|
|
|
FSD Pharma Inc.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date: |
November 13, 2020 |
|
By: |
/s/ Donal Carroll
|
|
|
|
|
Donal Carroll, Chief Financial Officer
|
EXHIBIT INDEX
Exhibit
|
|
Description
|
|
|
|
|
||
Exhibit 99.2 |
Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2020 and 2019 | |
Exhibit 99.3 |
News Release dated November 12, 2020 |
For the three months ended
September 30,
|
For the nine months ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
[restated]
|
[restated]
|
|||||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
General and administrative
|
3,734,788
|
3,044,731
|
10,281,452
|
7,967,714
|
||||||||||||
External research and development fees
|
4,668,253
|
—
|
7,147,198
|
—
|
||||||||||||
Share-based payments
|
6,870,177
|
6,793,614
|
10,417,063
|
12,225,360
|
||||||||||||
Depreciation and amortization
|
1,285,169
|
1,280,951
|
3,898,047
|
1,280,951
|
||||||||||||
Legal provision
|
928,541
|
—
|
928,541
|
—
|
||||||||||||
Impairment of right-of-use asset
|
—
|
—
|
119,447
|
—
|
||||||||||||
Total operating expenses
|
17,486,928
|
11,119,296
|
32,791,748
|
21,474,025
|
||||||||||||
Net loss from continuing operations
|
(16,486,272
|
)
|
(14,710,703
|
)
|
(32,550,955
|
)
|
(29,985,166
|
)
|
||||||||
Net loss from discontinued operations
|
(1,548,110
|
)
|
(2,251,304
|
)
|
(3,899,292
|
)
|
(4,964,393
|
)
|
||||||||
Net loss for the period
|
(18,034,382
|
)
|
(16,962,007
|
)
|
(36,450,247
|
)
|
(34,949,559
|
)
|
As at September 30,
|
As at December 31,
|
|||||||||||||||
2020
|
2019
|
Change
|
||||||||||||||
$
|
$
|
$ |
%
|
|||||||||||||
Cash
|
18,660,730
|
7,932,737
|
10,727,993
|
135
|
%
|
|||||||||||
Total assets
|
56,202,793
|
57,447,463
|
(1,244,670
|
)
|
-2
|
%
|
||||||||||
Total liabilities
|
13,641,023
|
9,225,376
|
4,415,647
|
48
|
%
|
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
[Restated]
|
Change
|
2020
|
2019
[Restated]
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
%
|
$
|
$
|
$ |
%
|
|||||||||||||||||||||||||
Expenses
|
||||||||||||||||||||||||||||||||
General and administrative
|
3,734,788
|
3,044,731
|
690,057
|
23
|
%
|
10,281,452
|
7,967,714
|
2,313,738
|
29
|
%
|
||||||||||||||||||||||
External research and development fees
|
4,668,253
|
—
|
4,668,253
|
100
|
%
|
7,147,198
|
—
|
7,147,198
|
100
|
%
|
||||||||||||||||||||||
Share-based payments
|
6,870,177
|
6,793,614
|
76,563
|
1
|
%
|
10,417,063
|
12,225,360
|
(1,808,297
|
)
|
-15
|
%
|
|||||||||||||||||||||
Depreciation and amortization
|
1,285,169
|
1,280,951
|
4,218
|
0
|
%
|
3,898,047
|
1,280,951
|
2,617,096
|
204
|
%
|
||||||||||||||||||||||
Legal provision
|
928,541
|
—
|
928,541
|
100
|
%
|
928,541
|
—
|
928,541
|
100
|
%
|
||||||||||||||||||||||
Impairment of right-of-use asset
|
—
|
—
|
-
|
100
|
%
|
119,447
|
—
|
119,447
|
100
|
%
|
||||||||||||||||||||||
Total operating expenses
|
17,486,928
|
11,119,296
|
6,367,632
|
57
|
%
|
32,791,748
|
21,474,025
|
11,317,723
|
53
|
%
|
||||||||||||||||||||||
Loss from continuing operations
|
(17,486,928
|
)
|
(11,119,296
|
)
|
(6,367,632
|
)
|
57
|
%
|
(32,791,748
|
)
|
(21,474,025
|
)
|
(11,317,723
|
)
|
53
|
%
|
||||||||||||||||
Other income (loss)
|
30,793
|
(3,150
|
)
|
33,943
|
-1078
|
%
|
(4,902
|
)
|
(3,150
|
)
|
(1,752
|
)
|
56
|
%
|
||||||||||||||||||
Finance expense
|
81,054
|
95,862
|
(14,808
|
)
|
-15
|
%
|
269,326
|
95,862
|
173,464
|
181
|
%
|
|||||||||||||||||||||
Gain on settlement of financial liability
|
(290,866
|
)
|
—
|
(290,866
|
)
|
100
|
%
|
(344,580
|
)
|
—
|
(344,580
|
)
|
100
|
%
|
||||||||||||||||||
Loss (gain) on change in fair value of
warrants and derivative liability
|
(894,249
|
)
|
1,365,597
|
(2,259,846
|
)
|
-165
|
%
|
(1,737,550
|
)
|
3,122,035
|
(4,859,585
|
)
|
-156
|
%
|
||||||||||||||||||
Loss on changes in fair value of investments
|
72,612
|
2,133,098
|
(2,060,486
|
)
|
-97
|
%
|
1,576,913
|
5,296,394
|
(3,719,481
|
)
|
-70
|
%
|
||||||||||||||||||||
Net loss from continuing operations
|
(16,486,272
|
)
|
(14,710,703
|
)
|
(1,775,569
|
)
|
12
|
%
|
(32,550,955
|
)
|
(29,985,166
|
)
|
(2,565,789
|
)
|
9
|
%
|
||||||||||||||||
Net loss from discontinued operations
|
(1,548,110
|
)
|
(2,251,304
|
)
|
703,194
|
-31
|
%
|
(3,899,292
|
)
|
(4,964,393
|
)
|
1,065,101
|
-21
|
%
|
||||||||||||||||||
Net loss for the period
|
(18,034,382
|
)
|
(16,962,007
|
)
|
(1,072,375
|
)
|
6
|
%
|
(36,450,247
|
)
|
(34,949,559
|
)
|
(1,500,688
|
)
|
4
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
%
|
$
|
$
|
$ |
%
|
|||||||||||||||||||||||||
Professional fees
|
1,349,964
|
1,568,645
|
(218,681
|
)
|
-14
|
%
|
2,971,990
|
2,855,342
|
116,648
|
4
|
%
|
|||||||||||||||||||||
General office, insurance and adminsitration expenditures
|
1,259,176
|
1,134,059
|
125,117
|
11
|
%
|
3,613,472
|
1,736,513
|
1,876,959
|
108
|
%
|
||||||||||||||||||||||
Consulting fees
|
407,806
|
484,000
|
(76,194
|
)
|
-16
|
%
|
1,781,442
|
1,635,242
|
146,200
|
9
|
%
|
|||||||||||||||||||||
Salaries, wages and benefits
|
954,870
|
431,260
|
523,610
|
121
|
%
|
2,237,188
|
1,877,187
|
360,001
|
19
|
%
|
||||||||||||||||||||||
Stock promotion
|
90,025
|
436,797
|
(346,772
|
)
|
-79
|
%
|
647,765
|
2,456,519
|
(1,808,754
|
)
|
-74
|
%
|
||||||||||||||||||||
Building and facility costs
|
209,357
|
88,941
|
120,416
|
135
|
%
|
470,769
|
854,173
|
(383,404
|
)
|
-45
|
%
|
|||||||||||||||||||||
Foreign exchange loss
|
122,347
|
—
|
122,347
|
100
|
%
|
167,350
|
—
|
167,350
|
100
|
%
|
||||||||||||||||||||||
4,393,545
|
4,143,702
|
249,843
|
6
|
%
|
11,889,976
|
11,414,976
|
475,000
|
4
|
%
|
|||||||||||||||||||||||
Allocated to:
|
||||||||||||||||||||||||||||||||
Continuing operations
|
3,734,788
|
3,044,731
|
690,057
|
23
|
%
|
10,281,452
|
7,967,714
|
2,313,738
|
29
|
%
|
||||||||||||||||||||||
Discontinued operations
|
658,757
|
1,098,971
|
(440,214
|
)
|
-40
|
%
|
1,608,524
|
3,447,262
|
(1,838,738
|
)
|
-53
|
%
|
||||||||||||||||||||
Professional fees
|
||||||||||||||||||||||||||||||||
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
%
|
$
|
$
|
$ |
%
|
|||||||||||||||||||||||||
Professional fees
|
1,349,964
|
1,568,645
|
(218,681
|
)
|
-14
|
%
|
2,971,990
|
2,855,342
|
116,648
|
4
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
%
|
$
|
$
|
$ |
%
|
|||||||||||||||||||||||||
Insurance, shareholders and public company costs
|
719,515
|
266,165
|
453,350
|
170
|
%
|
2,244,584
|
366,267
|
1,878,317
|
513
|
%
|
||||||||||||||||||||||
Travel, meals and entertainment
|
140,165
|
294,167
|
(154,002
|
)
|
-52
|
%
|
527,795
|
539,344
|
(11,549
|
)
|
-2
|
%
|
||||||||||||||||||||
Office and general administrative
|
399,496
|
573,727
|
(174,231
|
)
|
-30
|
%
|
841,093
|
