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Condensed consolidated interim financial statements of
NERVGEN PHARMA CORP.
(Expressed in Canadian Dollars - Unaudited)
For the three months ended March 31, 2026 and 2025
Condensed Consolidated Interim Statements of Financial Position
(Expressed in Canadian dollars)
| as at | March 31, 2026 | December 31, 2025 | ||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | 16,559,056 | 22,069,635 | ||||||
| Receivables (Note 8) | 93,535 | 80,825 | ||||||
| Prepaids, deposits, and other current assets (Note 7) | 3,717,742 | 641,649 | ||||||
| Current portion of net investment in lease (Note 9) | - | 8,369 | ||||||
| 20,370,333 | 22,800,478 | |||||||
| Non-current assets | ||||||||
| Intangible assets (Note 10) | 395,214 | 409,163 | ||||||
| 395,214 | 409,163 | |||||||
| 20,765,547 | 23,209,641 | |||||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (Note 11, 12) | 5,878,662 | 4,657,448 | ||||||
| Warrant derivative (Note 13) | 9,345,313 | 15,066,898 | ||||||
| Current portion of lease liability (Note 9) | - | 8,369 | ||||||
| 15,223,975 | 19,732,715 | |||||||
| Shareholders' Equity (Deficit) | ||||||||
| Common shares (Note 14) | 107,893,248 | 102,998,992 | ||||||
| Reserves (Note 15) | 46,087,391 | 47,241,452 | ||||||
| Deficit | (148,439,067 | ) | (146,763,518 | ) | ||||
| 5,541,572 | 3,476,926 | |||||||
| 20,765,547 | 23,209,641 |
| Nature of business (Note 1) |
| Commitments (Note 16) |
| Subsequent events (Note 18) |
| Approved by the Board | |||
| /s/ Adam Rogers | Director | /s/ Neil A. Klompas | Director |
The accompanying notes are an integral part
of these condensed consolidated interim financial statements
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(Expressed in Canadian dollars)
| For the Three Months | For the Three Months | |||||||
| Ended | Ended | |||||||
| March 31, 2026 | March 31, 2025 | |||||||
| $ | $ | |||||||
| Operating expenses | ||||||||
| Research and development (Note 17) | 4,863,626 | 3,148,255 | ||||||
| General and administrative (Note 17) | 2,667,952 | 2,887,027 | ||||||
| Total operating expenses | 7,531,578 | 6,035,282 | ||||||
| Interest income | (104,067 | ) | (107,761 | ) | ||||
| Unrealized gain on warrant derivative (Note 13) | (5,721,585 | ) | (1,996,400 | ) | ||||
| Foreign exchange loss (gain) | (30,377 | ) | 17,071 | |||||
| Net loss and comprehensive loss | (1,675,549 | ) | (3,948,192 | ) | ||||
| Basic net loss per share (Note 14) | (0.02 | ) | (0.06 | ) | ||||
| Diluted net loss per share (Note 14) | (0.09 | ) | (0.06 | ) | ||||
| Weighted average Common Shares outstanding (Note 14) | 79,900,758 | 70,666,920 |
The accompanying notes are an integral
part of these condensed consolidated interim financial statements
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in Canadian dollars)
| Three Months | Three Months | |||||||
| Ended | Ended | |||||||
| March 31, 2026 | March 31, 2025 | |||||||
| $ | $ | |||||||
| Operating Activities | ||||||||
| Net loss for the period | (1,675,549 | ) | (3,948,192 | ) | ||||
| Items not involving cash: | ||||||||
| Amortization of intangible asset (Note 10) | 13,949 | 13,949 | ||||||
| Interest expense on lease liability (Note 9) | 42 | 1,466 | ||||||
| Interest income on net investment in lease (Note 9) | (42 | ) | (1,466 | ) | ||||
| Stock-based compensation | 952,131 | 1,461,454 | ||||||
| Unrealized foreign exchange | 72,998 | (5,040 | ) | |||||
| Change in fair value of warrant derivative (Note 13) | (5,721,585 | ) | (1,996,400 | ) | ||||
| Changes in non-cash working capital: | ||||||||
| Receivables (Note 8) | (12,710 | ) | 81,535 | |||||
| Prepaid expenses (Note 7) | (3,076,093 | ) | 732,025 | |||||
