Exhibit 99.1
CLEARMIND MEDICINE INC.
Condensed Interim Consolidated Financial Statements
For The Three Months Ended January 31, 2024
(Expressed in United States Dollars)
(Unaudited)
CLEARMIND MEDICINE INC.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in United States Dollars)
(Unaudited)
| January 31, | October 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Other receivables | ||||||||
| Short-term investment (Note 3) | ||||||||
| Prepaid expenses | ||||||||
| Related parties (Note 4b) | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Property and equipment | ||||||||
| Intangible assets | ||||||||
| Restricted cash | ||||||||
| Right-of-use asset (Note 4d) | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Due to related parties (Note 4) | ||||||||
| Derivative warrants liabilities (Note 5) | ||||||||
| Short-term portion of lease liabilities (Note 4d) | ||||||||
| Total current liabilities | ||||||||
| Non- current liabilities | ||||||||
| Long-term lease liabilities (Note 4d) | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | $ | $ | ||||||
| Shareholders’ equity | ||||||||
| Share capital and share premium (Note 6) | ||||||||
| Warrants (Note 7) | ||||||||
| Share-based payment reserve (Notes 8,9) | ||||||||
| Accumulated other comprehensive loss | ( |
) | ( |
) | ||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
Approved and authorized for issuance on behalf of the Board of Directors on March 18, 2024:
| /s/ “Alan Rootenberg” | /s/ “Adi Zuloff-Shani” | |
| Alan Rootenberg, CFO | Adi Zuloff-Shani, CEO |
(The accompanying notes are an integral part of these condensed interim consolidated financial statements)
F-2
CLEARMIND MEDICINE INC.
Condensed Interim Consolidated Statements of Operations and Comprehensive Loss
(Expressed in United States Dollars)
(Unaudited)
| Three months ended January 31, |
||||||||
| 2024 | 2023 | |||||||
| Operating expenses | ||||||||
| General and administrative | $ | $ | ||||||
| Research and development, net | ||||||||
| Total operating expenses | ||||||||
| Finance incomes (expenses) | ||||||||
| Changes in fair value of derivative warrants liabilities (Note 5) | ||||||||
| Unrealized gain (loss) on short-term investment (Note 3) | ( |
) | ||||||
| Foreign exchange gain (loss) | ( |
) | ||||||
| Other finance income, net | ||||||||
| Total finance incomes (expenses) | ( |
) | ||||||
| Other income | ||||||||
| Dividend received | ||||||||
| Total other income | ||||||||
| Loss Before taxes | ( |
) | ( |
) | ||||
| Tax expenses | ( |
( |
) | |||||
| Net Loss and comprehensive loss | $ | ( |
) | $ | ( |
) | ||
| $ | ( |
) | $ | ( |
) | |||
| (*) | On September 30, 2022 the Company effected a 1-for-30 reverse split of its issued and outstanding common shares, pursuant to which holders of the Company’s common shares received 0.0333 of a common share for every one common share held.
On November 28, 2023, the Company effected a further 1-for-30 reverse split of its issued and outstanding common shares, pursuant to which holders of the Company’s common shares received 0.0333 of a common share for every one common share then held. |
(The accompanying notes are an integral part of these condensed interim consolidated financial statements)
F-3
CLEARMIND MEDICINE INC.
