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CLEARMIND MEDICINE INC.
Condensed Interim Consolidated Financial Statements
For The Three and Nine Months Ended July 31, 2024
(Expressed in United States Dollars)
CLEARMIND MEDICINE INC.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in United States Dollars)
| July 31, | October 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 7,679,648 | $ | 5,427,739 | ||||
| Other receivables | 82,745 | 104,320 | ||||||
| Short-term investment (Note 3) | - | 86,112 | ||||||
| Prepaid expenses | 123,765 | 40,403 | ||||||
| Related parties (Note 4b) | 108,597 | 136,002 | ||||||
| Total current assets | 7,994,755 | 5,794,576 | ||||||
| Non-current assets | ||||||||
| Property and equipment | 355 | 1,727 | ||||||
| Intangible assets | 111,087 | 119,310 | ||||||
| Restricted cash | 7,242 | 37,675 | ||||||
| Right-of-use asset (Note 4c) | 59,925 | - | ||||||
| Total non-current assets | 178,609 | 158,712 | ||||||
| Total assets | $ | 8,173,364 | $ | 5,953,288 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 276,744 | $ | 617,004 | ||||
| Due to related parties (Note 4a) | 48,577 | 42,433 | ||||||
| Derivative warrant liabilities (Note 5) | 4,314,223 | 4,310,379 | ||||||
| Short-term portion of lease liabilities (Note 4c) | 35,320 | - | ||||||
| Total current liabilities | 4,674,864 | 4,969,816 | ||||||
| Non- current liabilities | ||||||||
| Long-term lease liabilities (Note 4c) | 25,578 | - | ||||||
| Total non- current liabilities | 25,578 | 4,969,816 | ||||||
| Total liabilities | $ | 4,700,442 | $ | 4,969,816 | ||||
| Shareholders' equity | ||||||||
| Share capital and share premium (Note 6) | 23,800,735 | 17,131,223 | ||||||
| Warrants (Note 7) | 459,341 | 459,341 | ||||||
| Share-based payment reserve (Notes 8,9) | 2,372,093 | 2,182,221 | ||||||
| Accumulated other comprehensive loss | ( 21,250 | ) | ( 21,250 | ) | ||||
| Accumulated deficit | ( 23,137,997 | ) | ( 18,768,063 | ) | ||||
| Total shareholders' equity | 3,472,922 | 983,472 | ||||||
| Total liabilities and shareholders' equity | $ | 8,173,364 | $ | 5,953,288 |
Approved and authorized for issuance on behalf of the Board of Directors
on September 15, 2024:
| /s/ Alan Rootenberg | /s/ Adi Zuloff-Shani | |
| Alan Rootenberg, CFO | Adi Zuloff-Shani, CEO |
(The accompanying notes are an integral part of
these condensed interim consolidated financial statements)
CLEARMIND MEDICINE INC.
