What changed in this filing

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Item 1. Financial Statements

2023-11-08 compared with 2023-08-08 · 374 added, 384 removed, 154 unchanged (83% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30,

Current assets:

27 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

Operating expenses:

10 unchanged sentences

Interest/investment income, net

Realized (loss) gain on short-term investments

Realized loss on short-term investments

Unrealized (loss) gain on short-term investments

( 3,897,135 )

( 2,949,624 )

Total other income

Total other (expense) income – net

$ ( 22,002,058 )

7 unchanged sentences

Consolidated Statements of Stockholders’ Equity

Three and Six months ended June 30, 2023

Three and Nine months ended September 30, 2023

Balance – December 31, 2022

12 unchanged sentences

( 513,735,465 )

Stock-based compensation

( 22,002,058 )

Three and Six months ended June 30, 2022

Balance – September 30, 2023

$ 636,434,059

$ ( 535,737,523 )

$ 100,726,635

Three and Nine months ended September 30, 2022

Balance – December 31, 2021

18 unchanged sentences

( 384,747,863 )

Stock-based compensation

Warrant exercised for cash

Options exercised for cash

Share exchange – Pre-funded warrants, net of fees

( 1,452,016 )

( 39,418,707 )

Balance – September 30, 2022

$ 590,482,783

$ ( 424,166,570 )

$ 166,344,855

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

1 unchanged sentence

Consolidated Statements of Cash Flows

Six months ended

Nine months ended

September 30,

Cash flows from operating activities

$ ( 73,626,588 )

$ ( 119,099,458 )

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

Gain on settlement of fees

Realized loss (gain) on short-term investments

Realized loss on short-term investments

Unrealized (gain) loss on short-term investments

1 unchanged sentence

Lease payment receivable

Other receivables

Other receivable

Prepaid expenses and other assets

Accounts payable

( 2,405,184 )

Accrued expenses

( 1,641,475 )

Net cash used in operating activities

( 41,409,492 )

( 67,918,717 )

Cash flows from investing activities

Purchase of short-term investments

( 57,151,963 )

( 38,993,173 )

Sale of short-term investments

Net cash provided by (used in) investing activities

Net cash provided by investing activities

Cash flows from financing activities

Payment of fees for warrants issued for common stock

Proceeds from issuance of common stock – net

3 unchanged sentences

Net increase /(decrease) in cash and cash equivalents

( 1,919,070 )

Cash and cash equivalents at beginning of the period

1 unchanged sentence

Supplemental disclosure of cash flow information:

Cash paid during the period for:

Non-cash investing and financing activities:

Share exchange for Pre-funded warrants

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

Relmada Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial

NOTE 1 - BUSINESS

Relmada Therapeutics, Inc.

(Relmada or the Company)

(a Nevada corporation), is a clinical-stage, publicly traded biotechnology company focused on the development of esmethadone (d-methadone,

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

Esmethadone 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.

In addition to the normal risks associated with

a new business venture, there can be no assurance that the Company’s research and development will be successfully completed or

that any product will be approved or commercially viable.

The Company is subject to risks common to companies in the biotechnology industry

including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological

innovations, dependence on key personnel, protection of proprietary technology, and compliance with the Food and Drug Administration (FDA)

and other governmental regulations and approval requirements.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Presentation

The accompanying unaudited condensed consolidated

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

of America (U.S.

Therapeutics, Inc.

to Unaudited Condensed Consolidated Financial Statements

Therapeutics, Inc.

(Relmada or the Company) (a Nevada corporation), is a clinical-stage, publicly traded biotechnology company focused

on the development of esmethadone (d-methadone, dextromethadone, REL-1017), an N-methyl-D-aspartate (NMDA) receptor antagonist.

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.

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

development will be successfully completed or that any product will be approved or commercially viable.

The Company is subject to risks

common to companies in the biotechnology industry including, but not limited to, dependence on collaborative arrangements, development

by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology,

and compliance with the Food and Drug Administration (FDA) and other governmental regulations and approval requirements.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

accompanying unaudited condensed 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 condensed consolidated financial information.

Accordingly, they do not include all of the

information and footnotes required by U.S.

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

GAAP for complete consolidated financial statements.

The unaudited condensed 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

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

statements of the Company for the year ended December 31, 2022 and notes thereto contained in the Company’s Annual Report on Form

Principles of Consolidation

The unaudited condensed consolidated financial

statements include the Company’s accounts and those of the Company’s wholly-owned subsidiary.