Condensed Interim Statements of Changes in Shareholders’ Equity (Deficit)
(Expressed in United States Dollars)
(Unaudited)
| Share capital and share premium | Share-based | Accumulated other | Total shareholders’ | |||||||||||||||||||||||||
| Number of shares (*) | Amount | Warrants | payment reserve | comprehensive income | Accumulated deficit | equity (deficit) | ||||||||||||||||||||||
| Balance, October 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| Net loss for the period | – | ( | ) | ( | ) | |||||||||||||||||||||||
| Issuance of common shares | ||||||||||||||||||||||||||||
| Common shares and warrants issued to Medigus | – | |||||||||||||||||||||||||||
| Issuance of common shares upon vesting of restricted stock units | ( | ) | ||||||||||||||||||||||||||
| Common shares for services | – | |||||||||||||||||||||||||||
| Share-based compensation | – | |||||||||||||||||||||||||||
| Balance, January 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Balance, October 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Net loss for the period | – | ( | ) | ( | ) | |||||||||||||||||||||||
| Issuance of common shares, pre-funded warrants and warrants (Note 6c(iii)) | ||||||||||||||||||||||||||||
| Exercise of warrants (Note 6c(ii)) | ||||||||||||||||||||||||||||
| Common shares for services | ( | ) | ( | ) | ||||||||||||||||||||||||
| Share-based compensation (Notes 8, 9 (i)) | – | |||||||||||||||||||||||||||
| Balance, January 31, 2024 | $ | $ | $ | $ | ( | ) | $ | (20,135,863 | ) | $ | ||||||||||||||||||
| (*) | On September 30, 2022 the Company effected a 1-for-30 reverse split of its issued and outstanding common shares, pursuant to which holders of the Company’s common shares received 0.0333 of a common share for every one common share held.
On November 28, 2023, the Company effected a further 1-for-30 reverse split of its issued and outstanding common shares, pursuant to which holders of the Company’s common shares received 0.0333 of a common share for every one common share then held.
All share amounts have been retroactively restated for all periods presented. |
(The accompanying notes are an integral part of these condensed interim consolidated financial statements)
F-4
CLEARMIND MEDICINE INC.
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in United States Dollars)
(Unaudited)
| Three months ended January 31, |
||||||||
| 2024 | 2023 | |||||||
| Operating activities | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments for: | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of right-of-use asset | ||||||||
| Dividend received | ||||||||
| Interest on lease liability | ||||||||
| Exchange rate differences | ( |
) | ||||||
| Share issuance costs allocated to derivate warrants liability | ||||||||
| Depreciation of property and equipment | ||||||||
| Changes in fair value of derivative liabilities | ( |
) | ||||||
| Share-based compensation | ||||||||
| Unrealized (gain) loss on short-term investment | ( |
) | ||||||
| Tax expenses | ||||||||
| Changes in working capital: | ||||||||
| Decrease (increase) in other receivables | ( |
) | ||||||
| Increase in prepaid expenses | ( |
) | ( |
) | ||||
| Decrease in accounts payable and accrued liabilities | ( |
) | ( |
) | ||||
| Increase (decrease) in due to / from related parties | ( |
) | ||||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| Financing activities | ||||||||
| Proceeds from issuance of common shares and warrants, net of issuance costs (Note 6c (iii)) | ||||||||
| Proceeds received from exercise of warrants (Note 6c (ii)) | ||||||||
| Repayment of lease liabilities | ( |
) | ( |
) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | ( |
) | ||||||
| Net increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplementary disclosure of cash flow information: | ||||||||
| Cash received for interest | $ | $ | ||||||
| Dividend received | ||||||||
| Cash paid for taxes | ||||||||
| Non-cash financing and investing activities | ||||||||
| Derivative liability converted to equity | $ | $ | ||||||
| Right of use assets obtained in exchange for lease liabilities | ||||||||
F-5
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 1. | Nature of Operations and Going Concern |
| a. | Clearmind Medicine Inc. (the “Company”) was incorporated in the province of British Columbia on |
On November 14, 2022, the Company completed a listing on the Nasdaq Capital Market (“Nasdaq”). The Company trades under the symbol “CMND” on the Nasdaq and on the Frankfurt Stock Exchange, or FSE, under the symbol “CWY”. The Company was listed on the Canadian Securities Exchange (“CSE”) in Toronto until March 14, 2024. Following approval for a voluntary delisting, the Company no longer trades on the CSE but remains a reporting issuer in Canada.
On January 16, 2024, the Company completed
a registered direct and private placement for aggregate gross proceeds of $
| b. | Going concern |
These condensed interim consolidated financial
statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge
its liabilities in the normal course of business. For the three months ended January 31, 2024, the Company has not generated any revenues
and has negative cash flow from operations of $
| c. | Reverse share split |
On
September 30, 2022, the Company’s Board of Directors (the “Board”) approved a 1-for-30 reverse split of its issued
and outstanding common shares, effective as of September 30, 2022, pursuant to which holders of the Company’s common shares received
On November 28, 2023, the Company’s Board approved a further 1-for-30 reverse split of its issued and outstanding common shares, effective as of November 28, 2023, pursuant to which holders of the Company’s common shares received 0.0333 of a common share for every one common share then held.
F-6
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 2. | Significant Accounting Policies |
| a. | Basis of Presentation |
The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) on a going concern basis.
These condensed interim consolidated
financial statements include the accounts of the Company and its
These condensed interim consolidated financial statements have been prepared on a historical cost basis, except for financial assets and liabilities (including derivatives) which are presented at fair value through profit or loss (“FVTPL”), and are presented in United States dollars, which is the Company’s functional currency.
| b. | Unaudited Interim Financial Information |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with IFRS have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed interim consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended October 31, 2023 and the notes thereto (the “2023 Annual Report”).
The condensed interim consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, these condensed interim consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position and results of operations for the interim periods presented. The results for the three months ended January 31, 2024 are not necessarily indicative of the results for the year ending October 31, 2024, or for any future period.
As of January 31, 2024, there have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2023 Annual Report.
| c. | Significant Accounting Estimates and Judgments |
The preparation of consolidated financial statements in accordance with IFRS requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts of assets, liabilities, income, and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
F-7
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 2. | Significant Accounting Policies (continued) |
| c. | Significant Accounting Estimates and Judgments (continued) |
Significant Estimates
Share-based Compensation
Fair values are determined using the Black-Scholes option pricing model. Estimating fair value requires determining the most appropriate valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. Option-pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates and, therefore, existing models do not necessarily provide reliable measurement of the fair value of the Company’s stock options.
Warrant Liability
The Company analyses warrants issued to determine whether they meet the classification as liabilities or equity. Derivative warrant liabilities are adjusted to reflect fair value at each reporting period, with any increase or decrease in the fair value recorded in the results of operations. The Company uses a fair valuation specialist to estimate the value of these instruments using the Black and Scholes and binomial pricing model.
The key assumptions used in the models are the expected future volatility in the price of the Company's shares, the expected life of the warrants and the probability of any future adjustment event.
Significant Judgments
The critical judgments that the Company’s management has made in the process of applying the Company’s accounting policies that have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:
Going Concern
The application of the going concern assumption requires management to take into account all available information about the future, which is at least but not limited to, 12 months from the year end of the reporting period. The Company is aware that material uncertainties related to events or conditions raise substantial doubt upon the Company’s ability to continue as a going concern.
