Full Press Release Details
CONSOLIDATED FINANCIAL STATEMENTS
in United States Dollars
of July 31, 2022, BriaCell Therapeutics Corp. (the "Company")
determined that it no longer qualified as a "foreign private issuer" as such term is
defined in Rule 405 under the Securities Act. This means that, as of August 1, 2022, the Company has been required to comply with
all of the periodic disclosure requirements of the Securities Exchange Act of 1934 applicable to U.S. domestic issuers, such as Forms
10-K, 10-Q and 8-K, rather than the forms the Company has filed with the Securities and Exchange Commission ("SEC") in the
past, as a foreign private issuer, such as Forms 40-F and 6-K. Accordingly, the Company is now required to prepare its financial statements
filed with the SEC in accordance with generally accepted accounting principles in the United States ("U.S. GAAP").
required pursuant to section 4.3(4) of National Instrument 51-102 - Continuous Disclosure Obligations, the Company must restate
its interim financial statements for the fiscal year ended July 31, 2022 in accordance with U.S. GAAP, such interim financial statements
having previously been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting
attached restated condensed interim consolidated financial statements (the "Financial Statements") for the three month period
ended October 31, 2021 and 2020 have been prepared in accordance with U.S. GAAP, are current as of December 14, 2021 and provide
financial information for the three month period ended October 31, 2021 and 2020, as restated on October 27, 2022. Other than
as expressly set forth above, the revised Financial Statements do not, and do not purport to, update or restate the information in the
original condensed interim consolidated financial statements or reflect any events that occurred after the date of the filing of the
original condensed interim consolidated financial statements.
Company's Annual Report on Form 10-K (the "Annual Report") dated October 27, 2022 is available under the Company's
profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Readers are cautioned that these Financial Statements should be read in
conjunction with the Annual Report, including the consolidated financial statements and the related notes thereto included in Item 8
Consolidated Balance Sheet
(Unaudited, expressed in US Dollars, except share and per share data)
| October 31, 2021 | July 31, 2021 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 55,490,086 | $ | 57,268,685 | ||||
| Amounts receivable | 19,329 | 12,574 | ||||||
| Prepaid expenses and other current assets | 406,786 | 516,891 | ||||||
| Total current assets | 55,916,201 | 57,798,150 | ||||||
| NON-CURRENT ASSETS: | ||||||||
| Investments | 2 | 2 | ||||||
| Intangible assets, net | 241,793 | 245,610 | ||||||
| Total non-current assets | 241,795 | 245,612 | ||||||
| Total assets | $ | 56,157,996 | $ | 58,043,762 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Trade payables | $ | 240,051 | $ | 214,116 | ||||
| Accrued expenses and other payables | 191,315 | 342,679 | ||||||
| Total current liabilities | 431,366 | 556,795 | ||||||
| NON-CURRENT LIABILITIES: | ||||||||
| Warrant liability | 54,115,889 | 29,789,260 | ||||||
| Government loans | 26,964 | 25,986 | ||||||
| Total non-current liabilities | 54,142,853 | 29,815,246 | ||||||
| SHAREHOLDERS' EQUITY: | ||||||||
| Share Capital of no par value - Authorized: unlimited at October 31, 2021 and July 31, 2021, respectively; Issued and outstanding: 15,370,412 and 15,269,853 shares October 31, 2021 and July 31, 2021, respectively | 55,701,579 | 54,774,172 | ||||||
| Additional paid in capital | 2,696,264 | 2,178,130 | ||||||
| Accumulated other comprehensive loss | (138,684 | ) | (138,684 | ) | ||||
| Accumulated deficit | (56,675,382 | ) | (29,141,897 | ) | ||||
| Total shareholders' equity (deficit) | 1,583,777 | 27,671,721 | ||||||
| Total liabilities and shareholders' equity (deficit) | $ | 56,157,996 | $ | 58,043,762 |
accompanying notes are an integral part of the condensed consolidated financial statements.
Consolidated Statements of Operations and Comprehensive Loss
expressed in US Dollars, except share and per share data)
| Three months ended October 31, | ||||||||
| 2021 | 2020 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Operating Expenses: | ||||||||
| Research and development expenses | $ | 875,636 | $ | 149,062 | ||||
| General and administrative expenses | 1,409,173 | 231,309 | ||||||
| Total operating expenses | 2,284,809 | 380,371 | ||||||
| Operating loss | (2,284,809 | ) | (380,371 | ) | ||||
| Financial expenses, net | (25,248,676 | ) | (40,956 | ) | ||||
| Loss for the period | (27,533,485 | ) | (421,327 | ) | ||||
| Other comprehensive loss - Foreign currency translation adjustment | - | 35,340 | ||||||
| Comprehensive loss for the period | $ | (27,533,485 | ) | $ | (385,987 | ) | ||
| Net loss per share - basic and diluted | $ | (1.81 | ) | $ | (0.54 | ) | ||
| Weighted average number of shares used in computing net basic and diluted earnings per share of common stock | 15,238,646 | 774,401 |
accompanying notes are an integral part of the condensed consolidated financial statements.
