BriaCell Therapeutics Corp. 10-Q

Item 1. Financial Statements BRIACELL THERAPEUTICS CORP. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS January 31, 2024 July 31, 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 6,244,528 $ 21,251,092 Amounts receivable 30,145 18,873 Prepaid expenses 5,467,286 5,678,542 Total current assets 11,741,959 26,948,507 NON-CURRENT ASSETS: Investments 2 2 Equity investment in BC Therapeutics 281,655 - Intangible assets, net 207,431 215,068 Total non-current assets 489,088 215,070 Total assets $ 12,231,047 $ 27,163,577 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Trade payables $ 3,711,455 $ 1,123,739 Accrued expenses and other payables 212,870 677,718 Total current liabilities 3,924,325 1,801,457 NON-CURRENT LIABILITIES: Warrant liability 16,624,177 29,139,301 Total non-current liabilities 16,624,177 29,139,301 SHAREHOLDERS’ DEFICIT: Share Capital of no par value - Authorized: unlimited at January 31, 2024 and July 31, 2023, Issued and outstanding: 15,981,726 shares January 31, 2024 and July 31, 2023, respectively 69,591,784 69,591,784 Share-based payment reserve 8,419,154 7,421,950 Accumulated other comprehensive loss ( 138,684 ) ( 138,684 ) Non-controlling Interest ( 244,418 ) - Accumulated deficit ( 85,945,291 ) ( 80,652,231 ) Total shareholders’ deficit ( 8,317,455 ) ( 3,777,181 ) Total liabilities and shareholders’ deficit $ 12,231,047 $ 27,163,577 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 BRIACELL THERAPEUTICS CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2024 (Unaudited) 2024 2023 2024 2023 Three months ended January 31, Six months ended January 31, 2024 2023 2024 2023 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Operating Expenses: Research and development expenses $ 8,257,455 $ 3,053,357 $ 15,114,712 $ 6,308,572 General and administrative expenses 1,571,991 1,432,966 3,217,762 3,580,902 Total operating expenses 9,829,446 4,486,323 18,332,474 9,889,474 Operating loss ( 9,829,446 ) ( 4,486,323 ) ( 18,332,474 ) ( 9,889,474 ) Financial expenses, net ( 1,486,119 ) ( 7,395,439 ) 12,975,781 ( 3,098,829 ) Share of loss on equity investment ( 18,345 ) - ( 18,345 ) - Net loss for the period $ ( 11,333,910 ) $ ( 11,881,762 ) $ ( 5,375,038 ) ( 12,988,303 ) Net loss attributable to non-controlling interest ( 39,307 ) - ( 81,978 ) - Net loss and Comprehensive loss for the period attributable to BriaCell ( 11,294,603 ) ( 11,881,762 ) ( 5,293,060 ) ( 12,988,303 ) Net loss per share attributable to BriaCell – basic and diluted $ ( 0.71 ) $ ( 0.77 ) $ ( 0.33 ) $ ( 0.84 ) Weighted average number of shares used in computing net basic earnings per share of common stock 15,981,726 15,518,018 15,981,726 15,518,018 Weighted average number of shares used in computing net diluted earnings per share of common stock 15,981,726 15,518,018 15,981,726 15,518,018 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 BRIACELL THERAPEUTICS CORP. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (Unaudited) FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2024 Number Amount capital loss deficit interest (deficit) Share capital Additional paid in Accumulated other comprehensive Accumulated Non- controlling Total shareholders’ equity Number Amount capital loss deficit interest (deficit) Balance, October 31, 2023 15,981,726 $ 69,591,784 $ 7,918,999 $ ( 138,684 ) $ ( 74,650,688 ) $ ( 205,111 ) $ 2,516,300 Issuance of options - - 500,155 - - - 500,155 Loss for the period - - - - ( 11,294,603 ) ( 39,307 ) ( 11,333,910 ) Balance, January 31, 2024 15,981,726 $ 69,591,784 $ 8,419,154 $ ( 138,684 ) $ ( 85,945,291 ) $ ( 244,418 ) $ ( 8,317,455 ) Share capital Additional paid in Accumulated other comprehensive Accumulated Non- controlling Total shareholders’ Number Amount capital loss deficit interest deficit Balance, July 31, 2023 15,981,726 $ 69,591,784 $ 7,421,950 $ ( 138,684 ) $ ( 80,652,231 ) - $ ( 3,777,181 ) Instruments issued to minority shareholders at the Arrangement Date - - ( 36,767 ) - - ( 162,440 ) ( 199,207 ) Issuance of options - - 1,033,971 - - - 1,033,971 Loss for the period - - - - ( 5,293,060 ) ( 81,978 ) ( 5,375,038 ) Balance, January 31, 2024 15,981,726 $ 69,591,784 $ 8,419,154 $ ( 138,684 ) $ ( 85,945,291 ) $ ( 244,418 ) $ ( 8,317,455 ) Number Amount capital loss deficit (deficit) Share capital Additional paid in Accumulated other comprehensive Accumulated Total shareholders’ equity Number Amount capital loss deficit (deficit) Balance, October 31, 2022 15,518,018 $ 65,589,293 $ 6,340,101 $ ( 138,684 ) $ ( 61,456,378 ) $ 10,334,332 Issuance of options - - 266,844 - - 266,844 Loss for the period - - - - ( 11,881,762 ) ( 11,881,762 ) Balance, January 31, 2023 15,518,018 $ 65,589,293 $ 6,606,945 $ ( 138,684 ) $ ( 73,338,140 ) $ ( 1,280,586 ) Share capital Additional paid in Accumulated other comprehensive Accumulated Total shareholders’ equity Number Amount capital loss deficit (deficit) Balance, July 31, 2022 15,518,018 $ 65,589,293 $ 5,228,160 $ ( 138,684 ) $ ( 60,349,837 ) $ 10,328,932 Balance 15,518,018 $ 65,589,293 $ 5,228,160 $ ( 138,684 ) $ ( 60,349,837 ) $ 10,328,932 Issuance of options - - 1,378,785 - - 1,378,785 Loss for the period - - - - ( 12,988,303 ) ( 12,988,303 ) Income (loss) for the period - - - - ( 12,988,303 ) ( 12,988,303 ) Balance, January 31, 2023 15,518,018 $ 65,589,293 $ 6,606,945 $ ( 138,684 ) $ ( 73,338,140 ) $ ( 1,280,586 ) Balance 15,518,018 $ 65,589,293 $ 6,606,945 $ ( 138,684 ) $ ( 73,338,140 ) $ ( 1,280,586 ) The accompanying notes are an integral part of the condensed consolidated financial statements. 5 BRIACELL THERAPEUTICS CORP. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JANUARY 31, 2024 (Unaudited) 2024 2023 Six months ended January 31, 2024 2023 Cash flow from operating activities Net loss $ ( 5,375,038 ) $ ( 12,988,303 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 7,637 7,635 Share-based compensation 1,033,971 1,378,785 Share of loss on equity investment 18,345 - Change in fair value of warrants ( 12,714,331 ) 3,511,712 Changes in assets and liabilities: Increase in amounts receivable ( 11,272 ) 15,175 Decrease in prepaid expenses ( 88,744 ) 851,548 Increase in trade payable 2,587,716 119,171 Decrease in accrued expenses and other payables ( 464,848 ) ( 389,845 ) Total cash flow from operating activities ( 15,006,564 ) ( 7,494,122 ) Cash flows from investing activities Equity Investment in BC Therapeutics ( * ) - - Total cash flow from investing activities - - Cash flows from financing activities Share and warrant buyback program - ( 47,294 ) Total cash flow from financing activities - ( 47,294 ) Decrease in cash and cash equivalents ( 15,006,564 ) ( 7,541,416 ) Cash and cash equivalents at beginning of the period 21,251,092 41,041,652 Cash and cash equivalents at end of the period $ 6,244,528 $ 33,500,236 (*) $ 125,000 of this amount was loaned to BC Therapeutics during the year ended July 31, 2023 and an additional $ 175,000 was loaned to BC Therapeutics between August 1, 2023 and December 20, 2023. The total amount ($ 300,000 ) was converted into an investment). The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 BriaCell Therapeutics Corp Notes to the Condensed Consolidated Financial Statements (Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated) NOTE 1: GENERAL AND GOING CONCERN a. BriaCell Therapeutics Corp. (“BriaCell” or the “Company”) was incorporated under the Business Corporations Act (British Columbia) on July 26, 2006 and is listed on the Toronto Stock Exchange (“TSX”) under the symbol “BCT” and on the Nasdaq Capital Market (“NASDAQ”) under the symbols “BCTX” and “BCTXW”. b. BriaCell Therapeutics Corporation. (the “Company”), is an immuno-oncology biotechnology company. The Company is currently advancing its Bria-IMT targeted immunotherapy program against end-stage breast cancer to Phase 3 study which has been approved by the FDA and is expected to start before end of 2023. BriaCell is also developing a personalized off-the-shelf immunotherapy, Bria-OTS™, and a soluble CD80 protein therapeutic which acts both as a stimulator of the immune system as well as an immune checkpoint inhibitor. c. Basis of presentation of the financial statements: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X promulgated by the