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Condensed Interim Consolidated Financial Statements
For the Three Months Ended October
Expressed in United States
BriaCell Therapeutics Corp
Unaudited Condensed Interim Consolidated Statements
of Financial Position
As of October 31, 2021 and July 31, 2021
(Expressed in US Dollars)
| October 31, | July 31, | |||||||
| 2021 | 2021 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 55,490,086 | $ | 57,268,685 | ||||
| Amounts receivable | 19,329 | 12,574 | ||||||
| Prepaid expenses | 406,786 | 516,891 | ||||||
| Total current assets | 55,916,201 | 57,798,150 | ||||||
| Investments | 2 | 2 | ||||||
| Intellectual property (Note 5) | 241,793 | 245,610 | ||||||
| Total assets | $ | 56,157,996 | $ | 58,043,762 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (Note 10) | $ | 431,366 | $ | 556,795 | ||||
| Total current liabilities | 431,366 | 556,795 | ||||||
| Long term liabilities | ||||||||
| Warrant liability (Note 7) | 306,224 | 199,458 | ||||||
| Government loans (Note 6) | 26,964 | 25,986 | ||||||
| Total long term liabilities | 333,188 | 225,444 | ||||||
| Shareholders' equity | ||||||||
| Share capital (Note 8) | 55,358,289 | 54,782,633 | ||||||
| Share-based payment reserve (Note 9) | 2,696,264 | 2,178,130 | ||||||
| Warrant reserve (Note 8) | 15,617,819 | 16,193,475 | ||||||
| Accumulated other comprehensive loss | (138,684 | ) | (138,684 | ) | ||||
| Deficit | (18,140,246 | ) | (15,754,031 | ) | ||||
| Total shareholders' equity | 55,393,442 | 57,261,523 | ||||||
| Total liabilities and shareholders' equity | $ | 56,157,996 | $ | 58,043,762 |
Nature of Operations (Note 1)
Commitments (Note 15)
Events After the Reporting Period (Note 16)
These condensed interim consolidated financial statements
were approved and authorized for issue on behalf of the Board of Directors on December 14, 2021 by:
| On behalf of the Board: | |||
| " Jamieson Bondarenko " | "William Williams" | ||
| Director | Director |
The accompanying notes are an integral part of these
condensed interim consolidated financial statements.
BriaCell Therapeutics Corp
Condensed Interim Consolidated Statements of
Operations and Comprehensive Loss
For the Three Months Ended October 31, 2021 and 2020
(Expressed in US Dollars)
| Three month period ended October 31, | ||||||||
| 2021 | 2020 Restated (Note 2) | |||||||
| Expenses: | ||||||||
| Research and development costs (Note 13) | $ | 875,636 | $ | 149,062 | ||||
| General and administration costs (Note 14) | 891,039 | 231,309 | ||||||
| Share-based compensation (Note 9) | 518,134 | - | ||||||
| Total expenses | 2,284,809 | 380,371 | ||||||
| Operating loss | (2,284,809 | ) | (380,371 | ) | ||||
| Interest income | 6,305 | - | ||||||
| Interest expense (Note 6) | (979 | ) | (15,722 | ) | ||||
| Change in fair value of warrant liability (Note 7) | (106,766 | ) | - | |||||
| Loss on extinguishment of debt (Note 8) | - | (25,234 | ) | |||||
| Foreign exchange loss | 34 | - | ||||||
| (101,406 | ) | (40,956 | ) | |||||
| Loss for the period | (2,386,215 | ) | (421,327 | ) | ||||
| Foreign currency translation adjustment | - | 35,340 | ||||||
| Comprehensive loss for the period | $ | (2,386,215 | ) | $ | (385,987 | ) | ||
| Loss per share | $ | (0.16 | ) | $ | (0.54 | ) | ||
| Weighted average number of shares outstanding | 15,238,646 | 774,401 |
The accompanying notes are an integral part of these
condensed interim consolidated financial statements.
