What changed in this filing

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Item 1. Financial Statements

2024-05-10 compared with 2024-02-09 · 122 added, 66 removed, 349 unchanged (35% of the section changed)

2 unchanged sentences

Condensed Interim Consolidated Balance Sheets

December 31, 2023

September 30,

34 unchanged sentences

Three Months Ended

December 31, 2023

December 31, 2022

Six Months Ended

March 31, 2024

March 31, 2023

March 31, 2024

March 31, 2023

Research and development

3 unchanged sentences

( 2,410,581 )

( 4,077,903 )

( 4,788,886 )

Other income (loss):

1 unchanged sentence

Interest income

Miscellaneous other income

Foreign exchange (loss)

Loss before income taxes

( 1,860,531 )

( 2,333,549 )

( 3,538,982 )

( 4,668,366 )

Income tax expense

( 1,861,331 )

( 2,334,349 )

( 3,539,782 )

( 4,669,166 )

Exchange differences on translation

2 unchanged sentences

$ ( 2,325,706 )

$ ( 3,551,537 )

$ ( 4,685,590 )

Weighted average number of common shares

3 unchanged sentences

Condensed Interim Consolidated Statements of Cash Flows

Three Months Ended

December 31, 2023

December 31, 2022

Six Months Ended

March 31, 2024

March 31, 2023

Cash flows from operating activities:

4 unchanged sentences

Share-based compensation

Gain on loan forgiveness

Changes in working capital items:

5 unchanged sentences

( 3,363,240 )

Cash flows from investing activities:

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of common shares and warrants

Proceeds from exercise of warrants

Payments for issuance costs of common shares and warrants

Repayment of debt

Net cash provided by financing activities

11 unchanged sentences

Accumulated Deficit

Total Shareholders' Equity

Three Months Ended December 31, 2023

Balance - September 30, 2023

Shareholders' Equity

Three Months Ended March 31, 2024

Balance - December 31, 2023

$ ( 215,220 )

6 unchanged sentences

( 1,872,514 )

Balance - March 31, 2024

$ ( 226,403 )

$ ( 55,958,750 )

Three Months Ended March 31, 2023

Balance - December 31, 2022

1 unchanged sentence

$ ( 46,379,370 )

Three Months Ended December 31, 2022

Issuance of common shares upon exercise of warrants

Issuance costs

Share-based compensation

Net loss and comprehensive loss

( 2,334,349 )

( 2,325,706 )

Balance - March 31, 2023

$ ( 230,026 )

$ ( 48,713,719 )

Six Months Ended March 31, 2024

Balance - September 30, 2023

1 unchanged sentence

$ ( 52,418,968 )

Issuance of common shares and warrants

Issuance of common shares

Issuance costs

3 unchanged sentences

( 3,551,537 )

Balance - December 31, 2022

Balance - March 31, 2024

$ ( 226,403 )

$ ( 55,958,750 )

Six Months Ended March 31, 2023

Balance - September 30, 2022

$ ( 213,602 )

$ ( 44,044,553 )

Issuance of common shares and warrants in equity offering

Issuance of common shares upon exercise of warrants

Issuance costs

Share-based compensation

Net loss and comprehensive loss

( 4,669,166 )

( 4,685,590 )

Balance - March 31, 2023

$ ( 230,026 )

$ ( 48,713,719 )

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

16 unchanged sentences

All adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included in the interim periods.

Operating results for the three months ended December 31, 2023 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ending September 30, 2024.

Operating results for the three and six months ended March 31, 2024 are not necessarily indicative of the results that may be expected for other interim periods or the fiscal year ending September 30, 2024.

Use of estimates

27 unchanged sentences

Intangible assets, net consisted of the following:

March 31, 2024

September 30, 2023

2 unchanged sentences

Total intangible assets, net

Amortization expense amounted to $ 0.03 million for each of the three months ended December 31, 2023 and 2022 , respectively.

Amortization expense amounted to $ 0.03 million for each of the three months ended March 31, 2024 and 2023 and $ 0.05 million for each of the six months ended March 31, 2024 and 2023.