830,902
|
10,191
|
1
|
%
|
|||||||||||||||||||||
General office, insurance and adminsitration expenditures
|
1,259,176
|
1,134,059
|
125,117
|
11
|
%
|
3,613,472
|
1,736,513
|
1,876,959
|
108
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
|
%
|
$
|
$
|
$ |
|
%
|
|||||||||||||||||||||||
Consulting fees
|
407,806
|
484,000
|
(76,194
|
)
|
-16
|
%
|
1,781,442
|
1,635,242
|
146,200
|
9
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
|
%
|
$
|
$
|
$ |
|
%
|
|||||||||||||||||||||||
Salaries, wages and benefits
|
954,870
|
431,260
|
523,610
|
121
|
%
|
2,237,188
|
1,877,187
|
360,001
|
19
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
|
%
|
$
|
$
|
$ |
|
%
|
|||||||||||||||||||||||
Stock promotion
|
90,025
|
436,797
|
(346,772
|
)
|
-79
|
%
|
647,765
|
2,456,519
|
(1,808,754
|
)
|
-74
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
|
%
|
$
|
$
|
$ |
|
%
|
|||||||||||||||||||||||
Building and facility costs
|
209,357
|
88,941
|
120,416
|
135
|
%
|
470,769
|
854,173
|
(383,404
|
)
|
-45
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
|
%
|
$
|
$
|
$ |
|
%
|
|||||||||||||||||||||||
Foreign exchange loss
|
122,347
|
-
|
122,347
|
100
|
%
|
167,350
|
-
|
167,350
|
100
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
|
%
|
$
|
$
|
$ |
|
%
|
|||||||||||||||||||||||
External research and development fees
|
4,668,253
|
-
|
4,668,253
|
100
|
%
|
7,147,198
|
-
|
7,147,198
|
100
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
[Restated] | [Restated] | |||||||||||||||||||||||||||||||
$
|
$
|
$ |
|
%
|
$
|
$
|
$ |
|
%
|
|||||||||||||||||||||||
Share-based payments
|
6,870,177
|
6,793,614
|
76,563
|
1
|
%
|
10,417,063
|
12,225,360
|
(1,808,297
|
)
|
-15
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
|
%
|
$
|
$
|
$ |
|
%
|
|||||||||||||||||||||||
Depreciation and amortization
|
1,285,169
|
1,280,951
|
4,218
|
0
|
%
|
3,898,047
|
1,280,951
|
2,617,096
|
204
|
%
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
|
%
|
$
|
$
|
$ |
|
%
|
|||||||||||||||||||||||
Impairment of right-of-use asset
|
-
|
-
|
-
|
N/A
|
119,447
|
-
|
119,447
|
100
|
%
|
Entity
|
Instrument
|
Balance at December
31, 2019
|
Change in fair value through profit or loss
|
Proceeds
from sale
|
Balance at September 30, 2020
|
||||||||||||
$
|
$
|
$
|
$
|
||||||||||||||
Pharmadrug Inc.
|
Shares
|
339,060
|
527,723
|
(866,783
|
)
|
—
|
|||||||||||
Cannara Biotech Inc.
|
Shares
|
9,069,038
|
(1,325,546
|
)
|
(7,743,492
|
)
|
—
|
||||||||||
Clover Cannastrip
|
Shares
|
—
|
—
|
—
|
—
|
||||||||||||
HUGE Shops
|
Shares
|
760,868
|
(319,718
|
)
|
—
|
441,150
|
|||||||||||
SciCann Therapeutics
|
Shares
|
712,248
|
(37,095
|
)
|
—
|
675,153
|
|||||||||||
Solarvest BioEnergy Inc.
|
Shares
|
435,000
|
(180,000
|
)
|
—
|
255,000
|
|||||||||||
Solarvest BioEnergy Inc.
|
Warrants
|
116,650
|
(98,277
|
)
|
—
|
18,373
|
|||||||||||
Solarvest BioEnergy Inc.
|
Convertible debenture
|
348,000
|
(144,000
|
)
|
—
|
204,000
|
|||||||||||
11,780,864
|
(1,576,913
|
)
|
(8,610,275
|
)
|
1,593,676
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Revenue
|
7,682
|
488
|
19,293
|
488
|
||||||||||||
Cost of revenue
|
262,443
|
849,950
|
1,371,806
|
849,950
|
||||||||||||
Gross loss before fair value adjustments
|
(254,761
|
)
|
(849,462
|
)
|
(1,352,513
|
)
|
(849,462
|
)
|
||||||||
Fair value adjustments on inventory sold
|
—
|
—
|
(1,256
|
)
|
—
|
|||||||||||
Unrealized loss on changes in fair value of biological assets
|
—
|
132,966
|
221,835
|
308,490
|
||||||||||||
Gross loss
|
(254,761
|
)
|
(982,428
|
)
|
(1,573,092
|
)
|
(1,157,952
|
)
|
||||||||
Expenses
|
||||||||||||||||
General and administrative
|
658,757
|
1,098,971
|
1,608,524
|
3,447,262
|
||||||||||||
Depreciation and amortization
|
—
|
179,072
|
120,085
|
405,347
|
||||||||||||
Impairment of property, plant and equipment
|
515,052
|
—
|
515,052
|
—
|
||||||||||||
Total operating expenses
|
1,173,809
|
1,278,043
|
2,243,661
|
3,852,609
|
||||||||||||
Loss from discontinued operations
|
(1,428,570
|
)
|
(2,260,471
|
)
|
(3,816,753
|
)
|
(5,010,561
|
)
|
||||||||
Other income
|
(13,833
|
)
|
(9,167
|
)
|
(50,834
|
)
|
(46,168
|
)
|
||||||||
Loss on sale of equipment
|
133,373
|
—
|
133,373
|
—
|
||||||||||||
Net loss from discontinued operations
|
(1,548,110
|
)
|
(2,251,304
|
)
|
(3,899,292
|
)
|
(4,964,393
|
)
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||||||||||
$
|
$
|
$ |
|
%
|
$
|
$
|
$ |
|
%
|
|||||||||||||||||||||||
General office and administration
|
331,212
|
683,229
|
(352,017
|
)
|
-52
|
%
|
591,707
|
820,361
|
(228,654
|
)
|
-28
|
%
|
||||||||||||||||||||
Salaries, wages and benefits
|
118,189
|
326,801
|
(208,612
|
)
|
-64
|
%
|
546,049
|
1,772,728
|
(1,226,679
|
)
|
-69
|
%
|
||||||||||||||||||||
Building and facility costs
|
209,356
|
88,941
|
120,415
|
135
|
%
|
470,768
|
854,173
|
(383,405
|
)
|
-45
|
%
|
|||||||||||||||||||||
658,757
|
1,098,971
|
(440,214
|
)
|
-40
|
%
|
1,608,524
|
3,447,262
|
(1,838,738
|
)
|
-53
|
%
|
September 30, 2020
|
June 30,
2020
|
March 31,
2020
|
December 31, 2019
|
September 30, 2019
|
June 30,
2019
|
March 31,
2019
|
December 31, 2018
|
September 30,
2018
|
||||||||||||||||||||||||||||
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
||||||||||||||||||||||||||||
[restated]
|
[restated]
|
[restated]
|
||||||||||||||||||||||||||||||||||
Other income (loss)
|
(30,793
|
)
|
17,614
|
18,081
|
51,535
|
(3,150
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||
Net loss for the period
|
(18,034,382
|
)
|
(5,971,665
|
)
|
(12,444,200
|
)
|
(17,063,627
|
)
|
(16,962,007
|
)
|
(15,690,266
|
)
|
(2,297,286
|
)
|
(20,898,074
|
)
|
3,857,181
|
|||||||||||||||||||
Net loss per share - basic
|
(1.42
|
)
|
(0.66
|
)
|
(1.53
|
)
|
(2.16
|
)
|
(2.24
|
)
|
(2.24
|
)
|
(0.33
|
)
|
(3.05
|
)
|
0.58
|
|||||||||||||||||||
Net loss per share - diluted
|
(1.42
|
)
|
(0.66
|
)
|
(1.53
|
)
|
(2.16
|
)
|
(2.24
|
)
|
(2.24
|
)
|
(0.33
|
)
|
(3.05
|
)
|
0.50
|
Statement of Loss and Comprehensive Loss
|
For the three months ended September 30, 2019
|
|||||||||||
As previously reported
|
Adjustments
|
As revised
|
||||||||||
$
|
$
|
$
|
||||||||||
Share-based payments
|
6,205,323
|
588,291
|
6,793,614
|
|||||||||
Loss on change in fair value of derivative liability
|
1,700,000
|
(334,403
|
)
|
1,365,597
|
||||||||
Loss on changes in fair value of investments
|
2,075,717
|
57,381
|
2,133,098
|
|||||||||
Net loss for the period
|
(16,650,738
|
)
|
(311,269
|
)
|
(16,962,007
|
)
|
Statement of Loss and Comprehensive Loss
|
For the nine months ended September 30, 2019
|
|||||||||||
As previously reported
|
Adjustments
|
As revised
|
||||||||||
$
|
$
|
$
|
||||||||||
Share-based payments
|
11,891,380
|
333,980
|
12,225,360
|
|||||||||
Loss on change in fair value of derivative liability
|
1,700,000
|
1,422,035
|
3,122,035
|
|||||||||
Loss on changes in fair value of investments
|
5,296,394
|
—
|
5,296,394
|
|||||||||
Net loss for the period
|
(33,193,544
|
)
|
(1,756,015
|
)
|
(34,949,559
|
)
|
Statement of Loss and Comprehensive Loss
|
For the three months ended December 31, 2019
|
|||||||||||
As previously reported
|
Adjustments
|
As revised
|
||||||||||
$
|
$
|
$
|
||||||||||
Share-based payments
|
4,169,939
|
(333,980
|
)
|
3,835,959
|
||||||||
Loss on change in fair value of derivative liability
|
1,868,305
|
(1,422,035
|
)
|
446,270
|
||||||||
Net loss for the period
|
(18,819,642
|
)
|
(1,756,015
|
)
|
(17,063,627
|
)
|
As at
|
As at
|
|||||||||||||||
September 30,
|
December 31,
|
Change
|
||||||||||||||
2020
|
2019
|
$ |
%
|
|||||||||||||
ASSETS
|
||||||||||||||||
Current
|
||||||||||||||||
Cash
|
18,660,730
|
7,932,737
|
10,727,993
|
135
|
%
|
|||||||||||
Other receivables
|
4,726,545
|
2,070,055
|
2,656,490
|
128
|
%
|
|||||||||||
Prepaid expenses and deposits
|
1,127,506
|
430,381
|
697,125
|
162
|
%
|
|||||||||||
Inventories
|
—
|
942,939
|
(942,939
|
)
|
-100
|
%
|
||||||||||
24,514,781
|
11,376,112
|
13,138,669
|
115
|
%
|
||||||||||||
Assets held for sale
|
10,963,208
|
—
|
10,963,208
|
100
|
%
|
|||||||||||
35,477,989
|
11,376,112
|
24,101,877
|
212
|
%
|
||||||||||||
Non-current
|
||||||||||||||||
Investments
|
1,593,676
|
11,780,864
|
(10,187,188
|
)
|
-86
|
%
|
||||||||||
Right-of-use asset, net
|
—
|
127,410
|
(127,410
|
)
|
-100
|
%
|
||||||||||
Property, plant and equipment, net
|
—
|
11,804,145
|
(11,804,145
|
)
|
-100
|
%
|
||||||||||
Intangible assets, net
|
19,131,128
|
22,358,932
|
(3,227,804
|
)
|
-14
|
%
|
||||||||||
20,724,804
|
46,071,351
|
(25,346,547
|
)
|
-55
|
%
|
|||||||||||
Total assets
|
56,202,793
|
57,447,463
|
(1,244,670
|
)
|
-2
|
%
|
||||||||||
LIABILITIES
|
||||||||||||||||
Current
|
||||||||||||||||
Trade and other payables
|
3,290,037
|
4,467,826
|
(1,177,789
|
)
|
-26
|
%
|
||||||||||
Lease obligations
|
58,705
|
56,207
|
2,498
|
4
|
%
|
|||||||||||
Derivative liability
|
—
|
2,646,269
|
(2,646,269
|
)
|
-100
|
%
|
||||||||||
Warrants liability
|
3,477,581
|
—
|
3,477,581
|
100
|
%
|
|||||||||||
Legal liability
|
5,500,000
|
—
|
5,500,000
|
100
|
%
|
|||||||||||
Notes payable
|
1,202,105
|
1,908,412
|
(706,307
|
)
|
-37
|
%
|
||||||||||
13,528,428
|
9,078,714
|
4,449,714
|
49
|
%
|
||||||||||||
Non-current
|
||||||||||||||||
Lease obligations
|
112,595
|
146,662
|
(34,067
|
)
|
-23
|
%
|
||||||||||
Total liabilities
|
13,641,023
|
9,225,376
|
4,415,647
|
48
|
%
|
|||||||||||
SHAREHOLDERS' EQUITY
|
||||||||||||||||
Class A share capital
|
201,500
|
201,500
|
—
|
0
|
%
|
|||||||||||
Class B share capital
|
126,884,138
|
97,815,149
|
29,068,989
|
30
|
%
|
|||||||||||
Warrant reserve
|
5,748,629
|
5,745,034
|
3,595
|
0
|
%
|
|||||||||||
Contributed surplus
|
24,279,156
|
23,091,099
|
1,188,057
|
5
|
%
|
|||||||||||
Foreign exchange translation reserve
|
416,599
|
(112,690
|
)
|
529,289
|
-470
|
%
|
||||||||||
Accumulated deficit
|
(114,968,252
|
)
|
(78,518,005
|
)
|
(36,450,247
|
)
|
46
|
%
|
||||||||
Total shareholders' equity
|
42,561,770
|
48,222,087
|
(5,660,317
|
)
|
-12
|
%
|
||||||||||
Total liabilities and shareholders' equity
|
56,202,793
|
57,447,463
|
(1,244,670
|
)
|
-2
|
%
|
|
$ |
|||
Property and plant
|
10,963,208
|
|||
|
Nine months ended September 30,
|
||||||||
2020
|
2019
|
|||||||
$
|
$
|
|||||||
Cash
|
||||||||
Net cash provided by (used in):
|
||||||||
Cash used in continuing operating activities
|
(18,383,235
|
)
|
(6,897,923
|
)
|
||||
Cash used in discontinued operating activities
|
(704,574
|
)
|
(7,349,678
|
)
|
||||
Cash used in operating activities
|
(19,087,809
|
)
|
(14,247,601
|
)
|
||||
Cash provided by continuing investing activities
|
8,610,275
|
2,329
|
||||||
Cash used in discontinued investing activities
|
48,673
|
(331,970
|
)
|
|||||
Cash provided by (used in) investing activities
|
8,658,948
|
(329,641
|
)
|
|||||
Cash provided by continuing financing activities
|
21,156,854
|
694,008
|
||||||
Net (decrease) increase in cash during the period
|
10,727,993
|
(13,883,234
|
)
|
•
|
The Company paid expenses of $1,341,972 to a company owned by the CEO for the nine months ended September 30, 2020, included in the consolidated statement of loss and comprehensive loss under various expense
line categories. As at September 30, 2020, the CEO has repaid a related party loan of $472,920 for withholding taxes paid by the Company on behalf of the CEO in relation to the Class B common shares issue during the nine months ended
September 30, 2020.
|
•
|
As at September 30, 2020, the President of FSD BioSciences Division has repaid a related party loan of $29,079 for withholding taxes paid by the Company on behalf of the President of FSD BioSciences Division
in relation to the Class B common shares issued during the nine months ended September 30, 2020.
|
•
|
The Company pays independent directors $40,000 per annum, with the Chairman of each respective committee receiving an additional $10,000 per annum. Directors compensation for the nine months ended September
30, 2020 was $244,378 (2019 – $95,000) which included $234,378 recognized as share-based compensation. As of March 31, 2020, directors have received their compensation for the 2020 fiscal year in advance, through the issuance of Class B
shares.
|
•
|
For the nine months ended September 30, 2020, the Company issued 1,676,066 shares to key management and directors in the form of a compensation bonus for past services provided. The fair value of shares
issued to key management and directors is $6,117,641 and is included in share-based payments and bonuses below.
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Salaries, benefits, bonuses and consulting fees
|
981,750
|
1,007,500
|
2,800,516
|
2,326,943
|
||||||||||||
Share-based payments and bonuses
|
6,196,850
|
7,573,250
|
9,293,864
|
10,510,589
|
||||||||||||
Total
|
7,178,600
|
8,580,750
|
12,094,380
|
12,837,532
|
•
|
Foreign currency risk
|
•
|
Interest rate risk
|
•
|
Other price risk
|
•
|
Level 1 – Unadjusted quoted prices as at the measurement date for identical assets or liabilities in active markets.
|
•
|
Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and
liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
•
|
Level 3 – Significant unobservable inputs that are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value.
|
Class A shares
|
72
|
Class B shares
|
19,161,620
|
Share options
|
1,693,063
|
Warrants
|
6,765,896
|
FSD PHARMA INC.
