $3.14 million, and CFO Michelle Yanez's was $444,021, including significant equity awards 2024 Named Executive Officer Compensation | Name and Position | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other Comp ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Erez Aminov, CEO | 259,999 | 300,000 | 595,000 | 1,919,120 | 66,194 | 3,140,313 | | Michelle Yanez, CFO | 158,219 | - | - | 258,900 | 26,902 | 444,021 | - In December 2024, CEO Erez Aminov received a $300,000 milestone bonus and was awarded 500,000 Restricted Stock Units (RSUs)[430][617] - The 2022 Omnibus Incentive Plan authorizes up to 5,000,000 shares of common stock for equity awards to employees, directors, and consultants[445][610] Security Ownership of Certain Beneficial Owners and Management As of March 28, 2025, Brian McNulty is the largest beneficial owner at 29.14%, with CEO Erez Aminov holding 13.78% Beneficial Ownership (as of March 28, 2025) | Name / Group | Percentage of Class | | :--- | :--- | | Brian McNulty (as Trustee) | 29.14% | | Erez Aminov (CEO & Chairman) | 13.78% | | All current directors and officers as a group | 14.82% | - As of December 31, 2024, there were 412,142 securities remaining available for future issuance under the company's equity compensation plans[479] Certain Relationships and Related Transactions The company has significant related-party transactions with MIRALOGX and Bay Shore Trust, including licensing agreements and warrant issuances - The company entered into an exclusive license agreement with related party MIRALOGX for KETAMIR-2, paying $100,000 upfront and agreeing to an 8% royalty on sales[486][577] - In connection with the license agreement, MIRA issued 700,000 warrants to MIRALOGX exercisable at $2.00 per share[486][578] - The company had a line of credit with the Bay Shore Trust, which was paid off in 2023. In consideration for the facility, MIRA issued 1,000,000 warrants to the trust exercisable at $5.00 per share[482][483] Principal Accountant Fees and Services In 2024, the company incurred $0.13 million in audit fees to Cherry Bekaert LLP and Salberg & Company P.A., with all services pre-approved Accountant Fees for Fiscal Year 2024 | Fee Type | Amount | | :--- | :--- | | Audit Fees (Cherry Bekaert LLP) | $0.08 million | | Audit Fees (Salberg & Company P.A) | $0.05 million | | Audit-Related Fees (Cherry Bekaert LLP) | $0.05 million | | Tax Fees | $0 | | All Other Fees | $0 | - The company appointed Salberg & Company P.A. as its new audit firm effective December 19, 2024[497] Part IV Exhibits, Financial Statement Schedules This section indexes all exhibits filed with Form 10-K, including governance documents, material contracts, and employment agreements - Key filed exhibits include the 2022 Omnibus Incentive Plan (10.1), the Exclusive License Agreement with MIRALOGX (10.13), and employment agreements for CEO Erez Aminov (10.7, 10.8) and CFO Michelle Yanez (10.9, 10.15)[503][504]