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CLEARMIND MEDICINE INC.
Condensed Interim Consolidated Financial Statements
For The Three Months Ended January 31, 2023
(Expressed in Canadian Dollars)
CLEARMIND MEDICINE INC.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
| January 31, 2023 | October 31, 2022 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 4,498,048 | $ | 175,768 | ||||
| Other receivables | 291,829 | 69,518 | ||||||
| Short-term investment (Note 3) | 180,225 | 264,449 | ||||||
| Prepaid expenses | 933,829 | 19,443 | ||||||
| Related parties (Note 4b) | 77,314 | 64,134 | ||||||
| Total current assets | 5,981,245 | 593,312 | ||||||
| Non-current assets | ||||||||
| Property and equipment | 15,012 | 17,610 | ||||||
| Intangible assets | 173,840 | 177,797 | ||||||
| Restricted cash | 20,000 | 20,000 | ||||||
| Right-of-use asset | 24,340 | 48,768 | ||||||
| Deferred offering costs (Note 5c) | - | 270,487 | ||||||
| Total non-current assets | 233,192 | 534,662 | ||||||
| Total assets | $ | 6,214,437 | $ | 1,127,974 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 900,872 | $ | 1,906,706 | ||||
| Due to related parties (Note 4) | 143,832 | 281,844 | ||||||
| Derivative liability (Note 5c(i)) | - | 396,597 | ||||||
| Lease liability | 27,017 | 52,399 | ||||||
| Total liabilities | $ | 1,071,721 | $ | 2,637,546 | ||||
| Shareholders' equity (deficit) | ||||||||
| Share capital and share premium (Note 5) | 17,691,059 | 9,153,900 | ||||||
| RSU reserve (Note 8) | 742,662 | 672,945 | ||||||
| Warrants (Note 6) | 1,003,801 | 626,641 | ||||||
| Share-based payment reserve (Note 7) | 2,048,233 | 1,915,895 | ||||||
| Accumulated other comprehensive loss | ( 33,622 | ) | ( 29,004 | ) | ||||
| Accumulated deficit | ( 16,309,417 | ) | ( 13,849,949 | ) | ||||
| Total shareholders' equity (deficit) | 5,142,716 | ( 1,509,572 | ) | |||||
| Total liabilities and shareholders' equity (deficit) | $ | 6,214,437 | $ | 1,127,974 |
Approved and authorized for issuance on behalf of the Board on March
| /s/ "Alan Rootenberg" | /s/ "Adi Zuloff-Shani" | |
| Alan Rootenberg, Director, CFO | Adi Zuloff-Shani, Director, 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 Canadian Dollars)
| Three months ended | ||||||||
| January 31, | ||||||||
| 2023 | 2022 | |||||||
| Operating expenses | ||||||||
| General and administrative | $ | 1,679,546 | $ | 1,660,157 | ||||
| Research and development | 792,460 | 424,262 | ||||||
| Total operating expenses | 2,472,006 | 2,084,419 | ||||||
| Loss before other expenses | ( 2,472,006 | ) | ( 2,084,419 | ) | ||||
| Finance expenses | ||||||||
| Unrealized loss on short-term investment (Note 3) | ( 84,224 | ) | - | |||||
| Foreign exchange gain (loss) | 42,348 | ( 6,464 | ) | |||||
| Interest income | 36,875 | - | ||||||
| Total finance expenses | ( 5,001 | ) | ( 6,464 | ) | ||||
| Other income | ||||||||
| Dividend received | 22,101 | - | ||||||
| Total other incomes | 22,101 | - | ||||||
| Loss before taxes | ( 2,454,906 | ) | ( 2,090,883 | ) | ||||
| Tax expenses | ( 4,562 | ) | - | |||||
| Net Loss | ( 2,459,468 | ) | ( 2,090,883 | ) | ||||
| Other comprehensive loss for the period | ||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||
| Foreign exchange differences on translation of foreign operations | ( 4,618 | ) | - | |||||
| Comprehensive loss | $ | ( 2,464,086 | ) | $ | ( 2,090,883 | ) | ||
| Loss per share (*), basic and diluted | $ | ( 1.07 | ) | $ | ( 1.67 | ) | ||
| Weighted average number of shares (*) for the purposes of basic and diluted loss per share | 2,297,738 | 1,251,790 |
(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 Canadian Dollars)
| Share capital and share premium | Share-based | Accumulated other | Total | |||||||||||||||||||||||||||||
| Number of shares (*) | Amount | RSU reserve | Warrants | payment reserve | comprehensive income | Accumulated deficit | shareholders' equity (deficit) | |||||||||||||||||||||||||
| Balance, October 31, 2021 | 1,250,833 | $ | 7,905,514 | $ | 154,000 | $ | 342,000 | $ | 839,457 | $ | - | $ | ( 4,439,143 | ) | $ | 4,801,828 | ||||||||||||||||
| Shares issuable for vested RSU's | - | - | 36,000 | - | - | - | - | 36,000 | ||||||||||||||||||||||||
| Shares issued and issuable for services | 1,333 | 28,800 | 73,003 | 101,803 | ||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | 218,974 | - | - | 218,974 | ||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | - | ( 2,090,883 | ) | ( 2,090,883 | ) | |||||||||||||||||||||||
| Balance, January 31, 2022 | 1,252,166 | $ | 7,934,314 | $ | 263,003 | $ | 342,000 | $ | 1,058,431 | $ | - | $ | ( 6,530,026 | ) | $ | 3,067,722 | ||||||||||||||||
| Balance, October 31, 2022 | 1,319,770 | $ | 9,153,900 | $ | 672,945 | $ | 626,641 | $ | 1,915,895 | $ | ( 29,004 | ) | $ | ( 13,849,949 | ) | $ | ( 1,509,572 | ) | ||||||||||||||
| Net loss for the period | - | - | - | - | - | - | ( 2,459,468 | ) | ( 2,459,468 | ) | ||||||||||||||||||||||
| Foreign currency translation gain | - | - | - | - | - | ( 4,618 | ) | - | ( 4,618 | ) | ||||||||||||||||||||||
| Total comprehensive loss for the period | - | - | - | - | - | ( 4,618 | ) | ( 2,459,468 | ) | ( 2,464,086 | ) | |||||||||||||||||||||
| Public offering (Note 5c(i)) | 1,153,847 | 8,089,751 | - | 376,851 | - | - | - | 8,466,602 | ||||||||||||||||||||||||
| Shares and warrants issuable to Medigus (Note 5c(i)) | - | 396,288 | - | 309 | - | - | - | 396,597 | ||||||||||||||||||||||||
| Shares issued from RSUs (Note 5c(ii)) | 4,824 | 51,120 | ( 51,120 | ) | - | - | - | - | - | |||||||||||||||||||||||
| Shares for services (Notes 11a, 11c) | - | - | 46,832 | - | - | - | - | 46,832 | ||||||||||||||||||||||||
| RSU's vested (Note 8(i)) | - | - | 74,005 | - | - | - | - | 74,005 | ||||||||||||||||||||||||
| Share-based compensation (Note 7) | - | - | - | - | 132,338 | - | - | 132,338 | ||||||||||||||||||||||||
| Balance, January 31, 2023 | 2,478,441 | $ | 17,691,059 | $ | 742,662 | $ | 1,003,801 | $ | 2,048,233 | $ | ( 33,622 | ) | $ | ( 16,309,417 | ) | $ | 5,142,716 |
(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 Canadian Dollars)
| Three months ended | Three months ended | |||||||
| January 31, | January 31, | |||||||
| 2023 | 2022 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( 2,459,468 | ) | $ | ( 2,090,883 | ) | ||
| Adjustments for: | ||||||||
| Amortization of intangible assets | 3,957 | 10,102 | ||||||
| Amortization of right-of-use asset | 18,399 | - | ||||||
| Interest on lease liability | 2,324 | - | ||||||
| Dividend received | 22,101 | - | ||||||
| Depreciation of property and equipment | 2,607 | 2,040 | ||||||
| Share-based compensation | 253,175 | 356,777 | ||||||
| Unrealized loss on short-term investment | 84,224 | - | ||||||
| Tax expenses | 4,562 | - | ||||||
| Movements in working capital: | ||||||||
| Decrease (increase) in amounts receivable | ( 257,592 | ) | 37,821 | |||||
| Decrease (increase) in prepaid expenses | ( 914,386 | ) | 62,634 | |||||
| Decrease in accounts payable and accrued liabilities | ( 739,909 | ) | ( 202,805 | ) | ||||
| Increase (decrease) in due to related parties | ( 138,012 | ) | 37,459 | |||||
| Net cash used in operating activities | ( 4,118,018 | ) | ( 1,786,855 | ) | ||||
| Financing activities | ||||||||
| Proceeds from issuance of shares, net (Note 5c(i)) | 8,466,602 | - | ||||||
| Repayment of lease liabilities | ( 21,281 | ) | - | |||||
| Net cash provided by financing activities | 8,445,321 | - | ||||||
| Effect of foreign exchange rate changes | ( 5,023 | ) | ( 404 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 4,322,280 | ( 1,787,259 | ) | |||||
| Cash and cash equivalents at beginning of period | 175,768 | 4,599,437 | ||||||
| Cash and cash equivalents at end of period | $ | 4,498,048 | $ | 2,812,178 | ||||
| Supplementary disclosure of cash flow information: | ||||||||
| Cash received for interest | $ | 36,875 | $ | - | ||||
| Non-cash financing and investing activities | ||||||||
| Derivative liability converted to equity (Note 5c(i)) | $ | 396,597 | $ | - |
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
On November 14, 2022, the Company completed a public offering