|
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
|
||||||||||||
[unaudited] [expressed in Canadian dollars]
|
||||||||||||
As at,
|
September 30,
|
December 31,
|
||||||||||
2020
|
2019
|
|||||||||||
Notes
|
$
|
$
|
||||||||||
ASSETS
|
||||||||||||
Current assets
|
||||||||||||
Cash
|
18,660,730
|
7,932,737
|
||||||||||
Other receivables
|
5
|
4,726,545
|
2,070,055
|
|||||||||
Prepaid expenses and deposits
|
1,127,506
|
430,381
|
||||||||||
Inventories
|
—
|
942,939
|
||||||||||
24,514,781
|
11,376,112
|
|||||||||||
Assets held for sale
|
4
|
10,963,208
|
—
|
|||||||||
35,477,989
|
11,376,112
|
|||||||||||
Non-current assets
|
||||||||||||
Investments
|
6
|
1,593,676
|
11,780,864
|
|||||||||
Right-of-use asset, net
|
7
|
—
|
127,410
|
|||||||||
Property, plant and equipment, net
|
—
|
11,804,145
|
||||||||||
Intangible assets, net
|
8
|
19,131,128
|
22,358,932
|
|||||||||
56,202,793
|
57,447,463
|
|||||||||||
LIABILITIES
|
||||||||||||
Current liabilities
|
||||||||||||
Trade and other payables
|
3,290,037
|
4,467,826
|
||||||||||
Lease obligations
|
10
|
58,705
|
56,207
|
|||||||||
Derivative liability
|
6
|
—
|
2,646,269
|
|||||||||
Warrants liability
|
11
|
3,477,581
|
—
|
|||||||||
Legal liability
|
16
|
5,500,000
|
—
|
|||||||||
Notes payable
|
9
|
1,202,105
|
1,908,412
|
|||||||||
13,528,428
|
9,078,714
|
|||||||||||
Non-current liabilities
|
||||||||||||
Lease obligations
|
10
|
112,595
|
146,662
|
|||||||||
13,641,023
|
9,225,376
|
|||||||||||
SHAREHOLDER'S EQUITY
|
||||||||||||
Class A share capital
|
12
|
201,500
|
201,500
|
|||||||||
Class B share capital
|
12
|
126,884,138
|
97,815,149
|
|||||||||
Warrant reserve
|
12
|
5,748,629
|
5,745,034
|
|||||||||
Contributed surplus
|
13
|
24,279,156
|
23,091,099
|
|||||||||
Foreign exchange translation reserve
|
416,599
|
(112,690
|
)
|
|||||||||
Accumulated deficit
|
(114,968,252
|
)
|
(78,518,005
|
)
|
||||||||
42,561,770
|
48,222,087
|
|||||||||||
56,202,793
|
57,447,463
|
|||||||||||
Commitments and contingencies
|
16
|
|||||||||||
Subsequent events
|
19
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
|
||||
On behalf of the Board:
|
||||
"Signed"
|
"Signed"
|
|||
Director - Raza Bokhari
|
Director - Robert Ciaruffoli
|
FSD PHARMA INC.
|
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
|
||||||||||||||||||||
[unaudited] [expressed in Canadian dollars, except number of shares]
|
||||||||||||||||||||
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||||||
2020
|
2019
[Restated - note 18]
|
2020
|
2019
[Restated - note 18]
|
|||||||||||||||||
Notes
|
$
|
$
|
$
|
$
|
||||||||||||||||
Expenses
|
||||||||||||||||||||
General and administrative
|
15
|
3,734,788
|
3,044,731
|
10,281,452
|
7,967,714
|
|||||||||||||||
External research and development fees
|
4,668,253
|
—
|
7,147,198
|
—
|
||||||||||||||||
Share-based payments
|
12, 13
|
6,870,177
|
6,793,614
|
10,417,063
|
12,225,360
|
|||||||||||||||
Depreciation and amortization
|
7, 8
|
1,285,169
|
1,280,951
|
3,898,047
|
1,280,951
|
|||||||||||||||
Legal provision
|
16
|
928,541
|
—
|
928,541
|
—
|
|||||||||||||||
Impairment of right-of-use asset
|
7
|
—
|
—
|
119,447
|
—
|
|||||||||||||||
Total operating expenses
|
17,486,928
|
11,119,296
|
32,791,748
|
21,474,025
|
||||||||||||||||
Loss from continuing operations
|
(17,486,928
|
)
|
(11,119,296
|
)
|
(32,791,748
|
)
|
(21,474,025
|
)
|
||||||||||||
Other (income) loss
|
30,793
|
(3,150
|
)
|
(4,902
|
)
|
(3,150
|
)
|
|||||||||||||
Finance expense
|
81,054
|
95,862
|
269,326
|
95,862
|
||||||||||||||||
Gain on settlement of financial liability
|
(290,866
|
)
|
—
|
(344,580
|
)
|
—
|
||||||||||||||
Loss (gain) on change in fair value of warrants and derivative liability
|
(894,249
|
)
|
1,365,597
|
(1,737,550
|
)
|
3,122,035
|
||||||||||||||
Loss on changes in fair value of investments
|
6
|
72,612
|
2,133,098
|
1,576,913
|
5,296,394
|
|||||||||||||||
Net loss from continuing operations
|
(16,486,272
|
)
|
(14,710,703
|
)
|
(32,550,955
|
)
|
(29,985,166
|
)
|
||||||||||||
Net loss from discontinued operations
|
4
|
(1,548,110
|
)
|
(2,251,304
|
)
|
(3,899,292
|
)
|
(4,964,393
|
)
|
|||||||||||
Net loss for the period
|
(18,034,382
|
)
|
(16,962,007
|
)
|
(36,450,247
|
)
|
(34,949,559
|
)
|
||||||||||||
Other comprehensive income
|
||||||||||||||||||||
Items that may be subsequently reclassified to income:
|
||||||||||||||||||||
Exchange gain (loss) on translation of foreign operations
|
(362,156
|
)
|
244,814
|
529,289
|
244,814
|
|||||||||||||||
Comprehensive loss
|
(18,396,538
|
)
|
(16,717,193
|
)
|
(35,920,958
|
)
|
(34,704,745
|
)
|
||||||||||||
Net loss per share
|
||||||||||||||||||||
Basic and diluted - continuing operations
|
14
|
(1.30
|
)
|
(1.94
|
)
|
(3.27
|
)
|
(4.19
|
)
|
|||||||||||
Basic and diluted - discontinued operations
|
14
|
(0.12
|
)
|
(0.30
|
)
|
(0.39
|
)
|
(0.69
|
)
|
|||||||||||
Weighted average number of shares outstanding – basic and diluted
|
14
|
12,676,712
|
7,564,004
|
9,969,261
|
7,160,458
|
|||||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
|
||||||||||||||||||||
FSD PHARMA INC.
|
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
|
||||||||||
For the nine months ended September 30, 2020 and 2019
|
||||||||||
[unaudited] [expressed in Canadian dollars, except number of shares]
|
Class A shares |
Class B shares
|
Warrants
|
Contributed surplus
|
Foreign exchange translation reserve
|
Accumulated deficit
[Restated - note 18]
|
Total
|
||||||||||||||||||||||||||||||||||
#
|
$
|
#
|
$
|
#
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||||||||||||||
Balance, December 31, 2018
|
72
|
201,500
|
6,843,780
|
67,916,302
|
546,212
|
4,442,145
|
4,977,300
|
—
|
(26,504,819
|
)
|
51,032,428
|
|||||||||||||||||||||||||||||
Shares issued
|
—
|
—
|
331,004
|
9,821,141
|
—
|
—
|
—
|
—
|
—
|
9,821,141
|
||||||||||||||||||||||||||||||
Issued on acquisition of net assets of Prismic Pharmaceuticals, Inc.
|
—
|
—
|
510,940
|
16,431,818
|
67,598
|
1,888,086
|
2,567,306
|
—
|
—
|
20,887,210
|
||||||||||||||||||||||||||||||
Stock options exercised [note 13]
|
—
|
—
|
130,189
|
1,782,438
|
—
|
—
|
(1,049,839
|
)
|
—
|
—
|
732,599
|
|||||||||||||||||||||||||||||
Share-based payments [note 13]
|
—
|
—
|
—
|
—
|
—
|
—
|
12,225,360
|
—
|
—
|
12,225,360
|
||||||||||||||||||||||||||||||
Warrants exercised
|
—
|
—
|
197
|
6,047
|
(197
|
)
|
(2,483
|
)
|
—
|
—
|
—
|
3,564
|
||||||||||||||||||||||||||||
Comprehensive loss for the period
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
244,814
|
(34,949,559
|
)
|
(34,704,745
|
)
|
||||||||||||||||||||||||||||
Balance, September 30, 2019
|
72
|
201,500
|
7,816,110
|
95,957,746
|
613,613
|
6,327,748
|
18,720,127
|
244,814
|
(61,454,378
|
)
|
59,997,557
|
|||||||||||||||||||||||||||||
Class A shares
|
Class B shares
|
Warrants
|
Foreign exchange translation reserve
|
Accumulated deficit
|
Total
|
|||||||||||||||||||||||||||||||||||
#
|
$
|
#
|
$
|
#
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||||||||||||||
Balance, December 31, 2019
|
72
|
201,500
|
7,905,727
|
97,815,149
|
467,451
|
5,745,034
|
23,091,099
|
(112,690
|
)
|
(78,518,005
|
)
|
48,222,087
|
||||||||||||||||||||||||||||
Shares issued [note 12]
|
—
|
—
|
4,607,763
|
19,462,149
|
2,881,215
|
122,469
|
(1,730,794
|
)
|
—
|
—
|
17,853,824
|
|||||||||||||||||||||||||||||
Share-based payments [note 12, 13]
|
—
|
—
|
2,307,569
|
8,857,476
|
—
|
—
|
3,470,169
|
—
|
—
|
12,327,645
|
||||||||||||||||||||||||||||||
Share options exercised [note 13]
|
—
|
—
|
22,382
|
749,364
|
—
|
—
|
(670,192
|
)
|
—
|
—
|
79,172
|
|||||||||||||||||||||||||||||
Warrants expired
|
—
|
—
|
—
|
—
|
(37,313
|
)
|
(118,874
|
)
|
118,874
|
—
|
—
|
—
|
||||||||||||||||||||||||||||
Comprehensive loss for the period
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
529,289
|
(36,450,247
|
)
|
(35,920,958
|
)
|
||||||||||||||||||||||||||||
Balance, September 30, 2020
|
72
|
201,500
|
14,843,441
|
126,884,138
|
3,311,353
|
5,748,629
|
24,279,156
|
416,599
|
(114,968,252
|
)
|
42,561,770
|
|||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
|
FSD PHARMA INC.
