Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

November 13, 2023

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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 September 30, 2023

 

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 001-13467

 

Inhibitor Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   30-0793665

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

     

4905 South West Shore Blvd

Tampa, FL

  33611-3329
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number (including area code):

813-864-2562

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

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, or a non-accelerated filer or a smaller reporting company. See definition 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

 

As of November 13, 2023, there were 172,023,545 shares of company common stock issued and outstanding.

 

 

 

 

 

 

Inhibitor Therapeutics, Inc.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

 

    Page
     
Part I. Financial Information  
     
Item 1. Condensed Financial Statements (unaudited)  
     
  Condensed Balance Sheets as of September 30, 2023 and December 31, 2022 1
     
  Condensed Statements of Operations for the three and nine months ended September 30, 2023 and 2022 2
     
  Condensed Statements of Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022 3
     
  Condensed Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 4
     
  Notes to Condensed Financial Statements 5
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 8
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 10
     
Item 4. Controls and Procedures 10
     
Cautionary Note on Forward Looking Statements 10
   
Part II. Other Information  
     
Item 1 Legal Proceedings 11
     
Item 1A. Risk Factors 11
     
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 11
     
Item 3 Defaults upon Senior Securities 11
     
Item 4 Mine Safety Disclosures 11
     
Item 5 Other Information 11
     
Item 6. Exhibits 12
     
Signatures 13

 

 

 

 

INHIBITOR THERAPEUTICS, INC.

CONDENSED BALANCE SHEETS

AS OF SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

 

    (Unaudited)
September 30, 2023
    December 31, 2022  
ASSETS                
Current assets:                
Cash and cash equivalents   $ 9,537,618     $ 11,951,224  
Prepaid expenses     70,071       23,900  
Total current assets     9,607,689       11,975,124  
Total assets   $ 9,607,689     $ 11,975,124  
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 93,147     $ 145,161  
Notes payable, related party           411,000  
Accrued expenses and other liabilities     63,293       122,621  
Total current liabilities     156,440       678,782  
Deferred revenue     3,000,000       3,000,000  
Total liabilities     3,156,440       3,678,782  
Commitments and contingencies (note 5)            
Stockholders’ equity:                
Series A Preferred Stock, $0.0001 par value; 500,000 shares authorized; no shares issued and outstanding at September 30, 2023 and December 31, 2022            
Series B Convertible, Redeemable, Preferred Stock, $0.0001 par value; 7,246,377 shares authorized; no shares issued and outstanding at September 30, 2023 and December 31, 2022            
Undesignated Preferred Stock, $0.0001 par value; 2,253,623 shares authorized; no shares issued or outstanding at September 30, 2023 and December 31, 2022            
Common stock, $0.0001 par value; 500,000,000 shares authorized; 172,023,545 and 171,793,134 shares issued and outstanding at September 30, 2023 and December 31, 2022     17,202       17,179  
Additional paid-in capital     54,046,845       54,033,084  
Accumulated deficit     (47,612,798 )     (45,753,921 )
Total stockholders’ equity     6,451,249       8,296,342  
Total liabilities and stockholders’ equity   $ 9,607,689     $ 11,975,124  

 

See notes to condensed financial statements

 

1

 

 

INHIBITOR THERAPEUTICS, INC.

CONDENSED STATEMENTS OF OPERATIONS

FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

 

    2023     2022     2023     2022  
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2023     2022     2023     2022  
Revenues:   $     $     $     $  
Expenses:                                
Research and development     260,765             696,156       6,150  
General and administrative     498,763       69,987       1,435,557       228,141  
Total expenses     759,528       69,987       2,131,713       234,291  
Loss from operations     (759,528 )     (69,987 )     (2,131,713 )     (234,291 )
                                 
Other income / (expenses):                                
Interest expense, related party           (7,705 )           (19,878 )
Interest income     94,768             272,836        
Net loss     (664,760 )     (77,692 )     (1,858,877 )     (254,169 )
Preferred stock dividend           (50,411 )           (149,590 )
Net loss applicable to common stockholders   $ (664,760 )   $ (128,103 )   $ (1,858,877 )   $ (403,759 )
Basic and diluted net loss applicable to common stockholders per share   $ (0.00 )   $ (0.00 )   $ (0.01 )   $ (0.00 )
Weighted average common stock shares outstanding – basic and diluted     172,012,404       376,858,323       171,925,360       376,858,323  

