UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~OCTOBER~~JANUARY 31, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

FOR THE TRANSITION PERIOD FROM __ TO __

COMMISSION FILE NO. 000-54318

ONCOSEC MEDICAL INCORPORATED

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

nevada		98-0573252
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)


24 NORTH MAIN STREET
PENNINGTON, NJ		08534
(Address of principal executive offices)		(Zip Code)

(855) 662-6732

(Registrant’s telephone number, including area code)

~~Not applicable~~

~~(Former name, former address and former fiscal year, if changed since last report)~~

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		ONCS		Nasdaq Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange ~~Act:~~Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the Registrant’s Common Stock, $0.0001 par value, was ~~39,333,683~~39,350,363 as of ~~December~~March 15, ~~2021.~~2022.

OncoSec Medical Incorporated

Form 10-Q

for the Quarterly Period Ended ~~October~~January 31, ~~2021~~2022

PART I—FINANCIAL INFORMATION		3
Item 1.	Financial Statements:	3
	a) Condensed Consolidated Balance Sheets as of ~~October~~January 31, ~~2021~~2022 (unaudited) and July 31, 2021	3
	b) Condensed Consolidated Statements of Operations for the three and six months ended ~~October~~January 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	4
	c) Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended ~~October~~January 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	5
	d) Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended ~~October~~January 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	6
	e) Condensed Consolidated Statements of Cash Flows for the ~~three~~six months ended ~~October~~January 31, ~~2021~~2022 and ~~2020~~2021 (unaudited)	78
	f) Notes to Condensed Consolidated Financial Statements (unaudited)	89
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2526
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3135
Item 4.	Controls and Procedures	3235
PART II—OTHER INFORMATION		3235
Item 1.	Legal Proceedings	3235
Item 1A.	Risk Factors	3235
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3336
Item 3.	Defaults Upon Senior Securities	3336
Item 4.	Mine Safety Disclosures	3336
Item 5.	Other Information	3336
Item 6.	Exhibits	3337
SIGNATURES		3438

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements:

OncoSec Medical Incorporated

Condensed Consolidated Balance Sheets

	October 31, 2021			July 31, 2021			January 31, 2022			July 31, 2021
	(Unaudited)						(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	35,706,755		$	45,951,233		$	25,230,993		$	45,951,233
Prepaid expenses and other current assets		2,983,727			3,228,191			2,696,899			3,228,191
Total Current Assets		38,690,482			49,179,424			27,927,892			49,179,424
Property and equipment, net		874,636			928,821			1,071,001			928,821
Intangible assets, net		430,941			448,412			413,471			448,412
Operating lease right-of-use assets		5,350,864			5,445,744			5,149,229			5,445,744
Other long-term assets		278,000			273,523			527,733			273,523
Total Assets	$	45,624,923		$	56,275,924		$	35,089,326		$	56,275,924

Liabilities and Stockholders’ Equity

Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	4,513,535		$	5,561,645		$	3,454,209		$	5,561,645
Accrued compensation related		487,368			320,655			582,842			320,655
Operating lease liabilities		1,002,038			845,483			1,037,252			845,483
Notes payable		867,009			1,234,133
Note payable								497,223			1,234,133
Total Current Liabilities		6,869,950			7,961,916			5,571,526			7,961,916
Operating lease liabilities, net of current portion		4,976,279			5,238,207			4,702,622			5,238,207
Liability under co-promotion agreement - related party		5,000,000			5,000,000			5,000,000			5,000,000
Total Liabilities		16,846,229			18,200,123			15,274,148			18,200,123

Commitments and Contingencies (Note 8)								-			-

Stockholders’ Equity
Common stock authorized - 100,000,000 common shares with a par value of $0.0001 as of October 31, 2021 and July 31, 2021, common stock issued and outstanding — 39,202,590 and 39,152,610 common shares as of October 31, 2021 and July 31, 2021, respectively		3,921			3,916
Common stock authorized – 100,000,000 common shares with a par value of $0.0001 as of January 31, 2022 and July 31, 2021, common stock issued and outstanding – 39,349,269 and 39,152,610 common shares as of January 31, 2022 and July 31, 2021, respectively								3,935			3,916
Additional paid-in capital		286,979,197			286,337,291			287,539,711			286,337,291
Warrants issued and outstanding – 1,706,190 warrants as of October 31, 2021 and July 31, 2021		3,591,734			3,591,734
Accumulated other comprehensive loss		(209,502	)		(79,109	)
Warrants issued and outstanding – 1,706,190 warrants as of January 31, 2022 and July 31, 2021								3,591,734			3,591,734
Accumulated other comprehensive income (loss)								173,874			(79,109	)
Accumulated deficit		(261,586,656	)		(251,778,031	)		(271,494,076	)		(251,778,031	)
Total Stockholders’ Equity		28,778,694			38,075,801			19,815,178			38,075,801
Total Liabilities and Stockholders’ Equity	$	45,624,923		$	56,275,924		$	35,089,326		$	56,275,924

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

OncoSec Medical Incorporated

Condensed Consolidated Statements of Operations

(Unaudited)

							January 31, 2022			January 31, 2021			January 31, 2022			January 31, 2021
	Three Months Ended						Three Months Ended						Six Months Ended
	October 31, 2021			October 31, 2020			January 31, 2022			January 31, 2021			January 31, 2022			January 31, 2021
Revenue	$	-		$	-		$	-		$	-		$	-		$	-
Expenses:
Research and development		6,645,771			9,799,361			6,825,540			8,915,381			13,471,311			18,714,740
General and administrative		3,269,723			3,240,732			2,590,893			2,110,696			5,860,616			5,351,429
Loss from operations		(9,915,494	)		(13,040,093	)		(9,416,433	)		(11,026,077	)		(19,331,927	)		(24,066,169	)
Other expense, net		(2,010	)		(623	)		(2,583	)		(440	)		(4,594	)		(1,063	)
Interest expense		(8,045	)		(6,134	)		(5,382	)		(4,722	)		(13,427	)		(10,856	)
Foreign currency exchange gain (loss), net		116,924			(176,917	)		(480,072	)		328,592			(363,147	)		151,674
Loss before income taxes		(9,808,625	)		(13,223,767	)		(9,904,470	)		(10,702,647	)		(19,713,095	)		(23,926,414	)
Income tax expense		-			1,500			2,950			1,450			2,950			2,950
Net loss	$	(9,808,625	)	$	(13,225,267	)	$	(9,907,420	)	$	(10,704,097	)	$	(19,716,045	)	$	(23,929,364	)
Basic and diluted net loss per common share	$	(0.25	)	$	(0.49	)	$	(0.25	)	$	(0.37	)	$	(0.50	)	$	(0.86	)
Weighted average shares used in computing basic and diluted net loss per common share		39,177,330			26,771,176			39,314,860			28,676,719			39,246,095			27,723,948

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

OncoSec Medical Incorporated

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

	October 31, 2021			October 31, 2020			January 31, 2022			January 31, 2021			January 31, 2022			January 31, 2021
	Three Months Ended						Three Months Ended						Six Months Ended
	October 31, 2021			October 31, 2020			January 31, 2022			January 31, 2021			January 31, 2022			January 31, 2021

Net Loss	$	(9,808,625	)	$	(13,225,267	)	$	(9,907,420	)	$	(10,704,097	)	$	(19,716,045	)	$	(23,929,364	)
Foreign currency translation adjustments		(130,393	)		92,315			383,376			(358,134	)		252,983			(265,819	)
Comprehensive Loss	$	(9,939,018	)	$	(13,132,952	)	$	(9,524,044	)	$	(11,062,231	)	$	(19,463,062	)	$	(24,195,183	)

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

OncoSec Medical Incorporated

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

Three Months Ended ~~October~~January 31, ~~2021~~2022

												Accumulated									Shares		Amount		Capital			Shares		Amount		Loss			Deficit			Equity
					Additional							Other						Total			Common Stock				Additional Paid-In			Warrants				Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Common Stock				Paid-In			Warrants				Comprehensive			Accumulated			Stockholders’			Shares		Amount		Capital			Shares		Amount		Loss			Deficit			Equity
	Shares		Amount		Capital			Shares		Amount		Loss			Deficit			Equity
Balance, July 31, 2021		39,152,610	$	3,916	$	286,337,291			1,706,190	$	3,591,734	$	(79,109	)	$	(251,778,031	)	$	38,075,801
Balance, October 31, 2021																						39,202,590	$	3,921	$	286,979,197			1,706,190	$	3,591,734	$	(209,502	)	$	(261,586,656	)	$	28,778,694
Stock-based compensation expense		37,480		4		599,903			—		—		—			—			599,907			15,179		1		356,666			—		—		—			—			356,667
Tax withholdings paid on equity awards		—		—		(28,119	)		—		—		—			—			(28,119	)		—		—		(4,886	)		—		—		—			—			(4,886	)
Tax shares sold to pay for tax withholdings on equity awards		—		—		27,623			—		—		—			—			27,623			—		—		4,762			—		—		—			—			4,762
August 2020 Registered Direct Offering
August 2020 Registered Direct Offering,shares
Common stock issued for services		12,500		1		42,499			—		—		—			—			42,500
Common stock issued for services, shares
Exercise of common stock warrants
Exercise of common stock warrants, shares
Cancellation of expired warrants
Cancellation of expired warrants, shares
January 2021 Public Offering, net of $2,970,165 issuance costs
January 2021 Public Offering, net of $2,970,165 issuance costs, shares
Dividends declared ($0.00 per share)
August 2020 Registered Direct Offering, net of $1,464,276 issuance costs
August 2020 Registered Direct Offering, net of $1,464,276 issuance costs, shares
Exercise of common stock warrants
Exercise of common stock warrants, shares
Exercise of common stock options																						130,000		13		202,787			—		—		—			—			202,800
Common stock issued for employee stock purchase plan																						1,500		—		1,185			—		—		—			—			1,185
Other comprehensive income																						—		—		—			—		—		383,376			—			383,376
Net loss		—		—		—			—		—		—			(9,808,625	)		(9,808,625	)		—		—		—			—		—		—			(9,907,420	)		(9,907,420	)
Other comprehensive loss		—		—		—			—		—		(130,393	)		—			(130,393	)
Balance, October 31, 2021		39,202,590	$	3,921	$	286,979,197			1,706,190	$	3,591,734	$	(209,502	)	$	(261,586,656	)	$	28,778,694
Balance, January 31, 2022																						39,349,269	$	3,935	$	287,539,711			1,706,190	$	3,591,734	$	173,874		$	(271,494,076	)	$	19,815,178

~~Three~~Six Months Ended ~~October~~January 31, ~~2020~~2022

Accumulated
Additional Other Total
Common Stock Paid-In Warrants Comprehensive Accumulated Stockholders’
Shares Amount Capital Shares Amount Income (Loss) Deficit Equity
Balance, July 31, 2020 23,054,474 $ 2,305 $ 214,789,808 3,114,288 $ 5,708,127 $ (19,504 ) $ (206,610,300 ) $ 13,870,436
Stock-based compensation expense 6,541 — 1,894,022 — — — — 1,894,022
Tax withholdings paid on equity awards — — (13,532 ) — — — — (13,532 )
Tax shares sold to pay for tax withholdings on equity awards — — 14,113 — — — — 14,113
August 2020 Registered Direct Offering, net of $1,464,276 issuance costs 4,608,589 461 13,513,177 — — — — 13,513,638
Common stock issued for services 25,000 3 84,997 — — — — 85,000
Other comprehensive loss — — — — — 92,315 — 92,315
Net loss — — — — — (13,225,267 ) (13,225,267 )
Balance, October 31, 2020 27,694,604 $ 2,769 $ 230,282,585 3,114,288 $ 5,708,127 $ 72,811 $ (219,835,567 ) $ 16,230,725

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

	Common Stock				Additional Paid-In			Warrants				Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Shares		Amount		Loss			Deficit			Equity
Balance, July 31, 2021		39,152,610	$	3,916	$	286,337,291			1,706,190	$	3,591,734	$	(79,109	)	$	(251,778,031	)	$	38,075,801
Stock-based compensation expense		52,659		5		956,569			—		—		—			—			956,574
Tax withholdings paid on equity awards		—		—		(33,005	)		—		—		—			—			(33,005	)
Tax shares sold to pay for tax withholdings on equity awards		—		—		32,385			—		—		—			—			32,385
Common stock issued for services		12,500		1		42,499			—		—		—			—			42,500
Exercise of common stock options		130,000		13		202,787			—		—		—			—			202,800
Common stock issued for employee stock purchase plan		1,500		—		1,185			—		—		—			—			1,185
Other comprehensive income		—		—		—			—		—		252,983			—			252,983
Net loss		—		—		—			—		—		—			(19,716,045	)		(19,716,045	)
Balance, January 31, 2022		39,349,269	$	3,935	$	287,539,711			1,706,190	$	3,591,734	$	173,874		$	(271,494,076	)	$	19,815,178