All significant intercompany

accounts and transactions have been eliminated in consolidation.

The unaudited condensed 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 condensed consolidated financial statements should be read

in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2022 and notes thereto

contained in the Company’s Annual Report on Form 10-K.

of Consolidation

unaudited condensed consolidated financial statements include the Company’s accounts and those of the Company’s wholly-owned

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

As shown in the accompanying unaudited condensed

consolidated financial statements, the Company incurred negative operating cash flows of $ 29,778,363 for the six months ended June 30,

2023 and has an accumulated deficit of $ 513,735,465 from inception through June 30, 2023.

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 operations and clinical 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.

Further, additional financing 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.

Use of Estimates

The preparation of financial statements in conformity

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.

consolidated financial statements, the Company incurred negative operating cash flows of $ 41,409,492 for the nine months ended September

30, 2023 and has an accumulated deficit of $ 535,737,523 from inception through September 30, 2023.

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 operations and clinical 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.

Further, additional financing 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.

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 stock-based compensation expenses and

recorded amounts related to income taxes.

Cash and Cash Equivalents

The Company considers cash deposits and all highly

liquid investments with a maturity of three months or less when purchased to be cash equivalents.

The Company’s cash deposits are

held at two high-credit-quality financial institutions.

The Company’s cash and cash equivalents balance of $ 14,469,354 at June 30,

2023 at these institutions exceed the federally insured limits.

Relmada Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Short-term Investments

The Company’s investments consist

entirely of mutual funds.

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

Substantially all equity

investments in nonconsolidated entities are 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

unaudited condensed consolidated statement of operations.

Short term investment activity is presented in the investing activities

section on the unaudited condensed consolidated statement of cash flows.

Short-term investments at June 30, 2023 consisted

of mutual funds with a fair value of $ 104,059,737 .

Costs related to filing and pursuing patent applications

are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain.

The 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.

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

The significant

estimates are stock-based compensation expenses and recorded amounts related to income taxes.

and Cash Equivalents

Company considers cash deposits and all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

The Company’s cash deposits are held at two high-credit-quality financial institutions.

The Company’s cash and cash equivalents

balance of $ 6,698,599 at September 30, 2023 at these institutions exceed the federally insured limits.

Therapeutics, Inc.

to Unaudited Condensed Consolidated Financial Statements

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Company’s investments consist entirely of mutual funds.

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

Substantially all equity investments in nonconsolidated entities are 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 unaudited condensed consolidated statement of operations.

Short-term investment activity is presented in the investing

activities section on the unaudited condensed consolidated statement of cash flows.

investments at September 30, 2023 consisted of mutual funds with a fair value of $ 99,568,502 .

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

recoverability of such expenditures is uncertain.

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.

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 lease 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 exercise.

Fair 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.

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 exercise.

Value of Financial Instruments

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.

Fair value is defined as the price that would

4 unchanged sentences

The fair value hierarchy is as follows:

Level 1 Inputs – Unadjusted quoted

prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs – Inputs other

than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

These might include

quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets

that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities,

prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other

Level 3 Inputs – Prices or valuation

techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market

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.

The Company’s short-term investment

instruments of $ 104,059,737 at June 30, 2023 consist of mutual funds, bank deposits and money market funds and are classified using

Level 1 inputs within the fair value hierarchy because the value is based on quoted prices in active markets.

Unrealized gains

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

The Company recorded

unrealized loss of $ 639,634 and an unrealized gain of $ 651,476 included in other income for the three and six months ended June 30,

2023, respectively.

The Company recorded unrealized losses of $ 1,186,337 and $ 2,949,624 included in other income for the three and

six months ended June 30, 2022, respectively.

Relmada Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company accounts for income taxes using the

asset and liability method.

Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable

to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary

differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in the tax rate is

recognized in income or expense in the period that the change is effective.

Tax benefits are recognized when it is probable that the deduction

will be sustained.

A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset

will either expire before the Company is able to realize the benefit, or that future deductibility is uncertain.

As of June 30, 2023 and

December 31, 2022, 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 the benefit does not meet the more likely than not threshold.

The Company files a U.S.

Federal income tax return

and various state returns.

Uncertain tax positions taken on the Company’s tax returns will be accounted for as liabilities for unrecognized

tax benefits.

