What changed in this filing

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Item 1. Financial Statements

2021-05-13 compared with 2021-02-12 · 169 added, 122 removed, 470 unchanged (38% of the section changed)

2 unchanged sentences

Condensed Consolidated Interim Financial Statements

For the six months ended December 31, 2020

For the nine months ended March 31, 2021

(expressed in US dollars unless otherwise noted)

5 unchanged sentences

Prepaid expenses and deposits

Clinical trial deposit

Interest, taxes and other receivables

2 unchanged sentences

Intangible assets - net

Property and equipment

Property and equipment - net

Deferred financing costs

9 unchanged sentences

Issued and outstanding

279 Series A shares at December 31, 2020

279 Series A shares at March 31, 2021

(June 30, 2020 – 279 )

610 Series B shares at December 31, 2020

601 Series B shares at March 31, 2021

(June 30, 2020 – 649 )

24 Series C shares at December 31, 2020

21 Series C shares at March 31, 2021

(June 30, 2020 – 0 )

95,000 shares at December 31, 2020 and June 30, 2020,

95,000 shares at March 31, 2021 and June 30, 2020,

$ 0.001 par value

25,868 issued at December 31, 2020 (June 30, 2020 –

31,764 issued at March 31, 2021 (June 30, 2020 –

Additional paid-in capital

11 unchanged sentences

Three months ended

Six months ended

Nine months ended

Research and development

2 unchanged sentences

Other (income) loss

Foreign exchange loss

Foreign exchange

Amortization of deferred loan costs

13 unchanged sentences

Condensed Consolidated Interim Statements of Stockholders’ Equity

For the three and nine months ended March 31, 2021

(In thousands)

For the three and six months ended December 31, 2020

comprehensive

5 unchanged sentences

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

Deemed dividend recognized on beneficial

conversion features of Series C Preferred stock

Exercise of warrants

Warrants issued for services

9 unchanged sentences

to common stock

Exercise of warrants for cash

Exercise of warrants

Warrants issued for services

Exercise of stock options for cash

Stock options exercised

Stock option expense

3 unchanged sentences

Balance - December 31, 2020

Conversion of Series B Preferred stock

to common stock

Conversion of Series C Preferred stock

to common stock

Series C Agent Warrants exercised

Exercise of warrants

Warrants issued for services

Stock options exercised

Stock option expense

Series A Preferred cash dividend

Series B Preferred stock dividend

Loss for the period

Balance - March 31, 2021

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

1 unchanged sentence

Condensed Consolidated Interim Statements of Stockholders’ Equity

For the three and nine months ended March 31, 2020

(In thousands)

For the three and six months ended December 31, 2019

comprehensive

18 unchanged sentences

Balance - December 31, 2019

Warrants issued for services

Shares issued for services

Stock option expense

Series A Preferred cash dividend

Series B Preferred stock dividend

Loss for the period

Balance - March 31, 2020

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

2 unchanged sentences

(In thousands)

Six months ended

Nine months ended

Cash flows from operating activities

2 unchanged sentences

Amortization of intangible assets

Depreciation of property and equipment

In-process research and development

Change in fair value of milestone liability

Amortization of deferred loan costs

Interest expense

Amortization of deferred loan costs

Shares issued for services

9 unchanged sentences

Cash acquired on merger with Adgero

Purchase of equipment

Proceeds on sale of equipment

7 unchanged sentences

Net cash provided by financing activities

Decrease in cash and cash equivalents

Increase in cash and cash equivalents

Cash and cash equivalents – beginning of period

4 unchanged sentences

Notes to Condensed Consolidated Interim Financial Statements

December 31, 2020

(expressed in US dollars unless otherwise noted)

March 31, 2021

(expressed in US dollars and in thousands, except par value and per share amounts, unless otherwise noted)

Nature of operations, corporate history, and going concern and management plans

7 unchanged sentences

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.