Three Months Ended January 31, 2021~~OncoSec Medical Incorporated~~

~~Condensed Consolidated Statements of Cash Flows~~

~~(Unaudited)~~

	Common Stock				Additional Paid-In			Warrants						Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Shares			Amount			Income (Loss)			Deficit			Equity
Balance, October 31, 2020		27,694,604	$	2,769	$	230,282,585			3,114,288		$	5,708,127		$	72,811		$	(219,835,567	)	$	16,230,725
Common stock issued for employee stock purchase plan		1,538		—		5,798			—			—			—			—			5,798
Exercise of common stock warrants		882,261		88		4,178,747			(882,261	)		(1,135,035	)		—			—			3,043,800
Exercise of common stock options		158,248		16		261,710			—			—			—			—			261,726
Stock-based compensation expense		6,541		1		478,158			—			—			—			—			478,159
Tax withholdings paid on equity awards		—		—		(12,927	)		—			—			—			—			(12,927	)
Tax shares sold to pay for tax withholdings on equity awards		—		—		13,937			—			—			—			—			13,937
Cancellation of expired warrants		—		—		242,143			(10,712	)		(242,143	)		—			—			—
January 2021 Public Offering, net of $2,970,165 issuance costs		7,711,284		771		39,055,561			—			—			—			—			39,056,332
Common stock issued for services		37,500		4		127,496			—			—			—			—			127,500
Dividends declared ($0.00 per share)		—		—		—			—			—			—			—			—
Other comprehensive loss		—		—		—			—			—			(358,134	)		—			(358,134	)
Net loss		—		—		—			—			—			—			(10,704,097	)		(10,704,097	)
Balance, January 31, 2021		36,491,976	$	3,649	$	274,633,208			2,221,315		$	4,330,949		$	(285,323	)	$	(230,539,664	)	$	48,142,819

October 31, 2021 October 31, 2020
Three Months Ended
October 31, 2021 October 31, 2020
Operating activities
Net loss $ (9,808,625 ) $ (13,225,267 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 63,996 50,044
Amortization of right-of-use asset 94,880 209,248
Stock-based compensation 599,907 1,894,022
Common stock issued for services 42,500 85,000
Foreign currency exchange (gain) loss, net (116,924 ) 176,917
Changes in operating assets and liabilities:
Prepaid expenses and other current assets 270,956 (288,993 )
Other long-term assets - (8 )
Accounts payable and accrued liabilities (1,076,281 ) 1,605,700
Accrued compensation related 166,712 (98,505 )
Operating lease liabilities (105,373 ) (146,762 )
Net cash used in operating activities (9,868,252 ) (9,738,604 )

Financing activities
Proceeds from issuance of common stock - 14,977,914
Payment of financing and offering costs - (1,432,861 )
Principal payments on note payable (367,124 ) (164,376 )
Tax withholdings paid on equity awards (28,119 ) (13,532 )
Tax shares sold to pay for tax withholdings on equity awards 27,623 14,113
Net cash (used in) provided by financing activities (367,620 ) 13,381,258
Effect of exchange rate changes on cash and cash equivalents (8,606 ) (21,487 )
Net (decrease) increase in cash and cash equivalents (10,244,478 ) 3,621,167
Cash and cash equivalents, at beginning of period 45,951,233 20,354,462
Cash and cash equivalents, at end of period $ 35,706,755 $ 23,975,629

Supplemental disclosure for cash flow information:
Cash paid during the period for:
Interest $ 8,045 $ 3,741
Income taxes $ - $ 1,500
Noncash investing and financing transactions:
Increase in right-of-use assets and operating lease liabilities resulting from contract modification $ - $ 388,372
Amounts accrued for offering costs $ - $ 31,415

Six Months Ended January 31, 2021

	Common Stock				Additional Paid-In			Warrants						Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Shares			Amount			Income (Loss)			Deficit			Equity
Balance, July 31, 2020		23,054,474	$	2,305	$	214,789,808			3,114,288		$	5,708,127		$	(19,504	)	$	(206,610,300	)	$	13,870,436
Balance		23,054,474	$	2,305	$	214,789,808			3,114,288		$	5,708,127		$	(19,504	)	$	(206,610,300	)	$	13,870,436
Common stock issued for employee stock purchase plan		1,538		—		5,798			—			—			—			—			5,798
Exercise of common stock warrants		882,261		88		4,178,747			(882,261	)		(1,135,035	)		—			—			3,043,800
Exercise of common stock options		158,248		16		261,710						—			—			—			261,726
Stock-based compensation expense		13,082		1		2,372,180			—			—			—			—			2,372,181
Tax withholdings paid on equity awards		—		—		(26,459	)		—			—			—			—			(26,459	)
Tax shares sold to pay for tax withholdings on equity awards		—		—		28,049			—			—			—			—			28,049
Cancellation of expired warrants		—		—		242,143			(10,712	)		(242,143	)		—			—			—
August 2020 Registered Direct Offering, net of $1,464,276 issuance costs		4,608,589		461		13,513,177			—			—			—			—			13,513,638
January 2021 Public Offering, net of $2,970,165 issuance costs		7,711,284		771		39,055,561			—			—			—			—			39,056,332
Common stock issued for services		62,500		7		212,494			—			—			—			—			212,501
Dividends declared ($0.00 per share)		—		—		—			—			—			—			—			—
Other comprehensive loss		—		—		—			—			—			(265,819	)		—			(265,819	)
Net loss		—		—		—			—			—			—			(23,929,364	)		(23,929,364	)
Other comprehensive Income (loss)		—		—		—			—			—			(265,819	)					(265,819	)
Balance, January 31, 2021		36,491,976	$	3,649	$	274,633,208			2,221,315		$	4,330,949		$	(285,323	)	$	(230,539,664	)	$	48,142,819
Balance		36,491,976	$	3,649	$	274,633,208			2,221,315		$	4,330,949		$	(285,323	)	$	(230,539,664	)	$	48,142,819

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

OncoSec Medical Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	January 31, 2022			January 31, 2021
	Six Months Ended
	January 31, 2022			January 31, 2021
Operating activities
Net loss	$	(19,716,045	)	$	(23,929,364	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		129,959			108,068
Amortization of right-of-use asset		325,316			417,059
Stock-based compensation		956,574			2,372,181
Common stock issued for services		42,500			212,501
Foreign currency exchange (gain) loss, net		363,147			(151,674	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		508,205			246,393
Other long-term assets		(290,876	)		(21	)
Accounts payable and accrued liabilities		(2,118,642	)		240,307
Accrued compensation related		262,186			84,041
Operating lease liabilities		(343,817	)		(189,373	)
Net cash used in operating activities		(19,881,493	)		(20,589,882	)

Investing activities
Purchase of fixed assets		(244,857	)		—
Purchase of intangible assets		—			(250,000	)
Net cash used in investing activities		(244,857	)		(250,000	)

Financing activities
Proceeds from issuance of common stock through ESPP		1,185			5,798
Proceeds from issuance of common stock		—			57,004,411
Payment of financing and offering costs		(15,500	)		(4,157,379	)
Proceeds from exercise of warrants		—			3,043,800
Proceeds from exercise of options		202,800			261,726
Proceeds from co-promotion agreement		—			5,000,000
Principal payments on note payable		(736,910	)		(330,144	)
Tax withholdings paid on equity awards		(33,005	)		(26,459	)
Tax shares sold to pay for tax withholdings on equity awards		32,385			28,049
Net cash provided by (used in) financing activities		(549,045	)		60,829,802
Effect of exchange rate changes on cash and cash equivalents		(44,845	)		(13,811	)
Net increase (decrease) in cash and cash equivalents		(20,720,240	)		39,976,109
Cash and cash equivalents, at beginning of period		45,951,233			20,354,462
Cash and cash equivalents, at end of period	$	25,230,993		$	60,330,571

Supplemental disclosure for cash flow information:
Cash paid during the period for:
Interest	$	13,427		$	6,089
Income taxes	$	2,950		$	2,950
Noncash investing and financing transactions:
Amount accrued for purchase of intangible asset	$	—		$	245,000
Expiration of warrants	$	—		$	242,143
Increase in right-of-use assets and operating lease liabilities resulting from contract modification	$	—		$	338,819
Amounts accrued for offering costs	$	—		$	277,062

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

OncoSec Medical Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1—Nature of Operations and Basis of Presentation

OncoSec Medical Incorporated (together with its subsidiary, unless the context indicates otherwise, being collectively referred to as the “Company”) began its operations as a biotechnology company in March 2011. The Company has not generated any revenues since its inception. The Company was incorporated in the State of Nevada on February 8, 2008 under the name of Netventory Solutions, Inc. and changed its name to OncoSec Medical Incorporated in March 2011 when it began operating as a biotechnology company.

The Company is a late-stage immuno-oncology company focused on designing, developing and commercializing innovative, proprietary, intra-tumoral DNA-based therapeutics to stimulate and to augment anti-tumor immune responses for the treatment of cancers. Its core technology platform ImmunoPulse® is a drug-device therapeutic modality platform comprised of a proprietary intratumoral electroporation (“EP”) delivery ~~devices~~device (the ~~“OncoSec Medical System (“OMS”) Electroporation Device” or~~ “OMS EP Device”) and a proprietary DNA plasmid that triggers transient expression of target protein in cells. The OMS EP Device is designed to deliver plasmid DNA-encoded drugs directly into a solid tumor and promote an immunological response against the cancer. The OMS EP Device can be adapted to treat different tumor types, and consists of an electrical pulse generator and disposable applicators. The Company’s lead product candidate is a DNA-encoded interleukin-12 (“IL-12”) called tavokinogene telseplasmid (“~~TAVO”~~TAVO™”). The OMS EP Device is used to deliver ~~TAVO~~TAVO™ intratumorally, with the aim of reversing the immunosuppressive microenvironment in the treated tumor and elicit systemic tumor-specific immune responses in cancer patients. The activation of the appropriate inflammatory response in the treated tumor can drive a systemic anti-tumor response against untreated tumors in other parts of the body. In 2017, the Company received Fast Track Designation and Orphan Drug Designation from the U.S. Food and Drug Administration (“FDA”) for ~~TAVO~~TAVO™ in metastatic melanoma, which could qualify ~~TAVO~~TAVO™ for expedited FDA review, a rolling Biologics License Application (“BLA”) review and certain other benefits.

The Company’s primary focus is to pursue its study of ~~TAVO~~TAVO™ in combination with KEYTRUDA® (pembrolizumab) in melanoma and triple negative breast cancer (“TNBC”).

The Company’s KEYNOTE-695 study is a registration-directed, Phase 2b open-label, single-arm, multicenter study in approximately 100 patients treated with ~~TAVO~~TAVO™ in combination with KEYTRUDA® (pembrolizumab) in anti-PD-1 checkpoint inhibitor (nivolumab or pembrolizumab) relapsed or refractory metastatic melanoma, being conducted in the United States, Canada, Australia and Europe. In May 2017, the Company entered into a clinical trial collaboration and supply agreement with a subsidiary of Merck & Co., Inc. (“Merck”) in connection with the KEYNOTE-695 study. Pursuant to the terms of the agreement, ~~both companies~~each company will bear ~~their~~its own costs related to manufacturing and supply of ~~their~~its product, as well as be responsible for ~~their~~its own internal costs. The Company is the study sponsor and is responsible for external costs. The study completed enrollment of the primary cohort in December 2020. In December 2020, the protocol was amended to include an additional cohort, consisting of patients who progressed on prior treatment ~~of both~~with ipilimumab ~~and nivolumab.~~in addition to prior anti-PD-1 checkpoint inhibitor. The amendment also enabled enrollment of approximately 25 additional patients to be treated with an updated version of the OMS EP Device (i.e., GenPulse^TM generator and Series 3 Applicator), in preparation for seeking FDA ~~clearance.~~approval. Based on and subject to the outcome of the study and feedback from the FDA, the Company plans to file for accelerated approval with the FDA for this patient population in ~~the second half of 2022.~~2023.

The Company’s KEYNOTE-890 study is a Phase 2, open-label, single-arm, multicenter study conducted in the United States and Australia to evaluate the safety and efficacy of TAVO™ in combination with KEYTRUDA® in patients with inoperable locally advanced or metastatic TNBC ~~the safety and efficacy of TAVO in combination with KEYTRUDA® in patient~~ who have previously failed at least one systemic chemotherapy or immunotherapy (Cohort 1) or ~~the safety and efficacy of TAVO in combination with KEYTRUDA® and chemotherapy in patients with~~who have had no prior systemic therapy in the advanced or metastatic setting (Cohort 2). In May 2018, the Company entered into a second clinical trial collaboration and supply agreement with a subsidiary of Merck with respect to the KEYNOTE-890 study, Cohort 1. Pursuant to the terms of the agreement, ~~both companies~~each company will bear ~~their~~its own costs related to manufacturing and supply of ~~their~~its product, as well as be responsible for ~~their~~its own internal costs. The Company is the study sponsor and is responsible for external costs. In June 2020, the Company amended its second clinical trial collaboration and supply agreement ~~with Merck~~ to include KEYNOTE-890, Cohort 2. Pursuant to the terms of the amended agreement, both companies will bear their own costs related to the manufacture and supply of their product, as well as be responsible for their own internal costs. The Company is the study sponsor and is responsible for external costs. Enrollment of Cohort 1 was completed (26 patients) in December 2020. Interim data for Cohort 1 was initially presented at the San Antonio Breast Cancer Symposium (“SABCS”) in December 2019, and an update on this cohort is was presented at the SABCS in December 2021. Enrollment of Cohort 2 (target 40 patients) began in January 2021 and is expected to be completed in 2022.

In May 2019, the Company supported commencement of an investigator-initiated Phase 1 clinical trial conducted by the University of California San Francisco (“UCSF”) Helen Diller Family Comprehensive Cancer ~~Center (“OMS-131”).~~Center. This study targets patients with Squamous Cell Carcinoma of the Head & Neck and is a single-arm open-label clinical trial in which 68 evaluable patients will receive ~~TAVO,~~TAVO™, KEYTRUDA® and epacadostat. Recruitment on this study has been halted after the last patient was treated in June 2021 while the Company and UCSF consider alterations in the design of the study.

In August 2020, the Company supported commencement of an investigator-initiated Phase 2 study conducted by the H. Lee Moffitt Cancer Center and Research Institute and the University of South Florida Morsani College of Medicine to evaluate TAVO™ as neoadjuvant treatment (administered before surgery) in combination with intravenous OPDIVO®(nivolumab) in up to 33 patients with operable locally/regionally advanced melanoma. This study has been designed to evaluate whether the addition of ~~TAVO~~TAVO™ can increase the published anti-tumor response observed with monotherapy OPDIVO®, an anti-PD-1 checkpoint inhibitor, in patients with locally/regionally advanced melanoma prior to surgical resection of tumors. This study began enrolling patients in December of ~~2020 and is~~2020. Enrollment for this trial was expected to ~~complete enrollment~~be completed in 2022. However, the completion date is under evaluation given current recruitment rates and may extend beyond 2022.

In November 2020, the Company obtained ~~exclusively licensed rights~~an exclusive license to the Cliniporator® electroporation gene electrotransfer platform from IGEA Clinical Biophysics. This platform has been used for electrochemotherapy in and outside of Europe in over 200 major oncological centers to treat cutaneous metastatic cancer nodules, including melanoma. The license encompasses a broad field of use for gene delivery in oncology, including use as part of the Company’s visceral lesion applicator (“VLA”) program.

In April 2020, the Company announced that Providence Cancer Institute, a part of Providence St. Joseph Health (“Providence”), was pursuing a first-in-human Phase 1 clinical trial of ~~OncoSec’s~~the Company’s novel DNA-encodable, investigational vaccine, CORVax12, which is designed to act as a prophylactic vaccine to prevent COVID-19. CORVax12 consists of the Company’s existing product candidate, TAVO™, in combination with an immunogenic component of the SARS-CoV-2 virus developed by researchers at the National Institutes of Health National Institute of Allergy and Infectious Diseases (“NIAID”). Providence investigators filed and received an Investigator-Initiated Investigational New Drug (“IND”) Application; however, at this time, Providence does not intend to continue further enrollment in this study.

In April 2021, the Company announced that it ~~has~~ received authorization to CE mark the OMS ~~(OncoSec Medical System)~~ EP ~~(Electroporation)~~ Device for use in solid tumors. ~~The CE-marked OMS includes GenPulse~~^TM, a new version of the electrical pulse generator. The CE mark certification augments the Notified Body certification to the International Organization for Standardization’s (“ISO”) 13485 standard for the design, development, manufacture and distribution of electroporation devices, which is renewed annually, subject to a successful audit. AThat CE mark indicates compliance with Medical Device Directives (MDD) of the European Commission ~~within~~for the ~~31-nation European Economic Area and Switzerland. The GenPulse generator is being developed~~OMS EP Device as aconfigured at the time. Subsequent to receiving the CE mark for that version of the OMS EP Device, the Company has advanced the design of the applicator component of the OMS ~~and~~EP Device. This newer version of the OMS EP Device, which still includes the GenPulse^TM generator, is currently used as an investigational device in clinical trial sites in Australia, the EU and ~~the EU.~~Switzerland. The Company is currently seeking FDA agreement tofor investigational use of the GenPulse^TM as the generator component of the OMS EP Device in ~~U.S.~~US clinical sites.

~~In July 2021, the Company entered into a clinical trial collaboration and supply agreement with Merck with respect to a Phase 3 study of TAVO~~^TM ~~in combination with KEYTRUDA~~^® to evaluate the safety and efficacy of the combination in patients with Stage III or IV unresectable, metastatic melanoma, and who are refractory to prior checkpoint therapy. This study is referred to as KEYNOTE-C87. Pursuant to the terms of the agreement, both companies will bear their own costs related to manufacturing and supply of their product, as well as be responsible for their own internal costs. The Company is the study sponsor and is responsible for external costs. The trial is designed to be a global Phase 3 randomized clinical trial and is intended to support accelerated approval by the U.S. FDA and/or serve as a pivotal study to support a full licensure.

The Company intends to continue to pursue potential new trials and studies related to ~~TAVO,~~TAVO™, in various tumor types. In addition, the Company is also developing its next-generation EP device and applicator, including advancements toward prototypes, pursuing discovery research to identify other product candidates that, in addition to IL-12, can be encoded into ~~propriety~~proprietary plasmid-DNA and delivered intratumorally using EP. Specifically, the Company is developing ~~propriety~~proprietary technology to potentially treat liver, lung, bladder, pancreatic and other difficult to treat visceral lesions through the direct delivery of plasmid-based IL-12 with the VLA.

The VLA is being designed to work with low voltage EP generators, including but not limited to the Company’s proprietary APOLLO^TMEP generator and Cliniporator^®, and ~~will~~is expected to enable transfection of immunologically relevant genes into cells located in visceral organs. In early 2020, the Company had two poster presentations, one at the Society for Interventional Oncology ~~(“SIO”)~~ and one at the Society for Interventional Radiology, where it presented preclinical data pertaining to visceral delivery of plasmid therapy. Additionally, the Company has successfully completed several large animal studies to assess VLA ~~design and aims~~design. The Company expected to bring a VLA into the clinic in 2023. ~~By using the Company’s next-generation technology with the VLA (and in cutaneous/subcutaneous settings as well), the Company’s goal~~However, this timeline is ~~to reverse the immunosuppressive mechanisms of a tumor, as well as to expand the Company’s pipeline.~~under evaluation and may extend beyond 2023. The Company believes that the flexibility of the Company’s proprietary plasmid-DNA technology allows the Company to deliver other immunologically relevant molecules into the tumor microenvironment in addition to the delivery of plasmid-DNA encoding for IL-12.

The Company established a collaboration with Emerge Health Pty (“Emerge”), the leading Australian company providing full registration, reimbursement, sales, marketing and distribution services of therapeutic products in Australia and New Zealand, to commercialize ~~TAVO~~TAVO™ and make it available under Australia’s Special Access Scheme (“SAS”). Emerge was acquired in late 2019 and in June 2021 informed the Company that oncology will not be a core therapeutic focus for Emerge into the future. The collaboration was terminated effective October 1, 2021, and the Company will not continue to participate in the SAS program.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet as of ~~October~~January 31, ~~2021,~~2022, the condensed consolidated statements of operations for the three and six months ended January 31, 2022 and 2021, the condensed consolidated statements of comprehensive loss for the three and six months ended January 31, 2022 and 2021, the condensed consolidated statements of stockholders’ equity for the three and six months ended January 31, 2022 and 2021, and the condensed consolidated statements of cash flows for the ~~three~~six months ended ~~October~~January 31, ~~2021~~2022 and ~~2020,~~2021, are unaudited, but include all adjustments (consisting of normal recurring adjustments) that, in the ~~Company considers~~opinion of management, is necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented. The condensed consolidated results of operations for the three and six months ended ~~October~~January 31, ~~2021~~2022 shown herein are not necessarily indicative of the consolidated results that may be expected for the year ending July 31, 2022, or for any other period. These condensed consolidated financial statements, and notes thereto, should be read in conjunction with the audited consolidated financial statements for the fiscal year ended July 31, 2021, included in the Company’s Annual Report on Form 10-K (the “Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”) on October 29, 2021. The condensed consolidated balance sheet at July 31, 2021 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by U.S. GAAP for complete financial statements.

Note 2—Significant Accounting Policies

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, OncoSec Medical Australia PTY LTD. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The accompanying condensed consolidated financial statements have been prepared in conformity with ~~generally accepted accounting principles in the United States of America (“~~U.S. ~~GAAP”),~~GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Such estimates include the Company’s ability to continue as a going concern and certain calculations related to that determination, stock-based compensation, the accrual of research, product development and clinical obligations, impairment of long-lived assets, determining the Incremental Borrowing Rate for calculating Right-Of-Use (“ROU”) assets and lease liabilities and accounting for income taxes, including the related valuation allowance on the deferred tax asset and uncertain tax positions. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. On an ongoing basis, the Company reviews its estimates to ensure that they appropriately reflect changes in the business or as new information becomes available. Actual results may differ from these estimates.

Segment Reporting

The Company operates in a single industry segment—the discovery and development of novel immunotherapeutic product candidates to improve treatment options for patients and physicians, intended to treat a wide range of oncology indications.

Cash and Cash Equivalents

The Company considers all highly liquid investments that are readily convertible into cash and have an original maturity of three months or less at the time of purchase to be cash equivalents.

Concentrations and Credit Risk

The Company maintains cash balances at a small number of financial institutions in both the United States and Australia and such balances commonly exceed the $250,000amount insured by the Federal Deposit Insurance Corporation and $250,000AUD (approximately $~~183,000~~176,000 USD) insured by the Australian Financial Claims Scheme. The Company has not experienced any losses in such accounts and management believes that the Company does not have significant credit risk with respect to such cash and cash equivalents.

Property and Equipment

The Company’s capitalization threshold is $5,000 for property and equipment. The cost of property and equipment is depreciated on a straight-line basis over the estimated useful lives of the related assets. The useful lives of property and equipment for the purpose of computing depreciation are as follows:

Schedule of Useful Lives of Property and Equipment for Purpose of Computing Depreciation

Computers and equipment:		3 to 10 years
Computer software:		1 to 3 years
Leasehold improvements:		Shorter of lease period or useful life

Construction-in-progress is stated at cost, which relates to the cost of equipment not yet placed into service. No depreciation expense is recorded on construction-in-progress until such time as the relevant assets are completed and put into use.

Intangible Assets

Definite life intangible assets include a license. Intangible assets are recorded at cost. License ~~agreements~~agreement cost represent the fair value of the license agreement on the date acquired. Intangible assets are amortized on a straight-line basis over their estimated useful life.

Impairment of Long-Lived Assets

The Company periodically assesses the carrying value of intangible and other long-lived assets, and whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. The assets are considered to be impaired if the Company determines that the carrying value may not be recoverable based upon its assessment, which includes consideration of the following events or changes in circumstances:

	●	the asset’s ability to continue to generate income from operations and positive cash flow in future periods;

	●	loss of legal ownership or title to the asset(s);

	●	significant changes in the Company’s strategic business objectives and utilization of the asset(s); and

	●	the impact of significant negative industry or economic trends.

If the assets are considered to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets. Fair value is determined by the application of discounted cash flow models to project cash flows from the assets. In addition, the Company bases estimates of the useful lives and related amortization or depreciation expense on its subjective estimate of the period the assets will generate revenue or otherwise be used by it. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less selling costs. The Company also periodically reviews the lives assigned to long-lived assets to ensure that the initial estimates do not exceed any revised estimated periods from which the Company expects to realize cash flows from its assets.

Research and Development Expenses

Research and development expenses consist of costs incurred for internal projects, as well as partner-funded collaborative research and development activities. These costs include direct and research-related overhead expenses, which include salaries, stock-based compensation and other personnel-related expenses, facility costs, supplies, depreciation of facilities and laboratory equipment, as well as research consultants and the cost of funding research at universities and other research institutions, and are expensed as incurred. Costs to acquire technologies that are utilized in research and development that have no alternative future use, are expensed when incurred. In accordance with ~~ASC~~Accounting Standards Codification (“ASC”) 730-20, the Company accounts for upfront, non-refundable research and development payments received from a related party as a long-term liability as there has not been a substantive and genuine transfer of risk and there is a presumption that the Company is obligated to repay the related party.

Accruals for Research and Development Expenses and Clinical Trials

The Company is required to estimate its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts vary from contract to contract and may result in payment terms that do not match the periods over which materials or services are provided under such contracts. The Company accounts for these expenses in its financial statements by matching those expenses with the period in which services are performed and efforts are expended. The Company determines accrual estimates through financial models and takes into account discussion with applicable personnel and outside service providers as to the progress of clinical trials, or the services completed. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates.

Fair Value of Financial Instruments

The carrying amounts for cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses and notes payable approximate fair value due to the short-term nature of these instruments. It is management’s opinion that the Company is not exposed to significant interest, currency, or credit risks arising from its other financial instruments and that their fair values approximate their carrying values except where expressly disclosed.

The accounting standard for fair value measurements provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in the absence of a principal, most advantageous market for the specific asset or liability.

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value.

The three tiers are defined as follows:

●	Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets at the measurement date. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

●	Level 2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities.

●	Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.

