| Description of business and summary of significant accounting policies | Note
1. Description of business and summary of significant accounting policies Overview MIRA
Pharmaceuticals, Inc., a Florida corporation (“we,” “us,” “our,” “MIRA,” or the
“Company”), is a pre-clinical-stage pharmaceutical development company
with two neuroscience programs targeting a broad range of neurologic and neuropsychiatric disorders. We hold exclusive license
rights in the U.S., Canada and Mexico for Ketamir-2, a novel, patent pending oral ketamine analog under pre-clinical investigation
to potentially deliver ultra-rapid antidepressant effects, providing hope for individuals battling treatment-resistant depression
(“TRD”), major depressive disorder with suicidal ideation (MDSI), and potentially post-traumatic stress disorder (“PTSD”). Additionally,
our novel oral pharmaceutical marijuana, MIRA-55, is currently under investigation for its potential to alleviate neuropathic pain,
as well as anxiety and cognitive decline, symptoms often associated with early-stage dementia. MIRA-55, if approved by the U.S. Food and Drug Administration (“FDA”),
could mark a significant advancement in addressing various neuropsychiatric, inflammatory, and neurologic diseases and
disorders. The
U.S. Drug Enforcement Administration’s (“DEA”) scientific review of Ketamir-2 concluded that it would not be considered a controlled
substance or listed chemical under the Controlled Substances Act (“CSA”) and its governing regulations. Additionally, we have submitted
the required paperwork for MIRA-55 to be evaluated by the DEA. We
were incorporated under the laws of the State of Florida in September 2020 and commenced substantive operations, including our pharmaceutical development program, in late 2020. Our
accounting and reporting policies conform to accounting principles generally accepted in the United States of America
(“GAAP”). As
used herein, the Company’s Common Stock, par value $ 0.0001 0.0001 Operating
updates In
early February 2024, we made a significant discovery during the manufacturing and scale-up process of our patented molecule known as
“MIRA1a,” which we believed was the molecule used in our pre-clinical trials and had been synthesized by a contract manufacturer.
Through this process, we identified a novel and improved version of the molecule, which we call MIRA-55. As
part of our due diligence and subsequent testing, which began in late 2023, we discovered that the pre-clinical studies we
conducted, previously attributed to MIRA1a, were in fact performed on MIRA-55. Following this revelation, in early March 2024, we
promptly filed a provisional patent for MIRA-55, which encompasses all pre-clinical studies disclosed in our two registration
statements on Form S-1, declared effective on August 2, 2023 and December 27, 2023 (File Nos. 333-273024 and 333-276118,
respectively). If such patent is issued, we would own the patent rights to both MIRA1a and MIRA-55. Moreover,
based on our pre-clinical analyses to date, we believe that MIRA-55 is an improvement over MIRA1a in that it displays enhanced potency
and potential for efficacy. Additional
testing is required to confirm our preliminary beliefs. However, based on our discoveries to date, we have decided to advance
MIRA-55 as our lead compound for our oral pharmaceutical marijuana drug candidate while still retaining our rights to MIRA1a. As
such, we do not intend to move MIRA1a forward as of the date of this Quarterly Report on Form 10-Q for the period ended March 31,
2024 (this “Report”). Initial
public offering On
August 7, 2023, the Company closed its initial public offering consisting of 1,275,000 7.00 8.9 1.2 7.7 The
shares were offered and sold pursuant to the Company’s Registration Statement on Form S-1, as amended (File No. 333-273024), originally
filed with the Securities and Exchange Commission (the “SEC”) on June 29, 2023 (the “Registration Statement”)
and the final prospectuses filed with the SEC pursuant to Rule 424(b) of the Securities Act of 1933, as amended. The Registration
Statement was declared effective by the SEC on August 2, 2023. The common stock began trading on The Nasdaq Capital Market on
August 3, 2023, under the symbol “MIRA”. The closing of the IPO occurred on August 7, 2023. Income
taxes The
Company is taxed as a C corporation. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred
tax assets are recognized for temporary differences that will result in deductible amounts in future years and for loss carryovers. A
valuation allowance is recognized regarding deferred tax assets, if any, if it is more likely than not that some portion of the deferred
tax asset will not be realized. Research
and development expenses Research
and development costs are expensed in the period in which they are incurred and include the expenses paid to third parties, such as contract
research organizations and consultants, who conduct research and development activities on behalf of the Company. Patent-related costs,
including registration costs, documentation costs and other legal fees associated with the application, are expensed in the period in
which they are incurred. Leases The
Company accounts for leases under the provisions of FASB ASC Topic 842, “Leases”, which requires the Company to recognize
right-to-use (“ROU”) assets and lease liabilities for operating leases on the balance sheet. Use
of estimates The
preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires
the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the
disclosure of 270-10t assets and liabilities at the date of the financial statements and the reported amounts of expenses during the
reporting period. Actual results may differ from such estimates and such differences could be material. Cash The
Company maintains cash balances with financial institutions that management believes are of high credit quality. The Company’s
cash account at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes
it is not exposed to any significant credit risk from its cash account. Stock-based
compensation The
Company accounts for stock-based compensation under the provisions of FASB ASC 718, “ Compensation - Stock Compensation Fair
Value of Financial Instruments The
Company measures the fair value of financial instruments in accordance with GAAP which defines fair value, establishes a framework for
measuring fair value, and expands disclosures about fair value measurements. GAAP
defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
GAAP also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. The Company considers the carrying amount of deferred offering costs to approximate
fair value due to short-term nature of this instrument. GAAP describes three levels of inputs that may be used to measure fair value: Level
1 – quoted prices in active markets for identical assets or liabilities. Level
2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level
3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions). |
