Full Press Release Details
IMMUNOPRECISE ANTIBODIES LTD.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31, 2020 AND 2019
(Unaudited Expressed in Canadian Dollars)
IMMUNOPRECISE ANTIBODIES LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited Expressed in Canadian Dollars)
| Note | October 31, 2020 $ | April 30, 2020 $ | ||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash | 16,840,908 | 2,605,706 | ||||||||
| Amounts receivable | 4,096,008 | 2,491,636 | ||||||||
| Taxes receivable | 88,549 | |||||||||
| Inventory | 1,124,521 | 818,643 | ||||||||
| Unbilled revenue | 1,357,572 | 1,168,317 | ||||||||
| Prepaid expenses | 576,642 | 526,591 | ||||||||
| 23,995,651 | 7,699,442 | |||||||||
| Restricted cash | 84,010 | 85,129 | ||||||||
| Deposit on equipment | 13,963 | 87,847 | ||||||||
| Investment | 7 | 115,998 | 118,896 | |||||||
| Property and equipment | 8 | 3,605,255 | 3,077,762 | |||||||
| Intangible assets | 5, 6, 9 | 7,757,615 | 8,285,392 | |||||||
| Goodwill | 5, 6 | 8,129,671 | 7,908,653 | |||||||
| Total assets | 43,702,163 | 27,263,121 | ||||||||
| LIABILITIES | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable and accrued liabilities | 15 | 2,174,319 | 1,766,058 | |||||||
| Taxes payable | 398,639 | |||||||||
| Deferred revenue | 2,331,208 | 1,474,750 | ||||||||
| Debentures | 10 | 2,000,000 | ||||||||
| Loans payable | 11 | 7,026 | 121,833 | |||||||
| Leases | 13 | 929,931 | 752,306 | |||||||
| Deferred acquisition payments | 5, 6 | 2,001,876 | 1,814,820 | |||||||
| 7,842,999 | 7,929,767 | |||||||||
| Debenture subscriptions received | 12 | 313,268 | ||||||||
| Loans payable | 11 | 190,306 | ||||||||
| Convertible debentures liability component | 12 | 2,066,154 | ||||||||
| Leases | 13 | 1,263,759 | 1,131,744 | |||||||
| Deferred acquisition payments | 5, 6 | 1,010,620 | ||||||||
| Deferred income tax liability | 1,451,623 | 1,601,577 | ||||||||
| 12,624,535 | 12,177,282 | |||||||||
| SHAREHOLDERS EQUITY | ||||||||||
| Share capital | 14 | 50,454,411 | 34,086,942 | |||||||
| Convertible debentures equity component | 12 | 176,884 | ||||||||
| Contributed surplus | 14 | 3,758,446 | 3,777,771 | |||||||
| Accumulated other comprehensive income (loss) | 179,441 | (300,222 | ) | |||||||
| Deficit | (23,491,553 | ) | (22,478,652 | ) | ||||||
| 31,077,628 | 15,085,839 | |||||||||
| Total liabilities and shareholders equity | 43,702,163 | 27,263,121 |
Nature of operations (Note 1)
Subsequent event (Notes 1, 11 and 14)
Approved and authorized
on behalf of the Board of Directors on December 18, 2020
The accompanying notes are an integral part of these condensed interim consolidated financial statements
IMMUNOPRECISE ANTIBODIES LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
For the three and six months ended October 31, 2020 and 2019
(Unaudited Expressed in Canadian Dollars)
| Three months ended October 31, | Six months ended October 31, | |||||||||||||||||
| Note | 2020 $ | 2019 $ | 2020 $ | 2019 $ | ||||||||||||||
| REVENUE | 4,754,545 | 3,162,365 | 8,519,522 | 5,878,464 | ||||||||||||||
| COST OF SALES | 1,965,876 | 672,350 | 3,320,527 | 2,012,043 | ||||||||||||||
| GROSS PROFIT | 2,788,669 | 2,490,015 | 5,198,995 | 3,866,421 | ||||||||||||||
| EXPENSES | ||||||||||||||||||
| Advertising | 255,599 | 60,950 | 288,905 | 178,150 | ||||||||||||||
| Amortization and depreciation | 8, 9 | 715,857 | 746,543 | 1,393,744 | 1,294,384 | |||||||||||||
| Bad debt (recovery) expense | (5,265 | ) | 32,249 | (21,040 | ) | 32,249 | ||||||||||||
| Consulting fees | 156,559 | 43,005 | 193,980 | 65,345 | ||||||||||||||
| Foreign exchange loss (gain) | 25,547 | (4,331 | ) | 45,803 | (117,307 | ) | ||||||||||||
| Insurance | 61,782 | 23,584 | 97,474 | 44,115 | ||||||||||||||
| Interest and bank charges | 137,224 | 114,788 | 307,030 | 233,748 | ||||||||||||||
| Management fees | 15 | 72,051 | 25,287 | 268,590 | 70,435 | |||||||||||||