The Company will recognize interest and penalties, if any, related to unrecognized tax benefits in general and administrative

expenses in the statements of operations.

There were no liabilities recorded for uncertain tax positions at June 30, 2023 and December

The open tax years, subject to potential examination by the applicable taxing authority, for the Company are from June 30, 2018

Research and Development

Research and development costs primarily consist

of research contracts for the advancement of product development, salaries and benefits, stock-based compensation, and consultants.

Company expenses all research and development costs in the period incurred.

The Company makes an estimate of costs in relation to clinical

study contracts.

The Company analyzes the progress of studies, including the progress of clinical studies and phases, invoices received

and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability.

Stock-Based Compensation

The Company measures the cost of employee services

received in exchange for an award of equity instruments based on the grant-date fair value of the award.

That cost is recognized over

the period during which an employee is required to provide service in exchange for the award - the requisite service period.

The grant-date

fair value of employee share options is estimated using the Black-Scholes option pricing model adjusted for the unique characteristics

of those instruments.

Net Loss per Common Share

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 losses in each period.

For the six months ended June 30, 2023 and 2022, 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.

The anti-dilutive securities are as follows (in common stock equivalent shares):

Six months ended

Level 1 Inputs –

Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access

at the measurement date.

Level 2 Inputs –

Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets

or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such

as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated

by market data by correlation or other means.

Level 3 Inputs –

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported

by little or no market activity).

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.

The Company’s short-term investment instruments

of $ 99,568,502 at September 30, 2023 consist of mutual funds and are classified using Level 1 inputs within the fair value hierarchy

because the value is based on quoted prices in active markets.

Unrealized gains and losses are recorded in the unaudited condensed consolidated

statement of operations under other (expenses) income.

The Company recorded an unrealized loss of $ 579,147 for the three months ended

September 30, 2023 and an unrealized gain of $ 72,329 included in other (expenses) income for the nine months ended September 30, 2023.

The Company recorded unrealized loss of $ 947,512 and $ 3,897,135 included in other (expenses) income for the three and nine months ended

September 30, 2022, respectively.

Therapeutics, Inc.

to Unaudited Condensed Consolidated Financial Statements

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Company accounts for income taxes using the asset and liability method.

Accordingly, deferred tax assets and liabilities are recognized

for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities

and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable

income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and

liabilities of a change in the tax rate is recognized in income or expense in the period that the change is effective.

Tax benefits are

recognized when it is probable that the deduction will be sustained.

A valuation allowance is established when it is more likely than

not that all or a portion of a deferred tax asset will either expire before the Company is able to realize the benefit, or that future

deductibility is uncertain.

As of September 30, 2023 and December 31, 2022, 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 the benefit does not meet the more likely

than not threshold.

Company files a U.S.

Federal income tax return and various state returns.

Uncertain tax positions taken on the Company’s tax returns

will be accounted for as liabilities for unrecognized tax benefits.

The Company will recognize interest and penalties, if any, related

to unrecognized tax benefits in general and administrative expenses in the statements of operations.

There were no liabilities recorded

for uncertain tax positions at September 30, 2023 and December 31, 2022.

The open tax years, subject to potential examination by the

applicable taxing authority, for the Company are from June 30, 2018 forward.

and Development

and development costs primarily consist of research contracts for the advancement of product development, salaries and benefits, stock-based

compensation, and consultants.

The Company expenses all research and development costs in the period incurred.

The Company makes an estimate

of costs in relation to clinical study contracts.

The Company analyzes the progress of studies, including the progress of clinical studies

and phases, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset

and accrued liability.

Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value

of the award.

That cost is recognized over the period during which an employee is required to provide service in exchange for the award

– the requisite service period.

The grant-date fair value of employee share options is estimated using the Black-Scholes option

pricing model adjusted for the unique characteristics of those instruments.

Loss 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.

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.

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 losses in each period.

the nine months ended September 30, 2023 and 2022, 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.

The anti-dilutive securities

are as follows (in common stock equivalent shares):

Nine months ended

September 30,

Stock options

Common stock warrants

Relmada Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments

- Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments .

The standard requires enhanced disclosure of certain

loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty and eliminates certain current

recognition and measurement accounting guidance.

This ASU also requires the disclosure of current-period gross write-offs by year of origination

for financing receivables and net investments in leases.

