Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 08, 2023 | Feb. 06, 2023 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Securities Act File Number | 001-41429 | ||
Entity Registrant Name | PROMIS NEUROSCIENCES INC. | ||
Entity Incorporation, State or Country Code | Z4 | ||
Entity Tax Identification Number | 98-0647155 | ||
Entity Address, Address Line One | Suite 200, 1920 Yonge Street | ||
Entity Address, City or Town | Toronto | ||
Entity Address, State or Province | ON | ||
Entity Address, Postal Zip Code | M4S 3E2 | ||
City Area Code | 416 | ||
Local Phone Number | 847-6898 | ||
Title of 12(b) Security | Common Shares, No Par Value per Share | ||
Trading Symbol | PMN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 36.1 | ||
Entity Common Stock, Shares Outstanding | 8,579,284 | ||
Auditor Name | Baker Tilly US, LLP | ||
Auditor Location | Tewksbury, Massachusetts | ||
Auditor Firm ID | 23 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001374339 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 5,875,796 | $ 16,943,905 |
Short-term investments | 31,009 | 33,248 |
Prepaid expenses and other current assets | 996,682 | 737,316 |
Total current assets | 6,903,487 | 17,714,469 |
Property and equipment, net | 321 | 4,671 |
Intangible assets, net | 20,838 | 27,614 |
Total assets | 6,924,646 | 17,746,754 |
Current liabilities: | ||
Accounts payable | 2,975,398 | 408,981 |
Accrued liabilities | 3,437,646 | 520,093 |
Total current liabilities | 6,413,044 | 929,074 |
Convertible debt, net of issuance costs and debt discount | 3,906,057 | |
Derivative liability | 5,379,878 | |
Warrant liability | 1,859,374 | 1,871,687 |
Total liabilities | 8,272,418 | 12,086,696 |
Commitments and contingencies (Note 16) | ||
Shareholders' equity (deficit): | ||
Series 1 Convertible Preferred Shares, no par value, 70,000,000 shares authorized, 70,000,000 and 0 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively | ||
Additional paid-in capital | 79,101,061 | 68,039,178 |
Accumulated other comprehensive loss | (195,369) | (187,919) |
Accumulated deficit | (80,253,464) | (62,191,201) |
Total shareholders' (deficit) equity | (1,347,772) | 5,660,058 |
Total liabilities and shareholders' (deficit) equity | $ 6,924,646 | $ 17,746,754 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Jun. 17, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | |||
Series S1 Convertible Preferred stock, Par value | $ 0 | $ 0 | |
Series S1 Convertible Preferred stock, Shares authorized | 70,000,000 | 70,000,000 | 70,000,000 |
Series S1 Convertible Preferred stock, Shares issued | 70,000,000 | 0 | |
Series S1 Convertible Preferred stock, Shares outstanding | 70,000,000 | 0 | |
Common shares, par value | $ 0 | $ 0 | |
Common shares, shares issued | 8,579,284 | 7,195,529 | |
Common shares, shares outstanding | 8,579,284 | 7,195,529 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expenses: | ||
Research and development | $ 16,087,168 | $ 4,627,386 |
General and administrative | 7,292,744 | 3,663,707 |
Total operating expenses | 23,379,912 | 8,291,093 |
Loss from operations | (23,379,912) | (8,291,093) |
Other income (expense): | ||
Change in fair value of financial instruments | 4,176,767 | (1,095,636) |
Interest expense on convertible debt | (282,064) | (416,286) |
Gain on extinguishment of convertible debt and derivative liability | 1,307,421 | |
Other income | 115,525 | 12,909 |
Total other income (expense), net | 5,317,649 | (1,499,013) |
Net loss | (18,062,263) | (9,790,106) |
Other comprehensive loss | ||
Foreign currency translation adjustment | (7,450) | (137,188) |
Comprehensive loss | $ (18,069,713) | $ (9,927,294) |
Net loss per share, basic | $ (2.41) | $ (1.69) |
Net loss per share, diluted | $ (2.41) | $ (1.69) |
Weighted-average shares outstanding of common shares, basic | 7,502,609 | 5,785,617 |
Weighted-average shares outstanding of common shares, diluted | 7,502,609 | 5,785,617 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' (Deficit) Equity - USD ($) | Series1 Convertible Preferred Shares | Common Shares | Additional Paid-in Capital | Accumulated other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balance at the beginning at Dec. 31, 2020 | $ 51,655,168 | $ (50,731) | $ (52,401,095) | $ (796,658) | ||
Balance at the beginning (in shares) at Dec. 31, 2020 | 4,828,846 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Conversion of special warrants (in shares) | 270,326 | |||||
Issuance of common shares, net of issuance costs | 15,868,381 | 15,868,381 | ||||
Issuance of common shares, net of issuance costs (in shares) | 2,096,357 | |||||
Share-based compensation | 515,629 | 515,629 | ||||
Foreign currency translation | (137,188) | (137,188) | ||||
Net loss | (9,790,106) | (9,790,106) | ||||
Balance at the end at Dec. 31, 2021 | 68,039,178 | (187,919) | (62,191,201) | $ 5,660,058 | ||
Balance at the end (in shares) at Dec. 31, 2021 | 7,195,529 | 7,195,529 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common shares, net of issuance costs | 4,974,253 | $ 4,974,253 | ||||
Issuance of common shares, net of issuance costs (in shares) | 1,383,755 | |||||
Share-based compensation | 487,630 | 487,630 | ||||
Conversion of convertible debt and derivative liability to Series 1 Convertible Preferred Shares | 5,600,000 | 5,600,000 | ||||
Conversion of convertible debt and derivative liability to Series 1 Convertible Preferred Shares (in shares) | 70,000,000 | |||||
Foreign currency translation | (7,450) | (7,450) | ||||
Net loss | (18,062,263) | (18,062,263) | ||||
Balance at the end at Dec. 31, 2022 | $ 79,101,061 | $ (195,369) | $ (80,253,464) | $ (1,347,772) | ||
Balance at the end (in shares) at Dec. 31, 2022 | 70,000,000 | 8,579,284 | 8,579,284 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' (Deficit) Equity (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Changes in Shareholders' (Deficit) Equity | ||
Net of issuance costs | $ 977,624 | $ 1,665,099 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (18,062,263) | $ (9,790,106) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 487,630 | 515,629 |
Foreign currency exchange loss | 305,407 | 85,066 |
Change in fair value of derivative liability | (2,550,877) | 1,936,191 |
Change in fair value of warrant liability | (1,561,987) | (840,555) |
Depreciation of property and equipment | 6,144 | 40,576 |
Gain on sale of property and equipment | (59,157) | |
Amortization of debt discount and issuance costs | 241,854 | 366,018 |
Amortization of intangible assets | 5,072 | 5,249 |
Gain on extinguishment of convertible debt and derivative liability | (1,307,421) | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (318,747) | (600,635) |
Accounts payable | 2,675,693 | (31,654) |
Accrued liabilities | 3,045,612 | 471,463 |
Deferred compensation | (1,403,468) | |
Net cash used in operating activities | (17,033,883) | (9,305,383) |
Cash flows from investing activities | ||
Purchase of short-term investments | (31,009) | (33,102) |
Maturity of short-term investment | 31,009 | 33,069 |
Proceeds from sale of property and equipment | 98,335 | |
Purchase of property and equipment | (1,981) | (6,044) |
Other investing activities | 2,360 | |
Net cash provided by (used in) investing activities | (1,981) | 94,618 |
Cash flows from financing activities | ||
Proceeds from convertible debt | 6,915,199 | |
Proceeds from issuance of Common Shares, net of issuance costs | 4,974,253 | 15,868,381 |
Proceeds from issuance of warrants | 1,520,401 | 2,739,221 |
Net cash provided by financing activities | 6,494,654 | 25,522,801 |
Effect of exchange rates on cash | (526,899) | (175,018) |
Net (decrease) increase in cash | (11,068,109) | 16,137,018 |
Cash at beginning of year | 16,943,905 | 806,887 |
Cash at end of year | 5,875,796 | 16,943,905 |
Noncash financing activities | ||
Conversion of convertible debt and derivative liability to Series 1 Convertible Preferred Shares | 5,600,000 | |
Cash paid for interest on convertible debt | 87,069 | |
Issuance of compensation warrants in consideration of issuance costs | $ 343,000 | $ 957,947 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
DESCRIPTION OF BUSINESS | |
DESCRIPTION OF BUSINESS | 1. Business Description ProMIS Neurosciences Inc. (the “ Company ProMIS We are developing a pipeline of antibodies aimed at selectively targeting misfolded toxic forms of proteins that drive neurodegenerative diseases without interfering with the essential functions of the same properly folded proteins. Our product candidates are PMN310, PMN442, and PMN267. Our lead product candidate is PMN310, a monoclonal antibody designed to treat AD by selectively targeting toxic, misfolded oligomers of amyloid-beta. In light of research suggesting that misfolded toxic a-syn is a primary driver of disease in synucleinopathies, our second lead product candidate, PMN442, shows robust binding to pathogenic a-syn oligomers and seeding fibrils in preclinical in vivo studies, with negligible binding to a-syn monomers and physiologic tetramers which are required for normal neuronal function. PMN267 is our third lead product candidate, which has been shown in preclinical in vivo studies to selectively recognize misfolded, cytoplasmic TDP-43 aggregates without interacting with normal TDP-43. Misfolded TDP-43 is believed to play an important role in the development of ALS. The Company was incorporated on January 23, 2004 under the Canada Business Corporations Act and is located at 1920 Yonge Street, Toronto, Ontario. The Company’s Common Shares are traded on the Toronto Stock Exchange (“ TSX Nasdaq ProMIS USA The success of the Company is dependent on obtaining the necessary regulatory approvals of its product candidates, marketing its products and achieving profitable operations. The continuation of the research and development activities and the commercialization of its products, if approved, are dependent on the Company’s ability to successfully complete these activities and to obtain additional financing through a combination of financing activities and operations. It is not possible to predict either the outcome of future research and development or commercialization programs, or the Company’s ability to fund these programs. Liquidity Risk The accompanying consolidated financial statements were prepared on a going concern basis, which assumes that the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. To date, the Company has not generated revenues from its activities. The Company had a net loss of $18,062,263 for the year ended December 31, 2022 and an accumulated deficit of $80,253,464 as of December 31, 2022 and negative cash flows from operations. Management believes these conditions raise substantial doubt about the Company’s ability to continue as a going concern within the next twelve months from the date these consolidated financial statements are issued. The Company will require additional funding to conduct future clinical activities. The Company will seek additional funding through public and private financings, debt financings, collaboration agreements, strategic alliances and licensing agreements. Although the Company has been successful in raising capital in the past, there is no assurance of success in obtaining such additional financing on terms acceptable to us, if at all, and there is no assurance that the Company will be able to enter into collaborations or other arrangements. If the Company is unable to obtain funding, it could force delays, reduce or eliminate research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect future business prospects, and the ability to continue operations. The Company may continue to incur net losses for at least the next several years as the Company advances its product candidates. The Company is actively pursuing additional financing to further develop certain of the Company’s scientific initiatives, but there is no assurance these initiatives will be successful, timely or sufficient. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“ GAAP ASC ASU FASB On June 21, 2022, the directors of the Company authorized a reverse share split of the issued and outstanding Common Shares in a ratio of 60:1, effective June 28, 2022 (the “ Reverse Share Split Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include, but are not limited to, the accrual for research and development expenses, the valuation of warrant liabilities and embedded derivative liabilities. Actual results could differ from those estimates, and such differences could be material to the consolidated financial statements. Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker (“ CODM Foreign Currency Comprehensive loss is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. The reporting currency of the Company is the United States dollar (“ US$ C$ Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. As of December 31, 2022 and 2021 the Company did not have any material cash equivalents. Short-term Investments Short-term investments consist of guaranteed certificates of deposit with a maturity greater than 90 days and up to one year at the time of purchase. Accordingly, all short-term investments are classified as current assets in the accompanying consolidated balance sheets. The short-term investment is being held as collateral for the Company’s credit cards. Concentration of Credit Risk Financial instruments that potentially subject the Company to a significant concentration of credit risk consist of cash and short-term investments. Cash is deposited in checking and money market accounts at accredited financial institutions, which at times, may exceed federally insured limits. The short-term investment is deposited in a guaranteed certificate of deposit with an accredited financial institution that guarantees 100% of the original amount invested. Management believes that these financial institutions are financially sound, and, accordingly, minimal credit risk exists with respect to these high-quality financial institutions. As of December 31, 2022, the Company has not experienced any losses on its cash or short-term investments. Fair Value Measurements FASB ASC 820, Fair Value Measurements and Disclosures, “ASC 820” ● Level 1 – Observable inputs, such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. ● Level 2 – Inputs (other than Level 1 quoted prices) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities. ● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s derivative and warrant liabilities were classified as Level 3 financial instruments for the years ended December 31, 2022 and 2021. The carrying amounts of prepaid and other current assets, short-term investments, accounts payable, and accrued expenses are generally considered to be representative of their fair value based on the short-term nature of these financial instruments. Impairment of Long-lived Assets The Company evaluates its long-lived assets, which consist of property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. No impairments have been identified as of December 31, 2022 and 2021. Property and Equipment Property and equipment, net are stated at cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful life of each asset. Laboratory and equipment are depreciated over two two Intangible Assets Definite-lived intangible assets are stated at cost less accumulated amortization and any accumulated impairment losses. An intangible asset’s carrying amount is assessed for impairment whenever there is an indication that the asset may be impaired. The Company’s definite-lived intangible assets consist of acquired rights and patents. Intangible assets are amortized on a straight-line basis over the lesser of the life of the intangible asset or its estimated useful life, which is 15 years. Derivative Liability The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with FASB ASC Topic 815, Derivatives and Hedging Distinguishing Liabilities from Equity Collaboration Arrangements The Company may enter into collaboration arrangements with pharmaceutical and biotechnology partners. The Company analyzes its collaboration arrangements to assess whether they are within the scope of FASB ASC 808, Collaborative Arrangements, “ASC 808” Research and Development, General and Administrative Expenses General and administrative expenses consist primarily of personnel costs including salary, bonus, employee-benefits and share-based compensation, costs incurred in development and protection of intellectual property, professional service fees, and other general overhead and facility costs, including rent, depreciation and amortization, which relate to the Company’s general and administrative functions. Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with the development and research of the Company’s platform technology, as well as discovery program expenses. The Company expenses research and development costs as incurred. These expenses include: ● employee-related expenses, including salaries, related benefits and share-based compensation expense, for employees engaged in research and development functions; ● external research and development expenses incurred under arrangements with third parties, such as contract research organizations (“ CROs ”), and consultants; ● the cost of acquiring, developing, and manufacturing clinical study materials; and ● Costs associated with preclinical and clinical activities and regulatory operations. Prepaid and Accrued Research and Development Expenses Substantial portions of the Company’s pre-clinical trials are performed by third-party laboratories, medical centers, CROs and other vendors. These vendors generally bill monthly for services performed, or bill based upon milestone achievement. For preclinical studies, the Company accrues expenses based upon estimated percentage of work completed and the remaining contract milestones. At times, the Company is obligated to make upfront payments upon execution of research and development agreements. Upfront payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses until such goods are delivered or the related services are performed. The Company estimates the period over which such services will be performed based on the terms of the agreements as well as the level of effort to be expended in each period. Sometimes the actual timing of performance or the level of effort varies from the estimate, and if that does occur, the Company will adjust the amounts recorded accordingly. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. Warrants The Company issues warrants on its common shares in connection with financings as well as for compensation of intermediaries and advisors. The Company accounts for warrants as either equity instruments or as liabilities depending on the specific terms of the warrant agreements in accordance with FASB ASC Topic 815, Derivatives and Hedging Distinguishing Liabilities from Equity Debt Issuance Costs Debt issuance costs are specifically identifiable costs associated with issuance of a new debt instrument. Debt issuance costs are reported on the consolidated balance sheet as a direct deduction from the face amount of the related debt. Debt issuance costs are amortized to interest expense using the effective interest method over the term of the related debt. Share-based Compensation Share-based compensation expense related to share awards granted to employees, directors and non-employees is recognized based on the grant-date estimated fair values of the awards using the Black- Scholes option pricing model (“ Black-Scholes Black Scholes requires a number of assumptions, of which the most significant are expected volatility, expected option term (the time from the grant date until the options are exercised or expire) and risk-free rate. Expected volatility is determined using the historical volatility for the Company. The risk-free interest rate is based on the yield of Canadian government bonds with a remaining term equal to the expected life of the option. Expected dividend yield is zero because the Company has never paid cash dividends on common shares and the Company does not expect to pay cash dividends in the foreseeable future. Income Taxes The Company is a taxable entity under the Income Tax Act (Canada). Deferred income tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the respective income tax bases of assets and liabilities, measured using substantively enacted income tax rates and laws that are expected to be in effect when the differences are expected to reverse. Deferred tax assets are recognized to the extent it is more likely than not that taxable income will be available against which the deferred tax asset can be utilized. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company follows the provisions of ASC 740-10, Uncertainty in Income Taxes ASC 740-10 not Basic and Diluted Net Loss Per Share Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during each period. Diluted net loss per share of common shares includes the effect, if any, from the potential exercise or conversion of securities, such as convertible debt, share options and warrants, which would result in the issuance of incremental shares of common shares. For diluted net loss per share, the weighted-average number of common shares is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. For all periods presented, basic and diluted net loss per share are the same, as any additional share equivalents would be anti-dilutive. As the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share. Emerging Growth Company Status The Company is an Emerging Growth Company, as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012 (“ JOBS Act Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases Topic 842 Leases Topic 842 Targeted Improvements Company adopted this standard as of January 1, 2022 with no material impact on the consolidated financial statements. In December 2019, the FASB issued ASU No 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Topic 740 In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options ( Subtopic 470-20 ) and Derivatives and Hedging Contracts in Entity s Own Equity ( Subtopic 815-40 ): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In June 2016, and in later clarifying amendments, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 3. The following are the major categories of assets measured at fair value on a recurring basis as of December 31, 2022 and 2021: As of December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Short-term investments $ 31,009 $ — $ — $ 31,009 Total assets measured at fair value $ 31,009 $ — $ — $ 31,009 Liabilities: Derivative liability $ — $ — $ — $ — Warrant liability — — 1,859,374 1,859,374 Total liabilities measured at fair value $ — $ — $ 1,859,374 $ 1,859,374 As of December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Short-term investments $ 33,248 $ — $ — $ 33,248 Total assets measured at fair value $ 33,248 $ — $ — $ 33,248 Liabilities: Derivative liability $ — $ — $ 5,379,878 $ 5,379,878 Warrant liability — — 1,871,687 1,871,687 Total liabilities measured at fair value $ — $ — $ 7,251,565 $ 7,251,565 No transfers between levels have occurred in either reporting period presented. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 4. Prepaid expenses and other current assets consist of the following: December 31, 2022 2021 Upfront research payments $ 346,015 $ 554,878 Goods and services tax receivable 71,626 48,690 Insurance 471,088 32,853 Dues and subscriptions 7,926 — Consultants 56,797 69,915 License fee 25,700 19,754 Deposits 12,907 6,839 Miscellaneous 4,623 4,387 Total prepaid expenses and other current assets $ 996,682 $ 737,316 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 5. Property and equipment, net, consist of the following: December 31, 2022 2021 Laboratory equipment $ 61,933 $ 66,403 Computer equipment 18,388 17,657 Total property and equipment 80,321 84,060 Less: accumulated depreciation (80,000) (79,389) Property and equipment, net $ 321 $ 4,671 Depreciation expense was $6,144 and $40,576 for the years ended December 31, 2022 and 2021, respectively. The Company recognized a gain on the sale of property and equipment of $59,157 for the year ended December 31, 2021. There were no disposals of property and equipment during the year ended December 31, 2022 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 6. INTANGIBLE ASSETS The Company has intangible assets consisting of acquired rights and patents with finite lives. In March 2012, the Company acquired rights to a certain patented technology that it had licensed from its Chief Scientific Officer for C$100,000. The Company is amortizing this asset over its expected useful life of 15 years. December 31, 2022 2021 Intangible assets $ 73,695 $ 79,015 Less: accumulated amortization (52,857) (51,401) Intangible assets, net $ 20,838 $ 27,614 Amortization expense was $5,072 and $5,249 for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the estimated expected amortization expense related to the Company’s intangible assets for each year |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | 7. Accrued liabilities consist of the following: December 31, 2022 2021 Legal $ — $ 171,777 Accounting 73,970 123,026 Research and development 3,185,346 106,845 Accrued interest — 54,398 Other 178,330 64,047 Accrued liabilities $ 3,437,646 $ 520,093 |
DEFERRED COMPENSATION
DEFERRED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
DEFERRED COMPENSATION | |
DEFERRED COMPENSATION | 8. The Company deferred cash payment of management compensation for the Executive Chairman and Chief Executive Officer, Chief Scientific Officer, Chief Medical Officer and Chief Development Officer at December 31, 2020, in the amount of $1,398,989, which was repaid in full during the year ended December 31, 2021. As of December 31, 2021, all deferred compensation was paid in full. |
COLLABORATION AGREEMENTS
COLLABORATION AGREEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
COLLABORATION AGREEMENTS | |
COLLABORATION AGREEMENTS | 9. In July 2020, the Company entered into two collaborative agreements (“ BCNI Collaborations “BCNI” Neurodegenerative Diseases The Company and BCNI (“ Neurodegen Collaboration Covid-19 The Company and BCNI (“ Covid-19 Collaboration In January 2021, Covid-19 Collaboration became an independent entity. The Company and BCNI each owned 50% of the Covid-19 Collaboration. In February 2021, the Company funded C$25,000 of expenses, which would be paid back out of the profits, if any. As the Covid-19 Collaboration became an independent entity the Company accounted for it using the equity method. For the year ended December 31, 2021, the Company funded $77,549 of expenses. The Company recognized a pro-rata share of losses for the full amount of its investment in the Covid-19 Collaboration of $2,353 for the year ended December 31, 2021. In December 2021, The BCNI Collaborations were terminated. The Covid-19 Collaboration redeemed the shares purchased by the Company for an aggregated redemption price of $2,353. A payment to the Company of C$128,000, which included the share redemption payment, and for the portion of the equipment purchased and related expenses incurred by the Company in relation to the Neurodegen Collaboration, was received by the Company on December 21, 2021. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 12 Months Ended |
Dec. 31, 2022 | |
CONVERTIBLE DEBT | |
CONVERTIBLE DEBT | 10. In March 2021, the Company completed a $7.0 million private placement of convertible debentures (the “Debentures”). The Company allocated $3,567,442 of proceeds to the Debenture. The Company incurred $48,220 of issuance costs in connection with the private placement of which $24,575 was allocated to the Debentures and amortized over the life of the Debenture. The Debentures were convertible into Common Shares at the option of the holder at any time and from time to time at a conversion price of $6.00 following the Reverse Share Split and accrued interest at 1% per annum, which was payable annually. At the Company’s election, accrued interest was payable in in cash or Common Shares (such number of shares determined by dividing the interest due by the 5-day VWAP of the Common Shares). The Debentures were originally scheduled to mature on March 22, 2026. The Company recognized $241,854 and $366,000 of interest expense relating to the amortization of the debt discount related to the derivative liability and issuance costs allocated to the Debentures during the years December 31, 2022 and 2021, respectively. The conversion feature has been recognized as a derivative liability recorded as a discount to the Debenture, adjusted to fair value each reporting period and recorded in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2021. The derivative liability was valued at $3,432,558 at issuance date using a scenario-based valuation method using a Monte Carlo model, volatility of 101.43%, a risk-free interest rate of 0.15% and a selected debt yield of 15.96%. The derivative liability at December 31, 2021 was valued at $5,379,878 using a scenario-based valuation method using a Monte Carlo simulation model, volatility of 95.95%, a risk-free interest rate of 1.15% and a selected debt yield of 15.96%. The total liability of the Debenture and the derivative liability at December 31, 2021 was $9,285,935. The portion of issuance costs allocated to the conversion feature of $23,645 were expensed when incurred in 2021. A loss from the change in fair value the derivative liability of $1,936,191 was recorded in the consolidated statement of operations and comprehensive loss during the year ended December 31, 2021. On June 17, 2022, the Company amended the conversion feature of the Debentures (the “ Amended and Restated Debentures In June 2022, the Company received notices of conversion from the holders of the Company’s Amended and Restated Debentures, requesting conversions in the aggregate of $7.0 million, representing the entirety of the outstanding balance thereof. In satisfaction of the notices of conversion, the Company issued 70,000,000 Series 1 Convertible Preferred Shares, described further in Note 11, to the Amended and Restated Debenture holders in accordance with the terms of the Amended and Restated Debentures and made cash payments to settle accrued interest of $17,069. The Company recognized the redemption as an extinguishment of the outstanding debt and the related derivative, which required a remeasurement of the derivative liability as of June 19, 2022, the date of conversion. The derivative liability at June 19, 2022 was valued at $2,741,058 using a scenario-based valuation method using a Monte Carlo simulation model, volatility of 87%, a risk-free interest rate of 2.94% and a selected debt yield of 27.2%. Following the remeasurement of the derivative liability the Company recognized a total gain on the change in fair value of the derivative liability of $2,643,123 during the year ended December 31, 2022. The extinguishment of the convertible notes was accounted for as follows: June 19, 2022 Carrying value of convertible debt net of issuance costs and debt discount $ 4,166,363 Derivative liability remeasured as of June 19, 2022 2,741,058 Total liabilities extinguished on conversion 6,907,421 Fair value of Series 1 Convertible Preferred Shares recorded to additional paid-in-capital 5,600,000 Gain on extinguishment of convertible debt and derivative liability $ 1,307,421 The fair value of Series 1 Convertible Preferred Shares recorded to additional paid-in-capital was calculated using the observable market price of Common Shares as the basis for determining fair value. The fair value of Common Shares was $0.08 per share on the conversion date. Legal fees resulting from the debt modification were expensed as incurred. The summary of activity for derivative liability for the years ended December 31, 2022 and 2021 consists of the following: December 31, 2022 Balance at December 31, 2021 $ 5,379,878 Change in fair value of the derivative liability (2,643,123) Foreign exchange loss 4,303 Gain on extinguishment of the derivative liability (2,741,058) Balance at December 31, 2022 $ — December 31, 2021 Balance at December 31, 2020 $ — Derivative liability at issuance 3,432,558 Change in fair value of the derivative liability 1,936,191 Foreign exchange loss 11,129 Balance at December 31, 2021 $ 5,379,878 |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