 

See notes to condensed financial statements

 

2

 

 

INHIBITOR THERAPEUTICS, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

 

    Shares     Amount     Shares     Amount     Capital     Deficit     Equity  
    Preferred
Stock– Series B
    Common Stock     Additional
Paid-In
    Accumulated     Total Stockholders’  
    Shares     Amount     Shares     Amount     Capital     Deficit     Equity  
Balance, January 1, 2023         $       171,793,134     $ 17,179     $ 54,033,084     $ (45,753,921 )   $ 8,296,342  
Net loss                                   (539,596 )     (539,596 )
Balances, March 31, 2023         $       171,793,134     $ 17,179     $ 54,033,084     $ (46,293,517 )   $ 7,756,746  
Issuance of common stock under equity incentive plan                 175,000       18       12,232             12,250  
Net loss                                   (654,521 )     (654,521 )
Balances, June 30, 2023         $       171,968,134     $ 17,197     $ 54,045,316     $ (46,948,038 )   $ 7,114,475  
Issuance of common stock under equity incentive plan                 55,411       5       1,529             1,534  
Net loss                                   (664,760 )     (664,760 )
Balances, September 30, 2023         $       172,023,545       17,202       54,046,845       (47,612,798 )     6,451,249  

 

    Preferred
Stock– Series B
    Common Stock     Additional
Paid-In
    Accumulated     Total Stockholders’  
    Shares     Amount     Shares     Amount     Capital     Deficit     Equity  
Balance, January 1, 2022     5,797,102     $ 3,960,866       376,858,323     $ 37,686     $ 50,051,711     $ (57,671,109 )   $ (3,620,846 )
Preferred stock dividends, related party                                   (49,315 )     (49,315 )
Net loss                                   (98,910 )     (98,910 )
Balances, March 31, 2022     5,797,102     $ 3,960,866       376,858,323     $ 37,686     $ 50,051,711     $ (57,819,334 )   $ (3,769,071 )
Preferred stock dividends, related party                                   (49,863 )     (49,863 )
Net loss                                   (77,567 )     (77,567 )
Balances, June 30, 2022     5,797,102     $ 3,960,866       376,858,323     $ 37,686     $ 50,051,711     $ (57,946,764 )   $ (3,896,501 )
Preferred stock dividends, related party                                   (50,411 )     (50,411 )
Net loss                                   (77,692 )     (77,692 )
Balances, September 30, 2022     5,797,102       3,960,866       376,858,323       37,686       50,051,711       (58,074,868 )     (4,024,605 )

 

See notes to condensed financial statements

 

3

 

 

INHIBITOR THERAPEUTICS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

 

    2023     2022  
   

Nine Months Ended

September 30,

 
    2023     2022  
Operating activities:                
Net loss   $ (1,858,877 )   $ (254,169 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Stock based compensation     13,784        
Changes in assets and liabilities:                
Prepaid expenses     (46,171 )     18,099  
Accounts payable and other current liabilities     (111,342 )     78,502  
Net cash used in operating activities     (2,002,606 )     (157,568 )
Financing activities:                
Proceeds from notes payable, related party           180,000  
Payments made on notes payable, related party     (411,000 )      
Net cash (used in) provided by financing activities     (411,000 )     180,000  
Net change in cash and cash equivalents     (2,413,606 )     22,432  
Cash and cash equivalents at beginning of period     11,951,224       30,626  
Cash and cash equivalents at end of period   $ 9,537,618     $ 53,058  
Non-cash financing activities:                
Accrued, but unpaid dividends   $     $ 250,413  

 

See notes to condensed financial statements

 

4

 

 

INHIBITOR THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

 

1. Corporate overview:

 

Overview

 

The accompanying unaudited condensed financial statements of Inhibitor Therapeutics, Inc., a Delaware corporation (the “Company”, “INTI”, “we”, “us” or similar terminology), have been prepared by the Company without audit. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of September 30, 2023, and for all periods presented, have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the Securities and Exchange Commission (“SEC”) rules and regulations. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2022, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on March 31, 2023 (the “2022 Annual Report”). The accompanying condensed balance sheet as of December 31, 2022 has been derived from the audited financial statements at that date but does not include all information and footnotes required by GAAP for complete financial statements.