The Company had no assets or liabilities that required remeasurement on a recurring basis as of ~~October~~January 31, ~~2021~~2022 and July 31, 2021.

Warrants

The Company assesses its warrants as either equity or a liability based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded at fair value as of the date of issuance on the Company’s balance sheet and no further adjustments to their valuation are made. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as liabilities are recorded on the Company’s balance sheet at their fair value on the date of issuance and are re-measured on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. Management estimates the fair value of these liabilities using option pricing models and assumptions that are based on the individual characteristics of the warrants or other instruments on the valuation date, as well as assumptions for future financings, expected volatility, expected life, yield and risk-free interest rate. As of ~~October~~January 31, ~~2021~~2022 and July 31, 2021, all outstanding warrants issued by the Company were classified as equity.

Net Loss Per Share

The Company computes basic net loss per common share by dividing the applicable net loss by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing the applicable net loss by the weighted-average number of common shares outstanding during the period plus additional shares to account for the dilutive effect of potential future issuances of common stock relating to stock options and other potentially dilutive securities using the treasury stock method.

The Company did not include shares underlying stock options, restricted stock units and warrants issued and outstanding during any of the periods presented in the computation of net loss per share, as the effect would have been anti-dilutive. The following potentially dilutive outstanding securities were excluded from diluted net loss per share because of their anti-dilutive effect:

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

					For the Three and Six Months Ended		For the Three and Six Months Ended
	For the Three Months Ended October 31, 2021		For the Three Months Ended October 31, 2020		January 31, 2022		January 31, 2021
Stock options		2,852,425		2,520,639		2,436,059		2,359,604
Restricted stock units		105,164		25,873		89,985		19,332
Warrants		1,706,190		3,114,288		1,706,190		2,221,315
Total		4,663,779		5,660,800		4,232,234		4,600,251

Stock-Based Compensation

The Company grants equity-based awards (typically stock options or restricted stock units) under its stock-based compensation plan and outside of its stock-based compensation plan, with terms generally similar to the terms under the Company’s stock-based compensation plan. The Company estimates the fair value of stock option awards using the Black-Scholes option valuation model. For employees, directors and consultants, the fair value of the award is measured on the grant date. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. The Company estimates the fair value of restricted stock unit awards based on the closing price of the Company’s common stock on the date of issuance.

Employee Stock Purchase Plan

Employees may elect to participate in the Company’s stockholder-approved employee stock purchase plan. The stock purchase plan allows for the purchase of the Company’s common stock at not less than 85%85% of the lesser of (i) the fair market value of a share of common stock on the beginning date of the offering period and (ii) the fair market value of a share of common stock on the purchase date of the offering period, subject to a share and dollar limit as defined in the plan and subject to the applicable legal requirements. There are two six-month offering periods during each fiscal year, ending on January 31 and July 31.

In accordance with applicable accounting guidance, the fair value of awards under the stock purchase plan is calculated at the beginning of each offering period. The Company estimates the fair value of the awards using the Black-Scholes option valuation model. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and the offering period. This fair value is then amortized at the beginning of the offering period. Stock-based compensation expense is based on awards expected to be purchased at the beginning of the offering period, and therefore is reduced when participants withdraw during the offering period.

Leases

The Company determines if an arrangement is a lease at inception. Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating leases are included in ROU assets, current operating lease liabilities, and long-term operating lease liabilities on the Company’s condensed consolidated balance sheets.

Lease ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated using the Company’s incremental borrowing rate applicable to the lease asset, unless the implicit rate is readily determinable. ROU assets also include any lease payments made at or before lease commencement and exclude any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of 12 months or less are not recognized on the condensed consolidated balance sheets. The Company’s leases do not contain any residual value guarantees. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company accounts for lease and non-lease components as a single lease component for all its leases.

Foreign Currency Translation

The Company uses the U.S. Dollar as the reporting currency for its financial statements. Functional currency is the currency of the primary economic environment in which an entity operates. The functional currency of the Company’s wholly owned subsidiary is the Australian dollar.

Assets and liabilities of the Company’s subsidiary are translated into U.S. Dollars at period-end foreign exchange rates, and revenues and expenses are translated at average rates prevailing throughout the period. Translation adjustments are included in “Accumulated other comprehensive income” as a separate component of stockholders’ equity, and in the “Effect of exchange rate changes on cash and cash equivalents,” on the Company’s condensed consolidated statements of cash flows. Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in “Foreign currency exchange gain (loss), net” on the Company’s condensed consolidated statements of operations.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) includes foreign currency translation adjustments related to the Company’s subsidiary in Australia and is excluded from the accompanying condensed consolidated statements of operations.

1516

Australia Research and Development Tax Credit

The Company’s wholly-owned Australian subsidiary incurs research and development expenses, primarily in the course of conducting clinical trials. The Company’s Australian research and development activities qualify for the Australian government’s tax credit program, which provides a 43.5% credit for qualifying research and development expenses. The tax credit does not depend on the Company’s generation of future taxable income or ongoing tax status or position. Accordingly, the credit is not considered an element of income tax accounting under ~~Accounting Standards Codification (“ASC”)~~ASC 740 “Income Taxes” and is recorded against qualifying research and development expenses.

~~Tax Reform~~The CARES Act

On March 27, 2020, the president signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) providing nearly $2trillion in economic relief to eligible businesses impacted by the coronavirus outbreak. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss (“NOL”) utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. In addition to the Small Business Administration (“SBA”) loan received in April 2020, the Company continues to review, and intends to seek, any other available potential benefits under the CARES Act as well as any future legislation signed into law during ~~2021.~~2022. The effects of the CARES Act did not have a significant impact on the Company’s condensed consolidated financial statements during the three and six months ended ~~October~~January 31, 2022 and 2021.

Recent Accounting Pronouncements

No recent accounting pronouncements are anticipated to have an impact on or related to the Company’s financial condition, results of operations, or related disclosures.

Note 3—Going Concern and Management’s Plans

The Company has sustained losses in all reporting periods since inception, with an accumulated deficit of approximately $~~262~~ 271million as of ~~October~~January 31, ~~2021.~~2022. These losses are expected to continue for an extended period of time. Further, the Company has never generated any cash from its operations and does not expect to generate such cash in the near term. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the issuance date of the condensed consolidated financial statements. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern within one year after the date the condensed consolidated financial statements are issued.

As of ~~December 13, 2021,~~March 2, 2022, the Company had cash and cash equivalents of $~~30.2~~22.1 million. Since inception, cash flows from financing activities have been the primary source of the Company’s liquidity. Based on the Company’s current cash levels, the Company believes its cash resources are insufficient to meet the Company’s anticipated needs for the 12 months following the date the condensed consolidated financial statements are issued.

The Company recognizes it will need to raise additional capital to continue operating its business and fund its planned operations, including research and development, clinical trials and, if regulatory approval is obtained, commercialization of its product candidates. In addition, the Company will require additional financing if it desires to in-license or acquire new assets, research and develop new compounds or new technologies and pursue related patent protection, or obtain any other intellectual property rights or other assets. There is no assurance that additional financing will be available to the Company when needed, that management will be able to obtain financing on terms acceptable to the Company, or whether the Company will become profitable and generate positive operating cash flow. The source, timing and availability of any future financing will depend principally upon market conditions, and, more specifically, on the progress of our clinical development programs. Similarly, if our common stock is delisted from the Nasdaq Capital Market, it may limit our ability to raise additional funds. See Note 12—Nasdaq Deficiency Notices. The ongoing COVID-19 pandemic has also caused volatility in the global financial markets and threatened a slowdown in the global economy, which may negatively affect our ability to raise additional capital on attractive terms or at all. If the Company is unable to raise sufficient additional funds when needed, on favorable terms or at all, the Company will not be able to continue the development of its product candidates as currently planned or at all, will need to reevaluate its planned operations and may need to delay, scale back or eliminate some or all of its development programs, reduce expenses or cease operations, any of which would have a significant negative impact on its prospects and financial condition.

Note 4—Balance Sheet Details

Property and Equipment

Property and equipment, net, is comprised of the following:

Schedule of Property and Equipment, Net

	October 31, 2021			July 31, 2021			January 31, 2022			July 31, 2021
Equipment and furniture	$	1,911,641		$	1,919,301		$	1,944,540		$	1,919,301
Computer software		109,242			109,242			109,242			109,242
Leasehold improvements		32,651			32,651			32,651			32,651
Construction in progress		234,409			234,409			446,367			234,409
Property and equipment, gross		2,287,943			2,295,603			2,532,800			2,295,603
Accumulated depreciation and amortization		(1,413,307	)		(1,366,782	)		(1,461,799	)		(1,366,782	)
Total	$	874,636		$	928,821		$	1,071,001		$	928,821

Depreciation and amortization expense recorded for the three months ended ~~October~~January 31, ~~2021~~2022 and ~~2020~~2021 was approximately $~~47,000~~48,000 and $~~50,000~~46,000, respectively.

Depreciation and amortization expense recorded for the six months ended January 31, 2022 and 2021 was approximately $95,000 and $96,000, respectively.

Intangible Assets

Intangible assets, net, is comprised of the following:

Schedule of Intangible Assets

	October 31, 2021			July 31, 2021			January 31, 2022			July 31, 2021
License	$	495,000		$	495,000		$	495,000		$	495,000
Accumulated amortization		(64,059	)		(46,588	)		(81,529	)		(46,588	)
Total	$	430,941		$	448,412		$	413,471		$	448,412

In November 2020, the Company licensed generator technology for use in its clinical trials and other research and development efforts. Unless earlier terminated, the term of the license agreement will remain in effect for 85 months. The Company has determined that the license has alternative future uses in research and development projects. The value of the acquired license is recorded as an intangible asset with amortization over the estimated useful life of 85 months.

Intangible asset amortization expense recorded for the three months ended ~~October~~January 31, ~~2021~~2022 and ~~2020~~2021 was approximately $17,000 and $012,000, respectively.

Intangible asset amortization expense recorded for the six months ended January 31, 2022 and 2021 was approximately $35,000 and $12,000, respectively.

1718

At ~~October~~January 31, ~~2021,~~2022, the estimated amortization expense by fiscal year based on the current carrying value of intangible assets is as follows:

Schedule of Amortization Expense of Intangible Assets

	oct 31 2021			Jan 31,2022
Years ending July 31,
2022– the remainder of the fiscal year	$	52,412
2022 – the remainder of the fiscal year			$	34,942
2023		69,882		69,882
2024		69,882		69,882
2025		69,882		69,882
2026		69,882		69,882
Thereafter		99,001		99,001
Total	$	430,941	$	413,471

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities are comprised of the following:

Schedule of Accounts ~~Payable~~payable and ~~Accrued Liabilities~~accrued liabilities

	October 31, 2021		July 31, 2021		January 31, 2022		July 31, 2021
Research and development costs	$	3,032,542	$	4,206,926	$	2,622,088	$	4,206,926
Professional services fees		1,411,141		1,229,040		748,483		1,229,040
Other		69,852		125,679		83,638		125,679
Total	$	4,513,535	$	5,561,645	$	3,454,209	$	5,561,645

Accrued Compensation

Accrued compensation is comprised of the following:

Schedule of Accrued Compensation

	October 31, 2021		July 31, 2021		January 31, 2022		July 31, 2021
Accrued payroll	$	105,331	$	311,590	$	319,304	$	311,590
401K payable		31,933		9,065		8,584		9,065
Accrued Severance		350,104		-
Accrued severance						254,954		-
Total	$	487,368	$	320,655	$	582,842	$	320,655

Note 5—~~Notes~~Note Payable

On July 1, 2021, the Company entered into a finance agreement with AFCO Premium Credit LLC (“AFCO”). Pursuant to the terms of the agreement, AFCO loaned the Company the principal amount of $1,355,919, which would accrue interest at 2.894% per annum, to partially fund the payment of the premium of the Company’s Director & Officer insurance. The agreement requires the Company to make eleven monthly payments of $125,056, including interest starting on July 18, 2021. At ~~October~~January 31, ~~2021,~~2022, the outstanding balance related to this finance agreement was $~~867,009~~497,223.

Note 6—Stockholders’ Equity

January 2021 Offering

On January 25, 2021, the Company completed the offer and sale of an aggregate of 7,711,284 shares of its common stock at a purchase price of $5.45per share in a public offering. The gross proceeds from the offering were approximately $42.0 million, and the net proceeds, after deducting the placement agent’s fee and other offering fees and expenses paid by the Company, were approximately $39.1 million. In connection with the offering, the Company paid the underwriters an aggregate cash fee equal to 6.0% of the gross proceeds of the offering, as well as legal and other expenses equal to approximately $0.4 million.

August 2020 Offering

On August 19, 2020, the Company completed the offer and sale of an aggregate of 4,608,589shares of its common stock at a purchase price of $3.25per share in a registered direct public offering. The gross proceeds from the offering were approximately $15.0million, and the net proceeds, after deducting the placement agent’s fee and other offering fees and expenses paid by the Company, were approximately $13.5million. In connection with the offering, the Company paid the placement agent and other financial advisors an aggregate cash fee equal to ~~8.0%~~8.0% of the gross proceeds of the offering, as well as legal and other expenses equal to approximately $0.3million.

Outstanding Warrants

At ~~October~~January 31, ~~2021,~~2022, the Company had outstanding warrants to purchase 1,706,190 shares of its common stock, with exercise prices ranging from $3.45to $16.80, all of which were classified as equity instruments. These warrants expire at various dates between October 2022 and May 2024.

China Grand Pharmaceutical and Healthcare Holdings Limited and Sirtex Medical US Holdings, Inc.

On October 10, 2019, the Company and China Grand Pharmaceutical and Healthcare Holdings Limited, a company formed under the laws of the British Virgin Islands (“CGP”), and its affiliate, Sirtex Medical US Holdings, Inc., a Delaware corporation (“Sirtex”) entered into Stock Purchase Agreements (as amended, the “Purchase Agreements”). Pursuant to which CGP and Sirtex were given the right to purchase additional shares of common stock at a purchase price equal to the same exercise price paid by each warrant holder in order to maintain CGP and Sirtex’s respective ownership percentages of the outstanding shares of common stock of the Company as of October 10, 2019.

Note 7—Stock-Based Compensation

The OncoSec Medical Incorporated 2011 Stock Incentive Plan (as amended and approved by the Company’s stockholders (the “2011 Plan”)), authorizes the Company’s Board of Directors to grant equity awards, including but not limited to, stock options and restricted stock units, to employees, directors and consultants. The 2011 Plan authorizes a total of 4,600,000shares of common stock for issuance. Under the 2011 Plan, incentive stock options are to be granted at a price that is no less than 100% of the fair value of the Company’s common stock at the date of grant. Stock options vest over a period specified in the individual option agreements entered into with grantees and are exercisable for a maximum period of 10years after the date of grant. Incentive stock options granted to stockholders who own more than 10% of the outstanding stock of the Company at the time of grant must be issued at an exercise price of no less than 110% of the fair value of the Company’s common stock on the date of ~~grant~~.grant.

Modification of Stock Option Awards

During the six months ended January 31, 2021, the compensation committee of the Company’s Board of Directors approved the accelerated vesting of 791,019 and 91,666 previously granted time-vesting awards for employees and directors, respectively. The Company accounted for the effects of the stock option modifications described above under the guidance of ASC 718 as follows:

● The unamortized compensation costs associated with the time-vesting options was expensed on the date of acceleration, which was approximately $1.2 million and $0.1 million for the employees and directors, respectively.

● Upon modification, it is required under ASC 718 to analyze the fair value of the instruments, before and after the modification, recognizing additional compensation cost for any incremental value. The Company computed the fair value of the award immediately prior to the modification and compared the fair value to that of the modified award. Since the value of the awards were less after the modification as compared to immediately prior to the modification, no additional compensation expense was recorded.

Stock Options

During the ~~three~~six months ended ~~October~~January 31, ~~2021,~~2022, the Company granted options to purchase 23,400 and 25,000shares of its common stock to employees and a consultant under the 2011 Plan, respectively. The stock options issued to employees have a 10-year term, vest over two years and have exercise prices ranging from $2.01 to $2.26. The stock options issued to the consultant have a 10-year term, vest over one year and have an exercise price of $1.42.

During the ~~three~~six months ended ~~October~~January 31, ~~2020,~~2021, the Company granted options to purchase ~~726,576~~787,251, 125,000 and 25,000 shares of its common stock to employees, directors and a consultant under the 2011 Plan, respectively. The stock options issued to employees have a 10-year term, vest over three years and have exercise prices ranging from $3.43 to $~~3.82~~6.28. The stock options issued to directors have a 10-year term, vest over one year and have an exercise price of $3.43. The stock options issued to the consultant have a 10-year term, vest over one year and have an exercise price of $3.82.

During the ~~three~~six months ended ~~October~~January 31, ~~2020,~~2021, in accordance with Nasdaq Listing Rule 5635(c)(4), the Company granted an inducement equity award that consisted of options to purchase 300,000 shares of its common stock to an employee outside the 2011 Plan. The stock options issued to the employee are nonqualified, have a 10-year term, vest over one year and have an exercise price of $3.56.

The Company accounts for stock-based compensation based on the fair value of the stock-based awards granted and records forfeitures as they occur. As such, the Company recognizes stock-based compensation cost only for those stock-based awards that vest over their requisite service period, based on the vesting provisions of the individual grants. The service period is generally the vesting period, with the exception of stock options granted pursuant to a consulting agreement, in which case the stock option vesting period and the service period are defined pursuant to the terms of the consulting agreement.

The following assumptions were used for the Black-Scholes calculation of the fair value of stock-based compensation related to stock options granted during the periods presented:

Schedule of Assumptions used to Calculate Fair Value of Stock Based Compensation

	Three Months Ended October 31, 2021			Three Months Ended October 31, 2020			Six Months Ended January 31, 2022			Six Months Ended January 31, 2021
Expected term (years)		5.13 – 6.00 years			5.00–6.50 years			5.00 – 6.00 years			5.00 – 6.50 years
Risk-free interest rate		0.69 – 0.92	%		0.27 -0.52	%		0.69 – 1.30	%		0.27 – 0.65	%
Volatility		86.98 – 88.89	%		85.31 – 88.44	%		86.98 – 90.74	%		85.31 – 88.95	%
Dividend yield		0	%		0	%		0	%		0	%

The Company’s expected volatility is derived from the historical daily change in the market price of its common stock. The Company uses the simplified method to calculate the expected term of options issued to employees, non-employees and directors, as the Company does not have much stock option exercise history and thus does not have enough information on exercise behavior to calculate a refined expected term based on that information. The risk-free interest rate used in the Black-Scholes calculation is based on the prevailing U.S. Treasury yield in effect at the time of grant, commensurate with the expected term. For the expected dividend yield used in the Black-Scholes calculation, the Company has never paid any dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future.

The following is a summary of the Company’s 2011 Plan and non-Plan stock option activity for the ~~three~~six months ended ~~October~~January 31, ~~2021:~~2022:

Summary of Stock Option Activity

	Options			Weighted Average Exercise Price		Weighted - average Remaining Contract		Aggregate Intrinsic Value ($000)		Options			Weighted Average Exercise Price		Weighted - average Remaining Contract (in years)		Aggregate Intrinsic Value ($000)
Outstanding - July 31, 2021		3,111,642		$	3.27						3,111,642		$	3.27
Granted		23,400		$	2.12						48,400		$	1.76
Exercised											(130,000	)	$	1.56
Forfeited/Cancelled		(282,617	)	$	4.70						(593,983	)	$	3.75
Outstanding - October 31, 2021		2,852,425		$	3.12		8.9	$	92
Exercisable - October 31, 2021		2,083,160		$	2.88		8.8	$	88
Outstanding - January 31, 2022											2,436,059		$	3.22		8.7	$	-
Exercisable - January 31, 2022											1,877,040		$	3.07		8.6	$	-

The weighted-average grant date fair value of stock options granted during the ~~three~~six months ended ~~October~~January 31, ~~2021~~2022 and ~~2020~~2021 was $~~1.50~~1.24 and $~~2.58~~2.66, respectively.

As of ~~October~~January 31, ~~2021,~~2022, the Company has approximately $~~1.9~~1.3 million in unrecognized stock-based compensation expense attributable to the outstanding options, which is expected to be recognized over a weighted-average period of ~~1.45~~1.23 years. ~~The total fair value of shares vested during the three months ended October 31, 2021 and 2020 was approximately $1.1~~ ~~million and $1.7~~ ~~million, respectively.~~

Stock-based compensation expense recorded in the Company’s condensed consolidated statements of operations for the three and six months ended ~~October~~January 31, 2022 resulting from stock options awarded to the Company’s employees, directors and consultants was approximately $0.3 million and $0.8 million, respectively. Of the total expense, $0.2 million and $0.5 million, respectively, was recorded to research and development and $0.1 million and $0.3 million, respectively was recorded in general and administrative in the Company’s condensed consolidated statements of operations for the three and six months ended January 31, 2022.

Stock-based compensation expense recorded in the Company’s condensed consolidated statements of operations for the three and six months ended January 31, 2021 resulting from stock options awarded to the Company’s employees, directors and consultants was approximately $~~0.5~~ 0.4 million and $2.3 million, which included approximately $~~million.~~0 and $1.3 million, respectively, related to the accelerated vesting of time-vesting options. Of the total expense, $0.3 million and $1.3million, respectively, was recorded to research and development and $~~0.2~~ 0.1 million and $1.0million, respectively, was recorded in general and administrative in the Company’s condensed consolidated statements of operations for the three and six months ended ~~October~~January 31, 2021.

Stock-based compensation expense recorded in the Company’s condensed consolidated statements of operations for the three months ended October 31, 2020 resulting from stock options awarded to the Company’s employees, directors and consultants was approximately $~~1.9~~ ~~million. Of the total expense, $1.0~~ ~~million was recorded to research and development and $0.9~~ ~~million was recorded in general and administrative in the Company’s condensed consolidated statements of operations for the three months ended October 31, 2020.~~

Restricted Stock Units (“RSUs”)

For the three months ended ~~October~~January 31, ~~2021~~2022 and ~~2020,~~2021, the Company recorded approximately $~~76,000~~54,000 and $~~27,000~~42,000 in stock-based compensation related to RSUs, which is reflected in the condensed consolidated statements of operations.

For the six months ended January 31, 2022 and 2021, the Company recorded approximately $130,000 and $69,000 in stock-based compensation related to RSUs, which is reflected in the condensed consolidated statements of operations.

The following table summarize ~~restricted stock units~~RSUs issued and outstanding:

Summarize Restricted Stock Units

	RSUs			Weighted Average Grant Date Fair Value		RSUs			Weighted Average Grant Date Fair Value
Nonvested - July 31, 2021		442,749		$	3.24		442,749		$	3.24
Vested		(37,480	)	$	3.29		(52,659	)	$	3.35
Forfeited/Cancelled		(300,105	)	$	3.16		(300,105	)	$	3.16
Nonvested - October 31, 2021		105,164		$	3.44
Nonvested - January 31, 2022							89,985		$	3.43

As of ~~October~~January 31, ~~2021,~~2022, there was approximately $0.3 million unrecognized compensation cost related to unvested RSUs. This amount is expected to be recognized over a weighted-average period of ~~1.6~~1.35 years.

Shares Issued to Consultants

During the three months ended ~~October~~January 31, 2022 and 2021, 0and ~~2020,~~37,500 shares of common stock valued at $0 and approximately $0.1 million, respectively, were issued to a consultant for services. During the six months ended January 31, 2022 and 2021, 12,500 and ~~25,000~~62,500 shares of common stock valued at approximately $0.04million and $~~0.1~~0.2 million, respectively, were issued to a consultant for services. The common stock share values were based on the date the shares were granted.

2015 Employee Stock Purchase Plan

Under the Company’s 2015 Employee Stock Purchase Plan (“ESPP”), the Company is authorized to issue 50,000 shares of the Company’s common stock. At ~~October~~January 31, ~~2021,~~2022, there were ~~29,794~~28,294 shares remaining available for issuance under the ESPP.

The ESPP is considered a Type B plan under FASB ASC Topic 718 because the number of shares a participant is permitted to purchase is not fixed based on the stock price at the beginning of the offering period and the expected withholdings. The ESPP enables the participant to “buy-up” to the plan’s share limit, if the stock price is lower on the purchase date. As a result, the fair value of the awards granted under the ESPP is calculated at the beginning of each offering period as the sum of:

	●	15% of the share price of an unvested share at the beginning of the offering period,
	●	85% of the fair market value of a six-month call on the unvested share aforementioned, and
	●	15% of the fair market value of a six-month put on the unvested share aforementioned.

The fair market value of the six-month call and six-month put are based on the Black-Scholes option valuation model. For the six-month offering period to end on January 31, 2022, the following assumptions were used: six-month maturity, 0.05% risk free interest, 72.99% volatility, 0% forfeitures and $0 dividends. For the six-month offering period ended January 31, 2021, the following assumptions were used: six-month maturity, 0.1% risk free interest, 122.84% volatility, 0% forfeitures and $0 dividends.

Approximately $1,200and $4,100 was recorded as stock-based compensation during the ~~three~~six months ended ~~October~~January 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

Common Stock Reserved for Future Issuance

The following table summarizes all common stock reserved for future issuance at ~~October~~January 31, ~~2021:~~2022:

Summary of Common Stock Reserved for Future Issuance

			~~Oct312021~~
Common Stock options outstanding (within the 2011 Plan and outside of the terms of the 2011 Plan)			~~2,852,425~~2,436,059
Common Stock reserved for restricted stock unit release			~~105,164~~89,985
Common Stock authorized for future grant under the 2011 Plan			~~1,283,463~~1,569,829
Common Stock reserved for warrant exercise			1,706,190
Shares issuable under CGP and Sirtex stock purchase agreements ~~(See Note~~(Note 6)			1,924,001
Common Stock reserved for future ESPP issuance			~~29,794~~28,294
Total Common Stock reserved for future issuance			~~7,901,037~~7,754,358

Note 8—Commitments and Contingencies

Contingencies

The Company is not a party to any other legal proceeding or aware of any other threatened action as of the date of this report.

