What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-10 compared with 2022-08-11 · 259 added, 250 removed, 216 unchanged (70% of the section changed)

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This Quarterly Report on Form 10-Q (this Report)

contains forward looking statements that involve risks and uncertainties, principally in the sections entitled “Description of

Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results

of Operations.” All statements other than statements of historical fact contained in this Quarterly Report, including statements

regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations,

are forward-looking statements.

We have attempted to identify forward-looking statements by terminology including “anticipates,”

“believes,” “can,” “continue,” “could,” “estimates,” “expects,”

“intends,” “may,” “plans,” “potential,” “predicts,” “should,”

or “will” or the negative of these terms or other comparable terminology.

Although we do not make forward-looking statements

unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.

These statements are only predictions

and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or

elsewhere in this Quarterly Report, which may cause our or our industry’s actual results, levels of activity, performance or achievements

expressed or implied by these forward-looking statements.

Moreover, we operate in a very competitive and rapidly changing environment.

New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors

on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from

those contained in any forward-looking statements.

All forward-looking statements included in this document are based on information

available to us on the date hereof, and we assume no obligation to update any such forward-looking statements.

contains forward looking statements that involve risks and uncertainties, principally in the sections entitled “Risk Factors,”

and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” All statements other than

statements of historical fact contained in this Quarterly Report, including statements regarding future events, our future financial performance,

business strategy and plans and objectives of management for future operations, are forward-looking statements.

We have attempted to identify

forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,”

“could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,”

“predicts,” “should,” or “will” or the negative of these terms or other comparable terminology.

we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined

under “Risk Factors” or elsewhere in this Quarterly Report, which may cause our or our Industry’s actual results, levels

of activity, performance or achievements expressed or implied by these forward-looking statements.

Moreover, we operate in a very competitive

and rapidly changing environment.

New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can

we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual

results to differ materially from those contained in any forward-looking statements.

All forward-looking statements included in this document

are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements.

You should not place undue reliance on any forward-looking

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

In the REL-1017-202

study, 62 subjects, with an average age of 49.2 years, with an average Hamilton Depression Rating Scale score of 25.3 and an average

Montgomery-Asberg Depression Rating Scale (MADRS) score of 34.0 (severe depression), were randomized.

Other demographic characteristics

were balanced across all arms.

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

an average age of 49.2 years, with an average Hamilton Depression Rating Scale score of 25.3 and an average Montgomery-Asberg Depression

Rating 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

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

Efficacy was measured on Days 2, 4 and 7 in the dosing period and on

Day 14, one week after treatment discontinuation.

61 subjects received all treatment doses and were included in the per-protocol population

(PPP) treatment analysis;

57 subjects completed all visits.

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.

They returned for follow-up

visits at Day 14 and Day 21.

Efficacy was measured on Days 2, 4 and 7 in the dosing period and on Day 14, one week after treatment discontinuation.

61 subjects received all treatment doses and were included in the per-protocol population (PPP) treatment analysis;

57 subjects completed

All 62 randomized subjects were part of the intention-to-treat (ITT) analysis.

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

No differences were observed between the ITT

and PPP analyses and results.

Key findings:

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LS = Least Squares;

d = Cohen’s effect

d = Cohen’s effect size

The study also confirmed the tolerability profile

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Phase 3 Program

On December 20, 2020, Relmada announced that

the first patient had been enrolled in the first Phase 3 clinical trial (RELIANCE I) for the Company’s lead product candidate,

REL-1017, as an adjunctive treatment for MDD.

Following discussions with the Food and Drug

Administration (FDA), Relmada’s adjunctive MDD Phase 3 program includes the following key attributes:

On December 20, 2020, Relmada announced that the

first patient had been enrolled in the first Phase 3 clinical trial (RELIANCE I) for the Company’s lead product candidate, REL-1017,

as an adjunctive treatment for MDD.

Following discussions with the Food and Drug Administration

(FDA), Relmada’s adjunctive MDD Phase 3 program includes the following key attributes:

The Phase 3 program consists of two sister, two-arm, placebo-controlled clinical trials.

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Patients will add either a 25 mg oral dose of REL-1017 once per day or placebo to their ongoing antidepressant treatment.