 

As used herein, the term “Common Stock” means the Company’s common stock, $0.0001 par value per share.

 

The results of operations for the three-month and nine-month periods ended September 30, 2023, are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. Readers of this Quarterly Report are strongly encouraged to review the risk factors relating to the Company which are set forth in the 2022 Annual Report and the Company’s other filings with the SEC.

 

Nature of the Business and Background

 

The Company is a pharmaceutical development company that is focused on developing and ultimately commercializing innovative therapeutics based on already approved active pharmaceuticals that have patent-protected methods of use and/or methods of delivery for patients with certain cancers and certain non-cancerous proliferation disorders. The Company has explored and expects to continue to explore acquiring or licensing other innovative pre-clinical and clinical stage therapeutics addressing unmet needs for the treatment of cancer and other diseases based on repurposing active ingredients of already approved drugs.

 

The Company’s current primary focus is on the development of therapies initially for basal cell carcinoma, prostate and lung cancers in the United States utilizing itraconazole, a drug currently approved by the U.S. Food and Drug Administration (“FDA”) to treat fungal infections, and which has an extensive history of safe and effective use in humans. The Company has developed intellectual property and know-how related to the treatment of cancer patients using itraconazole. In particular, the Company is negotiating with Johns Hopkins University to license US Patent 8,890,930 B2 which deals with methods of inhibiting angiogenesis and treating or preventing a disease or disorder (or symptoms thereof) associated with angiogenesis such as cancers like basal cell carcinomas.

 

Following the resolution of the litigation involving the Company in December 2022 and the resulting settlement agreement, the new Board and management of the Company intend to continue the development of itraconazole for basal cell carcinoma nevus syndrome (“BCCNS”), and other cancers and non-cancerous proliferative disorders. To that end, the development or acquisition of its own proprietary and patent-protected formulation of itraconazole is anticipated. In addition, the Company is exploring the addition of other product candidates that meet our strict criteria: products that target an unmet medical need of significant clinical value, and are patent protected, and that qualify for the 505(b)2 regulatory pathway.

 

5

 

 

INHIBITOR THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

 

2. Summary of Significant Accounting Policies:

 

Estimates

 

The preparation of condensed financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

 

Revenue Recognition

 

The Company currently has no ongoing source of revenue. Miscellaneous income, including interest, is recognized when earned by the Company. Deferred revenue represents cash received for royalties in advance of being earned. Such payments are reflected as deferred revenue until recognized under the Company’s revenue recognition policy. Deferred revenue would be classified as current if management believes the Company will be able to recognize the deferred amount as revenue within twelve months of the balance sheet date. Deferred revenue will be recognized when the product is sold, and the royalty is earned. All deferred revenue is related to a BCCNS product, which is yet to be approved by FDA, and as a result the Company has determined that 100% of the advances of the royalty received should be classified as non-current. At September 30, 2023 and December 31, 2022, deferred revenue consisted of $3.0 million of royalties advanced by Mayne Pharma Ventures Pty Ltd. (“Mayne Pharma”).

 

Cash and Cash Equivalents

 

Cash and cash equivalents include cash in bank accounts as well as investments in highly liquid money market funds and sweep accounts with original maturities of three months or less. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At times, the Company may maintain cash balances in excess of Federal Deposit Insurance Corporation insured amounts. The Company continues to monitor the third-party depository institutions that hold the Company’s cash and limits its cash deposits to financial institutions with high credit standing.

 

Research and Development Expenses

 

Research and development costs are expensed in the period in which they are incurred and include the expenses paid to third parties who conduct research and development activities on behalf of the Company.