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 1.5740 shares (the “Exchange Ratio”) of the Company’s common stock per share of Adgero 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.

18 unchanged sentences

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 six months ended December 31, 2020, the Company reported a loss of $24.9 million, and a negative cash flow from operations of $9.5 million.

The Company had an accumulated deficit of $97.8 million and had cash and cash equivalents of $17.2 million as of December 31, 2020.

For the nine months ended March 31, 2021, the Company reported a loss of $ 31,566 and a negative cash flow from operations of $ 14,171 .

The Company had an accumulated deficit of $ 104,489 and had cash and cash equivalents of $ 15,718 as of March 31, 2021.

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 near future, the Company will require additional funding to maintain its clinical trials, research and

development projects, and for general operations.

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 interim financial statements.

2 unchanged sentences

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.

The Company may not be able to raise sufficient additional capital and may tailor its drug candidate development programs 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.

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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 at June 30, 2020 included in our Form 10-K.

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 the Company’s 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 and six-months ended December 31, 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.

The results for three and nine-months ended March 31, 2021 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.

The preparation of financial statements in conformity with U.S.

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.

3 unchanged sentences

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

For the three and six-month periods ended December 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, and convertible preferred shares is anti-dilutive.

As of December 31, 2020, potential common shares of 11,709,568 (2019 – 9,963,596) related to outstanding common share warrants, 2,152,701 (2019 – nil) related to outstanding Series C preferred stock warrants, 6,486,709 (2019 – 778,750) related to stock options, 152,580 (2019 – 162,177) relating

to outstanding Series B convertible preferred shares , and 2 0,348,764 (2019 – nil ) relating to outstanding Series C convertible preferred shares were excluded from the calculation of net loss per common share.

For the three and nine-month periods ended March 31, 2021 and 2020 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 March 31, 2021, potential common shares of 8,226 (2020 – 10,209 ) related to outstanding common share warrants, 2,104 (2020 – nil) related to outstanding Series C preferred stock warrants, 6,453 (2020 – 779 ) related to stock options, 150 (2020 – 162 ) relating to outstanding Series B convertible preferred shares, and 17,997 (2020 – 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 six-month period ended December 31, 2020.

As the acquired in-process research and development assets were deemed to have no current or alternative future use, an expense of $ 16,094 was recognized in the condensed consolidated interim statements of operations for the nine-month period ended March 31, 2021.

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

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

12 unchanged sentences

The amendments in this update remove references to various FASB Concepts Statements, situates all disclosure guidance in the appropriate disclosure section of the Codification, and makes other improvements and technical corrections to the Codification.

The amendments in Sections B and C of this amendment are effective for annual periods beginning after December 15, 2020, for public business entities.

For all other entities, the amendments are effective for annual periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022.

The amendments in Sections B and C of this amendment are effective for fiscal periods beginning after December 15, 2020, for public business entities.

For all other entities, the amendments are effective for fiscal periods beginning after December 15, 2021, and interim periods within fiscal periods beginning after December 15, 2022.

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 six-months ended December 31, 2020, other than ASUs 2020-06 and 2020-10, 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.

ASU 2021-04 — Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options.

The amendments in this update are intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange and that are not within the scope of another FASB Accounting Standards Codification.

The amendments in ASU 2021-04 are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments.

Early adoption is permitted for all entities, including adoption in an interim period.

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 nine-months ended March 31, 2021, other than ASUs 2020-06, 2020-10, and 2021-04, 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.

To determine the accounting for this transaction under ASU 2017-01, an assessment was 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.

9 unchanged sentences

Also, in conjunction with the Merger, the Company issued 572 shares of common stock to the placement agent as a success fee.

The shares of common stock 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 shares of common stock issued to the former Adgero stockholders as well as the success fee shares, have been valued 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 $ 1,553 of legal, consulting and other professional fees related to the Merger, of which approximately $ 1,054 had been incurred in the year ended June 30, 2020.

