Full Press Release Details
Interim Consolidated Financial Statements
The Three Months Ended January 31, 2024
in United States Dollars)
Interim Consolidated Statements of Financial Position
in United States Dollars)
| January 31, | October 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 9,285,973 | $ | 5,427,739 | ||||
| Other receivables | 68,491 | 104,320 | ||||||
| Short-term investment (Note 3) | 86,668 | 86,112 | ||||||
| Prepaid expenses | 316,886 | 40,403 | ||||||
| Related parties (Note 4b) | 85,382 | 136,002 | ||||||
| Total current assets | 9,843,400 | 5,794,576 | ||||||
| Non-current assets | ||||||||
| Property and equipment | 1,350 | 1,727 | ||||||
| Intangible assets | 116,549 | 119,310 | ||||||
| Restricted cash | 41,264 | 37,675 | ||||||
| Right-of-use asset (Note 4d) | 95,034 | - | ||||||
| Total non-current assets | 254,197 | 158,712 | ||||||
| Total assets | $ | 10,097,597 | $ | 5,953,288 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 608,520 | $ | 617,004 | ||||
| Due to related parties (Note 4) | 152,100 | 42,433 | ||||||
| Derivative warrants liabilities (Note 5) | 4,201,370 | 4,310,379 | ||||||
| Short-term portion of lease liabilities (Note 4d) | 63,707 | - | ||||||
| Total current liabilities | 5,025,697 | 4,969,816 | ||||||
| Non- current liabilities | ||||||||
| Long-term lease liabilities (Note 4d) | 30,507 | - | ||||||
| Total non-current liabilities | 30,507 | - | ||||||
| Total liabilities | $ | 5,056,204 | $ | 4,969,816 | ||||
| Shareholders' equity | ||||||||
| Share capital and share premium (Note 6) | 22,523,057 | 17,131,223 | ||||||
| Warrants (Note 7) | 459,341 | 459,341 | ||||||
| Share-based payment reserve (Notes 8,9) | 2,216,108 | 2,182,221 | ||||||
| Accumulated other comprehensive loss | ( 21,250 | ) | ( 21,250 | ) | ||||
| Accumulated deficit | ( 20,135,863 | ) | ( 18,768,063 | ) | ||||
| Total shareholders' equity | 5,041,393 | 983,472 | ||||||
| Total liabilities and shareholders' equity | $ | 10,097,597 | $ | 5,953,288 |
Approved and authorized for issuance on behalf of the Board of Directors
| /s/ "Alan Rootenberg" | /s/ "Adi Zuloff-Shani" | |
| Alan Rootenberg, CFO | Adi Zuloff-Shani, CEO |
accompanying notes are an integral part of these condensed interim consolidated financial statements)
Interim Consolidated Statements of Operations and Comprehensive Loss
in United States Dollars)
| Three months ended January 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating expenses | ||||||||
| General and administrative | $ | 1,156,513 | $ | 1,245,428 | ||||
| Research and development, net | 227,478 | 587,630 | ||||||
| Total operating expenses | 1,383,991 | 1,833,058 | ||||||
| Finance incomes (expenses) | ||||||||
| Changes in fair value of derivative warrants liabilities (Note 5) | 155,143 | - | ||||||
| Unrealized gain (loss) on short-term investment (Note 3) | 556 | ( 63,194 | ) | |||||
| Foreign exchange gain (loss) | 1,416 | ( 34,404 | ) | |||||
| Other finance income, net | 60,576 | 18,015 | ||||||
| Total finance incomes (expenses) | 217,691 | ( 79,583 | ) | |||||
| Other income | ||||||||
| Dividend received | - | 16,555 | ||||||
| Total other income | - | 16,555 | ||||||
| Loss Before taxes | ( 1,166,300 | ) | ( 1,896,086 | ) | ||||
| Tax expenses | ( 201,500 ) | ( 3,383 | ) | |||||
| Net Loss and comprehensive loss | $ | ( 1,367,800 | ) | $ | ( 1,899,469 | ) | ||
| Loss per share, basic and diluted | $ | ( 0.90 | ) | $ | ( 24.80 | ) | ||
| Weighted average number of shares for the purposes of basic and diluted loss per share (*) | 1,517,459 | 76,591 |
accompanying notes are an integral part of these condensed interim consolidated financial statements)
Interim Statements of Changes in Shareholders' Equity (Deficit)
