TYME TECHNOLOGIES, INC. - Quarter Report: 2018 September (Form 10-Q)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended:

September 30, 2018

or

For the transition period from                      to                     

Commission File Number: 001-38169

TYME TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

17 State Street – 7th Floor

New York, New York 10004

(Address of principal executive offices)

(Zip Code)

(212) 461-2315

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of October 31, 2018, there were 103,006,351 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

Table of Contents

TABLE OF CONTENTS

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical facts, including statements regarding our future results of operations and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believes,” “expects,” “hopes,” “may,” “will,” “plan,” “intends,” “estimates,” “could,” “should,” “would,” “continue,” “seeks,” “anticipates,” and similar expressions (including their use in the negative), are intended to identify forward-looking statements. Forward looking statements can also be identified by discussions of future matters such as the development and potential commercialization of our lead drug candidate and of other new products, technology enhancements, possible collaborations, the timing, scope and objectives of our ongoing and planned clinical trials and other statements that are not historical. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in our Form 10-K for the year ended March 31, 2018 and in this report under “Risk Factors,” and in any subsequent filings with the United States Securities and Exchange Commission and many of which are beyond our control. 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 any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this report and our Annual Report on Form 10-K for the year ended March 31, 2018 and subsequent reports we file from time to time may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We cannot assure you that forward-looking statements in this report or therein will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us to any other person that we will achieve our objectives and plans in any specified time frame, or at all. We disclaim any intent or duty to update any of these forward-looking statements after completion of this Quarterly Report on Form 10-Q to conform these statements to actual results or revised expectations.

The cautionary statements made in this report are intended to be applicable to all related forward-looking statements wherever they may appear in this report. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except as required by law, we assume no obligation to update our forward-looking statements, even if new information becomes available in the future.

1

Table of Contents

PART I – FINANCIAL INFORMATION

Tyme Technologies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

The Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

2

Table of Contents

Tyme Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

The Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

3

Table of Contents

Tyme Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

For the Six Months Ended September 30, 2018

(Unaudited)

The Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

4

Table of Contents

Tyme Technologies, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

The Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

5

Table of Contents

Tyme Technologies, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

September 30, 2018

(Unaudited)

Note 1. Nature of Business

Tyme Technologies, Inc. (“Tyme Tech”) is a Delaware corporation headquartered in New York, NY, with wholly-owned subsidiaries, Tyme Inc. (“ Tyme ”) and Luminant Biosciences, LLC (“ Luminant ”) (collectively, the “ Company ”). Prior to 2014, Luminant conducted the initial research and development of the Company’s therapeutic platform. Since January 1, 2014, the majority of the Company’s research, development and other business activities have been conducted by Tyme, which was incorporated in Delaware in 2013. On October 27, 2016, the Board of Directors of Tyme Tech approved a change in fiscal year end from December 31 to March 31 of each year.

The Company is a clinical stage biotechnology company developing cancer therapeutics that are intended to be broadly effective across many tumor types and have low toxicity profiles. Unlike targeted therapies that attempt to regulate specific mutations within cancer, the Company’s therapeutic approach is designed to take advantage of a cancer cell’s innate metabolic weaknesses to compromise its defenses, leading to cell death through oxidative stress and exposure to the body’s natural immune system.  The Company has two ongoing IND-enabled Phase II clinical trials in metastatic pancreatic cancer and biomarker recurrent prostate cancer.  The Company recently announced an investigator-initiated Phase II trial of SM-88 in patients with previously treated metastatic Ewing’s sarcoma. The Company is actively evaluating the expansion of its clinical programs to other types of cancer and may also seek to develop oncology drug candidates in addition to SM-88, our lead clinical program.

The accompanying condensed consolidated financial statements include the results of operations of Tyme Tech and its wholly-owned subsidiaries.