BriaCell Therapeutics Corp
Condensed Interim Consolidated Statements of Cash Flows
For the Three Months Ended October 31, 2021 and 2020
(Expressed in US Dollars)
| Three month period ended October 31 | ||||||||
| 2021 | 2020 Restated (Note 2) | |||||||
| Cash flow from operating activities | ||||||||
| Net loss for the period | $ | (2,386,215 | ) | $ | (421,327 | ) | ||
| Items not affecting cash: | ||||||||
| Depreciation and amortization | 3,817 | 3,814 | ||||||
| Share-based compensation | 518,134 | - | ||||||
| Interest expense | - | 6,674 | ||||||
| Loss on extinguishment of settlement of debt | - | 25,234 | ||||||
| Change in fair value of warrants | 106,766 | - | ||||||
| Changes in non-cash working capital: | ||||||||
| Amounts receivable | (6,755 | ) | 15,891 | |||||
| Prepaid expenses | 110,105 | (3,556 | ) | |||||
| Accounts payable and accrued liabilities | (124,451 | ) | 315,173 | |||||
| (1,778,599 | ) | (58,096 | ) | |||||
| Cash flow from financing activities | ||||||||
| Proceeds from receipt of short-term loans | - | 27,102 | ||||||
| - | 27,102 | |||||||
| Decrease in cash | (1,778,599 | ) | (30,994 | ) | ||||
| Effects of changes in foreign exchage | - | 16,738 | ||||||
| Cash, beginning of the period | 57,268,685 | 21,249 | ||||||
| Cash, end of the period | $ | 55,490,086 | $ | 6,993 |
The accompanying notes are an integral part of these
condensed interim consolidated financial statements.
BriaCell Therapeutics Corp
Condensed Interim Consolidated Statements of Changes
in Shareholders' Equity
For the Three Months Ended October 31, 2021 and 2020
(Expressed in US Dollars)
| SHARES | AMOUNT | SHARE-BASED PAYMENT RESERVE | WARRANT RESERVE | ACCUMULATED OTHER COMPREHENSIVE PROFIT (LOSS) | ACCUMULATED DEFICIT | TOTAL SHAREHOLDERS' EQUITY (DEFICIT) | ||||||||||||||||||||||
| Balance, July 31, 2020 Restated (Note 2) | 721,962 | $ | 12,263,858 | $ | 597,551 | $ | 1,849,335 | $ | (138,684 | ) | $ | (18,169,480 | ) | $ | (3,597,420 | ) | ||||||||||||
| Issuance of shares for debt (Note 8c(ii)) | 50,000 | 329,670 | - | - | - | 329,670 | ||||||||||||||||||||||
| Foreign exchange translation | - | - | - | - | - | 35,340 | 35,340 | |||||||||||||||||||||
| Loss for the period | - | - | - | - | - | (421,327 | ) | (421,327 | ) | |||||||||||||||||||
| Balance, October 31, 2020 Restated (Note 2) | 771,962 | $ | 12,593,528 | $ | 597,551 | $ | 1,849,335 | $ | (138,684 | ) | $ | (18,555,467 | ) | $ | (3,653,737 | ) | ||||||||||||
| Historic foreign currency adjustments | 821,327 | 821,327 | ||||||||||||||||||||||||||
| Issuance of warrants on convertible debt | - | - | - | 43,980 | - | - | 43,980 | |||||||||||||||||||||
| Conversion feature | - | 28,712 | - | - | - | 28,712 | ||||||||||||||||||||||
| Issuance of shares in public offering | 6,764,705 | 12,357,799 | - | 790,148 | - | - | 13,147,947 | |||||||||||||||||||||
| Issuance of shares in private placement | 5,170,343 | 13,611,136 | - | 11,084,060 | - | - | 24,695,196 | |||||||||||||||||||||
| Reclassification of warrant liability | - | - | - | 6,621,347 | - | - | 6,621,347 | |||||||||||||||||||||
| Exercise of warrants | 2,562,573 | 16,191,458 | - | (2,595,927 | ) | - | - | 13,595,531 | ||||||||||||||||||||
| Expiration of warrants | - | - | - | (1,599,468 | ) | - | 1,599,468 | - | ||||||||||||||||||||
| Expiration and forfeiture of options | - | - | (387,647 | ) | - | - | 387,647 | - | ||||||||||||||||||||
| Issuance of options | - | - | 1,968,226 | - | - | - | 1,968,226 | |||||||||||||||||||||
| Loss for the period | - | - | - | - | - | (7,006 | ) | (7,006 | ) | |||||||||||||||||||
| Balance, July 31, 2021 | 15,269,583 | 54,782,633 | 2,178,130 | 16,193,475 | (138,684 | ) | (15,754,031 | ) | 57,261,523 | |||||||||||||||||||
| Exercise of warrants (Note 8c(i)) | 100,829 | 575,656 | - | (575,656 | ) | - | - | - | ||||||||||||||||||||
| Issuance of options (Note 9a) | - | - | 518,134 | - | - | - | 518,134 | |||||||||||||||||||||
| Loss for the period | - | - | - | - | - | (2,386,215 | ) | (2,386,215 | ) | |||||||||||||||||||
| Balance, October 31, 2021 | 15,370,412 | $ | 55,358,289 | $ | 2,696,264 | $ | 15,617,819 | $ | (138,684 | ) | $ | (18,140,246 | ) | $ | 55,393,442 |
The accompanying notes are an integral part of these
condensed interim consolidated financial statements.
