EX-99.1 2 ex99-1.htm

 

Exhibit 99.1

 

BRIAPRO THERAPEUTIC CORP.

CONDESED INTERIM FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTH PERIOD ENDED JANUARY 31, 2024

(Unaudited)

(Expressed in United States Dollars)

 

NOTICE OF NO AUDITOR REVIEW OF THE

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

In accordance with National Instrument 51-102 Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of these condensed interim financial statements, they must be accompanied by a notice indicating that the condensed interim financial statements have not been reviewed by an auditor.

 

The accompanying unaudited condensed interim financial statements of BriaPro Therapeutics Corp. (“BriaPro”, the “Company”) for the three and six months periods ended January 31, 2024 have been prepared by and are the responsibility of the Company’s management, and have not been reviewed by the Company’s auditors.

 

F-1
 

 

BriaPro Therapeutics Corp.

Unaudited Condensed Interim Statements of Financial Position

As at January 31, 2024

(Expressed in US Dollars)

 

  

January 31, 2024

   July 31, 2023 
         
ASSETS          
           
CURRENT ASSETS:          
Cash and cash equivalents  $1   $1 
Total current assets   1    1 
           
NON-CURRENT ASSETS:          
Intangible assets, net (Note 5)   207,431    - 
Total non-current assets   207,431    - 
           
Total assets  $207,432   $1 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
           
CURRENT LIABILITIES:          
Due to related parties (Note 8)  $196,549   $- 
Accrued expenses and other payables   54,129    - 
Total current liabilities   250,678    - 
           
NON-CURRENT LIABILITIES:          
Warrant liability (Note 6)   188,121    - 
Total non-current liabilities   188,121    - 
           
SHAREHOLDERS’ EQUITY (DEFICIT):          
Share capital (Note 6)   1    1 
Share-based payment reserve (Note 6)   34,514    - 
Accumulated deficit   (265,882)   - 
Total shareholders’ equity (deficit)   (231,367)   1 
           
Total liabilities and shareholders’ equity (deficit)  $207,432   $1 

 

These Condensed interim financial statements were approved and authorized for issue on behalf of the Board of Directors on April 1, 2024 by:

 

On behalf of the Board:    
     
“Martin Schmieg”   “William Williams”
Director   Director

 

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

 

F-2
 

 

BriaPro Therapeutics Corp.

Unaudited Condensed Interim Statement of Operations and Comprehensive Loss

For the three and six months ended January 31, 2024

(Expressed in US Dollars)

 

  

Three months ended
January 31,

   Six months ended
January 31,		 
  

2024

  

2024

 
  

(Unaudited)

  

(Unaudited)

 
Research and development expenses (Note 8 and 9)  $104,103    168,536 
General and administrative expenses (Note 8 and 10)   21,191    88,494 
Operating Loss   (125,294)   (257,057)
Change in fair value of warrant liability (Note 6d)   7,349    11,086 
Total operating loss and comprehensive loss   (117,934)   (245,960)
Basic and diluted weighted average loss per share   (0.004)   (0.008)
Basic and diluted weighted average number of shares  $31,789,738    31,789,738 

 

(*) The Company was incorporated on May 15, 2023 and therefore no comparative numbers are presented.

 

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

 

F-3
 

 

BriaPro Therapeutics Corp.

Condensed Interim Statement of Changes in Shareholder’s Equity (Deficit)

For the three and six months ended January 31, 2024

(Unaudited)

(Expressed in US Dollars)

 

   Shares   Amount   Share
based
payment
reserve		   Accumulated deficit   Total
shareholder’s
equity
(Deficit)		 
Balance, May 15, 2023   -    -    -   $-   $- 
Founder shares   1   $1    -    -    1 
Loss for the period        -    -    -    - 
Balance July 31, 2023   1   $1    -   $-   $- 
Issuance of shares and options pursuant to the Arrangement   47,945,177    -    34,514    (19,922)   14,592 
Loss for the period   -    -    -    (245,960)   (245,960)
Balance, January 31, 2024   47,945,178   $1    34,514   $(265,882)  $(231,367)

 

  

Shares

   Amount  

Share
based
payment
reserve

  

Accumulated

deficit

  

Total

shareholder’s

equity

(Deficit)

 
Balance October 31, 2023   47,945,178   $1    34,514   $(147,948)  $(113,433)
Loss for the period        -    -    (117,934)   (117,934)
Balance, January 31, 2024   47,945,178   $1    34,514   $(265,882)  $(231,367)

 

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

 

F-4
 

 

BriaPro Therapeutics Corp.

Condensed Interim Statement of Cash Flows

For the six months ended January 31, 2024

(Expressed in US Dollars)

 

  

For the six

Months Ended

January 31, 2024(*)

 
Cash flow from operating activities     
Net loss  $(245,960)
Adjustments to reconcile net loss to net cash used in operating activities:     
Depreciation and amortization   6,368 
Change in fair value of warrants   (11,086)
Changes in assets and liabilities:     
Increase in due to related parties   196,549 
Increase in accrued expenses and other payables   54,129 
Total cash flow from operating activities   - 
      
Change in cash and cash equivalents   - 
Cash and cash equivalents at beginning of the period   1 
Cash and cash equivalents at end of the period  $1 
      
Significant non-cash transactions     
Intangibles acquired pursuant to the Arrangement  $(19,922)

 

(*) The Company was incorporated on May 15, 2023 and therefore no comparative numbers are presented.

 

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

 

F-5
 

 

BriaPro Therapeutics Corp.

Notes to the Condensed Interim Financial Statements

For the six months ended January 31, 2024

(Expressed in US Dollars)

 

NOTE 1: NATURE OF OPERATIONS AND GOING CONCERN

 

  a. BriaPro Therapeutics Corp. (“BriaPro” or the “Company”) was incorporated under the Business Corporations Act (British Columbia) on May 15, 2023. As of July 31, 2023 the Company was inactive, however, following the completion of the Arrangement (as defined below), BriaPro is now a pre-clinical immuno-oncology biotechnology company with multiple assets, specifically Bria-TILsRx™, and PKCδ inhibitors for multiple indications including cancer. The Company’s head office is located at 235 15th Street, Suite 300, West Vancouver B.C, V7T 2X1, Canada. The Company is an unlisted reporting issuer in Canada.
     
  b

On August 31, 2023 (the “Effective Date”), the Company and Briacell Therapeutics Corp, the Company’s holding company, and immune-oncology biotechnology company listed on the Toronto Stock Exchange and NASDAQ (“Briacell”), closed a plan of arrangement spinout transaction (the “Arrangement”) pursuant to which certain assets of the Briacell, including Bria-TILsRx™ and protein kinase C delta (PKCδ) inhibitors for multiple indications including cancer (the “BriaPro Assets”), were spun-out to the Company. See note 6 for details.

 

Pursuant to the terms of the Arrangement, the Company has acquired the entire right and interest in and to the BriaPro Assets in consideration for the issuance by the Company to Briacell of the Company’s common shares. Under the terms of the Arrangement, for each BriaCell share held immediately prior to closing, BriaCell Shareholders receive one (1) common share of BriaPro (“Warrant Shares”).

 

As a result of the Arrangement, 47,945,178 common shares were issued and outstanding and 2,131,400 stock options and 19,100 RSU’s were issued. BriaCell beneficially owns or controls approximately 31,963,452 common shares, representing 2/3rd of the issued and outstanding common shares.

 

In accordance with IFRS, management determined that the Arrangement does not meet the definition of a business combination as the BriaPro Assets met the concentration test. Further, management asserts that BriaPro had not yet achieved commercial operations and was still in the Research stage at the time of the Arrangement (hence there were no significant inputs, processes and outputs as defined in IFRS 3 as characteristics of a business).

 

Consequently, the Transaction has been recorded as an asset acquisition and the Company recorded the carrying value of the intangible assets acquired from Briacell.

 

The shares, options and RSU’s issued on the Effective Date along with the Warrant Share obligation are considered as part of the transaction. The carrying value of the BriaPro Assets at the Effective Date were $213,800. The warrants will be recorded as a liability at their fair value on the Effective Date, and revalued at reach reporting period. The options and RSU’s will be recorded at their fair value on the Effective Date in the share based payments reserve and the balance will be recorded in share capital.

 

The table below summarizes the breakdown of the consideration at the Effective date:

 

  

August 31, 2023

 
     
Value of the assets transferred  $213,800 
      
Accumulated Deficit  $(19,921)
Warrants   199,207 
Options and RSU’s   34,514 
Total consideration paid  $213,800 

 

   

Transition Services Agreement

 

On August 31, 2023, the Company and BriaPro executed a transition services agreement (the “Transition Agreement”), pursuant to which BriaCell will provide certain research and development and head office services (the “Services”) to BriaPro for a fixed monthly fee of $20,000.

 

Briacell and BriaPro acknowledged the transitional nature of the Services and accordingly, as promptly as practicable, BriaPro agreed to use commercially reasonable efforts to transition each Service to its own internal organization or to obtain alternate third party providers to provide the Services.

     
  c. The accompanying unaudited condensed interim financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business for the foreseeable future. The Company has incurred losses of $265,882 since incorporation, is currently in the pre-clinical research stage and has not commenced commercial operations. The Company’s ability to continue as a going concern is dependent upon its ability to attain future profitable operations and to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company expects to incur further losses through to the completion of the research and development of any therapy; the nature of a development stage immune-oncology company requires the raising of financial capital to support its clinical development programs and administrative costs. The uncertainty of the Company’s ability to raise such financial capital casts significant doubt on the Company’s ability to continue as a going concern. These condensed interim financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company not be able to continue as a going concern.

 

F-6
 

 

BriaPro Therapeutics Corp.

Notes to the Condensed Interim Financial Statements

For the six months ended January 31, 2024

(Expressed in US Dollars)

 

NOTE 2: BASIS OF PRESENTATION

 

a. Statement of Compliance:

 

The Company prepares its unaudited condensed interim consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) using the accounting policies described herein as issued by International Accounting Standards Board (“IASB”) and International Financial Reporting Interpretations Committee (“IFRIC”) interpretations. These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34 Interim Financial Reporting.

 

The policies applied in these condensed interim consolidated financial statements are based on IFRS effective as of January 31, 2024.

 

The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of the audited financial statements as of July 31, 2023. The accompanying condensed interim financial statements should be read in conjunction with the Company’s audited financial statements for the period ended July 31, 2023.

 

b. Basis of presentation

 

The condensed interim financial statements are prepared on a going concern basis and have been presented in United States dollars which is the Company’s reporting currency.

 

c. Basis of Measurement:

 

These condensed interim financial statements have been prepared on a going concern basis, under the historical cost basis, except for financial instruments which have been measured at fair value.

 

d. Functional Currency and Presentation Currency:

 

The functional currency is the currency that best reflects the economic environment in which the Company operates and conducts its transactions. The Company’s management believes that the functional currency of the Company is the U.S. dollar.

 

Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are remeasured into U.S. dollars at each reporting period end. All transaction gains and losses of the remeasured monetary financial position items are reflected in the statement of operations and comprehensive loss as financing income or expenses as appropriate.

 

F-7
 

 

BriaPro Therapeutics Corp.

Notes to the Condensed Interim Financial Statements

For the six months ended January 31, 2024

(Expressed in US Dollars)

 

NOTE 3: SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

 

The accounting policies and use of estimates and judgments described below have been applied consistently in these condensed interim financial statements.

 

The preparation of condensed interim financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed interim financial statements and accompanying notes. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the condensed interim financial statements, and the reported amount of expenses during the reporting periods. Actual results could differ from those estimates.

 

Going Concern

 

Preparation of the condensed interim financial statements is on a going concern basis, which contemplates the realization of assets and payments of liabilities in the ordinary course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets, including its intangible assets and to meet its liabilities as they become due.

 

Intangible assets

 

Intangible assets are tested for impairment annually or more frequently if there is an indication of impairment. The carrying value of intangibles with definite lives is reviewed each reporting period to determine whether there is any indication of impairment. If there are indications of impairment the impairment analysis is completed and if the carrying amount of an asset exceeds its recoverable amount, the asset is impaired and impairment loss is recognized.

 

Warrant liability and equity incentive grants

 

The Company uses the Black-Scholes option-pricing model to estimate fair value of the warrant liability at each reporting date and options granted under the Company’s equity inceptive plan. The key assumptions used in the model are the share price of the Company and the expected future volatility in the price of the Company’s shares and the expected life of the instrument.

 

F-8
 

 

BriaPro Therapeutics Corp.

Notes to the Condensed Interim Financial Statements

For the six months ended January 31, 2024

(Expressed in US Dollars)

 

NOTE 4: INTANGIBLE ASSETS. NET

 

Acquired intangible assets with finite lives consisted of the following as of January 31, 2024 and July 31, 2023:

 

  

January 31, 2024

   July 31, 2023 
         
Patents  $213,800   $- 
Gross intangible assets   -    - 
Less – accumulated amortization   (6,369)   - 
Intangible assets, net  $207,431   $- 

 

The attributable intellectual property relates to the BriaPro Assets acquired in the Arrangement, which the Company is amortizing over 14 years, consistent with its accounting policy.

 

NOTE 5: SHARE CAPITAL

 

a) Authorized share capital

 

The authorized share capital consists of an unlimited number of common shares with no par value (“Share”).

 

b) Issued share capital

 

  (i) On May 15, 2023, the Company issued one (1) incorporation Share to BriaCell in consideration for USD$1.00.

 

  (ii) On August 31, 2023, pursuant to the Arrangement, the Company issued 47,945,177 Shares.

 

c) Share Purchase Warrants

 

Pursuant to the Arrangement, each BriaCell warrant (“BriaCell Warrant”) shall, in accordance with its terms, entitle the holder thereof to receive, upon the exercise thereof, one BriaCell Share and one BriaPro Share for the original exercise price.

 

Upon the exercise of BriaCell Warrants, BriaCell shall, as agent for BriaPro, collect and pay to BriaPro an amount for each one (1) BriaPro Share so issued that is equal to the exercise price under the BriaCell Warrant multiplied by the fair market value of one (1) BriaPro Share at the Effective Date divided by the total fair market value of one (1) BriaCell Share and one (1) BriaPro Share at the Effective Date (“BriaPro Pro-rata Warrant Proceeds”).

 

As of the date of this report there are issued and outstanding an aggregate of 8,168,302 BriaCell Warrants as follows:

 

Number of

Briacell

Warrants (*)

  

BriaPro Pro-rata

Warrant Proceeds(*)

   Expiry Date
 51,698   $1,062   November 16, 2025
 3,896,809    106,216   February 26, 2026 – April 26, 2026
 4,173,143    132,536   June 7, 2026 - December 7, 2026
 4,890    100   November 16, 2025
 17,074    465   February 26, 2026
 24,688    784   June 7, 2026
 8,168,302   $241,163    

 

(*) The number of Shares issuable and proceeds, should the BriaCell Warrants be exercised.

 

F-9
 

 

BriaPro Therapeutics Corp.

Notes to the Condensed Interim Financial Statements

For the six months ended January 31, 2024

(Expressed in US Dollars)

 

NOTE 5: SHARE CAPITAL (CONTINUED)

 

d) Warrant liability continuity

 

  (i) The following table presents the summary of the changes in the fair value of the warrants recorded as a liability on the Balance Sheet (*):

 

  

Warrants liability

 
Balance as of July 31, 2023  $- 
      
Liability as of the Arrangement date (August 31, 2023)   199,207 
Change in fair value during the period (*)   (11,086)
      
Balance as of January 31, 2024  $188,121 

 

(*) The warrants were issued by Briacell contain terms that require the warrants to be recorded as a liability at fair value under IFRS. As a result, these warrants are valued at the end of each reporting period. For the six months ended January 31, 2024, the Company recorded a gain on the revaluation of the total warrant liability of $11,086 in the condensed interim statements of operations and comprehensive loss.

 

The key inputs used in the valuation of the of the warrants as of January 31, 2024 were as follows:

 

  

August 31, 2023

(Effective Date)

   January 31, 2024 
         
Share price  $0.0365   $0.0365 
Exercise price  $0.0206-0.0318    $ 0.0206-0.0318  
Expected life (years)   2.21-3.27     1.79-2.85  
Volatility   100%   100%
Dividend yield   0%   0%
Risk free rate   4.40%   3.77%

 

NOTE 6: SHARE-BASED COMPENSATION

 

The BriaPro Board adopted the BriaPro incentive plan, The purpose of the BriaPro incentive plan is to allow BriaPro to issue stock options, performance share units (“PSUs”), restricted share units (“RSUs”), and deferred share units (“DSUs” and together with the PSUs and RSUs, “Share Units”) to directors, officers, employees and consultants, as additional compensation, and as an opportunity to participate in the success of BriaPro. The granting of such Awards is intended to align the interests of such persons with that of the shareholders (the “Omnibus Plan”).

 

Pursuant to the Arrangement, all Briacell option holders received the same amount of BriaPro options (“BriaPro Option”) under the BriaPro incentive plan. The exercise price of the BriaCell options will be apportioned between the BriaCell options and the BriaPro options, as follows:

 

Each one (1) BriaPro Option to acquire one (1) Share shall have an exercise price equal to the product obtained by multiplying the original exercise price of the BriaCell Option by the quotient obtained by dividing (A) the fair market value of a BriaPro Share at the Effective Date by (B) the aggregate fair market value of a BriaCell Share and a BriaPro Share at the Effective Date (“BriaPro Option Exercise Price”)

 

F-10
 

 

BriaPro Therapeutics Corp.

Notes to the Condensed Interim Financial Statements

For the six months ended January 31, 2024

(Expressed in US Dollars)

 

NOTE 6: SHARE-BASED COMPENSATION (CONTINUED)

 

a. The following table summarizes the number of options granted under the Omnibus Plan for the for the six month period ended January 31, 2024 and related information:

 

  

Number of

options

  

 

Weighted

average

exercise price

  

Weighted average

remaining

contractual

term

(in years)

  

Aggregate

intrinsic value

 
                 
Balance as of July 31, 2023   -                     
Granted on the Arrangement date (*)   2,131,400    0.0957    3.47    - 
Forfeited   -    -           
Expired   -    -           
Balance as of January 31, 2024   2,131,400    0.0957    3.05    - 
                     
Exercisable as of January 31, 2024   1,693,718   $0.0959    2.83    - 

 

(*) The options granted on the Arrangement dates had a fair value of $38,628. based on the Black-Scholes option pricing model using the following assumptions: share price - $0.0365; exercise price - $0.0656-0.1310; expected life – 2.58 - 4.81 years; annualized volatility – 100%; dividend yield – 0%; risk free rate – 3.89 - 4.40%.

 

As the date of this report, the Company has 2,131,400 stock options outstanding as follows:

 

BriaPro Option

Exercise

Price

  

 

Options

outstanding

   Expiry Date
         
$0.0933    440,000   June 20, 2028
$0.1108    21,000   February 27, 2028
$0.0984    180,100   August 02, 2027
$0.0729    31,000   May 20, 2027
$0.1162    150,000   February 16, 2027
$0.1310    524,700   January 13, 2027
$0.1165    12,600   November 01, 2026
$0.0888    100,000   September 01, 2026
$0.0656    60,000   April 19, 2026
$0.0656    612,000   March 29, 2026
      2,131,400    

 

b. Restricted Share Units

 

The following table summarizes the number of RSU’s granted to directors under the Omnibus Plan for six month period ended January 31, 2024:

 

  

Number of RSU’s

outstanding

  

Aggregate

intrinsic value

 
Balance, July 31, 2023   -   $- 
Granted (i)   19,200    700 
Balance, January 31, 2024   19,200   $700 

 

  (i) On August 31, 2023, pursuant to the Arrangement and the Omnibus Plan, the Company issued 19,200 fully vested RSU’s to the CEO and have an aggregate intrinsic value of $700.

 

F-11
 

 

BriaPro Therapeutics Corp.

Notes to the Condensed Interim Financial Statements

For the six months ended January 31, 2024

(Expressed in US Dollars)

 

NOTE 7: RELATED PARTY TRANSACTIONS AND BALANCES

 

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making operating and financial decisions. This would include the Company’s senior management, who are considered to be key management personnel by the Company. Parties are also related if they are subject to common control or significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

 

As of January 31, 2024, pursuant to the Transition Agreement, the balance owing to BriaCell group companies is $196,549 comprising the fixed monthly services of $100,000 and direct expenses incurred by Briacell on behalf of BriaPro $96,549.

 

During the six-month period ended January 31, 2024, the Company incurred Services and direct expense paid for by Briacell in the amount of $196,549.

 

NOTE 8: RESEARCH AND DEVELOPMENT EXPENSES

 

   Three-months ended
January 31 2024		   Six-months ended
January 31 2024		 
         
Wages and Salaries  $59,500   $100,500 
Investigational drug costs   41,600    60,880 
Supplies   3,003    7,183 
   $104,103   $168,563 

 

NOTE 9: GENERAL AND ADMINISTATIVE EXPENSES

 

   Three-months ended
January 31 2024		   Six-months ended
January 31 2024		 
         
Consulting  $15,000   $25,000 
Amortization   3,818    6,368 
Professional fees   1,880    56,633 
Regulatory, filing and transfer agent fees   493    493 
   $21,191   $88,494 

 

F-12