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, 2022 | 43,992 | $ | 6,706,644 | $ | 459,110 | $ | 1,896,724 | $ | ( 21,250 | ) | $ | ( 10,147,226 | ) | $ | ( 1,105,998 | ) | ||||||||||||
| Net loss for the period | - | - | - | - | - | ( 1,899,469 | ) | ( 1,899,469 | ) | |||||||||||||||||||
| Issuance of common shares | 38,462 | 6,026,327 | - | 337,579 | - | - | 6,363,906 | |||||||||||||||||||||
| Common shares and warrants issued to Medigus | - | 296,845 | 231 | - | - | - | 297,076 | |||||||||||||||||||||
| Issuance of common shares upon vesting of restricted stock units | 161 | 39,975 | - | ( 39,975 | ) | - | - | - | ||||||||||||||||||||
| Common shares for services | - | - | - | 34,906 | - | - | 34,906 | |||||||||||||||||||||
| Share-based compensation | - | - | - | 154,565 | - | - | 154,565 | |||||||||||||||||||||
| Balance, January 31, 2023 | 82,615 | $ | 13,069,791 | $ | 459,341 | $ | 2,383,799 | $ | ( 21,250 | ) | $ | ( 12,046,695 | ) | $ | 3,844,986 | |||||||||||||
| 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 | - | - | - | - | - | ( 1,367,800 | ) | ( 1,367,800 | ) | |||||||||||||||||||
| Issuance of common shares, pre-funded warrants and warrants (Note 6c(iii)) | 1,500,000 | 1,459,815 | - | - | - | - | 1,459,815 | |||||||||||||||||||||
| Exercise of warrants (Note 6c(ii)) | 1,062,188 | 3,931,902 | - | - | - | - | 3,931,902 | |||||||||||||||||||||
| Common shares for services | 45 | 117 | - | ( 225 | ) | - | - | ( 108 | ) | |||||||||||||||||||
| Share-based compensation (Notes 8, 9 (i)) | - | - | - | 34,112 | - | - | 34,112 | |||||||||||||||||||||
| Balance, January 31, 2024 | 3,169,570 | $ | 22,523,057 | $ | 459,341 | $ | 2,216,108 | $ | ( 21,250 | ) | $ | (20 ,135,863 | ) | $ | 5,041,393 |
accompanying notes are an integral part of these condensed interim consolidated financial statements)
Interim Consolidated Statements of Cash Flows
in United States Dollars)
| Three months ended January 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( 1,367,800 | ) | $ | ( 1,899,469 | ) | ||
| Adjustments for: | ||||||||
| Amortization of intangible assets | 2,761 | 2,599 | ||||||
| Amortization of right-of-use asset | 5,493 | 17,498 | ||||||
| Dividend received | - | 16,555 | ||||||
| Interest on lease liability | 1 | 2,392 | ||||||
| Exchange rate differences | ( 1,570 | ) | 5,601 | |||||
| Share issuance costs allocated to derivate warrants liability | 115,046 | - | ||||||
| Depreciation of property and equipment | 377 | 1,897 | ||||||
| Changes in fair value of derivative liabilities | ( 155,143 | ) | - | |||||
| Share-based compensation | 34,004 | 195,978 | ||||||
| Unrealized (gain) loss on short-term investment | ( 556 | ) | 63,194 | |||||
| Tax expenses | 201,500 | 3,383 | ||||||
| Changes in working capital: | ||||||||
| Decrease (increase) in other receivables | 93,572 | ( 195,026 | ) | |||||
| Increase in prepaid expenses | ( 276,501 | ) | ( 685,259 | ) | ||||
| Decrease in accounts payable and accrued liabilities | ( 222,357 | ) | ( 533,822 | ) | ||||
| Increase (decrease) in due to / from related parties | 109,177 | ( 98,876 | ) | |||||
| Net cash used in operating activities | ( 1,461,996 | ) | ( 3,103,355 | ) | ||||
| Financing activities | ||||||||
| Proceeds from issuance of common shares and warrants, net of issuance costs (Note 6c (iii)) | 1,824,773 | 6,363,906 | ||||||
| Proceeds received from exercise of warrants (Note 6c (ii)) | 3,498,032 | - | ||||||
| Repayment of lease liabilities | ( 6,298 | ) | ( 15,780 | ) | ||||
| Net cash provided by financing activities | 5,316,507 | 6,348,126 | ||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | 3,723 | ( 4,224 | ) | |||||