U.S Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments consisting of a normal recurring nature which are necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report for the year ended July 31, 2023, filed with the SEC on October 25, 2023. The interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. d. The Company continues to devote substantially all of its efforts toward research and development activities. In the course of such activities, the Company has sustained operating losses and expects such losses to continue in the foreseeable future. The Company’s accumulated deficit as of January 31, 2024 was $ 85,945,291 and negative cash flows from operating activities during the six-month period ended January 31, 2024 was $ 15,006,564 . The Company is planning to finance its operations from its existing and future working capital resources and to continue to evaluate additional sources of capital and financing. The Company’s ability to continue as a going concern is dependent upon its ability to attain future profitable operations and to obtain the necessary financing to meet its obligations arising from normal business operations when they come due. The uncertainty of the Company’s ability to raise such financial capital casts significant doubt on the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company not be able to continue as a going concern. 7 BriaCell Therapeutics Corp Notes to the Condensed Consolidated Financial Statements (Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated) NOTE 1: GENERAL AND GOING CONCERN (Cont.) e. The Company has two wholly-owned U.S. subsidiaries: (i) BriaCell Therapeutics Corp. (“BTC”), which was incorporated in April 3, 2014, under the laws of the state of Delaware. (ii) BTC has a wholly-owned subsidiary, Sapientia Pharmaceuticals, Inc. (“Sapientia”), which was incorporated in September 20, 2012, under the laws of the state of Delaware. The Company also has one Canadian subsidiary: BriaPro Therapeutics Corp, (“BriaPro”) which was incorporated on May 15, 2023, was incorporated under the Business Corporations Act (British Columbia). As of July 31, 2023, BriaPro was a wholly-owned subsidiary. f. On August 31, 2023, the Company closed a plan of arrangement spinout transaction (the “Arrangement”) pursuant to which certain pipeline assets of the Company, including Bria-TILsRx™ and protein kinase C delta (PKCδ) inhibitors for multiple indications including cancer (the “BriaPro Assets”), were spun-out to BriaPro Therapeutics Corp. (“BriaPro”), resulting in a 2/3rd owned subsidiary of the Company with the remaining 1/3rd held by BriaCell shareholders (“BriaCell Shareholders”). Pursuant to the terms of the Arrangement, BriaPro has acquired the entire right and interest in and to the BriaPro Assets in consideration for the issuance by BriaPro to the Company of BriaPro common shares. Under the terms of the Arrangement, for each BriaCell share held immediately prior to closing, BriaCell Shareholders receive one (1) common share of BriaPro, and one (1) new common share of BriaCell (retiring their old share) having the same terms and characteristics as the existing BriaCell common shares. The Company will remain listed on the NASDAQ Stock Market and Toronto Stock Exchange, and BriaPro is an unlisted reporting issuer in Canada. Immediately following the closing of the Arrangement, the Company controls 2/3rd of the BriaPro common shares representing approximately 66.6 % of the issued and outstanding common shares of BriaPro. As a result of the Arrangement, there are 47,945,178 BriaPro common shares issued and outstanding. The Company now beneficially owns or controls approximately 31,963,452 BriaPro common shares, representing 2/3rd of the issued and outstanding BriaPro common shares. Pursuant to the Arrangement, each BriaCell warrant shall, in accordance with its terms, entitle the holder thereof to receive, upon the exercise thereof, one BriaCell Share and one BriaPro Share for the original exercise price. Upon the exercise of BriaCell Warrants, BriaCell shall, as agent for BriaPro, collect and pay to BriaPro an amount for each one (1) BriaPro