| 3. | Short-term Investment |
Pursuant
to the Share Exchange Agreement with Medigus Ltd (“Medigus”), on February 14, 2022, the Company received
As
of January 31, 2024, the Company holds
| October 31, 2023 | Additions | Unrealized gain | January 31, 2024 | |||||||||||||
| Medigus Ltd. – Shares | $ | $ | $ | $ | ||||||||||||
| October 31, 2022 | Additions | Unrealized loss | October 31, 2023 | |||||||||||||
| Medigus Ltd. – Shares | $ | $ | $ | ( | ) | $ | ||||||||||
F-8
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 4. | Related Party Transactions |
| a. | Compensation to key management personnel |
| (i) |
| Three months ended | Three months ended | |||||||
| January 31, | January 31, | |||||||
| 2024 | 2023 | |||||||
| Officers: | ||||||||
| Consulting fees | $ | $ | ||||||
| Share based compensation | ||||||||
| $ | $ | |||||||
| Directors: | ||||||||
| Directors’ fees | $ | $ | ||||||
| Share based compensation | ||||||||
| $ | $ | |||||||
| (ii) |
| January 31, | October 31, | |||||||
| 2024 | 2023 | |||||||
| Amounts owed to officers | $ | $ | ||||||
| Amounts owed to directors | ||||||||
| $ | $ | |||||||
| b. | On March 7, 2022, the Company signed an agreement with SciSparc Ltd (“SciSparc”), pursuant to which the Company and SciSparc agreed to cooperate in conducting a feasibility study using certain molecules developed by each party (the “Cooperation Agreement”). Certain of the Company’s officers and directors currently operate, manage or are engaged as officers and/or directors of SciSparc.
In June 2023, the Company entered into a research agreement with the Hebrew University of Jerusalem to evaluate SciSparc and the Company’s combination treatment for obesity and metabolic syndrome.
To date, the collaboration has resulted in the
filing of nine patent applications. To the extent the parties determine to proceed to a commercial cooperation, they may enter into a
joint venture by the parties share the economics and rights on a
For the three months ended January 31, 2024, the Company incurred research
and development expenses conducted within the framework of the Cooperation Agreement in the amount of $ |
| c. | The Company shares office space with SciSparc and contributes to office expenses costs. |
| d. | On December 25, 2023, the Company entered into a lease agreement with SciSparc for a total area of approximately 240m2, of which the Company occupies approximately 120m2 for the Company’s offices, in Tel Aviv, Israel. The Company’s base rent was ILS |
F-9
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 5. | Derivative warrants liabilities |
| a. | On April 6, 2023, the Company issued |
On January 21, 2024, following the
January 2024 Public Offering, which included the offering of common shares at a price lower than the exercise price of the April 2023
Warrants, the exercise price of the April 2023 Warrants was reduced to $
During the period between November
29, 2023 and December 5, 2023,
| b. | On September 18, 2023, the Company issued |
On January 21, 2024, following the
January 2024 Public Offering, which included the offering of common shares at a price lower than the exercise price of the September 2023
Warrants, the exercise price of the September 2023 Warrants was reduced to $
During the period between November
29, 2023 and December 5, 2023,
| c. | On January 16, 2024, the Company issued |
| d. | During the three months ended January 31, 2024, the Company
recorded a gain on the revaluation of the total derivative warrants liabilities of $ |
F-10
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 5. | Derivative warrants liabilities (continued) |
| e. |
| January 31, 2024 | ||||
| Share Price | $ | |||
| Exercise Price | $ | |||
| Expected life | ||||
| Risk-free interest rate | % | |||
| Dividend yield | % | |||
| Expected volatility | % | |||
| f. |
| Balance as of November 1, 2022 | $ | |||
| Issuance of April 2023 Warrants | ||||
| Issuance of September 2023 Warrants | ||||
| Exercise of warrants | ( | ) | ||
| Changes in fair value of warrants | ||||
| Balance as of October 31, 2023 | $ | |||
| Issuance of January 2024 Warrants | ||||
| Exercise of warrants | ( | ) | ||
| Changes in fair value of warrants | ( | ) | ||
| Balance as of January 31, 2024 | $ |
F-11
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 6. | Share Capital |
| a. | The Company’s authorized share capital is unlimited common shares without par value share. As of January 31, 2024, the number of common shares issued and outstanding was |
| b. |
| c. | Share transactions during the three months ended January 31, 2024: |
| (i) | On November 6, 2023, |
| (ii) | Between November 30, 2023 and December 5, 2023, April 2023 Warrants and September 2023 Warrants were exercised for |
| (iii) | On
January 16, 2024, the Company completed a registered direct offering and concurrent private placement of (i) |
| d. | Share transactions during the three months ended January 31, 2023: |
| (i) | On November 14, 2022, the Company completed an underwritten
public offering of |
In addition, the Company granted Aegis Capital Corp. (“Aegis”),
who acted as the underwriters for the deal, a 45-day option to purchase up to
Aegis received
| Risk-free interest rate | % | |||
| Expected life (in years) | ||||
| Expected volatility | % |
In connection with the offering, the Company’s common shares were approved for listing on the Nasdaq and began trading on the Nasdaq (in addition to the CSE) under the symbol “CMND” on November 15, 2022.