| Office and general | 208,197 | 386,172 | 356,357 | 609,507 | ||||||||||||||
| Professional fees | 233,245 | 365,560 | 420,919 | 515,280 | ||||||||||||||
| Rent | (6,961 | ) | 68,548 | 89,695 | 109,713 | |||||||||||||
| Repairs and maintenance | 146,706 | 32,133 | 155,145 | 32,133 | ||||||||||||||
| Research and development | 1,049,316 | 445,842 | 1,358,529 | 613,102 | ||||||||||||||
| Salaries and benefits | 15 | 1,499,772 | 997,473 | 2,851,004 | 2,093,717 | |||||||||||||
| Share-based payments | 14, 15 | 476,571 | 214,120 | 573,844 | 500,115 | |||||||||||||
| Telephone and utilities | 15,235 | 13,434 | 28,208 | 23,534 | ||||||||||||||
| Travel | 12,447 | 59,196 | 29,847 | 178,501 | ||||||||||||||
| 5,053,882 | 3,624,553 | 8,438,034 | 6,476,721 | |||||||||||||||
| Loss before other income (expenses) and income taxes | (2,265,213 | ) | (1,134,538 | ) | (3,239,039 | ) | (2,610,300 | ) | ||||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||||||||
| Accretion | 5, 6, 10, 12 | (107,876 | ) | (212,967 | ) | (209,021 | ) | (765,860 | ) | |||||||||
| Grant income | 16 | 1,312,472 | 1,880,607 | |||||||||||||||
| Subsidy | 16 | 134,821 | 273,970 | |||||||||||||||
| Interest and other income | 515,659 | 42,299 | 515,035 | 54,701 | ||||||||||||||
| 1,855,076 | (170,668 | ) | 2,460,591 | (711,159 | ) | |||||||||||||
| Loss before Income taxes | (410,137 | ) | (1,305,206 | ) | (778,448 | ) | (3,321,459 | ) | ||||||||||
| Income taxes recovery (expense) | (53,446 | ) | (58,339 | ) | (234,453 | ) | (54,284 | ) | ||||||||||
| NET LOSS FOR THE PERIOD | (463,583 | ) | (1,363,545 | ) | (1,012,901 | ) | (3,375,743 | ) | ||||||||||
| ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO LOSS | ||||||||||||||||||
| Exchange difference on translating foreign operations | (435,302 | ) | 50,912 | 479,663 | (551,692 | ) | ||||||||||||
| COMPREHENSIVE LOSS FOR THE PERIOD | (898,885 | ) | (1,312,633 | ) | (533,238 | ) | (3,927,435 | ) | ||||||||||
| LOSS PER SHARE BASIC AND DILUTED | (0.03 | ) | (0.10 | ) | (0.07 | ) | (0.25 | ) | ||||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 15,649,162 | 13,598,661 | 15,066,081 | 13,597,623 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements
IMMUNOPRECISE ANTIBODIES LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
(Unaudited Expressed in Canadian dollars, except for share figures)
| Number of Shares | Share Capital $ | Convertible Debentures Equity Component $ | Contributed Surplus $ | Accumulated Other Comprehensive (Loss) Income $ | Deficit $ | Total $ | ||||||||||||||||||||||
| Balance, April 30, 2019 | 13,587,865 | (1) | 32,699,425 | 3,074,192 | (228,060 | ) | (17,476,482 | ) | 18,069,075 | |||||||||||||||||||
| Adoption of IFRS 16 (Note 3) | (54,744 | ) | (54,744 | ) | ||||||||||||||||||||||||
| Balance, May 1, 2019 | 13,587,865 | 32,699,425 | 3,074,192 | (228,060 | ) | (17,531,226 | ) | 18,014,331 | ||||||||||||||||||||
| Shares issued pursuant to option exercise | 11,000 | 28,990 | (12,490 | ) | 16,500 | |||||||||||||||||||||||
| Share-based payments | 500,115 | 500,115 | ||||||||||||||||||||||||||
| Comprehensive loss for the period | (551,692 | ) | (3,375,743 | ) | (3,927,435 | ) | ||||||||||||||||||||||
| Balance, October 31, 2019 | 13,598,865 | 32,728,415 | 3,561,817 | (779,752 | ) | (20,906,969 | ) | 14,603,511 | ||||||||||||||||||||
| Shares issued pursuant to settlement of Debentures and accrued interest | 248,959 | 858,906 | 858,906 | |||||||||||||||||||||||||
| Shares issued pursuant to warrant exercise | 136,194 | 499,621 | (22,942 | ) | 476,679 | |||||||||||||||||||||||
| Share-based payments | 238,896 | 238,896 | ||||||||||||||||||||||||||
| Comprehensive loss for the period | 479,530 | (1,571,683 | ) | (1,092,153 | ) | |||||||||||||||||||||||
| Balance, April 30, 2020 | 13,984,018 | 34,086,942 | 3,777,771 | (300,222 | ) | (22,478,652 | ) | 15,085,839 | ||||||||||||||||||||