|
||
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
|
||
[unaudited] [expressed in Canadian dollars]
|
For the nine months ended September 30,
|
2020
|
2019
[Restated note - 18]
|
||||||
$
|
$
|
|||||||
Operating activities
|
||||||||
Net loss from continuing operations
|
(32,550,955
|
)
|
(29,985,166
|
)
|
||||
Add (deduct) items not affecting cash
|
||||||||
Depreciation and amortization
|
3,898,047
|
1,369,158
|
||||||
Impairment of right-of-use asset
|
119,447
|
—
|
||||||
Interest expense
|
7,254
|
109,749
|
||||||
Share-based payments
|
10,417,063
|
12,225,360
|
||||||
Change in fair value of investments
|
1,576,913
|
5,296,394
|
||||||
Change in fair value of derivative liability
|
(1,737,550
|
)
|
3,122,035
|
|||||
Unrealized foreign exchange loss
|
4,258
|
—
|
||||||
Gain on settlement of financial liability
|
(344,580
|
)
|
—
|
|||||
Changes in non-cash working capital balances
|
||||||||
Other receivables
|
(3,847,257
|
)
|
514,677
|
|||||
Prepaid expenses and deposits
|
(875,215
|
)
|
(56,297
|
)
|
||||
Legal liability
|
5,500,000
|
—
|
||||||
Other payables
|
(550,660
|
)
|
506,167
|
|||||
Cash used in continuing operating activities
|
(18,383,235
|
)
|
(6,897,923
|
)
|
||||
Cash used in discontinued operating activities
|
(704,574
|
)
|
(7,349,678
|
)
|
||||
Cash used in operating activities
|
(19,087,809
|
)
|
(14,247,601
|
)
|
||||
Investing activities
|
||||||||
Cash acquired from acquisition of Prismic Pharmaceuticals Inc.
|
—
|
2,329
|
||||||
Proceeds from sale of investments
|
8,610,275
|
—
|
||||||
Cash provided by continuing investing activities
|
8,610,275
|
2,329
|
||||||
Cash provided by (used in) discontinued investing activities
|
48,673
|
(331,970
|
)
|
|||||
Cash provided by (used in) investing activities
|
8,658,948
|
(329,641
|
)
|
|||||
Financing activities
|
||||||||
Repayment of lease obligation
|
(38,823
|
)
|
(42,155
|
)
|
||||
Proceeds from issuance of shares, net of issuance costs
|
21,906,270
|
—
|
||||||
Repayment of notes payable
|
(789,748
|
)
|
—
|
|||||
Proceeds from exercise of stock options
|
79,155
|
732,599
|
||||||
Proceeds from exercise of warrants
|
—
|
3,564
|
||||||
Cash provided by continuing financing activities
|
21,156,854
|
694,008
|
||||||
Cash provided by discontinued financing activities
|
—
|
—
|
||||||
Cash provided by financing activities
|
21,156,854
|
694,008
|
||||||
Net increase (decrease) in cash during the period
|
10,727,993
|
(13,883,234
|
)
|
|||||
Cash, beginning of period
|
7,932,737
|
21,134,930
|
||||||
Cash, end of period
|
18,660,730
|
7,251,696
|
||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
|
1.
|
Nature of business
|
Entity Name |
Country
|
Ownership percentage
September 30, 2020
|
Ownership percentage
December 31, 2019
|
||||||
% | % | ||||||||
FSD Biosciences Inc.
|
USA
|
100
|
0
|
||||||
Prismic Pharmaceuticals Inc.
|
USA
|
100
|
100
|
||||||
FV Pharma Inc.
|
Canada
|
100
|
100
|
2.
|
Basis of presentation
|
|
FSD Biosciences
|
United States Dollars |
|
Prismic | United States Dollars |
|
FV Pharma
|
Canadian Dollars
|
3.
|
Acquisition of Prismic Pharmaceutical
|
Share Options
|
Warrants
|
|||||||
Grant date share price
|
$
|
32.16
|
$
|
32.16
|
||||
Exercise price
|
$
|
2.61 - $17.89
|
$
|
2.61 - $26.73
|
||||
Expected dividend yield
|
-
|
-
|
||||||
Risk free interest rate
|
1.39% - 1.66
|
%
|
1.41% - 1.52
|
%
|
||||
Expected life (years)
|
0.98 - 16.21
|
1.39 - 6.55
|
||||||
Annualized volatility
|
100
|
%
|
100
|
%
|
Fair value recognized on acquisition
|
||||
$
|
||||
Cash
|
2,329
|
|||
Prepaid expenses and deposits
|
26,174
|
|||
Intangible assets
|
24,648,915
|
|||
Trade and other payables
|
(1,867,250
|
)
|
||
Notes payable
|
(1,922,959
|
)
|
||
20,887,209
|
4.
|
Assets held for sale
|
$
|
||||
Property and plant
|
10,963,208
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||||||
Notes
|
2020
|
2019
|
2020
|
2019
|
||||||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||||||
Revenue
|
7,682
|
488
|
19,293
|
488
|
||||||||||||||||
Cost of revenue
|
262,443
|
849,950
|
1,371,806
|
849,950
|
||||||||||||||||
Gross loss before fair value adjustments
|
(254,761
|
)
|
(849,462
|
)
|
(1,352,513
|
)
|
(849,462
|
)
|
||||||||||||
Fair value adjustments on inventory sold
|
—
|
—
|
(1,256
|
)
|
—
|
|||||||||||||||
Unrealized loss on changes in fair value of biological assets
|
—
|
132,966
|
221,835
|
308,490
|
||||||||||||||||
Gross loss
|
(254,761
|
)
|
(982,428
|
)
|
(1,573,092
|
)
|
(1,157,952
|
)
|
||||||||||||
Expenses
|
||||||||||||||||||||
General and administrative
|
15
|
658,757
|
1,098,971
|
1,608,524
|
3,447,262
|
|||||||||||||||
Depreciation and amortization
|
—
|
179,072
|
120,085
|
405,347
|
||||||||||||||||
Impairment of property, plant and equipment
|
515,052
|
—
|
515,052
|
—
|
||||||||||||||||
Total operating expenses
|
1,173,809
|
1,278,043
|
2,243,661
|
3,852,609
|
||||||||||||||||
Loss from discontinued operations
|
(1,428,570
|
)
|
(2,260,471
|
)
|
(3,816,753
|
)
|
(5,010,561
|
)
|
||||||||||||
Other income
|
(13,833
|
)
|
(9,167
|
)
|
(50,834
|
)
|
(46,168
|
)
|
||||||||||||
Loss on sale of equipment
|
133,373
|
—
|
133,373
|
—
|
||||||||||||||||
Net loss from discontinued operations
|
(1,548,110
|
)
|
(2,251,304
|
)
|
(3,899,292
|
)
|
(4,964,393
|
)
|
2020
|
2019
|
|||||||
$
|
$
|
|||||||
Operating activities
|
||||||||
Net loss from discontinued operations
|
(3,899,292
|
)
|
(4,964,393
|
)
|
||||
Add (deduct) items not affecting cash
|
||||||||
Depreciation and amortization
|
143,838
|
405,347
|
||||||
Change in fair value adjustments on inventory sold
|
(1,256
|
)
|
—
|
|||||
Impairment of inventory
|
710,905
|
—
|
||||||
Impairment of property, plant and equipment
|
515,052
|
—
|
||||||
Change in fair value of biological assets
|
221,835
|
308,490
|
||||||
Loss on disposal of inventory
|
262,443
|
—
|
||||||
Loss on sale of equipment
|
133,373
|
—
|
||||||
Changes in non-cash working capital balances
|
||||||||
Trade and other receivables
|
1,190,767
|
(527,758
|
)
|
|||||
Prepaid expenses and deposits
|
259,357
|
332,925
|
||||||
Inventories
|
(29,153
|
)
|
(1,749,025
|
)
|
||||
Biological assets
|
(221,835
|
)
|
(388,498
|
)
|
||||
Trade and other payables
|
9,392
|
(766,766
|
)
|
|||||
Cash used in operating activities
|
(704,574
|
)
|
(7,349,678
|
)
|
||||
Investing activities
|
||||||||
Purchase of property, plant and equipment
|
—
|
(331,970
|
)
|
|||||
Proceeds from sale of equipment
|
48,673
|
—
|
||||||
Cash provided by (used in) investing activities
|
48,673
|
(331,970
|
)
|
5.
|
Other receivables
|
September 30, 2020
|
December 31, 2019
|
|||||||
$
|
$
|
|||||||
Sales tax recoverable
|
155,086
|
2,033,535
|
||||||
Insurance receivable [note 16]
|
4,571,459
|
—
|
||||||
Rent receivable
|
—
|
12,990
|
||||||
Other
|
—
|
23,530
|
||||||
4,726,545
|
2,070,055
|
6.
|
Investments
|
Entity
|
Instrument
|
Note
|
Balance at December 31, 2019
|
Change in fair value through profit or
loss
|
Proceeds
from sale
|
Balance at September 30, 2020
|
||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||||
Pharmadrug Inc.