 

Stock-Based Compensation

 

The Company accounts for stock-based awards to employees and non-employees using Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 – Accounting for Share-Based Payments, which provides for the use of the fair value-based method to determine compensation for all arrangements where shares of stock or equity instruments are issued for compensation. Fair values of restricted stock units issued are determined by the Company based predominantly on the trading price of the common stock on the date of grant. Fair value of each common stock option is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected term and the risk-free interest rate. Expected volatility is based on historical volatility of a peer group’s common stock and other factors estimated over the expected term of the options. The expected term of the options granted is derived using the “simplified method” which computes the expected term as the average of the weighted-average vesting term and the contract term. The risk-free rate is based on the U.S. Treasury yield. During the nine months ended September 30, 2023, we granted 230,411 shares of restricted common stock that are restricted as to trading for a period of one year from the date of grant. No stock-based awards were issued during the nine months ended September 30, 2022.

 

6

 

 

INHIBITOR THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

 

Income Taxes

 

Deferred tax assets and liabilities are recognized for future tax consequences attributed to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that are expected to apply to the differences in the periods that they are expected to reverse. Management has evaluated the guidance relating to accounting for uncertainty in income taxes and has determined that the Company had no uncertain income tax positions that could have a significant effect on the financial statements as of September 30, 2023.

 

Recent accounting pronouncements:

 

Management has considered all recent accounting pronouncements issued, but not effective, and does not believe that any will have a material impact on the Company’s financial statements.

 

3. Notes payable, related party

 

The balance outstanding on the notes payable, related party at December 31, 2022 was $411,000 and was repaid in February 2023.

 

4. Stockholders’ Equity:

 

Employee Stock Plans

 

During the nine months ended September 30, 2023, we granted 230,411 restricted common shares with an aggregate grant date fair value of approximately $0.01 million to the members of our Board of Directors under the equity incentive plan. The common shares are fully vested upon issuance but are restricted to trading for a period of one year from the date of grant. There was no stock-based compensation for the nine months ended September 30, 2022.

 

As of September 30, 2023, there were 2,575,646 outstanding common stock options under the Company’s equity incentive plan of which 100% were vested. There was no unamortized stock-based compensation at September 30, 2023. The weighted-average remaining contractual life, weighted-average exercise price per share and the aggregate intrinsic value of the outstanding common stock options as of September 30, 2023 were 6.0 years, $0.09 and approximately $0.01 million, respectively.

 

5. Legal Proceedings:

 

The Company may from time to time become a party to various legal proceedings arising in the ordinary course of business. The Company is not currently the subject of any pending legal proceedings.

 

7

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion and analysis should be read in conjunction with the Condensed Financial Statements and Notes thereto included elsewhere in this Quarterly Report. This discussion contains certain forward-looking statements that involve risks and uncertainties. The Company’s actual results and the timing of certain events could differ materially from those discussed in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth herein and elsewhere in this Quarterly Report and in the Company’s other filings with the SEC. See “Cautionary Note Regarding Forward Looking Statements” below.

 

As used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, unless otherwise indicated, the terms “the Company”, “we”, “us”, “our” and similar terminology refer to Inhibitor Therapeutics, Inc.

 

Background of the Company

 

We are a pharmaceutical development company that is focused on developing and ultimately commercializing innovative therapeutics based on already approved active pharmaceuticals that have patent-protected methods of use and/or methods of delivery for patients with certain cancers and certain non-cancerous proliferation disorders. We also have explored and expect to continue to explore acquiring or licensing other innovative pre-clinical and clinical stage therapeutics addressing unmet needs for the treatment of cancer and other diseases based on repurposing active ingredients of already approved drugs.

 

Our current primary focus is on the development of therapies initially for basal cell carcinoma, prostate and lung cancers in the United States utilizing itraconazole, a drug currently approved by the U.S. Food and Drug Administration (“FDA”) to treat fungal infections, and which has an extensive history of safe and effective use in humans. The Company has developed intellectual property and know-how related to the treatment of cancer patients using itraconazole. In particular, the Company is negotiating with Johns Hopkins University to license US Patent 8,890,930 B2 which deals with methods of inhibiting angiogenesis and treating or preventing a disease or disorder (or symptoms thereof) associated with angiogenesis such as cancers like basal cell carcinomas.