The transaction costs applicable to the current period have been classified as merger expenses in the accompanying unaudited condensed consolidated interim statement of operations for the nine months ended March 31, 2021.

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:

4 unchanged sentences

Other current assets

Property and equipment

Property and equipment (note 5)

Accounts payable and accrued liabilities

1 unchanged sentence

In-process research and development

The fair value of the IPR&D assets has been expensed as a charge in the condensed consolidated interim statements of operations for the six months ended December 31, 2020 as there is no alternative use for these assets.

The fair value of the IPR&D assets has been expensed as a charge in the condensed consolidated interim statements of operations for the nine months ended March 31, 2021 as there is no alternative use for these assets.

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

15 unchanged sentences

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.

As at December 31, 2020, the Company has reviewed its estimates with respect to the planned timing of completion of the respective milestones and adjusted the liability accordingly.

As of March 31, 2021, the Company reviewed its estimates with respect to the planned timing of completion of the respective milestones and adjusted the liability accordingly.

(in thousands)

1 unchanged sentence

Change in fair value estimate

Balance – December 31, 2020

Balance – March 31, 2021

Clinical trial deposit

2 unchanged sentences

The Company is required to make certain payments under the agreement related to patient enrollment milestones.

For the three and six months ended December 31, 2020, the Company has recognized $750,000 and $1.25 million, respectively, of expenses for this study in relation to study startup and preparation for patient enrollment.

In relation to this study, the Company has made a deposit payment of $2.6 million to the CRO in relation to the commencement of recruitment of patients.

It is anticipated that the deposit will be applied to future invoices, or refunded to the Company, beyond twelve months from December 31, 2020.

For the three and nine months ended March 31, 2021, the Company has recognized $ 1,708 and $ 2,958 , respectively, of expenses for this study in relation to study startup and preparation for patient enrollment.

In relation to this study, the Company has made a deposit payment of $ 2,600 to the CRO in relation to the commencement of recruitment of patients.

It is anticipated that the deposit will be applied to future invoices, or refunded to the Company, of which $ 500 is anticipated to be applied in the near term and $ 2,100 beyond twelve months from March 31, 2021.

The Company can terminate the study at any time.

Upon termination, the Company will be liable for any payments due to the effective date of the termination as well as any non-refundable costs incurred by the CRO prior to the date of termination.

Property and equipment

Acquired in Adgero merger (note 3)

Laboratory equipment purchased

Disposal of furniture

Property and equipment

Less accumulated depreciation

Balance, March 31, 2021

Related party transactions

2 unchanged sentences

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.

The Company now owns all rights and title to VAL-083 and is responsible for 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.

4 unchanged sentences

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 December 31, 2020 and 2019 respectively, the Company recorded $2,089 related to the dividend paid to Valent while for the six-months ended December 31, 2020 and 2019 respectively, the Company recorded $4,178 related to the dividend.

For the three-months ended March 31, 2021 and 2020 respectively, the Company recorded $ 2 related to the dividend paid to Valent while for the nine-months ended March 31, 2021 and 2020 respectively, the Company recorded $ 6 related to the dividend.

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

Related party payables

At December 31, 2020 there is an aggregate amount of $289,397 (June 30, 2020 - $663,865) payable to the Company’s officers and directors for fees, expenses, and accrued liabilities.

At March 31, 2021 there is an aggregate amount of $ 385 (June 30, 2020 - $ 664 ) payable to the Company’s officers and directors for fees, expenses, and accrued bonuses and other liabilities.

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

4 unchanged sentences

Amortization of deferred financing costs

Balance – December 31, 2020

During the six-months ended December 31, 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”).

Balance – March 31, 2021

During the nine-months ended March 31, 2021, the Company received a loan of $ 500 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 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 of 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 .

