Filed pursuant to Rule 424(b)(3)
Registration Number 333-268700
PROSPECTUS
5,090,918 Common Shares
InMed Pharmaceuticals Inc.
This prospectus relates to the offer and resale by the selling shareholders identified herein, or the Selling Shareholders, or any of their pledgees, donees, assignees and successors-in-interest, or collectively, the permitted transferees, of up to 5,090,918 of our common shares, no par value per share, or the common shares, consisting of (i) 150,000 common shares issued to the Selling Shareholders in a private placement consummated in November 2022, or the November Private Placement, (ii) 1,668,185 common shares issuable upon exercise of pre-funded warrants issued to the Selling Shareholders in the November Private Placement and (iii) 3,272,733 common shares issuable upon the exercise of preferred investment options issued to the Selling Shareholders in the November Private Placement. See “Prospectus Summary—Recent Developments—November Private Placement” for additional information.
We will not receive any proceeds from the sale of common shares by the Selling Shareholders. However, upon (i) the cash exercise of the pre-funded warrants, we will receive the exercise price of such warrants, for an aggregate of approximately $166.82 and (ii) the cash exercise of the preferred investment options, we will receive the exercise price of such options, for an aggregate of approximately $10.0 million. We will bear all fees and expenses incident to our obligation to register the common shares covered by this prospectus. Brokerage fees, underwriting discounts and commissions, and similar expenses, if any, attributable to the sale of common shares offered hereby will be borne by the applicable Selling Shareholder.
The Selling Shareholders and any of their permitted transferees may offer and sell the common shares covered by this prospectus in a number of different ways and at varying prices. See “Plan of Distribution” beginning on page 16 for additional information.
Our common shares are listed on the Nasdaq Capital Market under the symbol “INM”. On December 6, 2022, the last reported sale price of our common shares on the Nasdaq Capital Market was $2.43 per share.
We are an “emerging growth company” and a “smaller reporting company” under the federal securities laws and are subject to reduced public company reporting requirements. See “Prospectus Summary—Implications of Being an Emerging Growth Company and a Smaller Reporting Company.”
Investing in our common shares involves a high degree of risk. Before you invest in our common shares, you should carefully read the section entitled “Risk Factors” on page 6 of this prospectus, and other risk factors contained in any applicable prospectus supplement and in the documents incorporated by reference herein and therein.
We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should carefully read this entire prospectus, any amendments or supplements, and the documents incorporated or deemed incorporated by reference herein and therein, before you make your investment decision.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Prospectus dated December 15, 2022
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS AND EXCHANGE RATES
You should rely only on the information contained in, or incorporated by reference into, this prospectus, and any applicable prospectus supplement or free writing prospectus that we have authorized for use in connection with this offering. Neither we nor the Selling Shareholders have authorized anyone to provide you with additional information or information that is different. This prospectus is an offer to sell only the securities offered hereby and only under circumstances and in jurisdictions where it is lawful to do so. The information appearing in this prospectus is accurate only as of the date of this prospectus and any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or of any sale of the common shares offered hereby. Our business, financial condition, results of operations and prospects may have changed since those dates.
We obtained the industry, market and competitive position data in this prospectus and the documents incorporated by reference herein from our own internal estimates and research as well as from industry and general publications and research surveys and studies conducted by third parties. This information involves many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and reports. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the heading “Risk Factors” in this prospectus and under similar headings in the documents incorporated by reference into this prospectus, that could cause results to differ materially from those expressed or implied in these publications and reports.
For investors outside the United States: Neither we nor the Selling Shareholders have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons who come into possession of this prospectus in a jurisdiction outside the United States must inform themselves about, and observe any restrictions relating to, this offering and the distribution of this prospectus.
This prospectus contains references to our trademark and to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we or the applicable licensor will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other entities.
Unless otherwise indicated, references in this prospectus to “$” or “United States dollars” are to United States dollars. Canadian dollars are referred as “Canadian dollars” or “C$”.
The high, low, average and closing rates for Canadian dollars in terms of the United States dollar for each of the periods indicated, as quoted by the Bank of Canada, were as follows:
| Year Ended June 30 | |||||||||
| 2022 | 2021 | 2020 | |||||||
| High for period | C$ | 1.3039 | C$ | 1.3616 | C$ | 1.4496 | |||
| Average for the period | C$ | 1.2659 | C$ | 1.2823 | C$ | 1.3427 | |||
| Low for period | C$ | 1.2329 | C$ | 1.2040 | C$ | 1.2970 | |||
| Rate at end of period | C$ | 1.2886 | C$ | 1.2394 | C$ | 1.3628 | |||
On December 6, 2022, the Bank of Canada daily rate of exchange was $1.00 = C$1.3649 or C$1.00 = $0.7327.
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This summary highlights selected information contained in other parts of this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in our securities and it is qualified in its entirety by, and should be read in conjunction with, this entire prospectus and the information incorporated herein by reference to our other filings with the Securities and Exchange Commission, or SEC. Investing in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described herein or incorporated by reference herein, together with all of the other information in this prospectus, including our financial statements and related notes, before investing in our securities. If any of the risks described herein or incorporated by reference herein materialize, our business, financial condition, operating results and prospects could be materially and adversely affected. In that event, the price of our securities could decline, and you could lose part or all of your investment.
Unless the context indicates otherwise, as used in this prospectus, the terms “we,” “us,” “our,” “our company,” “our business” or similar terms, refer to InMed Pharmaceuticals Inc., and our wholly-owned subsidiaries.
Overview
We are a clinical stage pharmaceutical company developing a pipeline of prescription-based products, including rare cannabinoids and novel cannabinoid analogs (together, Product Candidates) targeting the treatment of diseases with high unmet medical needs. We also have significant know-how in developing proprietary manufacturing approaches to produce cannabinoids for various market sectors, or Products.