Condensed Interim Consolidated Statements of Operations and Comprehensive
(Expressed in United States Dollars)
| Three months ended | Nine months ended | |||||||||||||||
| July 31, | July 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | $ | 1,125,365 | $ | 838,925 | $ | 3,262,427 | $ | 3,422,798 | ||||||||
| Research and development, net | 345,883 | 263,954 | 896,317 | 1,169,156 | ||||||||||||
| Total operating expenses | 1,471,248 | 1,102,879 | 4,158,744 | 4,591,954 | ||||||||||||
| Finance income (expenses) | ||||||||||||||||
| Changes in fair value of derivative warrant liabilities (Note 5) | ( 643,225 | ) | 482,331 | ( 83,080 | ) | 121,774 | ||||||||||
| Unrealized gain (loss) on short-term investment (Note 3) | - | ( 12,222 | ) | 415,826 | ( 70,971 | ) | ||||||||||
| Realized loss on short-term investment (Note 3) | - | - | ( 423,438 | ) | - | |||||||||||
| Foreign exchange gain (loss) | ( 5,380 | ) | 33,645 | ( 2,709 | ) | ( 61,711 | ) | |||||||||
| Other finance income, net | 85,024 | 17,307 | 179,555 | 41,288 | ||||||||||||
| Total finance income (expenses) | ( 563,581 | ) | 521,061 | 86,154 | 30,380 | |||||||||||
| Other income (expenses) | ||||||||||||||||
| Other expenses | ( 16,498 | ) | - | ( 16,498 | ) | - | ||||||||||
| Dividend received | - | - | - | 16,555 | ||||||||||||
| Total other income (expenses) | ( 16,498 | ) | - | ( 16,498 | ) | 16,555 | ||||||||||
| Loss before taxes | ( 2,051,327 | ) | ( 581,818 | ) | ( 4,089,088 | ) | ( 4,545,019 | ) | ||||||||
| Tax income (expenses) | ( 42,590 | ) | 6,631 | ( 280,846 | ) | ( 6,019 | ) | |||||||||
| Net Loss and Comprehensive loss | $ | ( 2,093,917 | ) | $ | ( 575,187 | ) | $ | ( 4,369,934 | ) | $ | ( 4,551,038 | ) | ||||
| Loss per share, basic and diluted | $ | ( 0.59 | ) | $ | ( 2.43 | ) | $ | ( 1.58 | ) | $ | ( 31.14 | ) | ||||
| Weighted average number of shares (*) for the purposes of basic and diluted loss per share | 3,559,860 | 236,295 | 2,773,384 | 146,163 |
(The accompanying notes are an integral part of
these condensed interim consolidated financial statements)
CLEARMIND MEDICINE INC.
Condensed Interim Statements of Changes in Shareholders' Equity
(Expressed in United States Dollars)
| Share capital and share premium | Share-based | Accumulated other | Total shareholders' | |||||||||||||||||||||||||
| Number of shares (*) | Amount | Warrants | payment reserve | comprehensive income | Accumulated deficit | equity (deficit) | ||||||||||||||||||||||
| Balance, October 31, 2023 | 607,337 | $ | 17,131,223 | $ | 459,341 | $ | 2,182,221 | $ | ( 21,250 | ) | $ | ( 18,768,063 | ) | $ | 983,472 | |||||||||||||
| Net loss for the period | - | - | - | - | - | ( 4,369,934 | ) | ( 4,369,934 | ) | |||||||||||||||||||
| Issuance of common shares, pre-funded warrants and warrants (Note 6c(iii)) | 1,500,000 | 1,459,815 | - | - | - | - | 1,459,815 | |||||||||||||||||||||
| Exercise of warrants (Notes 6c(ii, v, ix)) | 1,500,274 | 4,594,808 | - | - | - | - | 4,594,808 | |||||||||||||||||||||
| Issuance of common shares upon vesting of restricted share units (Notes 6c(vi, viii, xi)) | 306,838 | 511,190 | - | ( 511,190 | ) | - | - | - | ||||||||||||||||||||
| Share-based compensation (Notes 6c (i, iv, vii, ix), 8, 9) | 64,794 | 103,699 | - | 701,062 | - | - | 804,761 | |||||||||||||||||||||
| Balance, July 31, 2024 | 3,979,243 | $ | 23,800,735 | $ | 459,341 | $ | 2,372,093 | $ | ( 21,250 | ) | $ | ( 23,137,997 | ) | $ | 3,472,922 | |||||||||||||
| Balance, October 31, 2022 | 43,992 | $ | 6,706,644 | $ | 459,110 | $ | 1,896,724 | $ | ( 21,250 | ) | $ | ( 10,147,226 | ) | $ | ( 1,105,998 | ) | ||||||||||||
| Net loss for the period | - | - | - | - | - | ( 4,551,038 | ) | ( 4,551,038 | ) | |||||||||||||||||||
| Issuance of common shares | 38,462 | 6,026,327 | - | 337,579 | - | - | 6,363,906 | |||||||||||||||||||||
| Common shares and warrants issued to XYLO TECHNOLOGIES LTD. (formerly Medigus Ltd.) | 1,494 | 296,845 | 231 | - | - | - | 297,076 | |||||||||||||||||||||
| Issuance of common shares, pre-funded warrants and warrants | 150,191 | 1,455,832 | - | - | - | - | 1,455,832 | |||||||||||||||||||||
| Issuance of common shares upon vesting of restricted stock units | 806 | 198,265 | - | ( 198,265 | ) | - | - | - | ||||||||||||||||||||
| Share-based compensation | 2,330 | 147,965 | - | 174,560 | - | - | 322,525 | |||||||||||||||||||||
| Balance, July 31, 2023 | 237,275 | $ | 14,831,878 | $ | 459,341 | $ | 2,210,598 | $ | ( 21,250 | ) | $ | ( 14,698,264 | ) | $ | 2,782,303 |
All share amounts have been retroactively adjusted
for all periods presented.