The primary endpoint to be evaluated will be the change from baseline

on the MADRS score at day-28 for REL-1017 compared to placebo.

Success on this endpoint with the collection of sufficient safety

data could support the use of REL-1017 for chronic treatment, if approved.

The change from baseline and the 7-day MADRS score will serve as a

key secondary endpoint and will provide information on the time to treatment effect.

The primary endpoint to be evaluated will be the change from baseline on the MADRS score at day-28 for REL-1017 compared to placebo.

Success on this endpoint with the collection of sufficient safety data could support the use of REL-1017 for chronic treatment, if approved.

The change from baseline and the 7-day MADRS score will serve as a key secondary endpoint and will provide information on the time to treatment effect.

On April 1, 2021, Relmada announced the initiation

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candidate, REL-1017, as an adjunctive treatment for MDD.

On October 4, 2021, Relmada

announced RELIANCE III, the ongoing monotherapy trial for the Company’s lead product candidate, REL-1017.

On August 9, 2022, Relmada announced that the FDA granted Fast Track

designation to REL-1017 as a monotherapy for the treatment MDD.

On October 4, 2021, Relmada announced RELIANCE

III, the monotherapy trial for the Company’s lead product candidate, REL-1017.

On August 9, 2022, Relmada announced that the

FDA granted Fast Track designation to REL-1017 as a monotherapy for the treatment of MDD.

On October 13, 2022, Relmada announced that its

RELIANCE III study, evaluating REL-1017 in the monotherapy setting for Major Depressive Disorder (MDD), did not achieve its primary endpoint,

which was a statistically significant improvement in depression symptoms compared to placebo as measured by the Montgomery-Asberg Depression

Rating Scale (MADRS) on Day 28.

In the study, the REL-1017 treatment arm showed a MADRS reduction of 14.8 points at Day 28 versus 13.9

points for the placebo arm, a higher than expected placebo response.

Patients who complete the RELIANCE trials are

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in a REL-1017 clinical trial.

In addition, in order

to support potential regulatory submissions seeking approval for REL-1017 as monotherapy and adjunctive treatment, the FDA confirmed

that, based on what is known at this time, Relmada will not be required to conduct a two-year carcinogenicity study of REL-1017, as sufficient

clinical data have been generated to date.

The FDA also confirmed that Relmada does not need to conduct a thorough QT analysis (TQT)

cardiac study in humans to support cardiac safety in potential regulatory submissions for REL-1017, as the data provided so far and the

data generated by the Phase 3 program will be adequate to evaluate the cardiac safety profile of REL-1017.

In addition, in order to support potential regulatory

submissions seeking approval for REL-1017 as an adjunctive treatment, the FDA confirmed that, based on what is known at this time, Relmada

will not be required to conduct a two-year carcinogenicity study of REL-1017, as sufficient clinical data have been generated to date.

The FDA also confirmed that Relmada does not need to conduct a thorough QT analysis (TQT) cardiac study in humans to support cardiac safety

in potential regulatory submissions for REL-1017, as the data provided so far and the data generated by the Phase 3 program will be adequate

to evaluate the cardiac safety profile of REL-1017.

Human Abuse Potential (HAP) Study top-line results - Oxycodone:

On July 27, 2021, we announced top-line results that showed that all

three doses of REL-1017 (25 mg, 75 mg and 150 mg, the therapeutic, supratherapeutic and maximum tolerated doses (MTD), respectively) tested

in recreational opioid users, demonstrated a highly statistically significant difference vs.

the active control drug, oxycodone 40 mg.

The study’s primary endpoint was a measure of “likability” with the subjects rating the maximum effect (or Emax) for

Drug Liking “at the moment”, using a 1=100 bipolar rating scale (known as a visual analog scale or VAS), with 100 as the highest

likability, 50 as neutral (placebo-like), and 0 the highest dislike.

In summary, all tested doses of REL-1017, including the 150 mg maximum

tolerated dose, showed a highly statistically significant difference in abuse potential versus oxycodone with p-values less than 0.05.

On July 27, 2021, we announced top-line results

that showed that all three doses of REL-1017 (25 mg, 75 mg and 150 mg, the therapeutic, supratherapeutic and maximum tolerated doses (MTD),

respectively) tested in recreational opioid users, demonstrated a highly statistically significant difference vs.

the active control drug,

oxycodone 40 mg.