Total estimated future amortization of intangible assets for each fiscal year is as follows:

9 unchanged sentences

Three Months Ended

Six Months Ended

March 31, 2024

March 31, 2023

March 31, 2024

March 31, 2023

Right-of-use lease cost, included in general and administrative on the Statements of Operations

3 unchanged sentences

Estimated incremental borrowing rate:

The future minimum lease payments under right-of-use leases at December 31, 2023 were as follows:

The future minimum lease payments under right-of-use leases at March 31, 2024 were as follows:

September 30, 2024

6 unchanged sentences

Cash flow information was as follows:

Three Months Ended

Six Months Ended

March 31, 2024

March 31, 2023

Cash paid for amounts included in the measurement of right-of-use lease liabilities, included in accounts payable and accrued liabilities on the Statements of Cash Flow.

1 unchanged sentence

The Company has commitments for contracted research organizations who perform clinical trials for the Company’s ongoing clinical studies and other service providers.

Approximate aggregate future contractual payments at December 31, 2023 are as follows:

Approximate aggregate future contractual payments at March 31, 2024 are as follows:

September 30, 2024

9 unchanged sentences

The Company also has a commitment to pay royalties based on any net sales of products containing the Constructs in the countries where the Company directly commercializes the products containing the Constructs and a percentage of any sublicensing revenue received by the Company and its affiliates in the countries where it does not directly commercialize the products containing the Constructs.

No milestone, royalty or sublicensing payments were made to the third party during the three months ended December 31, 2023 and 2022.

No milestone, royalty or sublicensing payments were made to the third party during the three and six months ended March 31, 2024 and 2023.

In 2016, through its Ontario subsidiary, the Company entered into a license agreement with a third party to obtain exclusive rights to certain know-how, patents and data relating to a pharmaceutical product.

4 unchanged sentences

The Company also has a commitment to pay the third party a royalty based on net sales of the product in countries where the Company, or an affiliate, directly commercializes the product and a percentage of sublicensing revenue received by the Company and its affiliates in the countries where it does not directly commercialize the product.

A milestone payment of $ 0.1 million was made to the third party during the three months ended December 31, 2022 and no milestone payments were made during the three months ended December 31, 2023.

A milestone payment of $ 0.06 million and $ 0.12 million were to the third party during the three and six months ended March 31, 2023 and no milestone payments were made during the three and six months ended March 31, 2024.

In March 2021, through its Ontario subsidiary, the Company entered into a license agreement with the inventor of the same pharmaceutical product to acquire global rights for all fields of use beyond those named under the 2016 license agreement.

1 unchanged sentence

In addition, if the Company fails to file an investigational new drug application or foreign equivalent (IND) for the product within a certain period of time following the date of the agreement, the Company is required to remit to the inventor a fixed license fee quarterly as long as the requirement to file an IND remains unfulfilled.

For the three months ended December 31, 2023, the Company recorded an expense of $ 25,000 as a result of meeting milestones outlined in the 2021 license agreement.

There were no milestones achieved in the three months ended December 31, 2022 and no expenses were incurred.

For the three and six months ended March 31, 2024, the Company recorded an expense of $ 25,000 and $ 50,000 as a result of meeting milestones outlined in the 2021 license agreement.

There were no milestones achieved in the three and six months ended March 31, 2023 and no expenses were incurred.

Capital Shares

9 unchanged sentences

The Company has no obligation to sell any of the common shares and may at any time suspend sales or terminate the equity distribution agreement in accordance with its terms.

During the three months ended December 31, 2023, the Company sold a total of 89,249 common shares pursuant to the agreement for gross proceeds of approximately $ 0.3 million after deducting commissions and direct costs.

During the six months ended March 31, 2024, the Company sold a total of 140,495 common shares pursuant to the agreement for gross proceeds of approximately $ 0.5 million after deducting commissions and direct costs.

Black-Scholes option valuation model

12 unchanged sentences

Weighted Average Exercise Price

Three Months Ended December 31, 2023

Six Months Ended March 31, 2024

Balance - September 30, 2023

Balance - December 31, 2023

Three Months Ended December 31, 2022

Balance - March 31, 2024

Six Months Ended March 31, 2023

Balance - September 30, 2022

Balance - December 31, 2022

The weighted average contractual life remaining on the outstanding warrants at December 31, 2023 is 38 months.

The following table summarizes information about the warrants outstanding at December 31, 2023:

Balance - March 31, 2023

The weighted average contractual life remaining on the outstanding warrants at March 31, 2024 is 35 months.

The following table summarizes information about the warrants outstanding at March 31, 2024:

Number of Warrants (#)

3 unchanged sentences

September 2027

The fair value of warrants granted during the three months ended December 31, 2022 was estimated using the Black-Scholes option valuation model using the following assumptions:

Three Months Ended December 31, 2022

The fair value of warrants granted during the six months ended March 31, 2023 was estimated using the Black-Scholes option valuation model using the following assumptions:

Six Months Ended March 31, 2023

Class A Warrants

8 unchanged sentences

The total number of shares available for issuance under the terms of the 2019 Plan is 575,737 .

The remaining number of shares available to grant at December 31, 2023 is 81,371 .

The remaining number of shares available to grant at March 31, 2024 is 69,728 .

The Company’s 2019 Plan allows options to be granted to directors, officers, employees and certain external consultants and advisers.

4 unchanged sentences

Weighted Average Grant Date Fair Value

Three Months Ended December 31, 2023

Six Months Ended March 31, 2024

Balance - September 30, 2023

Balance - December 31, 2023

Three Months Ended December 31, 2022

Balance - March 31, 2024

Six Months Ended March 31, 2023

Balance - September 30, 2022

Balance - December 31, 2022

During the three months ended December 31, 2023, the independent members of the Board of Directors granted 500 employee options and no director options.

Balance - March 31, 2023

During the three and six months ended March 31, 2024, the independent members of the Board of Directors granted 500 employee options and no director options.

During the three and six months ended March 31, 2024 and 2023, there were no employee or director options granted.

The options have a term of 10 years and an exercise price equal to the Nasdaq closing price on the grant date.

The weighted average contractual life remaining on the outstanding options at December 31, 2023 is 83 months.

The following table summarizes information about the options under the 2019 Plan outstanding and exercisable at December 31, 2023:

The weighted average contractual life remaining on the outstanding options at March 31, 2024 is 79 months.

The following table summarizes information about the options under the 2019 Plan outstanding and exercisable at March 31, 2024:

Number of Options (#)

Exercisable at

December 31, 2023 (#)

March 31, 2024 (#)

Range of Exercise Prices

10 unchanged sentences

$ 4.10 - 10.01

Apr 2024 - Jul 2033

The options exercisable at December 31, 2023 had a weighted average exercise price of $ 29.99 , $ 245 intrinsic value and a weighted average remaining life of 74 months.

There were 108,584 options at December 31, 2023 that had not vested with a weighted average exercise price of $ 12.43 , no intrinsic value and a weighted average remaining life of 109 months.

The fair value of options granted during the three months ended December 31, 2023 and 2022 was estimated using the Black-Scholes option valuation model using the following assumptions:

Three Months Ended December 31, 2023

Three Months Ended December 31, 2022

Apr 2024 - Oct 2033

The options exercisable at March 31, 2024 had a weighted average exercise price of $ 29.27 , $ 7 .00 intrinsic value and a weighted average remaining life of 72 months.

There were 85,804 options at March 31, 2024 that had not vested with a weighted average exercise price of $ 10.70 , no intrinsic value and a weighted average remaining life of 107 months.

The fair value of options granted during the six months ended March 31, 2024 and 2023 was estimated using the Black-Scholes option valuation model using the following assumptions:

Six Months Ended

March 31, 2024

Six Months Ended

March 31, 2023

Risk free interest rate

3.62 % - 4.18 %

Expected life

Expected share price volatility

95.3 % - 97.34 %

Expected dividend yield

The Company recorded $ 0.2 million and $ 0.3 million of share-based compensation expenses for the three months ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, the Company had approximately $ 0.3 million of unrecognized share-based compensation expense, which is expected to be recognized over a period of 31months.

The Company recorded $ 0.1 million and $ 0.3 million of share-based compensation expenses for the three months ended March 31, 2024 and 2023, respectively and $ 0.3 million and $ 0.6 million for the six months ended March 31, 2024 and 2023.

As of March 31, 2024, the Company had approximately $ 0.2 million of unrecognized share-based compensation expense, which is expected to be recognized over a period of 30 months.

Restricted Share Units (RSU)

3 unchanged sentences

The initial grant of RSUs was in August 2023.

The following is a summary of changes in the status of RSUs from October 1, 2023 through December 31, 2023:

Number of RSU (#)

There were no RSUs granted in the comparative period.

The following is a summary of changes in the status of RSUs from October 1, 2023 through March 31, 2024:

Weighted Average Grant Date Fair Value

Three Months Ended December 31, 2023

Balance - September 30, 2023 and December 31, 2023

The following table summarizes information about the RSUs under the 2019 Plan outstanding and exercisable at December 31, 2023:

Number of RSU (#)

Six Months Ended March 31, 2024

Balance - September 30, 2023

Balance - March 31, 2024

The following table summarizes information about the RSUs under the 2019 Plan outstanding and exercisable at March 31, 2024:

Fully-vested RSUs

August 4, 2033

January 2034 - March 2034

All RSUs that were granted vested immediately upon the grant date.

18 unchanged sentences

The Agreement will expire on the later of December 31, 2042 or the date of the last repayment, unless earlier terminated, subject to certain provisions that extend three (3) years beyond the term or early termination of the Agreement .

Under the 2023 SIF Agreement the Company recorded grant income of $ 0.1 million for the three months ended December 31, 2023.

No grant income was recorded under the 2023 SIF Agreement for the three months ended December 31, 2022.

Under the 2023 SIF Agreement the Company recorded grant income of $ 0.3 million and $ 0.4 million for the three and six months ended March 31, 2024.

No grant income was recorded under the 2023 SIF Agreement for the three and six months ended March 31, 2023.

Financial Instruments

27 unchanged sentences

The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks.

At December 31, 2023, the Company and its Canadian subsidiary had assets denominated in Canadian dollars of approximately C$ 1.9 million and the U.S.

At March 31, 2024, the Company and its Canadian subsidiary had assets denominated in Canadian dollars of approximately C$ 1.9 million and the U.S.

dollar exchange rate at this date was equal to 1.3545 Canadian dollars.

Based on the exposure at December 31, 2023, a 10% annual change in the Canadian/U.S.

Based on the exposure at March 31, 2024, a 10% annual change in the Canadian/U.S.

exchange rate would impact the Company’s loss and other comprehensive loss by approximately $0.1 million .

5 unchanged sentences

Related Party Transactions

During each of the three months ended December 31, 2023 and 2022, the Company paid cash of $ 20,000 and $ 19,000 , respectively, for a ROU lease from a company controlled by the Company’s CEO.

During the three and six months ended March 31, 2024 and 2023, the Company paid cash of $ 20,000 and $ 40,000 , respectively, for a ROU lease from a company controlled by the Company’s CEO.

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by both parties.

On December 31, 2022, the Company executed a two-year lease extension through December 31, 2024 in accordance with the terms of the original lease agreement.

Rent of approximately $ 15,000 was payable at December 31, 2023.

There was no rent payable at December 31, 2022.

Rent of approximately $ 7,000 was payable at March 31, 2024.

There was no rent payable at March 31, 2023.

In October 2023, we entered into $ 10.0 million revolving credit agreement with Pardeep Nijhawan Medicine Professional Corporation, an entity controlled by Dr.

4 unchanged sentences

The Company has not drawn any funds from the Credit Agreement.

During the three months ended December 31, 2023 the Company incurred a standby charge of $ 12,000 .

There was no standby charge in the three months ended December 31, 2022.

During the three and six months ended March 31, 2024 the Company incurred a standby charge of $ 13,000 and $ 25,000 .

There was no standby charge in the three and six months ended March 31, 2023.

Subsequent Events

Subsequent to December 31, 2023, equity sales under the Company’s at-the-market offering program have resulted in the issuance of 7,038 common shares and receipt of net cash proceeds of $ 0.03 million after deducting sales agent commissions.

Subsequent to the quarter, we collected the receivable from 2023 SIF Agreement for $ 0.7 million from Canadian government.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements