What changed in this filing

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Item 1. Financial Statements

2020-08-12 compared with 2020-05-15 · 555 added, 489 removed, 467 unchanged (69% of the section changed)

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Short-term investments

Other receivable

Lease payments receivable –

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Three months ended

Six months ended

Operating expenses:

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Loss from operations

(12,757,202 )

(22,731,640 )

Other (expenses) income:

Interest/investment income, net

Realized loss on short-term investments

Unrealized loss on short-term investments

Realized gain (loss) on short-term investments

Unrealized gain on short-term investments

Total other (expenses) income

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$ (4,122,592 )

$ (21,791,757 )

$ (6,808,657 )

Loss per common share –

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accompanying notes are an integral part of these unaudited consolidated financial statements.

Relmada Therapeutics, Inc.

Consolidated Statements of Stockholders’

Six months ended June 30, 2020

Additional Paid-in

Balance - December 31, 2019

$ 235,522,746

$ (119,858,909 )

$ 115,678,294

Stock based compensation

Warrant exercised for cash

Cashless warrant exercise

Options exercised

(10,673,316 )

Balance - March 31, 2020

(130,532,225 )

Stock based compensation

Warrant exercised for cash

Cashless warrant exercise

Options exercised

ATM offering, net of offering costs

(11,118,441 )

Balance - June 30, 2020

$ 273,868,163

$ (141,650,666 )

$ 132,233,349

Six months ended June 30, 2019

Additional Paid-in

Balance - December 31, 2018

$ 106,280,950

$ (104,853,710 )

Stock-based compensation expense

Equity units issued for Cash

Shares relinquished

Balance - March 31, 2019

(107,539,775 )

Stock-based compensation expense

Equity units issued for Cash

Issuance of common stock for cashless exercises of warrants from consultants and Series A Preferred stock warrant holder

Balance - June 30, 2019

$ 119,265,938

$ (111,662,367 )

The accompanying notes are an integral part

of these unaudited consolidated financial statements.

Therapeutics, Inc.

Statements of Cash Flows

Three months ended

Six months ended

Cash flows from operating activities

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Realized loss on short-term investments

Unrealized loss on short-term investments

Unrealized gain on short-term investments

Change in operating assets and liabilities:

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Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net (decrease)/increase in cash and cash equivalents

(22,454,261 )

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Cashless exercise of warrants for common stock

accompanying notes are an integral part of these unaudited consolidated financial statements.

Therapeutics, Inc.

Statements of Stockholders’

Three months ended March 31, 2020

Additional Paid-in

Balance - December 31, 2019

$ 235,522,746

$ (119,858,909 )

$ 115,678,294

Stock-based compensation expense

Warrants exercised for cash

Cashless warrant exercise

Options exercised

(10,673,316 )

Balance - March 31, 2020

$ 243,676,817

$ (130,532,225 )

$ 113,159,533

Three months ended March

Additional Paid-in

Balance - December 31, 2018

$ 106,280,950

$ (104,853,710 )

Stock-based compensation expense

Equity units issued for Cash

Shares relinquished

Balance - March 31, 2019

$ 108,005,928

$ (107,539,775 )

Notes payable issued in connection with directors and officers insurance policies

accompanying notes are an integral part of these unaudited consolidated financial statements.

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system (CNS) diseases and other disorders.

October 7, 2019, our application to list our common stock on the NASDAQ Capital Market was approved.

On October 10, 2019, our

common stock began trading on Nasdaq under our existing symbol, “RLMD.”

On December 19, 2019, the Board of Directors

of the Company approved a change to its end of fiscal year from June 30 to December 31.

The change in fiscal year became effective

for the Company’s 2020 fiscal year, which began on January 1, 2020 and will end December 31, 2020.

On October 7, 2019, our application to list

our common stock on the NASDAQ Capital Market was approved.

On October 10, 2019, our common stock began trading on Nasdaq under

our existing symbol, “RLMD.”

On July 14, 2020, our common stock was uplisted to The Nasdaq Global Select Market and

continues to trade under the symbol “RLMD”.

December 19, 2019, the Board of Directors of the Company approved a change to its end of fiscal year from June 30 to December

The change in fiscal year became effective for the Company’s 2020 fiscal year, which began on January 1, 2020 and will

end December 31, 2020.

addition to the normal risks associated with a new business venture, there can be no assurance that the Company’s research

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of Presentation

The accompanying unaudited consolidated

financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United

States of America (U.S.

accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles

generally accepted in the United States of America (U.S.

GAAP) for interim unaudited consolidated financial information.

Accordingly, they do not include all of

the information and footnotes required by U.S.

they do not include all of the information and footnotes required by U.S.

GAAP for complete consolidated financial statements.

The unaudited consolidated

financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management,

necessary for a fair statement of the results for the interim periods presented.

Interim results are not necessarily indicative

of the results for the full year.

These unaudited consolidated financial statements should be read in conjunction with the audited

consolidated financial statements of the Company for the six months ended December 31, 2019 and notes thereto contained in the

Company’s Transition Report on Form 10-KT.

The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are,

in the opinion of management, necessary for a fair statement of the results for the interim periods presented.

Interim results

are not necessarily indicative of the results for the full year.

These unaudited consolidated financial statements should be read

in conjunction with the audited consolidated financial statements of the Company for the six months ended December 31, 2019 and

notes thereto contained in the Company’s Transition Report on Form 10-KT.

On September 26, 2019, the Company’s

Board of Directors approved a 1-for-4 reverse split of the Common Stock, which was effective on the NASDAQ Capital Market on September

As a result of the reverse stock split, every 4 shares of issued and outstanding common stock were converted into 1

share of issued and outstanding common stock, with all fractional shares rounded up to the nearest whole share, and the Company’s

Board of Directors approved a 1-for-4 reverse split of the Common Stock, which was effective on the OTC Markets on September 30,

As a result of the reverse stock split, every 4 shares of issued and outstanding common stock were converted into 1 share

of issued and outstanding common stock, with all fractional shares rounded up to the nearest whole share, and the Company’s

authorized share of common stock were reduced from 200,000,000 to 50,000,000 shares.

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retroactively restated to reflect this reverse stock split.

As shown in the accompanying financial statements, the Company

incurred negative operating cash flows of $3,424,763 for the quarter ended March 31, 2020 and has an accumulated deficit of $130,532,225

from inception through March 31, 2020.

At March 31, 2020 the Company had cash and short term investments of approximately $115,000,000.

As shown in the accompanying financial

statements, the Company incurred negative operating cash flows of $8,378,419 for the six months ended June 30, 2020 and has an

accumulated deficit of $141,650,666 from inception through June 30, 2020.

At June 30, 2020 the Company had cash and short term

investments of approximately $134,087,800.

Relmada has funded its past operations

through equity raises and most recently in 2019 raised net proceeds from the sale of common stock of $109,447,482 and $4,447,038

through the exercise of warrants.

The Company also raised an additional $3,115,193 during the three months ended March 31, 2020

from the exercises of options and warrants.

through equity raises and most recently in 2020 raised net proceeds from the sale of common stock of $19,855,018 through our ATM

offering and $5,619,276 through the exercise of warrants.

The Company also raised an additional $530,643 during the six months

ended June 30, 2020 from the exercises of options.

Therapeutics, Inc.

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2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Management believes that due to the recent

equity raises completed and exercises of outstanding warrants and the current cash position on its balance sheet, it has obtained

sufficient funding to continue ongoing operations for at least 12 months from the issuance of these unaudited consolidated quarterly

financial statements.

Since March 31, 2020 and to date, the Company has received approximately $1,516,400 in warrant and option

exercises, which resulted in the Company having approximately $115,378,100 million in cash, cash equivalents, and short term investments

at May 13, 2020.

Based on its budgeted cash flow requirements, the Company believes these funds are sufficient to fund its ongoing

operations for at least 12 months after the issuance of these unaudited consolidated quarterly financial statements.

of the results of any ongoing clinical trial, the Company has control over its expenditures and has the ability to adjust spending

accordingly based on the budgeted cash flow requirements developed and the excess cash on hand.

Management believes that due to the recent equity raises completed

and exercises of outstanding warrants and the current cash position on its balance sheet, it has obtained sufficient funding to

continue ongoing operations for at least 12 months from the issuance of these unaudited consolidated quarterly financial statements.

