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.
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 ended June 30, 2021 compared to the three months ended
June 30, 2020
Research and Development Expenses.
We recognized less than $0.01 million in research and development expenses
during the three months ended June 30, 2021 compared to approximately
$0.1 million for the three months ended June 30, 2020. Research and development
expenses for the three months ended June 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 ended June 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 ended June 30, 2021 compared to $0.3 million for the
three months ended June 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 ended June 30, 2021 compared to the three months ended June 30, 2020.
For the six months ended June 30, 2021 compared to the six months ended June 30,
2020
Research and Development Expenses.
We recognized less than $0.01 million in research and development expenses
during the six months ended June 30, 2021 compared to approximately $0.2 million
for the six months ended June 30, 2020. The decrease is primarily due to the
reduction of salaries in the six months ended June 30, 2021 compared to the six
months ended June 30, 2020.
General and Administrative Expenses.
We recognized approximately $0.2 million in general and administrative expenses
during the six months ended June 30, 2021 compared to $0.6 million for the six
months ended June 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 ended June 30, 2021 compared to the six months ended June 30,
2020.
Gain on loan forgiveness.
We recognized $41,600 in gain on loan forgiveness during the six months ended
June 30, 2021 when our PPP Loan was forgiven on March 31, 2021. There was no
such gain in the six months ended June 30, 2020.
Liquidity and Capital Resources
We had approximately $0.1 million cash on hand at June 30, 2021. Based on our
current operational plan and budget, which includes a deferral of all cash
compensation to employees and Board members that commenced July 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;



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  •   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, on January 30, 2020, the International Health Regulations Emergency
Committee of the World Health Organization (WHO) declared the novel coronavirus
(known as
COVID-19)
outbreak a public health emergency of international concern and on March 12,
2020 the WHO announced the outbreak was a pandemic. On January 31, 2020 the U.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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