EQUITY | |
EQUITY | 11. EQUITY The Company has authorized an unlimited number of both Common and Preferred shares. As of December 31, 2022 and 2021, the Company has 8,579,284 and 7,195,529 issued and outstanding Common Shares and 70,000,000 and 0 Series 1 Convertible Preferred Shares as of December 31, 2022 and 2021, respectively. Both the Common Shares and Series 1 Convertible Preferred Shares have no par value. Common Shares reserved for future issuance consists of the following: December 31, 2022 2021 Warrants 1,873,622 1,560,588 Series 1 Convertible Preferred Shares 1,166,667 — Convertible debt — 1,166,667 Options issued and outstanding under stock option plan 1,043,025 738,037 Deferred Share Units 1,061 1,061 Common Shares available for grant under stock option plan 396,080 281,798 Total Common Shares reserved for future issuance 4,480,455 3,748,151 The preferences, privileges, and rights of the Common Shares are as follows: Voting Subject to any special voting rights or restrictions, holders of common shares entitled to vote shall have one vote per share. Dividends The Company’s board of directors may from time to time declare and authorize payment of dividends, if any, as they may deem advisable and need not give notice of such declaration to any shareholder. Subject to the rights of common shareholders, if any, holding shares with specific rights as to dividends, all dividends on common shares shall be declared and paid according to the number of such shares held and paid in Canadian dollars. Liquidation Rights In the event of the liquidation, dissolution or winding-up of the Company or any other distribution of the Company’s assets for the purpose of winding up the Company’s affairs, after the payment of dividends declared but unpaid, the holders of Common Shares shall be entitled pari passu Series 1 Convertible Preferred Shares On June 17, 2022, the directors of the Company authorized the issuance of 70,000,000 Series 1 Convertible Preferred Shares (“Preferred Shares”) with the following preferences, privileges and rights: Dividends If the Company declares, pays or sets aside any dividends on shares of any other class or series of capital stock the holders of the Preferred Shares shall receive a dividend on each outstanding share of Preferred Share in an amount equal to that dividend per share of the Preferred Share as would equal the product of the dividend payable as if all shares of such series had been converted into Common Shares. Liquidation In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of the Preferred Shares shall be entitled to be paid out of the assets of the Company available for distribution to the shareholders an amount per share equal to $6.00, plus any dividends declared but not paid. If, upon any such liquidation event, the assets available for distribution to the shareholders are insufficient to pay the holders of the Preferred Shares, the holders of the Preferred Shares shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. Voting The Preferred Shares do not confer any voting rights or privileges. Redemption The Preferred Shares are not subject to mandatory redemption or other redemption provisions for which the events resulting in redemption are not within the Company’s control. Optional Conversion Preferred Shares are convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable Common Shares as is determined by dividing $0.10 by the applicable conversion price in effect at the time of conversion. The Conversion Price was initially equal to $0.10 and, following the Reverse Share Split on June 28, 2022, is equal to $6.00, such that 60 Preferred Shares are convertible into 1 Common Share. Mandatory Conversion All outstanding Preferred Shares shall automatically convert into Common Shares, at the effective conversion rate upon the closing of one or more sales of equity securities resulting in at least $30 million of cumulative gross proceeds to the Company. Equity Transactions In August 2021, the Company announced the closing of a public offering of 2,096,357 Common Share units at a price of $9.60 per unit for gross proceeds of $20,125,000. The Company incurred $2,109,657 of cash issuance costs in conjunction with the public offering. Each Common Share unit consisted of one Common Share and one 2021 accelerated warrants to purchase one Common Share at an exercise price of $12.60 per share at any time for five years. The warrants contain an acceleration clause allowing the Company to accelerate the expiry date of the warrants to 30 days following a time period during which the common share VWAP exceeds a TSX trading price of C$37.80 for ten consecutive trading days. The Company determined the allocation of the $9.60 Unit issue price to the Common Shares and the one Monte Carlo As of December 31, 2022, the fair value of the 2021 accelerated warrants was calculated using the Monte Carlo model with the following parameters: risk free interest rate of 4.14%; annual volatility of 87.5%; and expected life of 3.65 years. The balance at December 31, 2022 was approximately $931,000. In October 2022, the Company announced the closing of a private offering of 1,383,755 Common Share units at a price of $5.40 per unit for gross proceeds of $7,472,278. The Company incurred $1,227,357 of cash issuance costs in conjunction with the public offering. Each Common Share unit consisted of one Common Share and one 2022 warrants one The Company determined the allocation of the $5.40 Unit issue price to the Common Shares and the one As of December 31, 2022, the fair value of the 2022 warrants was calculated using the Black Scholes model with the following parameters: risk free interest rate of 4.00%; annual volatility of 86.0%; and expected life of 4.8 years. The balance at December 31, 2022 was approximately $928,500. A summary of the activity of the warrant liabilities from the 2021 accelerated warrants and the 2022 warrants for the years ending December 31, 2022 and 2021 is presented below: December 31, 2022 Balance at December 31, 2021 $ 1,871,687 October 2022 PIPE warrant liability at issuance 1,520,401 Change in fair value of the warrant liability (1,533,644) Foreign exchange loss 930 Balance at December 31, 2022 $ 1,859,374 December 31, 2021 Balance at December 31, 2020 $ — Accelerated warrant liability at issuance 2,739,221 Change in fair value of the accelerated warrant liability (840,555) Foreign exchange gain (26,979) Balance at December 31, 2021 $ 1,871,687 Related to the sale of the units in August 2021, the Company paid certain intermediaries $1,408,750 and issued 146,744 compensation warrants. The compensation warrants are exercisable at any time for five years at an exercise price of $9.60 and do not have an acceleration clause. The compensation warrants have been issued as consideration for services provided by the intermediaries. The Company used Black Scholes to determine the fair value of the compensation warrants at the issuance date. The fair value of $957,947 has a net zero impact on additional-paid-in capital. Significant assumption used in the Black Scholes calculation included risk free interest rate of 1.21%; historical volatility of 95.6%; and a 5.0 year expiry. Related to the sale of the units in October 2022, the Company paid certain intermediaries $597,780 and issued 69,188 compensation warrants. The compensation warrants are exercisable at any time for five years beginning six months from the issuance date at an exercise price of $6.10 and do not have an acceleration clause. The compensation warrants have been issued as consideration for services provided by the intermediaries. The Company used Black Scholes to determine the fair value of the compensation warrants at the issuance date. The fair value of $317,000 has a net zero impact to additional paid-in capital. Significant assumption used in Black Scholes included risk free interest rate of 4.10%; historical volatility of 94.0%; and a 5.0 year expiry. |
WARRANTS
WARRANTS | 12 Months Ended |
Dec. 31, 2022 | |
WARRANTS | |
