Full Press Release Details
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
three and nine months ended September 30, 2021 and 2020
(Unaudited - expressed in Canadian Dollars)
OF NO AUDITOR REVIEW OF
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Under National Instrument 51-102, Part
4, subsection 4.3(3) (a), if an auditor has not performed a review of the condensed interim consolidated financial statements they
must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed interim
consolidated financial statements of the Company have been prepared by management and reviewed by the Audit Committee and Board
of Directors of the Company.
The Company's independent auditor
has not performed a review of these condensed interim consolidated financial statements in accordance with the standards established
by the Chartered Professional Accountants of Canada for a review of condensed interim consolidated financial statements by an entity's
Condensed Interim Consolidated Statements of Financial Position
(Unaudited - expressed
in Canadian Dollars)
| Note | September 30, 2021 | December 31, 2020 | |||||||||
| $ | $ | ||||||||||
| Assets | |||||||||||
| Current | |||||||||||
| Cash | 4,997,607 | 171,271 | |||||||||
| Contract payments | 5 | 1,826,404 | 1,826,404 | ||||||||
| Prepaid expenses and other | 6 | 143,413 | 58,466 | ||||||||
| Deferred share issuance costs | 6,14 | 621,408 | - | ||||||||
| 7,588,832 | 2,056,141 | ||||||||||
| Non-current | |||||||||||
| Intangible assets | 7 | 243,956 | 234,316 | ||||||||
| Total Assets | 7,832,788 | 2,290,457 | |||||||||
| Liabilities | |||||||||||
| Current | |||||||||||
| Accounts payable and accrued liabilities | 8 | 716,842 | 1,034,213 | ||||||||
| Derivative warrant liability | 9(g) | 11,355,000 | - | ||||||||
| Total Liabilities | 12,071,842 | 1,034,213 | |||||||||
| Shareholders' (Deficiency) Equity | |||||||||||
| Share capital | 9 | 13,056,507 | 8,258,395 | ||||||||
| Share-based payments, warrant reserve and other | 9 | 1,456,712 | 1,003,609 | ||||||||
| Obligation to issue shares | 7(c) | 32,238 | 32,238 | ||||||||
| Deficit | (18,784,511 | ) | (8,037,998 | ) | |||||||
| Total Shareholders' (Deficiency) Equity | (4,239,054 | ) | 1,256,244 | ||||||||
| Total Liabilities and Shareholders' (Deficiency) Equity | 7,832,788 | 2,290,457 |
Nature of Operations (Note 1)
Commitments (Note 13)
Subsequent Events (Note 14)
| /s/ "Allen Davidoff" | /s/ "Paul Van Damme" | |
| Director | Director |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
Condensed Interim Consolidated Statements of Comprehensive
For the three and nine months ended September 30, 2021 and
(Unaudited - expressed
in Canadian Dollars)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
| Note | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||
| Expenses | ||||||||||||||||||||
| Amortization | 7 | 4,526 | 5,154 | 13,143 | 15,299 | |||||||||||||||
| Consulting | 10 | 109,269 | 15,000 | 355,610 | 63,708 | |||||||||||||||
| Directors' fees | 39,500 | - | 39,500 | - | ||||||||||||||||
| General and administrative | 6,263 | 1,742 | 30,087 | 7,583 | ||||||||||||||||
| Investor relations | 118,947 | 52,848 | 384,072 | 131,204 | ||||||||||||||||
| Listing fees | 36,858 | 10,802 | 88,314 | 36,628 | ||||||||||||||||
| Professional fees | 10 | (402,676 | ) | 37,819 | 201,697 | 87,580 | ||||||||||||||
| Research and development | 381,967 | 120,033 | 422,176 | 134,907 | ||||||||||||||||
| Share-based payments | 9(f),10 | 62,221 | 90,443 | 355,662 | 286,695 | |||||||||||||||
| Travel | - | - | 2,100 | 8,460 | ||||||||||||||||
| Wages and benefits | 10 | 48,000 | 48,000 | 148,412 | 148,097 | |||||||||||||||
| Loss before other items | (404,875 | ) | (381,841 | ) | (2,040,773 | ) | (920,161 | ) | ||||||||||||
| Accretion | - | - | - | (846 | ) | |||||||||||||||
| Transaction costs on derivative warrant liability | - | - | (85,732 | ) | - | |||||||||||||||
| Loss on derivative warrant liability | 9(g) | (7,936,114 | ) | - | (8,596,114 | ) | - | |||||||||||||
| Foreign exchange (loss) gain | (12,242 | ) | (42,230 | ) | (19,965 | ) | 9,967 | |||||||||||||
| Interest and other expenses | (1,382 | ) | (839 | ) | (3,929 | ) | (11,851 | ) | ||||||||||||
| Forgiveness of debt | - | - | - | 91,014 | ||||||||||||||||
| Net loss and comprehensive loss for the period | (8,354,613 | ) | (424,910 | ) | (10,746,513 | ) | (831,877 | ) | ||||||||||||
| Basic and diluted loss per common share | (0.89 | ) | (0.06 | ) | (1.19 | ) | (0.13 | ) | ||||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||||||
| Basic and diluted | 9,401,120 | 6,914,746 | 9,007,955 | 6,579,842 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
Condensed Interim Consolidated Statements of Changes in
Shareholders' (Deficiency) Equity
(Unaudited - expressed
in Canadian Dollars)