for aggregate gross proceeds of US$7.5 million and up listing to the Nasdaq Capital Market ("Nasdaq"), see note 5c. The Company
trades under the symbol CMND on both the Nasdaq and the Canadian Securities Exchange ("CSE") in Toronto.
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 three months ended January 31, 2023, the Company has not generated any revenues and has negative
cash flow from operations of $4,118,018. As of January 31, 2023, the Company has an accumulated deficit of $16,309,417. 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 may cast 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
On September 30, 2022, the Company's Board of Directors
approved a 1-for-30 reverse split of its issued and outstanding ordinary shares, effective as of September 30, 2022, pursuant to
which holders of the Company's ordinary shares received 0.0333 of an ordinary share for every one ordinary share.
All issued and outstanding ordinary shares or instruments
convertible into ordinary 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 Canadian Dollars)
The accompanying condensed interim 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 Ltd. (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 Canadian dollars, which is the Company's functional
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 financial statements should be read in conjunction with the audited financial statements
as of and for the year ended October 31, 2022 and the notes thereto (the "2022 Annual Report").
The unaudited condensed financial statements have been prepared
on the same basis as the audited financial statements. In the opinion of the Company's management, the accompanying unaudited condensed
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 three months ended January 31, 2023 are not necessarily indicative of
the results for the year ending October 31, 2023, or for any future period.
As of January 31, 2023, there have been no material changes
in the Company's significant accounting policies from those that were disclosed in the 2022 Annual Report.
The preparation of consolidated financial statements in accordance
with IFRS requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts
of assets, liabilities, income, and expenses. The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments
about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
Significant Estimates
Share-based Compensation
Fair values are determined using the Black-Scholes option
pricing model. Estimating fair value requires determining the most appropriate valuation model for a grant of equity instruments, which
is dependent on the terms and conditions of the grant. Option-pricing models require the use of highly subjective estimates and assumptions
including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates and,
therefore, existing models do not necessarily provide reliable measurement of the fair value of the Company's stock options.
Significant Judgments
The critical judgments that the Company's management
has made in the process of applying the Company's accounting policies that have the most significant effect on the amounts recognized
in the Company's consolidated financial statements are as follows:
The application of the going concern assumption requires
management to take into account all available information about the future, which is at least but not limited to, 12 months from the year
end of the reporting period. The Company is aware that material uncertainties related to events or conditions may cast significant doubt
upon the Company's ability to continue as a going concern.
As of January 31, 2023, the Company holds 27,778 common
shares of Medigus Ltd ("Medigus") (approximately 0.11%) with a total fair value of $180,225. The fair value of common shares
held was determined by reference to public price quotations in an active market.
| October 31, 2022 | Additions | Unrealized loss | January 31, 2023 | |||||||||||||
| Medigus Ltd. - Shares | $ | 264,449 | $ | - | $ | ( 84,224 | ) | $ | 180,225 |
CLEARMIND MEDICINE INC.