We are developing multiple manufacturing approaches for synthesizing rare cannabinoids for potential use in pharmaceutical Product Candidates and Products. Our know-how includes traditional approaches such as chemical synthesis and biosynthesis, as well as a proprietary, integrated manufacturing approach called IntegraSynTM. We are dedicated to delivering new therapeutic alternatives to patients and consumers who may benefit from cannabinoid-based products. Our approach leverages the several thousand years’ history of health benefits attributed to the Cannabis plant and brings this anecdotal information into the 21st century by applying tried, tested and true scientific approaches to establish non-plant-derived (synthetically manufactured), individual cannabinoids and cannabinoid analogs compounds as Product Candidates in important market segments including clinically-proven, FDA-approved medicines and Products that are provided to wholesalers and end-product manufacturers. While our activities do not involve the direct use of Cannabis or extracts from the plant, we note that the U.S. Food and Drug Administration, or the FDA, has, to date, not approved any marketing application for Cannabis for the treatment of any disease or condition and has approved only one Cannabis-derived and three Cannabis-related drug products. Our ingredients are synthetically made and, therefore, we have no interaction with the Cannabis plant. We do not grow or utilize Cannabis or its extracts in any of our Products or Product Candidates; our current pharmaceutical drug Product Candidates are applied topically, although future drug candidates may utilize other routes of administration; and, we do not utilize tetrahydrocannabinol, or THC, or cannabidiol, or CBD, the most common cannabinoid compounds that are typically extracted from the Cannabis plant, in any of our Products or Product Candidates. The active pharmaceutical ingredient, or API, under development for our initial two drug candidates, INM-755 for Epidermolysis bullosa, or EB, and INM-088 for glaucoma, is cannabinol, or CBN. Additional uses of both INM-755 and INM-088 are being explored, as well as the application of novel cannabinoid analogs as part of our INM-900 series program to treat diseases including but not limited to neurodegenerative diseases such as Alzheimer’s, Parkinson’s and Huntington’s.
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We believe we are positioned to develop multiple pharmaceutical Product Candidates for diseases which may benefit from medicines based on rare cannabinoid compounds. Most currently approved cannabinoid therapies are based specifically on CBD and/or THC and are often delivered orally, which has limitations and drawbacks, such as side effects (including the intoxicating effects of THC). Currently, we intend to deliver our rare cannabinoid pharmaceutical drug candidates through various topical formulations (cream for dermatology, eye drops for ocular diseases) as a way of enabling treatment of the specific disease at the site of disease while seeking to minimize systemic exposure and any related unwanted systemic side effects, including any drug-drug interactions and any metabolism of the active pharmaceutical ingredient by the liver. The cannabinoid products sold through our B2B raw material supply business are integrated into various product formats by the companies who then further commercialize such products. We plan to access rare cannabinoids via all non-plant-based approaches, including chemical synthesis, biosynthesis and our proprietary integrated IntegraSynTM approach, thus negating any interaction with or exposure to the Cannabis plant.
Additional information concerning our company and our business is set forth in our most recent annual report on Form 10-K filed with the SEC, and our most recent quarterly report filed with the SEC subsequent to such annual report, both of which are incorporated herein by reference.
Corporate Information
We were originally incorporated in the Province of British Columbia, under the British Columbia Business Corporations Act, or BCBCA, on May 19, 1981 and we have undergone a number of corporate name and business sector changes since such incorporation, ultimately changing our name to “InMed Pharmaceuticals Inc.” on October 6, 2014 to signify our intent to specialize in cannabinoid pharmaceutical product development. On October 13, 2021, we acquired BayMedica Inc. (now named BayMedica LLC), or BayMedica. Upon the closing of the transaction, BayMedica became our wholly-owned subsidiary. Our principal executive offices are located at Suite 310 - 815 West Hastings Street, Vancouver, British Columbia, Canada, V6C 1B4, and our telephone number is (604) 669-7207. Our internet address is https://www.inmedpharma.com. The information contained in or accessible from our website is not incorporated into this prospectus, and you should not consider it part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
Implications of Being an Emerging Growth Company and a Smaller Reporting Company
We are an “emerging growth company” as defined in the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of exemptions from various disclosure and reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to:
| ● | our exemption from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002; |
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| ● | being permitted to present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, in each case, instead of three years; |
| ● | reduced disclosure obligations regarding executive compensation, including no Compensation Disclosure and Analysis; |
| ● | our exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; and |
| ● | our exemption from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. |
We may take advantage of these exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of (i) June 30, 2026, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common shares held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
We may choose to take advantage of some but not all of these exemptions. We have taken advantage of reduced reporting requirements in this prospectus and in the documents incorporated by reference into this prospectus. Accordingly, the information contained or incorporated by reference herein may be different from the information you receive from other public companies in which you hold stock.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we may adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-public companies instead of the dates required for other public companies.
We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies until the fiscal year following the determination that our voting and non-voting common shares held by non-affiliates is $250 million or more, as measured on the last business day of our second fiscal quarter, or our annual revenues are less than $100 million during the most recently completed fiscal year and our voting and non-voting common shares held by non-affiliates is $700 million or more, as measured on the last business day of our second fiscal quarter.
Recent Developments
Reverse Stock Split
Effective September 7, 2022, we effected a 1-for-25 share consolidation, or the Reverse Stock Split, of all our issued and outstanding common shares. As a result of the Reverse Stock Split, each 25 of our common shares issued and outstanding pre-consolidation were automatically combined and converted into one share post-share consolidation. Unless otherwise indicated, all share numbers in this prospectus, including common shares and all securities convertible into common shares, give effect to the Reverse Stock Split.