9 unchanged sentences

Balance – June 30, 2020

Conversion of Series C Preferred stock to common

Balance – December 31, 2020

Issued on exercise of Series C Preferred Agent Warrants

Conversion of Series C Preferred stock to common stock

Balance – March 31, 2021

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.

7 unchanged sentences

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

related to the beneficial conversion feature arising from the issuance of Series C Convertible Preferred Stock.

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 $ 3,181 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.

1 unchanged sentence

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 December 31, 2020 is the stated value of $23,670,000.

Total gross proceeds from the private placement were $25 million, or approximately $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.

The liquidation value of the Series C Preferred Stock at March 31, 2021 is the stated value of $ 20,903 .

Total gross proceeds from the private placement were $ 25,000 , or approximately $ 21,598 in net proceeds after deducting financing costs of $ 3,402 with respect to agent commissions and expenses, as well as legal and accounting fees.

Of the total financing costs, $ 85 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 (“Series C Agent Warrants”) that are convertible into an aggregate 2,153 shares of common stock.

A total of 23,670 (June 30, 2020 – Nil) shares of Series C Preferred Stock are outstanding as of December 31, 2020, such that a total of 20,348,764 (June 30, 2020 – Nil) shares of common stock are issuable upon conversion of the Series C Preferred Stock as at December 31, 2020.

A total of 20,903 (June 30, 2020 – nil) shares of Series C Preferred Stock are outstanding as of March 31, 2021, such that a total of 17,997 (June 30, 2020 – nil) shares of common stock are issuable upon conversion of the Series C Preferred Stock as of March 31, 2021.

Converted shares are rounded up to the nearest whole share.

4 unchanged sentences

Conversion of Series B Preferred stock to common

Balance – December 31, 2020

Balance – March 31, 2021

During the year ended June 30, 2016, the Company issued an aggregate of 902 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 date of the filing of the Certificate of Designation which was April 29, 2016.

Each share of Series B Preferred Stock is currently 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 per share, or five years from the date of the filing of the Certificate of Designation which was April 29, 2016.

Therefore, all of the Series B Preferred stock will convert to common stock on April 29, 2021 .

6 unchanged sentences

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 December 31, 2020 is the stated value of $4.9 million (June 30, 2020 - $5.2 million).

The liquidation value of the Series B Preferred Stock at March 31, 2021 is the stated value of $ 4,808 (June 30, 2020 - $ 5,192 ).

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 the Company or sold pursuant to a licensing or partnering arrangement (the “Royalty Agreement”).

1 unchanged sentence

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 December 31, 2020, the Company issued 3,479 (2019 – 3,700) shares of common stock and recognized $4,453 (2019 – $2,552) and during the six-months ended December 31,

2020, the Company issued 7,179 (2019 – 7,400 ) shares of common stock and recognized $ 9,633 (2019 – $ 4,598 ).

Pursuant to the Series B Preferred Stock dividend, during the three-months ended March 31, 2021, the Company issued 3 (2020 – 4 ) shares of common stock and recognized $ 6 (2020 – $ 1 ) and during the nine-months ended March 31, 2021, the Company issued 10 (2020 – 12 ) shares of common stock and recognized $ 15 (2020 – $ 6 ).

These dividends have been recognized as a direct increase in accumulated deficit.

A total of 610,238 (June 30, 2020 – 648,613) shares of Series B Preferred Stock are outstanding as of December 31, 2020, such that a total of 152,580 (June 30, 2020 – 162,177) shares of common stock are issuable upon conversion of the Series B Preferred Stock as at December 31, 2020.

A total of 601 (June 30, 2020 – 649 ) shares of Series B Preferred Stock are outstanding as of March 31, 2021, such that a total of 150 (June 30, 2020 – 162 ) shares of common stock are issuable upon conversion of the Series B Preferred Stock as of March 31, 2021.

Converted shares are rounded up to the nearest whole share.

8 unchanged sentences

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 December 31, 2020 and June 30, 2020 was $278,530.