The study’s primary endpoint was a measure of “likability” with the subjects rating the maximum effect

(or Emax) for Drug Liking “at the moment”, using a 1=100 bipolar rating scale (known as a visual analog scale or VAS), with

100 as the highest likability, 50 as neutral (placebo-like), and 0 the highest dislike.

In summary, all tested doses of REL-1017, including

the 150 mg maximum tolerated dose, showed a highly statistically significant difference in abuse potential versus oxycodone with p-values

less than 0.05.

Consistent results were seen for the secondary endpoints.

Additionally, all REL-1017 doses including 150 mg (6 times the therapeutic dose

and MTD) were statistically equivalent to placebo (p<0.05).

Additionally, all REL-1017 doses including 150 mg (6 times the

therapeutic dose and MTD) were statistically equivalent to placebo (p<0.05).

These results support the lack of opioid effects on REL-1017.

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with 100 as the highest likability, 50 as neutral (placebo-like), and 0 the highest dislike.

Consistent results are seen for the secondary

Consistent results were seen for the secondary

Key Upcoming Anticipated Milestones

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These include:

Results of RELIANCE III monotherapy MDD trials in the second half of 2022 with last patient enrolled by the end of August, 2022.

Results of RELIANCE I and RELIANCE II adjunctive MDD trials in the

second half of 2022.

Results of RELIANCE I

adjunctive MDD trial by year-end 2022.

Results of RELIANCE II adjunctive MDD

trial during 2023.

Results of RELIANCE – OLS (Long-term, Open-label) study in MDD in the first half of 2023.

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(STAR*D) trial published in the American Journal of Psychiatry.

In addition to the high failure rate, only one

In addition to the high failure rate, only two

of the marketed products for depression, esketamine (marketed by Johnson and Johnson as Spravato®), an in-clinic nasal spray treatment,

can demonstrate rapid antidepressant effects, while the other currently approved products can take two to eight weeks to show activity.

The urgent need for improved, faster acting antidepressant treatments is underscored by the fact that severe depression can be life-threatening,

due to heightened risk of suicide.

and dextromethorphan-bupropion (marketed by Axsome as Auvelity ä ), can demonstrate rapid

antidepressant effects, while the other currently approved products can take two to eight weeks to show activity.

The urgent need for

improved, faster acting antidepressant treatments is underscored by the fact that severe depression can be life-threatening, due to heightened

risk of suicide.

Esmethadone Overview and Mechanism of Action

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as well as all atypical antipsychotics used adjunctively with standard, FDA-approved antidepressants.

Working through the same brain

mechanisms as ketamine and esketamine but potentially lacking their adverse side effects, esmethadone is being developed as a rapidly

acting, oral agent for the treatment of depression and potentially other CNS conditions.

In chemistry an enantiomer, also known as an

optical isomer, is one of two stereoisomers that are mirror images of each other that are non-superimposable (not identical), much as

one’s left and right hands are the same except for being reversed along one axis.

A racemic compound, or racemate, is one that

has equal amounts of left- and right-handed enantiomers of a chiral molecule.

For racemic drugs, often only one of a drug’s enantiomers

is responsible for the desired physiologic effects, while the other enantiomer is less active or inactive.

Working through the same brain mechanisms

as ketamine and esketamine but potentially lacking their adverse side effects, esmethadone is being developed as a rapidly acting, oral

agent for the treatment of depression and potentially other CNS conditions.

In chemistry an enantiomer, also known as an optical

isomer, is one of two stereoisomers that are mirror images of each other that are non-superimposable (not identical), much as one’s

left and right hands are the same except for being reversed along one axis.

A racemic compound, or racemate, is one that has equal amounts

of left- and right-handed enantiomers of a chiral molecule.

For racemic drugs, often only one of a drug’s enantiomers is responsible

for the desired physiologic effects, while the other enantiomer is less active or inactive.

As a single isomer of racemic methadone, esmethadone

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In addition to developing esmethadone as an adjunctive

treatment of MDD, we are evaluating the utility of esmethadone as a front line monotherapy treatment for MDD.