Liquidity

The condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has historically funded its operations primarily through equity offerings. During fiscal year 2018, the Company raised gross proceeds of approximately $32.1 million through the issuance of its common stock, par value $0.0001 per share (“Common Stock”). Most recently in March 2018, the Company raised aggregate gross proceeds of $23.3 million before underwriting discounts and commissions and expenses of the offering through an underwritten public offering. Previously on November 2, 2017, the Company entered into an equity distribution agreement (“Equity Distribution Agreement”) with Canaccord Genuity Inc. (“Canaccord”), to commence an at-the-market offering (the “ATM Financing Facility”) pursuant to which the Company may, from time to time, subject to certain rules and regulations, sell shares of the Company’s Common Stock having an aggregate offering price up to $30.0 million, through Canaccord, as the Company’s sales agent. In the year ended March 31, 2018, the Company raised approximately $6.2 million in aggregate gross proceeds before commissions and expenses through the ATM Financing Facility and paid Canaccord aggregate commissions of $0.3 million. For the six months ended September 30, 2018, the Company raised approximately $3.3 million in aggregate gross proceeds before commissions and expenses through the ATM Financing Facility and paid Canaccord aggregate commissions of $0.1 million.  At September 30, 2018, there remained approximately $20.4 million of availability to sell shares through the facility.  

For the six months ended September 30, 2018, the Company had negative cash flow from operations of $10.9 million and net loss of $13.7 million, which included $4.7 million of non-cash expenses, primarily non-cash equity compensation expense. For the three months ended September 30, 2018, the Company had negative cash flow from operations of $4.7 million and net loss of $7.0 million, which included $2.4 million of non-cash expenses, primarily non-cash equity compensation expense. As of September 30, 2018, the Company had working capital of approximately $18.9 million. On October 25, 2018, Tyme had decided to discontinue use of the ATM Financing Facility for at least the remainder of calendar year 2018. The Company intends to reassess the use of the ATM facility to sell Common Stock in calendar year 2019.

Management has concluded that substantial doubt does not exist regarding the Company’s ability to satisfy its obligations as they come due during the twelve-month period following the issuance of these financial statements. This conclusion is based on the Company’s assessment of qualitative and quantitative conditions and events, considered in the aggregate as of the date of issuance of these financial statements that are known and reasonably knowable. Among other relevant conditions and events, the Company has considered its operational plans, liquidity sources, obligations due or expected, funds necessary to maintain the Company’s operations, and potential adverse conditions or events as of the issuance date of these financial statements. The Company has developed an operational plan that manages expenses and delays initiation of certain operational initiatives to focus on core programs if appropriate funding is not available.

6

Table of Contents

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements and related notes should be read in conjunction with our condensed consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended March 31, 2018 filed with the SEC on June 13, 2018 (the “2018 10-K”). The condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) related to interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are necessary to present fairly the results for the interim periods. All such adjustments are of a normal and recurring nature. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

The Company’s condensed consolidated financial statements include the accounts of Tyme Tech and its subsidiaries, Tyme and Luminant. All intercompany transactions and balances have been eliminated in consolidation.

Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended March 31, 2018 included in the Company’s 2018 10-K.

Reclassifications

The Company has reclassified certain prior period amounts to conform to the current period presentation relating to Prepaid clinical costs for $1,306,225. These reclassifications have no effect on the previously reported net loss or cash flows.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and for interim periods therein, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact that the standard will have on its consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07 which simplifies the accounting for share-based payments made to nonemployees so that the accounting for such payments is substantially the same as those made to employees, with certain exceptions. Under this ASU, equity-classified share based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to ASC 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees, unless the award is modified after the service has been rendered, any other conditions necessary to earn the right to benefit from the instruments have been satisfied, and the nonemployee is no longer providing services. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. We elected to early adopt ASU 2018-07 effective July 1, 2018 and will apply the guidance to any future equity-classified share based awards to nonemployees.  

7

Table of Contents

Note 3. Net Loss Per Common Share

The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated:

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic net loss per share is computed by dividing net loss attributable to the Company by the weighted average number of shares of Company common stock outstanding for the period, and diluted earnings per share is computed by including common stock equivalents outstanding for the period. During the periods presented, the calculation excludes any potential dilutive common shares and any equivalents as they would have been anti-dilutive as the Company incurred losses for the periods then ended.

The following outstanding securities at September 30, 2018 and 2017 have been excluded from the computation of diluted weighted average shares outstanding, as they are anti-dilutive:

Note 4. Accounts Payable and Other Current Liabilities.

Accounts payable (including accounts payable to a related party – see Note 9) and other current liabilities consisted of the following:

Note 5. Fair Value of Financial Instruments

There are no assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 and March 31, 2018.

The changes in the fair value of the derivative liability for the six months ended September 30, 2017 are as follows:

The fair value of the derivative liability was written down to zero as of September 30, 2017, as the anti-dilution provision on the March 2017 Private Placement expired on September 10, 2017 and the anti-dilution provision on the April 2017 Private Placement expired on October 7, 2017, in each case with no shares issued pursuant to such provisions.