| Accounts payable and accrued liabilities (Note 11, 12) | 1,247,209 | (458,015 | ) | |||||
| (8,199,650 | ) | (4,118,684 | ) | |||||
| Investing Activities | ||||||||
| Payments received from net investment in lease (Note 9) | 8,411 | 25,232 | ||||||
| 8,411 | 25,232 | |||||||
| Financing Activities | ||||||||
| Repayment of lease liability (Note 9) | (8,411 | ) | (25,232 | ) | ||||
| Gross proceeds from issuance of common shares (Note 14) | 1,644 | 1,639,761 | ||||||
| Share issue costs - cash (Note 14) | (50,510 | ) | (460,153 | ) | ||||
| Warrant and option exercises (Note 15) | 2,836,930 | 120,000 | ||||||
| 2,779,653 | 1,274,376 | |||||||
| Effect of foreign exchange on cash and cash equivalents | (98,993 | ) | 22,884 | |||||
| Net (decrease) in cash and cash equivalents | (5,510,579 | ) | (2,796,192 | ) | ||||
| Cash and cash equivalents, beginning of period | 22,069,635 | 17,267,489 | ||||||
| Cash and cash equivalents, end of period | 16,559,056 | 14,471,297 | ||||||
| Cash paid for interest and taxes | $ | - | $ | - | ||||
| Non-cash transactions: | ||||||||
| Finder's/Broker's warrants | - | - | ||||||
| Fair value of options allocated to share capital | 2,044,837 | - | ||||||
| Fair value of warrants allocated to share capital | 61,335 | 12,000 |
accompanying notes are an integral part of these condensed consolidated interim financial statements
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity
(Expressed in Canadian dollars)
| Common Shares | ||||||||||||||||||||
| Amount | Reserves | Deficit | Total | |||||||||||||||||
| Number | $ | $ | $ | $ | ||||||||||||||||
| Balance December 31, 2024 | 70,333,149 | 81,194,288 | 24,028,532 | (102,646,213 | ) | 2,576,607 | ||||||||||||||
| Common share financings, net (Note 14) | 564,500 | 1,179,608 | - | - | 1,179,608 | |||||||||||||||
| Warrant exercise (Note 15) | 40,000 | 132,000 | (12,000 | ) | - | 120,000 | ||||||||||||||
| Stock-based compensation (Note 15) | - | - | 1,461,454 | - | 1,461,454 | |||||||||||||||
| Loss and comprehensive loss | - | - | - | (3,948,192 | ) | (3,948,192 | ) | |||||||||||||
| Balance March 31, 2025 | 70,937,649 | 82,505,896 | 25,477,986 | (106,594,405 | ) | 1,389,477 | ||||||||||||||
| Balance December 31, 2025 | 79,649,257 | 102,998,992 | 47,241,452 | (146,763,518 | ) | 3,476,926 | ||||||||||||||
| Common share financings, net (Note 14) | 245 | (48,866 | ) | - | - | (48,866 | ) | |||||||||||||
| Warrant exercises (Note 15) | 296,369 | 890,715 | (61,355 | ) | - | 829,360 | ||||||||||||||
| Option exercises (Note 15) | 1,045,000 | 4,052,407 | (2,044,837 | ) | - | 2,007,570 | ||||||||||||||
| Stock-based compensation | - | - | 952,131 | - | 952,131 | |||||||||||||||
| Loss and comprehensive loss | - | - | - | (1,675,549 | ) | (1,675,549 | ) | |||||||||||||
| Balance March 31, 2026 | 80,990,871 | 107,893,248 | 46,087,391 | (148,439,067 | ) | 5,541,572 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements
NERVGEN PHARMA CORP.
Notes to the condensed consolidated interim financial statements (unaudited)
For the three months ended March 31, 2026 and 2025
(Expressed in Canadian Dollars)
NervGen Pharma Corp. (the "Company" or "NervGen")
is a publicly traded biotechnology company incorporated on January 19, 2017, under the Business Corporations Act (British Columbia).
The corporate office of the Company is located at 112-970 Burrard Street, Unit 1290, Vancouver, BC, V6Z 2R4, Canada, and the registered
office is located at 1133 Melville Street, Suite 3500, The Stack, Vancouver, BC, V6E 4E5, Canada.
Common Shares in the capital of NervGen (the "Common
Shares") trade on the Nasdaq Capital Markets under the symbol "NGEN".