Additionally, other indications that Relmada

may explore in the future, include, restless leg syndrome and other glutamatergic system activation related diseases.

treatment of MDD, we are evaluating other indications that Relmada may explore in the future, including restless leg syndrome and other

glutamatergic system activation related diseases.

Recent Development

On September 20, 2022, we entered into an agreement with an investor

to exchange 1,452,016 shares of outstanding common stock for 1,452,016 prefunded warrants.

The 1,452,016 shares of common stock were returned

These warrants had an exercise price of $0.001 and a 9.99% beneficial ownership limitation.

On October 19, 2022, the investor

net exercised all 1,452,016 prefunded warrants, with 1,451,795 shares of common stock issued and the remaining 221 warrants being cancelled.

Our Corporate History and Background

We are a clinical-stage, publicly traded biotechnology

company developing NCEs and novel versions of drug products that potentially address areas of high unmet medical need in the treatment

company developing NCEs and novel verions of drug products that potentially address areas of high unmet medical need in the treatment

of depression and other CNS diseases.

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generating revenues for the foreseeable future.

We had net loss of $79,680,751 for the six months ended June 30, 2022.

At June 30, 2022,

We had net loss of $119,099,458 for the nine months ended September 30, 2022.

30, 2022, we have an accumulated deficit of $424,166,570.

Business Strategy

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 advisors, including recognized experts in the fields of depression, and business advisors with significant

industry and regulatory experience to lead and execute the development and commercialization of esmethadone.

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 advisors, including recognized experts in the fields of depression, and business advisors with significant industry and

regulatory experience to lead and execute the development and commercialization of esmethadone.

We plan to further develop esmethadone as our

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13% for cancer and 12% for cardiovascular disease.

The depression treatment market is segmented

on the basis of antidepressants drugs, devices, and therapies.

The depression treatment market is segmented on

the basis of antidepressants drugs, devices, and therapies.

Antidepressants are the largest and most popular market segment.

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Some of the notable drugs produced by these companies are Cymbalta® (Eli Lilly), Effexor® (Pfizer),

Pristiq® (Pfizer), Zulresso® (Sage) and Spravato® (Johnson & Johnson).

Pristiq® (Pfizer), Zulresso® (Sage), Spravato® (Johnson & Johnson) and Auvelity ä

Intellectual Property Portfolio and Market

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

Compelling lead product opportunity, REL-1017 currently in Phase 3 trials for the adjunctive and monotheraphy treatment of MDD.

Robust, and highly statistically significant, efficacy seen with esmethadone

in a randomized Phase 2 trial, the primary endpoint at 7 days, with onset of action seen at 4 days, and the effect carrying through

to 14 days (7 days post-treatment).

Successful Phase 1 safety studies of esmethadone and strong clinical

activity signal in depression established in three independent animal models in preclinical studies.

Potential in additional multiple indications in underserved markets

with large patient population in other affective disorders, and cognitive disorders

Compelling lead product opportunity, REL-1017 currently in Phase 3 trials for the adjunctive treatment of MDD.

Robust and highly statistically significant, efficacy seen with esmethadone in a randomized Phase 2 trial, with the primary endpoint at 7 days, and onset of action seen at 4 days, with the effect carrying through to 14 days (7 days post-treatment).

Successful Phase 1 safety studies of esmethadone and strong clinical activity signal in depression established in three independent animal models in preclinical studies.

Potential in additional multiple indications in underserved markets with large patient population in 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:

approved and filed

patent applications potentially provide coverage beyond 2033.

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 with approved and filed patent applications provide coverage beyond 2033.

A vailable Information

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Results of Operations

For the Three Months Ended June 30, 2022 versus June 30, 2021

For the Three Months Ended September 30, 2022 versus September

September 30,

Operating Expenses

Research and development

$ (3,464,866 )

General and administrative

$ (3,916,474 )

Research and Development Expense

Research and development expense for the three months ended June 30,

2022 was approximately $30,912,700 compared to $17,331,500 for the three months ended June 30, 2021, an increase of approximately $13,581,200.

The increase was primarily due to:

Increase in study costs of

$6,651,300 associated with the execution of our Phase 3 studies.