Since June 30, 2020 and to date, the Company has received approximately $1,230,000 in warrant exercises, which resulted in the

Company having approximately $131,549,600 million in cash, cash equivalents, and short term investments at August 5, 2020.

on its budgeted cash flow requirements, the Company believes these funds are sufficient to fund its ongoing operations for at least

12 months after the issuance of these unaudited consolidated quarterly financial statements.

Regardless of the results of any ongoing

clinical trial, the Company has control over its expenditures and has the ability to adjust spending accordingly based on the budgeted

cash flow requirements developed and the excess cash on hand.

believes that their existing cash and cash equivalents will enable them to fund operating expenses and capital expenditure requirement

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All significant intercompany accounts and transactions have been eliminated in consolidation.

Risks and Uncertainties

The pandemic caused by an outbreak of

a new strain of coronavirus (COVID-19) has resulted, and is likely to continue to result, in significant national

and global economic disruption and may adversely affect our business.

Based on the Company’s current assessment, the Company

does not expect any material impact on its long-term development timeline and its liquidity due to the worldwide spread of the

COVID-19 virus.

However, the Company is actively monitoring this situation and the possible effects on its financial condition,

liquidity, operations, suppliers, industry, and workforce.

The preparation of financial statements

in conformity with U.S.

GAAP 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 for the reporting period.

Actual results could differ from those estimates.

The significant estimates

are the valuation of stock-based compensation expenses and recorded amounts related to income taxes.

and Uncertainties

pandemic caused by an outbreak of a new strain of coronavirus (COVID-19) has resulted, and is likely to continue to result, in

significant national and global economic disruption and may adversely affect our business.

Based on the Company’s current

assessment, the Company does not expect any material impact on its long-term development timeline and its liquidity due to the

worldwide spread of the COVID-19 virus.

However, the Company is actively monitoring this situation and the possible effects on

its financial condition, liquidity, operations, suppliers, industry, and workforce.

preparation of financial statements in conformity with U.S.

GAAP 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 for the reporting period.

Actual results could differ from those

The significant estimates are the valuation of stock-based compensation expenses and recorded amounts related to income

Therapeutics, Inc.

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cash deposits at these institutions exceed federally insured limits.

The Company’s investments consist

entirely of mutual funds.

The securities are measured at fair value based on the net asset value (“NAV”).

has adopted Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) 2016-01, Financial Instruments, for the

six months ended December 31, 2019 which requires substantially all equity investments in nonconsolidated entities to be measured

at fair value with recurring changes recognized in earnings, except for those accounted for using equity method accounting.

in fair value of the securities are recorded as part of other income on the consolidated statement of operations.

Short term investment

activity is presented in the investing activities section on the consolidated statement of cash flows.

Company’s investments consist entirely of mutual funds.

The securities are measured at fair value based on the net asset

The Company adopted Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) 2016-01, Financial

Instruments, for the six months ended December 31, 2019 which requires substantially all equity investments in nonconsolidated

entities to be measured at fair value with recurring changes recognized in earnings, except for those accounted for using equity

method accounting.

Changes in fair value of the securities are recorded as part of other income on the consolidated statement

of operations.

Short term investment activity is presented in the investing activities section on the consolidated statement of

related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred

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Furniture and fixtures have an estimated useful life of approximately

Company recognizes its leases with a term of greater than a year on the balance sheet by recording right-of-use assets and

lease liabilities.

Company recognizes its leases with a term of greater than a year on the balance sheet by recording right-of-use assets and lease

Leases can be classified as either operating leases or finance leases.

Operating leases will result in

straight-line lease expense, while finance leases will result in front-loaded expense.

The Company’s lease consists of

an operating leases for office space.

The Company does not recognize a lease liability or right-of-use asset on the balance

sheet for short-term leases.

Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis

over the lease term.

A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months

or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to

Operating leases will result in straight-line

lease expense, while finance leases will result in front-loaded expense.

The Company’s lease consists of an operating leases

for office space.

The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases.

Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term.

lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option

to purchase the underlying asset that the lessee is reasonably certain to exercise.

Therapeutics, Inc.

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Value of Financial Instruments

The Company’s financial instruments

primarily include cash, short term investments, and accounts payable.

Due to the short-term nature of cash and accounts payable

the carrying amounts of these assets and liabilities approximate their fair value.

Company’s financial instruments primarily include cash, short term investments, and accounts payable.

Due to the short-term

nature of cash and accounts payable the carrying amounts of these assets and liabilities approximate their fair value.

value is defined as the price that would be received to sell an asset, or paid to transfer a liability (an exit price), in an

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(supported by little or no market activity).

The Company’s short-term investment instruments of $102,690,508

at March 31, 2020 are classified using Level 1 inputs within the fair value hierarchy because they are valued using NAV.

gains and losses are recorded in the consolidated statement of operations under other income.

The Company recorded an unrealized

loss of $934,919, included in other income for the three months ended March 31, 2020.

Value on a Recurring Basis

As required by Accounting Standard Codification

(ASC) Topic No.

820 - 10 Fair Value Measurement , financial assets and liabilities are classified based on the lowest level

of input that is significant to the fair value measurement.

The Company’s assessment of the significance of a particular

input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities

and their placement within the fair value hierarchy levels.

As of March 31, 2020 and December 31, 2019,

there were no financial liabilities accounted for at fair value.

The Company’s short-term investment

instruments of $120,263,581 at June 30, 2020 are classified using Level 1 inputs within the fair value hierarchy because they

are valued using NAV.

Unrealized gains and losses are recorded in the consolidated statement of operations under other income.

The Company recorded an unrealized gain of $287,027 included in other income for the six months ended June 30, 2020.

Therapeutics, Inc.

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realize the benefit, or that future deductibility is uncertain.

As of March 31, 2020 and December 31, 2019, the Company had recognized

As of June 30, 2020 and December 31, 2019, the Company had recognized

a valuation allowance to the full extent of the Company’s net deferred tax assets since the likelihood of realization of

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if any, related to unrecognized tax benefits in general and administrative expenses in the statements of operations.

no liabilities recorded for uncertain tax positions at March 31, 2020 and December 31, 2019.

no liabilities recorded for uncertain tax positions at June 30, 2020 and December 31, 2019.

The open tax years, subject to potential

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per Common Share

loss per common share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders

by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents.

Diluted loss per common share attributable to common stockholders is computed by dividing the net loss attributable to common

stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock

Dilutive common stock equivalents are comprised of Class A convertible preferred stock, Series A preferred stock, restricted

stock awards, options and warrants to purchase common stock.

For all periods presented, there is no difference in the number of

shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

the three months ended March 31, 2020 and 2019, the potentially dilutive securities that would be anti-dilutive due to the Company’s

Basic loss per common share attributable to

common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of

common shares outstanding for the period, without consideration for common stock equivalents.

Diluted loss per common share attributable

to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number

of common share equivalents outstanding for the period determined using the treasury-stock method.

Dilutive common stock equivalents

are comprised of options and warrants to purchase common stock.

For all periods presented, there is no difference in the number

of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

the six months ended June 30, 2020 and 2019, the potentially dilutive securities that would be anti-dilutive due to the Company’s

net loss are not included in the calculation of diluted net loss per share attributable to common stockholders.

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securities are as follows (in common stock equivalent shares):

Three months ended

Six months ended

Stock options

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We do not expect the adoption of ASU 2019-12 to have a material impact on our consolidated financial statements.

Subsequent Events

The Company’s management reviewed

all material events through the date the financial statements were issued for subsequent event disclosure consideration.

In August 2018, FASB issued ASU 2018-13, Fair

Value Measurement –

Disclosure Framework (Topic 820).

The updated guidance improves the disclosure requirements on fair

value measurements, primarily associated with Level 3 fair value measurements and is effective for fiscal years, and interim periods

within those fiscal years, beginning December 15, 2019.

Early adoption is permitted upon issuance of the standard disclosures

modified or removed with a delay of adoption of the additional disclosures until their effective date.

The Company adopted this

standard effective January 1, 2020 and the standard did not have a significant impact on the Company’s financial statements.