| Shares issued pursuant to deferred acquisition payment to IPA Europe | 132,833 | 511,405 | 511,405 | |||||||||||||||||||||||||
| Shares issued pursuant to option exercise | 130,100 | 661,772 | (273,967 | ) | 387,805 | |||||||||||||||||||||||
| Shares issued pursuant to warrant exercise | 2,431,300 | 14,854,977 | (319,202 | ) | 14,535,775 | |||||||||||||||||||||||
| Convertible debentures | 204,523 | 204,523 | ||||||||||||||||||||||||||
| Shares issued pursuant to conversion of convertible debentures | 83,528 | 339,315 | (27,639 | ) | 311,676 | |||||||||||||||||||||||
| Share-based payments | 573,844 | 573,844 | ||||||||||||||||||||||||||
| Comprehensive loss for the period | 479,663 | (1,012,901 | ) | (533,238 | ) | |||||||||||||||||||||||
| Balance, October 31, 2020 | 16,761,779 | 50,454,411 | 176,884 | 3,758,446 | 179,441 | (23,491,553 | ) | 31,077,629 |
The accompanying notes are an integral part of these condensed interim consolidated
financial statements
IMMUNOPRECISE ANTIBODIES LTD.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended October 31, 2020 and 2019
(Unaudited- Expressed in Canadian Dollars)
| 2020 $ | 2019 $ | |||||||
| Operating activities: | ||||||||
| Net loss for the period | (1,012,901 | ) | (3,375,743 | ) | ||||
| Items not affecting cash: | ||||||||
| Amortization and depreciation | 1,885,660 | 1,365,858 | ||||||
| Deferred income taxes | (194,000 | ) | (76,739 | ) | ||||
| Accretion | 209,021 | 765,860 | ||||||
| Foreign exchange | 64,618 | (113,493 | ) | |||||
| Loan forgiven | (279,982 | ) | ||||||
| Share-based payments | 573,844 | 500,115 | ||||||
| 1,246,260 | (934,142 | ) | ||||||
| Changes in non-cash working capital related to operations: | ||||||||
| Amounts receivable | (1,604,372 | ) | (286,946 | ) | ||||
| Inventory | (305,878 | ) | 40,743 | |||||
| Unbilled revenue | (189,255 | ) | (61,088 | ) | ||||
| Prepaid expenses | (50,051 | ) | (138,478 | ) | ||||
| Accounts payable and accrued liabilities | 408,261 | (510,651 | ) | |||||
| Taxes payable and receivable | 487,188 | |||||||
| Deferred revenue | 856,458 | 77,972 | ||||||
| Net cash provided by (used in) operating activities | 848,611 | (1,812,590 | ) | |||||
| Investing activities: | ||||||||
| Purchase of equipment | (467,827 | ) | (190,043 | ) | ||||
| Internally generated development costs | (278,995 | ) | (71,817 | ) | ||||
| Deferred acquisition payment | (518,534 | ) | ||||||
| Net cash used in investing activities | (1,265,356 | ) | (261,860 | ) | ||||
| Financing activities: | ||||||||
| Proceeds on share issuance | 14,923,580 | 16,500 | ||||||
| Repayment of leases | (563,540 | ) | (203,123 | ) | ||||
| Loan repayments | (25,131 | ) | (49,135 | ) | ||||
| Proceeds from convertible debentures, net of transaction costs | 2,201,821 | |||||||
| Repayment of debentures | (2,000,000 | ) | (125,000 | ) | ||||
| Net cash provided by (used in) financing activities | 14,536,730 | (360,758 | ) | |||||
| Increase (decrease) in cash during the period | 14,119,985 | (2,435,208 | ) | |||||
| Foreign exchange | 114,098 | (113,280 | ) | |||||
| Cash beginning of the period | 2,690,835 | 5,539,100 | ||||||
| Cash end of the period | 16,924,918 | 2,990,612 | ||||||
| Cash is comprised of: | ||||||||
| Cash | 16,840,908 | 2,964,271 | ||||||
| Restricted cash | 84,010 | 26,341 | ||||||
| 16,924,918 | 2,990,612 | |||||||
| Cash paid for interest | 73,396 | 143,750 | ||||||
| Cash paid for income tax | 10,088 | 62,433 |
Supplemental cash flow information (Note 18)
The accompanying notes are an integral part of these condensed interim consolidated financial statements
IMMUNOPRECISE ANTIBODIES LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended October 31, 2020 and 2019
(Unaudited Expressed in Canadian Dollars)
lmmunoPrecise Antibodies Ltd. (the Company or IPA ) was incorporated under the laws of Alberta on November 22,