Increase in manufacturing and drug storage costs of $132,500;

Increase in compensation expense of $58,100 due to a increase in research and development employees and their related bonuses;

A decrease in stock-based compensation expense of $724,400;

Increase in other research expenses of $7,463,700 primarily associated with the addition of consultants, clinical research associates, and medical science liaisons contracted to assist in the execution of our Phase 3 trials.

Research and development expense for the three

months ended September 30, 2022 was approximately $30,529,100 compared to $33,994,000 for the three months ended September 30, 2021, a

decrease of approximately $3,464,900.

The decrease was primarily driven by:

Decrease in stock-based compensation expense of $8,655,200

primarily related to warrants issued for a license agreement to Arbormentis, LLC in 2021 for $10,241,600;

Increase in other research expenses of $5,825,500 primarily associated with the addition of consultants contracted to assist in the execution of our Phase 3 trials;

Decrease in study costs of $516,700 associated with the execution of four Phase 3 trials;

Decrease in manufacturing and drug storage costs of $332,800;

Increase in compensation expense of $214,300 due to higher employee-related

salaries and benefits.

General and Administrative Expense

General and administrative expense for the three

months ended June 30, 2022 was approximately $14,599,400 compared to $9,130,400 for the three months ended June 30, 2021, an increase

months ended September 30, 2022 was approximately $8,208,100 compared to $8,659,700 for the three months ended September 30, 2021, a decrease

of approximately $451,600.

The increase was primarily due to:

in compensation expense of $151,600 related a decrease of general and administrative employees;

Increase in stock-based compensation expense of $4,751,000 primarily related to options granted to employees, as well as key consultants;

Increase in other general and administrative expenses of $869,600 primarily due to an increase in consulting services.

The decrease was primarily due to:

Decrease in stock-based compensation expense of $1,257,200 primarily

related to options granted to employees;

Increase in other general and administrative expenses of $608,600 primarily

due to an increase in consulting services;

Increase in compensation expense of $197,000 due to higher employee-related salaries and benefits.

Other Income (Expense)

Interest / investment income was approximately

$387,300 and $322,800 for the three months ended June 30, 2022 and 2021, respectively.

Realized gain on short-term investments was approximately

$24,500 for the three months ended June 30, 2022 compared to a realized loss of approximately $123,600 for the three months ended June

Unrealized loss on short-term investments was approximately $1,186,300 for the three months ended June 30, 2022 compared to

an unrealized loss of approximately $289,300 for the three months ended June 30, 2021.

Gain of settlement of fees was $6,351,600 for the

three months ended June 30,2022.

$827,600 and $297,600 for the three months ended September 30, 2022 and 2021, respectively.

Realized loss on short-term investments was

approximately $561,600 and $336,900 for the three months ended September 30, 2022 and 2021, respectively.

Unrealized loss on short-term

investments was approximately $947,500 for the three months ended September 30, 2022 compared to an unrealized gain of $86,700 for the

three months ended September 30, 2021.

The Company did not provide for income taxes for

the three months ended September 30, 2022 and 2021, since there was a loss and a full valuation allowance against all deferred tax assets.

The net loss for the Company for the three months

ended June 30, 2022 and 2021 was approximately $39,935,000 and $26,551,900, respectively.

The Company had loss per share basic and diluted

of $1.33 and $1.56 for the three months ended June 30, 2022 and 2021, respectively.

The Company did not provide for income taxes

for the six months ended June 30, 2022 and 2021, since there was a loss and a full valuation allowance against all deferred tax assets.

Results of Operations

For the Six Months Ended June 30, 2022 versus June 30, 2021

ended September 30, 2022 and 2021 was approximately $39,418,700 and $42,606,200 respectively.

The Company had loss per share, basic and

diluted of $1.31 and $2.44 for the three months ended September 30, 2022 and 2021, respectively.

For the Nine Months Ended September 30, 2022 versus September 30,

September 30,

Operating Expenses

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General and administrative

$ 122,546,656

Research and Development Expense

Research and development expense for the six months ended June 30,

2022 was approximately $55,925,500 compared to $31,353,700 for the six months ended June 30, 2021, an increase of approximately $24,571,800.

The increase was primarily due to:

Increase in study costs of $14,434,700 associated with the execution

of our Phase 3 studies.