|
Shares
|
(i)
|
339,060
|
527,723
|
(866,783
|
)
|
—
|
|||||||||||
Cannara Biotech Inc.
|
Shares
|
(ii)
|
9,069,038
|
(1,325,546
|
)
|
(7,743,492
|
)
|
—
|
||||||||||
Clover Cannastrip
|
Shares
|
(iii)
|
—
|
—
|
—
|
—
|
||||||||||||
HUGE Shops
|
Shares
|
(iv)
|
760,868
|
(319,718
|
)
|
—
|
441,150
|
|||||||||||
SciCann Therapeutics
|
Shares
|
(v)
|
712,248
|
(37,095
|
)
|
—
|
675,153
|
|||||||||||
Solarvest BioEnergy Inc.
|
Shares
|
(vi)
|
435,000
|
(180,000
|
)
|
—
|
255,000
|
|||||||||||
Solarvest BioEnergy Inc.
|
Warrants
|
(vi)
|
116,650
|
(98,277
|
)
|
—
|
18,373
|
|||||||||||
Solarvest BioEnergy Inc.
|
Convertible debenture
|
(vi)
|
348,000
|
(144,000
|
)
|
—
|
204,000
|
|||||||||||
11,780,864
|
(1,576,913
|
)
|
(8,610,275
|
)
|
1,593,676
|
7.
|
Right-of-use asset
|
$
|
||||
Balance – January 1, 2019
|
243,818
|
|||
Depreciation
|
(48,764
|
)
|
||
Impairment
|
(67,644
|
)
|
||
Balance – December 31, 2019
|
127,410
|
|||
Depreciation
|
(7,963
|
)
|
||
Impairment
|
(119,447
|
)
|
||
Balance – September 30, 2020
|
—
|
8.
|
Intangible assets
|
$
|
||||
Cost
|
||||
Balance, December 31, 2019
|
24,852,092
|
|||
Effects of foreign exchange
|
671,626
|
|||
As at September 30, 2020
|
25,523,718
|
|||
Accumulated amortization
|
||||
Balance, December 31, 2019
|
2,493,160
|
|||
Amortization
|
3,890,084
|
|||
Effects of foreign exchange
|
9,346
|
|||
As at September 30, 2020
|
6,392,590
|
|||
Carrying value
|
||||
Balance, December 31, 2019
|
22,358,932
|
|||
As at September 30, 2020
|
19,131,128
|
9.
|
Notes payable
|
September 30, 2020
|
December 31, 2019
|
|||||||
$
|
$
|
|||||||
Short-term notes
|
94,968
|
193,996
|
||||||
Notes payable
|
1,107,137
|
1,714,416
|
||||||
1,202,105
|
1,908,412
|
10.
|
Lease obligations
|
$
|
||||
Balance as at January 1, 2019
|
243,818
|
|||
Add: Interest Expense
|
15,258
|
|||
Less: Lease Payments
|
(56,207
|
)
|
||
Balance – December 31, 2019
|
202,869
|
|||
Balance – January 1, 2020
|
202,869
|
|||
Add: Interest Expense
|
10,586
|
|||
Less: Lease Payments
|
(42,155
|
)
|
||
Balance – September 30, 2020
|
171,300
|
|||
Current
|
58,705
|
|||
Non-current
|
112,595
|
|||
Balance – September 30, 2020
|
171,300
|
$ | ||||
Less than one year
|
58,705
|
|||
One to two years
|
59,954
|
|||
Two to three years
|
59,954
|
|||
Three to four years
|
14,988
|
|||
Thereafter
|
—
|
|||
Total undiscounted lease payments payable
|
193,601
|
|||
Less: impact of present value
|
(22,301
|
)
|
||
Balance as at September 30, 2020
|
171,300
|
|||
11.
|
Warrants Liability
|
12.
|
Share capital
|
[a]
|
Authorized
|
[b]
|
Issued and outstanding
|
Class A shares
|
Class B shares
|
Warrants
|
||||||||||||||||||||||
#
|
$ |
|
#
|
$ |
|
#
|
$
|
|||||||||||||||||
Balance, December 31, 2018
|
72
|
201,500
|
6,843,780
|
67,916,302
|
546,212
|
4,442,145
|
||||||||||||||||||
Shares issued [a] [b] [c]
|
—
|
—
|
331,004
|
9,821,141
|
—
|
—
|
||||||||||||||||||
Issued on acquisition of net assets of Prismic Pharmaceuticals, Inc. [d]
|
—
|
—
|
510,940
|
16,431,818
|
67,598
|
1,888,086
|
||||||||||||||||||
Stock options exercised
|
—
|
—
|
130,189
|
1,782,438
|
—
|
—
|
||||||||||||||||||
Share-based payments
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Warrants exercised
|
—
|
—
|
197
|
6,047
|
(197
|
)
|
(2,483
|
)
|
||||||||||||||||
Balance, September 30, 2019
|
72
|
201,500
|
7,816,110
|
95,957,746
|
613,613
|
6,327,748
|
||||||||||||||||||
Balance, December 31, 2019
|
72
|
201,500
|
7,905,727
|
97,815,149
|
467,451
|
5,745,034
|
||||||||||||||||||
Shares issued [f] [i] [j] [k] [m]
|
—
|
—
|
4,607,763
|
19,462,149
|
2,881,215
|
122,469
|
||||||||||||||||||
Share-based payments [e] [g] [h] [l]
|
—
|
—
|
2,307,569
|
8,857,476
|
—
|
—
|
||||||||||||||||||
Share options exercised
|
—
|
—
|
22,382
|
749,364
|
—
|
—
|
||||||||||||||||||
Warrants expired
|
—
|
—
|
—
|
—
|
(37,313
|
)
|
(118,874
|
)
|
||||||||||||||||
Balance, September 30, 2020
|
72
|
201,500
|
14,843,441
|
126,884,138
|
3,311,353
|
5,748,629
|
[a]
|
On April 24, 2019, the Company entered into a share exchange agreement with Aura. Pursuant to the share exchange agreement, FSD acquired 13,562,386 common shares at
$0.2212 per share in the capital of Aura in exchange for the issuance of 65,577 Class B shares of the Company at $45.75 for a total value of $3,000,000.
|
[b]
|
On May 7, 2019, the Company entered into an agreement with Solarvest. Per the agreement the Company issued 49,751 Class B Shares to Solarvest in exchange for the
investment in Solarvest for a total fair value of $2,500,000. Refer to Note 6 for details regarding the investment in Solarvest.
|
[c]
|
On September 30, 2019, the Company completed the issuance of 215,676 Class B Shares as part of a private placement for total proceeds of $4,321,141.
|
[d]
|
On June 29, 2019, the Company acquired all outstanding common and preferred shares of Prismic through the issuance of an aggregate of 510,940 Class B Shares. The
Class B Shares issued to the Prismic shareholders were deposited into escrow upon closing of the transaction, and were subject to an 18-month staggered escrow release.
|
[e]
|
On January 2, 2020, the Company issued 27,580 Class B Common Shares as share-based compensation to certain Board of Directors for services performed as directors
for the fiscal year 2019 for the amount payable of $98,521.
|
[f]
|
On February 4, 2020, the Company issued 225,371 Class B Common Shares to Solarvest as settlement under the Share Exchange Agreement to settle derivative liability
of $2,646,269.
|
[g]
|
On March 16, 2020, the Company issued 405,926 Class B Common Shares as part of share-based bonus to employees for performance related to fiscal year 2019 resulting
in movement of $1,730,794 from contributed surplus to share capital and recognition of an additional share-based compensation expense of $124,288.
|
[h]
|
On March 16, 2020, the Company issued 69,069 Class B Common Shares to members of the Board of Directors as share-based compensation for their annual compensation
for the year ended December 31, 2020 in lieu of cash.
|
[i]
|
On April 15, 2020, the Company issued 63,714 Class B Common Shares to settle Prismic notes payable of $300,924 (USD 207,792). The fair value of the Class B Common
Shares was $247,210 resulting in a gain on settlement of liability of $53,714.
|
[j]
|
On June 8, 2020, the Company issued 1,500,000 Class B Common Shares and 1,500,000 warrants as part of a private placement financing for total proceeds of
$10,125,000. The more reliably measured component, Class B Common Shares, were measured first, with the residual amount being allocated to the warrants. The fair value of the Class B Common Shares was $9,062,689 and the residual value
allocated to the warrants was $122,470. The Company incurred issuance costs of $939,841, which has been allocated pro-rata to the common shares and warrants.
|
[k]
|
On August 6, 2020, the Company issued 2,762,430 Class B Common Shares and 1,381,215 warrants as part of a direct offering for total cash proceeds of $13,291,995
($10,000,000 USD). Total cash proceeds were allocated to the warrants liability first with the residual amount allocated to the Class B Common Shares. The fair value of the warrants liability was determined to be $4,371,830 and the residual
amount of $8,920,165 was allocated to the Class B Common Shares. The Company incurred total cash transaction costs of $1,214,024. Transaction costs allocated to the warrants of $377,574 were expensed immediately and the transaction costs
allocated to common shares were deducted from equity.