November Private Placement
On November 21, 2022, we consummated a private placement with the Selling Shareholders pursuant to which we issued (i) 150,000 common shares, (ii) pre-funded warrants to purchase up to an aggregate of 1,668,185 common shares and (iii) preferred investment options to purchase up to an aggregate of 3,272,733 common shares. We refer to this private placement in this prospectus as the November Private Placement. In connection with the November Private Placement, the Selling Shareholders agreed to cancel preferred investment options to purchase up to an aggregate of 1,383,490 of our common shares which had been previously issued to the Selling Shareholders.
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The pre-funded warrants issued in the November Private Placement have an exercise price of $0.0001 per pre-funded warrant, are currently exercisable and do not expire. The terms of the pre-funded warrants preclude a holder thereof from exercising such holder’s pre-funded warrants, and us from giving effect to such exercise, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of (i) with respect to one of the Selling Shareholders, 9.99% of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise and (ii) with respect to the other Selling Shareholder, 4.99% (or, upon election by a holder prior to the issuance of any preferred investment options or pre-funded warrants, 9.99%) of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise.
The preferred investment options issued to the Selling Shareholders in the November Private Placement have an exercise price of $3.044 per share, are currently exercisable and will expire seven years from the date of issuance. The terms of the preferred investment options issued to the Selling Shareholders preclude a holder thereof from exercising such holder’s preferred investment option, and us from giving effect to such exercise, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% (or, upon election by a holder prior to the issuance of any preferred investment options, 9.99%) of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise.
A holder may increase or decrease the beneficial ownership thresholds specified above, except that the beneficial ownership limitation may not exceed 9.99% in any event.
In connection with the November Private Placement, we entered into a registration rights agreement with the Selling Shareholders, or the Registration Rights Agreement, which grants the Selling Shareholders certain registration rights and obligates us to file one or more registration statements with the SEC by certain dates, covering the resale of the common shares sold in the November Private Placement and the common shares issuable upon exercise of the pre-funded warrants and preferred investment options sold in the November Private Placement. The common shares issued to the Selling Shareholders in the November Private Placement and the common shares underlying the pre-funded warrants and preferred investment options issued to the Selling Shareholders in the November Private Placement are the common shares being registered for resale pursuant to this prospectus, in accordance with the Registration Rights Agreement.
In connection with the November Private Placement, we also issued preferred investment options to purchase up to an aggregate of 118,182 of our common shares to designees of the exclusive placement agent for the November Private Placement. Such preferred investment options have an exercise price of $4.125 per share, are currently exercisable and will expire seven years from the date of issuance. A holder of the preferred investment options issued to the designees of the placement agent is precluded from exercising such holder’s preferred investment option, and we are precluded from giving effect to such exercise, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% (or, upon election by a holder prior to the issuance of any preferred investment options, 9.99%) of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise.
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The Offering
| Securities Offered by the Selling Shareholders | 5,090,918 common shares consisting of (i) 150,000 common shares issued in the November Private Placement, (ii) 1,668,185 common shares issuable upon exercise of pre-funded warrants issued in the November Private Placement and (iii) 3,272, 733 common shares issuable upon the exercise of preferred investment options issued to the Selling Shareholders in the November Private Placement. | |
| Common Shares Outstanding Before this Offering | 908,761 (1) | |
| Common Shares Outstanding After this Offering (assuming full exercise of the pre-funded warrants and preferred investment options exercisable for common shares registered hereby) | 5,999,679 | |
| Use of Proceeds | We will not receive any of the proceeds from the sale of common shares being offered for sale by the Selling Shareholders. However, upon (i) the cash exercise of the pre-funded warrants we will receive the exercise price of such warrants, for an aggregate amount of approximately $166.82 and (ii) the cash exercise of the preferred investment options, we will receive the exercise price of such options, for an aggregate amount of approximately $10.0 million. See “Use of Proceeds” for further information. | |
| Nasdaq Capital Market Symbol | “INM”. | |
| Risk Factors | Please read “Risk Factors” and other information included in, or incorporated by reference into, this prospectus, for a discussion of factors you should carefully consider before deciding to invest in the securities offered pursuant to this prospectus. |
| (1) | The number of common shares outstanding before this offering is based on an aggregate of 908,761 shares outstanding as of September 30, 2022 and does not include: |
| ● | 77,645 common shares issuable upon the exercise of non-prefunded share purchase warrants outstanding as of September 30, 2022, with a weighted average exercise price of $104.14 per share; |
| ● | 601,245 common shares issuable upon the exercise of pre-funded warrants outstanding as of September 30, 2022, with a weighted average exercise price of $0.0001 per share; |
| ● | 1,442,573 common shares issuable upon the exercise of preferred investment options outstanding as of September 30, 2022, with a weighted average exercise price of $8.71 per share, of which preferred investment options to purchase 1,383,490 have since been cancelled; |
| ● | 53,466 common shares issuable upon exercise of options outstanding as of September 30, 2022, with a weighted-average exercise price of $124.74 per share; and |
| ● | 20,300 common shares available for future issuance as of September 30, 2022, under the InMed Pharmaceuticals Inc. Amended 2017 Stock Option Plan. |
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Investing in our common shares involves a high degree of risk and uncertainties. You should carefully consider the following risk described below, together with the information under the heading “Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K, which is incorporated herein by reference, as updated or superseded by the risks and uncertainties described under similar headings or elsewhere in the other documents that are filed after the date hereof and incorporated by reference into this prospectus, together with all of the other information contained or incorporated by reference in this prospectus, and any free writing prospectus that we have authorized for use in connection with this offering before you make a decision to invest in our common shares. The risks described in these documents are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be materially adversely affected. This could cause the trading price of our common shares to decline, resulting in a loss of all or part of your investment. Please also carefully read the section titled “Special Note Regarding Forward-Looking Statements.”
Additional Risk Related to this Offering and Our Common Shares
Sales by the Selling Shareholders of the common shares covered by this prospectus could adversely affect the market price of our common shares.