8

Table of Contents

Note 6. Debt.

Insurance Note Payable

During the year ended March 31, 2018, the Company entered into a short-term financing arrangement with its insurance carrier related to payment of premium for its Director and Officer liability insurance coverage totaling $480,094 for the policy year ending on March 31, 2019. As of September 30, 2018 and March 31, 2018, there remained a balance of $155,246 and $480,094, respectively, recorded to Insurance note payable on the accompanying consolidated balance sheets.

Note 7. Stockholders’ Equity.

Securities Purchase Agreements

In April 2017, the Company raised $2.7 million in gross proceeds through a private placement (“April 2017 Private Placement”) of 1,069,603 shares of Common Stock and 1,069,603 common stock purchase warrants (each, a “Warrant”). Each Warrant entitles its holder to purchase one share of common stock (each, a “Warrant Share”) at an exercise price of $3.00 per Warrant Share. The Warrants expire two years from the date of issuance and vest immediately. The warrants are included within additional paid-in capital on the statement of stockholders’ equity and will not be subject to remeasurement.

At each of September 30, 2018 and March 31, 2018, 5,566,107 common stock purchase warrants relating to securities purchase agreements were outstanding and exercisable.

The following summarizes the common stock warrant activity for the six months ended September 30, 2018:

At-the-Market Financing Facility

On November 2, 2017, the Company entered into the Equity Distribution Agreement with Canaccord, to commence the ATM Financing Facility pursuant to which the Company may, from time to time, sell shares of the Company’s Common Stock having an aggregate offering price up to $30,000,000 through Canaccord, as the Company’s sales agent. For the six months ended September 30, 2018, the Company sold 1,497,317 shares for net proceeds after commissions of $3,337,990.   At September 30, 2018, there remained approximately $20.4 million of availability to sell shares through the facility. Under the ATM Financing Facility, the Company is not required to issue the full available amount authorized and it may be cancelled at any time. On October 25, 2018, Tyme had decided to discontinue use of the ATM Financing Facility for at least the remainder of calendar year 2018. The Company intends to reassess the use of the ATM facility to sell common stock in calendar year 2019.

Public Offering

In March 2018, the Company raised approximately $23,288,000 in gross proceeds through a public offering of 10,350,000 shares of its Common Stock. The Offering was made pursuant to the Company’s registration statement on Form S-3 (Registration No. 333-211489), which was declared effective by the U.S. Securities and Exchange Commission on August 16, 2017, a base prospectus dated August 16, 2017 and a prospectus supplement dated March 1, 2018.

Note 8. Commitments and Contingencies.

Contract Service Providers

In the course of the Company’s normal business operations, it enters into agreements and arrangements with contract service providers to assist in the performance of its research and development and clinical research activities.

9

Table of Contents

Purchase Commitments

During the fiscal year ended March 31, 2018, we entered into two contracts with manufacturers to supply certain components used in SM-88 in order to achieve favorable pricing on supplied products. These contracts have non-cancellable elements related to the scheduled deliveries of these products in future periods.  Payments are made by us to the manufacturer when the products are delivered and of acceptable quality. The contracts are structured to match clinical supply needs for our ongoing trials and we expect the timing of associated payments to predominately occur during fiscal year 2019. During the three months ended September 30, 2018, the purchase commitment under one of the contracts was terminated without penalty.  Total outstanding future obligations associated with the remaining contract were $688,000 at September 30, 2018.  Total outstanding future obligations associated with the two contracts were $1,677,000 at March 31, 2018.

Note 9. Related Party Transactions.

Legal

Drinker Biddle & Reath LLP (“DBR”) has provided legal services to the Company. A partner of DBR was a member of the Board of Directors and had received, and was entitled to receive in the future, as well as cash compensation payable generally to non-employee directors, equity compensation payable to non-employee directors generally under the Amended and Restated 2016 Stock Option Plan for Non-Employee Directors. On September 10, 2018, the Company entered into an employment agreement with the partner and he was appointed as the Company’s Chief Legal Officer and Secretary.  He ceased to be a non-employee director on September 10, 2018 and he resigned as a member of the Board, effective September 30, 2018. On September 1, 2018, the partner resigned from the partnership of DBR and he assumed the consulting role “of Counsel” with the firm.  During the three and six months ending September 30, 2018 and 2017, approximately $251,000, $565,000, $651,000 and $972,000, respectively, have been incurred as legal fees associated with DBR. At September 30, 2018 and March 31, 2018, the Company had approximately $251,000 and $384,000, respectively, in accounts payable and accrued expenses payable to DBR.