BriaCell was incorporated under the Business Corporations
Act (British Columbia) on July 26, 2006 and is listed on the TSX Venture Exchange ("TSXV"), and as of February 24, 2021, on
the Nasdaq Capital Market under the symbols "BCTX" and "BCTXW". The Company is developing a new therapy for advanced
breast cancer. The Company's head office in Canada is located at Suite 300 - 235 West 15th Street, West Vancouver, British
Columbia, V7T 2X1 and in the United States, the Company has an office located at 180 Varick Street, 6th Floor New York, NY 10014.These
condensed interim consolidated financial statements were authorized for issue by the Board of Directors on December 14, 2021.
Statement of Compliance
The Company prepares its unaudited condensed interim
consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS") using the accounting
policies described herein as issued by International Accounting Standards Board ("IASB") and International Financial Reporting
Interpretations Committee ("IFRIC") interpretations. These unaudited condensed interim consolidated financial statements have
been prepared in accordance with International Accounting Standards ("IAS") 34 Interim Financial Reporting. The unaudited
condensed interim consolidated financial statements do not include all of the information required for annual consolidated financial statements
and should be read in conjunction with the Company's audited consolidated financial statements for the year ended July 31, 2021.
The policies applied in these condensed interim consolidated
financial statements are based on IFRS effective as of October 31, 2021.
Basis of Presentation
These condensed interim consolidated financial statements
are prepared on a going concern basis and have been presented in United States dollars which is the Company's reporting currency.
A summary of the significant accounting policies is provided in Note 3.
Basis of Measurement
These condensed interim consolidated financial statements
have been prepared on a going concern basis, under the historical cost basis, except for certain financial instruments which have been
measured at fair value.
Basis of Consolidation
These condensed interim consolidated financial statements
include the accounts of BriaCell and its wholly-owned US subsidiary BriaCell Therapeutics Corp. ("BTC") and BTC's wholly
owned subsidiary - Sapientia Pharmaceuticals, Inc. ("Sapientia"). The financial statements of the subsidiaries are included
in the consolidated financial statements from the date that control commenced until the date control ceases. Control exists when the Company
has the power directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The Company applies the acquisition method to account for business combinations in accordance with IFRS 3.
All inter-company balances, and transactions,
have been eliminated upon consolidation.
Functional Currency and Presentation Currency
The financial statements of each company within the
consolidated group are measured using their functional currency which is the currency of the primary economic environment in which an
entity operates. As of May 1, 2021, the Company changed its functional currency from the Canadian dollar (C$) to the United States dollar
(US$). The change in presentation currency is a voluntary change which is accounted for retrospectively. For comparative reporting purposes,
historical financial information has been translated to United States dollars which is disclosed in the tables below using the exchange
rate as of May 1, 2021, which is the date of the change in the functional and presentation currency.
The following shows the restatement of prior period
| Three month period ended October 31, | ||||||||||||
| 2020 reported, CAD | Foreign Currency Translation | 2020 restated, USD | ||||||||||
| Expenses: | ||||||||||||
| Research and development costs | $ | 183,123 | $ | (34,061 | ) | $ | 149,062 | |||||
| General and administration costs | 284,163 | (52,854 | ) | 231,309 | ||||||||
| Total expenses | 467,286 | (86,915 | ) | 380,371 | ||||||||
| Operating loss | (467,286 | ) | 86,915 | (380,371 | ) | |||||||
| Interest expense | (19,315 | ) | 3,593 | (15,722 | ) | |||||||
| Loss on extinguishment of debt | (31,000 | ) | 5,766 | (25,234 | ) | |||||||
| (50,315 | ) | 9,359 | (40,956 | ) | ||||||||
| Loss for the period | (517,601 | ) | 96,274 | (421,327 | ) | |||||||
| Foreign currency translation adjustment | 43,415 | (8,075 | ) | 35,340 | ||||||||
| - | ||||||||||||
| Comprehensive loss for the period | $ | (474,186 | ) | $ | 88,199 | $ | (385,987 | ) | ||||
| Loss per share - basic and diluted | $ | (0.67 | ) | $ | 0.13 | $ | (0.54 | ) | ||||
| Weighted average number of shares outstanding - basic and diluted | 774,401 | - | 774,401 |