(The accompanying notes are an integral part of
these condensed interim consolidated financial statements)
CLEARMIND MEDICINE INC.
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in United States Dollars)
| Nine months ended July 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( 4,369,934 | ) | $ | ( 4,551,038 | ) | ||
| Adjustments for: | ||||||||
| Amortization of intangible assets | 8,223 | 12,509 | ||||||
| Amortization of right-of-use asset | 29,965 | 35,381 | ||||||
| Interest on lease liability | 3,924 | 2,907 | ||||||
| Exchange rate differences | 2,288 | ( 622 | ) | |||||
| Dividend received | - | 16,555 | ||||||
| Share issuance costs allocated to derivate warrant liability | 115,046 | - | ||||||
| Depreciation of property and equipment | 1,372 | 5,603 | ||||||
| Changes in fair value of derivative warrant liability | 83,080 | ( 121,774 | ) | |||||
| Share-based compensation | 701,374 | 329,032 | ||||||
| Unrealized (gain) loss on short-term investment | ( 415,826 | ) | 70,971 | |||||
| Realized loss on short-term investment | 423,438 | - | ||||||
| Tax expenses | 39,759 | 6,019 | ||||||
| Changes in working capital: | ||||||||
| Decrease (increase) in other receivables | 54,820 | ( 153,550 | ) | |||||
| Increase in prepaid expenses | ( 83,380 | ) | ( 136,599 | ) | ||||
| Decrease in accounts payable and accrued liabilities | ( 382,275 | ) | ( 898,795 | ) | ||||
| Increase (decrease) in due to / from related parties | 6,612 | ( 164,903 | ) | |||||
| Net cash used in operating activities | ( 3,781,514 | ) | ( 5,548,304 | ) | ||||
| Investing activities | ||||||||
| Proceeds from sale of short-term investment | 78,500 | - | ||||||
| Restricted Cash | 33,803 | 7,686 | ||||||
| Net cash generated in investing activities | 112,303 | 7,686 | ||||||
| Financing activities | ||||||||
| Proceeds from issuance of common shares and warrants, net of issuance costs (Note 6c (iii)) | 1,824,773 | 9,300,048 | ||||||
| Proceeds received from issuance of shares | 103,387 | - | ||||||
| Proceeds received from exercise of warrants (Notes 6c (ii, v, ix)) | 4,035,568 | - | ||||||
| Repayment of lease liabilities | ( 32,555 | ) | ( 40,922 | ) | ||||
| Net cash provided by financing activities | 5,931,173 | 9,259,126 | ||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | ( 10,053 | ) | ( 26 | ) | ||||
| Net increase in cash and cash equivalents | 2,251,909 | 3,718,482 | ||||||
| Cash and cash equivalents at beginning of period | 5,427,739 | 128,777 | ||||||
| Cash and cash equivalents at end of period | $ | 7,679,648 | $ | 3,847,259 | ||||
| Supplementary disclosure of cash flow information: | ||||||||
| Cash received as interest | $ | 210,090 | $ | 40,636 | ||||
| Cash paid for taxes | 269,007 | - | ||||||
| Non-cash financing and investing activities | ||||||||
| Derivative liability converted to equity | $ | - | $ | 290,569 | ||||
| Right of use assets obtained in exchange for lease liabilities | 181,779 | - | ||||||
| Early termination of office lease (Note 4c) | ( 88,562 | ) | - |
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
On November 14, 2022, the Company completed
a listing on the Nasdaq Capital Market ("Nasdaq"). The Company trades under the symbol "CMND" on the Nasdaq and
on the Frankfurt Stock Exchange, (FSE), under the symbol "CWY". The Company was listed on the Canadian Securities Exchange
("CSE") in Toronto until March 14, 2024. Following approval for a voluntary delisting, the Company no longer trades on the
CSE but remains a reporting issuer in Canada.