Note 10. Equity Incentive Plan.

Stock Options

As of September 30, 2018, there was approximately $9,858,550 of total unrecognized compensation expense related to non-vested stock options. The cost is expected to be recognized over the remaining weighted average service period of 1.03 years. As of September 30, 2018, there were 5,482,955 shares available for grant under the Equity Incentive Plans.

On July 30, 2018, the Company entered into amended employment agreements with Ben R. Taylor, the Company’s President and Chief Financial Officer, and Dr. Jonathan Eckard, the Company’s Chief Scientific Affairs Officer (the “Amended Employment Agreements”). The Amended Employment Agreements modify the severance benefits provided thereunder and provide that all equity awards would immediately vest in the event of a change of control (as defined in the Company’s 2015 Equity Incentive Plan). The Amended Employment Agreements also changed the duration of each executive’s non-compete and non-solicitation covenants to two years.

On July 30, 2018, the Board approved modifications to the vesting terms of stock options awarded to employees and the Board of Directors under the 2015 Equity Incentive Plan on May 24, 2018 which previously vested over a four-year period (with 25% of the award vesting on the one-year anniversary of grant and the remaining vesting in pro rata quarterly increments), and were modified to vest instead on a three-year vesting schedule, vesting in pro rata quarterly increments. No other terms of these options were modified.  Due to the accelerated vesting as a result of these modifications, the Company recorded an additional $432,000 of expense for the three months ended September 30, 2018.

Stock based compensation expense recognized was as follows (in thousands):

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. For employees and non-employees, the compensation expense is amortized on a straight-line basis over the requisite service period, which approximates the vesting period. The Company accounts for forfeitures as they occur, rather than estimating forfeitures as of an award’s grant date.

10

Table of Contents

The expected volatility of options granted has been determined using the method described under ASC 718 using the expected volatility of similar companies. The expected term of options granted to employees in the current fiscal period has been based on the term by using the simplified “plain-vanilla” method as allowed under SAB No. 110. The expected term of options granted to non-employees and consultants is based on the grant’s full contractual life.

Prior to the three months ended December 31, 2017, the Company used the full contractual term as the expected term in its Black Scholes model to estimate stock option value. The Company used the full contractual term because there was no history of exercise activity and the stock was thinly-traded on the OTC Market.

Beginning in the three months ended December 31, 2017, the Company determined the use of the simplified method was more appropriate than the full contractual term due to the increased trading volume and activity during the quarter and the increased market and demand for shares.

Based on these factors, the Company deemed it no longer appropriate to use the full contractual term for expected life, because these changes in the business indicate the likelihood that there will be exercise activity before completion of the full contractual term.

The Company considered other methods to estimate expected term other than the simplified method. However, as noted above, there is no historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded and no other refined estimate of expected life that is appropriate.

The weighted average assumptions used to determine such values are presented in the following table:

The following is a summary of the status of the Company’s stock options as of September 30, 2018:

The intrinsic value, which is calculated as the excess of the market value of September 30, 2018 over the exercise price of the options, is approximately $461,736 and $40,920 for outstanding stock options and vested stock options, respectively. The market value per share as of September 30, 2018 was $2.78 as reported by the NASDAQ Capital Market.

11

Table of Contents

Note 11. Income Taxes.

A valuation allowance is recorded if it is more likely than not that a deferred tax asset will not be realized. The Company weighed available positive and negative evidence and concluded that a full valuation allowance should continue to be maintained on its net deferred tax assets.

The Company is required to evaluate uncertain tax positions taken or expected to be taken in the course of preparing the Company’s condensed consolidated financial statements to determine whether the tax positions are more likely than not of being sustained by the applicable tax authority. As of September 30, 2018, the Company’s uncertain tax positions remain unchanged. Due to the full valuation allowance, none of the gross unrecognized tax benefits would affect the effective tax rate at September 30, 2018, if recognized.

The Company had no income tax related penalties or interest for periods presented in these condensed consolidated financial statements related to uncertain tax positions due to available net operating loss carryforwards, which would be recorded as tax expense should the Company accrue for such items.