The adoption of this ASU did not have a significant impact on the Company’s

unaudited condensed consolidated financial statements.

NOTE 3 - PREPAID EXPENSES

Prepaid expenses consisted of the following (rounded to nearest $00):

Therapeutics, Inc.

to Unaudited Condensed Consolidated Financial Statements

3 – PREPAID EXPENSES

expenses consisted of the following (rounded to nearest $00):

September 30,

Research and Development

NOTE 4 - ACCRUED EXPENSES

Accrued expenses consisted of the following (rounded to nearest $00):

4 – ACCRUED EXPENSES

expenses consisted of the following (rounded to nearest $00):

September 30,

Research and development

2 unchanged sentences

Accrued vacation

Relmada Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial

NOTE 5 - STOCKHOLDERS’ EQUITY

During the six months ended June 30, 2023, no

shares of common stock were issued.

On April 6, 2022, the Company entered into a new

Open Market Sale Agreement with Jefferies, as sales agent, pursuant to which we may offer and sell, from time to time, through Jefferies,

shares of our common stock, having an aggregate offering price of up to $ 100,000,000 .

We are not obligated to sell any shares under the

As of June 30, 2023, no shares have been issued under this agreement.

Options and Warrants

In December 2014, the Board of Directors adopted

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

which allows for the granting of 5,152,942 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.

In May 2021, the Company’s Board of Directors

adopted and shareholders approved Relmada’s 2021 Equity Incentive Plan (the “2021 Plan”) which allows for the granting

of 1,500,000 options or stock awards.

In May 2022, the Company’s Board of Directors

adopted and shareholders approved an amendment to the 2021 Plan to increase the shares of the Company’s common stock available for

issuance thereunder by 3,900,000 shares.

In May 2023, the Company’s Board of Directors

adopted and shareholders approved an amendment to the 2021 Plan to increase the shares of the Company’s common stock available for

issuance thereunder by 2,500,000 shares.

These combined plans allowed for the granting

of up to 13,052,942 options or other stock awards.

5 – STOCKHOLDERS’ EQUITY

the nine months ended September 30, 2023, no shares of common stock were issued.

April 6, 2022, the Company entered into a new Open Market Sale Agreement with Jefferies, as sales agent, pursuant to which we may offer

and sell, from time to time, through Jefferies, shares of our common stock, having an aggregate offering price of up to $ 100,000,000 .

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

As of September 30, 2023, no shares have been issued under this agreement.

December 2014, the Board of Directors adopted, and the Company’s shareholders approved Relmada’s 2014 Stock Option and Equity

Incentive Plan, as amended (the “Plan”), which allows for the granting of 5,152,942 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.

May 2021, the Company’s Board of Directors adopted, and shareholders approved Relmada’s 2021 Equity Incentive Plan (the “2021

Plan”) which allows for the granting of 1,500,000 options or stock awards.

May 2022, the Company’s Board of Directors adopted, and shareholders approved an amendment to the 2021 Plan to increase the shares

of the Company’s common stock available for issuance thereunder by 3,900,000 shares.

May 2023, the Company’s Board of Directors adopted and shareholders approved an amendment to the 2021 Plan to increase the shares

of the Company’s common stock available for issuance thereunder by 2,500,000 shares.

combined plans allowed for the granting of up to 13,052,942 options or other stock awards.

Therapeutics, Inc.

to Unaudited Condensed Consolidated Financial Statements

5 – STOCKHOLDERS’ EQUITY (continued)

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, 2023, 569,086 shares were

available for future grants under the 2014 or 2021 Plan.

As of June 30, 2023, 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.

volatility was based on historical volatility.

The Company uses the simplified method for share-based

compensation to estimate the expected term for equity awards for share-based compensation in its option-pricing model.

From January 1, 2023 through June 30, 2023, 680,000

options were issued to various consultants and employees with an exercise price ranging from $ 2.28 to $ 4.30 and a 10 -year term, vesting

over a 4 year period.

As of September 30, 2023, 597,374 shares were available

for future grants under the 2014 or 2021 Plan.

of September 30, 2023, no stock appreciation rights have been issued.

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.

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.

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

in its option-pricing model.

From January 1, 2023 through September 30,

2023, 690,000 options were issued to various consultants and employees with an exercise price ranging from $ 2.28 to $ 4.30 and a

10 -year term, vesting over a 4 year period.

The options granted include time-based vesting grants.