Research and development expense for the nine

months ended September 30, 2022 was approximately $86,454,600 compared to $65,347,700 for the nine months ended September 30, 2021, an

increase of approximately $21,106,900.

The increase was primarily driven by:

Increase in other research expenses of $16,849,800 primarily associated with the addition of consultants contracted to assist in the execution of our Phase 3 trials;

Increase in study costs of $13,918,200 associated with the execution of four Phase 3 trials;

Decrease in stock-based compensation expense of $8,667,100

primarily related to warrants issued for license agreement to Arbormentis, LLC in 2021 for $10,241,600;

Decrease in manufacturing and drug storage costs of $812,800;

Increase in pre-clinical and toxicology expenses of $336,200;

Decrease in compensation expense of $395,500 due to a decrease in research and development employees and their related bonuses;

A decrease in stock-based compensation expense of $11,900;

Increase in other research expenses of $10,688,200 primarily associated

with the addition of consultants, clinical research associates, and medical science liaisons contracted to assist in the execution of

our Phase 3 trials.

Decrease in compensation expense of $181,200 due to lower employee-related

salaries and benefits.

General and Administrative Expense

General and administrative expense for the six

months ended June 30, 2022 was approximately $27,884,000 compared to $17,513,300 for the six months ended June 30, 2021, an increase

of approximately $10,370,700.

General and administrative expense for the nine

months ended September 30, 2022 was approximately $36,092,000 compared to $26,173,000 for the nine months ended September 30, 2021, an

increase of approximately $9,919,000.

The increase was primarily due to:

Decrease in compensation expense of $267,200 primarily related a decrease

of general and administrative employees;

Increase in stock-based compensation expense of $10,117,900 related

to option grants to employees and key consultants;

Increase in stock-based compensation expense of $8,860,800 primarily

related to options granted to employees, as well as the hiring of two additional employees;

Increase in other general and administrative expenses of $1,128,400

primarily due to an increase in consulting services;

Decrease in compensation expense of $70,200 due to lower employee-related costs.

Other Income (Expense)

Interest / investment income was approximately

$717,300 and $742,800 for the six months ended June 30, 2022 and 2021, respectively.

Realized gain on short-term investments was approximately

$9,500 for the six months ended June 30, 2022 compared to a realized loss of approximately $176,400 for the six months ended June 30,2021.

Unrealized loss on short-term investments was approximately $2,949,600 and $466,400 for the six months ended June 30, 2022 and 2021, respectively.

Gain on settlement fees of $6,351,600 for the six months ended June 30, 2022.

The net loss for the Company for the six months

ended June 30, 2022 and 2021 was approximately $79,680,800 and $48,767,100, respectively.

The Company had loss per share basic and diluted

of $2.73 and $2.90 for the six months ended June 30, 2022 and 2021, respectively.

The Company did not provide for income taxes

for the six months ended June 30, 2022 and 2021, since there was a loss and a full valuation allowance against all deferred tax assets.

$1,544,900 and $1,040,400 for the nine months ended September 30, 2022 and 2021, respectively.

Realized loss on short-term investments

was approximately $552,200 and $513,300 for the nine months ended September 30, 2022 and 2021, respectively.

Unrealized loss on short-term

investments was approximately $3,897,100 and $379,700 for the nine months ended September 30, 2022 and 2021, respectively.

on settlement fees was $6,351,600 for the nine months ended September 30, 2022.

The Company did not provide for income taxes for

the nine months ended September 30, 2022 and 2021, since there was a loss and a full valuation allowance against all deferred tax assets.

The net loss for the Company for the nine months

ended September 30, 2022 and 2021 was approximately $119,099,500 and $91,373,300 respectively.

The Company had loss per share, basic and

diluted of $4.04 and $5.36 for the nine months ended September 30, 2022 and 2021, respectively.

As shown in the accompanying financial statements,

the Company incurred negative operating cash flows of $41,055,884 for the six months ended June 30, 2022 and has an accumulated deficit

of $384,747,863 from inception through June 30, 2022.

At June 30, 2022, the Company had cash and short term investments of $211,955,077.

the Company incurred negative operating cash flows of $67,918,717 for the nine months ended September 30, 2022 and has an accumulated

deficit of $424,166,570 from inception through September 30, 2022.