On December 22, 2017 the U.S. Tax Cuts and Jobs Act (“the Act”) was signed into legislation. The Act changed the Federal statutory tax rate to 21% for tax years beginning January 1, 2018. Because the Company has a full valuation allowance against its net deferred tax asset, the rate change has no effect on the Company’s income tax expense.

Note 12. Subsequent Events

On October 9, 2018, the Company entered into a Clinical Research Funding and Drug Supply Agreement with the Pancreatic Cancer Action Network, Inc., a non-profit tax exempt organization (“PanCAN”) whereby SM-88 will be included as an experimental arm in the novel Precision Promise adaptive Phase II/III trial platform sponsored by PanCAN. The primary goal is to initially study SM-88 as a monotherapy treatment arm for patients who have failed one prior line of chemotherapy. Additionally, it is planned that SM-88 will be evaluated in combination with other cancer therapy medications (gemcitabine (Gemzar^®) and nab-paclitaxel (Abraxane^®)) for both first- and second-line subjects.  Precision Promise is expected to launch in the first half of calendar year 2019 at 14 pancreatic cancer treatment centers in the country. At the time the agreement was entered into, the Company advanced PanCAN funds to cover setup costs associated with the initial study. There are no other associated contractual obligations at this time

On October 25, 2018, Tyme had decided to discontinue use of the ATM Financing Facility for at least the remainder of calendar year 2018. The Company intends to reassess the use of the ATM facility to sell Common Stock in calendar year 2019.

12

Table of Contents

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Quarterly Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this report and of our Annual Report on Form 10-K filed on June 13, 2018, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. As used in this report, unless the context suggests otherwise, “we,” “us,” “our,” “the Company” or “Tyme Technologies” refer to Tyme Technologies, Inc. together with its subsidiaries. All amounts in Management’s Discussion and Analysis of Financial Condition and Results of Operations are approximate.

Critical Accounting Policies and Significant Judgments and Estimates

This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, revenue recognition, deferred revenue and stock-based compensation. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no significant changes in our critical accounting policies and significant judgments and estimates as discussed in our Form 10-K filed with the SEC on June 13, 2018 (the “2018 10-K”).

Overview

We are a clinical stage biotechnology company developing cancer therapeutics that are intended to be broadly effective across many tumor types and have low toxicity profiles. Unlike targeted therapies that attempt to regulate specific mutations within cancer, the Company’s therapeutic approach is designed to take advantage of a cancer cell’s innate metabolic weaknesses to compromise its defenses, leading to cell death through oxidative stress and exposure to the body’s natural immune system.  We have two ongoing IND-enabled Phase II clinical trials in metastatic pancreatic cancer and biomarker recurrent prostate cancer.  We recently announced an investigator-initiated Phase II trial of SM-88 in patients with previously treated metastatic Ewing’s sarcoma. We are actively evaluating the expansion of our clinical programs to other types of cancer and may also seek to develop oncology drug candidates in addition to SM-88, our lead clinical program.

Recent Developments

Consistent with our overall corporate mission of developing effective cancer therapies that can extend patients’ lives while not compromising on the quality of life gained, during the three and six months ended September 30, 2018 and subsequently, we continued the following notable activities:

On October 9, 2018, the Company entered into a Clinical Research Funding and Drug Supply Agreement with the Pancreatic Cancer Action Network, Inc., a non-profit tax-exempt organization (“PanCAN”) whereby SM-88 will be included as an experimental arm in the novel Precision Promise adaptive Phase II/III trial platform sponsored by PanCAN. The primary goal is to initially study SM-88 as a monotherapy treatment arm for patients who have failed one prior line of chemotherapy. Additionally, it is planned that SM-88 will be evaluated in combination with other cancer medications gemcitabine (Gemzar®) and nab-paclitaxel (Abraxane®) for both first- and second-line subjects.  Precision Promise is expected to launch in the first half of calendar year 2019 at 14 pancreatic cancer treatment centers in the country.

PanCAN is sponsoring Precision Promise and providing funding and other support. While Tyme’s SM-88 will be included in the trial, Tyme will not oversee, conduct or control the trial.

The Company’s ongoing Phase II trial in pancreatic cancer exceeded its enrollment expectations for Stage 1 with more than 36 patients fully randomized into the trial. The Company currently continues to expect to provide an interim safety and efficacy analysis for Stage 1 in January 2019.