The options have an aggregate fair value of approximately

$ 2.1 million calculated using the Black-Scholes option-pricing model.

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

(1) discount rate of 3.43 – 4.12 % (2) expected life of 6.25 years, (3) expected volatility of 114.2 - 115.6 %, and (4) zero expected

At June 30, 2023, the Company has unrecognized

stock-based compensation expense of approximately $ 74.3 million related to unvested stock options which will be recognized over the weighted

average remaining service period of 2.45 years.

Relmada Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial

NOTE 5 - STOCKHOLDERS’ EQUITY (continued)

A summary of the changes in options during the

six months ended June 30, 2023 is as follows:

The options have an aggregate

fair value of approximately $ 2.1 million calculated using the Black-Scholes option-pricing model.

Variables used in the

Black-Scholes option-pricing model include:

(1) discount rate of 3.43 – 4.44 % (2) expected life of 6.25 years, (3) expected

volatility of 113.3 – 115.6 %, and (4) zero expected dividends.

On September 5, 2023, Dr.

Eric Schmidt, a member

of the Board of Directors (the “Board”), notified the Company that he would resign from the Board, effective immediately.

On September 22, 2023, the Board voted and approved that all of Dr.

Schmidt’s unvested options would vest immediately and be exercisable

through the original term of the respective grants.

In addition, the Board approved the extension of the exercise period for the options

which were vested on September 5, 2023 from 90 days to the original term of the respective options.

As a result of the modifications, the

Company recorded approximately $ 1.2 million of stock-based compensation during the quarter ended September 30, 2023.

At September 30, 2023,

the Company has unrecognized stock-based compensation expense of approximately $ 61.2 million related to unvested stock options which will

be recognized over the weighted average remaining service period of 2.33 years.

summary of the changes in options during the nine months ended September 30, 2023 is as follows:

Outstanding and expected to vest at December 31, 2022

Outstanding at June 30, 2023

Options exercisable at June 30, 2023

A summary of the changes in outstanding warrants during the six months

ended June 30, 2023 is as follows:

Outstanding at September 30, 2023

Options exercisable at September 30, 2023

summary of the changes in outstanding warrants during the nine months ended September 30, 2023 is as follows:

Outstanding at December 31, 2022

Outstanding at June 30, 2023

Warrants vested at June 30, 2023

At June 30, 2023, the Company had approximately

Outstanding at September 30, 2023

Warrants vested at September 30, 2023

Therapeutics, Inc.

to Unaudited Condensed Consolidated Financial Statements

5 – STOCKHOLDERS’ EQUITY (continued)

At September 30, 2023, the Company had approximately

$ 3.95 million of unrecognized compensation expense related to outstanding warrants.

At June 30, 2023, the aggregate intrinsic value

of warrants vested and outstanding was $ 0 .

Stock -based compensation by class of expense

The following table summarizes the components

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

the six months ended June 30, 2023 and 2022 (rounded to nearest $00):

September 30, 2023, the aggregate intrinsic value of warrants vested and outstanding was $ 0 .

compensation by class of expense

following table summarizes the components of stock-based compensation expense which includes stock options and warrants in the unaudited

consolidated statements of operations for the nine months ended September 30, 2023 and 2022 (rounded to nearest $00):

September 30,

Research and development

General and administrative

Relmada Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial

NOTE 6 - 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 was developing at the time of the signing of the agreement

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 June 30, 2023, 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

Based upon a prior acquisition, the Company assumed

an obligation to pay third parties (Dr.

6 – COMMITMENTS AND CONTINGENCIES

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 was developing

at the time of the signing of the agreement 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 September 30, 2022, 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 arbitration.

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.

Party Licensor

upon a prior acquisition, the Company assumed an obligation to pay third parties (Dr.

Inturrisi and Dr.

Paolo Manfredi – see below):

(A) royalty payments up to 2%

on net sales of licensed products that are not sold by sublicensee and (B) on each and every sublicense earned royalty payment received

by licensee from its sublicensee on sales of license product by sublicensee, the higher of (i) 20% of the royalties received by licensee;

Paolo Manfredi –

(A) royalty payments up to 2% on net sales of licensed products that are not sold by sublicensee and (B) on each and every

sublicense earned royalty payment received by licensee from its sublicensee on sales of license product by sublicensee, the higher of

(i) 20% of the royalties received by licensee;

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

The Company will also make milestone payments of up to $4 million 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, 2023, the Company

has not generated any revenue related to this license agreement.