There was no change to the Series A Preferred stock for the three or six-months ended December 31, 2020 or 2019.

The liquidation value of the Series A Preferred stock at March 31, 2021 and June 30, 2020 was $ 279 .

There was no change to the Series A Preferred stock for the three or nine-months ended March 31, 2021 or March 31, 2020.

Stock Issuances

Six months ended December 31, 2019

Nine months ended March 31, 2020

Underwritten public offering

5 unchanged sentences

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

During the six months ended December 31, 2019, all of the 2,655,000 PFW were exercised at $0.01 per PFW for proceeds of $26,550.

During the nine months ended March 31, 2020, all of the 2,655 PFW were exercised at $ 0.01 per PFW for proceeds of $ 27 .

Shares issued for services

During the six months ended December 31, 2020, the Company issued $nil (2019 – 11,672) shares of common stock for services resulting in the recognition of $nil (2019 – $8,187) in expense.

All of the shares issued for services for the three and six-months ended December 31, 2019 have been recognized as research and development expense.

During the nine months ended March 31, 2021, the Company issued nil (2020 – 21 ) shares of common stock for services resulting in the recognition of nil (2020 – $ 12 ) in expense.

All of the shares issued for services for the three and nine months ended March 31, 2020 have been recognized as research and development expense.

2017 Omnibus Incentive Plan

1 unchanged sentence

In addition, the Board of Directors 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 December 31, 2020, a total of 142,375 shares of common stock are outstanding under the Legacy Plan and/or are subject to outstanding stock options granted under the Legacy Plan, and a total of 6,344,334 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 178,291 (after deducting accumulated stock option exercises of 35,000) shares of common stock available at December 31, 2020 for issuance under the 2017 Plan if all such options under the Legacy Plan were exercised.

Under the 2017 Plan, 6,700 shares of Company common stock are currently reserved for issuance, less the number of options to purchase 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 options to purchase shares of common stock made, or that may be made, under the Legacy Plan.

As of March 31, 2021, a total of 142 options to purchase shares of common stock are outstanding under the Legacy Plan and/or are subject to outstanding options to purchase shares of common stock granted under the Legacy Plan, and a total of 6,380 options to purchase shares of common stock have been issued under the 2017 Plan and/or are subject to outstanding options to purchase shares of common stock granted under the 2017 Plan leaving 178 options to purchase shares of common stock available at March 31, 2021 for issuance under the 2017 Plan if all such options to purchase shares of common stock 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.

During the six-months ended December 31, 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.

Also, during the six months ended December 31, 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 resulting in accelerated expense of $53,455.

The exercise price of the stock options is $0.61 per share.

During the six-months ended December 31, 2020, a total of 4,758,687 stock options were granted to executive officers and directors of the Company.

During the nine-months ended March 31, 2021, a total of 223 options to purchase shares of common stock issued to directors of the Company were amended such that the period to exercise vested options to purchase shares of common stock from the date of termination of continuous service with the Company was extended from 90 days to one year .

Of the total, 67 had their expiry extended from September 26, 2020 to June 26, 2021 and 156 had their expiry extended from November 19, 2020 to August 19, 2021.

As a result of the amendments, a total of $9 in stock-based compensation expense has been recognized.

In addition, 250 options to purchase shares of common stock previously granted to an officer of the Company were amended such that the vesting of the options to purchase shares of common stock was changed from a completely contingent vesting to a time-based vesting such that 1/6 th of the options to purchase shares of common stock 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 will be recognized over the amended vesting period for the 250 options to purchase shares of common stock.

Also, during the nine months ended March 31, 2021, the Board of Directors approved the acceleration of vesting of 280 options to purchase shares of common stock previously granted on September 5, 2019 to an executive officer of the Company resulting in accelerated expense of $ 53 .

The exercise price of the options to purchase shares of common stock is $ 0.61 per share.

During the nine-months ended March 31, 2021, a total of 4,759 options to purchase shares of common stock were granted to executive officers and directors of the Company.