Following the public offering and pursuant to the Medigus
SPA, Medigus was entitled to receive
| (ii) | On January 16, 2023, |
F-12
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 7. | Share Purchase Warrants |
| Number of warrants | Weighted average exercise price | |||||||
| Balance, October 31, 2022 | ||||||||
| Issuance of underwriter warrants | ||||||||
| Issuance of April 2023 warrants (*) | ||||||||
| Issuance of September 2023 warrants (**) | ||||||||
| Issuance of Medigus warrants | ||||||||
| Expiration of warrants | ( | ) | ||||||
| Exercise of warrants | ( | ) | ||||||
| Balance, October 31, 2023 | $ | |||||||
| Number of shares to be issued from the exercise of warrants | ||||||||
| Issuance of January 2024 warrants (Note 5c) | ||||||||
| Exercise of warrants | ( | ) | ||||||
| Balance, January 31, 2024 | $ | |||||||
| Number of shares to be issued from the exercise of warrants | ) | |||||||
| (*) |
| (**) |
| (***) |
| Number of warrants outstanding | Number of shares to be issued from the exercise of warrants | Exercise price | Exercise price (USD) | Expiry date | ||||||||||||
| C$ | $ | |||||||||||||||
| $ | $ | |||||||||||||||
| $ | $ | |||||||||||||||
| C$ | $ | |||||||||||||||
| $ | $ | |||||||||||||||
| $ | $ | |||||||||||||||
| (*) | ||||||||||||||||
| (*) |
F-13
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 8. | Stock Options |
| (a) | On November 14, 2023, the shareholders of the Company approved the Omnibus Equity Incentive Plan, or the Omnibus Plan. Pursuant to the Omnibus Plan, the Company is authorized to grant options or restricted share units (“RSUs” and together with “Options”, “Awards” or “Stock Awards”) to officers, directors, employees and consultants enabling them to acquire up to |
The maximum number of common shares
reserved for issuance in any 12-month period to a related party consultant may not exceed
| (b) |
| Number of options | Weighted (C$) | Weighted (USD$) | ||||||||||
| Outstanding, October 31, 2022 | C$ | $ | ||||||||||
| Granted | ||||||||||||
| Outstanding, October 31, 2023 | C$ | $ | ||||||||||
| Expired | ( | ) | ||||||||||
| Outstanding, January 31, 2024 | C$ | $ | ||||||||||
| Exercisable, January 31, 2024 | C$ | $ | ||||||||||
F-14
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 8. | Stock Options (continued) |
| (c) |
| Outstanding | Exercisable | |||||||||||||||||||||||||
| Number of stock options | Weighted average remaining contractual life (years) | Weighted average exercise price (C$) | Weighted average exercise price (USD$) | Number of stock options | Weighted average exercise price (C$) | Weighted average exercise price (USD$) | ||||||||||||||||||||
| C$ | $ | C$ | $ | |||||||||||||||||||||||
| C$ | $ | C$ | $ | |||||||||||||||||||||||
Three months ended January 31, 2024 | Three months ended January 31, 2023 | |||||||
| Risk-free interest rate | % | % | ||||||
| Expected life (in years) | ||||||||
| Expected volatility | % | % | ||||||
| d. | The portion of the total fair value of stock options expensed
during the three months ended January 31, 2024, was $ |
F-15
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 9. | Restricted Share Units |
| Number of RSUs | Weighted average issue price (C$) | Weighted average issue price (USD$) | ||||||||||
| Balance, October 31, 2022 | $ | $ | ||||||||||
| Granted | ||||||||||||
| Vested | ( | ) | ||||||||||
| Balance, October 31, 2023 | $ | $ | ||||||||||
| Granted (i) | ||||||||||||
| Vested | ( | ) | ||||||||||
| Balance, January 31, 2024 | $ | $ | ||||||||||
| (i) |
F-16
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 10. | Financial Instruments and Risk Management |
| Fair Value Measurements Using | ||||||||||||||||
| Quoted prices in active markets for identical instruments (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Balance January 31, 2024 | |||||||||||||