On January 16, 2024, the Company completed
a registered direct and private placement for aggregate gross proceeds of $2.40 million. See note 6(c)(iii).
These condensed interim consolidated
financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets
and discharge its liabilities in the normal course of business. For the nine months ended July 31, 2024, the Company has not generated
any revenues and has negative cash flows from operations of $3,781,514. As of July 31, 2024, the Company has an accumulated deficit of
$23,137,997. The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional financing
through debt or equity. Management is of the opinion that sufficient working capital will be obtained from external financing to meet
the Company's liabilities and commitments as they become due, although there is a risk that additional financing will not be available
on a timely basis or on terms acceptable to the Company. These factors raise substantial doubt on the Company's ability to continue
as a going concern. These condensed interim consolidated financial statements do not reflect any adjustments that may be necessary if
the Company is unable to continue as a going concern.
On November 28, 2023, the Company's
Board of Directors (the "Board") approved a 1-for-30 reverse split of its issued and outstanding common shares, effective
as of November 28, 2023, pursuant to which holders of the Company's common shares received 0.0333 of a common share for every one
common share then held.
All issued and outstanding common shares
or instruments convertible into common shares contained in these financial statements have been retroactively adjusted to reflect the
reverse share split for all periods presented, unless explicitly stated otherwise.
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
The accompanying consolidated financial
statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International
Accounting Standards Board ("IASB") on a going concern basis.
These condensed interim consolidated
financial statements include the accounts of the Company and its 100% owned subsidiaries, Clearmindmed Ltd. and Clearmind Labs Corp. (inactive).
All inter-company balances and transactions have been eliminated on consolidation.
These condensed interim consolidated
financial statements have been prepared on a historical cost basis, except for financial assets and liabilities (including derivatives)
which are presented at fair value through profit or loss ("FVTPL"), and are presented in United States dollars, which is the
Company's functional currency.
Certain information and footnote disclosures
normally included in financial statements prepared in accordance with IFRS have been condensed or omitted from this report, as is permitted
by such rules and regulations. Accordingly, these condensed interim consolidated financial statements should be read in conjunction with
the audited financial statements as of and for the year ended October 31, 2023 and the notes thereto (the "2023 Annual Report").
The condensed interim consolidated financial
statements have been prepared on the same basis as the 2023 Annual Report. In the opinion of the Company's management, these condensed
interim consolidated financial statements contain all adjustments that are necessary to present fairly the Company's financial position
and results of operations for the interim periods presented. The results for the nine months ended July 31, 2024 are not necessarily indicative
of the results for the year ending October 31, 2024, or for any future period.
As of July 31, 2024, there have been
no material changes in the Company's significant accounting policies from those that were disclosed in the 2023 Annual Report except
Amendments to IAS 1 Presentation
of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements-Disclosure of Accounting Policies
The Company has adopted the amendments
to IAS 1 for the first time in the current year. The amendments change the requirements in IAS 1 with regard to disclosure of accounting
policies. The amendments replace all instances of the term significant accounting policies' with material accounting
policy information'. Accounting policy information is material if, when considered together with other information included in an
entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial
statements make on the basis of those financial statements.
The supporting paragraphs in IAS 1 are also amended to clarify that
accounting policy information that relates to immaterial transactions, other events or conditions that are immaterial and need not be
disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions,
even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or
conditions is itself material.
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
The preparation of consolidated financial
statements in accordance with IFRS requires management to make judgments, estimates, and assumptions that affect the application of policies