WARRANTS | 12. In November 2020, the Company closed on a special warrant financing ( “Special Warrants” “Warrants” 60 months four months and one day Related to the special warrant financing, the Company compensated certain intermediaries cash fees equal to 7% of the gross proceeds totaling $53,929 and issued 9,287 warrants, which have the same terms as the Warrants. In March 2021, the Special Warrants issued by the Company in connection with the November 2020 financing, automatically converted into 270,326 common shares and 270,326 Warrants. During the year ended December 31, 2022, 102,092 warrants expired that were not exercised. As at December 31, 2022, outstanding Common Share warrants and exercise prices denominated in C$ unless otherwise noted, related to unit offerings are as follows: Exercise Number of Price $ Warrants Expiry date 28.80 100,073 April 2023 28.80 139,659 January 2024 18.00 68,334 June 2024 18.00 150,818 November 2024 18.00 49,167 December 2024 12.00 279,613 November 2025 USD 12.60 524,088 August 2026 USD 9.60 146,744 August 2026 USD 7.50 345,938 April 2028 USD 6.10 69,188 April 2028 1,873,622 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 13. 2015 Stock Option Plan The Company maintains the 2015 Stock Option Plan ( “2015 Option Plan” The following table summarizes the activity of the share options under the 2015 Option Plan for the years ended December 31, 2022 and 2021. All amounts are denominated in Canadian dollars, except year and share amounts: Weighted Weighted Average Average Remaining Number of Exercise Contractual Aggregate Share Price Per Term Intrinsic Options Share (years) Value Outstanding as of January 1, 2021 646,195 $ 7.80 4.8 $ 1,155,145 Granted 197,291 12.00 Forfeited (104,166) 14.40 Expired (1,283) 18.00 Outstanding as of December 31, 2021 738,037 8.40 5.1 $ 2,231,293 Granted 360,000 7.54 Forfeited (55,012) 15.98 Outstanding as of December 31, 2022 1,043,025 5.60 6.1 $ 1,183,860 Vested and exercisable as of December 31, 2022 665,185 $ 5.35 4.3 $ 1,183,860 The aggregate intrinsic value of options outstanding, exercisable, and vested and exercisable is calculated as the difference between the exercise price of the underlying options, and the fair value of the Company’s Common Shares. During the years ended December 31, 2022 and 2021, the Company granted share options with a grant date fair value of C$2,103,016 and C$1,225,433, respectively. During the years ended December 31, 2022 and 2021, there were no options exercised. The fair value of the share options granted was estimated using Black Scholes with the following assumptions: Year Ended December 31, 2022 2021 Weighted average fair value of Common Shares C$ 5.84 C$ 6.00 Expected volatility 95 % 92 % Risk-free interest rate 2.71 % 0.95 % Expected dividend yield — % — % Expected term (years) 6.0 4.5 Expected volatility is based on historical volatility of our shares over the expected life of the option, as our options are not readily tradable. DSU Plan The Company has a Deferred Share Unit plan (“ DSU Plan S hare-based Payment Expense The following table summarizes total share-based compensation included in the Company’s accompanying consolidated statements of operations and comprehensive loss: Year Ended December 31, 2022 2021 Research and development $ 297,933 $ 144,905 General and administrative 189,697 370,724 Total share-based compensation $ 487,630 $ 515,629 As of December 31, 2022, there was $1,617,412 of unrecognized share-based compensation related to options outstanding, which were expected to be recognized over weighted-average remaining service period of 3.2 years. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 14. As of December 31, 2022 and 2021, the net deferred tax assets have not been recognized in the accompanying consolidated financial statements. A valuation allowance is recognized to reduce the deferred tax asset as it is more likely than not that a tax benefit will not be realized. The following are the significant components of the Company’s deferred taxes as of December 31: 2022 2021 Non-capital losses carried forward $ 17,614,000 $ 11,640,000 Research and development expenditures 3,346,000 3,421,000 Investment tax credits 2,152,000 2,201,000 Tax value of technology rights and property and equipment in excess of accounting basis 250,000 287,000 Unrealized foreign exchange loss on convertible debt — 12,000 Share issue costs 656,000 550,000 Total deferred income tax assets 24,018,000 18,111,000 Valuation allowance (24,018,000) (18,111,000) Net deferred income tax assets $ — $ — As of December 31, 2022, the Company has available research and development expenditure credits for income tax purposes of approximately $12,625,000, which may be carried forward without expiration to reduce future taxable income. As of December 31, 2022, the Company has non-capital income tax loss carry-forwards of approximately $66,467,000 available to reduce future income for income tax purposes. The income tax loss carry-forwards have expiry dates between the years 2026 and 2042. As of December 31, 2022, the Company has approximately $2,152,000 of non-refundable investment tax credits available to offset future income taxes. The non-refundable investment tax credits have expiry dates between 2025 and 2035. A reconciliation of the combined federal and provincial statutory income tax rate applied to the net loss for the year to the income tax recovery as of December 31 is as follows: 2022 2021 Basic combined Canadian statutory income tax rate 26.5 % 26.5 % Income tax recovery based on statutory rate $ (4,887,000) $ (2,457,000) Permanent differences (1,164,000) 396,000 Share issue costs recorded, net of equity (271,000) (443,000) Unrecognized benefit of current year tax losses 6,322,000 2,504,000 $ — $ — The Company does not expect a significant change in the amount of unrecognized tax benefits over the next 12 months. However, any adjustments arising from certain ongoing examinations by tax authorities could alter the timing or amount of taxable income or deductions and these adjustments could differ from the amount accrued. The Company’s federal and provincial income tax returns files for all years remain subject to examination by the taxation authorities. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 15. Danforth Advisors, LLC During the years ended December 31, 2022 and 2021, the Company made cash payments of $397,691 and $290,656, respectively, and incurred costs of $365,247 and $322,639, respectively, which are included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss for consulting services to a firm specializing in finance and strategic support for life science companies. The Chief Financial Officer of the Company is a managing director of the consulting firm. UBC Collaborative Research Agreement In April 2016, the Company entered into a three-year, collaborative research agreement (“ CRA UBC one- year Virtua, LLC During the years ended December 31, 2022 and 2021, the Company made cash payments of $0 and $1,187,886, respectively, for management services to a company owned by the Company’s former Chief Executive Officer and Executive Chairman for services rendered, including the settlement of all deferred compensation outstanding as of December 31, 2021. During the years ended December 31, 2022 and 2021, the Company recorded expenses of $0 and $413,555, respectively, with 2021 expenses of $257,619 and $137,936 included in research and development expenses and general and administrative expenses, respectively, in the accompanying consolidated statements of operations and comprehensive loss. Title 19 Promis The Company entered into the following transactions with a related party during the years ended December 31 2022 and 2021: ● In March 2021, the Company issued a convertible unsecured debenture to Title 19 Promis in the principal amount of $3,000,000 , convertible into Common Shares at the option of the holder at a conversion price of $6.00 (the “ Title 19 Debenture ”). The Title 19 Debenture was later amended to provide that it was convertible into Series 1 Preferred Shares at the option of the holder at a conversion price of $6.00 . In June 2022, Title 19 Promis elected to convert the Title 19 Debenture and was issued 30,000,000 Series 1 Preferred Shares, which, as a result of the Reverse Stock Split, are now convertible into an aggregate of 500,000 Common Shares. ● In August 2021, Title 19 Promis acquired (a) 206,250 Common Shares and (b) a warrant to purchase 51,562 Common Shares for an aggregate purchase price of $1,980,000 , each represented on a post-split basis. ● In August 2021, Title 19 Acies, an affiliate of Title 19 Promis, acquired 48,333 Common Shares for an aggregate purchase price of $463,996 , represented on a post-split basis. ● In October 2022, in a private offering, Title 19 Promis acquired 106,391 Common Shares and a warrant to purchase 26,597 Common Shares for an aggregate purchase price of $574,511 . Crocker Mountain LLC The Company entered into the following transactions with a related party during the years ended December 31 2022 and 2021: ● In March 2021, the Company issued a convertible unsecured debenture to Crocker Mountain in the principal amount of $900,000 , convertible into Common Shares at the option of the holder at a conversion price of $6.00 (the “ Crocker Mountain Debenture ”). The Crocker Mountain Debenture was later amended to provide that it was convertible into Series 1 Preferred Shares at the option of the holder at a conversion price of $6.00 . In June 2022, Crocker Mountain elected to convert the Crocker Mountain Debenture and was issued 9,000,000 Series 1 Preferred Shares, which, as a result of the Reverse Stock Split, are now convertible into an aggregate of 150,000 Common Shares. ● In March 2021, the Company issued a convertible unsecured debenture to the Jeremy M. Sclar 2012 Irrevocable Family Trust, an affiliate of Crocker Mountain (the “ Trust ”), in the principal amount of $900,000 , convertible into Common Shares at the option of the holder at a conversion price of $6.00 (the “ Trust Debenture ”). The Trust Debenture was later amended to provide that it was convertible into Series 1 Preferred Shares at the option of the holder at a conversion price of $6.00 . In June 2022, the Trust elected to convert the Trust Debenture and was issued 9,000,000 Series 1 Preferred Shares, which, as a result of the Reverse Stock Split, are now convertible into an aggregate of 150,000 Common Shares. ● In August 2021, Crocker Mountain acquired (a) 340,833 Common Shares and (b) a warrant to purchase 85,208 Common Shares for an aggregate purchase price of $3,272,000 , each represented on a post-split basis. ● In October 2022, in a private offering, the Trust acquired 104,869 Common Shares and a warrant to purchase 26,217 Common Shares for an aggregate purchase price of $566,292 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 16. Research, Development and License Agreements The Company enters into research, development and license agreements with various parties in the ordinary course of business where the Company receives research services and rights to proprietary technologies. The agreements require compensation to be paid by the Company, typically, by a combination of the following: ● fees comprising amounts due initially on entering into the agreements and additional amounts due either on specified timelines or defined services to be provided; ● milestone payments that are dependent on products developed under the agreements proceeding toward specified plans of clinical trials and commercial development; and ● royalty payments calculated as a percentage of net sales, commencing on commercial sale of any product candidates developed from the technologies. Milestone