At September 30, 2022 the Company had cash and cash equivalents, and

short-term investments of $184,152,174.

Relmada has funded its past operations through

equity raises and in the six months ended June 30, 2022, the Company raised net proceeds of $42,728,599 from the sale of common stock

through our ATM equity offering, and $417,544 through the exercise of options and $895,356 through the exercise of warrants.

equity raises and in the nine months ended September 30, 2022, the Company raised net proceeds of $42,728,599 from the sale of common

stock through our ATM equity offering, and $703,720 through the exercise of options and $1,228,272 through the exercise of warrants.

On April 8, 2022, we raised net proceeds of $13,145,057

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We are not obligated to sell any shares under the agreement.

Management believes that the Company’s

existing cash and cash equivalents will enable it to fund operating expenses and capital expenditure requirements for at least 12 months

from the issuance of these unaudited condensed consolidated financial statements.

Beyond that point management will evaluate the size

and scope of any subsequent trials that will affect the timing of additional financings through public or private sales of equity or

debt securities or from bank or other loans or through strategic collaboration and/or licensing agreements.

Any such expenditures related

to any subsequent clinical trials will not be incurred until such additional financing is raised.

Further, additional financing related

to subsequent clinical trials does not affect the Company’s conclusion that based on the cash on hand and the budgeted cash flow

requirements, the Company has sufficient funds to maintain operations for at least 12 months from the issuance of these unaudited condensed

consolidated financial statements.

The following table sets forth selected cash flow information for

the periods indicated below:

As of September

30, 2022, no shares have been issued under this agreement.

Management believes that the Company’s existing

cash and cash equivalents, and short-term investments will enable it to fund operating expenses and capital expenditure requirements for

at least 12 months from the issuance of these unaudited condensed consolidated financial statements.

Beyond that point management will

evaluate the size and scope of any subsequent trials that will affect the timing of additional financings through public or private sales

of equity or debt securities or from bank or other loans or through strategic collaboration and/or licensing agreements.

Any such expenditures

related to any subsequent clinical trials will not be incurred until such additional financing is raised.

Further, additional financing

related to subsequent clinical trials does not affect the Company’s conclusion that the Company has sufficient funds to maintain

operations for at least 12 months from the filing of this report.

The following table sets forth selected cash flow information for the

periods indicated below:

Nine Months Ended

September 30,

Nine Months Ended

September 30,

Cash used in operating activities

$ (41,055,884 )

$ (33,296,890 )

Cash (used in) provided by investing activities

(10,168,188 )

Cash provided by investing activities

Cash provided by financing activities

Net (decrease) / increase in cash and cash equivalents

$ (7,182,573 )

For the six months ended June 30, 2022, cash used

in operating activities was $41,055,884 primarily due to the net loss of $79,680,751, decrease in accounts payable of 3,652,816, increase

in other current assets of $256,192, realized gain of 9,480, offset by non-cash stock compensation charges of $24,225,697, decrease in

prepaid expenses and other assets of $7,810,846, increase in accrued expenses of $7,513,045 and unrealized loss of $2,949,624.

For the six months ended June 30, 2021, cash used

in operating activities was $33,296,890 primarily due to the net loss of $48,767,125, increase in prepaid expense and other assets of

$645,690, decrease in accrued expenses of $796,162, offset by non-cash stock compensation charges of $14,119,660, increase in accounts

payable of $2,109,447, unrealized loss of $466,444, and realized loss of $176,379.

For the six months ended June 30, 2022, cash used in investing activities

was $10,168,188 related to the net purchase and sale of short-term investments.

For the six months ended June 30, 2021, cash

provided by investing activities was $9,553,562 related to the net purchase and sale of short-term investments.

Net cash provided by financing activities for

the six months ended June 30, 2022 was $44,041,499 due to proceeds from options exercised for common stock of $417,544, proceeds from

warrants exercised for common stock of $895,356, and sales of common stock of $42,728,599.

