MIRA Pharmaceuticals reported financial results for the third quarter ended September 30, 2024. As is typical for a preclinical-stage company, revenue was $0, on par with our estimates. GAAP EPS of $(0.14) was a slight miss on our $(0.13)estimate, mainly due to higher-than-forecast general and administrative expenses. Common shares outstanding increased from 14.78 million at the end of Q2 2024 to 16.27 million on September 30, 2024, representing a dilution of 10.05%.
MIRA’s cash position improved from $2.82 million at the end of Q2 2024 to $4.14 million on September 30, 2024, causing the company’s current ratio to rise from 3.7x to 6.1x. With current cash on hand, management expects to be able to fund operations through Q4 2025; however, as MIRA advances its Ketamir-2 asset into human clinical trials in early 2025, the need to raise significant additional external capital in the near term remains pressing.
The company maintains an effective shelf registration statement, filed with the SEC on August 12, 2024 and amended on September 24, 2024, for the issuance of common stock under various types of equity offerings. The shelf registration statement includes an At The Market (ATM) Offering Agreement with Rodman & Renshaw LLC, under which MIRA may sell shares of its common stock up to an aggregate amount of $75 million. As of September 30, 2024, MIRA had sold 1,485,263 shares of common stock at an average price per share of $1.61, receiving net proceeds of $3.1 million after commissions and fees. Between October 1 and November 12, 2024, MIRA sold 294,704 shares of common stock under the ATM Agreement at an average price per share of $1.84, for net proceeds of $0.5 million.
While the ATM Agreement is a convenient way for the company to meet its liquidity needs, it will lead to ongoing dilution of existing shareholders. MIRA remains on track to submit an Investigational New Drug application for neuropathic pain indications in December 2024 and begin Phase I clinical trials in humans during the first quarter of 2025.
We reiterate our BUY rating and 13-month price target of $7.50.