| Short-term investment | $ | $ | $ | $ | ||||||||||||
| Derivative warrants liability | ||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s statement of financial position as of October 31, 2023, as follows:
| Fair Value Measurements Using | ||||||||||||||||
| Quoted prices in active markets for identical instruments (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Balance October 31, 2023 | |||||||||||||
| Short-term investment | $ | $ | $ | $ | ||||||||||||
| Derivative warrants liability | ||||||||||||||||
The fair value of other assets and liabilities, which include cash, amounts receivable, accounts payable and accrued liabilities, and amounts due to related parties, approximate their carrying values due to the relatively short-term maturity of these instruments.
| b. | Credit Risk |
Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. The carrying amount of financial assets represents the maximum credit exposure.
| c. | Foreign Exchange Rate Risk |
Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent that monetary assets and liabilities are denominated in a foreign currency. The Company’s subsidiary operates in Israel and has certain monetary financial instruments denominated in New Israeli Shekel and CAD. The Company has not entered into foreign exchange rate contracts to mitigate this risk.
F-17
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 10. | Financial Instruments and Risk Management (continued) |
| c. | Foreign Exchange Rate Risk (continued) |
| Cash and cash equivalents | $ | |||
| Other receivables | ||||
| Accounts payable and accrued liabilities | ( |
) | ||
| Due to related parties | ( |
) | ||
| Total foreign currency financial assets and liabilities | $ | ( |
||
| Impact of a |
$ | ( |
| d. | Interest Rate Risk |
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk as it does not have any liabilities with variable rates.
| e. | Liquidity Risk |
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s objective to managing liquidity risk is to ensure that it has sufficient liquidity available to meet its liabilities when due. The Company relies on raising debt or equity financing in a timely manner.
| January 31, 2024 | Total | Within 1 year |
Within 2-5 years |
|||||||||
| Accounts payable and accrued liabilities | $ | $ | $ | |||||||||
| Due to related parties | ||||||||||||
| Lease liability | ||||||||||||
| $ | $ | $ | ||||||||||
| October 31, 2023 | Total | Within 1 year | Within 2-5 years | |||||||||
| Accounts payable and accrued liabilities | $ | $ | $ | |||||||||
| Due to related parties | ||||||||||||
| $ | $ | $ | ||||||||||
F-18
CLEARMIND MEDICINE INC.
Notes to the Condensed Interim Consolidated Financial Statements
(Expressed in United States Dollars)
(Unaudited)
| 11. | Capital Management |
The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash and equity comprised of issued share capital, RSU reserve, warrants reserve, and options reserve.
The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board, will balance its overall capital structure through new share issuances or by undertaking other activities as deemed appropriate under the specific circumstances.
The Company is not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged from the three months ended January 31, 2024.
| 12. | Segmented Information |
As of January 31, 2024, the Company has one operating segment, research and development of psychedelic medicine, which takes place primarily in Israel.
| 13. | Subsequent Events |
| a. | On February 14, 2024, the Company issued |
| b. | During the period between February 23, 2024 and March 8, 2024, April
2023 Warrants, September 2023 Warrants and January 2024 Warrants were exercised into |
F-19