13

Table of Contents

Given the potential patient demographic overlap with the Precision Promise trial, the Company plans to discuss with the Food and Drug Administration how to amend Stage 2 of the Phase II pancreatic trial to focus on subjects who have failed two or more prior lines of therapy or have poor functional health (Eastern Cooperative Oncology Group (“ECOG”) performance status 2).

We continue to enroll patients in our six-month multi-center, open label study patients with biomarker-recurrent prostate cancer who have rising Prostate Specific Antigen levels and no radiographically detectable lesions. Our target to provide updated data from this trial remains in the first quarter of calendar year 2019.

On September 26, 2018, the Company entered into a Memorandum of Understanding with The Joseph Ahmed Foundation, a 501(c) not for profit organization (“JAF”) whereby JAF will provide funding and patient support for an investigator-initiated Phase II trial of SM-88 in patients with previously-treated metastatic Ewing’s sarcoma. The Company will supply SM-88 at no cost and provide certain administrative support. The Sarcoma Oncology Research Center will be the sole enrolling site and will lead clinical and regulatory operations. The trial is expected to begin in the first six months of 2019.

Consistent with the Company’s strategy to manage anticipated future growth, on September 10, 2018 we hired James Biehl as our Chief Legal Officer and Secretary, and on October 9, 2018 we hired Michele Korfin as our Chief Commercial Officer. Mr. Biehl joined the Company from the law firm of Drinker Biddle & Reath LLP, where he was a partner working in the Corporate and Securities group. Mr. Biehl brings to the Company over 29 years of legal experience in corporate governance, financings and transactions. Mr. Biehl served on our Board of Directors until September 30, 2018.

Ms. Korfin has over 20 years of experience in oncology, focused on product launches, oncology marketing strategy, commercial sales, market access and government affairs. She has held senior positions at Kite Pharma and Celgene, playing an important role in new product commercialization.

Results of Operations

Three and Six Months Ended September 30, 2018 Compared to Three and Six Months Ended September 30, 2017

Net loss for the three months ended September 30, 2018 was $7,015,000 compared to $5,222,000 for the three months ended September 30, 2017; and the loss for the six months ended September 30, 2018 was $13,738,000 compared to $8,095,000 for the six months ended September 30, 2017. The increases in losses were primarily due to expenses related to the Phase II pancreatic and prostate cancer clinical trials, administrative costs associated with the Company’s equity financings, and the initiation of pre-clinical animal testing.  

Revenues

During the three and six month periods ended September 30, 2018 and 2017, the Company did not realize any revenues from operations. The Company does not anticipate recognizing any revenues until such time as (1) one of our product candidates has been approved for marketing by appropriate regulatory authorities, which is not anticipated to occur in the near future, or (2) we enter into a collaboration or licensing arrangement

14

Table of Contents

Operating Costs and Expenses

For the three months ended September 30, 2018, operating costs and expenses totaled $7,013,000 compared to $5,297,000 for the three months ended September 30, 2017, representing an increase of $1,716,000. Operating costs and expenses were comprised of the following:

For the six months ended September 30, 2018, operating costs and expenses totaled $13,732,000 compared to $8,485,000 for the six months ended September 30, 2017, representing an increase of $5,247,000. Operating costs and expenses were comprised of the following:

15

Table of Contents

Other income (expense)

For the three months ended September 30, 2018, the Company had other income of $0. For the three months ended September 30, 2017, the Company had other income of $75,000.  The other income was attributed to the remeasurement of the derivative liability relating to anti-dilution provisions of two private placement offerings in March 2017 and April 2017.  The anti-dilution provisions expired in September 2017.  

For the six months ended September 30, 2018, the Company had other income of $0 compared to $390,000 for the six months ended September 30, 2017. The other income was attributed to the remeasurement of the derivative liability relating to anti-dilution provisions of two private placement offerings in March 2017 and April 2017.  The anti-dilution provisions expired in September 2017.  

Liquidity and Capital Resources

At September 30, 2018, we had cash of $21,070,000, working capital of $18,869,000, and stockholders’ equity of $20,774,000.

Net cash used in or provided by operating, investing and financing activities from continuing operations were as follows:

Operating Activities

Our cash used in operating activities in the six months ended September 30, 2018 totaled $10,904,000, which is the sum of (i) our net loss of $13,738,000, less non-cash expenses totaling $4,707,000 (principally stock-based compensation), and (ii) changes in operating assets and liabilities of $1,873,000, primarily due to the payment of accrued 2018 bonuses for $1,207,000 in the first quarter of 2019, which was offset by the accrual of $691,000 for the year ended March 31, 2019.  Additionally, prepaid clinical costs increased $634,000 and accounts payable and other liabilities decreased $416,000.

Our cash used in operating activities in the six months ended September 30, 2017 totaled $5,741,000, which is the sum of (i) our net loss of $8,095,000, less non-cash expenses totaling $3,205,000 (principally stock-based compensation), and (ii) changes in operating assets and liabilities of $851,000.

16

Table of Contents

Investing Activities

During the six months ended September 30, 2018, our investing activities consisted of purchases of $16,000 of machinery and equipment.

No cash was used in investing activities for the six months ended September 30, 2017.

Financing Activities

During the six months ended September 30, 2018, there was $3,013,000 of financing activities, consisting of $3,338,000 of proceeds from the issuance of Common Stock from the Company’s at-the-market offering (the “ATM Financing Facility”) pursuant to the Equity Distribution Agreement, dated November 2, 2017 (the “Equity Distribution Agreement”), by and between the Company and Canaccord Genuity LLC (“Canaccord”), and offset by insurance note payments.

During the six months ended September 30, 2017, our financing activities consisted of the following:

In April 2017, the Company raised $2,727,000 in gross proceeds through a private placement (“April 2017 Private Placement”) of 1,069,603 shares of our Common Stock and 1,069,603 common stock purchase warrants (each, a “Warrant”). Each Warrant entitles its holder to purchase one share of Common Stock (each, a “Warrant Share”) at an exercise price of $3.00 per Warrant Share. The warrants expire two years from the date of issuance and vest immediately. The warrants are included within additional paid-in capital on the statement of stockholders’ equity and will not be subject to remeasurement. The Company collected approximately $175,000 of subscription receivables in the quarter ended June 30, 2017.

Liquidity and Capital Requirements Outlook

During fiscal year 2018, we raised net proceeds of approximately $28.1 million through the issuance of our Common Stock. Most recently in March 2018, we raised aggregate net proceeds of $21.9 million after underwriting discounts and commissions and expenses of the offering through an underwritten public offering. Previously, on November 2, 2017, the Company entered into the Equity Distribution Agreement with Canaccord, to commence the ATM Financing Facility pursuant to which the Company may, from time to time, subject to certain rules and regulations, sell shares of the Company’s Common Stock, having an aggregate offering price up to $30.0 million, through Canaccord as the Company’s sales agent. In the year ended March 31, 2018, the Company raised approximately $6.2 million in aggregate gross proceeds before commissions and expenses through the ATM Financing Facility and incurred related costs, including commissions to Canaccord, of approximately $0.3 million. For the three and six months ended September 30, 2018, the Company sold 1,497,317 shares of Common Stock and received net proceeds after commissions of $3.3 million. The Company paid commissions to Canaccord of $0.1 million during the three and six months ended September 30, 2018. The Company is using the net proceeds raised through the ATM Financing Facility for general corporate purposes and to fund its operating activities. On October 25, 2018, Tyme had decided to discontinue use of its at-the-market (“ATM”) financing facility for at least the remainder of calendar year 2018. The Company intends to reassess the use of the ATM facility to sell Common Stock in calendar year 2019.

We anticipate requiring additional capital to further fund the development of our product candidates, as well as to engage in potential partnerships or collaborations. The most significant funding needs continue to be in connection with conducting immediate Phase II clinical trials of our SM-88 drug candidate for prostate cancer, pancreatic cancer, and Ewing’s sarcoma, as well as additional or related studies and investigations, including small-scale pre-clinical studies related to the mechanism of action of our lead clinical program SM-88 and other potential drug candidates.  The Company’s financing needs also relate to expenses of its participation in the Precision Promise adaptive Phase II/III pancreatic trial platform sponsored by PanCAN. Precision Promise is expected to launch in the first half of calendar year 2019. Primarily as a result of its active clinical trials, the anticipated initiation of the Precision Promise trial, and the pause in enrollment and initiation of Stage 2 of the Company’s ongoing- Phase II trial in pancreatic cancer, the Company currently anticipates that its quarterly cash usage, or “cash burn rate”, will approximate $5 million per quarter. The burn rate for the quarter ending September 30, 2018, was lower than the previous quarter due to higher clinical expenses, prepaid rent, and fiscal year 2018 performance bonuses paid in the prior period.  If we determine to move beyond the pre-clinical stage for any of our pre-clinical trials or if we amend Stage 2 of the Company’s ongoing Phase II trial in pancreatic cancer and proceed with Phase II or significantly expand currently active clinical trials, our liquidity requirements will be increased.  

As of September 30, 2018, the Company has cash on hand of approximately $21.1 million and working capital of approximately $18.9 million.

17

Table of Contents

Management has concluded that substantial doubt does not exist regarding the Company’s ability to satisfy its obligations as they come due during the twelve-month period following the issuance of these financial statements. This conclusion is based on the Company’s assessment of qualitative and quantitative conditions and events, considered in aggregate as of the date of issuance of these financial statements that are known and reasonably knowable. Among other relevant conditions and events, the Company has considered its operational plans, liquidity sources, obligations due or expected, funds necessary to maintain the Company’s operations, and potential adverse conditions or events as of the issuance date of these financial statements. The Company has developed an operational plan that manages expenses and delays initiation of certain operational initiatives to focus on core programs if appropriate funding is not available.

We regularly evaluate opportunities to raise capital and obtain necessary, as well as opportunistic, financing. To meet our short and long-term liquidity needs, we currently expect to use existing cash balances and a variety of other means, including potential issuances of debt or equity securities in public or private financings, including our ATM Financing Facility, option exercises, and partnerships and/or collaborations. The demand for the equity and debt of biotechnology companies like ours is dependent upon many factors, including the general state of the financial markets. During times of extreme market volatility, capital may not be available on favorable terms, if at all. Our inability to obtain such additional capital could materially and adversely affect our business operations.

While we will continue to seek capital through a number of means, there can be no assurance that additional financing will be available on acceptable terms, if at all, and our negotiating position in capital generating efforts may worsen as existing resources are used.

Additional equity financing, which we expect to raise, may be dilutive to our stockholders; debt financing, if available, may involve significant cash payment obligations and covenants that restrict our ability to operate as a business; and our stock price may not reach levels necessary to induce option exercises. If we are unable to raise the funds necessary to meet our long-term liquidity needs, we may have to delay or discontinue the development of certain or all of our drug candidates or raise funds on terms that we currently consider unfavorable.

Seasonality

The Company does not believe that its operations are seasonal in nature.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

Not required for smaller reporting companies.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, and in light of the material weaknesses described below identified by Messrs. Hoffman and Taylor disclosed in our Annual Report on Form 10-K for the year ended March 31, 2018, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2018, our disclosure controls and procedures were not effective. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

18

Table of Contents

The matters involving internal controls and procedures that our management considered to be material weaknesses were as follows:

Management began implementing certain practices and procedures to address the foregoing material weaknesses and significant deficiencies with plans to complete the remediation of the foregoing deficiencies in the future. Such remediation efforts are discussed below under “Management’s Remediation Initiatives.”

Our management believes that the material weaknesses set forth above did not have an effect on our financial results.

Management’s Remediation Initiatives

Management began implementing certain practices and procedures to address the foregoing material weaknesses with plans to complete the remediation of the foregoing deficiencies in the future. Such remediation efforts are discussed below.

Management’s Actions and Plans to Remediate Material Weaknesses:

Management believes that progress has been made during the quarter ended September 30, 2018, and through the date of this report, to remediate the underlying causes of the material weaknesses in internal control over financial reporting and has taken the following steps to remediate such material weaknesses:

Management plans to further remediate the material weaknesses as follows:

19

Table of Contents

The material weaknesses will not be considered remediated until the applicable remedial controls operate for a sufficient period and management has concluded, through testing, that the controls are operating effectively.

Changes in Internal Control over Financial Reporting

Other than as described above under “Management Remediation Initiatives”, there have been no changes in our internal control over financial reporting during our three months ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

20

Table of Contents

PART II – OTHER INFORMATION

We are not currently a party to any material legal proceedings and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on us, our business, operating results or financial condition.

Our Annual Report on Form 10-K for the year ended March 31, 2018 includes a detailed discussion of our risk factors.  At the time of this filing, there have been no material changes to the risk factors that were included in the Form 10-K.  

None.

None.

Not applicable.

21

Table of Contents

22

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: November 5, 2018

23