Assuming full exercise of the pre-funded warrants and the preferred investment options the underlying common shares of which form a part of the common shares being registered hereby, and without giving effect to the beneficial ownership limitations related to the pre-funded warrants and preferred investment options described elsewhere in this prospectus, the 5,090,918 common shares registered hereby represent approximately 560.2% of our total outstanding shares of common shares as of September 30, 2022. The resale of all or a substantial number of these shares in the public market by the Selling Shareholders, or the perception that such sales might occur, could depress the market price of our common shares, which could impair our ability to raise capital through the sale of additional equity or equity-linked securities.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference into this prospectus, including the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contain forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements, other than statements of historical facts contained herein or in the documents incorporated herein by reference may be deemed forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in or incorporated by reference into this prospectus include, but are not limited to, statements about:
| ● | Our researching, developing, manufacturing and commercializing cannabinoid-based biopharmaceutical products will treat diseases with high unmet medical needs; |
| ● | The continued optimization of cannabinoid manufacturing approaches; |
| ● | Our success in initiating discussions with potential partners for licensing various aspects of our Product Candidates; |
| ● | Our ability to commercialize and, where required, register Product Candidates and Products in the United States and other jurisdictions; |
| ● | Our ability to successfully access existing manufacturing capacity via leases with third parties or to transfer our manufacturing processes to contract manufacturing organizations; |
| ● | Our belief that our manufacturing approaches that we are developing are robust and effective and will result in high yields of cannabinoids and will be a significant improvement upon existing manufacturing platforms; |
| ● | Our belief that that INM-755 offers specific advantages and will prove to provide the extensive relief symptomology with the added potential of addressing the underlying disease in Epidermolysis Bullosa, or EB; |
| ● | The structure and timing of future INM-755 studies including that we will complete patient enrollment into our Phase II study in EB in 2022; |
| ● | The ability of the IntegraSynTM approach to introduce a revenue stream to us before the expected commercial approval of our therapeutic programs; |
| ● | Our ability to advance the INM-900 series program for the treatment of neurodegenerative diseases; |
| ● | The potential of selected cannabinoid analogs in the INM-900 series program to inhibit or slow progression of neurodegenerative disease in a population of affected neurons; |
| ● | Our ability to successfully scale up our IntegraSynTM or other cost-effective approaches so that it will be commercial-scale ready after Phase II clinical trials are completed, after which time we may no longer need to source APIs from API manufacturers; |
| ● | The success of the key next steps in our manufacturing approaches, including continuing efforts to diversify the number of cannabinoids produced, scaling-up the processes to larger vessels and identifying external vendors to assist in the commercial scale-up of the process; |
| ● | Our ability to successfully make determinations as to which research and development programs to continue based on several strategic factors; |
| ● | Our ability to monetize our IntegraSynTM manufacturing approach to the broader pharmaceutical industry; |
| ● | Our ability to continue to outsource the majority of our research and development activities through scientific collaboration agreements and arrangements with various scientific collaborators, academic institutions and their personnel; |
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| ● | The success of work to be conducted under the research and development collaboration between us and various contract development and manufacturing organizations; |
| ● | Our ability to develop our therapies through early human testing; |
| ● | Our ability to evaluate the financial returns on various commercialization approaches for our Product Candidates, such as a ‘go it-alone’ commercialization effort, out-licensing to third parties, or co-promotion agreements with strategic collaborators; |
| ● | Our ability to oversee clinical trials for INM-755 in EB and building the requisite internal commercialization infrastructure to self-market the product to EB clinics; |
| ● | Our ability to find a partnership early in the development process for INM-088 in glaucoma; |
| ● | Our ability to explore our manufacturing technologies as processes which may confer certain benefits, either cost, yield, speed, or all of the above, when pursuing specific types of cannabinoids, and filing a provisional patent application for same; |
| ● | Plans regarding our next steps, options, and targeted benefits of our manufacturing technologies; |
| ● | Our IntegraSynTM or BayMedica derived products being bio-identical to the naturally occurring cannabinoids, and offering superior ease, control and quality of manufacturing when compared to alternative methods; |
| ● | Our ability to potentially earn revenue from our IntegraSynTM approach by (i) becoming a supplier of APIs to the pharmaceutical industry and/or (ii) providing pharmaceutical-grade ingredients to the non-pharmaceutical market; |
| ● | Our plans to work closely with regulatory authorities and clinical experts in developing the clinical program for INM-755; |
| ● | Our ability to successfully prosecute patent applications; |
| ● | Our ability to complete formulation development and scale-up, conduct additional preclinical studies, and initiate and complete IND/CTA-enabling toxicology studies in calendar year 2023 for INM-088; |
| ● | INM-088 being a once-a-day or twice-a-day eye drop medication that will compete with treatment modalities in the medicines category, and with the potential of INM-088 assisting in reducing the high rate of non-adherence with current glaucoma therapies; |
| ● | Our belief that with a novel delivery system, the reduction of intraocular pressure (IOP) and/or providing neuroprotection in glaucoma patients by topical (eye drop) application of cannabinoids will hold significant promise as a new therapy; |
| ● | The potential for any of our patent applications to provide intellectual property protection for us; |
| ● | Our ability to secure insurance coverage for shipping and storage of Product Candidates, and clinical trial insurance; |
| ● | Our ability to expand our insurance coverage to include the commercial sale of Products and Product Candidates; |
| ● | Developing patentable New Chemical Entities which, if issued, will confer market exclusivity to us for the potential development into pharmaceutical Product Candidates, license, partner or sell to interested external parties; |
| ● | Our ability to initiate discussions and conclude strategic partnerships to assist with development of certain programs; |
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| ● | Our ability to position ourselves to achieve value-driving, near-term milestones for our Product Candidates with limited investment; |
| ● | Our ability to execute our business strategy; |
| ● | Critical accounting estimates; |
| ● | Management’s assessment of future plans and operations; |
| ● | The outlook of our business and the global economic and geopolitical conditions; and |
| ● | The competitive environment in which we and our business units operate. |
These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this prospectus or the dates of the documents incorporated herein by reference, as applicable, and are subject to risks and uncertainties. We discuss many of these risks in greater detail under “Risk Factors” in this prospectus and under similar headings in the documents incorporated herein by reference. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in or implied by any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
You should read this prospectus, the documents incorporated by reference herein and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in or incorporated by reference into this prospectus by these cautionary statements. Except as required by law, each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
We will not receive any proceeds from the sale of common shares by the Selling Shareholders. However, upon (i) the cash exercise of the pre-funded warrants, we will receive the exercise price of such warrants, for an aggregate of approximately $166.82 and (ii) the cash exercise of the preferred investment options, we will receive the exercise price of such options, for an aggregate of approximately $10.0 million. We will bear all fees and expenses incident to our obligation to register the common shares covered by this prospectus. Brokerage fees, underwriting discounts and commissions, and similar expenses, if any, attributable to the sale of common shares offered hereby will be borne by the applicable Selling Shareholder.