1983. The Company is listed on the TSX Venture Exchange (the Exchange ) as a Tier 2 life science issuer under the trading symbol IPA . The Company s OTC symbol is IPATD . The Company is a supplier of custom
hybridoma development services. The address of the Company s corporate office is 3204 4464 Markham Street, Victoria, BC, Canada V8Z 7X8.
On November 23, 2020, the Company consolidated its issued and outstanding common shares on the basis of 5
pre-consolidation shares for one post-consolidation share (the Consolidation ). All references to share and per share amounts in these condensed interim consolidated financial statements have been
retroactively restated to reflect the Consolidation.
The condensed interim consolidated financial statements have been prepared on the
basis of accounting principles applicable to a going concern. This assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its obligations in the normal course of operations. The
Company has incurred operating losses since inception, including $1,012,901 for the six months ended October 31, 2020 and has accumulated a deficit of $23,491,553 as at October 31, 2020. The Company has $16,840,908 cash on hand as of
October 31, 2020 which will sustain its existing operations through at least 2022. The Company may need to raise additional funds in order to funds its strategic goals and there can be no assurances that sufficient funding, including adequate
financing, will be available. The ability of the Company to arrange additional financing in the future depends in part, on the prevailing capital market conditions and profitability of its operations.
In March 2020, there was a global pandemic outbreak of COVID-19. The actual and threatened spread of
the virus globally has had a material adverse effect on the global economy and specifically, the regional economies in which the Company operates. The pandemic could result in delays in the course of business and could have a negative impact on the
Company s ability to raise new capital. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company s business or results of operations at this time. To date
these material uncertainties have not cast significant doubt on the Company s ability to continue as a going concern. Accordingly, the condensed interim consolidated financial statements do not give effect to adjustments that would be necessary
should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities, contingent obligations and commitments other than in the normal course of business and at amounts different
from those in the condensed interim consolidated financial statements.
These condensed interim consolidated financial statements have been prepared in conformity with International Accounting Standard
( lAS ) 34, Interim Financial Reporting, using the same accounting policies as detailed in the Company s audited annual financial statements for the year ended April 30, 2020. They do not include all the information
required for complete annual financial statements in accordance with International Financial Reporting Standards ( IFRS ), as issued by the International Accounting Standards Board ( IASB ) and interpretations of the
International Financial Reporting Interpretations Committee ( IFRIC ) and therefore should be read together with the audited annual financial statements for the year ended April 30, 2020.
These condensed interim consolidated financial statements were approved by the Board of Directors for issue on December 18, 2020.
IMMUNOPRECISE ANTIBODIES LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended October 31, 2020 and 2019
(Unaudited Expressed in Canadian Dollars)
These condensed interim consolidated financial statements have been prepared on the historical cost basis. In addition, these condensed interim
consolidated financial statements have been prepared using the accrual basis of accounting, except for cashflow information.