 

A minority shareholder of the Company was involved in extended litigation for approximately five years with the former majority shareholder of the Company, which through mediation finalized in late 2022 resulting in the forfeiture of all equity securities of the Company for cancellation by the former majority shareholder and resignation of all Directors and Officers. As part of the settlement, the Company received a cash payment of $14.25 million, forgiveness of certain debts owed by the Company to the former majority shareholder, new officers and directors were elected, and the Company continued under new management. Further details have been disclosed in the Company’s Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on March 31, 2023.

 

Following the resolution of the litigation involving the Company in December 2022 and the resulting settlement agreement, the new Board and management of the Company intend to continue the development of itraconazole for BCCNS, and other cancers and non-cancerous proliferative disorders. To that end, the development or acquisition of its own proprietary and patent-protected formulation of itraconazole is anticipated. The Company has developed intellectual property and know-how related to the treatment of cancer patients using itraconazole. In particular, the Company is negotiating with Johns Hopkins University to license US Patent 8,890,930 B2 which deals with methods of inhibiting angiogenesis and treating or preventing a disease or disorder (or symptoms thereof) associated with angiogenesis such as cancers like basal cell carcinomas. In addition, the Company is exploring the addition of other product candidates that meet our strict criteria: products that target an unmet medical need of significant clinical value, and are patent protected, and that qualify for the 505(b)2 regulatory pathway.

 

Critical Accounting Policies

 

See Note 2 of the Notes to Condensed Financial Statements included in Item 1 of this Quarterly Report for a summary of significant accounting policies and information on recently issued accounting pronouncements.

 

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Results of Operations

 

For the three months ended September 30, 2023, compared to the three months ended September 30, 2022

 

Research and Development Expenses. We incurred approximately $0.3 million in research and development expenses during the three months ended September 30, 2023. The expenses are primarily patent-related expenses and personnel costs relating to research and development activities. There were no such research and development expenses incurred during the same period in 2022.

 

General and Administrative Expenses. We incurred approximately $0.5 million and $0.1 million in general and administrative expenses during the three months ended September 30, 2023 and September 30, 2022, respectively. For the three months ended September 30, 2023 general and administrative expenses were composed primarily of compensation costs of $0.2 million, insurance costs of $0.2 million, professional fees of $0.1 million. The increase of approximately $0.4 million is due primarily to the increase in overhead costs incurred as a result of the governance and management transitions related to litigation that resolved in December 2022.

 

Interest expense. We incurred approximately $0.01 million in interest expense during the three months ended September 30, 2022 associated with the outstanding balance on the Mayne Term Debt Facility during the period. There was no such interest incurred during the same period in 2023.

 

Interest income. We recognized approximately $0.1 million of interest income during the three months ended September 30, 2023. The interest income was generated from the proceeds resulting from the legal settlement received by the Company in December 2022 which earned interest within the Company’s depository accounts during the period. There was no such income earned during the same period in 2022.

 

For the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022

 

Research and Development Expenses. We incurred approximately $0.7 million in research and development expenses during the nine months ended September 30, 2023. The expenses are primarily patent-related expenses and personnel costs relating to research and development activities. We incurred less than $0.01 million in research and development expenses during the nine months ended September 30, 2022, relating to minimal costs incurred relating to patents.

 

General and Administrative Expenses. We incurred approximately $1.4 million and $0.2 million in general and administrative expenses during the nine months ended September 30, 2023 and September 30, 2022, respectively. For the nine months ended September 30, 2023 general and administrative expenses were composed primarily of compensation costs of $0.6 million, insurance costs of $0.4 million, professional fees of $0.1 million and a variety of other related costs. The increase of approximately $1.2 million is due primarily to the increase in overhead costs incurred as a result of the governance and management transitions related to litigation that resolved in December 2022.

 

Interest expense. We incurred approximately $0.02 million in interest expense during the nine months ended September 30, 2022, associated with the outstanding balance on the Mayne Term Debt Facility during the period. There was no such interest incurred during the same period in 2023.

 

Interest income. We recognized approximately $0.3 million of interest income during the nine months ended September 30, 2023. The interest income was generated from the proceeds resulting from the legal settlement received by the Company in December 2022 which earned interest within the Company’s depository accounts during the period. There was no such income earned during the same period in 2022.