The Company has two wholly owned subsidiaries: NervGen US
Inc. incorporated in the State of Delaware on June 11, 2018, and NervGen Australia Pty Ltd. registered in Queensland on December 8,
The Company's principal business activity is the discovery,
development and commercialization of pharmaceutical products for the treatment of nervous system damage. NervGen's initial target
indication is spinal cord injury ("SCI").
These condensed consolidated interim
financial statements have been prepared in accordance with International Accounting Standards ("IAS") 34 Interim Financial
Reporting' (IAS 34) using the same accounting policies as detailed in the Company's annual audited consolidated financial
statements for the year ended December 31, 2025. These condensed consolidated interim financial statements do not include all of
the information required for full annual financial statements in accordance with International Financial Reporting Standards ("IFRS")
as issued by the International Accounting Standards Board ("IASB").
The condensed consolidated interim
financial statements have been prepared on a historical cost basis except for certain financial assets measured at fair value. In addition,
these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for cash flow
information. These condensed consolidated interim financial statements should be read in conjunction with the Company's audited
consolidated financial statements for the year ended December 31, 2025.
The condensed consolidated interim financial statements were
approved by the Company's board of directors (the "Board of Directors") and authorized for issue on May 15, 2026.
These condensed consolidated interim financial statements
have been prepared in accordance with IFRS accounting principles applicable to a going concern using the historical cost basis.
The Company is in pre-revenue stage and no revenues are expected
in the foreseeable future. The Company's future operations are dependent on successful development and commercialization of pharmaceutical
products, as well as its ability to secure additional financing as needed. Management has forecasted that the Company's ability
to operate the Company for the ensuing 12 months from the issuance of these financial statements is dependent on raising additional financing
or successfully implementing measures to reduce operating costs, delay planned expenditures in its research and development programs and
slow the progress in the Company's planned clinical programs. The Company will need to raise additional capital to fund its research
and development plans including its next phase human clinical trials for its various drug candidates until it generates revenue that reaches
a level sufficient to provide self-sustaining cash flows. While the Company has been successful in the past in obtaining financing, there
can be no assurance that the Company will be able to obtain adequate financing, or that such financing will be on terms acceptable to
the Company, to meet future operational needs which may result in the delay, reduction, or discontinuation of ongoing development programs.
These factors indicate the existence of a material uncertainty that may cast significant doubt as to the Company's ability to continue
NERVGEN PHARMA CORP.
Notes to the condensed consolidated interim financial statements (unaudited)
For the three months ended March 31, 2026 and 2025
(Expressed in Canadian Dollars)
These consolidated financial statements do not reflect the
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 settleits liabilities and commitments in other than the normal
course of business and at amounts different from those in the accompanying consolidated financial statements. Such amounts could be material.
These condensed consolidated interim financial statements
include the accounts of the Company and its wholly-owned subsidiaries NervGen US Inc. and NervGen Australia Pty Ltd. The subsidiaries
are fully consolidated from the date at which control is determined to have occurred and are deconsolidated from the date that the Company
no longer controls the entity. Intercompany transactions, balances, and gains and losses on transactions between subsidiaries are eliminated.
The functional currency of an entity is the currency of the
primary economic environment in which the entity operates. The functional currency of NervGen and its subsidiaries is the Canadian dollar.
Transactions in foreign currencies are translated to the functional currency at the rate on the date of the transactions. Monetary assets
and liabilities denominated in foreign currencies are retranslated at the spot rate of exchange as at the reporting date. All differences
are taken to profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rate at the date when the fair value was determined.
The preparation of these condensed consolidated interim
financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application
of accounting policies and reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the condensed consolidated interim financial statements and reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The condensed consolidated interim financial statements
include estimates, which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the condensed consolidated
interim financial statements and may require accounting adjustments based on future occurrences. The estimates and underlying assumptions
are reviewed on a regular basis. Revisions to accounting estimates are accounted for prospectively.
The key judgments and assumptions concerning the future,
and other key sources of estimation uncertainty, as of the date of the condensed consolidated interim statement of financial position,
that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next fiscal year
arise in connection with the going concern assessment, valuation of intangible assets, recognition of government assistance, valuation
of warrant derivative, stock-based compensation, contingent repayment of grant funding and the determination of the functional currency
The accounting policies applied in these condensed consolidated
interim financial statements are the same as those applied in our audited consolidated financial statements for the year ended December 31,