Consolidated Statements of Changes in Shareholders' Equity (Deficit)
expressed in US Dollars, except share and per share data)
| Share capital | Additional paid in | Accumulated other comprehensive | Accumulated | Total shareholders' | ||||||||||||||||||||
| Number | Amount | capital | loss | deficit | Equity (deficit ) | |||||||||||||||||||
| Balance, July 31, 2021 | 15,269,583 | $ | 54,774,172 | $ | 2,178,130 | $ | (138,684 | ) | $ | (29,141,897 | ) | $ | 27,671,721 | |||||||||||
| Exercise of warrants | 100,829 | 927,407 | - | - | - | 927,407 | ||||||||||||||||||
| Issuance of options | - | - | 518,134 | - | - | 518,134 | ||||||||||||||||||
| Loss for the period | - | - | - | - | (27,533,485 | ) | (27,533,485 | ) | ||||||||||||||||
| Balance, October 31, 2021 | 15,370,412 | $ | 55,701,579 | $ | 2,696,264 | $ | (138,684 | ) | $ | (56,675,382 | ) | $ | 1,583,777 |
Consolidated Statements of Changes in Shareholders' Equity (Deficit)
expressed in US Dollars, except share and per share data)
| Share capital | Additional paid in | Accumulated other comprehensive | Accumulated | Total shareholders' Equity | ||||||||||||||||||||
| Number | Amount | capital | loss | deficit | (deficit) | |||||||||||||||||||
| Balance, July 31, 2020 | 721,962 | $ | 12,263,858 | $ | 2,446,886 | $ | (138,684 | ) | $ | (17,312,812 | ) | $ | (2,740,752 | ) | ||||||||||
| Issuance of shares for debt | 50,000 | 329,670 | - | - | - | 329,670 | ||||||||||||||||||
| Loss for the period | - | - | - | - | (421,327 | ) | (421,327 | ) | ||||||||||||||||
| Balance, October 31, 2020 | 771,962 | $ | 12,593,528 | $ | 2,446,886 | $ | (138,684 | ) | $ | (17,734,139 | ) | $ | (2,832,409 | ) |
accompanying notes are an integral part of the condensed consolidated financial statements.
Consolidated Statements of Cash Flows
expressed in US Dollars, except share and per share data)
| Three months ended October 31, | ||||||||
| 2021 | 2020 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash flow from operating activities | ||||||||
| Net loss | $ | (27,533,485 | ) | $ | (421,327 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 3,817 | 3,814 | ||||||
| Share-based compensation | 518,134 | - | ||||||
| Interest expense | 979 | 6,674 | ||||||
| Loss on extinguishment of settlement of debt | - | 25,234 | ||||||
| Remeasurement of warrants | 25,254,036 | - | ||||||
| Changes in assets and liabilities: | ||||||||
| Decrease (increase) in amounts receivable | (6,755 | ) | 15,891 | |||||
| Decrease (increase) in prepaid expenses | 110,105 | (3,556 | ) | |||||
| Increase (decrease) in accounts payable | 29,334 | (26,371 | ) | |||||
| Increase (decrease) in accrued expenses and other payables | (154,763 | ) | 341,544 | |||||
| Total cash flow from operating activities | (1,778,599 | ) | (58,097 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from receipt of short-term loans | - | 27,102 | ||||||
| Total cash flow from financing activities | - | 27,102 | ||||||
| Effects of changes in foreign exchange | - | 16,738 | ||||||
| Decrease in cash and cash equivalents | (1,778,599 | ) | (30,994 | ) | ||||
| Cash and cash equivalents at beginning of the period | 57,268,685 | 21,249 | ||||||
| Cash and cash equivalents at end of the period | $ | 55,490,086 | $ | 6,993 |
accompanying notes are an integral part of the condensed consolidated financial statements.
to the Condensed Consolidated Financial Statements
expressed in US Dollars, except share and per share data and unless otherwise indicated)
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") for interim financial information and in accordance with the instructions
to Form 10-Q and Article 10 of Regulation S-X promulgated by the U.S Securities and Exchange Commission (the "SEC"). Certain
information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or
omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information
and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management,
the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature,
which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report
as of July 31, 2022 and 2021 filed with the SEC on October 27, 2022. The interim period results do not necessarily indicate the
results that may be expected for any other interim period or for the full fiscal year.
to 2021, the Company prepared its financial statements, including its condensed financial statements, in accordance with International
Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), as permitted in the United States
based on the Company's qualification as a "foreign private issuer" under the rules and regulations of the SEC. In connection
with the loss of the Company's status as a foreign private issuer effective on August 1, 2022, the Company, as a domestic filer,
prepares its consolidated financial statements in accordance with U.S. GAAP, and restated its condensed consolidated financial statements
as of October 31, 2021 to be prepared in accordance with U.S. GAAP.