and royalty related amounts that may come due under various agreements are dependent on, among other factors, preclinical safety and efficacy, clinical trials, regulatory approvals and, ultimately, the successful development and commercial launch of a new drug, the outcomes and timings of which are uncertain. Amounts due per the various agreements for milestone payments will accrue once the occurrence of a milestone is likely. Amounts due as royalty payments will accrue as commercial revenues from the product are earned. Through December 31, 2022, no events have occurred that require accrual of any milestone or royalty related amounts. UBC and the Vancouver Coastal Health Authority Agreement In April 2016, the Company entered into a three-year, CRA with the UBC and the Vancouver Coastal Health Authority. The agreement was amended various times through November 2021. Refer to Note 15 Related Party Transactions. UBC Agreement In February 2009, the Company entered into an agreement with UBC to further the development and commercialization of certain technology developed, in part, by the Company’s Chief Scientific Officer. The agreement was amended and restated in October 2015. Under the amended and restated agreement, the Company is committed to make royalty payments based on revenue earned from the licensed technology. An annual license fee is payable over the term of the agreement. The agreement remains effective unless terminated under the provisions of the agreement. The Company made annual license payments of C$25,000 during each of the years ended December 31, 2022 and 2021. Through December 31, 2022 no accruals for royalty payments have been made. University Health Network Agreement In April 2006, and in additional amendments through November 2013, the Company entered into an agreement with the University Health Network, Toronto, to license certain technology and related intellectual property. The UHN License Agreement calls for certain customary payments such as milestone payments, buyout payments and payment to UHN between a half of a percent to a low single digit royalty on revenues. The aggregate amount of all potential milestone and buyout payments under the UHN License Agreement (excluding royalty payments) is C$3,325,000. The Company did not make any payments under the agreement to UHN pursuant to the terms of the UHN License Agreement during the years ended December 31, 2022 and 2021. As of December 31, 2022 and 2021, no accruals for any milestones or royalty payments have been made. Indemnification In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers. The Company currently has directors’ and officers’ insurance. Leases During the years ended December 31, 2022 and 2021, the Company made short-term lease payments in the amount of $68,870 and $20,806, respectively, and are included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. The Company’s commitment for future payments under its lease agreements is C$22,912 for the year ended December 31, 2023. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | 17. NET LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per share attributable to common shareholders: Years Ended December 31, 2022 2021 Numerator: Net loss attributable to common shareholders $ 18,062,263 $ 9,790,106 Denominator: Weighted-average shares outstanding used in computing net loss per share attributable to common shareholders, basic and diluted 7,502,609 5,785,617 Net loss per share attributable to common shareholders, basic and diluted $ (2.41) $ (1.69) The following outstanding potentially dilutive common shares equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive: December 31, 2022 2021 Options issued and outstanding under stock option plan 1,043,025 738,037 Warrants 1,873,622 1,560,688 Convertible debt — 1,166,667 Series 1 Convertible Preferred Shares 1,166,667 — Deferred Share Units 1,061 1,061 Total 4,084,375 3,466,453 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 18. The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to March 8, 2023. Based upon this review, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“ GAAP ASC ASU FASB On June 21, 2022, the directors of the Company authorized a reverse share split of the issued and outstanding Common Shares in a ratio of 60:1, effective June 28, 2022 (the “ Reverse Share Split |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include, but are not limited to, the accrual for research and development expenses, the valuation of warrant liabilities and embedded derivative liabilities. Actual results could differ from those estimates, and such differences could be material to the consolidated financial statements. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker (“ CODM |
Foreign Currency | Foreign Currency Comprehensive loss is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. The reporting currency of the Company is the United States dollar (“ US$ C$ |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. As of December 31, 2022 and 2021 the Company did not have any material cash equivalents. |
Short-term Investments | Short-term Investments Short-term investments consist of guaranteed certificates of deposit with a maturity greater than 90 days and up to one year at the time of purchase. Accordingly, all short-term investments are classified as current assets in the accompanying consolidated balance sheets. The short-term investment is being held as collateral for the Company’s credit cards. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to a significant concentration of credit risk consist of cash and short-term investments. Cash is deposited in checking and money market accounts at accredited financial institutions, which at times, may exceed federally insured limits. The short-term investment is deposited in a guaranteed certificate of deposit with an accredited financial institution that guarantees 100% of the original amount invested. Management believes that these financial institutions are financially sound, and, accordingly, minimal credit risk exists with respect to these high-quality financial institutions. As of December 31, 2022, the Company has not experienced any losses on its cash or short-term investments. |
Fair Value Measurements | Fair Value Measurements FASB ASC 820, Fair Value Measurements and Disclosures, “ASC 820” ● Level 1 – Observable inputs, such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. ● Level 2 – Inputs (other than Level 1 quoted prices) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities. ● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s derivative and warrant liabilities were classified as Level 3 financial instruments for the years ended December 31, 2022 and 2021. The carrying amounts of prepaid and other current assets, short-term investments, accounts payable, and accrued expenses are generally considered to be representative of their fair value based on the short-term nature of these financial instruments. |
Impairment of Long-Lived Assets | Impairment of Long-lived Assets The Company evaluates its long-lived assets, which consist of property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. No impairments have been identified as of December 31, 2022 and 2021. |
Property and Equipment | Property and Equipment Property and equipment, net are stated at cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful life of each asset. Laboratory and equipment are depreciated over two two |
Intangible Assets | Intangible Assets Definite-lived intangible assets are stated at cost less accumulated amortization and any accumulated impairment losses. An intangible asset’s carrying amount is assessed for impairment whenever there is an indication that the asset may be impaired. The Company’s definite-lived intangible assets consist of acquired rights and patents. Intangible assets are amortized on a straight-line basis over the lesser of the life of the intangible asset or its estimated useful life, which is 15 years. |
Derivative Liability | Derivative Liability The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with FASB ASC Topic 815, Derivatives and Hedging Distinguishing Liabilities from Equity |
Collaboration Arrangements | Collaboration Arrangements The Company may enter into collaboration arrangements with pharmaceutical and biotechnology partners. The Company analyzes its collaboration arrangements to assess whether they are within the scope of FASB ASC 808, Collaborative Arrangements, “ASC 808” Research and Development, |
General and Administrative | General and Administrative Expenses General and administrative expenses consist primarily of personnel costs including salary, bonus, employee-benefits and share-based compensation, costs incurred in development and protection of intellectual property, professional service fees, and other general overhead and facility costs, including rent, depreciation and amortization, which relate to the Company’s general and administrative functions. |
Research and Development Expenses | Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with the development and research of the Company’s platform technology, as well as discovery program expenses. The Company expenses research and development costs as incurred. These expenses include: ● employee-related expenses, including salaries, related benefits and share-based compensation expense, for employees engaged in research and development functions; ● external research and development expenses incurred under arrangements with third parties, such as contract research organizations (“ CROs ”), and consultants; ● the cost of acquiring, developing, and manufacturing clinical study materials; and ● Costs associated with preclinical and clinical activities and regulatory operations. |
Prepaid and Accrued Research and Development Expenses | Prepaid and Accrued Research and Development Expenses Substantial portions of the Company’s pre-clinical trials are performed by third-party laboratories, medical centers, CROs and other vendors. These vendors generally bill monthly for services performed, or bill based upon milestone achievement. For preclinical studies, the Company accrues expenses based upon estimated percentage of work completed and the remaining contract milestones. At times, the Company is obligated to make upfront payments upon execution of research and development agreements. Upfront payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses until such goods are delivered or the related services are performed. The Company estimates the period over which such services will be performed based on the terms of the agreements as well as the level of effort to be expended in each period. Sometimes the actual timing of performance or the level of effort varies from the estimate, and if that does occur, the Company will adjust the amounts recorded accordingly. |