In November 2018, FASB issued ASU 2018-18 –

Collaborative

Arrangements (Topic 808):

Clarifying the Interaction between Topic 808 and Topic 606 , which, among other things, provides guidance

on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606.

The amendments

in the ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with

early adoption permitted.

The Company adopted this standard on January 1, 2020 and the standard did not have a significant impact

on the Company’s financial statements.

Company’s management reviewed all material events through the date the financial statements were issued for subsequent event

disclosure consideration.

3 - PREPAID EXPENSES

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accumulated depreciation

Therapeutics, Inc.

to Unaudited Consolidated Financial Statements

5 - ACCRUED EXPENSES

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Legal settlement

Therapeutics, Inc.

to Unaudited Consolidated Financial Statements

6 - NOTES PAYABLE

In June 2019, the Company entered into a note

for approximately $364,200 in conjunction with a renewal of its director and officer insurance policy.

The interest rate was 3.09%

June 2019, the Company entered into a note for approximately $364,200 in conjunction with a renewal of its director and officer

insurance policy.

The interest rate was 3.09% per annum.

The note matured on April 9, 2020.

March 31, 2020 and December 31, 2019, the note payable outstanding balances were approximately $0 and $110,200, respectively.

June 30, 2020 and December 31, 2019, the note payable outstanding balances were approximately $0 and $110,200, respectively.

7 - STOCKHOLDERS’

On September 26, 2019, the Company’s

Board of Directors approved a 1-for-4 reverse split of the Common Stock, which was effective on the NASDAQ Capital Market on September

Board of Directors approved a 1-for-4 reverse split of the Common Stock, which was effective on the OTC Markets on September 30,

As a result of the reverse stock split, every 4 shares of issued and outstanding common stock were converted into 1 share

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retroactively restated to reflect this reverse stock split.

During the three months ended March 31, 2020,

During the six months ended June 30,

2020, the Company issued 35,954 shares of common stock for cashless exercise of 49,196 warrants.

The Company also issued 447,107 shares

of common stock for cash exercises of warrants for proceeds of $3,042,173.

During the three months ended March 31, 2020,

the Company issued 2,434 shares of common stock for cash exercise of options for proceeds of $73,020.

Options and Warrants

The Company also issued

815,471 shares of common stock for cash exercises of warrants for proceeds of $5,619,276.

During the six months ended June 30, 2020,

the Company issued 115,715 shares of common stock for the exercise of options for proceeds of $530,643.

On May 15, 2020, the Company entered into an

Open Market Sale Agreement with Jefferies LLC, as sales agent (“Jefferies”), pursuant to which the Company may

offer and sell, from time to time, through Jefferies, shares of the Company’s common stock, having an aggregate offering

price of up to $75,000,000 .

The Company is not obligated to sell any shares under the agreement.

During the six months ended June

30, 2020 the Company issued 427,700 shares of common stock for net cash proceeds of $19,900,000 million under the agreement.

In December 2014, the Board of Directors

adopted and the shareholders approved Relmada’s 2014 Stock Option and Equity Incentive Plan, as amended (the Plan), which

allows for the granting of common stock awards, stock appreciation rights, and incentive and nonqualified stock options to purchase

shares of the Company’s common stock to designated employees, non-employee directors, and consultants and advisors.

allowed for the granting of 5,152,942 options or stock awards.

Stock options are exercisable generally

for a period of 10 years from the date of grant and generally vest over four years.

As of March 31, 2020, 1,155,086 shares were

available for future grants under the Plan.

As of March 31, 2020, no stock appreciation

rights have been issued.

The Company utilizes the Black-Scholes

option pricing model to estimate the fair value of stock options and warrants.

The price of common stock prior to the Company being

public was determined from a third party valuation.

The risk-free interest rate assumptions were based upon the observed interest

rates appropriate for the expected term of the equity instruments.

The expected dividend yield was assumed to be zero as the Company

has not paid any dividends since its inception and does not anticipate paying dividends in the foreseeable future.

volatility was based on historical volatility.

The Company routinely reviews its calculation of volatility changes in future volatility,

the Company’s life cycle, its peer group, and other factors.

The Company uses the simplified method

for share-based compensation to estimate the expected term for employee option awards for share-based compensation in its option-pricing

On March 9, 2020, the Company awarded

a total of 350,000 options to an employee with exercise price of $45.61 and a 10-year term vesting over 4-year period.

have an aggregate fair value of $13.1 million calculated using the Black-Scholes option-pricing model.

Variables used in the Black-Scholes

option-pricing model include:

(1) discount rate of 0.51% (2) expected life of 6.25 years, (3) expected volatility of 107%, and

(4) zero expected dividends.

adopted and the shareholders approved Relmada’s 2014 Stock Option and Equity Incentive Plan, as amended (the “Plan”),

which allows for the granting of common stock awards, stock appreciation rights, and incentive and nonqualified stock options to

purchase shares of the Company’s common stock to designated employees, non-employee directors, and consultants and advisors.

The Plan allowed for the granting of 5,152,942 options or stock awards.

Stock options are exercisable generally for a period of 10 years

from the date of grant and generally vest over four years.

As of June 30, 2020, 1,018,367 shares were available for future grants

under the Plan.

of June 30, 2020, no stock appreciation rights have been issued.

The Company utilizes the Black-Scholes option pricing model

to estimate the fair value of stock options and warrants.

The risk-free interest rate assumptions were based upon the observed

interest rates appropriate for the expected term of the equity instruments.

The expected dividend yield was assumed to be zero

as the Company has not paid any dividends since its inception and does not anticipate paying dividends in the foreseeable future.

The expected volatility was based on historical volatility.

The Company routinely reviews its calculation of volatility changes

in future volatility, the Company’s life cycle, its peer group, and other factors.

Company uses the simplified method for share-based compensation to estimate the expected term for employee option awards for share-based

compensation in its option-pricing model.

March 9, 2020, the Company awarded a total of 350,000 options to an employee with exercise price of $45.61 and a 10-year term

vesting over 4-year period.

The options have an aggregate fair value of $13.1 million calculated using the Black-Scholes option-pricing

Variables used in the Black-Scholes option-pricing model include:

(1) discount rate of 0.51% (2) expected life of 6.25

years, (3) expected volatility of 107%, and (4) zero expected dividends.

Therapeutics, Inc.

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EQUITY (continued)

On March 19, 2020, the Company awarded

March 19, 2020, the Company awarded a total of 100,000 options to an employee with exercise price of $28.00 and a 10-year term

vesting over a 4-year period.

The options have an aggregate fair value of $2.3 million calculated using the Black-Scholes option-pricing

Variables used in the Black-Scholes option-pricing model include:

(1) discount rate of 0.83% (2) expected life of 6.25

years, (3) expected volatility of 108%, and (4) zero expected dividends.

March 25, 2020, the Company awarded a total of 150,000 options to an employee with exercise price of $31.88 and a 10-year term

vesting over a 4-year period.

The options have an aggregate fair value of $4.0 million calculated using the Black-Scholes option-pricing

Variables used in the Black-Scholes option-pricing model include:

(1) discount rate of 0.67% (2) expected life of 6.25

years, (3) expected volatility of 108%, and (4) zero expected dividends.

On April 21, 2020, the Company awarded

a total of 100,000 options to an employee with exercise price of $33.29 and a 10-year term vesting over a 4-year period.

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(4) zero expected dividends.

On March 25, 2020, the Company awarded

a total of 150,000 options to an employee with exercise price of $31.88 and a 10-year term vesting over a 4-year period.

On May 20, 2020, the Company awarded a

total of 150,000 options to an employee with exercise price of $45.25 and a 10-year term vesting over a 4-year period.

have an aggregate fair value of $5.6 million calculated using the Black-Scholes option-pricing model.

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(4) zero expected dividends

At March 31, 2020, the Company has unrecognized

At June 30, 2020, the Company has unrecognized

stock-based compensation expense of approximately $69,788,000 related to unvested stock options over the weighted average remaining

service period of 3.5 years.

the three months ended March 31, 2020, the Company recognized additional compensation expense of approximately $1,500,000 related

to acceleration of vesting and a nominal amount related to the modification of certain options in connection with the separation

and settlement agreement with Dr.

During the six months

ended June 30, 2020, the Company recognized additional compensation expense of approximately $1.5 million related to acceleration

of vesting and a nominal amount related to the modification of certain options in connection with the separation and settlement

agreement with Dr.