Share so issued that is equal to the exercise price under the BriaCell Warrant multiplied by the fair market value of one (1) BriaPro Share at the Effective Date divided by the total fair market value of one (1) BriaCell Share and one (1) BriaPro Share at the Effective Date (“BriaPro Warrant Shares”). Pursuant to the Arrangement, all Briacell option holders received the same amount of BriaPro options (“BriaPro Option”) and under the BriaPro incentive plan. The exercise price of the BriaCell options was apportioned between the BriaCell options and the BriaPro options, as follows: Each one (1) BriaPro Option to acquire one (1) Share shall have an exercise price equal to the product obtained by multiplying the original exercise price of the BriaCell Option by the quotient obtained by dividing (A) the fair market value of a BriaPro Share at the Effective Date by (B) the aggregate fair market value of a BriaCell Share and a BriaPro Share at the Effective Date. Pursuant to the Arrangement, all BriaCell Restricted Shares Units (“RSU”) holders received the same amount of BriaPro RSU’s under the BriaPro incentive plan. Transition Services Agreement On August 31, 2023, the Company and BriaPro executed a transition services agreement (the “Agreement”), pursuant to which BriaCell will provide certain research and development and head office services (the “Services”) to BriaPro for a fixed monthly fee of $ 20,000 . Briacell and BriaPro acknowledged the transitional nature of the Services and accordingly, as promptly as practicable, BriaPro agreed to use commercially reasonable efforts to transition each Service to its own internal organization or to obtain alternate third party providers to provide the Services. In accordance with US GAAP’s Accounting Standards Codification 505 “Equity”, the Arrangement was determined to be a spinoff of nonmonetary assets which did not constitute a business. However, since the assets were transferred to an entity under the Company’s control, the assets is being recorded on the Company’s basis (carry value) and not at fair market value. 8 BriaCell Therapeutics Corp Notes to the Condensed Consolidated Financial Statements (Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES a. Use of estimates : The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the consolidated financial statements, and the reported amount of expenses during the reporting periods. Actual results could differ from those estimates. b. Equity method investments : Investments in entities over which the Company does not have a controlling financial interest but has significant influence, are accounted for using the equity method, with the Company’s share of losses reported in loss from equity method investments on the statements of loss and comprehensive loss. Equity method investments are recorded at cost, plus the Company’s share of undistributed earnings or losses, and impairment, if any, within interest in equity investees on the statements of financial position. c. Recently issued and adopted accounting standards : As an “emerging growth company,” the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflects this election. The pronouncements below relate to standards that impact the Company. 1. In March 2022, the FASB issued ASU 2022-02 - Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. This standard eliminates the accounting guidance on TDRs for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under ASC 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, for any entities that have adopted ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The adoption of this standard did not result in amended disclosures in the Company’s Condensed Consolidated Financial Statements, nor did this standard have a material impact the Company’s results of operations. 9 BriaCell Therapeutics Corp Notes to the Condensed Consolidated Financial Statements (Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated) NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.) 