Functional Currency and Presentation Currency (continued)
| Three month period ended October 31, | ||||||||||||
| 2020 reported, CAD | Foreign Currency Translation | 2020 restated, USD | ||||||||||
| Cash flow from operating activities | ||||||||||||
| Net loss for the period | $ | (517,601 | ) | $ | 96,274 | $ | (421,327 | ) | ||||
| Items not affecting cash: | ||||||||||||
| Depreciation and amortization | 4,686 | (872 | ) | 3,814 | ||||||||
| Accrued interest expense | 8,199 | (1,525 | ) | 6,674 | ||||||||
| Loss on extinguishment of settlement of debt | 31,000 | (5,766 | ) | 25,234 | ||||||||
| Changes in non-cash working capital: | ||||||||||||
| Amounts receivable | 19,522 | (3,631 | ) | 15,891 | ||||||||
| Prepaid expenses | (4,368 | ) | 812 | (3,556 | ) | |||||||
| Accounts payable and accrued liabilities | 387,191 | (72,018 | ) | 315,173 | ||||||||
| (71,371 | ) | 13,274 | (58,096 | ) | ||||||||
| Cash flow from financing activities | ||||||||||||
| Proceeds from receipt of short-term loans | 33,295 | (6,193 | ) | 27,102 | ||||||||
| 33,295 | (6,193 | ) | 27,102 | |||||||||
| Decrease in cash | (38,076 | ) | 7,081 | (30,994 | ) | |||||||
| Effect of changes in foreign exchange | 20,563 | (3,825 | ) | 16,738 | ||||||||
| Cash, beginning of period | 26,104 | (4,855 | ) | 21,249 | ||||||||
| Cash, end of period | $ | 8,591 | $ | (1,599 | ) | $ | 6,993 |
The preparation of financial data is based on accounting
principles and practices consistent with those used in the preparation of the audited consolidated financial statements as of July 31,
2021. The accompanying condensed interim consolidated financial statements should be read in conjunction with the Company's audited
consolidated financial statements for the year ended July 31, 2021.
The critical judgments and significant estimates in
applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements
| Intangible assets with an infinite life are tested for impairment annually or more frequently if there is an indication of impairment. The carrying value of intangibles with definite lives is reviewed each reporting period to determine whether there is any indication of impairment. If there are indications of impairment the impairment analysis is completed and if the carrying amount of an asset exceeds its recoverable amount, the asset is impaired and impairment loss is recognized. | |
| The Company uses the Black-Scholes option-pricing model to estimate fair value of options and the warrant liability at each reporting date. The key assumptions used in the model are the expected future volatility in the price of the Company's shares and the expected life of the warrants. | |
| The Company and its subsidiaries are required to determine their functional currencies based on the primary economic environment in which each entity operates. In order to do that, management has to analyze several factors, including which currency mainly influences the cost of undertaking the business activities, in which currency the entity has received financing, and in which currency it keeps its receipts from operating activities. Management uses its judgment to determine which factors are most important when the above indicators are mixed and the functional currency is not obvious. |
The attributable intellectual property relates to
Sapientia's various patents, which the Company is amortizing over 20 years, consistent with its accounting policy. During the three
months ended October 31, 2021, the Company recorded $3,817 in amortization on intellectual property (for the three months ended October
| Costs | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||||
| July 31, 2021: | ||||||||||||||||||||||||||
| July 31, 2020 | Additions | July 31, 2021 | July 31, 2020 | Amortization during the year | July 31, 2021 | July 31, 2021 | ||||||||||||||||||||
| $ | 305,130 | $ | - | $ | 305,130 | $ | 44,263 | $ | 15,256 | $ | 59,520 | $ | 245,610 |
| October 31, 2021: | ||||||||||||||||||||||||||
| July 31, 2021 | Additions | October 31, 2021 | July 31, 2021 | Amortization during the period | October 31, 2021 | October 31, 2021 | ||||||||||||||||||||
| $ | 305,130 | $ | - | $ | 305,130 | $ | 59,520 | $ | 3,817 | $ | 63,337 | $ | 241,793 |
On April 24, 2020, the Company received a $32,560
(CAD$40,000) loan from the Canada Emergency Business Account ("CEBA Loan"). The CEBA Loan bears 0% interest until December
31, 2022. If the balance is not paid by December 31, 2022, the remaining balance will be converted to a 3-year term loan at 5% annual
interest, paid monthly, effective January 1, 2023. The full balance must be repaid by no later than December 31, 2025. No principal payments