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 theSEC . 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 toInhibitor Therapeutics, Inc. Critical Accounting Policies See Note 3 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. Results of Operations For the three months endedJune 30, 2021 compared to the three months endedJune 30, 2020 Research and Development Expenses. We recognized less than$0.01 million in research and development expenses during the three months endedJune 30, 2021 compared to approximately$0.1 million for the three months endedJune 30, 2020 . Research and development expenses for the three months endedJune 30, 2020 primarily included salary expenses and expenses related to follow-up with the FDA on the Investigational New Drug application for use of SUBA-Itraconazole for prostate cancer that was cleared by the FDA in late 2019. The expenses for the three months endedJune 30, 2021 primarily included patent expenses. General and Administrative Expenses. We recognized approximately$0.1 million in general and administrative expenses during the three months endedJune 30, 2021 compared to$0.3 million for the three months endedJune 30, 2020 . General and administrative expenses consisted primarily of professional fees, compensation and related costs for corporate administrative staff and accrued compensation for Board members. The decrease is primarily due to the reduction of salaries and Board compensation in the three months endedJune 30, 2021 compared to the three months endedJune 30, 2020 . For the six months endedJune 30, 2021 compared to the six months endedJune 30, 2020 Research and Development Expenses. We recognized less than$0.01 million in research and development expenses during the six months endedJune 30, 2021 compared to approximately$0.2 million for the six months endedJune 30, 2020 . The decrease is primarily due to the reduction of salaries in the six months endedJune 30, 2021 compared to the six months endedJune 30, 2020 . General and Administrative Expenses. We recognized approximately$0.2 million in general and administrative expenses during the six months endedJune 30, 2021 compared to$0.6 million for the six months endedJune 30, 2020 . General and administrative expenses consisted primarily of professional fees, compensation and related costs for corporate administrative staff and Board members including stock compensation expense. The decrease is primarily due to the reduction of salaries and Board compensation in the six months endedJune 30, 2021 compared to the six months endedJune 30, 2020 . Gain on loan forgiveness. We recognized$41,600 in gain on loan forgiveness during the six months endedJune 30, 2021 when our PPP Loan was forgiven onMarch 31, 2021 . There was no such gain in the six months endedJune 30, 2020 . Liquidity and Capital Resources We had approximately$0.1 million cash on hand atJune 30, 2021 . Based on our current operational plan and budget, which includes a deferral of all cash compensation to employees and Board members that commencedJuly 1, 2021 , we expect that we will have sufficient cash to manage our business into the first quarter of 2022, although this estimation assumes we do not begin any clinical trials, acquire other drug development opportunities or otherwise face unexpected events, costs or contingencies, any of which could affect our cash requirements. Available resources may be consumed more rapidly than anticipated, potentially resulting in the need for additional funding. We intend to seek additional financing for our research and development, commercialization and distribution efforts and our working capital needs primarily through: • proceeds from public and private financings (including most recently, financials from our majority shareholder, Mayne Pharma) and, potentially, from other strategic transactions; 11
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Table of Contents • royalty revenue from Mayne Pharma from sales of SUBA-Itraconazole BCCNS upon and assuming approval by FDA (after earned royalties have been applied to any royalties advanced under Third Amended SLA), although it is uncertain if and when such FDA approval will be obtained; • proceeds from the exercise of outstanding warrants previously issued in private financings (including, potentially, warrants held by our majority shareholder, Mayne Pharma); • potential partnerships with other pharmaceutical companies to assist in the supply, manufacturing and distribution of our products for which we would expect to receive upfront milestone and royalty payments; • potential licensing and joint venture arrangements with third parties, including other pharmaceutical companies where we would receive funding based on out-licensing our product; and • government or private foundation grants or loans which would be awarded to us to further develop our current and future therapies, or government payroll protection or similar programs available as a result of the novel coronavirus outbreak. However, there is a significant risk that none of these plans will be implemented in a manner necessary to sustain our operations beyond the first quarter of 2022 and that we will be unable to obtain additional financing when needed on commercially reasonable terms, if at all. In particular, we are presently subject to shareholder litigations (see Note 7 - Legal Proceedings in the accompanying unaudited financial statements). The existence of the Action and the Putative Class Action (as defined in such note) and the uncertainty surrounding their outcome has impeded our ability to secure additional funding and may continue to do so for so long as the outcome of the Action and the Putative Class Action is uncertain. In addition, onJanuary 30, 2020 , theInternational Health Regulations Emergency Committee of theWorld Health Organization (WHO ) declared the novel coronavirus (known as COVID-19) outbreak a public health emergency of international concern and onMarch 12, 2020 theWHO announced the outbreak was a pandemic. OnJanuary 31, 2020 theU.S. Health and Human Services Secretary declared COVID-19 a public health emergency, and subsequently state and local governments have imposed various restrictions on public activity. We have maintained operations virtually during the outbreak Although COVID-19 vaccines have been introduced in 2021 and federal, state and local restrictions have been modified, variants of COVID-19 have appeared, and thus the impact of COVID-19 continues to be unknown and rapidly evolving. The continuation of COVID-19 as a public health emergency could impact our ability to conduct operations (such as clinical trials) should adequate funding be obtained, If we are unable to raise new funding in the second half of 2021, or if we are faced with additional risks and uncertainties, we may be required to obtain funds through arrangements that may require us to relinquish rights to technologies or potential markets, any of which could have a material adverse effect on us. In addition, our inability to secure additional funding in the near future by any means could require us to wind down or discontinue operations. To save resources, we may also elect (if legally permissible) to cease our reporting obligations under the federal securities laws and/or migrate the trading of our Common Stock to a more junior market.
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