2. In July 2023, the FASB issued 2023-03 — Presentation of Financial Statements (Topic 205), Income Statement — Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation — Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022, EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 — General Revision of Regulation S-X: Income or Loss Applicable to Common Stock (SEC Update). The adoption of this standard did not result in amended disclosures in the Company’s Condensed Consolidated Financial Statements, nor did this standard have a material impact the Company’s results of operations. NOTE 3: INVESTMENT IN BC THERAPEUTICS INC. On December 21, 2021, the Company and BC Therapeutics, Inc. (“BC Therapeutics” or “the Investee”) entered a share purchase agreement (“SPA”), pursuant to which the Company invested $ 300,000 at $ 1.25 per BC Therapeutics share for a 37.5 % interest in the Investee. Pursuant to the SPA, Briacell also received two options to invest an additional $ 225,000 per option at $ 1.25 per BC Therapeutics share. The first option expires on February 15, 2024 and the second option expires on June 30, 2024 (“BC Therapeutics Options”). In accordance with ASC 321 and ASC 815, the BC Therapeutics Options were valued at $ 76,350 in accordance with the Black Scholes Option Price Model, using the following assumptions: Share price: $ 1.25 , Exercise price: $ 1.25 , Dividend yield: 0 %, Risk free interest rate: $ 4.902 %, Volatility: 100 %. Subsequent to January 31, 2024, the Company exercised the first option on February 1, 2024 and now holds 51 % of BC Therapeutics. BC Therapeutics has a board of four representatives, with two representatives appointed by BriaCell and two representatives appointed by the existing shareholders. All significant decisions related to BC Therapeutics require the approval of at least a majority of the board members. Changes in the Company’s Investment in BC Therapeutics is summarized as follows: SCHEDULE OF CHANGES IN INVESTMENT Balance – August 1, 2023 $ - Funding (including the value of the BC Therapeutics Options) 300,000 Share of losses: Operating expenses ( 18,345 ) Balance – January 1, 2024 $ 281,655 The following amounts represent the Company’s 37.5 % share of the assets and liabilities of BC Therapeutics: SCHEDULE OF ASSETS AND LIABILITIES OF BC THERAPEUTICS As of January 31, 2024 Current assets: Cash $ 4,196 Net assets $ 4,196 NOTE 4: CONTINGENT LIABILITIES AND COMMITMENTS a. BriaPro Warrants As detailed in note 1(f), upon the exercise of BriaCell Warrants, BriaCell shall, as agent for BriaPro, collect and pay to BriaPro an amount of up to $ 241,164 . b. Lease The Company is currently in a 12 -month commitment (ending August 31, 2024 ) for office and lab space in Philadelphia, PA, costing the company approximately $ 36,000 per month. 10 BriaCell Therapeutics Corp Notes to the Condensed Consolidated Financial Statements (Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated) NOTE 5: FAIR VALUE MEASUREMENTS The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of January 31, 2024, and July 31, 2023: SCHEDULE OF FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A RECURRING BASIS Fair Value Measurements at January 31, 2024 July 31, 2023 Level 1 Level 2 Total Level 1 Level 2 Total Financial Assets: Cash and cash equivalents 6,244,528 - 6,244,528 21,251,092 - 21,251,092 Total assets measured at fair value $ 6,244,528 $ - $ 6,244,528 $ 21,251,092 $ - $ 21,251,092 Financial liabilities: Warrants liability 6,936,320 9,687,857 16,624,177 9,742,023 19,397,278 29,139,301 Total liabilities measured at fair value $ 6,936,320 $ 9,687,857 $ 16,624,177 $ 9,742,023 $ 19,397,278 $ 29,139,301 The Company classifies its cash and cash equivalents and the liability in respect of publicly traded warrants within Level 1 because we use quoted market prices in active markets. The fair value of the warrant liability for non-public warrants is measured using inputs other than quoted prices included in Level 1 that are observable for the liability either directly or indirectly, and thus are classified as Level 2 financial instruments. NOTE 6: SHAREHOLDERS’ EQUITY a. Authorized share capital The authorized share capital consists of an unlimited number of common shares with no par value. b. Issued share capital No shares were issued during the six-month period ended January 31, 2024. c. Share Purchase Warrants SUMMARY OF CHANGES IN WARRANTS (i) There were no changes in share purchase warrants for the six-month period ended January 31, 2024 as presented below: Number of warrants outstanding Weighted average exercise price Balance, July 31, 2023 and January 31, 2024 8,121,650 $ 5.76 SCHEDULE OF WARRANTS OUTSTANDING (ii) As of January 31, 2024, warrants outstanding were as follows: Number of Warrants Exercise Price(*) Exercisable At January 31, 2024 Expiry Date 51,698 $ 3.91 51,698 November 16, 2025 3,896,809 $ 5.31 3,896,809 February 26, 2026 – April 26, 2026 4,173,143 $ 6.19 4,173,143 December 7, 2026 8,121,650 8,121,650 (*) See note 4(a). 11 BriaCell Therapeutics Corp Notes to the Condensed Consolidated Financial Statements (Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated) NOTE 6: SHAREHOLDERS’ EQUITY (Cont.) d. Compensation Warrants (i) There were no changes to compensation warrants for the six-month period ended January 31, 2024. (ii) As of January 31, 2024, compensation warrants outstanding were as follows: SCHEDULE OF WARRANTS OUTSTANDING Number of Warrants Exercise Price(*) Exercisable At January 31, 2024 Expiry Date 4,890 $ 3.91 4,890 November 16, 2025 17,074 $ 5.31 17,074 February 26, 2026 24,688 $ 6.19 24,688 June 7, 2026 46,652 46,652 (*) See note 4(a). e. Warrant liability continuity The following table presents the summary of the changes in the fair value of the warrants: SCHEDULE OF CHANGE IN FAIR VALUE OF WARRANTS Warrants liability Balance as of August 1, 2023 $ 29,139,301 Fair value of BriaPro Warrant Shares at Effective Date $ 199,207 Change in fair value during the period $ ( 12,714,331 ) Balance as of January 31, 2024 $ 16,624,177 The key inputs used in the valuation of the non-public warrants as of January 31, 2024 and at July 31, 2023 were as follows: 12 BriaCell Therapeutics Corp Notes to the Condensed Consolidated Financial Statements (Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated) NOTE 6: SHAREHOLDERS’ EQUITY (Cont.) SCHEDULE OF VALUATION OF WARRANTS January 31, 2024 July 31, 2023 Share price $ 4.12 $ 6.69 Exercise price $ 5.31 - 6.19 $ 5.31 - 6.19 Expected life (years) 1.79 - 2.85 2.58 - 3.35 Volatility 100 % 100 % Dividend yield 0 % 0 % Risk free rate 3.99 - 4.21 % 4.51 % The key inputs used in the valuation of the of the BriaPro Warrant Shares as of January 31, 2024 were as follows: SCHEDULE OF VALUATION OF WARRANTS January 31, 2024 August 31, 2023 (Effective Date) Share price $ 0.0365 $ 0.0365 Exercise price $ 0.0206 - 0.0308 $ 0.0206 - 0.0308 Expected life (years) 1.79 - 2.85 2.21 - 3.27 Volatility 100 % 100 % Dividend yield 0 % 0 % Risk free rate 3.99 - 4.00 % 4.40 % NOTE 7: SHARE-BASED COMPENSATION a. On August 2, 2022, the Company approved an omnibus equity incentive plan (“Omnibus Plan), which will permit the Company to grant incentive stock options, preferred share units, RSU, and deferred share units (collectively, the “Awards”) for the benefit of any employee, officer, director, or consultant of the Company or any subsidiary of the Company. The maximum number of shares available for issuance under the Omnibus Plan shall not exceed 15 % of the issued and outstanding Shares, from time to time, less the number of Shares reserved for issuance under all other security-based compensation arrangements of the Company, including the existing Stock Option Plan. On February 9, 2023, the Omnibus Plan was approved by the shareholders. b. The following table summarizes the number of options granted to directors, officers, employees and consultants under the option plan for six-month period ended January 31, 2023 and related information: SUMMARY OF NUMBER OF OPTIONS GRANTED Number of options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Balance as of July 31, 2023 2,131,400 $ 6.19 3.55 $ 1,065,700 Balance as of January 31, 2024 2,131,400 6.18 3.05 - Exercisable as of January 31, 2024 1,797,000 $ 6.19 2.83 $ - As of January 31, 2024 there are $ 1,556,676 of total unrecognized costs related to share-based compensation that is expected to be recognized over a period of up to 1.25 years. 13 BriaCell Therapeutics Corp Notes to the Condensed Consolidated Financial Statements (Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated) NOTE 7: SHARE-BASED COMPENSATION (Cont.) c. The following table summarizes information about the Company’s outstanding and exercisable options granted to employees as of January 31, 2024. SUMMARY OF OUTSTANDING AND EXERCISABLE OPTIONS Exercise price Options outstanding as of January 31, 2024 Weighted average remaining contractual term (years) Options exercisable as of January 31, 2024 Weighted average remaining contractual term (years) Expiry Date $ 6.03 440,000 4.39 165,000 4.39 June 20, 2028 $ 7.16 21,000 4.08 10,500 4.08 February 27, 2028 $ 6.04 180,100 3.51 135,075 3.51 August 02, 2027 $ 4.71 31,000 3.31 27,125 3.31 May 20, 2027 $ 7.51 150,000 3.04 150,000 3.04 February 16, 2027 $ 8.47 524,700 2.95 524,700 2.95 January 13, 2027 $ 7.15 12,600 2.75 12,600 2.75 November 01, 2026 $ 5.74 100,000 2.59 100,000 2.59 September 01, 2026 $ 4.24 60,000 2.22 60,000 2.22 April 19, 2026 $ 4.24 612,000 2.16 612,000 2.16 March 29, 2026 2,131,400 1,797,000 d. As result of the Arrangement, 2,131,400 BriaPro Options were issued and are outstanding as of January 31, 2024: SCHEDULE OF OPTION ISSUED AND OUTSTANDING Exercise Price Options outstanding as of January 31, 2024 Options exercisable as of January 31, 2024 Expiry Date $ 0.0933 440,000 165,000 June 20, 2028 $ 0.1108 21,000 10,500 February 27, 2028 $ 0.0984 180,100 135,075 August 02, 2027 $ 0.0729 31,000 27,125 May 20, 2027 $ 0.1162 150,000 150,000 February 16, 2027 $ 0.1310 524,700 524,700 January 13, 2027 $ 0.1165 12,600 12,600 November 01, 2026 $ 0.0888 100,000 100,000 September 01, 2026 $ 0.0656 60,000 60,000 April 19, 2026 $ 0.0656 612,000 612,000 March 29, 2026 2,131,400 1,797,000 e. Restricted Share Unit Plan The following table summarizes the number of RSU’s granted to directors under the Omnibus plan as of January 31, 2024: SUMMARY OF RESTRICTED STOCK UNITS GRANTED Number of RSU’s outstanding Aggregate intrinsic value Balance, July 31, 2023 19,200 $ 123,072 Balance, January 31, 2024 19,200 $ 79,104 14 BriaCell Therapeutics Corp Notes to the Condensed Consolidated Financial Statements (Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated) NOTE 7: SHARE-BASED COMPENSATION (Cont.) f. The total share-based compensation expense related to all of the Company’s equity-based awards, recognized for the three and six-month period ended January 31, 2024 and 2023 is comprised as follows: SCHEDULE OF SHARE-BASED COMPENSATION EXPENSES 2024 2023 2024 2023 Three months ended January 31, Six months ended January 31, 2024 2023 2024 2023 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Research and development expenses $ 234,253 225,091 $ 492,062 575,347 General and administrative expenses 265,902 41,753 541,909 803,438 Total share-based compensation $ 500,155 266,844 $ 1,033,971 1,378,785 NOTE 8: FINANCIAL INCOME (EXPENSES), NET SCHEDULE OF FINANCIAL INCOME (EXPENSES), NET 2024 2023 2024 2023 Three months ended January 31, Six months ended January 31, 2024 2023 2024 2023 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Interest income $ 81,595 240,595 $ 272,410 428,948 Change in fair value of warrant liability ( 1,567,747 ) ( 7,629,502 ) 12,714,331 ( 3,511,712 ) Foreign exchange gain (loss) 33 ( 6,532 ) ( 10,960 ) ( 16,065 ) Financial income (expenses), net $ ( 1,486,119 ) $ ( 7,395,439 ) $ 12,975,781 $ ( 3,098,829 ) NOTE 9: SUBSEQUENT EVENT The Company evaluated the possibility of subsequent events existing in the Company’s unaudited condensed consolidated financial statements through March 18, 2024, the date that the condensed consolidated financial statements were available for issuance. The Company is not aware of any subsequent events which would require recognition or disclosure in the consolidated financial statements, except as follows: a. As disclosed in note 3, subsequent to January 31, 2024, on February 1, 2024 the Company exercised an option to acquire an additional interest in BC Therapeutics and now owns 51 %. 15