Patent Costs | Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. |
Warrants | Warrants The Company issues warrants on its common shares in connection with financings as well as for compensation of intermediaries and advisors. The Company accounts for warrants as either equity instruments or as liabilities depending on the specific terms of the warrant agreements in accordance with FASB ASC Topic 815, Derivatives and Hedging Distinguishing Liabilities from Equity |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are specifically identifiable costs associated with issuance of a new debt instrument. Debt issuance costs are reported on the consolidated balance sheet as a direct deduction from the face amount of the related debt. Debt issuance costs are amortized to interest expense using the effective interest method over the term of the related debt. |
Share-based Compensation | Share-based Compensation Share-based compensation expense related to share awards granted to employees, directors and non-employees is recognized based on the grant-date estimated fair values of the awards using the Black- Scholes option pricing model (“ Black-Scholes Black Scholes requires a number of assumptions, of which the most significant are expected volatility, expected option term (the time from the grant date until the options are exercised or expire) and risk-free rate. Expected volatility is determined using the historical volatility for the Company. The risk-free interest rate is based on the yield of Canadian government bonds with a remaining term equal to the expected life of the option. Expected dividend yield is zero because the Company has never paid cash dividends on common shares and the Company does not expect to pay cash dividends in the foreseeable future. |
Income Taxes | Income Taxes The Company is a taxable entity under the Income Tax Act (Canada). Deferred income tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the respective income tax bases of assets and liabilities, measured using substantively enacted income tax rates and laws that are expected to be in effect when the differences are expected to reverse. Deferred tax assets are recognized to the extent it is more likely than not that taxable income will be available against which the deferred tax asset can be utilized. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company follows the provisions of ASC 740-10, Uncertainty in Income Taxes ASC 740-10 not |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during each period. Diluted net loss per share of common shares includes the effect, if any, from the potential exercise or conversion of securities, such as convertible debt, share options and warrants, which would result in the issuance of incremental shares of common shares. For diluted net loss per share, the weighted-average number of common shares is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. For all periods presented, basic and diluted net loss per share are the same, as any additional share equivalents would be anti-dilutive. As the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share. |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an Emerging Growth Company, as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012 (“ JOBS Act |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases Topic 842 Leases Topic 842 Targeted Improvements Company adopted this standard as of January 1, 2022 with no material impact on the consolidated financial statements. In December 2019, the FASB issued ASU No 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Topic 740 In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options ( Subtopic 470-20 ) and Derivatives and Hedging Contracts in Entity s Own Equity ( Subtopic 815-40 ): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In June 2016, and in later clarifying amendments, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
Summary of major categories of assets and liabilities measured at fair value on a recurring basis | As of December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Short-term investments $ 31,009 $ — $ — $ 31,009 Total assets measured at fair value $ 31,009 $ — $ — $ 31,009 Liabilities: Derivative liability $ — $ — $ — $ — Warrant liability — — 1,859,374 1,859,374 Total liabilities measured at fair value $ — $ — $ 1,859,374 $ 1,859,374 As of December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Short-term investments $ 33,248 $ — $ — $ 33,248 Total assets measured at fair value $ 33,248 $ — $ — $ 33,248 Liabilities: Derivative liability $ — $ — $ 5,379,878 $ 5,379,878 Warrant liability — — 1,871,687 1,871,687 Total liabilities measured at fair value $ — $ — $ 7,251,565 $ 7,251,565 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Summary of prepaid expenses and other current assets | December 31, 2022 2021 Upfront research payments $ 346,015 $ 554,878 Goods and services tax receivable 71,626 48,690 Insurance 471,088 32,853 Dues and subscriptions 7,926 — Consultants 56,797 69,915 License fee 25,700 19,754 Deposits 12,907 6,839 Miscellaneous 4,623 4,387 Total prepaid expenses and other current assets $ 996,682 $ 737,316 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
Summary of property and equipment, net | December 31, 2022 2021 Laboratory equipment $ 61,933 $ 66,403 Computer equipment 18,388 17,657 Total property and equipment 80,321 84,060 Less: accumulated depreciation (80,000) (79,389) Property and equipment, net $ 321 $ 4,671 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS | |
Summary of intangible assets | December 31, 2022 2021 Intangible assets $ 73,695 $ 79,015 Less: accumulated amortization (52,857) (51,401) Intangible assets, net $ 20,838 $ 27,614 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED LIABILITIES | |
Summary of accrued liabilities | December 31, 2022 2021 Legal $ — $ 171,777 Accounting 73,970 123,026 Research and development 3,185,346 106,845 Accrued interest — 54,398 Other 178,330 64,047 Accrued liabilities $ 3,437,646 $ 520,093 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Schedule of fair value of derivative liability | June 19, 2022 Carrying value of convertible debt net of issuance costs and debt discount $ 4,166,363 Derivative liability remeasured as of June 19, 2022 2,741,058 Total liabilities extinguished on conversion 6,907,421 Fair value of Series 1 Convertible Preferred Shares recorded to additional paid-in-capital 5,600,000 Gain on extinguishment of convertible debt and derivative liability $ 1,307,421 |
Summary of fair value of the warrant liability | December 31, 2022 Balance at December 31, 2021 $ 1,871,687 October 2022 PIPE warrant liability at issuance 1,520,401 Change in fair value of the warrant liability (1,533,644) Foreign exchange loss 930 Balance at December 31, 2022 $ 1,859,374 December 31, 2021 Balance at December 31, 2020 $ — Accelerated warrant liability at issuance 2,739,221 Change in fair value of the accelerated warrant liability (840,555) Foreign exchange gain (26,979) Balance at December 31, 2021 $ 1,871,687 |
Derivative liability | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Summary of fair value of the warrant liability | December 31, 2022 Balance at December 31, 2021 $ 5,379,878 Change in fair value of the derivative liability (2,643,123) Foreign exchange loss 4,303 Gain on extinguishment of the derivative liability (2,741,058) Balance at December 31, 2022 $ — December 31, 2021 Balance at December 31, 2020 $ — Derivative liability at issuance 3,432,558 Change in fair value of the derivative liability 1,936,191 Foreign exchange loss 11,129 Balance at December 31, 2021 $ 5,379,878 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EQUITY | |
Summary of common shares reserved for future issuance | December 31, 2022 2021 Warrants 1,873,622 1,560,588 Series 1 Convertible Preferred Shares 1,166,667 — Convertible debt — 1,166,667 Options issued and outstanding under stock option plan 1,043,025 738,037 Deferred Share Units 1,061 1,061 Common Shares available for grant under stock option plan 396,080 281,798 Total Common Shares reserved for future issuance 4,480,455 3,748,151 |
Summary of fair value of the warrant liability | December 31, 2022 Balance at December 31, 2021 $ 1,871,687 October 2022 PIPE warrant liability at issuance 1,520,401 Change in fair value of the warrant liability (1,533,644) Foreign exchange loss 930 Balance at December 31, 2022 $ 1,859,374 December 31, 2021 Balance at December 31, 2020 $ — Accelerated warrant liability at issuance 2,739,221 Change in fair value of the accelerated warrant liability (840,555) Foreign exchange gain (26,979) Balance at December 31, 2021 $ 1,871,687 |
WARRANTS (Tables)
WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
WARRANTS | |
Schedule of warrant exercise price | Exercise Number of Price $ Warrants Expiry date 28.80 100,073 April 2023 28.80 139,659 January 2024 18.00 68,334 June 2024 18.00 150,818 November 2024 18.00 49,167 December 2024 12.00 279,613 November 2025 USD 12.60 524,088 August 2026 USD 9.60 146,744 August 2026 USD 7.50 345,938 April 2028 USD 6.10 69,188 April 2028 1,873,622 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SHARE-BASED COMPENSATION | |
Summary of the activity of share options | Weighted Weighted Average Average Remaining Number of Exercise Contractual Aggregate Share Price Per Term Intrinsic Options Share (years) Value Outstanding as of January 1, 2021 646,195 $ 7.80 4.8 $ 1,155,145 Granted 197,291 12.00 Forfeited (104,166) 14.40 Expired (1,283) 18.00 Outstanding as of December 31, 2021 738,037 8.40 5.1 $ 2,231,293 Granted 360,000 7.54 Forfeited (55,012) 15.98 Outstanding as of December 31, 2022 1,043,025 5.60 6.1 $ 1,183,860 Vested and exercisable as of December 31, 2022 665,185 $ 5.35 4.3 $ 1,183,860 |
Summary of fair value of share options granted estimated using Black Scholes with the assumptions | Year Ended December 31, 2022 2021 Weighted average fair value of Common Shares C$ 5.84 C$ 6.00 Expected volatility 95 % 92 % Risk-free interest rate 2.71 % 0.95 % Expected dividend yield — % — % Expected term (years) 6.0 4.5 |