Of these, 4,699 have an exercise price of $ 1.70 per share and 60 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.

Of the total granted, 4,279 options to purchase shares of common stock 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 options to purchase shares of common stock granted to executive officers and directors, 480 vest in 12 equal monthly installments beginning on October 15, 2020.

All of the options to purchase shares of common stock 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

3 unchanged sentences

Balance – June 30, 2020

Balance – December 31, 2020

The following table summarizes stock options outstanding and exercisable under all plans at December 31, 2020:

Balance – March 31, 2021

The following table summarizes stock options outstanding and exercisable under all plans at March 31, 2021:

Exercise price

Outstanding at

December 31, 2020

March 31, 2021

(in thousands)

2 unchanged sentences

exercisable at

December 31, 2020

March 31, 2021

(in thousands)

Included in the number of stock options outstanding are 2.5 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$15.70 using the period ending closing exchange rate.

Stock options granted during the six months ended December 31, 2020 have been valued using a Black-Scholes pricing model with the following assumptions:

The exercise price of these options shown in the above table have been converted to US$ 15.90 per share using the period ending closing exchange rate.

Stock options granted during the nine months ended March 31, 2021 have been valued using a Black-Scholes pricing model with the following assumptions:

Dividend rate

6 unchanged sentences

Three months ended

Six months ended

Nine months ended

Research and development

General and administrative

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

The aggregate intrinsic value of stock options outstanding at December 31, 2020 was $789,343 (2019 - $39,198) and the aggregate intrinsic value of stock options exercisable at December 31, 2020 was $571,657 (2019 - $7,472).

As of December 31, 2020, there was $5.7 million in unrecognized compensation expense that will be recognized over the next 2.75 years.

All of the stock option expense for the periods ended March 31, 2021 and 2020 has been recognized as additional paid in capital.

The aggregate intrinsic value of stock options outstanding at March 31, 2021 was $ 1,618 (2020 - $ 0 ) and the aggregate

intrinsic value of stock options exercisable at March 31, 2021 was $ 1,044 ( 2020 - $ 0 ) .

As of March 31, 2021 , there was $ 3,959 i n unrecognized compensation expense that will be recognized over the next 2.5 0 years .

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

1 unchanged sentence

Unvested at June 30, 2020

Unvested at December 31, 2020

The aggregate intrinsic value of unvested stock options at December 31, 2020 was $217,686 (2019 - $31,726).

Unvested at March 31, 2021

The aggregate intrinsic value of unvested stock options at March 31, 2021 was $ 573 (2020 - $ 519 ).

The unvested stock options have a remaining weighted average contractual term of 9.39 (2020 – 9.20) years.

7 unchanged sentences

Expiry of warrants (iii)

Balance – December 31, 2020

A total of 1,179,707 2020 Investor Warrants were exercised at $1.00 per share.

Balance – March 31, 2021

A total of 4,399 2020 Investor Warrants were exercised at $ 1.00 per share and 472 warrants issued as either agent warrants or issued for services were exercised on a cashless basis for which 258 common shares were issued.

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

1 unchanged sentence

All of the expired warrants were exercisable at $ 30.00 per share.

The following table summarizes the Company’s outstanding common stock warrants as of December 3 1 , 2020:

The following table summarizes the Company’s outstanding common stock warrants as of March 31, 2021:

Description of warrants

10 unchanged sentences

Warrants issued for services

February 1, 2021

Warrants issued for services

January 25, 2023

2 unchanged sentences

Warrants issued for services

September 15, 2023 and October 11, 2023

September 15, 2023

Warrants issued for services

October 11, 2023

Warrants issued for services

November 18, 2023

5 unchanged sentences

November 13, 2023

Warrants issued for services

January 20, 2024

Warrants issued for services

February 17, 2024

Warrants issued for services

February 25, 2024

2020 Underwriter Warrants

17 unchanged sentences

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

The Series C 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 Series C Agent Warrants were valued at a total of $ 3,287 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.