|
[l]
|
In August 2020, the Company approved the issuance of 1,804,994 Class B Common Shares to board members and certain officers and employees of the company in the form
of a compensation bonus for past services provided. Total fair value of the share-based compensation bonus was $6,588,228.
|
[m]
|
During the nine months ended September 30, 2020, the Company issued 56,248 Class B Common Shares through the Equity Distribution Agreement with A.G.P/Alliance
Global Partners for net proceeds of $265,566.
|
Number of warrants
|
Weighted average exercise price
|
|||||||
#
|
$
|
|||||||
Outstanding as at December 31, 2018
|
546,212
|
9.47
|
||||||
Issued
|
67,598
|
10.45
|
||||||
Exercised
|
(197
|
)
|
18.09
|
|||||
Outstanding as at September 30, 2019
|
613,613
|
9.57
|
||||||
Outstanding as at December 31, 2019
|
467,451
|
10.20
|
||||||
Issued
|
2,881,215
|
7.74
|
||||||
Expired
|
(37,313
|
)
|
6.03
|
|||||
Outstanding as at September 30, 2020
|
3,311,353
|
8.11
|
13.
|
Share-based compensation
|
Number of
options
|
Weighted average exercise price
|
|||||||
#
|
$
|
|||||||
Outstanding as at December 31, 2018
|
485,159
|
74.53
|
||||||
Granted
|
960,567
|
29.36
|
||||||
Exercised
|
(82,094
|
)
|
10.02
|
|||||
Forfeited
|
(12,438
|
)
|
56.28
|
|||||
Cancelled
|
(299,006
|
)
|
115.80
|
|||||
Outstanding as at September 30, 2019
|
1,052,188
|
27.53
|
||||||
Outstanding as at December 31, 2019
|
1,454,943
|
21.96
|
||||||
Granted
|
1,082,639
|
4.26
|
||||||
Exercised
|
(22,382
|
)
|
2.61
|
|||||
Cancelled
|
(822,137
|
)
|
31.65
|
|||||
Outstanding as at September 30, 2020
|
1,693,063
|
6.19
|
||||||
Exercisable as at September 30, 2020
|
1,475,438
|
6.16
|
September 30, 2020
|
September 30, 2019
|
|||||||
Grant date share price
|
$
|
3.75 — $9.54
|
$
|
4.60 — $84.42
|
||||
Exercise price
|
$
|
3.68 — $9.80
|
$
|
4.42 — $142.71
|
||||
Expected dividend yield
|
—
|
—
|
||||||
Risk free interest rate
|
0.27% — 1.55
|
%
|
1.40% — 1.90
|
%
|
||||
Expected life
|
4 — 9 years
|
2 — 6 years
|
||||||
Expected volatiity
|
120
|
%
|
100
|
%
|
Options outstanding |
Options exercisable
|
|||||||||||||||
Exercise price
|
Number outstanding
|
Weighted average remaining contractual life [years]
|
Exercise price
|
Number exercisable
|
||||||||||||
$
|
|
#
|
#
|
$ |
#
|
|||||||||||
2.61
|
12,683
|
2.74
|
2.61
|
12,683
|
||||||||||||
3.75
|
5,500
|
6.73
|
3.75
|
500
|
||||||||||||
3.86
|
837,139
|
4.34
|
3.86
|
837,139
|
||||||||||||
4.42
|
99,502
|
1.96
|
4.42
|
99,502
|
||||||||||||
4.75
|
110,000
|
4.54
|
4.75
|
77,500
|
||||||||||||
5.03
|
60,000
|
4.96
|
5.03
|
-
|
||||||||||||
5.43
|
16,264
|
2.74
|
5.43
|
16,264
|
||||||||||||
6.16
|
20,000
|
3.43
|
6.16
|
20,000
|
||||||||||||
7.17
|
199,005
|
4.08
|
7.17
|
199,005
|
||||||||||||
7.63
|
203,750
|
4.59
|
7.63
|
99,375
|
||||||||||||
7.83
|
35,000
|
4.13
|
7.83
|
23,000
|
||||||||||||
9.54
|
15,000
|
4.31
|
9.54
|
11,250
|
||||||||||||
10.65
|
3,730
|
2.74
|
10.65
|
3,730
|
||||||||||||
13.07
|
10,855
|
2.74
|
13.07
|
10,855
|
||||||||||||
13.47
|
1,418
|
2.74
|
13.47
|
1,418
|
||||||||||||
16.08
|
18,409
|
2.74
|
16.08
|
18,409
|
||||||||||||
17.89
|
4,178
|
2.74
|
17.89
|
4,178
|
||||||||||||
18.09
|
17,413
|
2.47
|
18.09
|
17,413
|
||||||||||||
20.10
|
8,289
|
2.52
|
20.10
|
8,289
|
||||||||||||
47.24
|
1,493
|
3.62
|
47.24
|
1,493
|
||||||||||||
50.25
|
5,224
|
3.56
|
50.25
|
5,224
|
||||||||||||
52.26
|
498
|
3.46
|
52.26
|
498
|
||||||||||||
55.28
|
498
|
3.37
|
55.28
|
498
|
||||||||||||
59.30
|
498
|
3.21
|
59.30
|
498
|
||||||||||||
75.38
|
498
|
3.29
|
75.38
|
498
|
||||||||||||
86.43
|
1,244
|
3.13
|
86.43
|
1,244
|
||||||||||||
142.71
|
4,975
|
2.99
|
142.71
|
4,975
|
||||||||||||
6.19
|
1,693,063
|
4.13
|
6.16
|
1,475,438
|
Options outstanding |
Options exercisable
|
|||||||||||||||
Exercise price
|
Number outstanding
|
Weighted average remaining contractual life [years]
|
Exercise price
|
Number exercisable
|
||||||||||||
|
$
|
#
|
#
|
$
|
#
|
|||||||||||
2.61
|
35,065
|
3.75
|
2.61
|
35,065
|
||||||||||||
4.42
|
99,502
|
2.96
|
4.42
|
99,502
|
||||||||||||
5.43
|
16,264
|
3.75
|
5.43
|
16,264
|
||||||||||||
10.65
|
3,730
|
3.75
|
10.65
|
3,730
|
||||||||||||
13.07
|
10,855
|
3.75
|
13.07
|
10,855
|
||||||||||||
13.47
|
1,418
|
3.75
|
13.47
|
1,418
|
||||||||||||
16.08
|
18,409
|
3.75
|
16.08
|
18,409
|
||||||||||||
17.89
|
4,178
|
3.75
|
17.89
|
4,178
|
||||||||||||
18.09
|
37,313
|
3.59
|
18.09
|
37,313
|
||||||||||||
20.10
|
493,363
|
4.97
|
20.10
|
485,075
|
||||||||||||
21.11
|
12,438
|
4.92
|
21.11
|
12,438
|
||||||||||||
24.12
|
9,950
|
4.84
|
24.12
|
4,975
|
||||||||||||
26.13
|
14,925
|
3.88
|
26.13
|
14,925
|
||||||||||||
40.20
|
29,851
|
4.70
|
40.20
|
18,657
|
||||||||||||
44.22
|
2,488
|
3.66
|
44.22
|
2,488
|
||||||||||||
47.24
|
1,493
|
4.62
|
47.24
|
1,493
|
||||||||||||
50.25
|
227,861
|
5.34
|
50.25
|
114,179
|
||||||||||||
52.26
|
498
|
4.46
|
52.26
|
498
|
||||||||||||
55.28
|
498
|
4.38
|
55.28
|
498
|
||||||||||||
59.30
|
498
|
4.21
|
59.30
|
498
|
||||||||||||
75.38
|
498
|
4.29
|
75.38
|
498
|
||||||||||||
86.43
|
1,244
|
4.13
|
86.43
|
1,244
|
||||||||||||
88.44
|
14,925
|
4.12
|
88.44
|
14,925
|
||||||||||||
120.60
|
9,950
|
3.96
|
120.60
|
9,950
|
||||||||||||
142.71
|
4,974
|
3.99
|
142.71
|
4,975
|
||||||||||||
27.53
|
1,052,188
|
4.65
|
24.63
|
914,050
|
14.
|
Loss per share
|
September 30, 2020
|
September 30, 2019
|
|||||||
#
|
#
|
|||||||
Warrants
|
3,311,353
|
613,613
|
||||||
Share Options
|
1,693,063
|
1,052,188
|
||||||
5,004,416
|
1,665,801
|
15.
|
General and administrative
|
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Professional fees
|
1,349,964
|
1,568,645
|
2,971,990
|
2,855,342
|
||||||||||||
General office, insurance and adminsitration expenditures
|
1,259,176
|
1,134,059
|
3,613,472
|
1,736,513
|
||||||||||||
Consulting fees
|
407,806
|
484,000
|
1,781,442
|
1,635,242
|
||||||||||||
Salaries, wages and benefits
|
954,870
|
431,260
|
2,237,188
|
1,877,187
|
||||||||||||
Stock promotion
|
90,025
|
436,797
|
647,765
|
2,456,519
|
||||||||||||
Building and facility costs
|
209,357
|
88,941
|
470,769
|
854,173
|
||||||||||||
Foreign exchange loss
|
122,347
|
—
|
167,350
|
—
|
||||||||||||
4,393,545
|
4,143,702
|
11,889,976
|
11,414,976
|
|||||||||||||
Allocated to:
|
||||||||||||||||
Continuing operations
|
3,734,788
|
3,044,731
|
10,281,452
|
7,967,714
|
||||||||||||
Discontinued operations
|
658,757
|
1,098,971
|
1,608,524
|
3,447,262
|
16.