These condensed interim consolidated financial statements include the financial statements of the Company and the following subsidiaries which
are wholly owned and subject to control by the Company:
| Name of Subsidiary | % Equity Interest - 2020 | % Equity Interest - 2019 | Country of Incorporation | |||||||
| lmmunoPrecise Antibodies (Canada) Ltd. | 100 | % | 100 | % | Canada | |||||
| lmmunoPrecise Antibodies (USA) Ltd. ( IPA USA ) | 100 | % | 100 | % | USA | |||||
| lmmunoPrecise Antibodies (N.D.) Ltd. | 100 | % | 100 | % | USA | |||||
| lmmunoPrecise Antibodies (MA) LLC | 100 | % | 100 | % | USA | |||||
| Talem Therapeutics LLC ( Talem ) | 100 | % | 100 | % | USA | |||||
| U-Protein Express B.V. ( U-Protein ) | 100 | % | 100 | % | Netherlands | |||||
| lmmunoPrecise Netherlands B.V. | 100 | % | 100 | % | Netherlands | |||||
| lmmunoPrecise Antibodies (Europe) B.V. ( IPA | 100 | % | 100 | % | Netherlands | |||||
| Europe , formerly ModiQuest Research B.V.) lmmulease B.V. ( lmmulease ) | 100 | % | 100 | % | Netherlands |
Control is achieved when the Company has the power to, directly or indirectly, govern the financial and
operating policies of an entity so as to obtain benefits from its activities. Subsidiaries are fully consolidated from the date on which control is obtained and continue to be consolidated until the date that such control ceases. Intercompany
balances, transactions and unrealized intercompany gains and losses are eliminated upon consolidation.
The Company incorporated a new
subsidiary, lmmunoPrecise Antibodies (USA) Ltd., in Delaware, USA on September 11, 2019.
The functional currency of a company is the currency of the primary economic environment in which the company operates. The presentation
currency for a company is the currency in which the company chooses to present its financial statements.
The functional currency of the
Company and lmmunoPrecise Antibodies (Canada) Ltd. is the Canadian dollar. The functional currency of IPA USA, lmmunoPrecise Antibodies (N.D.) Ltd., lmmunoPrecise Antibodies (MA) LLC and Talem is the US dollar. The functional currency of U-Protein, lmmunoPrecise Netherlands BV, IPA Europe and lmmulease is the Euro. The presentation currency of the Company is the Canadian dollar.
Entities whose functional currencies differ from the presentation currency are translated into Canadian dollars as follows: assets and
liabilities at the closing rate as at the reporting date, and income and expenses at the average rate of the period. All resulting changes are recognized in other comprehensive income as cumulative translation differences.
IMMUNOPRECISE ANTIBODIES LTD.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended October 31, 2020 and 2019
(Unaudited Expressed in Canadian Dollars)
Transactions in foreign currencies are translated into the functional currency at exchange
rates at the date of the transactions. Foreign currency monetary assets and liabilities are translated at the functional currency exchange rate at the reporting date. Non-monetary items that are measured in
terms of historical cost in a foreign currency are translated using exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value is determined. All gains and losses on translation of these foreign currency transactions are included in profit or loss.
When the Company disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a
foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an interest in a foreign operation which remains a
subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary are reallocated between controlling and non-controlling interests.
The Company has adopted the following new standards, along with any consequential amendments, effective May 1, 2019. These changes were
made in accordance with the applicable transitional provisions.
The Company adopted all of the requirements of IFRS 16, Leases
( IFRS 16 ) as of May 1, 2019. IFRS 16 replaces lAS 17, Leases ( lAS 17 ). IFRS 16 provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease
term is 12 months or less or the underlying asset has a low value. The Company has adopted IFRS 16 using the modified retrospective application method, where the 2019 comparatives are not restated and a cumulative catch up adjustment is recorded on
May 1, 2019 for any differences identified, including adjustments to opening deficit balance.
The Company analyzed its contracts to
identify whether they contain a lease arrangement for the application of IFRS 16. The following is the Company s new accounting policy for leases under IFRS 16:
At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Leases of right-of-use assets are recognized at the lease commencement date at the present value of the lease payments that are not paid at that date. The lease payments are discounted