We have never declared or paid any cash dividends on our common shares to date. We do not anticipate declaring or paying, in the foreseeable future, any cash dividends on our common shares. We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. Any future determination related to our dividend policy will be made at the discretion of our board of directors, or our Board, and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our Board may deem relevant.
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The table below sets forth certain information known to us regarding the beneficial ownership of our common shares as of November 21, 2022 by:
| ● | each person, or group of affiliated persons, known by us to be the beneficial owner of more than 5% of our outstanding common shares; |
| ● | each of our directors and named executive officers; and |
| ● | all our directors and executive officers as a group. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security. Under those rules, beneficial ownership includes securities that the person has the right to acquire, such as through the exercise of options or warrants, within 60 days of November 21, 2022. Common shares subject to options, warrants or other convertible securities that are currently exercisable or exercisable within 60 days of November 21, 2022 are considered outstanding and beneficially owned by the person holding such options, warrants or other convertible securities for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Except as noted by footnote, and subject to community property laws where applicable, based on the information provided to us, we believe that the persons named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. The percentage of beneficial ownership of our common shares is calculated based on 1,589,987 common shares issued and outstanding as of November 21, 2022.
Unless otherwise noted, the business address of each of the individuals and entities listed in the table below is Suite 310 - 815 West Hastings Street, Vancouver, British Columbia, Canada, V6C 1B4.
| Name and Address of Beneficial Owner | Number of Common Shares Beneficially Owned | Percentage of Common Shares Beneficially Owned (%) | ||||||
| Five Percent Shareholders: | ||||||||
| Armistice Capital Master Fund Ltd. | 3,388,244 | (1) | 9.99 | (2) | ||||
| Sabby Volatility Warrant Master Fund, Ltd. | 2,171,191 | (3) | 4.99 | (4) | ||||
| Named Executive Officers and Directors: | ||||||||
| Eric A. Adams(5) | 13,361 | * | ||||||
| Alexandra Mancini(6) | 3,492 | * | ||||||
| Eric Hsu(7) | 4,029 | * | ||||||
| Bruce Colwill(8) | 5,273 | * | ||||||
| William J. Garner(9) | 644 | * | ||||||
| Andrew Hull(10) | 1,402 | * | ||||||
| Janet Grove(11) | 176 | * | ||||||
| Bryan Baldasare(12) | 128 | * | ||||||
| Nicole Lemerond(13) | 80 | * | ||||||
| All other executive officers as a group(14) | 3,475 | * | ||||||
| All executive officers and directors as a group (11 persons)(15) | 32,060 | 1.98 | ||||||
| * | Less than 1%. |
| (1) | Consists of (i) 150,000 common shares, (ii) 910,610 common shares issuable upon presently exercisable pre-funded warrants, and (iii) 2,327,634 common shares issuable upon presently exercisable preferred investment options. The terms of the pre-funded warrants preclude a holder thereof from exercising such holder’s pre-funded warrants, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 9.99% of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise. The terms of the preferred investment options preclude a holder thereof from exercising such holder’s preferred investment option or warrant, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise. The securities are directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company, and may be deemed to be indirectly beneficially owned by (i) Armistice Capital, LLC, as the investment manager of Armistice Capital Master Fund Ltd. and (ii) Steven Boyd, as the Managing Member of Armistice Capital, LLC. Armistice Capital, LLC and Steven Boyd disclaim beneficial ownership of the securities except to the extent of their respective pecuniary interests therein. The address for the foregoing entities is c/o Armistice Capital, LLC, 510 Madison Avenue, 7th Floor, New York, NY 10022. |
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| (2) | Based solely on the 150,000 common shares beneficially owned and 9,750 of the 910,610 common shares underlying presently exercisable pre-funded warrants, and does not include 900,860 of the 910,610 common shares issuable upon presently exercisable pre-funded warrants and the 2,327,634 common shares issuable upon presently exercisable preferred investment options, the exercise of which pre-funded warrants and preferred investment options are subject to the beneficial ownership limitations discussed in footnote 1 above and elsewhere in this prospectus. |
| (3) | Consists of (i) 49,981 common shares, (ii) 757,575 common shares issuable upon exercise of presently exercisable pre-funded warrants and (iii) 1,363,635 common shares issuable upon exercise of presently exercisable preferred investment options. The terms of the pre-funded warrants and preferred investment options preclude a holder thereof from exercising such holder’s pre-funded warrant or preferred investment option, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% (or, upon election by a holder prior to the issuance of any preferred investment options, 9.99%) of the number of common shares outstanding immediately after giving effect to the issuance of common shares issuable upon such exercise. Sabby Management, LLC is the investment manager of Sabby Volatility Warrant Master Fund, Ltd. and shares voting and investment power with respect to these shares in this capacity. As manager of Sabby Management, LLC, Hal Mintz also shares voting and investment power on behalf of Sabby Volatility Warrant Master Fund, Ltd. Each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over the securities listed except to the extent of their pecuniary interest therein. |
| (4) | Based solely on the 49,981 common shares beneficially owned and 30,900 of the 757,575 common shares underlying presently exercisable pre-funded warrants, and does not include 726,675 of the 757,575 common shares issuable upon exercise of presently exercisable pre-funded warrants and the 1,363,635 common shares issuable upon exercise of presently exercisable preferred investment options, the exercise of which pre-funded warrants and preferred investment options are subject to the beneficial ownership limitations discussed in footnote 3 above and elsewhere in this prospectus. |