|
Commitments and contingencies
|
17.
|
Related party transactions
|
●
|
The Company paid expenses of $1,341,972 to a company owned by the CEO for the nine months ended September 30, 2020, included in the consolidated statement of loss and comprehensive loss under various expense
line categories. As at September 30, 2020, the CEO has repaid a related party loan of $472,920 for withholding taxes paid by the Company on behalf of the CEO in relation to the Class B common shares issue during the nine months ended
September 30, 2020.
|
●
|
As at September 30, 2020, the President of FSD BioSciences Division has repaid a related party loan of $29,079 for withholding taxes paid by the Company on behalf of the President of FSD BioSciences Division
in relation to the Class B common shares issued during the nine months ended September 30, 2020.
|
●
|
The Company pays independent directors $40,000 per annum, with the Chairman of each respective committee receiving an additional $10,000 per annum. Directors compensation for the nine months ended September
30, 2020 was $244,378 (2019 - $95,000) which included $234,378 recognized as share-based compensation. As of March 31, 2020, directors have received their compensation for the 2020 fiscal year in advance, through the issuance of Class B
shares.
|
●
|
For the nine months ended September 30, 2020, the Company issued 1,676,066 shares to key management and directors in the form of a compensation bonus for past services provided. The fair value of shares
issued to key management and directors is $6,117,641 and is included in share-based payments and bonuses below.
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Salaries, benefits, bonuses and consulting fees
|
981,750
|
1,007,500
|
2,800,516
|
2,326,943
|
||||||||||||
Share-based payments and bonuses
|
6,196,850
|
7,573,250
|
9,293,864
|
10,510,589
|
||||||||||||
Total
|
7,178,600
|
8,580,750
|
12,094,380
|
12,837,532
|
18.
|
Restatement of comparative figures
|
Statement of Loss and Comprehensive Loss
|
For the three months ended September 30,
2019
|
|||||||||||||||
As previously reported
|
Adjustments
|
As revised
|
||||||||||||||
Note
|
$
|
$
|
$
|
|||||||||||||
Share-based payments
|
[i]
|
|
6,205,323
|
588,291
|
6,793,614
|
|||||||||||
Loss from continuing operations
|
(10,531,005
|
)
|
588,291
|
(11,119,296
|
)
|
|||||||||||
Loss on change in fair value of derivative liability
|
[ii]
|
1,700,000
|
(334,403
|
)
|
1,365,597
|
|||||||||||
Loss on changes in fair value of investments
|
[iii]
|
2,075,717
|
57,381
|
2,133,098
|
||||||||||||
Loss from continuing operations
|
(14,399,434
|
)
|
(311,269
|
)
|
(14,710,703
|
)
|
||||||||||
Net loss for the period
|
(16,650,738
|
)
|
(311,269
|
)
|
(16,962,007
|
)
|
||||||||||
Statement of Changes in Shareholders' Equity
|
September 30, 2019
|
|||||||||||||||
As previously reported
|
Adjustments
|
As revised
|
||||||||||||||
Note
|
$
|
$
|
$
|
|||||||||||||
Accumulated deficit
|
[i] [ii] [iii]
|
(59,698,363
|
)
|
(1,756,015
|
)
|
(61,454,378
|
)
|
|||||||||
Statement of Loss and Comprehensive Loss
|
For the nine months ended September 30,
2019
|
|||||||||||||||
As previously reported
|
Adjustments
|
As revised
|
||||||||||||||
$
|
$
|
$
|
||||||||||||||
Share-based payments
|
[i]
|
|
11,891,380
|
333,980
|
12,225,360
|
|||||||||||
Loss from continuing operations
|
(21,140,045
|
)
|
333,980
|
(21,474,025
|
)
|
|||||||||||
Loss on change in fair value of derivative liability
|
[ii]
|
1,700,000
|
1,422,035
|
3,122,035
|
||||||||||||
Loss from continuing operations
|
(28,229,151
|
)
|
(1,756,015
|
)
|
(29,985,166
|
)
|
||||||||||
Net loss for the period
|
(33,193,544
|
)
|
(1,756,015
|
)
|
(34,949,559
|
)
|
19.
|
Subsequent events
|
TORONTO--(BUSINESS WIRE)--November 12, 2020--FSD Pharma Inc. (Nasdaq: HUGE) (CSE: HUGE) (“FSD Pharma” or the “Company”) today announced its financial results for the third quarter ending September 30, 2020 and provided a corporate update. The filing is available on SEDAR.
Financial and corporate highlights include:
Three and Nine Months’ Financial Results (All Figures in C$)
For the three and nine months ended September 30, 2020, total operating expenses were $17,486,928 and $32,791,748, respectively, compared to $11,119,296 and $21,474,025 for the comparative periods in the prior year. This represents an increase of $6,367,632 or 57% for the three months ended September 30, 2020 and an increase of $11,317,723 or 53% for the nine months ended September 30, 2020, compared to the equivalent periods in the prior year. The increase for the three and nine months ended September 30, 2020 compared to the three and nine months ended September 30, 2019 is primarily related to pharmaceutical R&D expense of the Phase 1 safety & tolerability study of FSD201, ongoing Phase 2 clinical study of FSD201 to evaluate treatment of hospitalized COVID-19 patients, higher stock based compensation, higher professional fees, and insurance expense as a result of the Nasdaq listing in January 2020.
For the three and nine months ended September 30, 2020, net loss was $18,034,382 and $36,450,247, respectively, compared to $16,962,007 and $34,949,559 for the three and nine months ended September 30, 2019. This represents an increase of $1,072,375 or 6% for the three months ended September 30, 2020 and an increase of $1,500,688 or 4% for the nine months ended September 30, 2020, compared to the equivalent periods in the prior year. The net loss in the three, and, nine month period ending September 30 2020 includes share based compensation of $6,870,177 and one time charge of $928,541 for the class action settlement.
The Company is not making any express or implied claims that its product has the ability to eliminate, cure or contain the COVID-19 (or SARS-2-Coronavirus) at this time.
About FSD Pharma
FSD Pharma Inc. is a publicly-traded holding company.
FSD Pharma BioSciences, Inc., a wholly-owned subsidiary, is a specialty biotech pharmaceutical R&D company focused on developing over time multiple applications of its lead compound, FSD201, by down-regulating the cytokines to effectuate an anti-inflammatory response.
The Company filed an IND with the FDA on August 28, 2020 and was approved on September 25, 2020 to initiate a phase 2 clinical trial for the use of FSD201 to treat COVID-19, the disease caused by the SARS-CoV-2 virus.
Severe COVID-19 is characterized by an over-exuberant inflammatory response that may lead to a cytokine storm and ultimately death. The Company is focused on developing FSD201 for its anti-inflammatory properties to avoid the cytokine storm associated with acute lung injury in hospitalized COVID-19 patients.
Forward-Looking Statements
Neither the Canadian Securities Exchange nor its regulation services provider accept responsibility for the adequacy or accuracy of this press release.
Certain statements contained in this press release constitute “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian and U.S. securities laws (collectively, “Forward-Looking Information”). Forward-Looking Information includes, but is not limited to, information with respect to FSD Pharma's strategy, plans or future financial or operating performance, receipt of any FDA approvals, the completion of any trials regarding the use of FSD201 to treat COVID-19, the safety of FSD201 or whether FSD201 may be effective in treating COVID-19, the costs associated with such planned trials and our belief that we have sufficient cash to complete the Phase 2 study, our ability to obtain required funding and the terms and timing thereof, the ultimate development of any FDA approved synthetic compounds, the expected insurance recovery related to the settlement agreement, the completion of the settlement contemplated in the settlement agreement and the timing and closing of the sale of certain non-core real estate assets. The use of words such as “budget”, “intend”, “anticipate”, “believe”, “expect”, “plan”, “forecast”, “future”, “target”, “project”, “capacity”, “could”, “should”, “focus”, “proposed”, “scheduled”, “outlook”, “potential”, “estimate” and other similar words, and similar expressions and statements relating to matters that are not historical facts, or statements that certain events or conditions “may” or “will” occur, are intended to identify Forward-Looking Information and are based on FSD Pharma’s current beliefs or assumptions as to the outcome and timing of such future events. Such beliefs or assumptions necessarily involve known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such Forward‐Looking Information. Certain of these risks and uncertainties are described in the Company’s continuous disclosure filings available under the Company’s SEDAR profile at www.sedar.com and under the Company’s EDGAR profile at www.sec.gov. Forward‐Looking Information is not a guarantee of performance. The Forward-Looking Information contained in this press release is made as of the date hereof, and FSD Pharma is not obligated to update or revise any Forward- Looking Information, whether as a result of new information, future events or otherwise, except as required by law. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on Forward Looking-Information. The foregoing statements expressly qualify any Forward-Looking Information contained herein.
For further information:
Sandy Huard, Head of Communications, FSD Pharma Inc.
sandy@fsdpharma.com
(647) 864-7969
Donal Carroll, Chief Financial Officer, FSD Pharma Inc.
Dcarroll@fsdpharma.com
Investor Relations
IR@fsdpharma.com