For the nine months ended September 30, 2022,

cash used in operating activities was $67,918,717 primarily due to the net loss of $119,099,458, decrease in accounts payable of $766,661,

offset by non-cash stock compensation charges of $32,568,836, decrease in prepaid expenses and other assets of $8,359,994, increase in

accrued expenses of $6,482,889, decrease in lease payment receivable of $86,377, unrealized loss of $3,897,135, and realized loss of $552,171.

For the nine months ended September 30, 2021,

cash used in operating activities was $54,213,231 primarily due to the net loss of $91,373,316, increase in prepaid expense of $1,812,288,

offset by non-cash stock compensation charges of $32,375,229, increase in accounts payable of 4,362,071, increase in accrued expenses

of 1,281,821, decrease in lease payment receivable of $58,967, unrealized loss of $379,699, and realized loss of $513,328.

For the nine months ended September 30, 2022,

cash provided by investing activities was $21,389,056 related to the net purchase of short-term investments.

For the nine months ended September 30, 2021,

cash provided by investing activities was $37,064,696 related to the net purchase of short-term investments.

Net cash provided by financing activities for the nine months ended

September 30, 2022 was $44,610,591 due to sales of common stock of $42,728,599, proceeds from warrants exercised for common stock of $1,228,272,

and proceeds from options exercised for common stock of $703,720.

Net cash provided by financing activities for

the six months ended June 30, 2021 was $25,917,276 due to proceeds from options exercised for common stock of $517,271, proceeds from

warrants exercised for common stock of $1,941,955, and sales of common stock of $23,458,050.

the nine months ended September 30, 2021 was $26,102,432 due to sales of common stock of $23,416,036, proceeds from warrants exercised

for common stock of $2,116,969, and proceeds from options exercised for common stock of $569,427.

Effects of Inflation

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

and short term investments.

Our assets are primarily monetary, consisting

of cash and cash equivalents and short-term investments.

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

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.

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.

Commitments and Contingencies

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subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our unaudited condensed

consolidated financial statements are presented in accordance with U.S.

Our unaudited condensed consolidated financial

statements are presented in accordance with U.S.

GAAP, and all applicable U.S.

GAAP accounting standards effective

as of June 30, 2022 have been taken into consideration in preparing the unaudited consolidated financial statements.

The preparation

of unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported

amounts of assets, 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.

Management bases its estimates on historical experience and on various assumptions

that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying

value of assets and liabilities that are not readily apparent from other sources.

On a continual basis, management reviews its estimates

utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable assumptions.

such reviews, and if deemed appropriate, managements estimates are adjusted accordingly.

Actual results could differ from those estimates

and assumptions under different and/or future circumstances.

GAAP accounting standards effective as of September 30,

2022 have been taken into consideration in preparing the unaudited consolidated financial statements.

The preparation of unaudited condensed

consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, 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.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable

under the circumstances, the results of which form the basis for making judgements about the carrying value of assets and liabilities

that are not readily apparent from other sources.

On a continual basis, management reviews its estimates utilizing currently available

information, changes in facts and circumstances, historical experience, and reasonable assumptions.

After such reviews, and if deemed

appropriate, management estimates are adjusted accordingly.

Actual results could differ from those estimates and assumptions under different

and/or future circumstances.

Management considers an accounting estimate to be critical if:

it requires assumptions to be made that were uncertain at the time

the estimate was made;

changes in the estimate, or the use of different estimating methods

that could have been selected, could have a material impact on the results of operations or financial condition.

We evaluate our estimates and assumptions on

an ongoing basis and none of the Company’s estimates and assumptions used within the unaudited condensed consolidated financial

statements involve a high level of estimation uncertainty.

For additional discussion regarding the application of the significant accounting

policies, see Note 2 to the Company’s unaudited condensed consolidated financial statements included in this report.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK.

it requires assumptions to be made that were uncertain at the time the estimate was made;

changes in the estimate, or the use of different estimating methods that could have been selected, could have a material impact on the results of operations or financial condition.

We evaluate our estimates and assumptions on an

ongoing basis and none of the Company’s estimates and assumptions used within the unaudited condensed consolidated financial statements

involve a high level of estimation uncertainty.

For additional discussion regarding the application of the significant accounting policies,

see Note 2 to the Company’s unaudited condensed consolidated financial statements included in this report.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK.

There have been no material changes to our exposures

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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 2. Management’s Discussion and Analysis