| (5) | Consists of (i) 2,359 common shares and (ii) 11,002 common shares issuable pursuant to options presently exercisable or exercisable within 60 days of November 21, 2022. Not reflected in the table are 597 common shares beneficially owned by Mr. Adams’ spouse. Mr. Adams disclaims beneficial ownership in the 597 common shares held by his spouse. |
| (6) | Consists of (i) 240 common shares and (ii) 3,252 common shares issuable pursuant to options presently exercisable or exercisable within 60 days of November 21 , 2022. |
| (7) | Consists of (i) 51 common shares and (ii) 3,978 common shares issuable pursuant to options presently exercisable or exercisable within 60 days of November 21 , 2022. |
| (8) | Consists of (i) 461 common shares and (ii) 4,812 common shares pursuant to options presently exercisable or exercisable within 60 days of November 21, 2022. Mr. Colwill resigned from his position as the Chief Financial Officer effective March 31, 2022, and transitioned to the role of an advisor of our company until June 30, 2022. |
| (9) | Consists of 644 common shares issuable pursuant to options presently exercisable or exercisable within 60 days of November 21, 2022. Not reflected in the table are 152 common shares beneficially owned by Dr. Garners’ spouse. Dr. Garner disclaims beneficial ownership in the 152 common shares held by his spouse. |
| (10) | Consists of (i) 758 common shares and (ii) 644 common shares issuable pursuant to options presently exercisable or exercisable within 60 days of November 21, 2022. |
| (11) | Consists of 176 common shares issuable pursuant to options presently exercisable or exercisable within 60 days of November 21, 2022. |
| (12) | Consists of 128 common shares issuable pursuant to options presently exercisable or exercisable within 60 days of November 21, 2022. |
| (13) | Consists of 80 common shares issuable pursuant to options presently exercisable or exercisable within 60 days of November 21, 2022. |
| (14) | Consists of (i) 21 common shares and (ii) 3,454 common shares issuable pursuant to options presently exercisable or exercisable within 60 days of November 21, 2022. |
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 11, 2022, our Board appointed Janet Grove as a member of the Board. Ms. Grove is a Partner of Norton Rose Fulbright Canada LLP. From February 11, 2022 to December 7, 2022, Norton Rose Fulbright Canada LLP rendered legal services in the amount of $191,916 to our company. These transactions were in the normal course of operations and were measured at the exchange amount which represented the amount of consideration established and agreed to by Norton Rose Fulbright Canada LLP.
Except as disclosed above, and except for compensation arrangements for our directors and executive officers, which are disclosed in documents incorporated by reference into this prospectus, since July 1, 2019, there has not been and there is not currently proposed, any transaction or series of similar transactions to which:
| ● | we were, or will be, a participant; |
| ● | the amount involved exceeded, or will exceed, $120,000; and |
| ● | in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of, or entities affiliated with, any of the foregoing persons, had, or will have, a direct or indirect material interest. |
Indemnification Agreements
Our Amended and Restated Articles, or our Articles, contain provisions limiting the liability of directors and provide that we will indemnify each of our directors and officers to the fullest extent permitted under law. In addition, we have entered into an indemnification agreement with each of our directors, which requires us to indemnify them.
Policies and Procedures for Transactions with Related Persons
We have adopted a written policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common shares and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related person transaction with us without the approval or ratification of our Board or the audit committee of our Board. Any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of any class of our capital stock, or any member of the immediate family of any of the foregoing persons, in which the amount involved exceeds $120,000 and such person would have a direct or indirect interest, must be presented to our Board or the Board’s audit committee for review, consideration and approval. In approving or rejecting any such proposal, our Board or its audit committee is to consider the material facts of the transaction, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
General
Our authorized share capital consists of an unlimited number of common shares without par value and an unlimited number of preferred shares without par value. As of the date of this prospectus, we had 1,589,987 common shares issued and outstanding and no preferred shares issued and outstanding.
The description of our securities contained herein is a summary only and may be exclusive of certain information that may be important to you. For more complete information, you should read our Articles, which have been filed with the SEC and incorporated as an exhibit to the registration statement of which this prospectus forms a part.
Common Shares
Each common share entitles the holder thereof to one vote at all meetings of shareholders.
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There are no limitations on the rights of non-Canadian owners to hold or vote common shares.
In the event of our liquidation, dissolution or winding-up, whether voluntary or involuntary, or other distribution of our assets among shareholders for the purpose of winding up our affairs, subject to the rights, privileges and restrictions attaching to any preferred shares that may then be outstanding, the shareholders shall be entitled to receive our remaining property.
The shareholders are entitled to receive dividends, as and when declared by our Board, subject to the rights, privileges and restrictions attaching to our securities, which may be paid in money, property or by the issue of fully paid shares in our capital. However, we do not anticipate paying any cash dividends for the foreseeable future, and instead intend to retain future earnings, if any, for use in the operation and expansion of our business.
Pre-Funded Warrants and Preferred Investment Options
The pre-funded warrants and preferred investment options, the underlying shares of which form a part of the common shares being registered hereby, and preferred investment options issued to the designees of the November Private Placement, are described under “Prospectus Summary—Recent Developments—November Private Placement.”
As of November 21, 2022, we had 1,738,204 pre-funded warrants outstanding and 3,450,998 preferred investment options and other warrants outstanding.