2 unchanged sentences

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

Balance – June 30, 2020

June 30, 2020

Warrants Issued

Warrants Exercised

March 31, 2021

Issuance of Preferred Series C-1 Agent Warrants

1 unchanged sentence

Issuance of Preferred Series C-3 Agent Warrants

Balance – December 31, 2020

The following table summarizes the Company’s outstanding Series C Agent Warrants as of December 31, 2020:

The following table summarizes the Company’s outstanding Series C Agent Warrants as of March 31, 2021:

Series C Agent Warrants

1 unchanged sentence

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

Series B Preferred Stock common stock dividend

Series B Preferred Stock common stock dividend (note 8)

Deemed dividend recognized on beneficial conversion features of Series C Preferred stock issuance (note 8)

Non-cash issue costs (note 8)

Issue costs in accounts payable (note 7)

Cashless exercise of Series C warrants (note 8)

Income taxes paid

11 unchanged sentences

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

As at December 31, 2020, the Company’s milestone payment liability was measured using level 3 inputs (note 3).

December 31, 2020

As at March 31, 2021, the Company’s milestone payment liability was measured using level 3 inputs (note 3).

March 31, 2021

Milestone payment liability

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 $ 5 1 6 ,027 as at December 3 1 , 2020 .

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 $ 523 as of March 31, 2021.

Subsequent events

Subsequent to December 31, 2020, 2,276,814 stock purchase warrants were exercised at $1.00 per share for gross cash proceeds of $2,276,814.

In addition, 471,283 warrants were exercised on a cashless basis for 257,979 shares of common stock.

The Company also issued 100,000 stock purchase warrants for services at an exercise price of $1.47 per share and 12,500 warrants issued for services at an exercise price of $30.00 per share expired.

Subsequent to March 31, 2021, the Company’s Board of Directors approved an increase in the Company’s authorized common share capital from 95,000 shares of common stock to 175,000 shares of common stock.

In addition, the Board of Directors approved an increase to the number of shares available under the 2017 Omnibus Equity Incentive Plan from 6,700 shares to 13,000 shares.

Both of these matters require stockholder approval at the Company’s annual general meeting of stockholders being held on June 25, 2021.

Subsequent to March 31, 2021, 1,206 stock purchase warrants exercisable at $ 3.18 per share and 10 exercisable at $ 40 per share expired.

Series C Preferred Stock

Subsequent to December 31, 2020, 1,515 shares of Series C-1 Preferred Stock were converted into 1,306,041 shares of common stock, 912 shares of Series C-2 Preferred Stock were converted into 751,239 shares of common stock, and 150 shares of Series C-3 Preferred Stock were converted into 130,436 shares of common stock.

Subsequent to March 31, 2021, 125 shares of Series C-1 Preferred Stock were converted into 107,759 shares of common stock, 50 shares of Series C-2 Preferred Stock were converted into 41,188 shares of common stock, and 636 shares of Series C-3 Preferred Stock were converted into 553,047 shares of common stock.

Series B Preferred Stock

Subsequent to December 31, 2020, 6,250 shares of Series B Preferred Stock were converted into 1,563 shares of common stock.

On April 29, 2021, all remaining shares of Series B Preferred Stock were converted into shares of common stock as a result of mandatory conversion corresponding to the fifth anniversary of their issuance.

As a result, 601 shares of Series B Preferred Stock were converted into 150 shares of common stock.

Stock Options

Subsequent to December 31, 2020, 33,750 stock options were exercised at $0.61 per share for gross proceeds of $20,588.

The Company has evaluated its subsequent events from December 31, 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.

Subsequent to March 31, 2021, 75 stock options were issued exercisable at $ 1.37 per share until April 29, 2031.

The Company has evaluated its subsequent events from March 31, 2021 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 above.

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