Ottavio Vitolo (see note 8).

summary of the changes in options during the three months ended March 31, 2020 is as follows:

summary of the changes in options during the six months ended June 30, 2020 is as follows:

Outstanding and expected to vest at December 31, 2019

Outstanding and expected to vest at March 31, 2020

Options exercisable at March 31, 2020

summary of the changes in outstanding warrants during the three months ended March 31, 2020 is as follows:

Outstanding and expected to vest at June 30, 2020

Options exercisable at June 30, 2020

A summary of the changes in outstanding warrants during the

six months ended June 30, 2020 is as follows:

Outstanding and vested at December 31, 2019

Outstanding and vested at March 31, 2020

Outstanding and vested at June 30, 2020

Therapeutics, Inc.

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EQUITY (continued)

At March 31, 2020 the Company had approximately

On April 1, 2020, the Company granted 120,000

warrants to consultants with exercise price of $31.59, a 5-year term and immediate vesting.

The warrants have an aggregated fair

value of $2.5 million that was calculated using the Black-Scholes option-pricing model.

Variables used in the Black-Scholes option-pricing

model include:

(1) discount rate of 0.26% (2) expected life of 2.5 years, (3) expected volatility of 118%, and (4) zero expected

On April 27, 2020, the Company granted

2,000 warrants to a consultant with exercise price of $37.67, a 5-year term and immediate vesting.

The warrants have an aggregated

fair value of $48 thousand that was calculated using the Black-Scholes option-pricing model.

Variables used in the Black-Scholes

option-pricing model include:

(1) discount rate of 0.27% (2) expected life of 2.5 years, (3) expected volatility of 116%, and (4)

zero expected dividends.

At June 30, 2020 the Company had approximately

$103,000 of unrecognized compensation expense related to outstanding warrants.

At March 31, 2020 and December 31, 2019,

the aggregate intrinsic value of warrants vested and outstanding was approximately $85,466,000 and $115,731,000, respectively.

At June 30, 2020 and December 31,

2019, the aggregate intrinsic value of warrants vested and outstanding was approximately $106,423,000 and $115,731,000,

respectively.

The following summarizes the components

of stock-based compensation expense which includes stock options and warrants in the unaudited consolidated statements of operations

for the three months ended March 31, 2020 and 2019 (rounded to nearest $00):

for the six months ended June 30, 2020 and 2019 (rounded to nearest $00):

Research and development

General and administrative

NOTE 8 - RELATED PARTY TRANSACTIONS

Effective March 6, 2020, Dr.

Vitolo entered

into a Separation and Severance Agreement with the Company.

Pursuant to the terms of the agreement, the Company agreed to pay Dr.

8 - RELATED PARTY TRANSACTIONS

March 6, 2020, Dr.

Vitolo entered into a Separation and Severance Agreement with the Company.

Pursuant to the terms of the agreement,

the Company agreed to pay Dr.

Vitolo severance of $200,000 in accordance with his employment contract.

In addition, Dr.

Vitolo’s options granted under

the Company’s 2014 Stock Option and Equity Incentive Plan will continue to vest until September 6, 2020.

have until March 6, 2021 to exercise his vested options and he shall be allowed to use a cashless exercise provision to exercise

his vested options.

The agreement also contains customary confidentiality, release, and non-disparagement provisions, and the Company

agreed to pay accrued and unpaid salary, vacation time and attorneys fees totaling approximately $45,000.

On March 9, 2020, the Company appointed

Vitolo’s

options granted under the Company’s 2014 Stock Option and Equity Incentive Plan will continue to vest until September 6,

Vitolo shall have until March 6, 2021 to exercise his vested options and he shall be allowed to use a cashless exercise

provision to exercise his vested options.

The agreement also contains customary confidentiality, release, and non-disparagement

provisions, and the Company agreed to pay accrued and unpaid salary, vacation time and attorney’s fees totaling approximately $45,000.

March 9, 2020, the Company appointed Dr.

Thomas Wessel as the Company’s Executive Vice President, Head of Research and Development.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

License Agreements

On August 20, 2007, the Company entered into

a License Development and Commercialization Agreement with Wonpung Mulsan Co, a shareholder of the Company.

Wonpung has exclusive

territorial rights in countries it selects in Asia to market up to two drugs the Company is currently developing and a right of

first refusal (ROFR) for up to an additional five drugs that the Company may develop in the future as defined in more detail in

the license agreement.

If the parties cannot agree to terms of a license agreement then the Company shall be able to engage in

discussions with other potential licensors.

As of March 2020, no discussions are active between the Company and Wonpung.

The Company received an upfront license

fee of $1,500,000 and will earn royalties of up to 12% of net sales for up to two licensed products it is currently developing.

The licensing terms for the ROFR products are subject to future negotiations and binding arbitration.

The terms of each licensing

agreement will expire on the earlier of any time from 15 years to 20 years after licensing or on the date of commercial availability

of a generic product to such licensed product in the licensed territory.

Third Party Licensor

9 - COMMITMENTS AND CONTINGENCIES

On August 20, 2007, the Company

entered into a License Development and Commercialization Agreement with Wonpung Mulsan Co, a shareholder of the Company.

Wonpung has exclusive territorial rights in countries it selects in Asia to market up to two drugs the Company is currently

developing and a right of first refusal (“ROFR”) for up to an additional five drugs that the Company may develop

in the future as defined in more detail in the license agreement.

If the parties cannot agree to terms of a license agreement

then the Company shall be able to engage in discussions with other potential licensors.

As of July 2020, no discussions are

active between the Company and Wonpung.

Company received an upfront license fee of $1,500,000 and will earn royalties of up to 12% of net sales for up to two licensed

products it is currently developing.

The licensing terms for the ROFR products are subject to future negotiations and binding

The terms of each licensing agreement will expire on the earlier of any time from 15 years to 20 years after licensing

or on the date of commercial availability of a generic product to such licensed product in the licensed territory.

Therapeutics, Inc.

to Unaudited Consolidated Financial Statements

9 - COMMITMENTS AND CONTINGENCIES (continued)

Party Licensor

Based upon a prior acquisition, the Company

assumed an obligation to pay a third party (Dr.

assumed an obligation to pay third parties (Dr.

Inturrisi and Dr.

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or (ii) up to 2% of net sales of sublicensee.

The Company will also make milestone payments of up to $4

or $2 million, for the first commercial sale of product in the field that has a single active pharmaceutical ingredient, and for

the first commercial sale of product in the field of product that has more than one active pharmaceutical ingredient, respectively.

As of March 31, 2020, the Company has not generated any revenue related to this license agreement.

Therapeutics, Inc.

to Unaudited Consolidated Financial Statements

9 - COMMITMENTS AND CONTINGENCIES (continued)

January 2018, we entered into an Intellectual Property Assignment Agreement (the Assignment Agreement) and License Agreement

(the License Agreement and together with the Assignment Agreement, the Agreements) with Dr.

The Company will also make milestone payments of up to $4 or

$2 million, for the first commercial sale of product in the field that has a single active pharmaceutical ingredient, and for the

first commercial sale of product in the field of product that has more than one active pharmaceutical ingredient, respectively.

As of June 30, 2020, the Company has not generated any revenue related to this license agreement.

In January 2018, we entered into an Intellectual

Property Assignment Agreement (the Assignment Agreement) and License Agreement (the License Agreement and together with the Assignment

Agreement, the Agreements) with Dr.

Inturrisi and Dr.

Paolo Manfredi (collectively, the Licensor).

Pursuant to the Agreements, Relmada assigned its existing rights, including patents

and patent applications, to d-methadone in the context of psychiatric use (the Existing Invention) to Licensor.

Licensor then

granted Relmada under the License Agreement a perpetual, worldwide, and exclusive license to commercialize the Existing Invention

and certain further inventions regarding d-methadone in the context of other indications such as those contemplated above.

the Agreements, Relmada assigned its existing rights, including patents and patent applications, to d-methadone in the context

of psychiatric use (the Existing Invention) to Licensor.

Licensor then granted Relmada under the License Agreement a perpetual,

worldwide, and exclusive license to commercialize the Existing Invention and certain further inventions regarding d-methadone.

consideration of the rights granted to Relmada under the License Agreement, Relmada paid the Licensor an upfront, non-refundable

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on net sales of licensed products covered under the License Agreement.

Relmada will also pay Licensor tiered payments up to a

maximum of 20%, and decreasing to 17.5%, and 15% in certain circumstances, of all consideration received by Relmada for sublicenses

granted under the License Agreement.

Relmada will also pay Licensor tiered payments up to a maximum

of 20%, and decreasing to 17.5%, and 15% in certain circumstances, of all consideration received by Relmada for sublicenses granted

under the License Agreement.

time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business.

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Brought by Former Officer

On February 6, 2019, the Company entered into

a settlement agreement in its previous dispute with Najib Babul, Relmada’s former President.

Babul relinquished his 303,392

shares in Relmada, signed a consulting contract and Relmada committed to a $500,000 initial payment and four subsequent payments

of $250,000 on March 31, 2019, June 30, 2019, September 30, 2019 and December 31, 2019.

The Company recorded a loss on the settlement

of $1.1 million in the first quarter of 2019.

February 6, 2019, the Company entered into a settlement agreement in its previous dispute with Najib Babul, Relmada’s former

Babul relinquished his 303,392 shares in Relmada, signed a consulting contract and Relmada committed to a $500,000

initial payment and four subsequent payments of $250,000 on March 31, 2019, June 30, 2019, September 30, 2019 and December 31,

The Company recorded a loss on the settlement of $1.1 million in the first quarter of 2019.

Therapeutics, Inc.

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the Company’s leases consist of one lease for their corporate headquarters, which is for a period of 12 months or less.

accordance with ASU 2016-02, Leases, the Company has elected the practical expedient and recognizes rent expense evenly over the

accordance with ASC 842, Leases, the Company has elected the practical expedient and recognizes rent expense evenly over the 12

The monthly rent is approximately $13,800.

For the three months ended March 31, 2020 and 2019, the Company recognized

lease expense of approximately $41,600 and $23,200, respectively.

For the six months ended June 30, 2020 and 2019, the Company recognized lease

expense of approximately $83,000 and $46,800, respectively.

On June 8, 2017, the Company entered into an

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Pursuant to the terms of the agreement, Actinium will continue to license

the furniture, fixtures, equipment and tenant improvements located in the office (FFE) for a license fee of $7,529 per month until

December 8, 2022.

Actinium shall have at any time during the term of this agreement the right to purchase the FFE for $496,914,

less any previously paid license fees.

the furniture, fixtures, equipment and tenant improvements located in its office (“FFE”) for a license fee of $7,529

per month until December 8, 2022.

Actinium shall have at any time during the term of this agreement the right to purchase the FFE

for $496,914, less any previously paid license fees.

The license of FFE qualifies as a sales-type lease.

At inception, the Company derecognized

the underlying assets of $493,452, recognized discounted lease payments receivable of $397,049 using the discount rate of 8.38%

and recognized loss on sales-type lease of fixed assets of $96,403.

For the three months ended March 31, 2020 and 2019, the Company

recognized lease income of approximately $4,900 and $6,300, respectively.

As of March 31, 2020, the balance of unearned interest

income was approximately $27,200.

At inception, the Company

derecognized the underlying assets of $493,452, recognized discounted lease payments receivable of $397,049 using the discount

rate of 8.38% and recognized loss on sales-type lease of fixed assets of $96,403.

For the six months ended June 30, 2020 and 2019,

the Company recognized lease income of approximately $9,400 and $12,300, respectively.

As of June 30, 2020, the balance of unearned

interest income was approximately $22,700.

following tables sets forth our contractual obligations for the next five years and thereafter:

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10 - SUBSEQUENT EVENTS

to March 31, 2020, 257,441 outstanding warrants and options were exercised for total cash proceeds of approximately $1,516,400.

These warrant exercises include 338 shares issued with a cashless exercise.

On April 20, 2020, the Company awarded

a total of 100,000 options to an employee with exercise price of $33.29 and a 10-year term vesting over a 4-year period.

On May 15, 2020, the Company entered into an Open Market Sale Agreement SM (the

“Agreement”) with Jefferies LLC, as sales agent (“Jefferies”), pursuant to which the Company may offer

and sell, from time to time, through Jefferies, shares of the Company’s common stock, par value $0.001 per share, having

an aggregate offering price of up to $75,000,000.

Subsequent to June 30,

2020, 172,093 outstanding warrants were exercised for total cash proceeds of approximately $1,230,000.

These warrant exercises

include 481 shares issued with a cashless exercise.

15, 2020, an employee of the Company filed a Complaint alleging unequal pay based on gender and other employment based claims.

The Company intends to defend the lawsuit vigorously and does not expect that the lawsuit will have a material effect on its financial

On July 22, 2020, the Company awarded a

total of 100,000 options to two new employees with an exercise price of $41.70 and a 10-year term vesting over a 4-year period.

MANAGEMENT’S

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results or changed expectations.

Business Overview

Relmada Therapeutics, Inc.

(Relmada or the

Company, we or us) (a Nevada corporation), is a clinical-stage biotechnology company focused on the development of d-methadone

(dextromethadone, REL-1017), an N-methyl-D-aspartate (NMDA) receptor antagonist.

d-methadone is a new chemical entity (NCE) that

potentially addresses areas of high unmet medical need in the treatment of central nervous system (CNS) diseases and other disorders.

NMDA receptors are present in many parts of

the central nervous system and play important roles in regulating neuronal activity.

We believe that dextromethadone acting as

an NMDA receptor antagonist can have potential applications in a number of disease indications which mitigates risk and offers

significant upside.

Company, we or us) (a Nevada corporation), is a clinical-stage biotechnology company focused on the development of REL-1017 (d-methadone

dextromethadone), an N-methyl-D-aspartate (NMDA) receptor antagonist.

d-methadone is a new chemical entity (NCE) that potentially

addresses areas of high unmet medical need in the treatment of central nervous system (CNS) diseases and other disorders.

receptors are present in many parts of the central nervous system and play important roles in regulating neuronal activity.

believe that dextromethadone acting as an NMDA receptor antagonist can have potential applications in a number of disease indications

which mitigates risk and offers significant upside.

On October 7, 2019, our application to list

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on NASDAQ under the existing symbol, “RLMD”.

On December 19, 2019, the Board of Directors

of the Company approved a change to its end of fiscal year from June 30 to December 31.

The change in fiscal year became effective

for the Company’s 2020 fiscal year, which began on January 1, 2020 and will end December 31, 2020.

On July 14, 2020, our common stock was uplisted to The Nasdaq Global Select

Market and continues to trade under the symbol “RLMD.”

December 19, 2019, the Board of Directors of the Company approved a change to its end of fiscal year from June 30 to December

The change in fiscal year became effective for the Company’s 2020 fiscal year, which began on January 1, 2020 and will

end December 31, 2020.

Our lead product candidate, d-methadone, is

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and efficacy of two oral doses of REL-1017, 25 mg once a day and 50 mg once a day, as an adjunctive treatment in patients with

major depressive disorder (MDD), who experienced an inadequate response to 1 to 3 adequate antidepressant treatments with an antidepressant

major depressive disorder (MDD), who experienced an inadequate response to 1 to 3 treatments with an antidepressant medications.

In the REL-1017-202 study, 62 subjects, average

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Scale (MADRS) score of 34.0 (severe depression), were randomized.

Other demographic characteristics were balanced across all arms.

After an initial screening period, subjects were randomized to one of three arms:

placebo, REL-1017 25 mg or REL-1017 50 mg, in

addition to stable background antidepressant therapy.

Subjects in the REL-1017 treatment arms received one loading dose of either

75 mg (25 mg arm) or 100 mg (50 mg arm) of REL-1017.

Subjects were treated inpatient for 7 days and discharged home at Day 9.

Demographic characteristics were balanced across all arms.

an initial screening period, subjects were randomized to one of three arms:

placebo, REL-1017 25 mg or REL-1017 50 mg, in addition

to stable background antidepressant therapy.

Subjects in the REL-1017 treatment arms received one loading dose of either 75 mg

(25 mg arm) or 100 mg (50 mg arm) of REL-1017.

Subjects were treated as inpatients for 7 days and discharged home at Day 9.

returned for follow-up visits at Day 14 and Day 21.