| Net increase in cash and cash equivalents | 3,858,234 | 3,240,547 | ||||||
| Cash and cash equivalents at beginning of period | 5,427,739 | 128,777 | ||||||
| Cash and cash equivalents at end of period | $ | 9,285,973 | $ | 3,369,324 | ||||
| Supplementary disclosure of cash flow information: | ||||||||
| Cash received for interest | $ | 63,502 | $ | 18,015 | ||||
| Dividend received | - | 16,555 | ||||||
| Cash paid for taxes | 29,974 | - | ||||||
| Non-cash financing and investing activities | ||||||||
| Derivative liability converted to equity | $ | - | $ | 290,569 | ||||
| Right of use assets obtained in exchange for lease liabilities | 100,818 | - |
to the Condensed Interim Consolidated Financial Statements
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, or 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 three months ended January 31, 2024, the Company has not generated any revenues
and has negative cash flow from operations of $1,461,996. As of January 31, 2024, the Company has an accumulated deficit of $20,135,863.
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.
September 30, 2022, 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 September 30, 2022, pursuant to which holders of the Company's common shares received
0.0333 of a common share for every one common share.
On November 28, 2023, the Company's Board approved a further
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.
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.
to the Condensed Interim Consolidated Financial Statements
in United States Dollars)
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 audited financial statements. 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 three months ended January 31, 2024
are not necessarily indicative of the results for the year ending October 31, 2024, or for any future period.
of January 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.
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 estimates.
to the Condensed Interim Consolidated Financial Statements
in United States Dollars)
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.
Company analyses warrants issued to determine whether they meet the classification as liabilities or equity. Derivative warrant liabilities
are adjusted to reflect fair value at each reporting period, with any increase or decrease in the fair value recorded in the results
of operations. The Company uses a fair valuation specialist to estimate the value of these instruments using the Black and Scholes and
binomial pricing model.
key assumptions used in the models are the expected future volatility in the price of the Company's shares, the expected life of the
warrants and the probability of any future adjustment event.
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:
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 raise substantial doubt upon the Company's ability to continue as a going concern.
to the Share Exchange Agreement with Medigus Ltd ("Medigus"), on February 14, 2022, the Company received 27,778 ordinary
shares of Medigus (the "Medigus Agreement").
of January 31, 2024, the Company holds 27,778 ordinary shares of Medigus (approximately 0.11%) with a total fair value of $86,668. The
fair value of ordinary shares held was determined by reference to public price quotations in an active market. See Note 10.
| October 31, 2023 | Additions | Unrealized gain | January 31, 2024 | |||||||||||||
| Medigus Ltd. - Shares | $ | 86,112 | $ | - | $ | 556 | $ | 86,668 |
| October 31, 2022 | Additions | Unrealized loss | October 31, 2023 | |||||||||||||
| Medigus Ltd. - Shares | $ | 193,750 | $ | - | $ | ( 107,638 | ) | $ | 86,112 |
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)