| Note | Number of common shares | Share capital | Reserves | Obligation to issue shares | Share subscriptions received in advance | Equity component on convertible loans | Deficit | Total | ||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Balance, December 31, 2019 | 5,359,444 | 5,863,872 | 607,803 | - | 70,000 | 5,202 | (6,758,598 | ) | (211,721 | ) | ||||||||||||||||||||||||||
| Shares issued pursuant to private placement | 9(b) | 1,555,314 | 2,556,320 | - | - | (70,000 | ) | - | - | 2,486,320 | ||||||||||||||||||||||||||
| Share issuance costs | - | (70,500 | ) | 11,066 | - | - | (59,434 | ) | ||||||||||||||||||||||||||||
| Convertible loan debt forgiveness | - | 5,202 | - | (5,202 | ) | - | ||||||||||||||||||||||||||||||
| Share-based payments | 9(f) | - | 286,695 | - | - | 286,695 | ||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | - | - | (831,877 | ) | (831,877 | ) | ||||||||||||||||||||||||||
| Balance, September 30, 2020 | 6,914,758 | 8,349,692 | 910,766 | - | - | - | (7,590,475 | ) | 1,669,983 | |||||||||||||||||||||||||||
| Warrants issued pursuant to private placement | 9(b) | - | (91,297 | ) | 91,297 | - | - | - | - | - | ||||||||||||||||||||||||||
| Convertible loan debt forgiveness | - | - | (5,202 | ) | - | - | - | 5,202 | - | |||||||||||||||||||||||||||
| Obligation to issue shares | 7(c) | - | - | - | 32,238 | - | - | - | 32,238 | |||||||||||||||||||||||||||
| Share-based payments | 9(f) | - | - | 6,748 | - | - | - | - | 6,748 | |||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | - | (452,725 | ) | (452,725 | ) | |||||||||||||||||||||||||||
| Balance, December 31, 2020 | 6,914,758 | 8,258,395 | 1,003,609 | 32,238 | - | - | (8,037,998 | ) | 1,256,244 | |||||||||||||||||||||||||||
| Shares issued pursuant to private placement | 9(b) | 2,085,687 | 6,121,572 | - | - | - | - | - | 6,121,572 | |||||||||||||||||||||||||||
| Warrants issued | 9 | - | (2,932,000 | ) | - | - | - | - | - | (2,932,000 | ) | |||||||||||||||||||||||||
| Share issuance costs | 9(b) | - | (311,216 | ) | 195,000 | - | - | - | - | (116,216 | ) | |||||||||||||||||||||||||
| Options exercised | 51,106 | 149,172 | (65,172 | ) | - | - | - | - | 84,000 | |||||||||||||||||||||||||||
| Warrants exercised | 451,583 | 1,695,584 | (32,387 | ) | - | - | - | - | 1,663,197 | |||||||||||||||||||||||||||
| Shares issued for services | 25,553 | 75,000 | - | - | - | - | - | 75,000 | ||||||||||||||||||||||||||||
| Share-based payments | 9(f) | - | - | 355,662 | - | - | - | - | 355,662 | |||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | - | - | (10,746,513 | ) | (10,746,513 | ) | ||||||||||||||||||||||||||
| Balance, September 30, 2021 | 9,528,687 | 13,056,507 | 1,456,712 | 32,238 | - | - | (18,784,511 | ) | (4,239,054 | ) |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
Condensed Interim Consolidated Statements of Cash Flows
For the nine months ended September 30, 2021 and 2020
(Unaudited - expressed
in Canadian Dollars)
| Nine months ended September 30 | ||||||||
| 2021 | 2020 | |||||||
| $ | $ | |||||||
| Cash provided by (used in): | ||||||||
| Operating activities | ||||||||
| Net loss for the period | (10,746,513 | ) | (831,877 | ) | ||||
| Items not affecting cash: | ||||||||
| Accretion expense | - | 846 | ||||||
| Loss on derivative warrant liability | 8,596,114 | - | ||||||
| Amortization | 13,143 | 15,299 | ||||||
| Forgiveness of debt | - | (91,014 | ) | |||||
| Share-based payments | 355,662 | 286,695 | ||||||
| Shares issued for services | 75,000 | - | ||||||
| Unrealized foreign exchange loss | (2,156 | ) | 29,426 | |||||
| Changes in non-cash operating assets and liabilities: | ||||||||
| Funds held in trust | - | 70,000 | ||||||
| Deposit | - | (1,606,320 | ) | |||||
| Prepaid expenses and other | (83,783 | ) | (85,988 | ) | ||||
| Accounts payable and accrued liabilities | (316,379 | ) | (86,808 | ) | ||||
| (2,108,912 | ) | (2,299,741 | ) | |||||
| Investing activities | ||||||||
| Acquisition of intangible assets | (22,783 | ) | (11,510 | ) | ||||
| (22,783 | ) | (11,510 | ) | |||||
| Financing activities | ||||||||
| Proceeds from issuance of shares | 6,121,572 | 2,486,320 | ||||||
| Cash share issuance costs | (116,216 | ) | (59,434 | ) | ||||
| Options exercised | 84,000 | - | ||||||
| Warrants exercised | 1,490,083 | - | ||||||
| Deferred share issuance costs | (621,408 | ) | 14,842 | |||||
| 6,958,031 | 2,441,728 | |||||||
| Increase in cash | 4,826,336 | 130,477 | ||||||
| Cash, beginning of period | 171,271 | 58,614 | ||||||
| Cash, end of period | 4,997,607 | 189,091 | ||||||
| Supplemental Cash Flow and Non-Cash Investing and Financing Activities Disclosure | ||||||||
| Cash paid for interest | - | - | ||||||
| Cash paid for income taxes | - | - | ||||||
| Application of CATO deposit against payable | - | 172,784 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
XORTX THERAPEUTICS INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2021 and 2020