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No differences were observed between the ITT and PPP analyses and results.

We observed that subjects in both the REL-1017

25 mg and 50 mg treatment groups experienced statistically significant improvement on all efficacy measures tested as compared

to subjects in the placebo group, including:

the Montgomery-Asberg Depression Rating Scale (MADRS);

the Clinical Global Impression

observed that subjects in both the REL-1017 25 mg and 50 mg treatment groups experienced statistically significant improvement

on all efficacy measures tested as compared to subjects in the placebo group, including:

the Montgomery-Asberg Depression Rating

Scale (MADRS);

the Clinical Global Impression –

Severity (CGI-S) scale;

the Clinical Global Impression –

Improvement (CGI-I) scale;

and the Symptoms of Depression

Questionnaire (SDQ).

Improvements on the MADRS endpoint appeared

on Day 4 in both REL-1017 dose groups and continued through Day 7 and Day 14, seven days after treatment discontinuation, with

P values< 0.03 and large effect sizes (a measure of quantifying the difference between two groups), ranging from 0.7 to 1.0.

(CGI-I) scale;

and the Symptoms of Depression Questionnaire (SDQ).

on the MADRS endpoint appeared on Day 4 in both REL-1017 dose groups and continued through Day 7 and Day 14, seven days after

treatment discontinuation, with P values< 0.03 and large effect sizes (a measure of quantifying the difference between two

groups), ranging from 0.7 to 1.0.

Similar findings emerged from the CGI-S and CGI-I scales.

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Means Difference

LS Means Difference

Means Difference

25mg vs Placebo

50mg vs Placebo

REL-1017 25mg vs Placebo

REL-1017 50mg vs Placebo

= Least Squares;

d = Cohen’s effect size

The study also confirmed the favorable tolerability profile

of REL-1017, which was also observed in the Phase 1 studies.

Subjects experienced mild and moderate adverse events (AEs), and no

serious adverse events, without significant differences between placebo and treatment groups.

The AEs observed in the Phase 2a

clinical study were of the same nature as those observed in the Phase 1 clinical studies in d-Methadone, and there was no evidence

of either treatment induced psychotomimetic and dissociative AEs or withdrawal signs and symptoms upon treatment discontinuation.

Key Upcoming Anticipated Milestones

We expect multiple key milestones over the

next 12 months.

study also confirmed the favorable tolerability profile of REL-1017, which was also observed in the Phase 1 studies.

experienced mild and moderate adverse events (AEs), and no serious adverse events, without significant differences between placebo

and treatment groups.

The AEs observed in the Phase 2a clinical study were of the same nature as those observed in the Phase 1

clinical studies in d-Methadone, and there was no evidence of either treatment induced psychotomimetic and dissociative AEs or

withdrawal signs and symptoms upon treatment discontinuation.

Upcoming Anticipated Milestones

expect multiple key milestones over the next 12 months.

These include:

Presentation of full details of the Phase 2 data for REL-1017.

Feedback from the U.S.

Food and Drug Administration (FDA) related

to an End-of-Phase 2 meeting for the REL-1017 development by the end of the first half of 2020.

We intend to focus the registrational

plan for REL-1017 as an adjunctive treatment of MDD.

Start of pivotal studies for REL-1017 as an

adjunctive treatment of MDD in the second half of 2020.

Start of Phase 2 study in MDD.

We plan to start a Phase 2 MDD study in the second half of 2020, though development plans may change based on the FDA’s feedback and other factors.

NMDA receptors are present in many parts of

the CNS and play important roles in regulating neuronal activity and promoting synaptic plasticity in brain areas important for

cognitive functions such as executive function, learning and memory.

Based on these premises, d-methadone could show benefits in

several different CNS indications.

d-Methadone Phase 1 Clinical Safety Studies

The safety data from two Company-funded d-methadone

Phase 1 clinical safety studies and a third study conducted by researchers at Memorial Sloan-Kettering Cancer Center indicate that

d-methadone was well tolerated in both healthy subjects and cancer patients at all projected therapeutic doses tested.

of full details of the Phase 2 data for REL-1017.

of pivotal studies for REL-1017 as an adjunctive treatment of MDD in the second half of 2020.

of Phase 2 study in MDD.

We plan to start a Phase 2 MDD study in the second half of 2020, though development plans may change

based on the FDA’s feedback and other factors.

receptors are present in many parts of the CNS and play important roles in regulating neuronal activity and promoting synaptic

plasticity in brain areas important for cognitive functions such as executive function, learning and memory.

Based on these premises,

d-methadone could show benefits in several different CNS indications.

Phase 1 Clinical Safety Studies

safety data from two Company-funded d-methadone Phase 1 clinical safety studies and a third study conducted by researchers at

Memorial Sloan-Kettering Cancer Center indicate that d-methadone was well tolerated in both healthy subjects and cancer patients

at all projected therapeutic doses tested.

Corporate History and Background

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anticipate generating revenues for the foreseeable future.

We had net loss of approximately $10,673,300 for the three months ended

March 31, 2020.

At March 31, 2020, we have an accumulated deficit of approximately $130,532,200.

strategy is to leverage our considerable industry experience, understanding of CNS markets and development expertise to identify,

develop and commercialize product candidates with significant market potential that can fulfill unmet medical needs in the treatment

of CNS diseases.

We have assembled a management team along with both scientific and business advisors, including recognized experts

in the fields of depression, with significant industry and regulatory experience to lead and execute the development and commercialization

of d-methadone.

plan to further develop d-methadone as our priority program.

As the drug d-methadone is an NCE, the regulatory pathway required

to support and NDA submission will consist of conducting a full clinical development program.

We plan to also generate intellectual

property (IP) that will further protect our products from competition.

We will continue to prioritize our product development

activities after taking into account the resources we have available, market dynamics and potential for adding value.

believe that the market for addressing areas of high unmet medical need in the treatment of CNS diseases will continue to be large

for the foreseeable future and that it will represent a sizable revenue opportunity for us.

For example, the World Health Organization

(WHO) has estimated that CNS diseases affect nearly 2 billion people globally, making up approximately 40% of total disease burden

(based on disability adjusted life years), compared with 13% for cancer and 12% for cardiovascular disease.

We had net loss of $21,791,757 for the six months ended June 30, 2020.

At June 30, 2020, we have an accumulated deficit of $141,650,666.

Our strategy is to leverage our considerable

industry experience, understanding of CNS markets and development expertise to identify, develop and commercialize product candidates

with significant market potential that can fulfill unmet medical needs in the treatment of CNS diseases.

We have assembled a management

team along with both scientific and business advisors, including recognized experts in the fields of depression, with significant

industry and regulatory experience to lead and execute the development and commercialization of REL-1017.

We plan to further develop REL-1017 as our

priority program.

As the drug d-methadone is an NCE, the regulatory pathway required to support and NDA submission will consist

of conducting a full clinical development program.

We plan to also generate intellectual property (IP) that will further protect

our products from competition.

We will continue to prioritize our product development activities after taking into account the

resources we have available, market dynamics and potential for adding value.

Market Opportunity

We believe that the market for addressing areas

of high unmet medical need in the treatment of CNS diseases will continue to be large for the foreseeable future and that it will

represent a sizable revenue opportunity for us.

For example, the World Health Organization (WHO) has estimated that CNS diseases

affect nearly 2 billion people globally, making up approximately 40% of total disease burden (based on disability adjusted life

years), compared with 13% for cancer and 12% for cardiovascular disease.

The depression treatment market is segmented

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(Johnson & Johnson).

Property Portfolio and Market Exclusivity

We have over 50 issued patents

and pending patent applications related to dextromethadone (REL-1017) for multiple uses, including psychological and neurological

Intellectual Property Portfolio and Market

over 50 issued patents and pending patent applications related to REL-1017 for multiple uses, including psychological and neurological

We have also secured an Orphan Drug Designation from the FDA for d-methadone for “the treatment of postherpetic

neuralgia”, which, upon NDA approval, carry 7-year FDA Orphan Drug marketing exclusivity.

In the European Union, some of

our products may be eligible up to 10 years of market exclusivity, which includes 8 years data exclusivity and 2 years market

In addition to any granted patents, our products will be eligible for market exclusivity to run concurrently with

the term of the patent for 5 years in the U.S.

neuralgia”, which, if pursed and upon potential NDA approval, would carry 7-year FDA Orphan Drug marketing exclusivity.

the European Union, some of our products may be eligible up to 10 years of market exclusivity, which includes 8 years data exclusivity

and 2 years market exclusivity.

In addition to any granted patents, REL-1017 will be eligible for market exclusivity to run concurrently

with the term of the patent for 5 years in the U.S.

(Hatch Waxman plus pediatric exclusivity) and up to 10 years of in the E.U.

believe an extensive intellectual property estate of US and foreign patents and applications will protect our technology and products

once our patent applications for our products are approved.

Key Strengths

We believe an extensive intellectual property estate of US and foreign patents and applications, once approved, will protect our

technology and products.

We believe that the key elements for our market success include:

Compelling lead product opportunity, d-methadone completed Phase

2 trial for the adjunctive treatment of MDD, including patients with TRD.

Potential in additional multiple indications in underserved markets with large patient population, such as MDD, other affective disorders, and cognitive disorders.

Compelling lead product opportunity, REL-1017 completed Phase 2 trial for the adjunctive treatment of MDD.

Potential in multiple indications in underserved markets with large patient population, such as MDD, other affective disorders, and cognitive disorders.

Scientific support of leading experts:

Our scientific advisors include clinicians and scientists who are affiliated with a number of highly regarded medical institutions such as Harvard, Cornell, Yale, and University of Pennsylvania.

Substantial IP portfolio

and market protection:

Substantial IP portfolio and market protection:

approved and filed patent applications provide coverage beyond 2030.

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maintained by the SEC at 100 F Street NE, Washington, D.C.

September 26, 2019, our Board of Directors approved a 1-for-4 reverse split of our common stock, which was effective on the NASDAQ

Capital Market on September 30, 2019.

As a result of the reverse stock split, every 4 shares of issued and outstanding common

stock were converted into 1 share of issued and outstanding common stock, with all fractional shares rounded up to the nearest

whole share, and our authorized shares of common stock were reduced from 200,000,000 to 50,000,000 shares.

share and per share amounts herein have been retroactively restated to reflect this reverse stock split.

On September 26, 2019, our Board of Directors

approved a 1-for-4 reverse split of our common stock, which was effective on the OTC Markets on September 30, 2019.

of the reverse stock split, every 4 shares of issued and outstanding common stock were converted into 1 share of issued and outstanding

common stock, with all fractional shares rounded up to the nearest whole share, and our authorized shares of common stock were

reduced from 200,000,000 to 50,000,000 shares.

All share and per share amounts herein have been retroactively

restated to reflect this reverse stock split.

of Operations

the Three Months Ended March 31, 2020 versus March 31, 2019

the Three Months Ended June 30, 2020 versus June 30, 2019

and development

and administrative

Research and Development Expense

Research and development expense for the three months ended

June 30, 2020 was approximately $ 5,323,900 compared to $ 3,069,900 for the three months ended June 30, 2019, an increase of approximately

The increase was driven by an increase in study costs of $431,900, of which the majority pertained to completion of

our Phase 2 study and manufacturing costs, as well as an increase in compensation costs of $1,822,200 as a result of hiring 4 additional

research and development employees and the related options granted to them.

and Administrative Expense

General and administrative expense for the three months ended

June 30, 2020 was approximately $7,433,200 compared to $1,065,800 for the three months ended June 30, 2019, an increase of approximately

The increase resulted from an increase in compensation costs of $484,700 as a result of hiring an additional employee;

an increase in stock-based compensation costs of $5,673,200 primarily related to warrant expenses from consultants of approximately

a net increase in other G&A expenses of $209,500 that pertained primarily to investor relations.

Income (Expense)

Interest / investment income was approximately $404,000 and

$13,100 for the three months ended June 30, 2020 and 2019, respectively.

Unrealized gain on short-term investments was approximately

$1,221,900 for the three months ended June 30, 2020.

Realized gain on short-term investments was approximately $12,800 for the

three months ended June 30, 2020.

All investments were classified as cash equivalents at June 30, 2019.

There was no unrealized

gain or loss or realized gain or loss at June 30, 2019.

The net loss for the Company for the three

months ended June 30, 2020 and 2019 was approximately $11,118,400 and $4,122,600, respectively.

The Company had loss per share

of basic and diluted $0.73 and $0.50 for the three months ended June 30, 2020 and 2019, respectively.

Company did not provide for income taxes for the three months ended June 30, 2020 and 2019, since there was a loss and a full

valuation allowance against all deferred tax assets.

of Operations

the Six Months Ended June 30, 2020 versus June 30, 2019

Operating Expenses

General and administrative

Research and development

General and Administrative Expense

General and administrative expense for

the three months ended March 31, 2020 was approximately $5,466,700 compared to $1,426,100 for the three months ended March 31,

2019, an increase of approximately $4,040,000.

The increase resulted from an increase in compensation costs of $948,600;

in stock-based compensation costs of $2,934,400;

an increase in other G&A expenses of $209,400 that pertained primarily to

investor relations;

an increase in professional service fees of $193,500;

and an increase in patent legal fees of $27,000.

increases were partially offset by a decrease in litigation fees of $272,300.

General and administrative

Research and Development Expense

Research and development expense for the three

months ended March 31, 2020 was approximately $4,507,800 compared to $1,276,000 for the three months ended March 31, 2019, an increase

Research and development expense for the six months ended June

30, 2020 was approximately $9,831,700 compared to $4,345,800 for the six months ended June 30, 2019, an increase of approximately

The increase was driven by an increase in study costs of $1,298,700, of which the majority pertained to completion

of our Phase 2 study and manufacturing costs, as well as an increase in compensation costs of $4,187,200 which included the approximately

$2,936,100 of stock based compensation expense primarily related to the separation agreement with Ottavio Vitolo, the remaining

increase was a result of hiring 4 additional research and development employees and the related options granted to them.

General and Administrative Expense

General and administrative expense for the six months ended

June 30, 2020 was approximately $12,899,900 compared to $2,491,900 for the six months ended June 30, 2019, an increase of approximately

The increase resulted from an increase in compensation costs of $1,442,100, as a result of hiring additional employees

and their related bonuses;

an increase in stock-based compensation costs of $8,607,600 related to warrant expenses from consultants

of approximately $2,500,000;

The increase was driven by an increase in study costs of $866,700, of which the majority pertained

to completion of our Phase 2 study and manufacturing costs, as well as an increase in compensation costs of $2,365,100, which included

the approximately $1,500,000 of stock based compensation expense related to the separation agreement with Ottavio Vitolo.

a net increase in other G&A expenses of $358,300 that pertained primarily to investor relations

and professional fees.

Other Income (Expense)

Interest / investment income was approximately $407,600 and

$15,900 for the three months ended March 31, 2020 and 2019, respectively.

Unrealized loss on short-term investments was approximately

$934,900 for the three months ended March 31, 2020.

There was no unrealized gain or loss at March 31, 2019.

Realized loss on short-term

investments was approximately $171,600 for the three months ended March 31, 2020.

There was no realized gain or loss at March 31,

The net loss for the Company for the three

months ended March 31, 2020 and 2019 was approximately $10,673,300 and $2,686,100 respectively.

Interest / investment income was approximately

$811,700 and $29,000 for the six months ended June 30, 2020 and 2019, respectively.

Unrealized gain on short-term investments was

approximately $287,000 for the six months ended June 30, 2020.

Realized loss on short-term investments was approximately $158,800

for the six months ended June 30, 2020.

All investments were classified as cash equivalents at June 30, 2019.

There was no unrealized

gain or loss or realized gain or loss at June 30, 2019.

The net loss for the Company for the six

months ended June 30, 2020 and 2019 was approximately $21,791,800 and $6,808,700 respectively.

The Company had loss per share

of basic and diluted $0.72 and $0.36 for the three months ended March 31, 2020 and 2019, respectively.

Company did not provide for income taxes for the three months ended March 31, 2020 and 2019, since there was a loss and a full

valuation allowance against all deferred tax assets.

As shown in the accompanying financial statements, the Company

incurred negative operating cash flows of $3,424,763 for the quarter ended March 31, 2020 and has an accumulated deficit of $130,532,225

from inception through March 31, 2020.