Employment Agreements

The Company has entered into employment agreements with certain executive officers and certain other key employees. Generally, the terms of these agreements provide that, if the Company terminates the officer or employee other than for cause, death or disability, or if the officer terminates his or her employment with the Company for good cause, the officer shall be entitled to receive certain severance compensation and benefits as described in each such agreement.

On August 13, 2021, the Company and the former interim CEO entered into an agreement, providing for severance payments and benefits to the former interim CEO consistent with the terms of his existing offer letter with the Company, including a severance payment of $~~365,000~~, less tax withholdings, and reimbursement of COBRA premiums (less the portion of the premium that he would have paid if he was an active employee), in each case payable for twelve months following his departure. Accrued severance of approximately $~~350,000~~ ~~was included in Accrued compensation related on the condensed consolidated balance sheet as of October 31, 2021.~~

Note 9—Leases

Lease Agreements

The Company has operating leases for corporate offices and lab space. These leases have remaining lease terms of approximately one year to seven years, some of which include options to extend the lease. For any lease where the Company is reasonably certain that a renewal option will be exercised, the lease payments associated with the renewal option period are included in the ROU asset and lease liability as of ~~October~~January 31, ~~2021.~~2022.

Supplemental balance sheet information related to leases as of ~~October~~January 31, ~~2021~~2022 was as follows:

Schedule of Operating Lease Liabilities

Operating Leases:	Oct, 31, 2021
Operating lease right-of-use assets	$	5,350,864	$	5,149,229
Operating Leases:
Current portion included in current liabilities	$	1,002,038	$	1,037,252
Long-term portion included in non-current liabilities		4,976,279		4,702,622
Total operating lease liabilities	$	5,978,317	$	5,739,874

Supplemental lease expense related to leases ~~was~~is as follows:

Schedule of Lease Expenses

For the Three Months Ended

October 31, 2021

For the Three Months Ended

January 31, 2022

For the Six

Months Ended

January 31, 2022

Operating lease cost

369,792

377,318

747,110

Total lease expense

369,792

377,318

747,110

Other information related to leases where the Company is the lessee is as follows:

Schedule of Other Information Related to Leases

	As of ~~October~~January 31, ~~2021~~2022
Weighted-average remaining lease term		~~4.8~~4.5 years

Weighted-average discount rate		9.96	%

Supplemental cash flow information related to operating leases is as follows:

Schedule of Cash Flow Information Related to Operating Leases

For the Three Months Ended

October 31, 2021

For the Three Months Ended

January 31, 2022

For the Six

Months Ended

January 31, 2022

Cash paid for operating lease liabilities

380,284

385,327

765,611

Total cash flows related to operating lease liabilities

380,284

385,327

765,611

Future minimum lease payments under non-cancellable leases as of ~~October~~January 31, ~~2021~~2022 is as follows:

Schedule of Future Minimum Lease Payments Under Non-Cancellable Lease

Years ending July 31,	Oct,31,2021
2022– the remainder of the fiscal year	$	1,162,716
2022 – the remainder of the fiscal year				$	777,389
2023		1,585,224			1,585,224
2024		1,539,142			1,539,142
2025		1,516,126			1,516,126
2026		1,533,882			1,533,882
Thereafter		240,688			240,688
Total minimum lease payments		7,577,778			7,192,451
Less: Imputed interest		(1,599,461	)		(1,452,577	)
Total	$	5,978,317		$	5,739,874

Note 10—401(k) Plan

Effective May 15, 2012, the Company adopted a defined contribution savings plan pursuant to Section 401(k) of the Code. The plan is for the benefit of all qualifying employees and permits voluntary contributions by employees of up to 100% of eligible compensation, subject to the maximum limits imposed by Internal Revenue Service. The terms of the plan allow for discretionary employer contributions and the Company currently matches 100% of its employees’ contributions, up to 3% of their annual compensation. The Company’s contributions are recorded as expense in the accompanying condensed consolidated statements of operations and ~~totalled~~totaled approximately $~~54,000~~ 28,000and $~~28,000~~ 32,000for the three months ended ~~October~~January 31, 2022 and 2021, respectively. The Company’s contributions totaled approximately $81,000and ~~2020,~~$60,000 for the six months ended January 31, 2022 and 2021, respectively.

Note 11—Related Party Transactions

Except as disclosed elsewhere herein, below are the Company’s related party ~~transactions.~~transactions for the three and six months ended January 31, 2022 and 2021.

Equity Offerings

On January 25, 2021, the Company completed the offer and sale of an aggregate of 7,711,284 shares of its common stock at a purchase price of $5.45 per share in a public offering (See Note 6). CGP and Sirtex participated in the offering. Each of CGP and Sirtex exercised its right of participation in future offerings in order to maintain respective ownership percentages of the outstanding shares of common stock of the Company upon close, and purchased 3,389,198 and 677,839 shares of common stock, respectively, at a purchase price of $5.45 per share.

On August 19, 2020, the Company completed the offer and sale of an aggregate of 4,608,589shares of its common stock at a purchase price of $3.25per share in a registered direct offering (See Note 6). CGP and Sirtex participated in the registered direct offering and maintained their respective ownership percentages of the outstanding shares of common stock of the Company upon ~~close.~~close, and purchased 1,999,000 and 399,800 shares of common stock, respectively, at a purchase price of $3.25 per share.

Co-Promotion ~~and Funded Research~~ Agreement

In January 2021, the Company entered into a co-promotion agreement with Sirtex, pursuant to which the Company granted Sirtex the option to co-promote ~~TAVO~~TAVO™ for the treatment of anti-PD-1 refractory locally advanced or metastatic melanoma in the U.S., including its territories and possessions. In consideration for the option, the Company received an upfront, non-refundable payment of $5.0million from Sirtex (the “option fee”). The option to co-promote is non-exclusive and may be exercised at any time by Sirtex from the effective date until 90 days following the receipt by Sirtex of a complete copy of the final BLA filed by the Company with the FDA (the “option period”). If Sirtex exercises the option, the Company will receive an additional non-refundable and non-creditable option exercise fee of $25.0million, comprised of $20.0million in cash, and $5.0million for the issuance of common shares of the Company determined by the average closing price of the stock for the 30 days prior to the date of receipt of the exercise notice for the option.

Under the terms of the co-promotion agreement, if Sirtex exercises the co-promote option, the Company will pay to Sirtex a high-teens to low-twenties royalty (“promotion fee”) of U.S. net sales of the ~~TAVO~~TAVO™ products. The co-promotion agreement will continue until the earlier of the expiration of the option period without Sirtex extending the option or the eighth anniversary of the first FDA approval of the BLA, and can be extended by mutual agreement between the Company and Sirtex. During the co-promotion term, the Company is responsible for funding approximately two-thirds of the promotional costs incurred by Sirtex and Sirtex shall be responsible for approximately one-third.

The Company has determined that the co-promotion agreement represents a funded research and development arrangement within the scope of ASC Subtopic 730-20, Research and Development—Research and Development Arrangements (ASC 730-20). The Company concluded that there has not been a substantive and genuine transfer of risk related to the co-promotion agreement and the Company’s ongoing development of ~~TAVO~~TAVO™ as there is a presumption that the Company is obligated to repay Sirtex based on the significant related party relationship that exists between the parties. This significant related party relationship is based on Sirtex’s approximate 8% ownership of the outstanding shares of the Company’s common stock, and that of its significant equity holder, CGP (which owns 49%49% of Sirtex), which, at the time of entering into the agreement, owned approximately 42%42% of the outstanding shares of the Company’s common stock and is the Company’s largest shareholder.

The Company has determined that the appropriate accounting treatment under ASC 730-20 is to record any proceeds received from Sirtex for the co-promote option or upon exercise of the option as cash and cash equivalents as the Company has the ability to direct the usage of funds, and as a corresponding long-term liability (“Liability under co-promotion agreement – related party”) on the Company’s condensed consolidated balance sheet when received. The liability will remain on the balance sheet until (i) Sirtex exercises the option which results in royalties paid by the Company to Sirtex based on the net sales of the ~~TAVO~~TAVO™ products, or (ii) Sirtex does not exercise the option and the co-promotion agreement is terminated by the parties.

As of ~~October~~January 31, ~~2021,~~2022, the balance of the Liability under co-promotion agreement – related party relates to the option fee payment of $5.0 million received from Sirtex.

Note 12—~~Subsequent Events~~Nasdaq Deficiency Notices

On February 9, 2022, the Company received notice (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”) that the Company is not in compliance with Nasdaq Listing Rule 5550(a)(2), as the minimum bid price of the Company’s common stock had been below $1.00 per share for 30 consecutive business days as of the date of the Notice. The Notice has no immediate effect on the listing of the Company’s common stock, which will continue to trade at this time on the Nasdaq Capital Market under the symbol “ONCS.”

~~Except as disclosed elsewhere herein, below are~~In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days, or until August 8, 2022, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company’s ~~subsequent events.~~common stock must meet or exceed $1.00 per share for at least ten consecutive business days during this 180 calendar day period. In the event the Company does not regain compliance by August 8, 2022, the Company may be eligible for an additional 180 calendar day grace period if it meets the continued listing requirement for market value of publicly held shares ($1 million) and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price, and provides written notice to Nasdaq of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. If the Company does not regain compliance within the allotted compliance period(s), Nasdaq will provide notice that the Company’s common stock will be subject to delisting from the Nasdaq Capital Market. In that event, the Company may appeal such delisting determination to a hearings panel.

On November 29, 2021, the Company notified ~~The~~ Nasdaq ~~Capital Market (“Nasdaq”)~~ that Robert E. Ward had resigned as ~~previously~~a member of the Board of Directors and the Company’s Audit Committee, as disclosed on the Company’s Current Report filed on Form 8-K on November 30, ~~2021, had resigned as a member of the board of directors of the Company (the “Board”) and the Company’s Audit Committee.~~2021. After giving effect to Mr. Ward’s resignation, the Company’s Audit Committee no longer consists of three independent members as required by Nasdaq Listing Rule 5605(c)(2)(A).

On December 8, 2021, the Company received a letter from Nasdaq noting that the Company no longer complied with the requirement of Listing Rule 5605. The letter also acknowledged that the Listing Rules provide a cure period in order for the Company to regain compliance until the earlier of the Company’s next annual meeting of stockholders or November 23, ~~2022 (or, by May 23, 2022, if such meeting~~2022.

We are currently evaluating our alternatives to resolve these listing deficiencies. To the extent that we are unable to resolve these listing deficiencies, there is ~~held before May 23, 2022). The Company intends to cure this deficiency during the allotted period afforded to it by Nasdaq.~~a risk that our common stock may be delisted from Nasdaq, which would adversely impact liquidity of our common stock and potentially result in even lower bid prices for our common stock.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Unless the context indicates otherwise, all references to “OncoSec,” ~~“our company,~~“the Company,” “we,” “us” and “our” in this report refer to OncoSec Medical Incorporated and its consolidated subsidiary. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes included in this report.

This discussion and analysis of our financial condition and results of operations is not a complete description of our business or the risks associated with an investment in our common stock. As a result, this discussion and analysis should be read together with our condensed consolidated financial statements and related notes included in this report, as well as the other disclosures in this report and in the other documents we file from time to time with the Securities and Exchange Commission, or SEC, including our Annual Report on Form 10-K for our fiscal year ended July 31, 2021 filed with the SEC on October 29, 2021 (the “Annual Report”). Pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K promulgated by the SEC, in preparing this discussion and analysis, we have presumed that readers have access to and have read the discussion and analysis of our financial condition and results of operations included in the Annual Report.

This discussion and analysis and the other disclosures in this report contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act. Forward-looking statements relate to future events or circumstances or our future performance and are based on our current assumptions, expectations and beliefs about future developments and their potential effect on our business. All statements in this report that are not statements of historical fact could be forward-looking statements. The forward-looking statements in this discussion and analysis include statements about, among other things, the status, progress and results of our clinical programs and our expectations regarding our liquidity and performance, including our expense levels, and the potential impact of the COVID-19 pandemic. Forward-looking statements are only predictions and are not guarantees of future performance, and they are subject to known and unknown risks, uncertainties and other factors, including the risks described under the heading “Risk Factors” herein and in Part I, Item IA of the Company’s most recent Annual Report on Form 10-K and similar discussions contained in the other documents we file from time to time with the SEC. In light of these risks, uncertainties and other factors, the forward-looking events and circumstances described in this report may not occur and our results, levels of activity, performance or achievements could differ materially from those expressed in or implied by any forward-looking statements we make. As a result, you should not place undue reliance on any of our forward-looking statements. Forward-looking statements speak only as of the date they are made, and unless required to by law, we undertake no obligation to update or revise any forward-looking statement for any reason, including to reflect new information, future developments, actual results or changes in our expectations.