(Unaudited - expressed in Canadian Dollars)
XORTX Therapeutics Inc. (the "Company"
or "XORTX") was incorporated under the laws of Alberta, Canada on August 24, 2012 under the name ReVasCor Inc. and
was continued under the Canada Business Corporations Act on February 27, 2013 under the name of XORTX Pharma Corp. Upon completion
of the reverse take-over ("RTO") transaction on January 10, 2018 with APAC Resources Inc. ("APAC"),
a company incorporated under the laws of British Columbia, the Company changed its name to "XORTX Therapeutics Inc."
and XORTX Pharma Corp. became a wholly-owned subsidiary.
XORTX is a public company listed on the
TSX Venture Exchange (the "TSXV") and the Nasdaq Stock Market ("Nasdaq") under the symbol "XRTX"
(Note 14). The Company's operations and mailing address is Suite 4000, 421 - 7th Avenue SW, Calgary, Alberta, T2P 4K9 and
its head and registered address is located at Suite 2400, 745 Thurlow Street, Vancouver, British Columbia, V6E 0C5.
XORTX is a bio-pharmaceutical company,
dedicated to the development and commercialization of therapies to treat progressive kidney disease modulated by aberrant purine
and uric acid metabolism in orphan disease indications such as autosomal dominant polycystic kidney disease, larger market type
2 diabetic nephropathy, and fatty liver disease. The Company's current focus is on developing products to slow and/or reverse
the progression of kidney disease in patients at risk of end stage kidney failure.
The Company is subject to a number of risks
associated with the successful development of new products and their marketing and the conduct of its clinical studies and their
results. The Company will have to finance its research and development activities and its clinical studies. To achieve the objectives
in its business plan, the Company plans to raise the necessary capital and to generate revenues. Although there is no certainty,
management is of the opinion that additional funding for future projects and operations can be raised as needed. The products developed
by the Company will require approval from the U.S. Food and Drug Administration and equivalent organizations in other countries
before their sale can be authorized. If the Company is unsuccessful in obtaining adequate financing in the future, research activities
will be postponed until market conditions improve.
In March 2020, the World Health Organization
declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related
adverse public health developments, have adversely affected workforces, economies, and financial markets globally, potentially
leading to an economic downturn. 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 but may impact the Company's
ability to obtain additional financing to support future research projects.
Statement of Compliance
These condensed interim consolidated financial
statements have been prepared in accordance with International Standard 34, Interim Financial Reporting as issued by the
International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee ("IFRIC").
Accordingly, certain disclosures included in the annual financial statements prepared in accordance with International Financial
Reporting Standards ("IFRS") have been condensed or omitted. These unaudited condensed interim consolidated financial
statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended
XORTX THERAPEUTICS INC.
Notes to the Condensed Interim Consolidated Financial Statements
For the three and nine months ended September 30, 2021 and 2020
(Unaudited - expressed in Canadian Dollars)
Basis of Measurement and Presentation
These condensed interim consolidated financial
statements have been prepared using the historical cost convention using the accrual basis of accounting except for financial instruments
which have been measured at fair value. In the opinion of management, all adjustments (including normal recurring accruals), considered
necessary for a fair presentation have been included. The accounting policies have been applied consistently to all periods presented
in these consolidated financial statements.
These condensed interim consolidated financial
statements incorporate the financial statements of the Company and its 100% owned subsidiaries. The accounts of the Company's
subsidiary are prepared for the same reporting period as the parent company, using consistent accounting policies, and all intercompany
transactions and balances are eliminated on consolidation.
These condensed interim consolidated financial
statements were approved for issue by the Board of Directors on November 24, 2021.
These condensed interim consolidated financial
statements have been prepared on a basis consistent with the significant accounting policies disclosed in the annual financial
statements for the year ended December 31, 2020. Accordingly, they should be read in conjunction with the annual consolidated financial