Relmada has funded its past operations through

equity raises and most recently in 2019 Relmada raised net proceeds from the sale of common stock of $109,447,482 and $4,447,038

of basic and diluted $1.45 and $0.86 for the six months ended June 30, 2020 and 2019, respectively.

Company did not provide for income taxes for the six months ended June 30, 2020 and 2019, since there was a loss and a full valuation

allowance against all deferred tax assets.

As shown in the accompanying financial statements,

the Company incurred negative operating cash flows of approximately $8,378,400 for the six months ended June 30, 2020 and has an

accumulated deficit of approximately $141,650,700 from inception through June 30, 2020.

At June 30, 2020 the Company had cash and

short term investments of approximately $134,087,800.

Relmada has funded its past operations through equity raises

and most recently in 2020 raised net proceeds from the sale of common stock of $19,855,018 through our ATM offering and $5,619,276

through the exercise of warrants.

The Company also raised an additional $3,115,193 during the three months ended March 31, 2020

from the exercise of options and warrants.

believes that due to the recent equity raises completed and exercises of outstanding warrants and the current cash position on

its balance sheet, it has obtained sufficient funding to continue ongoing operations for the at least 12 months from the issuance

of the accompanying consolidated quarterly financial statements.

Since March 31, 2020 and to date, the Company has received approximately

$1,516,400 in warrant and option exercises, which resulted in the Company having approximately $115,378,100 million in cash, cash

equivalents and short term investments at May 13, 2020.

Based on its budgeted cash flow requirements, the Company believes these

funds are sufficient to fund its ongoing operations for at least 12 months after the issuance of these consolidated quarterly financial

The following table sets forth selected cash flow information for

the periods indicated below:

Three Months Ended

The Company also raised an additional $530,643 during the six months ended June 30, 2020 from

the exercises of options.

Management believes that

due to the recent equity raises completed and exercises of outstanding warrants and the current cash position on its balance sheet,

it has obtained sufficient funding to continue ongoing operations for the at least 12 months from the issuance of the accompanying

consolidated quarterly financial statements.

Since June 30, 2020 and to date, the Company has received approximately $1,230,000

in warrant exercises, which resulted in the Company having approximately $131,549,600 million in cash, cash equivalents and short

term investments at August 5, 2020.

Based on its budgeted cash flow requirements, the Company believes these funds are sufficient

to fund its ongoing operations for at least 12 months after the issuance of these consolidated quarterly financial statements.

following table sets forth selected cash flow information for the periods indicated below:

Six Months Ended

Cash used in operating activities

$ (3,424,763 )

$ (2,011,929 )

Cash used in investing activities

(23,632,215 )

Cash provided by financing activities

Net decrease in cash and cash equivalents

$ (24,052,032 )

For the three months ended March 31, 2020,

cash used in operating activities was $3,424,763 primarily due to the net loss of $10,673,316, offset by prepaid expense of $177,855,

accounts payable of $580,153, unrealized loss of $934,919, realized loss of $171,611, accrued expenses of $333,432, and non-cash

stock compensation charges of $5,039,362.

For the three months ended March 31, 2019,

cash used in operating activities was $2,011,929 primarily due to the loss from operations for the three months ended March 31,

2019 of $2,686,065 off set by accounts payable of $721,220, prepaid expense of $329,872, and non-cash stock compensation expense

of $394,692, offset by accrued expenses of 369,598 and shares relinquished in litigation of $394,410.

For the three months ended March 31, 2020,

cash used in investing activities was $23,632,215 related to the purchase and sale of short-term investments.

For the three months

ended March 31, 2019, no cash was used in investing activities.

For the six months ended June 30, 2020, cash used in operating

activities was $8,378,419 primarily due to the net loss of $21,791,757, offset by non-cash stock compensation charges of $12,341,875,

prepaid expense of $183,329, accounts payable of $442,506, unrealized gain of $287,027, realized loss of $158,801, and accrued

expenses of $535,997.

For the six months ended June 30, 2019,

cash used in operating activities was $5,679,009 primarily due to the loss from operations for the six months ended June 30, 2019

of $6,808,657 off set by accounts payable of $565,469 prepaid expense of $381,124, and non-cash stock compensation expense of

$798,151, offset by accrued expenses of $72,692 and shares relinquished in litigation of $394,410.

For the six months ended June 30, 2020, cash

used in investing activities was $39,970,532 related to the net purchase and sale of short-term investments.

For the six months

ended June 30, 2020, no cash was used in investing activities.

Net cash provided by financing activities for

the three months ended March 31, 2020 was $3,004,946 due to proceeds from options exercised for common stock of $73,020 and proceeds

from warrants exercised for common stock of $3,042,173, partially offset by payments of notes payable of 110,247.

Net cash provided

by financing activities for the three months ended March 31, 2019 was $1,639,031 primarily due to proceeds from the issuance of

common stock of $1,725,000 partially offset by payments of notes payable of $85,969.

Effects of Inflation

Our assets are primarily monetary, consisting

of cash and cash equivalents.

Because of their liquidity, these assets are not directly affected by inflation.

Because we intend

to retain and continue to use our equipment, we believe that the incremental inflation related to replacement costs of such items

will not materially affect our operations.

However, the rate of inflation affects our expenses, such as those for employee compensation

and contract services, which could increase our level of expenses and the rate at which we use our resources.

the six months ended June 30, 2020 was $25,894,690 due to proceeds from options exercised for common stock of $530,643, proceeds

from warrants exercised for common stock of $5,619,276, and sales of common stock of $19,855,018, partially offset by payments

of notes payable of $110,247.

Net cash provided by financing activities for the six months ended June 30, 2019 was $12,468,812

primarily due to proceeds from the sale of common stock of $12,583,550 partially offset by payments of notes payable of $114,738.

assets are primarily monetary, consisting of cash and cash equivalents.

Because of their liquidity, these assets are not directly

affected by inflation.

Because we intend to retain and continue to use our equipment, we believe that the incremental inflation

related to replacement costs of such items will not materially affect our operations.

However, the rate of inflation affects our

expenses, such as those for employee compensation and contract services, which could increase our level of expenses and the rate

at which we use our resources.

Sheet Arrangements

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have been established for the purpose of facilitating off-balance sheet arrangements or other contractually limited purposes.

As of March 31, 2020 and December 31, 2019, we were not involved in any SPE transactions.

Commitments and Contingencies

refer to Note 12 in our Annual Report on Form 10-KT for the six months ended December 31, 2019 under the heading Commitments

As of June 30, 2020 and December 31, 2019, we were not involved in any SPE transactions.

and Contingencies

To our knowledge there have been no material changes to the risk factors that were previously disclosed in

the Company’s Annual Report on Form 10-KT for the six months ended December 31, 2019.

Additional risks and

uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our

business, financial condition and/or operating results.

refer to Note 12 in our Annual Report on Form 10-KT for the six months ended December 31, 2019 under the heading Commitments and

Contingencies.

To our knowledge there have been no material changes to the risk factors that were previously disclosed in the

Company’s Annual Report on Form 10-KT for the six months ended December 31, 2019.

Additional risks and uncertainties

not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial

condition and/or operating results.

Accounting Policies and Estimates

5 unchanged sentences

GAAP accounting

standards effective as of September 30, 2018 have been taken into consideration in preparing the unaudited consolidated financial

The preparation of unaudited consolidated financial statements requires estimates and assumptions that affect the

reported amounts of assets, liabilities, expenses and related disclosures.

Some of those estimates are subjective and complex,

and, consequently, actual results could differ from those estimates.

The following accounting policies and estimates have been

highlighted as significant because changes to certain judgments and assumptions inherent in these policies could affect our consolidated

financial statements:

standards effective as of June 30, 2020 have been taken into consideration in preparing the unaudited consolidated financial statements.

The preparation of unaudited consolidated financial statements requires estimates and assumptions that affect the reported amounts

of assets, liabilities, expenses and related disclosures.

Some of those estimates are subjective and complex, and, consequently,

actual results could differ from those estimates.

The following accounting policies and estimates have been highlighted as significant

because changes to certain judgments and assumptions inherent in these policies could affect our consolidated financial statements:

and development expenses, and

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements