What changed in this filing

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Item 1. Financial Statements

2020-11-12 compared with 2020-05-13 · 420 added, 1480 removed, 107 unchanged (95% of the section changed)

Financial Statements.

Pharmaceuticals, Inc.

Consolidated Interim Financial Statements

the nine months ended March 31, 2020

in US dollars unless otherwise noted)

DelMar Pharmaceuticals, Inc.

Condensed Consolidated Interim Balance Sheets

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Financial Statements

For the three months ended September 30, 2020

(expressed in US dollars unless otherwise noted)

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Balance Sheets

(In thousands, except par value amounts)

September 30,

Current assets

2 unchanged sentences

Interest, taxes and other receivables

Deferred loan costs

Intangible assets - net

Property and equipment

Deferred financing costs

Current liabilities

Accounts payable and accrued liabilities

Loan payable, net of deferred loan costs

Related party payables

Milestone payment liability

Total liabilities

Stockholders’

Stockholders’ equity

Preferred stock

1 unchanged sentence

Issued and outstanding

278,530 Series A shares at March 31, 2020 (June 30, 2019 –

648,613 Series B shares at March 31, 2020 (June 30, 2019 –

1 special voting share at March 31, 2020 (June 30, 2019 –

95,000,000 shares at March 31, 2020 and June 30, 2019, $0.001 par value

11,427,132 issued at March 31, 2020 (June 30, 2019 –

279 Series A shares at September 30, 2020

(June 30, 2020 – 279)

649 Series B shares at September 30, 2020

(June 30, 2020 – 649)

25 Series C shares at September 30, 2020

(June 30, 2020 – 0)

95,000 shares at September 30, 2020 and June 30, 2020,

$0.001 par value

24,466 issued at September 30, 2020 (June 30, 2020 –

Additional paid-in capital

Accumulated deficit

(65,893,587 )

(60,578,345 )

Accumulated other comprehensive income

Total stockholders’

Total liabilities and stockholders’

Nature of operations, corporate history, and going concern (note 1)

Total stockholders’ equity

Total liabilities and stockholders’ equity

Nature of operations, corporate history, and liquidity risk and management plans (note 1)

Subsequent events (note 9)

The accompanying notes are an integral part of these condensed

consolidated interim financial statements.

DelMar Pharmaceuticals, Inc.

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

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Operations

(expressed in US dollars unless otherwise noted)

Nine months ended

(In thousands, except per share amounts)

Three months ended

September 30,

Research and development

General and administrative

In-process research and development

Other (income) loss

Change in fair value of derivative liability

Foreign exchange (gain) loss

Foreign exchange loss

Amortization of deferred loan costs

Interest expense

Interest income

2 unchanged sentences

Net loss for the period

Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance

Series A Preferred cash dividend

Series B Preferred stock dividend

1 unchanged sentence

Basic and fully diluted loss per share

Basic and fully diluted number of shares

The accompanying notes are an integral part of these condensed

consolidated interim financial statements.

DelMar Pharmaceuticals, Inc.

Condensed Consolidated Interim Statements of Stockholders’

(expressed in US dollars unless otherwise noted)

the three and nine months ended March 31, 2020

Basic and fully diluted weighted average number of shares

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

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Stockholders’ Equity

(In thousands)

For the three months ended September 30, 2020 and 2019

comprehensive

Preferred stock

Stockholders’

Stockholders'

Balance - June 30, 2020

(60,578,345 )

Issuance of shares and warrants - net of issue costs

Adgero merger (note 3)

Issuance of Series C Preferred stock

Series C placement agent warrants

Series C Preferred stock share issuance costs

Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance

Exercise of warrants for cash

Conversion of Series B preferred stock to common stock

Shares issued for services

Stock option expense

Series A preferred cash dividend

Series B preferred stock dividend

Loss for the period

Balance - September 30,

(62,188,351 )

Warrants issued for services

Shares issued for services

Stock option expense

2 unchanged sentences

Loss for the period

Balance - December 31, 2019

(63,933,043 )

Warrants issued for services

Shares issued for services

Warrants expired

Stock option expense

Series A preferred cash dividend

Series B preferred stock dividend

Loss for the period

Balance - March 31, 2020

(65,893,587 )

The accompanying notes are an integral part of these condensed

consolidated interim financial statements.

DelMar Pharmaceuticals, Inc.

Condensed Consolidated Interim Statements of Stockholders’

Equity …

(expressed in US dollars unless otherwise noted)

the three and nine months ended March 31, 2019

comprehensive

Preferred stock

Stockholders’

Balance - September 30, 2020

Balance - June 30, 2019

(52,441,337 )

Warrants issued for services

Issuance of shares and warrants - net of

Exercise of pre-funded warrants for cash

Conversion of Series B Preferred stock

to common stock

Shares issued for services

Performance stock unit expense

Stock option expense

3 unchanged sentences

Balance - September 30, 2019

(54,471,315 )

Exercise and exchange of warrants

Conversion of Series B preferred stock to common stock

Warrants issued for services

Shares issued for services

Performance stock unit expense

Stock option expense

Series A preferred cash dividend

Series B preferred stock dividend

Loss for the period

Balance - December 31, 2018

(56,299,291 )

Exercise and exchange of warrants –

Warrants issued for services

Shares issued for services

Performance stock unit expense

Stock option expense

Series A preferred cash dividend

Series B preferred stock dividend

Loss for the period

Balance - March 31, 2019

(57,988,567 )

The accompanying notes are an integral part of these condensed

consolidated interim financial statements.

DelMar Pharmaceuticals, Inc.

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

Kintara Therapeutics, Inc.

Condensed Consolidated Interim Statements of Cash Flows

March 31, 2020

(expressed in US dollars unless otherwise noted)

Nine months ended March 31,

(In thousands)

Three months ended

September 30,

Cash flows from operating activities

Loss for the period

Adjustments to reconcile net loss to net cash used in operating activities

Adjustments to reconcile net loss to net cash used in operating

Amortization of intangible assets

Change in fair value of derivative liability

Warrants issued for services

In-process research and development

Amortization of deferred loan costs

Interest expense

Shares issued for services

Performance stock unit expense

Warrants issued for services

Stock option expense

5 unchanged sentences

Net cash used in operating activities

Cash flows from investing activities

Cash acquired on merger with Adgero

Net cash provided by investing activities

Cash flows from financing activities

Net proceeds from the issuance of shares and warrants

Net proceeds from the exercise of warrants

Series A preferred stock dividend

Deferred financing costs

Net cash provided by financing

Increase (decrease) in cash and cash equivalents

Warrants exercised for cash

Proceeds from loan

Series A preferred cash dividend

Net cash provided by financing activities

Decrease in cash and cash equivalents

Cash and cash equivalents – beginning of period

1 unchanged sentence

Supplementary information (note 7)

The accompanying notes are an integral part of these condensed

consolidated interim financial statements.

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

of operations, corporate history, and going concern

of operations

Pharmaceuticals, Inc.

(the “Company”) is a clinical stage drug development company with a focus on the treatment of

solid tumor cancers.

The Company is currently conducting two phase 2 clinical trials in the United States and China with its product

candidate, VAL-083, as a potential new treatment for glioblastoma multiforme, the most common and aggressive form of brain cancer.

Historical research indicates that VAL-083 is also active in other solid tumor cancers such as ovarian, lung, pediatric brain

cancer, as well as other solid tumors of the central nervous system.

The Company may pursue opportunities in these cancers in

In order to accelerate the Company’s development timelines, it leverages existing preclinical and clinical data

from a wide range of sources.

The Company may seek marketing partnerships in order to potentially offset clinical costs

and to generate future royalty revenue from approved indications of its product candidate.

Company is a Nevada corporation formed on June 24, 2009 under the name Berry Only, Inc.

On January 25, 2013, the Company entered

into and closed an exchange agreement (the “Exchange Agreement”), with Del Mar Pharmaceuticals (BC) Ltd.

Mar (BC)”), 0959454 B.C.

(“Callco”), and 0959456 B.C.

(“Exchangeco”) and the security

holders of Del Mar (BC).

Upon completion of the Exchange Agreement, Del Mar (BC) became a wholly-owned subsidiary of the Company

(the “Reverse Acquisition”).

Pharmaceuticals, Inc.

is the parent company of Del Mar (BC), a British Columbia, Canada corporation incorporated on April 6, 2010,

which is a clinical stage company with a focus on the development of drugs for the treatment of cancer.

The Company is also the

parent company to Callco and Exchangeco which are British Columbia, Canada corporations.

Callco and Exchangeco were formed to

facilitate the Reverse Acquisition.

to the Company refer to the Company and its wholly-owned subsidiaries, Del Mar (BC), Callco and Exchangeco.

These condensed

consolidated interim financial statements have been prepared on a going concern basis, which assumes that the Company will continue

its operations for the foreseeable future and contemplates the realization of assets and the settlement of liabilities in the

normal course of business.

For the nine months

ended March 31, 2020, the Company reported a loss of $5,302,904, and a negative cash flow from operations of $5,348,629.

had an accumulated deficit of $65,893,587 and had cash and cash equivalents of $4,973,378 as of March 31, 2020.

The Company is

in the development stage and has not generated any revenues to-date.

The Company does not have the prospect of achieving revenues

until such time that its product candidate is commercialized, or partnered, which may not ever occur.

In the near future, the Company

will require additional funding to maintain its clinical trials, research and development projects, and for general operations.

These circumstances indicate substantial doubt exists about the Company’s ability to continue as a going concern within one

year from the date of filing of these condensed consolidated financial statements.

DelMar Pharmaceuticals, Inc.

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

Kintara Therapeutics, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

September 30, 2020

(expressed in US dollars unless otherwise noted)

Consequently,

management is pursuing various financing alternatives to fund the Company’s operations so it can continue as a going concern.

However, the coronavirus (“COVID-19”) pandemic has created significant economic uncertainty and volatility in the

credit and capital markets.

Management plans to secure the necessary financing through the issue of new equity and/or the entering

into of strategic partnership arrangements but the ultimate impact of the COVID-19 pandemic on the Company’s ability

to raise additional capital is unknown and will depend on future developments, which are highly uncertain and cannot be predicted

with confidence, including the duration of the COVID-19 outbreak and any new information which may emerge concerning the severity

of the COVID-19 pandemic.

The Company may not be able to raise sufficient additional capital

and may tailor its drug candidate development program based on the amount of funding the Company is able to raise in the future.

Nevertheless, there is no assurance that these initiatives will be successful.

financial statements do not give effect to any adjustments to the amounts and classification of assets and liabilities that may

be necessary should the Company be unable to continue as a going concern.

Such adjustments could be material.

2 Significant

accounting policies

May 7, 2019, the Company filed a Certificate of Change with the Secretary of State of Nevada that effected a 1-for-10 (1:10) reverse

stock split of its common stock, par value $0.001 per share, which became effective on May 8, 2019.

Pursuant to the Certificate

of Change, the Company’s authorized common stock was decreased in the same proportion as the split resulting in a decrease

from 70,000,000 authorized shares of common stock to 7,000,000 shares authorized.

The par value of its common stock was unchanged

at $0.001 per share, post-split.

All common shares, warrants, stock options, conversion ratios, and per share information in these

condensed consolidated interim financial statements give retroactive effect to the 1-for-10 reverse stock split.

The Company’s

authorized and issued preferred stock was not affected by the split.

articles of incorporation

June 26, 2019, the Company amended its articles of incorporation to increase the number of authorized shares of common stock from

7,000,000 to 95,000,000 shares.

of presentation

condensed consolidated interim financial statements of the Company have been prepared in accordance with United States Generally

Accepted Accounting Principles (“U.S.

GAAP”) and are presented in United States dollars.

The functional currency of

the Company and each of its subsidiaries is the United States dollar.

accompanying condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiaries,

Del Mar BC, Callco, and Exchangeco.

Nature of operations, corporate history, and liquidity risk and management plans

Nature of operations

Kintara Therapeutics, Inc.

(formerly DelMar Pharmaceuticals, Inc.) (the “Company”) is a clinical stage drug development company with a focus on the development of novel cancer therapies for patients with unmet medical needs.

The Company is developing two late-stage, Phase 3-ready therapeutics - VAL-083 for glioblastoma multiforme and REM-001 for cutaneous metastatic breast cancer.

In order to accelerate the Company’s development timelines, it leverages existing preclinical and clinical data from a wide range of sources.

The Company may seek marketing partnerships in order to potentially offset clinical costs and to generate future royalty revenue from approved indications of its product candidates.

On June 9, 2020, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), by and among Adgero Acquisition Corp., the Company’s wholly-owned subsidiary incorporated in the State of Delaware (“Merger Sub”), and Adgero Biopharmaceuticals Holdings, Inc., a Delaware corporation (“Adgero”).

On August 19, 2020, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub merged with and into Adgero (the “Merger”), the separate corporate existence of Merger Sub ceased and Adgero continued its existence under Delaware law as the surviving corporation in the Merger and became a direct, wholly-owned subsidiary of the Company.

As a result of the Merger, each issued and outstanding share of Adgero common stock, par value $0.0001 per share (the “Adgero Common Stock”) (other than treasury shares held by Adgero), was converted automatically into the right to receive 1.5740 shares (the “Exchange Ratio”) of the Company’s common stock, and cash in lieu of any fractional shares.

Also, each outstanding warrant to purchase Adgero Common Stock was converted into a warrant exercisable for that number of shares of the Company’s common stock equal to the product of (x) the aggregate number of shares of Adgero Common Stock for which such warrant was exercisable and (y) the Exchange Ratio.

Following the completion of the Merger, the Company changed its name from DelMar Pharmaceuticals, Inc.

to Kintara Therapeutics, Inc.

and began trading on Nasdaq under the symbol “KTRA”.

Corporate history

The Company is a Nevada corporation formed on June 24, 2009 under the name Berry Only, Inc.

On January 25, 2013, the Company entered into and closed an exchange agreement (the “Exchange Agreement”), with Del Mar Pharmaceuticals (BC) Ltd.

(“Del Mar (BC)”), 0959454 B.C.

(“Callco”), and 0959456 B.C.

(“Exchangeco”) and the security holders of Del Mar (BC).

Upon completion of the Exchange Agreement, Del Mar (BC) became a wholly-owned subsidiary of the Company (the “Reverse Acquisition”).

Kintara Therapeutics, Inc.

is the parent company of Del Mar (BC), a British Columbia, Canada corporation and Adgero, a Delaware corporation, which are clinical stage companies with a focus on the development of drugs for the treatment of cancer.

The Company is also the parent company to Callco and Exchangeco which are British Columbia, Canada corporations.

Callco and Exchangeco were formed to facilitate the Reverse Acquisition.

In connection with the Merger, the Company also became the parent company of Adgero Biopharmaceuticals, Inc.

(“Adgero Bio”), formerly a wholly-owned subsidiary of Adgero.

References to the Company refer to the Company and its wholly-owned subsidiaries.

Liquidity risk and management plans

During the three months ended September 30, 2020, the Company reported a net loss of $19.5 million.

As of September 30, 2020, the Company had $22.6 million of cash and cash equivalents and used $4.1 million of cash in its operating activities during the three months ended September 30, 2020.

The Company is in the clinical stage and has not generated any revenues to-date.

The Company does not have the prospect of achieving revenues until such time that its product candidates are commercialized, or partnered, which may not ever occur.

In the future, the Company will require additional funding to maintain its clinical trials, research and development projects, and for general operations.

The Company may tailor its drug development programs based on the amount of funding the Company is able to raise in the future.

During the three months ended September 30, 2020, the Company completed a private placement in three closings for aggregate net proceeds of approximately $21.6 million (note 6).

The Company believes that based on its current estimates, the cash and cash equivalents at September 30, 2020 of $22.6 million, as well as cash from the proceeds from stock purchase warrants exercised subsequent to September 30, 2020, will be sufficient to fund its planned operations for at least

the next twelve months from the date these condensed consolidated interim financial statements are issued.

However, the coronavirus (“COVID-19”) pandemic has created significant economic uncertainty and volatility in the credit and capital markets.

The ultimate impact of the COVID-19 pandemic on the Company’s ability to raise additional capital in the future is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak and any new information which may emerge concerning the severity of the COVID-19 pandemic.

Significant accounting policies

Basis of presentation

The condensed consolidated interim financial statements of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S.

GAAP”) and are presented in United States dollars.

The functional currency of the Company and each of its subsidiaries is the United States dollar.

The accompanying condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiaries, Adgero, Adgero Bio, Del Mar BC, Callco, and Exchangeco.

All intercompany balances and transactions have been eliminated in consolidation.

principal accounting policies applied in the preparation of these condensed consolidated interim financial statements are set

out below and have been consistently applied to all periods presented.

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

interim financial data

accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with the rules and

regulations of the Securities and Exchange Commission (“SEC”) for interim financial information.

Accordingly, they

do not include all of the information and the notes required by U.S.

The principal accounting policies applied in the preparation of these condensed consolidated interim financial statements are set out below and have been consistently applied to all periods presented.

Certain prior period balances have been reclassified to conform with the current period’s presentation.

Unaudited interim financial data

The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission for interim financial information.

Accordingly, they do not include all of the information and the notes required by U.S.

GAAP for complete financial statements.

These unaudited condensed

consolidated interim financial statements should be read in conjunction with the audited financial statements of the Company as

of, and for the fiscal year ended, June 30, 2019 included in the Form 10-K filed with the SEC on September 9, 2019.

In the opinion

of management, the unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal

and recurring adjustments, necessary for a fair presentation.

The results for three and nine months ended March 31, 2020 are not

necessarily indicative of the results to be expected for the fiscal year ending June 30, 2020, or for any other future annual

or interim period.

preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions about future

events that affect the reported amounts of assets, liabilities, expenses, contingent assets, and contingent liabilities as at

the end of, or during, the reporting period.

These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited financial statements of the Company as at June 30, 2020 included in our Form 10-K.

In the opinion of management, the unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation.

The results for three months ended September 30, 2020 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2021, or for any other future annual or interim period.

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions about future events that affect the reported amounts of assets, liabilities, expenses, contingent assets, and contingent liabilities as at the end of, or during, the reporting period.

Actual results could significantly differ from those estimates.

Significant areas

requiring management to make estimates include the derivative liability, the valuation of equity instruments issued for services,

and clinical trial accruals.

Further details of the nature of these assumptions and conditions may be found in the relevant notes

to these condensed consolidated interim financial statements.

for research and development expenses and clinical trials

part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from its

obligations under contracts with vendors, clinical research organizations and consultants, and under clinical site agreements

in connection with conducting clinical trials.

The financial terms of these contracts are subject to negotiations, which vary

from contract to contract and may result in payment terms that do not match the periods over which materials or services are provided

under such contracts.

The Company’s objective is to reflect the appropriate expenses in its financial statements by matching

those expenses with the period in which services are performed and efforts are expended.

The Company accounts for these expenses

according to the timing of various aspects of the expenses.

The Company determines accrual estimates by taking into account discussion

with applicable personnel and outside service providers as to the progress of clinical trials, or the services completed.

the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates.

The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to

it at that time.

The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract

research organizations and other third-party vendors.

Although the Company does not expect its estimates to be materially different

from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status

and timing of services performed may vary and may result in it reporting amounts that are too high or too low for any particular

For the three and nine months ended March 31, 2020 and 2019, there were no material adjustments to the Company’s

prior period estimates of accrued expenses for clinical trials.

or loss per share is calculated based on the weighted average number of common shares outstanding.

For the three and nine month

periods ended March 31, 2020 and 2019 diluted loss per share does not differ from basic loss per share since the effect of the

Company’s warrants, stock options, performance stock units, and convertible preferred shares is anti-dilutive.

31, 2020, potential common shares of 10,209,456 (2019 –

862,502) related to outstanding warrants, 778,750 (2019 –

292,683) relating to stock options, nil (2019 –

120,000) relating to performance stock units, and 162,177 (2019 –

210,279) relating to outstanding Series B convertible preferred shares were excluded from the calculation of net loss per common

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

accounting pronouncements

time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other

standard setting bodies that are adopted by the Company as of the specified effective date.

Accounting Standard Update (“ASU”)

2016-02 —

Leases (Topic 842)

new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability

on the consolidated balance sheet for all leases with terms longer than 12 months.

Leases will be classified as either finance

or operating, with classification affecting the pattern of expense recognition in the consolidated income statement.

is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with

early adoption permitted.

A modified retrospective transition approach is required for lessees for capital and operating leases

existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with

certain practical expedients available.

The adoption of ASU 2016-02 did not have a material impact on the Company’s results

of operations or financial results.

2018-07 —

Stock Compensation (Topic 718) Improvements to Nonemployee Shares-based Payment Accounting

amendments in this update are intended to the reduce cost and complexity and to improve financial reporting for share-based payments

issued to nonemployees.

The ASU expands the scope of Topic

718, Compensation —Stock Compensation, which currently only includes share-based payments issued to employees, to also

include share-based payments issued to nonemployees for goods and services.

The existing guidance on nonemployee share-based payments

is significantly different from current guidance for employee share-based payments.

This ASU expands the scope of the employee

share-based payments guidance to include share-based payments issued to nonemployees.

By doing so, the FASB improves the accounting

of nonemployee share-based payments issued to acquire goods and services used in its own operations.

The amendments in this ASU

are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal

The adoption of ASU 2018-07 did not have a material impact on the Company’s results of operations or financial results.

2017-11 —

Accounting for Certain Financial Instruments with Down Round Features, II.

Replacement of the Indefinite Deferral

for Mandatorily Redeemable Financial Instruments of Certain Non-public Entities and Certain Mandatorily Redeemable Noncontrolling

Interests with a Scope Exception

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

amendments in this update are intended to reduce the complexity associated with the accounting for certain financial instruments

with characteristics of liabilities and equity.

Specifically, a down round feature would no longer cause a freestanding equity-linked

financial instrument (or an embedded conversion option) to be accounted for as a derivative liability at fair value with changes

in fair value recognized in current earnings.

In addition, the indefinite deferral of certain provisions of Topic 480 have been

re-characterized to a scope exception.

The re-characterization has no accounting effect.

ASU 2017-11 is effective for public business

entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

Early adoption is

The Company has not yet evaluated the impact of adoption of this ASU on its condensed consolidated interim financial

statements and related disclosures.

the nine months ended March 31, 2020, other than ASU 2017-11, there have been no new, or existing recently issued, accounting

pronouncements that are of significance, or potential significance, that impact the Company’s condensed consolidated interim

financial statements.

party transactions

Series A Preferred Stock is held by Valent Technologies, LLC (“Valent”), an entity owned by Dr.

Dennis Brown, the

Company’s Chief Scientific Officer.

Therefore, Valent is a related party to the Company.

For the three months ended March

31, 2020 and 2019 respectively, the Company recorded $2,089 related to the dividend payable to Valent on the Series A Preferred

Stock and for the nine months ended March 31, 2020 and 2019 respectively, the Company recorded $6,267 related to the dividend

Significant areas requiring management to make estimates include the fair value of the milestone payment liability, the valuation of equity instruments issued for services, and clinical trial accruals.

Further details of the nature of these assumptions and conditions may be found in the relevant notes to these condensed consolidated interim financial statements.

Loss per share

Income or loss per share is calculated based on the weighted average number of common shares outstanding.

For the three-month periods ended September 30, 2020 and 2019 diluted loss per share does not differ from basic loss per share since the effect of the Company’s warrants, stock options, and convertible preferred shares is anti-dilutive.

As of September 30, 2020, potential common shares of 11,858,152 (2019 – 9,683,596) related to outstanding common share warrants, 2,152,701 (2019 – nil) related to outstanding Series C preferred stock warrants, 6,543,569 (2019 – 780,000) related to stock options, 162,177 (2019 – 162,177) relating to outstanding Series B convertible preferred shares, and 21,516,484 (2019 – nil) relating to outstanding Series C convertible preferred shares were excluded from the calculation of net loss per common share.

Acquired in-process research and development expense

The Company acquired in-process research and development assets in connection with its Merger with Adgero.

As the acquired in-process research and development assets were deemed to have no current or alternative future use, an expense of $16.1 million was recognized in the condensed consolidated interim statements of operations for the three month period ended September 30, 2020.

Property and equipment

Property and equipment is stated at cost less accumulated depreciation.

Depreciation is calculated on a straight-line basis over its estimated useful life of five years.

Depreciation expense is recognized from the date the equipment is put into use.

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date.

Not yet adopted

Accounting Standards Update (“ASU”) 2020-06 — Debt - Debt with conversion and other options (subtopic 470-20) and derivatives and hedging – contracts in entity’s own equity (subtopic 815-40):

accounting for convertible instruments and contracts in an entity’s own equity

The amendments in this update are intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity.

The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S.

For public business entities that are not smaller reporting companies, the ASU’s amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years.

For all other entities, the effective date is for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

The guidance may be early adopted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

The Company has not yet evaluated the impact of adoption of this ASU on its condensed consolidated interim financial statements and related disclosures.

During the three-months ended September 30, 2020, other than ASU 2020-06 there have been no new, or existing recently issued, accounting pronouncements that are of significance, or potential significance, that impact the Company’s condensed consolidated interim financial statements.

As described in Note 1, on August 19, 2020, the Company completed its Merger with Adgero in accordance with the terms of the Merger Agreement.

To determine the accounting for this transaction under ASU 2017-01, an assessment must be made as to whether an integrated set of assets and activities should be accounted for as an acquisition of a business or an asset acquisition.

The guidance requires an initial screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets.

If that screen is met, the set is not a business.

In connection with the Merger, substantially all of the fair value is concentrated in in-process research and development (“IPR&D”).

As such, the Merger has been treated as an acquisition of Adgero assets and an assumption of Adgero liabilities.

Under the terms of the Merger Agreement, upon closing of the Merger, the Company issued 11,439,013 shares of Company common stock and 2,313,904 stock purchase warrants to the security holders of Adgero (“Adgero Warrants”).

The Adgero Warrants are exercisable at $3.18 per share (note 6).

The Adgero Warrants were valued using a Black-Scholes valuation with a weighted-average risk-free interest rate of 0.21%, a term of one year, a volatility of 115.96%, and a dividend rate of 0%.

The estimated volatility of the Company’s common stock at the date of measurement is based on the historical volatility of the Company.

The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the instrument at the valuation date.

The expected term has been estimated using the remaining life of the warrant.

Also, in conjunction with the Merger, the Company issued 571,951 shares of common stock to the placement agent as a success fee.

The common shares issued to the former Adgero stockholders as well as the success fee shares, have been value at $1.34 per share which was the closing price of the Company’s common stock on August 19, 2020, the date the Merger closed.

The Company incurred approximately $1.55 million of legal, consulting and other professional fees related to the Merger, of which approximately $1.1 million had been incurred in the year ended June 30, 2020.

The transaction costs have been classified as merger expenses in the accompanying unaudited condensed consolidated interim statement of operations for the three months ended September 30, 2020.

The following summarizes total consideration transferred to the Adgero stockholders under the Merger as well as the assets acquired and liabilities assumed under the Merger:

(in thousands)

Consideration:

Success fee shares

Net assets acquired:

Other current assets

Property and equipment

Accounts payable and accrued liabilities

Milestone payment liability

In-process research and development

Property and equipment include office furniture that was subsequently sold and laboratory equipment that has not yet been put into use.

The milestone payment liability relates to an asset purchase agreement with St.

Cloud Investments, LLC (“St.

Cloud”) that Adgero has regarding the acquisition of REM-001.

The Agreement, as amended, is dated November 26, 2012 (the “St.

Cloud Agreement”).

Pursuant to the terms of the St.

Cloud Agreement, the Company is obligated to make certain payments under the agreement.

The future contingent amounts payable under that agreement are as follows:

Upon the earlier of (i) a subsequent equity financing to take place after the Company conducts a Phase 2B clinical study in which fifty patients complete the study and their clinical data can be evaluated or (ii) the commencement of a clinical study intended to be used as a definitive study for market approval in any country, the Company is obligated to pay an aggregate amount of $300,000 in cash or an equivalent amount of common stock, with $240,000 to St.

Cloud and $60,000 to an employee of the Company;

Upon receipt of regulatory approval of REM-001 Therapy, the Company is obligated to pay an aggregate amount of $700,000 in cash or an equivalent amount of common stock, with $560,000 to St.

Cloud and $140,000 to an employee of the Company.

With respect to the $300,000 and $700,000 potential milestone payments referenced above (each a “Milestone Payment”), if either such Milestone Payment becomes payable, and in the event the Company elects to pay either such Milestone Payment in shares of its common stock, the value of the common stock will equal the average of the closing price per share of the Company’s common stock over the twenty (20) trading days following the first public announcement of the applicable event described above.

The milestone payment liability has been determined using the discounted cash flow value of the two respective milestone payments.

A discount rate of 79% has been used which accounts for the probability of success given the phase of clinical development of REM-001.

The term is based on an estimate of the planned timing of completion of the respective milestones that would result in payment of the milestones.

The fair value of the IPR&D assets is expensed as a charge in the condensed consolidated interim statements of operations for the three months ended September 30, 2020 as there is no alternative use for these assets.

Related party transactions

Valent Technologies, LLC Agreements

One of the Company’s officers is a principal of Valent Technologies, LLC (“Valent”) and as result Valent is a related party to the Company.

On September 12, 2010, the Company entered into a Patent Assignment Agreement (the “Valent Assignment Agreement”) with Valent pursuant to which Valent transferred to the Company all its right, title and interest in, and to, the patents for VAL-083 owned by Valent.

The Company now owns all rights and title to VAL-083 and is responsible for the drug’s further development and commercialization.

In accordance with the terms of the Valent Assignment Agreement, Valent is entitled to receive a future royalty on

all revenues derived from the development and commercialization of VAL-083.

In the event that the Company terminates the agreement, the Company may be entitled to recei ve royalties from Valent’s subsequent development of VAL-083 depending on the development milestones the Company has achieved prior to the termination of the Valent Assignment Agreement.

On September 30, 2014, the Company entered into an exchange agreement (the “Valent Exchange Agreement”) with Valent and Del Mar (BC).

Pursuant to the Valent Exchange Agreement, Valent exchanged its loan payable in the outstanding amount of $278,530 (including aggregate accrued interest to September 30, 2014 of $28,530), issued to Valent by Del Mar (BC), for 278,530 shares of the Company’s Series A Preferred Stock.

The Series A Preferred Stock has a stated value of $1.00 per share (the “Series A Stated Value”) and is not convertible into common stock.

The holder of the Series A Preferred Stock is entitled to dividends at the rate of 3% of the Series A Stated Value per year, payable quarterly in arrears.

For the three months ended September 30, 2020 and 2019 respectively, the Company recorded $2,089 related to the dividend paid to Valent.

The dividends have been recorded as a direct increase in accumulated deficit.

Company has issued common stock purchase warrants.

Based on the terms of certain of these warrants the Company determined that

the warrants were a derivative liability which is recognized at fair value at the date of the transaction and re-measured at fair

value each reporting period with the changes in fair value recorded in the condensed consolidated interim statement of operations.

derivative liabilities balance was zero at March 31, 2020 and June 30, 2019.

The derivative liabilities balance consisted of 2,180

agent warrants at March 31, 2020 and June 30, 2019.

in the Company’s derivative liability are summarized as follows:

Three months ended

Opening balance

Change in fair value of warrants

Closing balance

Less current portion

Long term portion

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

Nine months ended

Opening balance

Change in fair value of warrants

Closing balance

Less current portion

Long term portion

5 Stockholders’

B Preferred stock

Series B Preferred Stock

Number of shares

Balance –

June 30, 2019

Conversion of Series B Preferred stock to common stock

Balance –

March 31, 2020

the year ended June 30, 2016, the Company issued an aggregate of 902,238 shares of Series B Preferred Stock at a purchase price

of $8.00 per share.

Each share of Series B Preferred Stock is convertible into 0.25 shares of common stock equating to a conversion

price of $32.00 (the “Conversion Price”) and will automatically convert to common stock at the earlier of 24 hours

following regulatory approval of VAL-083 with a minimum closing bid price of $80.00, or five years from the respective final closing

The holders of the Series B Preferred Stock are entitled to an annual cumulative, in arrears, dividend at the rate of 9%

payable quarterly.

The 9% dividend accrues quarterly commencing on the date of issue and is payable quarterly on June 30, September

30, December 31, and March 31 of each year commencing on June 30, 2016.

Dividends are payable solely by delivery of shares

of common stock, in an amount for each holder equal to the aggregate dividend payable to such holder with respect to the shares

of Series B Preferred Stock held by such holder divided by the Conversion Price.

The Series B Preferred Stock does not contain

any repricing features.

Each share of Series B Preferred Stock entitles its holder to vote with the common stock on an as-converted

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

Series B Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i)

senior to the Company’s common stock and (ii) senior to the Special Voting Preferred Stock and (iii) senior to any other

class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with, or senior to,

the Series B Preferred Stock.

The Series B Preferred Stock shall be pari passu in liquidation to the Company’s Series A

Related party payables

At September 30, 2020 there is an aggregate amount of $382,004 (June 30, 2020 - $663,865) payable to the Company’s officers and directors for fees, expenses, and accrued liabilities.

Loan from National Brain Tumor Society and National Foundation for Cancer Research

(in thousands)

Balance – June 30, 2020

Financing costs

Interest expense

Amortization of deferred financing costs

Balance – September 30, 2020

During the period ended September 30, 2020, the Company received a loan of $500,000 from National Brain Tumor Society (“NBTS”) and the National Foundation for Cancer Research to support VAL-083's preparation for participation in the Global Coalition for Adaptive Research's (“GCAR”) sponsored trial, Glioblastoma (“GBM”) Adaptive Global Innovative Learning Environment (“GBM AGILE”) study (the “NBTS Loan”).

In relation to the NBTS Loan, the Company issued 125,000 share purchase warrants which are exercisable at a price of $1.09 per common share until June 19, 2025 and had been included in deferred financing costs as at June 30, 2020 (“NBTS Warrants”).

The NBTS Loan is secured by a promissory note, accrues interest at a rate of 6% per annum and matures on June 19, 2021.

The NBTS Warrants were valued at $93,701 using a Black-Scholes valuation with a risk-free interest rate of 0.37%, a term of 5 years, a volatility of 89.82%, and a dividend rate of 0%.

The estimated volatility of the Company’s common stock at the date of measurement is based on the historical volatility of the Company.

The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the instrument at the valuation date.

The expected term has been estimated using the remaining life of the warrant.

Stockholders’ equity

Preferred stock

The liquidation value of the Series B Preferred Stock at March 31, 2020 is the stated value of $5,188,904 (June

30, 2019 - $5,388,904).

addition, the Company and the holders entered into a royalty agreement, pursuant to which the Company will pay the holders of

the Series B Preferred Stock, in aggregate, a low, single-digit royalty based on their pro rata ownership of the Series B Preferred

Stock on products sold directly by the Company or sold pursuant to a licensing or partnering arrangement (the “Royalty Agreement”).

conversion of a holder’s Series B Preferred Stock to common stock, such holder shall no longer receive ongoing royalty payments

under the Royalty Agreement but will be entitled to receive any residual royalty payments that have vested.

Rights to the royalties

shall vest during the first three years following the applicable closing date, in equal thirds to holders of the Series B Preferred

Stock on each of the three vesting dates, upon which vesting dates such royalty amounts shall become vested royalties.

to the Series B Preferred Stock dividend, during the three months ended March 31, 2020, the Company issued 3,700 (2019 –

4,735) shares of common stock for an amount of $1,473 (2019 –

$23,202) and during the nine months ended March 31, 2020,

the Company issued 11,100 (2019 –

14,430) shares of common stock for an amount of $6,071 (2019 –

These dividends

have been recognized as a direct increase in accumulated deficit.

total of 648,613 (2019 –

841,113) shares of Series B Preferred Stock are outstanding as of March 31, 2020, such that a total

of 162,177 (2019 –

210,279) shares of common stock are issuable upon conversion of the Series B Preferred Stock as at March

Series C Preferred stock

Series C Preferred Stock

(in thousands)

Balance – June 30, 2020

Balance – September 30, 2020

In connection with the Merger (note 3), the Company issued 25,028 shares of Series C Convertible Preferred Stock (the “Series C Preferred Stock”) in three separate closings of a private placement (Series C-1, C-2, and C-3) in August , 2020 .

Each share of Series C Preferred Stock was issued at a purchase price of $1,000 per share and is convertible into shares of c ommon s tock based on the respective conversion price s which w ere determined at the closing of each round of the private placemen t.

Subject to ownership limitations, t he owners of the Series C Preferred Stock are entitled to receive dividends, payable in shares of c ommon s tock at a rate of 10%, 15%, 20% and 25% of the number of shares of c ommon s tock issuable upon conversion of the Series C Preferred Stock, on the 12 th , 24 th , 36 th and 48 th month, anniversary of the initial closing of the private placement which occurred on August 19, 2020.

The Series C Preferred S tock dividends do not require declaration by the Board of Directors and are accrued annually as of the date the dividend is earned in an amount equal to the applicable rate of the stated value.

Any outstanding shares of Series C Preferred Stock will automatically convert to shares of c ommon stock on August 19, 2024.

The conversion prices for the Series C-1 Preferred Stock, Series C-2 Preferred Stock and Series C-3 Preferred Stock are $1.16, $1.214 and $1.15, respectively.

Based on the conversion prices of the three respective classes of the Series C Preferred Stock, the 25,028 shares of Series C Preferred Stock will be convertible into an aggregate of 21,516,484 shares of common stock.

The cumulative dividends to be issued on the 12 th , 24 th , 36 th and 48 th month anniversary of the initial closing of the private placement are 15,061,952.

The conversion feature of the Series C Convertible Preferred Stock at the time of issuance was determined to be beneficial on the commitment date.

Because the Series C Convertible Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from inception, the Company immediately recorded a non-cash deemed dividend of $3.18 million related to the beneficial conversion feature arising from the issuance of Series C Convertible Preferred Stock.

This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share.

The Series C Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i) senior to the Company’s common stock and (ii) senior to any other class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with, or senior to, the Series C Preferred Stock.

The Series C Preferred Stock shall be pari passu in liquidation to the Company’s Series A and Series B Preferred Stock.

The liquidation value of the Series C Preferred Stock at September 30, 2020 is the stated value of $25,028,000.

Total gross proceeds from the private placement were $25 million, or $21.6 million in net proceeds after deducting financing costs of $3.4 million with respect to agent commissions and expenses, as well as legal and accounting fees.

Of the total financing costs, $84,944 was deferred as of June 30, 2020.

In addition, the Company issued warrants to purchase 2,504 shares of Series C Stock to the placement agent (“2020 Agent Warrants”) that are convertible into an aggregate 2,152,701 shares of common stock.

A total of 25,028 (June 30, 2020 – Nil) shares of Series C Preferred Stock are outstanding as of September 30, 2020, such that a total of 21,516,484 (June 30, 2020 – Nil) shares of common stock are issuable upon conversion of the Series C Preferred Stock as at September 30, 2020.

Converted shares are rounded up to the nearest whole share.

A Preferred Stock

September 30, 2014, the Company filed a Certificate of Designation of Series A Preferred Stock (the “Series A Certificate

of Designation”) with the Secretary of State of Nevada.

Pursuant to the Series A Certificate of Designation, the Company

designated 278,530 shares of preferred stock as Series A Preferred Stock.

The shares of Series A Preferred Stock have a stated

value of $1.00 per share (the “Series A Stated Value”) and are not convertible into common stock.

The holder of the

Series A Preferred Stock is entitled to dividends at the rate of 3% of the Series A Stated Value per year, payable quarterly in

Upon any liquidation of the Company, the holder of the Series A Preferred Stock will be entitled to be paid, out of any

assets of the Company available for distribution to stockholders, the Series A Stated Value of the shares of Series A Preferred

Stock held by such holder, plus any accrued but unpaid dividends thereon, prior to any payments being made with respect to the

common stock.

The Series A Preferred Stock is held by Valent (note 3).

Series A Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i)

senior to the Company’s common stock, and (ii) senior to the Company’s Special Voting Preferred Stock and (iii) senior

to any other class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with,

or senior to, the Series A Preferred Stock.

The Series A Preferred Stock shall be pari passu in liquidation to the Company’s

Series B Preferred Stock

The liquidation value of the Series A Preferred stock at March 31, 2020 and June 30, 2019 is the stated

value of $278,530.

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

was no change to the Series A Preferred stock for the three or nine month periods ended March 31, 2020 or 2019.

months ended March 31, 2020

public offering

August 16, 2019, the Company closed on the sale of (i) 4,895,000 shares of its common stock, par value $0.001 per share (the “Common

Stock”), (ii) pre-funded warrants (“PFW”) to purchase an aggregate of 2,655,000 shares of Common Stock and (iii)

common warrants to purchase an aggregate of 7,762,500 shares of Common Stock (“2020 Investor Warrants”), including

800,000 shares of Common Stock and 2020 Investor Warrants to purchase an aggregate of 1,012,500 shares of Common Stock sold pursuant

to a partial exercise by the underwriters of the underwriters’

option to purchase additional securities, in the Company’s

underwritten public offering (the “Offering”).

Each share of Common Stock or PFW, as applicable, was sold together

with a 2020 Investor Warrant to purchase one share of Common Stock at a combined effective price to the public of $1.00 per share

of Common Stock and accompanying 2020 Investor Warrant.

net proceeds from the Offering, including from the partial exercise of the underwriters’

option to purchase additional securities,

were $6,582,966, after deducting underwriting discounts and commissions, and other offering expenses.

2020 Investor Warrants are exercisable at $1.00 per share until their expiry on August 16, 2024 and the PFW are exercisable at

$0.01 per share at any time after August 16, 2019.

The Company also issued 377,500 warrants to the underwriters of the Offering.

During the year ended June 30, 2016, the Company issued an aggregate of 902,238 shares of Series B Preferred Stock at a purchase price of $8.00 per share.

Each share of Series B Preferred Stock is convertible into 0.25 shares of common stock equating to a conversion price of $32.00 (the “Conversion Price”) and will automatically convert to common stock at the earlier of 24 hours following regulatory approval of VAL-083 with a minimum closing bid price of $80.00, or five years from the respective final closing dates.

The holders of the Series B Preferred Stock are entitled to an annual cumulative, in arrears, dividend at the rate of 9% payable quarterly.

The 9% dividend accrues quarterly commencing on the date of issue and is payable quarterly on September 30, December 31, March 31, and June 30 of each year commencing on June 30, 2016.

Dividends are payable solely by delivery of shares of common stock, in an amount for each holder equal to the aggregate dividend payable to such holder with respect to the shares of Series B Preferred Stock held by such holder divided by the Conversion Price.

The Series B Preferred Stock does not contain any repricing features.

Each share of Series B Preferred Stock entitles its holder to vote with the common stock on an as-converted basis.

The Series B Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i) senior to the Company’s common stock and (ii) senior to any other class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with, or senior to, the Series B Preferred Stock.

The Series B Preferred Stock shall be pari passu in liquidation to the Company’s Series A and Series C Preferred Stock.

The liquidation value of the Series B Preferred Stock at September 30, 2020 is the stated value of $5.2 million (June 30, 2020 - $5.2 million).

In addition, the Company and the holders entered into a royalty agreement, pursuant to which the Company will pay the holders of the Series B Preferred Stock, in aggregate, a low, single-digit royalty based on their pro rata ownership of the Series B Preferred Stock on products sold directly by t he Company or sold pursuant to a licensing or partnering arrangement (the “Royalty Agreement”).

Upon conversion of a holder’s Series B Preferred Stock to common stock, such holder shall no longer receive ongoing royalty payments under the Royalty Agreement but will be entitled to receive any residual royalty payments that have vested.

Rights to the royalties shall vest during the first three years following the applicable closing date, in equal thirds to holders of the Series B Preferred Stock on each of the three vesting dates, upon which vesting dates such royalty amounts shall become vested royalties.

Pursuant to the Series B Preferred Stock dividend, during the three months ended September 30, 2020, the Company issued 3,700 (2019 – 3,700) shares of common stock and recognized $5,180 (2019 – $2,046) as a direct increase in accumulated deficit.

During the three months ended September 30, 2020 there were no conversions (2019 - 25,000) of Series B Preferred Stock for nil (2019 – 6,250) shares of common stock.

A total of 648,613 (June 30, 2020 – 648,613) shares of Series B Preferred Stock are outstanding as of September 30, 2020, such that a total of 162,177 (June 30, 2020 – 162,177) shares of common stock are issuable upon conversion of the Series B Preferred Stock as at September 30, 2020.

Converted shares are rounded up to the nearest whole share.

Series A Preferred Stock

Effective September 30, 2014, the Company filed a Certificate of Designation of Series A Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of Nevada.

Pursuant to the Series A Certificate of Designation, the Company designated 278,530 shares of preferred stock as Series A Preferred Stock.

The shares of Series A Preferred Stock have a stated value of $1.00 per share (the “Series A Stated Value”) and are not convertible into common stock.

The holder of the Series A Preferred Stock is entitled to dividends at the rate of 3% of the Series A Stated Value per year, payable quarterly in arrears.

Upon any liquidation of the Company, the holder of the Series A Preferred Stock will be entitled to be paid, out of any assets of the Company available for distribution to stockholders, the Series A Stated Value of the shares of Series A Preferred Stock held by such holder, plus any accrued but unpaid dividends thereon, prior to any payments being made with respect to the common stock.

The Series A Preferred Stock is held by Valent (note 4).

The Series A Preferred Stock shall with respect to distributions of assets and rights upon the occurrence of a liquidation, rank (i) senior to the Company’s common stock, and (ii) senior to any other class or series of capital stock of the Company hereafter created which does not expressly rank pari passu with, or senior to, the Series A Preferred Stock.

The Series A Preferred Stock shall be pari passu in liquidation to the Company’s Series B and Series C Preferred Stock.

The liquidation value of the Series A Preferred stock at September 30, 2020 and June 30, 2020 was $278,530.

There was no change to the Series A Preferred stock for the three months ended September 30, 2020 or 2019.

Stock Issuances

Three months ended September 30, 2019

Underwritten public offering

On August 16, 2019, the Company closed on the sale of (i) 4,895,000 shares of its common stock, par value $0.001 per share (the “Common Stock”), (ii) pre-funded warrants (“PFW”) to purchase an aggregate of 2,655,000 shares of Common Stock and (iii) common warrants to purchase an aggregate of 7,762,500 shares of Common Stock (“2020 Investor Warrants”), including 800,000 shares of Common Stock and 2020 Investor Warrants to purchase an aggregate of 1,012,500 shares of Common Stock sold pursuant to a partial exercise by the underwriters of the underwriters’ option to purchase additional securities, in the Company’s underwritten public offering (the “Offering”).

Each share of Common Stock or PFW, as applicable, was sold together with a 2020 Investor Warrant to purchase one share of Common Stock at a combined effective price to the public of $1.00 per share of Common Stock and accompanying 2020 Investor Warrant.

The net proceeds from the Offering, including from the partial exercise of the underwriters’ option to purchase additional securities, were $6,582,966 after deducting underwriting discounts and commissions, and other offering expenses.

The 2020 Investor Warrants are exercisable at $1.00 per share until their expiry on August 16, 2024 and the PFW are exercisable at $0.01 per share at any time after August 16, 2019.

The Company also issued 377,500 warrants to the underwriters of the

The underwriter warrants are exercisable at $1.15 per share commencing February 10, 2020 until their expiry on August 14, 2022.

the nine months ended March 31, 2020, all of the 2,655,000 PFW were exercised at $0.01 per PFW for proceeds of $26,550.

During the three months ended September 30, 2019, all of the 2,655,000 PFW were exercised at $0.01 per PFW for proceeds of $26,550.

Shares issued for services

During the three months ended September 30, 2020, the Company issued Nil (2019 – 6,925) shares of common stock for services resulting in the recognition of $Nil (2019 – $4,843) in expense.

All of the shares issued for services for the three months ended September 30, 2019 have been recognized as research and development expense.

2017 Omnibus Incentive Plan

approved by the Company’s stockholders at the annual meeting of stockholders held on April 11, 2018, on July 7, 2017, as

amended on February 1, 2018, the Company’s board of directors approved adoption of the Company’s 2017 Omnibus Equity

Incentive Plan (the “2017 Plan”).

The board of directors also approved a form of Performance Stock Unit Award Agreement

to be used in connection with grants of performance stock units (“PSUs”) under the 2017 Plan.

Under the 2017 Plan,

780,000 shares of Company common stock are reserved for issuance, less the number of shares of common stock issued under the Del

Mar (BC) 2013 Amended and Restated Stock Option Plan (the “Legacy Plan”) or that are subject to grants of stock options

made, or that may be made, under the Legacy Plan.

A total of 164,235 shares of common stock have been issued under the Legacy

Plan and/or are subject to outstanding stock options granted under the Legacy Plan, and a total of 614,515 shares of common stock

have been issued under the 2017 Plan and/or are subject to outstanding stock options granted under the 2017 Plan leaving 1,250

shares of common stock available at March 31, 2020 for issuance under the 2017 Plan if all such options under the Legacy Plan

were exercised.

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

maximum number of shares of Company common stock with respect to which any one participant may be granted awards during any calendar

year is 8% of the Company’s fully diluted shares of common stock on the date of grant (excluding the number of shares of

common stock issued under the 2017 Plan and/or the Legacy Plan or subject to outstanding awards granted under the 2017 Plan and/or

the Legacy Plan).

No award will be granted under the 2017 Plan on or after July 7, 2027, but awards granted prior to that date

may extend beyond that date.

the nine months ended March 31, 2020, and subject to approval by the Company’s stockholders, the Company’s board of

directors approved an increase in the number of shares of common stock available to be issued under the 2017 Plan by 1,500,000.

The increase brings the total number of shares available under the 2017 Plan to 2,280,000.

During the nine months ended March 31, 2020, the Company’s

board of directors approved an aggregate 1,041,016 stock options to officers and directors of the Company.

Of the total grant,

549,199 stock options are subject to stockholder approval of the 2017 Plan share increase.

The total grant date aggregate fair

value of the remaining 491,817 stock options granted was $238,760.

All of these stock options granted to officers and directors

have an exercise price of $0.61 and expire on September 5, 2029.

Of the 1,041,016 stock options approved by the board of directors,

375,000 vest pro rata monthly over one year from the date of approval by the board of directors and 666,016 vest as to one-sixth

on the six-month anniversary of the date of approval by the board of directors with the remaining five-sixths vesting pro rate

monthly over 30 months commencing on the seven-month anniversary of the board of directors’

approval date.

addition, during the nine months ended March 31, 2020, the Company granted 250,000 stock options to an officer of the Company,

subject to stockholder approval of the share increase to the 2017 Plan.

The options have an exercise price of $0.735 and expire

November 12, 2029.

The options vest upon the achievement of certain clinical development milestones.

Stock option disclosure in the tables

below excludes 799,199 stock option grants approved by the board of directors that are subject to approval by the Company’s

stockholders of the share reserve increase under the 2017 Plan.

Of these options, 549,199 are exercisable at $0.61 per share until

September 5, 2029 and 250,000 are exercisable at $0.735 until November 12, 2029.

following table sets forth the aggregate stock options outstanding under all plans as of March 31, 2020:

Weighted average

Balance –

June 30, 2019

Balance –

March 31, 2020

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

The following table summarizes stock options

outstanding and exercisable under all plans at March 31, 2020:

The Company’s board of directors has approved adoption of the Company’s 2017 Omnibus Equity Incentive Plan (the “2017 Plan”) that has also been approved by the Company’s stockholders.

The board of directors also approved a form of Performance Stock Unit Award Agreement to be used in connection with grants of performance stock units (“PSUs”) under the 2017 Plan.

Under the 2017 Plan, 6,700,000 shares of Company common stock are currently reserved for issuance, less the number of shares of common stock issued under the Del Mar (BC) 2013 Amended and Restated Stock Option Plan (the “Legacy Plan”) or that are subject to grants of stock options made, or that may be made, under the Legacy Plan.

As of September 30, 2020, a total of 164,235 shares of common stock are currently outstanding under the Legacy Plan and/or are subject to outstanding stock options granted under the Legacy Plan, and a total of 6,379,334 shares of common stock have been issued under the 2017 Plan and/or are subject to outstanding stock options granted under the 2017 Plan leaving 156,431 shares of common stock available at September 30, 2020 for issuance under the 2017 Plan if all such options under the Legacy Plan were exercised.

The maximum number of shares of Company common stock with respect to which any one participant may be granted awards during any calendar year is 8% of the Company’s fully diluted shares of common stock on the date of grant (excluding the number of shares of common stock issued under the 2017 Plan and/or the Legacy Plan or subject to outstanding awards granted under the 2017 Plan and/or the Legacy Plan).

No award will be granted under the 2017 Plan on or after July 7, 2027, but awards granted prior to that date may extend beyond that date.

During the three months ended September 30, 2020, a total of 222,584 stock options issued to directors of the Company were amended such that the period to exercise vested stock options from the date of termination of continuous service with the Company was extended from 90 days to one year.

Of the total of 222,584, 66,850 had their expiry increased from September 26, 2020 to June 26, 2021 and 155,734 had their expiry increased from November 19, 2020 to August 19, 2021.

As a result of the amendments, a total of $8,569 stock-based compensation expense has been recognized.

In addition, 250,000 stock options previously granted to an officer of the Company were amended such that the vesting of the stock options was changed from a completely contingent vesting to a time-based vesting such that 1/6 th of the stock options vest on the six-month anniversary of the amendment date with the remaining portion vesting in equal monthly installments over a period of 30 months commencing on the seven-month anniversary of the amendment date.

A total compensation expense of $319,376 will be recognized over the amended vesting period for the 250,000 stock options.

During the three months ended September 30, 2020, a total of 4,758,687 stock options were granted to executive officers and directors of the Company.

Of these, 4,698,687 have an exercise price of $1.70 per share and 60,000 have an exercise price of $1.355 per share.

Of the total granted, 4,278,687 stock options vest as to 1/6 on the six month anniversary of the grant date with the remaining portion vesting in equal monthly installments over a period of 30 months commencing on the seven month anniversary of the grant date.

Of the total stock options granted to executive officers and directors, 480,000 vest in 12 equal monthly installments beginning on October 15, 2020.

All of the stock options granted have a 10-year term and are subject to cancellation upon the grantees’ termination of service for the Company, with certain exceptions.

Stock Options

The following table sets forth changes in stock options outstanding under all plans:

stock options

(in thousands)

Balance – June 30, 2020

Balance – September 30, 2020

The following table summarizes stock options outstanding and exercisable under all plans at September 30, 2020:

Exercise price

Outstanding at

in the number of stock options outstanding are 2,500 stock options granted at an exercise price of CA $20.00.

The exercise price

of these options shown in the above table have been converted to US $14.11 using the period ending closing exchange rate.

options issued during the nine months ended March 31, 2020 have been valued using a Black-Scholes pricing model with the following

September 30, 2020

(in thousands)

average remaining

contractual life

exercisable at

September 30, 2020

(in thousands)

Included in the number of stock options outstanding are 2,500 stock options granted at an exercise price of CA$20.00.

The exercise price of these options shown in the above table have been converted to US$14.94 using the period ending closing exchange rate.

Stock options granted during the three months ended September 30, 2020 have been valued using a Black-Scholes pricing model with the following assumptions:

September 30,

Dividend rate

Risk-free rate

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

estimated volatility of the Company’s common stock at the date of issuance of the stock options is based on the historical

volatility of the Company.

The risk-free interest rate is based on rates published by the government for bonds with a maturity

similar to the expected remaining life of the stock options at the valuation date.

The expected life of the stock options has

been estimated using the plain vanilla method.

Company has recognized the following amounts as stock option expense for the periods noted:

0.19% to 0.42

The estimated volatility of the Company’s common stock at the date of issuance of the stock options is based on the historical volatility of the Company.

The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the stock options at the valuation date.

The expected life of the stock options has been estimated using the plain vanilla method.

The Company has recognized the following amounts as stock option expense for the periods noted (in thousands):

Three months ended

Nine months ended

September 30,

Research and development

General and administrative

of the stock option expense for the periods ended March 31, 2020 and 2019 has been recognized as additional paid in capital.

aggregate intrinsic value of stock options outstanding at March 31, 2020 was $0 (2019 - $0) and the aggregate intrinsic value

of stock options exercisable at March 31, 2020 was $0 (2019 - $0).

As of March 31, 2020, there was $96,061 in unrecognized compensation

expense that will be recognized over the next 2.43 years.

No stock options granted under the Company’s equity plans have

been exercised during the nine months ended March 31, 2020.

All of the stock option expense for the periods ended September 30, 2020 and 2019 has been recognized as additional paid in capital.

The aggregate intrinsic value of stock options outstanding at September 30, 2020 was $977,465 (2019 - $0) and the aggregate

intrinsic value of stock options exercisable at September 30, 2020 was $ 446,950 ( 2019 - $ 0 ).

As of September 30, 2020, there was $ 7,802,208 in unrecognized compensation expense that will be reco gnized over the next 3.0 years.

No stock options granted under the Company’s equity plans have been exercised during the three months ended September 30, 2020.

Upon the exercise of stock options new shares will be issued.

following table sets forth unvested stock options under all plans at March 31, 2020:

The following table sets forth changes in unvested stock options under all plans:

(in thousands)

Unvested at June 30, 2020

Unvested at March 31, 2020

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

The following table summarizes changes in the Company’s

outstanding warrants as of March 31, 2020:

Balance –

June 30, 2019

2020 Investor Warrants issued in underwritten offering

PFW issued in underwritten offering

2020 Underwriter Warrants

Exercise of PFW

Warrants issued for services (1)

Expiry of warrants for services (2)

Balance - March 31, 2020

Company issued 530,000 warrants for services during the nine months ended March 31, 2020.

280,000 warrants are exercisable

at $0.75 per share until November 18, 2023 and they vest pro rata monthly commencing December 18, 2019.

250,000 warrants are

exercisable at $0.64 per share until January 20, 2024 and they vest pro rata monthly commencing February 20, 2020.

fair value of the warrants issued was $233,176 with $133,297 being recognized during the nine months ended March 31, 2020.

February 27, 2020, 4,140 warrants at an exercise price of $59.30 expired.

following table summarizes the Company’s outstanding warrants as of March 31, 2020:

Unvested at September 30, 2020

The aggregate intrinsic value of unvested stock options at September 30, 2020 was $530,516 (2019 - $0).

The unvested stock options have a remaining weighted average contractual term of 9.83 (2019 – 9.76) years.

Common Stock Warrants

The following table sets forth changes in outstanding common stock warrants:

(in thousands)

Balance – June 30, 2020

Issuance of Adgero Warrants

Exercise of warrants (i)

Warrants issued for services (ii)

Expiry of warrants (iii)

Balance – September 30, 2020

A total of 994,000 2020 Investor Warrants were exercised at $1.00 per share.

Warrants issued for services are exercisable at various prices and expire at the various dates noted in the table below.

The warrant expiries include the 2015 Investor Warrants, the 2015 Agent Warrants, and certain warrants issued for services.

All of the expired warrants were exercisable at $30 per share.

The following table summarizes the Company’s outstanding common stock warrants as of September 30, 2020:

Description of warrants

(in thousands)

2020 Investor warrants

5 unchanged sentences

April 19, 2022

2015 Investor warrants

July 31, 2020

NBTS Warrants

June 19, 2025 (i)

Warrants issued for services

December 1, 2020 to

February 1, 2021

Warrants issued for services

January 25, 2023

Warrants issued for services

November 18, 2023

February 27, 2023

Warrants issued for services

July 1, 2020 to February 1, 2021

September 15, 2023 and October 11, 2023

Warrants issued for services

January 25, 2023

November 18, 2023

Warrants issued for services

February 27, 2023

January 20, 2024

Warrants issued for services

September 22, 2023

Warrants issued for services

October 11, 2021

2020 Underwriter Warrants

6 unchanged sentences

2016 Agent warrants

2015 Agent warrants

July 15, 2020

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

Company has financial instruments that are measured at fair value.

To determine the fair value, the Company uses the fair value

hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable

inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs market participants would

use to value an asset or liability and are developed based on market data obtained from independent sources.

Unobservable inputs

are inputs based on assumptions about the factors market participants would use to value an asset or liability.

The three levels

of inputs that may be used to measure fair value are as follows:

one - inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities;

two - inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability,

either directly or indirectly such as interest rates, foreign exchange rates, and yield curves that are observable at commonly

quoted intervals;

three - unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and

reflect those assumptions that a market participant would use.

and liabilities are classified based on the lowest level of input that is significant to the fair value measurements.

in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value

Company’s financial instruments consist of cash and cash equivalents, other receivables, accounts payable, related party

payables and derivative liability.

The carrying values of cash and cash equivalents, other receivables, accounts payable and related

party payables approximate their fair values due to the immediate or short-term maturity of these financial instruments.

Company accounts for certain warrants under the authoritative guidance on accounting for derivative financial instruments indexed

to, and potentially settled in, a company’s own stock, on the understanding that in compliance with applicable securities

laws, the warrants require the issuance of securities upon exercise and do not sufficiently preclude an implied right to net cash

The Company classifies these warrants on its balance sheet as a derivative liability which is fair valued at each

reporting period subsequent to the initial issuance.

The Company has used a Black-Scholes Option Pricing Model (based on a closed-form

model that uses a fixed equation) to estimate the fair value of the warrants which is equivalent to the fair value of the warrants

calculated using the Binomial-Lattice Pricing Model.

Determining the appropriate fair-value model and calculating the fair value

of warrants requires considerable judgment.

Any change in the estimates (specifically probabilities and volatility) used may cause

the value to be higher or lower than that reported.

The estimated volatility of the Company’s common stock at the date of

issuance, and at each subsequent reporting period, is based on the historical volatility of the Company.

The risk-free interest

rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the warrants

at the valuation date.

The expected life of the warrants is assumed to be equivalent to their remaining contractual term.

DelMar Pharmaceuticals, Inc.

Notes to Condensed Consolidated Interim Financial Statements

March 31, 2020

(expressed in US dollars unless otherwise noted)

value of derivative liability

derivative is not traded in an active market and the fair value is determined using valuation techniques.

The Company uses judgment

to select a variety of methods to make assumptions that are based on specific management plans and market conditions at the end

of each reporting period.

The Company uses a fair value estimate to determine the fair value of the derivative liability.

carrying value of the derivative liability would be higher, or lower, as management estimates around specific probabilities change.

The estimates may be significantly different from those amounts ultimately recorded in the consolidated financial statements because

of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an

active market.

All changes in the fair value are recorded in the consolidated statement of operations and comprehensive loss each

reporting period.

This is considered to be a Level 3 financial instrument as volatility is considered a Level 3 input.

fair value of derivative liabilities at March 31, 2020 and June 30, 2019 was $0.

7 Supplementary

statement of cash flows information

Nine months ended

Series B Preferred share common stock dividend (note 5)

Adgero Warrants

April 8, 2021

Adgero Warrants

August 31, 2021

Adgero Warrants

January 17, 2022

NBTS Warrants were issued in connection with respect to the NBTS Loan (note 5).

Series C Preferred Stock Warrants

In connection with the Series C Preferred Stock private placement, the Company issued 2,504 Series C Stock purchase warrants (the “Series C Warrants”).

The Series C Warrants have an exercise price of $1,000 per share, provide for a cashless exercise feature, and are exercisable for a period of four years from August 19, 2020.

The Series C Preferred Stock issuable upon exercise of the Series C Warrants is convertible into shares of common stock in the same manner as each respective series of outstanding Series C Stock, and will be entitled to the same dividend rights as each respective series.

The 2020 Agent Warrants were valued at a total of approximately $3.3 million using a binomial pricing model with a risk-free interest rate of 0.27%, a term of 4.0 years, and a volatility of 95.2% to 95.8%.

The estimated volatility of the Company’s common stock at the date of measurement is based on the historical volatility of the Company’s common stock.

The risk-free interest rate is based on rates published by the government for bonds with a maturity similar to the expected remaining life of the instrument at the valuation date.

The expected term has been estimated using the contractual term of the warrant.

The following table sets forth changes in outstanding Series C Warrants:

Balance – June 30, 2020

Issuance of Preferred Series C-1 Warrants

Issuance of Preferred Series C-2 Warrants

Issuance of Preferred Series C-3 Warrants

Balance – September 30, 2020

The following table summarizes the Company’s outstanding Series C Warrants as of September 30, 2020:

Description of warrants

Supplementary statement of cash flows information

The Company incurred the following non-cash investing and financing transactions (in thousands):

September 30,

Series B Preferred Stock common stock dividend

Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance (note 6)

Non-cash issue costs (note 6)

Issue costs in accounts payable (note 6)

Income taxes paid

Interest paid

Company has evaluated its subsequent events from March 31, 2020 through the date these condensed consolidated financial statements

were issued and has determined that there are no subsequent events requiring disclosure in these condensed consolidated financial

statements other than the items noted below.

Subsequent to March 31, 2020, the Company issued 2,096 shares

of common stock for services.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This Management’s Discussion and Analysis (“MD&A”)

contains “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995,

which represent our projections, estimates, expectations, or beliefs concerning, among other things, financial items that relate

to management’s future plans or objectives or to our future economic and financial performance.

In some cases, you can identify

these statements by terminology such as “may”, “should”, “plans”, “believe”, “will”,

“anticipate”, “estimate”, “expect”

“project”, or “intend”, including

their opposites or similar phrases or expressions.

You should be aware that these statements are projections or estimates as to

future events and are subject to a number of factors that may tend to influence the accuracy of the statements.

These forward-looking

statements should not be regarded as a representation by us or any other person that our events or plans will be achieved.

should not unduly rely on these forward-looking statements, which speak only as of the date of this report.

Except as may be required

under applicable securities laws, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances

or events after the date of this report or to reflect the occurrence of unanticipated events.

You should review the factors and risks we describe under “Risk

Factors”

in our report on Form 10-K for the year ended June 30, 2019 and in our other filings with the Securities and Exchange

Commission, available at www.sec.gov.

Actual results may differ materially from any forward-looking statement.

References to “we”, “us”, and “our”,

refer to DelMar Pharmaceuticals, Inc.

and our wholly-owned subsidiaries, Del Mar (BC), Callco and Exchangeco.

Impact of Coronavirus (“COVID-19”)

on our Operations, Financial Condition, Liquidity and Results of Operations

In December 2019, a novel strain of

coronavirus, COVID-19, was reported to have surfaced in Wuhan, China and on March 11, 2020 was declared a pandemic by the

World Health Organization.

The ultimate impact of the COVID-19 pandemic on our operations is unknown and will depend on

future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the

COVID-19 outbreak, new information which may emerge concerning the duration and severity of the COVID-19 pandemic, and any

additional preventative and protective actions that governments, or us, may determine are needed.

COVID-19 pandemic has not caused significant disruption to our clinical studies.

Each of our ongoing Phase 2 clinical studies

is being conducted at a single site which has reduced the risk of disruption.

Patient visits are currently taking place on

schedule for both the MD Anderson Cancer Center (“MDACC”) study being conducted in Houston, Texas and the Sun

Yat-sen University Cancer Center (“SYSUCC”) study being conducted in China.

In addition, thus far, any

disruptions to patient treatments have been within allowances under each study protocol.

Access to the sites by our clinical

monitors has been limited during the COVID-19 pandemic but the recording of study data in both studies and patient treatments

at both study sites are being conducted per protocol at this time.

We have cash available to fund planned operations into the fourth

quarter of calendar 2020.

Consequently, management is pursuing various financing alternatives

to fund our operations so we can continue as a going concern.

However, the COVID-19 pandemic has created significant economic uncertainty

and volatility in the credit and capital markets.

Management plans to secure the necessary financing through the issue of new equity

and/or the entering into of strategic partnership arrangements but the ultimate impact of the COVID-19 pandemic on our ability

to raise additional capital is unknown and will depend on future developments, which are highly uncertain and cannot be predicted

with confidence, including the duration of the COVID-19 outbreak and new information which may emerge concerning the severity of

the COVID-19 pandemic.

We may not be able to raise sufficient additional capital and may

tailor our drug candidate development program based on the amount of funding we are able to raise in the future.

Nevertheless,

there is no assurance that these initiatives will be successful.

Recent Highlights

May 5, 2020 we announced enrollment of our 22 nd patient (study

over 90% enrolled) in the adjuvant arm of our ongoing Phase 2 clinical study investigating adjuvant treatment (pre-temozolomide

-- or TMZ –

maintenance therapy) of MGMT-unmethylated glioblastoma multiforme (“GBM”) with VAL-083.

adjuvant arm of the Phase 2 study of VAL-083 being conducted at the MDACC is designed to enroll up to 24 newly-diagnosed patients

who have undergone surgery and chemoradiation with TMZ but will now receive VAL-083 in place of standard of care TMZ for adjuvant

Additionally, in the recurrent arm of the study, which is also being conducted at MDACC, 72 patients out of a planned

83 patients have been enrolled as of May 5, 2020.

On March 26, 2020 we received a listing extension from the Staff of the Listing Qualifications Department of The Nasdaq Capital Market LLC (“Nasdaq”).

The extension granted us until September 21, 2020 to regain compliance with the $1.00 Minimum Bid Price requirement for continued listing on Nasdaq.

On April 20, 2020, we received a second notification letter from Nasdaq stating that in response to the current extraordinary market conditions, Nasdaq had filed a rule change with the Securities and Exchange Commission to suspend the compliance period for the minimum closing bid price requirement from April 16, 2020 through June 30, 2020.

As a result, we have until December 7, 2020 to regain compliance.

We can regain compliance if at any time during the suspension or during the remaining compliance period resuming after the suspension the closing bid price of our common stock is at least $1.00 per share for a minimum of ten consecutive business days.

On February 19, 2020 we announced we had enrolled the final patient

in our ongoing Phase 2 clinical study investigating the first-line treatment of VAL-083 with radiation therapy in newly-diagnosed,

MGMT-unmethylated GBM being conducted at SYSUCC.

On January 29, 2020 we announced the publication of previously released interim clinical data in the February 2020 issue of peer-reviewed journal, Glioma.

The article highlights results from the first 22 patients of our ongoing Phase 2 clinical study investigating the first-line treatment of VAL-083 with radiation therapy in newly-diagnosed, MGMT-unmethylated GBM being conducted at SYSUCC.

VAL-083 Clinical Studies

We are currently developing VAL-083, a novel DNA-targeting agent

for the treatment of GBM and potentially other solid tumors, including ovarian cancer.

Our recent research has highlighted the

opportunities afforded by VAL-083’s unique mechanism of action and its potential to address unmet medical needs by focusing

our development efforts on patients whose tumors exhibit biological features that make them resistant to, or unlikely to respond

to, currently available therapies.

For example, our research demonstrating VAL-083’s activity in GBM is independent of the

MGMT methylation status allows us to focus patient selection based on this important biomarker.

The evaluation of MGMT promoter methylation status has increasingly

become common practice in the diagnostic assessment of GBM.

In September 2017, the National Comprehensive Cancer Network (“NCCN”)

updated its guidelines for the standard treatment of GBM based on MGMT methylation status.

We believe these guidelines provide

for enhanced opportunities for us to capitalize on VAL-083’s unique mechanism of action by utilizing MGMT methylation as

a biomarker to optimize patient selection for our novel DNA-targeting agent to focus on the majority of GBM patients who are diagnosed

with MGMT-unmethylated tumors.

Our current priority is to leverage this research, and VAL-083’s

unique mechanism of action, to efficiently advance VAL-083 for the most promising indications, including:

MGMT-unmethylated GBM, currently comprising two ongoing separate Phase 2 clinical studies for:

GBM patients in two study arms at MDACC:

as adjuvant therapy immediately following chemoradiation;

in Avastin ®

-naïve recurrent GBM patients;

Newly diagnosed GBM patients (ongoing study at SYSUCC);

Potential future indications including ovarian cancer, non-small cell lung cancer (“NSCLC”), and other solid tumor indications.

Phase 2 Study in Newly-Diagnosed MGMT-unmethylated

In September 2017, we initiated a single arm, biomarker driven,

open-label Phase 2 study in newly-diagnosed MGMT-unmethylated GBM patients at SYSUCC in Guangzhou, China.

The study is being conducted

under our collaboration agreement with Guangxi Wuzhou Pharmaceutical Company.

In this Phase 2 study, VAL-083 is being combined with radiotherapy

as a potential replacement for standard-of-care chemoradiation with temozolomide in patients with MGMT-unmethylated GBM.

of the study are to confirm the safety of the three-day VAL-083 dosing regimen in combination with radiotherapy and to investigate

efficacy outcomes of the combination of VAL-083 and radiotherapy in MGMT-unmethylated GBM patients.

We have completed enrollment of this study with a total of 29

newly-diagnosed, MGMT-unmethylated GBM patients.

The efficacy endpoints of the study include tumor response, as assessed by the

Response Assessment in NeuroOncology (“RANO”), and progression-free survival (“PFS”), progression-free

survival at six months (“PFS6”), and overall survival (“OS”), compared to historical results in the target

The study is being conducted in two parts:

(1) Dose-confirmation:

VAL-083 in cohorts (20, 30 and 40 mg/m 2 /day

IV daily x 3 every 21 days) to assess safety and activity when administered concurrently with x-ray therapy (“XRT”)

to confirm the maximum tolerated dose (“MTD”), and (2) Expansion:

VAL-083 will be studied in up to 20 additional patients

at the target dose, as determined by the dose-confirmation part of the study, administered concurrently with XRT.

Assessments of

safety and tolerability will be used to support further clinical development of VAL-083 in combination with radiotherapy.

Pharmacokinetic

assessments of VAL-083 in plasma and cerebral spinal fluid (“CSF”) will be used to correlate drug exposure in the central

nervous system with patient outcomes.

Dose-confirming cohorts studying 20, 30, and 40 mg/m 2 /day

x three every 21 days have been completed.

Based on the dose confirmation phase of the study, we have selected 30 mg/m 2 /day

for combination with irradiation for the treatment of newly-diagnosed MGMT-unmethylated GBM patients.

This study is fully enrolled at 29 patients.

We previously released

data with 23 patients enrolled as of the data cut-off date of November 2, 2019.

For the 22 patients who had completed at least

one cycle of treatment as of that date, median PFS with VAL-083 was 9.9 months (CI 7.3-12.0 months).

For the 18 patients

initially receiving the intended treatment dose (30 mg/m 2 /day on days 1, 2 and 3 of a 21-day cycle) median PFS was 10.4

months (CI 6.0-12.0 months).

While this is not a head-to-head study, historically, temozolomide (“TMZ”) has been demonstrated

to have 6.9 months PFS in unmethylated GBM patients.

Other doses were also examined as part of the dose escalation aspect of the

study, and all but the 20 mg/m 2 /day dose also demonstrated superior PFS to the historical comparator.

A median of eight

cycles of treatment has been received by all patients who had either completed treatment, or remain in active treatment.

Nine patients have received ten or more cycles.

Through our research, and that of the NCI, we have previously

demonstrated that VAL-083 crosses the blood brain barrier.

Preliminary data from the SYSUCC study indicate that the concentration

of VAL-083 is generally as high in CSF as in plasma at two hours post-infusion.

Concentration of VAL-083 —

Hours Post Dose

Mean Concentrations (ng/mL)

Ratio @ 2 hours

Dose (mg/m 2 )

Plasma (2 hours post dose)

CSF (2 hours post dose)

By comparison, temozolomide is typically 80% lower in the CSF

than the plasma (Schreck et al.

2018, Oncology (Williston Park)).

The accumulation of VAL-083 in the CSF further validates that

VAL-083 crosses the blood-brain-barrier and demonstrates that therapeutic drug concentrations in the CSF are achievable for extended

periods of time.

Phase 2 Study in MGMT-unmethylated GBM in Collaboration

with University of Texas MD Anderson Cancer Center

In February 2017, we initiated a biomarker driven, open-label,

single-arm Phase 2 study in collaboration with MDACC.

This biomarker-driven study (testing for MGMT methylation status) has been

amended to enroll up to 83 patients (35 with a starting dose of 40 mg/m 2 /day and 48 with a starting dose of 30 mg/m 2 /day)

to determine the potential of VAL-083 treatment to improve overall survival in GBM patients whose tumors have recurred following

treatment with temozolomide.

These patients will not have been treated previously with Avastin ®

In addition, this

study has been amended to add a new adjuvant patient arm.

This arm will include 24 patients previously treated with TMZ in combination

with radiation who, rather than being treated with additional cycles of TMZ, will begin treatment with VAL-083.

Recurrent Study Arm

The patients in the recurrent study arm are receiving second-line

therapy with VAL-083 following TMZ failure.

As of May 5, 2020, 72 patients (out of a planned 83) have been enrolled in the

recurrent arm of this study.

Previously we released data when we had enrolled 62 patients.

Of the 62 patients enrolled as of November 15, 2019, 35 patients (with no additional patients planned) had received an initial

dose of 40 mg/m 2 /day and 27 (out of a planned 48) had received an initial dose of 30 mg/m 2 /day (on days 1,

2 and 3 of a 21-day cycle).

mOS for the 60 patients who had completed at least one cycle of treatment was 7.5 months (CI 6.0-11.5

For the 25 of those patients who initially received the intended treatment dose of 30 mg/m 2 /day, mOS was 10.6

months (CI 5.8-10.6 months).

While this is not a head-to-head study, historically lomustine, which is the most commonly used chemotherapy

for these recurrent patients, has demonstrated a mOS of 7.2 months (EORTC 26101, MGMT-unmethylated lomustine arm).

The safety profile has been well within the existing safety

monitoring guidelines described in the present study protocol.

However, in consultation with the principal investigator at MDACC,

we have amended the protocol for this clinical study to modify the starting dose of VAL-083 to 30 mg/m 2 /day on days

1, 2 and 3, of a 21-day cycle.

This modification may improve tolerance in this patient population and thereby potentially increase

overall exposure to VAL-083 by increasing the number of cycles of drug patients may be able to receive.

We have modified the patient

screening platelet count, from 100,000/µL to 125,000/µL, for the same reasons.

Safety data from this study will become

part of the overall safety dossier to support future filings with the FDA and other regulatory agencies.

It is important for this GBM patient population, which has been

heavily pre-treated with temozolomide, to be able to be treated with multiple cycles of VAL-083 without significant hematological

We believe the modified dose of VAL-083, in addition to the change in patient eligibility platelet counts, should help

provide for enhanced patient safety.

We believe a positive outcome from this study can establish a position for VAL-083 in the

treatment of MGMT-unmethylated recurrent GBM.

A detailed description of this study can be found at clinicatrials.gov,

Identifier Number:

Adjuvant Study Arm

On July 24, 2019, we announced the enrollment of the first patient

in the adjuvant arm of the Phase 2 study being conducted at MDACC.

The adjuvant arm will include up to 24 patients.

These patients

will have had initial cycles of temozolomide concomitant with radiation but will not have yet started subsequent cycles of TMZ

maintenance stage TMZ patients).

Published data from Tanguturi et al (2017 Nero-Oncology) indicates that MGMT-unmethylated

patients receiving current standard of care have a median progression-free survival of 6.9 months.

As of May 5, 2020, 22 patients

(out of a planned 24) have been enrolled and all patients remain alive on continued therapy.

As noted above, patients in the recurrent arm of the MDACC clinical

study have been heavily pre-treated with temozolomide.

Based on published data from our MDACC and SYSUCC clinical studies, we believe

there is a significant opportunity to treat GBM patients in the pre-temozolomide maintenance stage (i.e., adjuvant).

At the AACR’s

annual meeting in April 2019, we reported that myelosuppression (thrombocytopenia and neutropenia) is the most common adverse event

associated with VAL-083.

The higher potential for myelosuppression with the 40 mg/m 2 /day of VAL-083 in this study appears

to be correlated with the number of cycles of prior TMZ maintenance therapy (> 5 cycles).

Safety Across Studies

Four subjects have experienced a serious adverse event (“SAE”)

possibly related to VAL-083 in the newly-diagnosed group as of the cut-off date of November 2, 2019.

In addition, eleven subjects

have experienced a possibly drug-related SAE in the recurrent group, and no patients have experienced a possibly drug-related SAE

in the adjuvant group as of the relevant data cut-off date of November 15, 2019.

Fast Track Designation

The FDA has granted us Fast Track designation for VAL-083 in

recurrent GBM.

Fast Track designation is designed to expedite the review of

drugs that show promise in treating life-threatening diseases and address unmet medical needs, with the goal of getting new treatments

to patients earlier.

Fast Track designation provides sponsors with an opportunity for increased frequency for communication with

the FDA to ensure an optimal development plan and to collect appropriate data needed to support drug approval.

Additional benefits

of the Fast Track designation may include an Accelerated Approval, a Priority Review, and a Rolling Review.

Accelerated Approval

is granted to drugs that demonstrate an effect on a surrogate, or intermediate endpoints, reasonably likely to predict clinical

Priority Review shortens the FDA review process for a new drug from ten months to six months and is appropriate for drugs

that demonstrate significant improvements in both safety and efficacy of an existing therapy.

Rolling Review provides a drug company

the opportunity to submit completed sections of its New Drug Application (“NDA”) for review by the FDA.

NDA reviews do not commence until the drug company has submitted the entire application to the FDA.

Through the Fast Track designation,

the FDA attempts to ensure that questions raised during the drug development process are resolved quickly, often leading to earlier

approval and increased access for patients.

MGMT-unmethylated GBM

GBM is the most common and the most lethal form of glioma.

to the Central Brain Tumor Registry of the United States, GBM occurs with an incidence of 3.20 per 100,000 person-years.

Approximately

13,000 new cases of GBM were diagnosed in the United States and 16,000 in Europe during 2017.

Within the GBM patient population,

approximately two-thirds of patients are unmethylated with respect to their MGMT status.

Measurement of MGMT (O6-methyl guanine methyltransferase) methylation

status has become routine in clinical practice as a biomarker that correlates with resistance to the standard-of-care chemotherapy

with TMZ (Temodar ®

), and patient outcomes in GBM.

Approximately two-thirds of GBM patients’

tumors are characterized

as “MGMT-unmethylated”

and exhibit a high expression of MGMT, a naturally occurring DNA-repair enzyme, the activity

of which nullifies the chemotherapeutic activity of TMZ.

The lack of specific therapies for MGMT-unmethylated GBM is a significant

unmet medical need.

Importantly, the 2017 update to the NCCN guidelines states that the treatment benefit of TMZ is likely to be

lower in GBM patients with an unmethylated MGMT promoter.

We have demonstrated that VAL-083’s anti-tumor mechanism

is active independent from the MGMT status in vitro .

We believe this suggests the potential of VAL-083 as a replacement

for the current standard-of-care chemotherapy, temozolomide, in MGMT-unmethylated GBM.

We are therefore utilizing MGMT-methylation

status to identify GBM patients who are unlikely to respond to temozolomide and including only MGMT-unmethylated patients in our

current clinical studies of VAL-083.

We believe that our research, in the context of the 2017 update

to the NCCN guidelines, highlights this unmet need and the opportunity for VAL-083 as a potential new standard-of-care in the treatment

of MGMT-unmethylated GBM.

Current Treatments for Gliomas and Glioblastoma

Gliomas are a type of Central Nervous System (“CNS”)

tumor that arises from glial cells in the brain or spine.

Glial cells are the cells surrounding nerves.

Their primary function

is to provide support and protection for neurons in the CNS.

GBM is the most common and the most lethal form of glioma.

to the Central Brain Tumor Registry of The United States, GBM occurs with an incidence of 3.20 per 100,000 person-years.

Approximately

13,000 new cases of GBM were diagnosed in the United States and 16,000 in Europe during 2017.

Common symptoms of GBM include headaches, seizures, nausea,

weakness, paralysis and personality or cognitive changes such as loss of speech or difficulty in thinking clearly.

GBM progresses

quickly and patients’

conditions deteriorate rapidly progressing to death.

The outlook for GBM patients is generally poor.

The overall median survival in newly diagnosed GBM patients with best available treatments is less than 15 months, and two-year

and five-year survival rates are approximately 30% and 10%, respectively.

Median overall survival in newly-diagnosed, unmethylated

GBM patients is 12.2 months.

In September 2017, the NCCN updated treatment guidelines for

The recommended treatment regimen for GBM includes surgical resection to remove as much of the tumor as possible (“debulking”)

followed by radiotherapy with concomitant and adjuvant chemotherapy with temozolomide with or without tumor treating fields (“TTF”).

GBM patients whose tumors exhibit an unmethylated promoter for the gene encoding the DNA repair enzyme MGMT, a biomarker correlated

with resistance to temozolomide, may be treated with radiation alone following surgery.

Patients with an unmethylated MGMT promoter have high levels

of MGMT, a naturally-occurring DNA repair enzyme that repairs tumor-fighting lesions induced by TMZ thus allowing a patient’s

tumor to continue to grow despite treatment, which leads to poor outcomes.

Measurement of MGMT methylation status has become routine

in clinical practice as biomarker that correlates with response to TMZ and patient outcomes in GBM.

Probability of GBM Patient Survival Correlated

to Expression of MGMT Enzyme

(Unmethylated promoter = High MGMT Expression and Significantly Shorter Survival)

TTF (Optune ®

) is a non-invasive technique for

adults with GBM.

TTF uses alternating electrical fields to disrupt tumor cell division, or cause cell death, thereby preventing

the tumor from growing or spreading as quickly.

A clinical study reported that GBM patients treated with TTF combined with TMZ

experienced longer survival than those treated with TMZ alone.

The majority of GBM patients’

tumors recur within 6 –

12 months of initial treatment.

Experimental therapy through clinical studies is recommended under NCCN guidelines for eligible

NCCN guidelines also recommend treatment with systemic chemotherapy, such as lomustine (“CCNU”).

who are eligible for additional surgical debulking, local chemotherapy with carmustine (“BCNU”) wafers may be employed.

CCNU and BCNU target the same DNA-site as TMZ and are also subject to MGMT-related resistance.

Avastin (Avastin ®

, an anti-VEGF antibody) recently

received full approval in the US, Canada, Australia, and Japan as a single agent for patients with recurrent GBM following prior

Avastin carries an FDA “black-box warning”

related to severe, sometimes fatal, side effects such as gastrointestinal

perforations, wound healing complications and hemorrhage.

There are no data demonstrating an improvement in disease-related symptoms

or increased survival for GBM patients treated with Avastin.

Recurrent GBM patients, especially those whose tumors progress

following treatment with Avastin, have limited or no treatment options and a very poor prognosis.

According to published literature,

the median survival for GBM patients whose tumors progress following Avastin is less than five months.

VAL-083 Mechanism of Action

Chemotherapy forms the basis of treatment in nearly all cancers.

We believe that VAL-083 may be effective in treating tumors exhibiting biological features that cause resistance to currently available

chemotherapy, particularly for patients who have failed, or become resistant to, other treatment regimens.

Based on published research and our own data, the cytotoxic

functional groups, and the mechanism of action of VAL-083 are functionally different from alkylating agents commonly used in the

treatment of cancer.

VAL-083 has previously demonstrated activity in cell-lines that are resistant to other types of chemotherapy.

No evidence of cross-resistance has been reported in published clinical studies.

Our research suggests that VAL-083 attacks cancer cells via

a unique mechanism of action which is distinct from other chemotherapies used in the treatment of cancer.

Our data indicate that

VAL-083 forms inter-strand crosslinks at the N 7 position of guanine on the DNA of cancer cells.

Our data also indicate

that this crosslink forms rapidly and is not easily repaired by the cancer cell resulting in cell-cycle arrest and lethal double-strand

DNA breaks in cancer cells.

VAL-083 readily crosses the blood brain barrier.

Published preclinical and clinical research demonstrate

that VAL-083 is absorbed more readily in tumor cells than in normal cells.

In vitro , our data also demonstrate that VAL-083’s

distinct mechanism may be able to overcome drug resistance against a range of cancers.

For example, VAL-083 is active against MGMT-unmethylated

GBM cells which are resistant to treatment with temozolomide and nitrosoureas.

VAL-083 also retains a high level of activity in

p53 mutated non-small cell lung cancer (“NSCLC”), ovarian cancer and medulloblastoma cell lines that are resistant

to platinum-based chemotherapy.

Importantly, clinical activity against each of the tumors mentioned

above was established in prior NCI-sponsored Phase 2 clinical studies.

We believe that these historical clinical data and our own

research support the development of VAL-083 as a potential new treatment for multiple types of cancer.

The main dose-limiting toxicity (“DLT”) related

to the administration of VAL-083 in previous NCI-sponsored clinical studies and our own clinical studies is myelosuppression, particularly

thrombocytopenia.

Myelosuppression, including thrombocytopenia, is a common side effect of chemotherapy.

Myelosuppression is the

decrease in cells responsible for providing immunity, carrying oxygen, and causing normal blood clotting.

Thrombocytopenia is a

reduction in platelet counts which assist in blood clotting.

Modern medicine allows for better management of myelosuppressive side

We believe this offers the potential opportunity to improve upon the drug’s already established efficacy profile

by substantially increasing the dose of VAL-083 that can be safely administered to cancer patients.

There is no evidence of lung, liver, or kidney toxicity even

with prolonged treatment by VAL-083.

Data from the Chinese market where the drug has been approved for more than 15 years supports

the safety findings of the NCI studies.

Other Indications for VAL-083 —

Potential Future Opportunities

Ovarian Cancer

Ovarian cancer is the fifth most common cancer in women and

is the leading cause of death among women diagnosed with gynecological malignancies.

In 2016, approximately 22,300 women in the

US were diagnosed with ovarian cancer and 14,300 died from their disease.

VAL-083’s activity against ovarian epithelial adenocarcinoma

(“OEA”) and squamous cell carcinoma of the cervix (“SCC”) was reported in prior NCI-sponsored clinical

Importantly, NCI-researchers recommended VAL-083 for further advanced studies in the treatment of ovarian cancer.

We have presented data demonstrating that VAL-083’s distinct

mechanism of action allows activity in tumors that are resistant to other therapies.

We have shown that cytotoxicity of VAL-083

against ovarian cancer is independent of sensitivity to cisplatin or p53 status in vitro.

We have demonstrated that VAL-083

is active in Pt-resistant ovarian cells harboring a range of p53-mutations.

In April 2016, the FDA granted orphan drug designation for the

use of VAL-083 in the treatment of ovarian cancer.

In September 2017, we filed an IND for the use of VAL-083 in

ovarian cancer, along with a protocol for a Phase 1/2, open-label, multicenter, study of VAL-083 in patients with Re current

P latinum R esistant Ov arian Cancer (the REPROVe study).

The FDA has allowed this study to begin enrolling patients,

but based on ongoing evaluation and input from our ovarian clinical advisory board, we are reassessing the ovarian cancer program.

We are in the process of evaluating the best path forward in ovarian cancer and are looking at various strategic options including

combination with PARP inhibitors.

As a result, we have inactivated the IND while we explore alternative study designs.

Lung cancer is a leading cause of cancer death around the world

and effective treatment for lung cancer remains a significant global unmet need despite advances in therapy.

Incidence of lung

cancer in the United States is approximately 47 per 100,000 with the majority (85%) being NSCLC, the most common type of lung cancer.

Globally, the market for lung cancer treatment may exceed $24 billion by 2033 according to a report published by Evaluate Pharma.

The activity of VAL-083 against solid tumors, including lung

cancer, has been established in both preclinical and human clinical studies conducted by the NCI.

DelMar has developed new nonclinical

data to support the utility of VAL-083 in the modern treatment of lung cancer.

In an established murine xenograft model of NSCLC,

the activity of VAL-083 was compared to standard platinum-based therapy with cisplatin against human NSCLC cell lines A549 (TKI-sensitive)

and H1975 (TKI-resistant).

In the study, VAL-083 demonstrated superior efficacy and safety in the treatment of TKI-susceptible

(A549) tumors and in TKI-resistant (H1975) tumors.

Central Nervous System Metastases of Solid Tumors

The successful management of systemic tumors by modern targeted

therapies has led to increased incidence of mortality due to CNS metastases of lung cancer and other solid tumors.

In June 2013,

we split our Phase 1/2 clinical study protocol into two separate studies:

one focusing solely on refractory GBM and the other focusing

on secondary brain cancers caused by other tumors that have spread to the brain.

Based on historical clinical activity and our own research,

we believe that VAL-083 may be suitable for the treatment of patients with central nervous system metastases who currently have

limited treatment options.

Subject to the availability of financial and operating resources, we may develop a separate protocol

for the continued exploration of VAL-083 in patients with secondary brain cancer caused by a solid tumor spreading to the brain.

Pediatric Brain Tumors

Tumors of the brain and spine make up approximately 20% of all

childhood cancers and they are the second most common form of childhood cancer after leukemia.

The activity of VAL-083 against childhood and adolescent brain

tumors has been established in both preclinical and human clinical studies conducted by the NCI.

We have presented data indicating

that VAL-083 offers potential therapeutic alternatives for the treatment of pediatric brain tumors including SHH-p53 mutated medulloblastoma.

In March 2016, the FDA granted orphan drug designation for the use of VAL-083 in the treatment of medulloblastoma.

Subject to the

availability of resources, we intend to collaborate with leading academic researchers for the continued exploration of VAL-083

as a potential treatment of childhood brain tumors.

Corporate History

We are a Nevada corporation formed on June 24, 2009 under the

name Berry Only, Inc.

(“Berry’).

Prior to a reverse acquisition undertaken on January 25, 2013 Berry did not have any

significant assets or operations.

We are the parent company of Del Mar Pharmaceuticals (BC) Ltd.

(“Del Mar (BC)”),

a British Columbia, Canada corporation incorporated on April 6, 2010, that is focused on the development of drugs for the treatment

We are also the parent company to 0959454 B.C.

Ltd., a British Columbia corporation (“Callco”), and 0959456

Ltd., a British Columbia, Canada corporation (“Exchangeco”).

Callco and Exchangeco were formed to facilitate the

reverse acquisition.

Outstanding Securities

As of May 12 2020, we had 11,429,228 shares of common stock

issued and outstanding, outstanding warrants to purchase 10,209,456 shares of common stock, 648,613 outstanding shares of

Series B Preferred Stock that are convertible into 162,177 shares of common stock, and outstanding stock options to purchase

1,577,949 shares of common stock (of which 799,199 options are subject to stockholder approval of the increase in the number

of shares authorized for issuance under the 2017 Plan at the next annual meeting of stockholders).

All warrants, and stock

options are convertible, or exercisable into, one share of common stock.

Each Series B convertible preferred share is

convertible into 0.25 shares of common stock.

On May 8, 2019, we effected a one-for-ten reverse stock split

(the “Reverse Stock Split”) of our issued and outstanding and authorized common stock.

All per share amounts and number

of shares of common stock in the MD&A and condensed consolidated interim financial statements reflect the Reverse Stock Split.

The Reverse Stock Split does not affect the our authorized preferred stock of 5,000,000 shares;

except that, pursuant to the terms

of the Certificate of Designations of Series B Convertible Preferred Stock for the issued and outstanding shares of our Series

B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), the conversion price

at which shares of Series B Preferred Stock may be converted into shares of common stock will be proportionately adjusted to reflect

the Reverse Stock Split.

On June 26, 2019, we amended our articles of incorporation,

as amended, to increase the number of authorized shares of common stock from 7,000,000 to 95,000,000 shares.

Related Parties

We acquired our initial patents and technology rights from Valent,

an entity owned by Dr.

Dennis Brown, our Chief Scientific Officer.

As a result, Valent is a related party to us.

Selected Quarterly Information

The financial information reported herein

has been prepared in accordance with accounting principles generally accepted in the United States.

Our functional currency at

March 31, 2020 and June 30, 2019 is the US$.

The following tables represent selected financial information for us for the periods

Selected Balance Sheet Data

Cash and cash equivalents

Working capital

Total stockholders’

Selected Statement of Operations Data

Impact of COVID-19

The ultimate impact of the COVID-19 pandemic

on our operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence,

including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic,

and any additional preventative and protective actions that governments, or us, may determine are required.

To date, the COVID-19

pandemic has not caused significant disruption to our clinical studies.

Each of our ongoing Phase 2 clinical studies is being conducted

at a single site which has reduced the risk of disruption.

Patient visits are currently taking place on schedule for both the MDACC

study being conducted in Houston, Texas and the SYSUCC study being conducted in China.

In addition, thus far, any disruptions to

patient treatments have been within allowances under each study protocol.

Access to the sites by our clinical monitors has been

limited during the COVID-19 pandemic but the recording of study data in both studies and patient treatments at both study sites

are being conducted per protocol at this time.

For the three months ended:

Research and development

General and administrative

Other (income) loss

Change in fair value of derivative liability

Foreign exchange (gain) loss

Interest income

Net loss for the period

Series B preferred stock dividend

Net loss attributable to common stockholders

Basic and fully diluted number of shares

Basic and fully diluted loss per share

For the nine months ended:

Research and development

General and administrative

Other (income) loss

Change in fair value of derivative liability

Foreign exchange (gain) loss

Interest income

Net loss for the period

Series B Preferred stock dividend

Net loss attributable to common stockholders

Basic and fully diluted number of shares

Basic and fully diluted loss per share

Expenses net of non-cash, share-based

compensation expense –

The following table discloses research

and development, and general and administrative expenses net of non-cash, share-based compensation payment expense.

The disclosure

has been provided to reconcile the total operational expenses on a GAAP basis and the non-GAAP operational expenses net of non-cash,

stock-based compensation in order to provide an estimate of cash used in research and development, and general and administrative

Management uses the cash basis of expenses for forecasting and budget purposes to determine the allocation of resources

and to plan for future financing opportunities.

For the three months ended:

Research and development - GAAP

non-cash, share-based compensation expense

Research and development net of non-cash, share-based, compensation expense –

General and administrative - GAAP

non-cash, share-based compensation expense

General and administrative net of non-cash, share-based, compensation expense –

For the nine months ended:

Research and development - GAAP

non-cash, share-based compensation expense

Research and development net of non-cash, share-based, compensation expense –

General and administrative - GAAP

non-cash, share-based compensation expense

General and administrative net of non-cash, share-based, compensation expense –

Results of Operations

Comparison of the three months ended

March 31, 2020 and March 31, 2019

Three Months Ended

Research and development

General and administrative

Other (income) loss

Change in fair value of derivative liability

Foreign exchange (gain) loss

Interest income

Net loss for the period

Research and Development

Research and development expenses increased to $898,720 for

the three months ended March 31, 2020 from $735,844 for the three months ended March 31, 2019.

The increase was primarily attributable

to an increase in clinical development costs partially offset by lower preclinical research expenses.

The increase in clinical development costs for the three months

ended March 31, 2020 compared to the three months ended March 31, 2019 was largely due to enrollment in our ongoing Phase 2 clinical

During the current period, we announced we had exceeded 50% enrollment in the adjuvant arm of our Phase 2 study at MDACC.

This study began enrolling earlier this fiscal year and as result had no related expenses in the three months ended March 31, 2019.

Preclinical research decreased in the three months ended March 31, 2020 compared to the three months ended March 31, 2019 due in

part to us deferring certain studies as well as focusing our resources on our clinical studies in the current period.

General and Administrative

General and administrative expenses were $1,077,642 for the three

months ended March 31, 2020 compared to $935,530 for the three months ended March 31, 2019.

The increase was primarily due to an

increase in professional fees with smaller increases due to higher office and sundry, as well as non-cash, share-based compensation

Professional fees increased during the three months ended March

31, 2020 compared to the three months ended March 31, 2019 primarily due higher legal fees as well as increased investor relations

Office and sundry increased in the current period compared to the prior period due to higher insurance costs.

share-based compensation expense increased during the three months ended March 31, 2020 compared to the three months ended March

31, 2019 largely due to higher expenses recognized for warrants issued for services partially offset by lower stock option expense.

Preferred Share Dividends

For each of the three months ended March

31, 2020 and 2019 we recorded $2,089 related to the dividend payable to Valent on the Series A preferred stock.

The dividend has

been recorded as a direct increase in accumulated deficit for both periods.

We issued 3,700 (2019 –

4,735) shares

of common stock on March 31, 2020 as a dividend on the Series B Preferred stock and recognized $1,473 (2019 - $23,202) as a direct

increase in accumulated deficit.

Comparison of the nine months ended

March 31, 2020 and March 31, 2019

Nine Months Ended

Research and development

General and administrative

Other (income) loss

Change in fair value of derivative liability

Foreign exchange (gain) loss

Interest income

Net loss for the period

Research and Development

Research and development expenses decreased

to $2,332,388 for the nine months ended March 31, 2020 from $2,702,213 for the nine months ended March 31, 2019.

The decrease was

largely attributable to lower preclinical research, personnel, and intellectual property expenses in the current period compared

to the prior period.

Preclinical research costs have decreased in the current period

due to the completion, or deferral, of studies that were ongoing in the prior period as well as us focusing our resources on our

clinical studies in the current period.

Personnel costs have decreased in nine months ended March 31, 2020 compared to the nine

months ended March 31, 2019 due a reduction in full-time employee head count in the current period compared to the prior period.

Intellectual property costs decreased in the nine months ended March 31, 2020 compared to the nine months ended March 31, 2019

as we have refined our patent portfolio by focusing on our most important patent claims in the most strategic jurisdictions.

costs can vary considerably depending on the filing of new patents, conversion of the provisional applications to PCT applications,

foreign office actions, and actual filing costs.

General and Administrative

General and administrative expenses were

$3,045,017 for the nine months ended March 31, 2020 compared to $2,796,884 for the nine months ended March 31, 2019.

A significant portion of the increase was due to higher professional

fees, office and sundry, and personnel expenses partially offset by lower non-cash, share-based compensation expense in the current

period compared to the prior period.

Professional fees increased due to a variety of factors including

accounting and legal fees and increased investor outreach expenses during the nine months ended March 31, 2020 compared to the

nine months ended March 31, 2019.

Office and sundry has increased in the nine months ended March 31, 2020 compared to the nine

months ended March 31, 2019 due primarily to costs of higher directors’

and officers’

liability insurance.

In relation to general and administrative expenses during the

nine months ended March 31, 2020, we incurred non-cash, share-based compensation expense relating to warrants issued for services

and stock option expense while during the nine months ended March 31, 2019, we incurred non-cash, share-based compensation expense

relating to performance share units, warrants issued for services, and stock option expense.

All performance share units were canceled

on April 30, 2019 so there was no related expense incurred during the nine months ended March 31, 2020.

Preferred Share Dividends

For each of the nine-month periods ended

March 31, 2020 and 2019 we recorded $6,267 related to the dividend payable to Valent on the Series A preferred stock.

has been recorded as a direct increase in accumulated deficit for both periods.

During the nine months ended March 31,

2020, we issued 11,100 (2019 –

14,430) shares of common stock as a dividend on the Series B Preferred stock and recognized

$6,071 (2019 - $75,477) as a direct increase in accumulated deficit.

Liquidity and Capital Resources

Nine months ended March 31, 2020 compared

to the nine months ended March 31, 2019

Cash flows from operating activities

Cash flows from financing activities

The COVID-19 pandemic has created significant

economic uncertainty and volatility in the credit and capital markets.

We have cash available to fund planned operations into

the fourth quarter of calendar 2020.

Consequently, management is pursuing various financing

alternatives to fund our operations so we can continue as a going concern.

However, the COVID-19 pandemic has created significant

economic uncertainty and volatility in the credit and capital markets.

Management plans to secure the necessary financing through

the issue of new equity and/or the entering into of strategic partnership arrangements but the ultimate impact of the COVID-19

pandemic on our ability to raise additional capital is unknown and will depend on future developments, which are highly uncertain

and cannot be predicted with confidence, including the duration of the COVID-19 outbreak and new information which may emerge

concerning the severity of the COVID-19 pandemic.

We may not be able to raise sufficient

additional capital and may tailor our drug candidate development program based on the amount of funding we are able to raise in

Nevertheless, there is no assurance that these initiatives will be successful.

Operating Activities

Net cash used in operating activities increased to $5,348,629 for

the nine months ended March 31, 2020 from $4,514,674 for the nine months ended March 31, 2019.

During the nine months ended March

31, 2020 and 2019 we reported net losses of $5,302,904 and $5,465,486, respectively.

Non-cash items relating to amortization of

intangible assets, warrants and shares issued for services, performance stock unit expense (2019 only), and stock option expense

totaled $461,014 (2019 - $598,944) for the nine months ended March 31, 2020.

The most significant changes in working capital for

the nine months ended March 31, 2020 were from a use of cash from a reduction in accounts payable and accrued liabilities of $658,946

and a source of cash from the reduction in prepaid expenses of $165,383.

The most significant change in working capital for the

nine months ended March 31, 2019 was cash from a reduction in prepaid expenses and deposits of $794,859 largely due to a partial

refund of a clinical study deposit, and cash used in a decrease in accounts payable and accrued liabilities of $425,383.

Financing Activities

During the nine months ended March 31,

2020 we received $6,582,966 in net proceeds from the completion of an underwritten public offering by us of common stock, pre-funded

warrants, and common stock purchase warrants.

Additionally, we received $26,550 pursuant to the exercise of warrants in the current

During the nine months ended March 31, 2019, we received $726,719 from the exercise of warrants.

Going Concern and Capital Expenditure

Going Concern

note 1 to the condensed consolidated interim financial statements)

condensed consolidated interim financial statements have been prepared on a going concern basis which assumes that we will continue

our operations for the foreseeable future and contemplates the realization of assets and the settlement of liabilities in the normal

course of business.

For the nine months ended March 31, 2020, we reported a loss of

$5,302,904 and negative cash flow from operations of $5,348,629.

As of March 31, 2020, we had an accumulated deficit of $65,893,587

and cash and cash equivalents on hand of $4,973,378.

We are in the development stage and have not generated any revenues to date.

We do not have the prospect of achieving revenues until such time that our product candidate is commercialized, or partnered, which

may not ever occur.

In the near future, we will require additional funding to maintain our clinical trials, research and development

projects, and for general operations.

These circumstances indicate substantial doubt exists about our ability to continue as a

going concern.

Consequently, management is

pursuing various financing alternatives to fund our operations so we can continue as a going concern.

However, the COVID-19 pandemic

has created significant economic uncertainty and volatility in the credit and capital markets.

Management plans to secure the necessary

financing through the issue of new equity and/or the entering into of strategic partnership arrangements but the ultimate

impact of the COVID-19 pandemic on our ability to raise additional capital is unknown and will depend on future developments, which

are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak and new information

which may emerge concerning the severity of the COVID-19 pandemic.

We may not be able to

raise sufficient additional capital and may tailor our drug candidate development program based on the amount of funding we are

able to raise in the future.

Nevertheless, there is no assurance that these initiatives will be successful.

The financial statements do not give effect to any adjustments

to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

Such adjustments could be material.

Our future funding requirements will depend

on many factors, including but not limited to:

the rate of progress and cost of our clinical trials, preclinical studies and other discovery and research and development activities;

the costs associated with establishing manufacturing and commercialization capabilities;

the costs of acquiring or investing in businesses, product candidates and technologies;

the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

the costs and timing of seeking and obtaining FDA and other regulatory approvals;

the effect of competing technological and market developments;

the economic and other terms and timing of any collaboration, licensing or other arrangements into which we may enter;

the impact of us being a public entity.

Until we can generate a sufficient amount of product revenue

to finance our cash requirements, which we may never do, we expect to finance future cash needs primarily through public or private

equity offerings, or strategic collaborations.

The sale of equity and convertible debt securities may result in dilution to our

stockholders and certain of those securities may have rights senior to those of our shares of capital stock.

If we raise additional

funds through the issuance of preferred stock, convertible debt securities or other debt financing, these securities or other debt

could contain covenants that would restrict our operations.

Any other third-party funding arrangement could require us to relinquish

valuable rights.

Economic conditions may affect the availability of funds and activity in equity markets.

We do not know whether

additional funding will be available on acceptable terms, or at all.

If we are not able to secure additional funding when needed,

we may have to delay, reduce the scope of or eliminate one or more of our clinical trials or research and development programs

or make changes to our operating plan.

In addition, we may have to seek a partner for one or more of our product candidate programs

at an earlier stage of development, which would lower the economic value of those programs to us.

Critical Accounting Policies

The preparation of financial statements, in conformity with

generally accepted accounting principles in the United States, requires companies to establish accounting policies and to make

estimates that affect both the amount and timing of the recording of assets, liabilities, revenues and expenses.

Some of these

estimates require judgments about matters that are inherently uncertain and therefore actual results may differ from those estimates.

A detailed presentation of all of our significant accounting

policies and the estimates derived therefrom is included in Note 2 to our consolidated financial statements for the year ended

June 30, 2019 contained in our Form 10-K filed with the SEC on September 9, 2019.

While all of the significant accounting policies

are important to our condensed consolidated financial statements, the following accounting policies and the estimates derived therefrom

are critical:

Warrants and shares issued for services

Stock options

Accruals for research and development expenses and clinical trials

Warrants and shares issued for services

We have issued equity instruments for services provided by employees

and nonemployees.

The equity instruments are valued at the fair value of the instrument granted.

Stock options

We account for these awards under Accounting Standards Codification

(“ASC”) 718, “Compensation - Stock Compensation”

(“ASC 718”).

ASC 718 requires measurement

of compensation cost for all stock-based awards at fair value on the date of grant and recognition of compensation over the requisite

service period for awards expected to vest.

Compensation expense for unvested options to non-employees is revalued at each period

end and is being amortized over the vesting period of the options.

The determination of grant-date fair value for stock option

awards is estimated using the Black-Scholes model, which includes variables such as the expected volatility of our share price,

the anticipated exercise behavior of its grantee, interest rates, and dividend yields.

These variables are projected based on our

historical data, experience, and other factors.

Changes in any of these variables could result in material adjustments to the expense

recognized for share-based payments.

Such value is recognized as expense over the requisite service period, net of actual forfeitures,

using the accelerated attribution method.

We recognize forfeitures as they occur.

The estimation of stock awards that will ultimately

vest requires judgment, and to the extent actual results, or updated estimates, differ from current estimates, such amounts are

recorded as a cumulative adjustment in the period estimates are revised.

Accruals for research and development

expenses and clinical trials

As part of the process of preparing our financial statements,

we are required to estimate our expenses resulting from our obligations under contracts with vendors, clinical research organizations

and consultants, and under clinical site agreements in connection with conducting clinical trials.

The financial terms of these

contracts are subject to negotiations, which vary from contract to contract and may result in payment terms that do not match the

periods over which materials or services are provided under such contracts.

Our objective is to reflect the appropriate expenses

in our financial statements by matching those expenses with the period in which services are performed and efforts are expended.

We account for these expenses according to the timing of various aspects of the expenses.

We determine accrual estimates by taking

into account discussion with applicable personnel and outside service providers as to the progress of clinical trials, or the services

During the course of a clinical trial, we adjust our clinical expense recognition if actual results differ from our

We make estimates of our accrued expenses as of each balance sheet date based on the facts and circumstances known to

us at that time.

Our clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations

and other third-party vendors.

Although we do not expect our estimates to be materially different from amounts actually incurred,

our understanding of the status and timing of services performed relative to the actual status and timing of services performed

may vary and may result in us reporting amounts that are too high or too low for any particular period.

For the three and nine

months ended March 31, 2020 and 2019, there were no material adjustments to our prior period estimates of accrued expenses for

clinical trials.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Quantitative and Qualitative Disclosures About Market Risk.

required for a smaller reporting company.

Financial instruments

The Company has financial instruments that are measured at fair value.

To determine the fair value, the Company uses the fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs market participants would use to value an asset or liability and are developed based on market data obtained from independent sources.

Unobservable inputs are inputs based on assumptions about the factors market participants would use to value an asset or liability.

The three levels of inputs that may be used to measure fair value are as follows:

Level one - inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level two - inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals;

Level three - unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements.

Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

The Company’s financial instruments consist of cash and cash equivalents, other receivables, accounts payable, related party payables and loan payable.

The carrying values of cash and cash equivalents, other receivables, accounts payable and related party payables approximate their fair values due to the immediate or short-term maturity of these financial instruments.

The fair value of the loan payable is equal to its principal and accrued interest of $508,466 as at September 30, 2020.

Subsequent events

Warrant exercises

Subsequent to September 30, 2020, 161,084 warrants were exercised at $1.00 per share for gross proceeds of $161,084.

Stock option exercises

Subsequent to September 30, 2020, 35,000 stock options were exercised at $0.61 per share for gross proceeds of $21,350.

Stock option amendments

On November 11, 2020, the Board of Directors approved the acceleration of vesting of 279,675 stock options to purchase shares of the Company’s common stock previously granted on September 5, 2019 to an executive officer of the Company.

The exercise price of the stock options is $0.61 per share

The Company has evaluated its subsequent events from September 30, 2020 through the date these condensed consolidated interim financial statements were issued and has determined that there are no subsequent events requiring disclosure in these condensed consolidated interim financial statements other than the items noted below.

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