| e. | The Company has a wholly-owned U.S. subsidiary, BriaCell Therapeutics Corp. ("BTC"), which was incorporated in April 3, 2014, under the laws of the state of Delaware. BTC has a wholly-owned subsidiary, Sapientia Pharmaceuticals, Inc. ("Sapientia" and together with BTC the "Subsidiaries"), which was incorporated in September 20, 2012, under the laws of the state of Delaware. The Company has one operating segment and reporting unit. | |
| f. | Since January 2020, the Coronavirus outbreak has dramatically expanded into a worldwide pandemic creating macro-economic uncertainty and disruption in the business and financial markets. Many countries around the world, including Canada and the United States have been taking measures designated to limit the continued spread of the Coronavirus, including the closure of workplaces, restricting travel, prohibiting assembling, closing international borders and quarantining populated areas. Such measures present concerns that may dramatically affect the Company's ability to conduct its business effectively. | |
| The Company may face difficulties recruiting or retaining patients in our ongoing and planned clinical trials if patients are affected by the virus or are fearful of visiting or traveling to our clinical trial sites because of the outbreak of COVID-19. In the event that clinical trial sites are slowed down or closed to enrolment in our trials, this could have a material adverse impact on our clinical trial plans and timelines. The Company is continuing to assess its business plans and the impact COVID-19 is having on the Company's clinical trial timelines and the Company's ability to recruit candidates for clinical trials. The extent to which COVID-19 and global efforts to contain its spread will impact our operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the outbreak and the actions taken to contain or treat the coronavirus outbreak. The Company currently believes that the execution of our clinical trials and research programs are delayed by at least one quarter due to COVID-19. |
to the Condensed Consolidated Financial Statements
expressed in US Dollars, except share and per share data and unless otherwise indicated)
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that
affect the amounts reported in the consolidated financial statements and accompanying notes. The Company's management believes
that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates,
judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the consolidated financial statements,
and the reported amount of expenses during the reporting periods. Actual results could differ from those estimates.
an "emerging growth company," the Jumpstart Our Business Startups Act ("JOBS Act") allows the Company to delay
adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to
private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below
reflects this election.
to the Condensed Consolidated Financial Statements
expressed in US Dollars, except share and per share data and unless otherwise indicated)
May 19, 2021, Alpha Capital Anstalt ("Alpha") filed a lawsuit in the New York State Supreme Court, Commercial Division, New
York County against BriaCell Therapeutics Corp. ("BriaCell"), alleging that BriaCell breached a loan contract when it refused
to reprice and extend the term of warrants purported held by Alpha in spring 2021, seeking monetary and injunctive relief for delivery
of those amended warrants. Counterclaiming and defending against Alpha's complaint, BriaCell alleges that Alpha's loan to
BriaCell is unenforceable both because the loan is criminally usurious under New York law and because Alpha acted as an unregistered
securities dealer in violation of American securities law. BriaCell also has alleged that Canadian securities law, regulation, and rules
prohibited it from amending the warrants to comply with Alpha's spring 2021 demands. On May 11, 2022, Alpha moved to dismiss BriaCell's
operative Amended Counterclaim. The parties have fully briefed that motion, and the Court has calendared oral argument on that motion
for February 7, 2023. Expert discovery is ongoing and may affect the value of the parties' respective claims and damages.
Company disagrees with Alpha's claims, is defending these claims, and has filed a counter claim. At this time, whilst it is impossible
to provide any guarantee as to the outcome of the lawsuit, it is the Company's assessment, based on advice from the Company's
legal counsel at this time, and based on the information known by the Company, that it's more likely than not that BriaCell will
not have to pay Alpha in the litigation.
The Company is currently on a month-to-month
lease arrangement for office and lab space in New York, New York in the amount of approximately $8,600 per month.
following table presents information about our financial instruments that are measured at fair value on a recurring basis as of October
31, 2021 and July 31, 2021:
| Fair Value Measurements at | ||||||||||||||||||||||||
| October 31, 2021 | July 31, 2021 | |||||||||||||||||||||||
| Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||||||||
| Financial Assets: | ||||||||||||||||||||||||
| Cash and cash equivalents | 55,490,086 | - | 55,490,086 | 57,268,685 | - | 57,268,685 | ||||||||||||||||||
| Total assets measured at fair value | $ | 55,490,086 | $ | - | $ | 55,490,086 | $ | 57,268,685 | $ | - | $ | 57,268,685 | ||||||||||||
| Financial liabilities: | ||||||||||||||||||||||||
| Warrants liability | 19,621,242 | 34,494,647 | 54,115,889 | 7,426,535 | 22,362,725 | 29,789,260 | ||||||||||||||||||
| Total liabilities measured at fair value | $ | 19,621,242 | $ | 34,494,647 | $ | 54,115,889 | $ | 7,426,535 | $ | 22,362,725 | $ | 29,789,260 |
We classify our cash and cash equivalents and
the liability in respect of publicly traded warrants within Level 1 because we use quoted market prices in active markets.
The fair value of the warrant liability for non-public
warrants is measured using inputs other than quoted prices included in Level 1 that are observable for the liability either directly
or indirectly, and thus are classified as Level 2 financial instruments.
to the Condensed Consolidated Financial Statements
expressed in US Dollars, except share and per share data and unless otherwise indicated)
Authorized share capital
authorized share capital consists of an unlimited number of common shares with no par value.