Inturrisi / Manfredi

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.

The Company will also make milestone payments

of up to $4 million 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 September 30, 2023, the Company has not generated any revenue related to this license agreement.

In January 2018, the Company 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 esmethadone 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 esmethadone, in the context of other indications such

as those contemplated above.

In consideration of the rights granted to Relmada under the License Agreement, Relmada paid the Licensor

an upfront, non-refundable license fee of $180,000.

Additionally, Relmada will pay Licensor $45,000 every three months until the earliest

to occur of the following events:

(i) the first commercial sale of a licensed product anywhere in the world, (ii) the expiration or invalidation

of the last to expire or be invalidated of the patent rights anywhere in the world, or (iii) the termination of the License Agreement.

Relmada will also pay Licensor tiered royalties with a maximum rate of 2%, decreasing to 1.75%, and 1.5% in certain circumstances, 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

to the Agreements, Relmada assigned its existing rights, including patents and patent applications, to esmethadone 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 esmethadone, in the context of other indications

such as those contemplated above.

In consideration of the rights granted to Relmada under the License Agreement, Relmada paid the

Licensor an upfront, non-refundable license fee of $180,000.

Additionally, Relmada will pay Licensor $45,000 every three months until

the earliest to occur of the following events:

(i) the first commercial sale of a licensed product anywhere in the world, (ii) the expiration

or invalidation of the last to expire or be invalidated of the patent rights anywhere in the world, or (iii) the termination of the License

Relmada will also pay Licensor tiered royalties with a maximum rate of 2%, decreasing to 1.75%, and 1.5% in certain circumstances,

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.

As of June 30, 2023, no events have occurred, and the Company continues to pay Licensor $ 45,000 every three months.

Relmada Therapeutics, Inc.

Notes to Unaudited Condensed Consolidated Financial

NOTE 6 - COMMITMENTS AND CONTINGENCIES (continued)

Arbormentis, LLC

On July 16, 2021, the Company entered into a License

Agreement with Arbormentis, LLC, a privately held Delaware limited liability company, by which the Company acquired development and

commercial rights to a novel psilocybin and derivate program from Arbormentis, LLC, worldwide excluding the countries of Asia.

Company will collaborate with Arbormentis, LLC on the development of new therapies targeting neurological and psychiatric disorders, leveraging

its understanding of neuroplasticity, and focusing on this emerging new class of drugs targeting the neuroplastogen mechanism of action.

Under the terms of the License Agreement, the Company paid Arbormentis, LLC an upfront fee of $ 12.7 million, consisting of a mix

of cash and warrants to purchase the Company’s common stock, in addition to potential milestone payments totaling up to approximately

$ 160 million related to pre-specified development and commercialization milestones.

Arbormentis, LLC is also eligible to receive

a low single digit royalty on net sales of any commercialized therapy resulting from this agreement.

The license agreement is terminable

by the Company but is perpetual and not terminable by the licensor absent material breach of its terms by the Company.

The new licensed program stems from an international

collaboration among U.S., European and Swiss scientists that has focused on the discovery and development of compounds that may promote

neural plasticity.

Paolo Manfredi, Relmada’s Acting Chief Scientific Officer and co-inventor of REL-1017, and Dr.

Pappagallo, Relmada’ s prior Acting Chief Medical Officer, are among the scientists affiliated with Arbormentis, LLC.

From time to time, the Company may become involved

in lawsuits and other legal proceedings that arise in the course of business.

Litigation is subject to inherent uncertainties, and it

is not possible to predict the outcome of litigation with total confidence.

The Company is currently not aware of any legal proceedings

or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the

Company’s business, financial condition, operating results, or cash flows.

Leases and Sublease

As of September 30, 2023, no events have occurred, and the Company continues to pay Licensor $ 45,000 every three

Therapeutics, Inc.

to Unaudited Condensed Consolidated Financial Statements

6 – COMMITMENTS AND CONTINGENCIES (continued)

July 16, 2021, the Company entered into a License Agreement with Arbormentis, LLC, a privately held Delaware limited liability company,

by which the Company acquired development and commercial rights to a novel psilocybin and derivate program from Arbormentis, LLC, worldwide

excluding the countries of Asia.

The Company will collaborate with Arbormentis, LLC on the development of new therapies targeting

neurological and psychiatric disorders, leveraging its understanding of neuroplasticity, and focusing on this emerging new class of drugs

targeting the neuroplastogen mechanism of action.

Under the terms of the License Agreement, the Company paid Arbormentis, LLC an upfront

fee of $ 12.7 million, consisting of a mix of cash and warrants to purchase the Company’s common stock, in addition to potential

milestone payments totaling up to approximately $ 160 million related to pre-specified development and commercialization milestones.

Arbormentis, LLC is also eligible to receive a low single digit royalty on net sales of any commercialized therapy resulting from this

The license agreement is terminable by the Company but is perpetual and not terminable by the licensor absent material breach

of its terms by the Company.

new licensed program stems from an international collaboration among U.S., European and Swiss scientists that has focused on the discovery

and development of compounds that may promote neural plasticity.

Paolo Manfredi, Relmada’s Acting Chief Scientific Officer

and co-inventor of REL-1017, and Dr.

Marco Pappagallo, Relmada’ s prior Acting Chief Medical Officer, are among the scientists

affiliated with Arbormentis, LLC.

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

is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence.

is currently not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the

aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows.

On August 1, 2021, the Company relocated its corporate

1 unchanged sentence

The lease period was for five months .

The lease agreement expired on December 31, 2021 and was renewed for the calendar

year 2022 and 2023 with monthly rent of approximately $ 9,000 and $ 7,000 , respectively.

Beginning on January 1, 2023, we also leased office

space at 880 Third Avenue, 12th Floor, New York, NY 10022 with monthly rent of approximately $ 13,000 , that expires on December 31, 2023.

The lease agreement expired on December 31, 2021 and was renewed for the calendar year

2022 and 2023 with monthly rent of approximately $ 9,000 and $ 7,000 respectively.

Beginning on January 1, 2023, we also leased office space

at 880 Third Avenue, 12 th Floor, New York, NY 10022 with monthly rent of approximately $ 14,500 that expires on December 31,

In accordance with ASC 842, Leases , the Company recognizes rent expense evenly over the 12 months.

For the six months ended

June 30, 2023 and 2022, the Company recognized lease expense of approximately $ 137,000 and $ 44,000 , respectively.

On June 8, 2017, the Company entered into an agreement

with Actinium Pharmaceuticals, Inc.

Pursuant to the terms of the agreement, Actinium licensed 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.

On July 7, 2022, Actinium exercised

its right to purchase the FFE for $ 52,698 .

The license of FFE qualified 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 .

As of June 30, 2023 and 2022, there was no unearned interest income.

NOTE 7 - OTHER POST-RETIREMENT BENEFIT PLAN

Relmada participates in a multiemployer 401(k)

plan that permits eligible employees to contribute funds on a pretax basis subject to maximum allowed under federal tax provisions.

Company matches 100% of the first 3% of employee contributions, plus 50% of employee contributions that exceed 3% but do not exceed 5%.

The employees choose an amount from various investment

options for both their contributions and the Company’s matching contribution.

The Company’s contribution expense was approximately

$ 80,900 and $ 62,800 for the six months ended June 30, 2023 and 2022, respectively.

NOTE 9 - SUBSEQUENT EVENTS

August 1, 2023, 5,000 options were granted to a new employee with an exercise price of $ 2.56 .

For the nine months ended

September 30, 2023 and 2022, the Company recognized lease expense of approximately $ 213,500 and $ 87,100 , respectively.

June 8, 2017, the Company entered into an agreement with Actinium Pharmaceuticals, Inc.

Pursuant to the terms of the agreement, Actinium

licensed 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.

On July 7, 2022, Actinium exercised its right to purchase the FFE for $ 52,698 .

The license of FFE qualified 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 .

As of September 30,

2023 and 2022 there was no unearned interest income.

7 – OTHER POST-RETIREMENT BENEFIT PLAN

participates in a multiemployer 401(k) plan that permits eligible employees to contribute funds on a pretax basis subject to maximum

allowed under federal tax provisions.

The Company matches 100% of the first 3% of employee contributions, plus 50% of employee contributions

that exceed 3% but do not exceed 5%.

employees choose an amount from various investment options for both their contributions and the Company’s matching contribution.

The Company’s contribution expense was approximately $ 118,800 and $ 87,900 for the nine months ended September 30, 2023 and 2022,

respectively.

8 – SUBSEQUENT EVENTS

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