Certain Takeover Bid Requirements
Unless such offer constitutes an exempt transaction, an offer made by a person to acquire outstanding shares of a Canadian entity that, when aggregated with the offeror’s holdings (and those of persons or companies acting jointly with the offeror), would constitute 20% or more of the outstanding shares, would be subject to the take-over provisions of Canadian securities laws. The foregoing is a limited and general summary of certain aspects of applicable securities law in the provinces and territories of Canada, all in effect as of the date hereof.
In addition to the take-over bid requirements noted above, the acquisition of shares may trigger the application of additional statutory regimes including amongst others, the Investment Canada Act and the Competition Act.
This summary is not a comprehensive description of relevant or applicable considerations regarding such requirements and, accordingly, is not intended to be, and should not be interpreted as, legal advice to any prospective purchaser and no representation with respect to such requirements to any prospective purchaser is made. Prospective investors should consult their own Canadian legal advisors with respect to any questions regarding securities law in the provinces and territories of Canada.
Actions Requiring a Special Majority
Under the BCBCA, unless otherwise stated in the Articles, certain corporate actions require the approval of a special majority of shareholders, meaning holders of shares representing 662/3% of those votes cast in respect of a shareholder vote addressing such matter. Those items requiring the approval of a special majority generally relate to fundamental changes with respect to our business, and include amongst others, resolutions: (i) removing a director prior to the expiry of his or her term; (ii) altering the Articles, (iii) approving an amalgamation; (iv) approving a plan of arrangement; and (v) providing for a sale of all or substantially all of our assets.
Transfer Agent and Registrar
The transfer agent and registrar for our common shares is Computershare Investor Services Inc., 100 University Avenue, 9th Floor, Toronto, Ontario, Canada M5J 2Y1.
Listing
Our common shares are currently quoted under the symbol “INM” on the Nasdaq Capital Market.
Holders
As of October 24 , 2022, there were 3,743 holders of record of our issued and outstanding common shares.
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The common shares being offered by the Selling Shareholders are those previously issued to the Selling Shareholders, and those issuable to the Selling Shareholders upon exercise of the pre-funded warrants and preferred investment options, in each case, issued to the Selling Shareholders in the November Private Placement. For additional information regarding the issuances of those common shares, pre-funded warrants and preferred investment options, see “Prospectus Summary—Recent Developments—November Private Placement” above. We are registering the common shares in order to permit the Selling Shareholders to offer the shares for resale from time to time. Except for participation in our previous offerings and the ownership of the common shares, the pre-funded warrants and the preferred investment options, the Selling Shareholders have not had any material relationship with us within the past three years.
The table below lists the Selling Shareholders and other information regarding the beneficial ownership of our common shares by each of the Selling Shareholders. The second column lists the number of common shares beneficially owned by each Selling Shareholder, based on its ownership of the common shares, warrants and preferred investment options, as of the date of this prospectus, assuming exercise of the pre-funded warrants and preferred investment options held by the Selling Shareholders on that date, without regard to any limitations on exercises.
The third column lists the common shares being offered by this prospectus by the Selling Shareholders.
In accordance with the terms of the Registration Rights Agreement, this prospectus generally covers the resale of the sum of (i) the number of common shares issued to the Selling Shareholders in the November Private Placement and (ii) the maximum number of common shares issuable upon exercise of the pre-funded warrants and preferred investment options issued to the Selling Shareholders in the November Private Placement, determined as if the outstanding pre-funded warrants and preferred investment options were exercised in full as of the trading day immediately preceding the date this registration statement was initially filed with the SEC, each as of the trading day immediately preceding the applicable date of determination and all subject to adjustment as provided in the Registration Right Agreement, without regard to any limitations on the exercise of the pre-funded warrants and preferred investment options.
The table is based on information supplied to us by the Selling Shareholders, with beneficial ownership determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to common shares. This information does not necessarily indicate beneficial ownership for any other purpose. In computing the number of common shares beneficially owned by a Selling Shareholder, common shares subject to warrants or preferred investment options held by that Selling Shareholder that are currently exercisable for common shares or exercisable for common shares within 60 days after the date of this prospectus, are deemed outstanding.
The terms of the pre-funded warrants and preferred investment options contain certain beneficial ownership limitations, as more particularly described under “Prospectus Summary—Recent Developments—November Private Placement” and in the footnotes to the table below. The number of shares in the second column does not reflect these limitations. The Selling Shareholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”
| Name of Selling Shareholder | Number of Common Shares Beneficially Owned Prior to Offering | Maximum Number of Common Shares to be Sold Pursuant to this Prospectus | Number of Common Shares Beneficially Owned After Offering(5) | Percentage Beneficially Owned After Offering)(5) | ||||||||||||
| Sabby Volatility Warrant Master Fund, Ltd.(1) | 2,171,191 | (2) | 2,121,210 | — | — | |||||||||||
| Armistice Capital Master Fund Ltd.(3) | 3,388,244 | (4) | 2,969,708 | — | — | |||||||||||
| (1) | Sabby Management, LLC is the investment manager of Sabby Volatility Warrant Master Fund, Ltd. and shares voting and investment power with respect to these shares in this capacity. As manager of Sabby Management, LLC, Hal Mintz also shares voting and investment power on behalf of Sabby Volatility Warrant Master Fund, Ltd. Each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over the securities listed except to the extent of their pecuniary interest therein. |
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| (2) | Consists of (i) 49,981 common shares, (ii) 757,575 common shares issuable upon the exercise of pre-funded warrants issued in the November Private Placement and (iii) 1,363,635 common shares issuable upon the exercise of preferred investment options issued in the November Private Placement. The terms of the pre-funded warrants and preferred investment options preclude a holder thereof from exercising such holder’s pre-funded warrant or preferred investment option, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% (or, upon election by a holder prior to the issuance of any preferred investment options, 9.99%) of the number of common shares outstanding immediately after giving effect to the issuance of common shares issuable upon such exercise. |
| (3) | The securities are directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company, and may be deemed to be indirectly beneficially owned by (i) Armistice Capital, LLC, as the investment manager of Armistice Capital Master Fund Ltd. and (ii) Steven Boyd, as the Managing Member of Armistice Capital, LLC. Armistice Capital, LLC and Steven Boyd disclaim beneficial ownership of the securities except to the extent of their respective pecuniary interests therein. |
| (4) | Consists of (i) 150,000 common shares issued in the November Private Placement, (ii) 910,610 common shares issuable upon the exercise of pre-funded warrants issued in the November Private Placement and (iii) 2,327,634 common shares issuable upon presently exercisable preferred investment options (1,909,098 of which preferred investment options were issued in the November Private Placement). The terms of the pre-funded warrants preclude a holder thereof from exercising such holder’s pre-funded warrants, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 9.99% of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise. The terms of the preferred investment options preclude a holder thereof from exercising such holder’s preferred investment option, if after giving effect to the issuance of common shares upon such exercise, the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% of the number of common shares outstanding immediately after giving effect to the issuance of common shares upon such exercise. |
| (5) | Because the Selling Shareholders may sell, transfer or otherwise dispose of all, some or none of the common shares covered by this prospectus, we cannot determine the number of such common shares that will be sold, transferred or otherwise disposed of by the Selling Shareholders, or the amount or percentage of our common shares that will be held by the Selling Shareholders upon completion of this offering. For purposes of this table, we have assumed that the Selling Shareholders will sell all their common shares covered by this prospectus, including common shares issuable upon exercise of the pre-funded warrants and preferred investment options issued in the November Private Placement. |
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Each Selling Shareholder of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the Nasdaq Capital Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Shareholder may use any one or more of the following methods when selling securities:
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| ● | block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| ● | an exchange distribution in accordance with the rules of the applicable exchange; |
| ● | privately negotiated transactions; |
| ● | settlement of short sales; |
| ● | in transactions through broker-dealers that agree with the Selling Shareholders to sell a specified number of such securities at a stipulated price per security; |
| ● | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
| ● | a combination of any such methods of sale; or |
| ● | any other method permitted pursuant to applicable law. |
The Selling Shareholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Shareholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Shareholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.
In connection with the sale of the securities or interests therein, the Selling Shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Shareholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
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The Selling Shareholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Shareholder has informed us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.
We are required to pay certain fees and expenses incurred by us incident to the registration of the securities. We have agreed to indemnify the Selling Shareholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Shareholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for us to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common shares for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Shareholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common shares by the Selling Shareholders or any other person. We will make copies of this prospectus available to the Selling Shareholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
Norton Rose Fulbright US LLP, which has acted as our United States counsel in connection with this offering, will pass on certain legal matters with respect to United States federal law in connection with this offering. Norton Rose Fulbright Canada LLP, which has acted as our Canadian counsel in connection with this offering, will pass on certain legal matters with respect to Canadian law in connection with this offering.
The consolidated financial statements of InMed Pharmaceuticals Inc. as of June 30, 2022 and 2021, and for each of the years in the two-year period ended June 30, 2022 have been incorporated by reference herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the June 30, 2022 consolidated financial statements contains an explanatory paragraph that states that the Company has incurred recurring losses and negative cash flows and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common shares offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our common shares, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit.
We are subject to the periodic reporting requirements of the Exchange Act and in accordance therewith file periodic reports, including, but not limited to, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, proxy statements and other information filed or furnished with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. You may read and copy (at prescribed rates) any such reports, proxy statements and other information at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. The SEC maintains an internet website that contains reports, proxy and information statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov. We also maintain a website at www.inmedpharma.com, by which you may access these materials (including the documents incorporated into this prospectus by reference) free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information that is contained on, or that may be accessed through, our website is not incorporated into this prospectus, and you should not consider it part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
SEC rules permit us to “incorporate by reference” certain information into this prospectus, which means that we can disclose important information about us by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this prospectus, except for information superseded by information contained in this prospectus or in any subsequently filed incorporated document. Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated in this prospectus. This means that you must carefully review all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded. However, we undertake no obligation to update or revise any statements we make, except as required by law.
This prospectus incorporates by reference the documents listed below and any filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (in each case, other than those documents or the portions of those documents furnished and not filed with the SEC) on or after the date of this prospectus and prior to the termination of the offering covered by this prospectus:
| · | our Annual Report on Form 10-K for the fiscal year ended June 30, 2022, filed with the SEC on September 23, 2022, as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on September 28, 2022; |
| · | our Definitive Proxy Statement on Schedule 14A, filed with the SEC on October 28, 2022; |
| · | our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022, filed with the SEC on November 14, 2022; and our Current Reports on Form 8-K, filed with the SEC on July 18, 2022, July 20, 2022, August 11, 2022, August 26, 2022, September 14, 2022, September 29, 2022, November 15, 2022, November 17, 2022, November 22, 2022, December 13, 2022, December 13, 2022 and December 13, 2022 (except, in each case, any information, including exhibits, furnished and not filed with the SEC). |
Any statement contained herein or in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded to the extent that a statement contained in this prospectus or in any subsequently filed document which is or is deemed to be incorporated by reference in this prospectus modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We will furnish without charge to each person, including any beneficial owner, to whom a prospectus is delivered, upon written or oral request, a copy of any or all of the documents incorporated by reference, including exhibits to these documents. Any such request may be made by writing or calling us at the following address or phone number:
InMed Pharmaceuticals Inc.
Suite 310 – 815 W. Hastings Street
Vancouver, BC, Canada
V6C 1B4
(604) 669-7207
Attention: Sarah Li
18
5,090,918 Common Shares
PROSPECTUS
December 15, 2022