Overview

We are a late-stage immuno-oncology company focused on designing, developing and commercializing innovative, proprietary, intra-tumoral DNA-based therapeutics to stimulate and to augment anti-tumor immune responses for the treatment of cancers. Our core technology platform ImmunoPulse® is a drug-device therapeutic modality platform comprised of proprietary intratumoral electroporation (“EP”) delivery devices (the ~~“OncoSec Medical System (“OMS”) Electroporation Device” or~~ “OMS EP Device”) and a proprietary DNA plasmid that triggers transient expression of target protein in cells. The OMS EP Device is designed to deliver plasmid DNA-encoded drugs directly into a solid tumor and promote an immunological response against the cancer. The OMS EP Device can be adapted to treat different tumor types, and consists of an electrical pulse generator, a reusable handle and disposable applicators. Our lead product candidate is a DNA-encoded interleukin-12 (“IL-12”) called tavokinogene telseplasmid (“~~TAVO”~~TAVO™”). The OMS EP Device is used to deliver ~~TAVO~~TAVO™ intratumorally, with the aim of reversing the immunosuppressive microenvironment in the treated tumor. The activation of the appropriate inflammatory response can drive a systemic anti-tumor response against untreated tumors in other parts of the body. In 2017, we received Fast Track Designation and Orphan Drug Designation from the U.S. Food and Drug Administration (“FDA”) for ~~TAVO~~TAVO™ in metastatic melanoma, which could qualify ~~TAVO~~TAVO™ for expedited FDA review, a rolling Biologics License Application review and certain other benefits.

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Our current focus is to pursue our study of ~~TAVO~~TAVO™ in combination with KEYTRUDA® (pembrolizumab) in melanoma and triple negative breast cancer.

Performance Outlook

We expect to use our available working capital in the near term primarily for the advancement of our existing and planned clinical programs, including performance of the KEYNOTE-695 and KEYNOTE-890 studies and, to a lesser extent, the continuation of our other clinical trials and studies. We anticipate our spending on clinical programs and the development of our next-generation OMS EP Device will continue throughout our current fiscal year, primarily in support of the KEYNOTE-695 and KEYNOTE-890 studies, while our spending on research and development programs will be prioritized, based on our focus on the KEYNOTE-695 and KEYNOTE-890 studies. We expect our cash-based general and administrative expenses to remain relatively flat in the near term, as we seek to continue to leverage internal resources and automate processes to decrease our outside services expenses. See “Results of Operations” below for more information.

COVID-19

Our operational and financial performance have ~~already~~ been affected by ~~the impact of~~ the COVID-19 pandemic. Our clinical trials have experienced delays in patient enrollment, potentially due to prioritization of hospital resources toward the COVID-19 pandemic or concerns among patients about participating in clinical trials during a public health emergency. The COVID-19 pandemic is also affecting the operations of government entities, such as the FDA, as well as contract research organizations, third-party manufacturers, and other third-parties upon whom we rely. The extent of the impact on our operations cannot be ascertained at this time.

Results of Operations for the Three Months Ended ~~October~~January 31, ~~2021~~2022 Compared to the Three Months Ended ~~October~~January 31, ~~2020~~2021

The unaudited financial data for the three months ended ~~October~~January 31, ~~2021~~2022 and ~~2020~~2021 is presented in the following table and the results of these two periods are included in the discussion thereafter.

	October 31, 2021			October 31, 2020			$ Change			% Change			January 31, 2022			January 31, 2021			$ Change			% Change
Revenue	$	-		$	-		$	-			-		$	-		$	-		$	-			-
Expenses
Research and development		6,645,771			9,799,361			(3,153,590	)		(32	)		6,825,540			8,915,381			(2,089,841	)		(23	)
General and administrative		3,269,723			3,240,732			28,991			1			2,590,893			2,110,696			480,197			23
Loss from operations		(9,915,494	)		(13,040,093	)		3,124,599			(24	)		(9,416,433	)		(11,026,077	)		1,609,644			(15	)
Other expense, net		(2,010	)		(623	)		(1,387	)		223			(2,583	)		(440	)		(2,143	)		487
Interest expense		(8,045	)		(6,134	)		(1,911	)		31			(5,382	)		(4,722	)		(660	)		14
Foreign currency exchange gain (loss), net		116,924			(176,917	)		293,841			(166	)		(480,072	)		328,592			(808,664	)		(246	)
Loss before income taxes		(9,808,625	)		(13,223,767	)		3,415,142			(26	)		(9,904,470	)		(10,702,647	)		798,177			(7	)
Income tax expense		-			1,500			(1,500	)		(100	)		2,950			1,450			1,500			103
Net loss	$	(9,808,625	)	$	(13,225,267	)	$	3,416,642			(26	)	$	(9,907,420	)	$	(10,704,097	)	$	796,677			(7	)

Revenue

We have not generated any revenue since our inception, and we do not anticipate generating ~~meaningful~~ revenue in the near term.

Research and Development Expenses

Our research and development expenses decreased by approximately ~~$3.2~~$2.1 million, from ~~$9.8~~$8.9 million during the three months ended ~~October~~January 31, ~~2020~~2021 to ~~$6.6~~$6.8 million during the three months ended ~~October~~January 31, ~~2021.~~2022. This decrease was primarily due to: (i) a $1.1 million decrease in clinical trial related costs to support our various clinical studies and costs for discovery research and product development and (ii) a $0.9 million decrease in payroll and related benefit expenses, primarily due to bonuses awarded during the three months ended January 31, 2021, while no bonuses were awarded during the three months ended January 31, 2022.

General and Administrative

Our general and administrative expenses increased by $0.5 million, from $2.1 million during the three months ended January 31, 2021, to $2.6 million during the three months ended January 31, 2022. This increase was largely due to the following: (i) a $0.8 million increase in legal expenses, primarily related to the $1 million in insurance recoveries received in connection with prior litigation with Alpha Holdings, Inc. during the prior period, (ii) a $0.2 million increase in insurance costs related to increased D&O insurance premiums, and (iii) a $0.2 million increase in director fees paid to the members of the Leadership Committee of the Company’s Board of Directors. These increases were partially offset by a $0.5 million decrease in payroll expenses and a $0.2 million decrease in stock-based compensation to employees and consultants.

Other Expense, Net

Other expense, net, increased by approximately $2,000, from less than $1,000 for the three months ended January 31, 2021 to $3,000 for the three months ended January 31, 2022. This increase was primarily due to increased tax expense related to the increased interest income from an intercompany loan during the current period.

Foreign Currency Exchange Gain (Loss), Net

Foreign currency exchange gain (loss), net, decreased by approximately $0.8 million from a $0.3 million gain during the three months ended January 31, 2021 to a $0.5 million loss for the three months ended January 31, 2022. This decrease was primarily due to ~~$3.1~~unrealized foreign currency transaction loss recognized in connection with the Australian subsidiary’s intercompany loan.

Results of Operations for the Six Months Ended January 31, 2022 Compared to the Six Months Ended January 31, 2021

The unaudited financial data for the six months ended January 31, 2022 and January 31, 2021 is presented in the following table and the results of these two periods are included in the discussion thereafter.

	January 31, 2022			January 31, 2021			$ Change			% Change
Revenue	$	-		$	-		$	-			-
Expenses
Research and development		13,471,311			18,714,740			(5,243,429	)		(28	)
General and administrative		5,860,616			5,351,429			509,187			10
Loss from operations		(19,331,927	)		(24,066,169	)		4,734,242			(20	)
Other expense, net		(4,594	)		(1,063	)		(3,531	)		332
Interest expense		(13,427	)		(10,856	)		(2,571	)		24
Foreign currency exchange gain (loss), net		(363,147	)		151,674			(514,821	)		(339	)
Loss before income taxes		(19,713,095	)		(23,926,414	)		4,213,319			(18	)
Income tax expense		2,950			2,950			-			-
Net loss	$	(19,716,045	)	$	(23,929,364	)	$	4,213,319			(18	)

Revenue

We have not generated any revenue since our inception, and we do not anticipate generating revenue in the near term.

Research and Development Expenses

Our research and development expenses decreased by approximately $5.2 million, from $18.7 million during the six months ended January 31, 2021 to $13.5 million during the six months ended January 31, 2022. This decrease was primarily due to the following: (i) a $4.2 million decrease in clinical trial-related costs to support our various clinical studies and costs for discovery research and product ~~development.~~development, (ii) a $0.4 million decrease in payroll and related benefit expenses, primarily due to bonuses awarded during the six months ended January 31, 2021, while no bonuses were awarded during the six months ended January 31, 2022, partially offset by payroll and related benefit expenses incurred in connection with the Company’s increased headcount during the six months ended January 31, 2022, and (iii) a $0.7 million decrease in stock-based compensation expense to employees and consultants, as there was an accelerated vesting of options during the six months ended January 31, 2021 that was not repeated during the six months ended January 31, 2022.

General and Administrative

Our general and administrative expenses increased by ~~less than $0.1~~approximately $0.5 million, from ~~$3.2~~$5.4 million during the ~~three~~six months ended ~~October~~January 31, ~~2020,~~2021, to ~~$3.3~~$5.9 million during the ~~three~~six months ended ~~October~~January 31, ~~2021.~~2022. This increase was largely due to the ~~following approximate increases:~~following: (i) a $0.7 million increase in legal costs, primarily related to $1 million in insurance recoveries received in connection with prior litigation with Alpha Holdings, Inc. in the prior period, (ii) a $0.4 million ~~in payroll costs related to the severance to the former interim CEO (ii) $0.2 million~~increase in insurance costs related to ~~the~~ increased D&O insurance ~~premium~~premiums, and (iii) ~~$0.1~~a $0.2 million increase in ~~consulting costs, primarily related~~director fees paid to ~~executive search.~~the members of the Leadership Committee of the Company’s Board of Directors. These increases were partially offset by a ~~$0.7~~$0.9 million decrease in stock-based compensation expense to employees and ~~consultants.~~consultants, as there was an accelerated vesting of options during the six months ended January 31, 2021 that was not repeated during the six months ended January 31, 2022.

Other Expense, Net

Other expense, net, increased by approximately ~~$1,000,~~$4,000 from $1,000 for the ~~three~~six months ended ~~October~~January 31, ~~2020~~2021 to ~~$2,000~~$5,000 for the ~~three~~six months ended ~~October~~January 31, ~~2021.~~2022. This increase was primarily due to increased tax expense related to the increased interest income from an intercompany loan and the reduced interest income as a result of a lower return on our investments during the current period.

Foreign Currency Exchange Gain (Loss), Net

Foreign currency exchange gain (loss), net, ~~increased~~decreased by approximately ~~$294,000~~$0.5 million from a ~~$177,000 loss~~$0.2 million gain during the ~~three~~six months ended ~~October~~January 31, ~~2020~~2021 to a ~~$117,000 gain~~$0.4 million loss for the ~~three~~six months ended ~~October~~January 31, ~~2021.~~2022. This increase was primarily due to unrealized foreign currency transaction ~~gains~~loss recognized in connection with the Australian subsidiary’s intercompany loan.

Liquidity and Capital Resources

Working Capital

The following table and subsequent discussion summarize our working capital as of each of the periods presented:

	At October 31, 2021		At July 31, 2021		At January 31, 2022		At July 31, 2021
Current assets	$	38,690,482	$	49,179,424	$	27,927,892	$	49,179,424
Current liabilities		6,869,950		7,961,916		5,571,526		7,961,916
Working capital	$	31,820,532	$	41,217,508	$	22,356,366	$	41,217,508

Current Assets

Current assets as of ~~October~~January 31, ~~2021~~2022 decreased by ~~$10.5~~$21.3 million to ~~$38.7~~$27.9 million, from $49.2 million as of July 31, 2021. This decrease was primarily due to cash used to support our operations during the ~~three~~six months ended ~~October~~January 31, ~~2021.~~2022.

Current Liabilities

Current liabilities as of ~~October~~January 31, ~~2021~~2022 decreased by ~~$1.1~~$2.4 million to ~~$6.9~~$5.6 million, from $8.0 million as of July 31, 2021. This decrease was primarily due to a decrease in accounts payable and accrued expenses pertaining to our manufacturing and clinical research activities.

Cash Flow

Cash Used in Operating Activities

Net cash used in operating activities for the ~~three~~six months ended ~~October~~January 31, ~~2021~~2022 was ~~$9.9~~$19.9 million, as compared to ~~$9.7~~$20.6 million for the ~~three~~six months ended ~~October~~January 31, ~~2020.~~2021. The ~~$0.2~~$0.7 million ~~increase~~decrease in cash used in operating activities was primarily attributable to ~~an increase~~a decrease in cash used to support our operating activities, including but not limited to, our clinical trials, ~~R&D~~research and development activities and general working capital requirements.

Cash Used in Investing Activities

Net cash used in investing activities for the six months ended January 31, 2022 was $0.2 million, as compared to $0.3 million for the six months ended January 31, 2021. During the six months ended January 31, 2022, the Company purchased fixed assets for use in its clinical trials. During the six months ended January 31, 2021, the Company licensed generator technology for use in its clinical trials and other research and development efforts.

Cash (Used in) Provided by Financing Activities

Net cash used in financing activities was ~~$0.4~~$0.5 million for the ~~three~~six months ended ~~October~~January 31, ~~2021,~~2022, as compared to ~~$13.4~~$60.8 million cash provided by financing activities for the ~~three~~six months ended ~~October~~January 31, ~~2020.~~2021. Net cash used in financing activities during the ~~three~~six months ended ~~October~~January 31, ~~2021~~2022 was primarily attributable to payments on a note payable. Net proceeds during the ~~three~~six months ended ~~October~~January 31, ~~2020~~2021 was primarily attributable to the ~~$13.5~~$52.6 million net proceeds received from the August 2020 ~~registered direct offering.~~and January 2021 securities offerings, $5 million received from the co-promotion agreement with Sirtex, and $3.3 million received from warrant and option exercises.

Uses of Cash and Cash Requirements

Our primary uses of cash have been to finance clinical and research and development activities focused on the identification and discovery of new potential product candidates, the development of innovative and proprietary medical approaches for the treatment of cancer, and the design and advancement of pre-clinical and clinical trials and studies related to our pipeline of product candidates. We ~~have~~ also ~~used~~use our capital resources on general and administrative activities and building and strengthening our corporate infrastructure, programs and procedures to enable compliance with applicable federal, state and local laws and regulations.

Our primary objectives for the next 12 months are to continue the advancement of our KEYNOTE-695 and KEYNOTE-890 studies and, to a lesser extent, our other ongoing clinical trials and studies, and to continue our research and development activities for our next-generation EP device and drug discovery efforts. In addition, we expect to pursue capital-raising transactions, which could include equity or debt financings, in the near term to fund our existing and planned operations and acquire and develop additional assets and technology consistent with our business objectives as opportunities arise.

Going Concern and Management’s Plans

The Company has sustained losses in all reporting periods since inception, with an accumulated deficit of approximately ~~$262~~$271 million as of ~~October~~January 31, ~~2021.~~2022. These losses are expected to continue for an extended period of time. Further, the Company has never generated any cash from its operations and does not expect to generate such cash in the near term. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the issuance date of the condensed consolidated financial statements. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern within one year after the date the condensed consolidated financial statements are issued.

As of ~~December 13, 2021,~~March 2, 2022, the Company had cash and cash equivalents of ~~$30.2~~$22.1 million. Since inception, cash flows from financing activities has been the primary source of the Company’s liquidity. Based on its current cash levels, the Company believes its cash resources are insufficient to meet the Company’s anticipated needs for the 12 months following the date the condensed consolidated financial statements are issued.

The Company recognizes it will need to raise additional capital to continue operating its business and fund its planned operations, including research and development, clinical trials and, if regulatory approval is obtained, commercialization of its product candidates. In addition, the Company will require additional financing if it desires to in-license or acquire new assets, research and develop new compounds or new technologies and pursue related patent protection, or obtain any other intellectual property rights or other assets. There is no assurance that additional financing will be available to the Company when needed, that management will be able to obtain financing on terms acceptable to the Company, or whether the Company will become profitable and generate positive operating cash flow. The source, timing and availability of any future financing will depend principally upon market conditions, and, more specifically, on the progress of our clinical development programs. Similarly, if our common stock is delisted from the Nasdaq Capital Market, it may limit our ability to raise additional funds. See “Nasdaq Deficiency Notices” below. The ongoing COVID-19 pandemic has also caused volatility in the global financial markets and threatened a slowdown in the global economy, which may negatively affect our ability to raise additional capital on attractive terms or at all. If the Company is unable to raise sufficient additional funds when needed, on favorable terms or at all, the Company will not be able to continue the development of its product candidates as currently planned or at all, will need to reevaluate its planned operations and may need to delay, scale back or eliminate some or all of its development programs, reduce expenses or cease operations, any of which would have a significant negative impact on its prospects and financial condition.

Sources of Capital

We have not generated any revenue since our inception, and we do not anticipate generating ~~meaningful~~ revenue in the near term. Historically, we have raised the majority of the funding for our business through offerings of our common stock and warrants to purchase our common stock. If we issue equity or convertible debt securities to raise additional funds, our existing stockholders would experience further dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. If we incur debt, our fixed payment obligations, liabilities and leverage relative to our equity capitalization would increase, which could increase the cost of future capital. Further, the terms of any debt securities we issue or borrowings we incur, if available, could impose significant restrictions on our operations, such as limitations on our ability to incur additional debt or issue additional equity or other operating restrictions that could adversely affect our ability to conduct our business, and any such debt could be secured by any or all of our assets pledged as collateral. Additionally, we may incur substantial costs in pursuing future capital, including investment banking, legal and accounting fees, printing and distribution expenses and other costs.

Nasdaq Deficiency Notices

As previously disclosed, on February 9, 2022, the Company received notice (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”) that the Company is not in compliance with Nasdaq Listing Rule 5550(a)(2), as the minimum bid price of the Company’s common stock had been below $1.00 per share for 30 consecutive business days as of the date of the Notice. The Notice has no immediate effect on the listing of the Company’s common stock, which will continue to trade at this time on the Nasdaq Capital Market under the symbol “ONCS.”

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days, or until August 8, 2022, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for at least ten consecutive business days during this 180 calendar day period. In the event the Company does not regain compliance by August 8, 2022, the Company may be eligible for an additional 180 calendar day grace period if it meets the continued listing requirement for market value of publicly held shares ($1 million) and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price, and provides written notice to Nasdaq of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. If the Company does not regain compliance within the allotted compliance period(s), Nasdaq will provide notice that the Company’s common stock will be subject to delisting from the Nasdaq Capital Market. In that event, the Company may appeal such delisting determination to a hearings panel.

On November 29, 2021, the Company notified Nasdaq that Robert E. Ward had resigned as a member of the Board of Directors and the Company’s Audit Committee, as disclosed on the Company’s Current Report filed on Form 8-K on November 30, 2021. After giving effect to Mr. Ward’s resignation, the Company’s Audit Committee no longer consists of three independent members as required by Nasdaq Listing Rule 5605(c)(2)(A).

We are currently evaluating our alternatives to resolve these listing deficiencies. To the extent that we are unable to resolve these listing deficiencies, there is a risk that our common stock may be delisted from Nasdaq, which would adversely impact liquidity of our common stock and potentially result in even lower bid prices for our common stock.

Critical Accounting Policies

Use of Estimates

The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Such estimates include the Company’s ability to continue as a going concern and certain calculations related to that determination, stock-based compensation, the accrual of research, product development and clinical obligations, impairment of long-lived assets, determining the Incremental Borrowing Rate for calculating Right-Of-Use (“ROU”) assets and lease liabilities and accounting for income taxes, including the related valuation allowance on the deferred tax asset and uncertain tax positions. The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. On an ongoing basis, the Company reviews its estimates to ensure that they appropriately reflect changes in the business or as new information becomes available. Actual results may differ from these estimates.

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Impairment of Long-Lived Assets

	●	the asset’s ability to continue to generate income from operations and positive cash flow in future periods;

	●	loss of legal ownership or title to the asset(s);

	●	significant changes in the Company’s strategic business objectives and utilization of the asset(s); and

	●	the impact of significant negative industry or economic trends.

Research and Development Expenses

Research and development expenses consist of costs incurred for internal projects, as well as partner-funded collaborative research and development activities. These costs include direct and research-related overhead expenses, which include salaries, stock-based compensation and other personnel-related expenses, facility costs, supplies, depreciation of facilities and laboratory equipment, as well as research consultants and the cost of funding research at universities and other research institutions, and are expensed as incurred. Costs to acquire technologies that are utilized in research and development that have no alternative future use, are expensed when incurred. In accordance with ASC 730-20, the Company accounts for upfront, non-refundable research and development payments received from a related party as a long-term liability as there has not been a substantive and genuine transfer of risk and there is a presumption that the Company is obligated to repay the related party.

Accruals for Research and Development Expenses and Clinical Trials

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Equity-Based Awards

The Company grants equity-based awards (typically stock options or restricted stock units) under our stock-based compensation plan and outside of our stock-based compensation plan, with terms generally similar to the terms under our stock-based compensation plan. The Company estimates the fair value of stock option awards using the Black-Scholes option valuation model. For employees, directors and consultants, the fair value of the award is measured on the grant date. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. The Company estimates the fair value of restricted stock unit awards based on the closing price of the Company’s common stock on the date of issuance.

Australia Research and Development Tax Credit

Our Australian, wholly-owned, subsidiary incurs research and development expenses, primarily in the course of conducting clinical trials. The Australian research and development activities qualify for the Australian government’s tax credit program, which provides a 43.5% credit for qualifying research and development expenses. The tax credit does not depend on our generation of future taxable income or ongoing tax status or position. Accordingly, the credit is not considered an element of income tax accounting under ASC 740 and is recorded against qualifying research and development expenses in the Company’s condensed consolidated statements of operations.

Leases

The Company determines if an arrangement is a lease at inception. Operating lease ~~right of use (“ROU”)~~ROU assets represent the Company’s right to use an underlying asset during the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating leases are included in ROU assets, current operating lease liabilities, and long-term operating lease liabilities on the Company’s condensed consolidated balance sheets.

Lease ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated using our incremental borrowing rate applicable to the lease asset, unless the implicit rate is readily determinable. ROU assets also include any lease payments made at or before lease commencement and exclude any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of 12 months or less are not recognized on the condensed consolidated balance sheet. The Company’s leases do not contain any residual value guarantees. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company accounts for lease and non-lease components as a single lease component for all its leases.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements is contained in Note 2 to our condensed consolidated financial statements included in this report.

Off-Balance Sheet Arrangements

We are not party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, or Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, or the SEC, and that such information is accumulated and communicated to our management, including our Interim Principal Executive Officer and Principal ~~Accounting~~Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures reflects the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

As required by Rule 13a-15(b) under the Exchange Act, our management, under the supervision and with the participation of our Interim Principal Executive Officer and our Principal ~~Accounting~~Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures as of ~~October~~January 31, ~~2021.~~2022. Based on such evaluation, our Interim Principal Executive Officer and Principal ~~Accounting~~Financial Officer concluded that, as of ~~October~~January 31, ~~2021,~~2022, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during our fiscal quarter ended ~~October~~January 31, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Limitations on Effectiveness of Controls~~

Our management, including our Interim Principal Executive Officer and Principal Accounting Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we are involved in legal proceedings in the ordinary course of our business. Refer to Note 8: Commitments and Contingencies for more information on legal proceedings.

ITEM 1A. RISK FACTORS.

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2021.~~2021, except as noted below. The risk factors disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended July 31, 2021, in addition to the other information set forth in this report, could materially affect our business, financial condition, or results of operations.

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If our stock price continues to remain below $1.00, our common stock may be subject to delisting from The Nasdaq Stock Market, which would materially reduce the liquidity of our common stock and have an adverse effect on our market price.

On February 9, 2022, the Company received Notice (the “Notice”) from Nasdaq that the Company is not in compliance with Nasdaq Listing Rule 5550(a)(2), as the minimum bid price of the Company’s common stock has been below $1.00 per share for 30 consecutive business days. The Notice has no immediate effect on the listing of the Company’s common stock, which will continue to trade at this time on the Nasdaq Capital Market under the symbol “ONCS.”

We are currently evaluating our alternatives to resolve the listing deficiency. To the extent that we are unable to resolve the listing deficiency, there is a risk that our common stock may be delisted from Nasdaq, which would adversely impact liquidity of our common stock, potentially result in even lower bid prices for our common stock, and make it more difficult for us to obtain financing through the sale of our common stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

~~On August 2, 2021, we issued a total of 12,500 shares of our common stock to a third-party firm pursuant to a consulting agreement at a market price of $2.22 per share for services rendered.~~Not applicable.

The securities above were offered and sold without registration under the Securities Act of 1933, as amended, or the Securities Act, pursuant to the exemption provided in Section 4(a)(2) under the Securities Act as a transaction not involving a public offering as well as similar exemptions under applicable state laws, in reliance on the following facts: no general solicitation was used in the offer or sale of such shares; the recipient of such shares represented that it was acquiring the shares for investment for its own account and not with a view to or for resale in connection with any distribution thereof within the meaning of the Securities Act; the recipient of such shares had adequate access to information about us; the recipient of such shares represented that it had a preexisting business or personal relationship with us or had the capacity to protect its own interests in connection with acquiring such shares; and such shares were issued as restricted securities with restricted legends referring to the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

The following exhibits are either filed or furnished with this report:

3.1		Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K, filed on December 17, 2021)

10.1*		OncoSec Medical Incorporated 2015 Employee Stock Purchase Plan

31.1*		Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934

31.2*		Certification of Principal Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934

32.1**		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*		Inline XBRL Instant Document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

~~104~~104*		Cover Page Interactive Data File (embedded within the Inline XBRL ~~document)~~document in Exhibit 101)

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ONCOSEC MEDICAL INCORPORATED

By:	/s/ ~~Robert J. DelAversano~~Kevin Smith
	~~Robert J. DelAversano~~Kevin Smith
	~~Principal Accounting~~Interim President and Chief Executive Officer ~~& Controller~~
	(Interim Principal ~~Financial Officer and Principal Accounting~~Executive Officer)

Dated: ~~December~~March 15, ~~2021~~2022

By:	/s/ George Chi
	George Chi
	Chief Financial Officer
	(Principal Financial Officer)

Dated: March 15, 2022

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