 

Liquidity and Capital Resources

 

We are presently developing and conducting our business plan and are exploring the potential acquisition or license of additional product candidates. Based on our current operational plan and budget, we expect that we will have sufficient cash to manage our business as now contemplated for more than 12 months. As we determine capital requirements for existing and new opportunities, we will consider raising additional capital in the public market.

 

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

None.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this Quarterly Report, the Company’s management, with the participation of the Company’s Chief Executive Officer and Interim Chief Financial Officer (the “Certifying Officers”), conducted evaluations of our disclosure controls and procedures. As defined under Sections 13a–15I and 15d–15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the Certifying Officers, to allow timely decisions regarding required disclosures.

 

Based on this evaluation, the Certifying Officers have concluded that our disclosure controls and procedures were effective.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during our third fiscal quarter of 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Limitations on the Effectiveness of Internal Controls

 

Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our control have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

 

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

 

Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (and the “Liquidity and Capital Resources” section thereof) and elsewhere may address or relate to future events and expectations and as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. Such forward-looking statements involve significant risks and uncertainties. Such statements may include, without limitation, statements with respect to our plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects”, “may”, “could”, “would”, “should”, “believes”, “expects”, “anticipates”, “estimates”, “intends”, “plans” or similar expressions. These statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties, including those detailed in our filings with the SEC. Actual results, including, without limitation: (i) our ability to develop and ultimately commercialize therapeutics, or (ii) the application and availability of corporate funds and our need for future funds. Such forward-looking statements also involve other factors which may cause our actual results, performance or achievements to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Such factors include, among others,

 

  acceptance of our business model by investors and potential commercial collaborators;
     
  our future capital requirements and our ability to satisfy our capital needs;

 

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  our ability to commence and complete required clinical trials of product candidates and obtain approval from the FDA or other regulatory agencies in different jurisdictions;
     
  our ability to secure and maintain key development and commercialization partners for our product candidate;
     
  our ability to obtain, maintain or protect the validity of our owned or licensed patents and other intellectual property;
     
  our ability to internally develop, acquire or license new inventions and intellectual property;
     
  our ability to retain key executive members;
     
  interpretations of current laws and the passages of future laws, rules and regulations applicable to our business; and
     
  those risk factors listed under Item 1A of our 2022 Annual Report and other factors detailed from time to time in our other filings with the SEC.

 

Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different from the expectations expressed in this Report. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

The Company may from time to time become a party to various legal proceedings arising in the ordinary course of business. The Company is not currently the subject of any pending legal proceedings.

 

Item 1A. Risk Factors.

 

Not required for smaller reporting companies.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

Not applicable.

 

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Item 6. Exhibits.

 

Number   Description
     
31.1   Certification of Chief Executive Officer Pursuant to Sarbanes-Oxley Section 302
     
31.2   Certification of Interim Chief Financial Officer Pursuant to Sarbanes-Oxley Section 302
     
32.1   Certification Pursuant To 18 U.S.C. Section 1350 (*)
     
32.2   Certification Pursuant To 18 U.S.C. Section 1350 (*)
     
101.ins   Inline XBRL Instance Document
     
101.sch   Inline XBRL Taxonomy Extension Schema Document
     
101.cal   Inline XBRL Taxonomy Calculation Linkbase Document
     
101.def   Inline XBRL Taxonomy Definition Linkbase Document
     
101.lab   Inline XBRL Taxonomy Label Linkbase Document
     
101.pre   Inline XBRL Taxonomy Presentation Linkbase Document
     
104   The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL.
     
*   A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

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SIGNATURES

 

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  INHIBITOR THERAPEUTICS, INC.
     
Date: November 13, 2023 By: /s/ Francis E. O’Donnell
    Francis E. O’Donnell
    Chief Executive Officer
    (Principal Executive Officer)
     
Date: November 13, 2023 By: /s/ James A. McNulty
    James A. McNulty
    Interim Chief Financial Officer, Treasurer and Secretary
    (Principal Financial Officer)

 

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