Summary of total share-based compensation | Year Ended December 31, 2022 2021 Research and development $ 297,933 $ 144,905 General and administrative 189,697 370,724 Total share-based compensation $ 487,630 $ 515,629 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of significant components of the deferred taxes | 2022 2021 Non-capital losses carried forward $ 17,614,000 $ 11,640,000 Research and development expenditures 3,346,000 3,421,000 Investment tax credits 2,152,000 2,201,000 Tax value of technology rights and property and equipment in excess of accounting basis 250,000 287,000 Unrealized foreign exchange loss on convertible debt — 12,000 Share issue costs 656,000 550,000 Total deferred income tax assets 24,018,000 18,111,000 Valuation allowance (24,018,000) (18,111,000) Net deferred income tax assets $ — $ — |
Schedule of reconciliation of the combined federal and provincial statutory income tax rate applied to the net loss for the year to the income tax recovery | 2022 2021 Basic combined Canadian statutory income tax rate 26.5 % 26.5 % Income tax recovery based on statutory rate $ (4,887,000) $ (2,457,000) Permanent differences (1,164,000) 396,000 Share issue costs recorded, net of equity (271,000) (443,000) Unrecognized benefit of current year tax losses 6,322,000 2,504,000 $ — $ — |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NET LOSS PER SHARE | |
Summary of computation of basic and diluted net loss per share attributable to common shareholders | Years Ended December 31, 2022 2021 Numerator: Net loss attributable to common shareholders $ 18,062,263 $ 9,790,106 Denominator: Weighted-average shares outstanding used in computing net loss per share attributable to common shareholders, basic and diluted 7,502,609 5,785,617 Net loss per share attributable to common shareholders, basic and diluted $ (2.41) $ (1.69) |
Summary of outstanding potentially dilutive common shares equivalents were excluded from the computation of diluted net loss per share | December 31, 2022 2021 Options issued and outstanding under stock option plan 1,043,025 738,037 Warrants 1,873,622 1,560,688 Convertible debt — 1,166,667 Series 1 Convertible Preferred Shares 1,166,667 — Deferred Share Units 1,061 1,061 Total 4,084,375 3,466,453 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
DESCRIPTION OF BUSINESS | ||
Net loss | $ (18,062,263) | $ (9,790,106) |
Accumulated deficit | $ (80,253,464) | $ (62,191,201) |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | |
Dec. 31, 2022 segment | Jun. 21, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Reverse share split ratio | 60 | 60 |
Segment Information | ||
Number of operating segment | 1 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Laboratory and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Depreciation term | 2 years |
Laboratory and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Depreciation term | 5 years |
Computer equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Depreciation term | 2 years |
Computer equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Depreciation term | 3 years |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2012 | Dec. 31, 2022 | Dec. 31, 2021 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Original amount invested percent | 100% | ||
Impairments | $ 0 | $ 0 | |
Unrecognized benefits | 0 | ||
Interest expense or penalties | $ 0 | ||
Estimated useful life | 15 years | 15 years |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2022 | Jun. 19, 2022 | Dec. 31, 2021 |
Liabilities: | |||
Derivative liability | $ 2,741,058 | $ 5,379,878 | |
Warrant liability | $ 1,859,374 | 1,871,687 | |
Recurring | |||
Assets: | |||
Short-term investments | 31,009 | 33,248 | |
Total assets measured at fair value | 31,009 | 33,248 | |
Liabilities: | |||
Derivative liability | 5,379,878 | ||
Warrant liability | 1,859,374 | 1,871,687 | |
Total liabilities measured at fair value | 1,859,374 | 7,251,565 | |
Recurring | Level 1 | |||
Assets: | |||
Short-term investments | 31,009 | 33,248 | |
Total assets measured at fair value | 31,009 | 33,248 | |
Recurring | Level 3 | |||
Liabilities: | |||
Derivative liability | 5,379,878 | ||
Warrant liability | 1,859,374 | 1,871,687 | |
Total liabilities measured at fair value | $ 1,859,374 | $ 7,251,565 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Upfront research payments | $ 346,015 | $ 554,878 |
Goods and services tax receivable | 71,626 | 48,690 |
Insurance | 471,088 | 32,853 |
Dues and subscriptions | 7,926 | |
Consultants | 56,797 | 69,915 |
License fee | 25,700 | 19,754 |
Deposits | 12,907 | 6,839 |
Miscellaneous | 4,623 | 4,387 |
Total prepaid expenses and other current assets | $ 996,682 | $ 737,316 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property and equipment, net | ||
Total property and equipment | $ 80,321 | $ 84,060 |
Less: accumulated depreciation | (80,000) | (79,389) |
Property and equipment, net | 321 | 4,671 |
Depreciation expense | 6,144 | 40,576 |
Recognized gain on sale of property and equipment | 59,157 | |
Disposals of property and equipment | 0 | |
Laboratory equipment | ||
Property and equipment, net | ||
Total property and equipment | 61,933 | 66,403 |
Computer equipment | ||
Property and equipment, net | ||
Total property and equipment | $ 18,388 | $ 17,657 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2012 CAD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
INTANGIBLE ASSETS | |||
Rights to certain patented technology acquired | $ 100,000 | ||
Expected useful life | 15 years | 15 years | |
INTANGIBLE ASSETS | |||
Intangible assets | $ 73,695 | $ 79,015 | |
Less: accumulated amortization | (52,857) | (51,401) | |
Intangible assets, net | 20,838 | 27,614 | |
Amortization expense | 5,072 | $ 5,249 | |
Estimated expected amortization expense | |||
2022 | 0 | ||
2023 | 0 | ||
2024 | 0 | ||
2025 | 0 | ||
2026 | 4,917 | ||
Thereafter totals | $ 1,170 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ACCRUED LIABILITIES | ||
Legal | $ 171,777 | |
Accounting | $ 73,970 | 123,026 |
Research and development | 3,185,346 | 106,845 |
Accrued interest | 54,398 | |
Other | 178,330 | 64,047 |
Accrued liabilities | $ 3,437,646 | $ 520,093 |
DEFERRED COMPENSATION (Details)
DEFERRED COMPENSATION (Details) | Dec. 31, 2021 USD ($) |
DEFERRED COMPENSATION | |
Deferred compensation | $ 1,398,989 |
COLLABORATION AGREEMENTS (Detai
COLLABORATION AGREEMENTS (Details) | 1 Months Ended |
Jul. 31, 2020 agreement | |
COLLABORATION AGREEMENTS | |
Number of collaborative agreements | 2 |
COLLABORATION AGREEMENTS - Neur
COLLABORATION AGREEMENTS - Neurodegenerative Diseases (Details) - Neurodegen Collaboration | 12 Months Ended | ||
Dec. 31, 2022 CAD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
COLLABORATION AGREEMENTS | |||
Maximum contribution amount per month | $ 12,500 | ||
Amount contributed recorded in research and development expenses | $ 0 | $ 19,973 | |
BCNI | |||
COLLABORATION AGREEMENTS | |||
Amount contributed | $ 0 | $ 19,973 |
COLLABORATION AGREEMENTS - Covi
COLLABORATION AGREEMENTS - Covid 19 Collaboration (Details) - Covid 19 Collaboration | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2021 USD ($) | Dec. 31, 2021 CAD ($) | Feb. 28, 2021 CAD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jan. 31, 2021 | |
COLLABORATION AGREEMENTS | |||||||
Amount contributed recorded in research and development expenses | $ 10,306 | ||||||
Expense funded | $ 25,000 | $ 77,549 | |||||
Pro-rata share of losses of investment | $ 2,353 | ||||||
Aggregated redemption price | $ 2,353 | ||||||
Payout received upon termination | $ 128,000 | ||||||
BCNI | |||||||
COLLABORATION AGREEMENTS | |||||||
Equity method, ownership percentage | 50% | 50% | |||||
Payments to acquire equity method investment | $ 2,353 |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) | 1 Months Ended | 12 Months Ended | |||||
Jun. 30, 2022 USD ($) EquityInstruments | Mar. 31, 2021 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | Jun. 19, 2022 USD ($) | Jun. 17, 2022 $ / shares | Jun. 16, 2022 $ / shares | |
CONVERTIBLE DEBT | |||||||
Derivative liability | $ 5,379,878 | $ 2,741,058 | |||||
Fair value of Common Shares per share | $ / shares | $ 0.08 | ||||||
Derivative liability | |||||||
CONVERTIBLE DEBT | |||||||
Derivative liability at issuance | 3,432,558 | ||||||
Interest expense relating to the amortization of the debt discount | $ 241,854 | 366,000 | |||||
Gain from change in fair value of derivative liability | $ 2,643,123 | 1,936,191 | |||||
Issuance costs allocated to conversion feature | $ 23,645 | ||||||
volatility | |||||||
CONVERTIBLE DEBT | |||||||
Derivative liability, measurement input | 95.95 | 87 | |||||
volatility | Derivative liability | |||||||
CONVERTIBLE DEBT | |||||||
Derivative liability, measurement input | 101.43 | ||||||
Risk Free Interest rate | |||||||
CONVERTIBLE DEBT | |||||||
Derivative liability, measurement input | 1.15 | 2.94 | |||||
Risk Free Interest rate | Derivative liability | |||||||
CONVERTIBLE DEBT | |||||||
Derivative liability, measurement input | 0.15 | ||||||
Debt yield | |||||||
CONVERTIBLE DEBT | |||||||
Derivative liability, measurement input | 15.96 | 27.2 | |||||
Debt yield | Derivative liability | |||||||
CONVERTIBLE DEBT | |||||||
Derivative liability, measurement input | 15.96 | ||||||
Debentures | |||||||
CONVERTIBLE DEBT | |||||||
Proceeds from issuance of debt | $ 3,567,442 | ||||||
Conversion price | $ / shares | $ 6 | $ 6 | |||||
Debentures converted amount | $ 7,000,000 | ||||||
Number of Series 1 convertible preferred shares to be issued on conversion of debentures | EquityInstruments | 70,000,000 | ||||||
Cash payments to settle accrued interest | $ 17,069 | ||||||
Total liability of the Debenture and the derivative liability | $ 9,285,935 | ||||||
Private Placement | |||||||
CONVERTIBLE DEBT | |||||||
Issuance costs | 48,220 | ||||||
Private Placement | Debentures | |||||||
CONVERTIBLE DEBT | |||||||
Proceeds from issuance of debt | 7,000,000 | ||||||
Issuance costs | $ 24,575 | ||||||
Conversion price | $ / shares | $ 6 | ||||||
Accrued interest rate | 1% |
CONVERTIBLE DEBT - Extinguishme
CONVERTIBLE DEBT - Extinguishment of the convertible notes (Details) - USD ($) | 12 Months Ended | ||
Jun. 19, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Extinguishment of Debt [Line Items] | |||
Derivative liability remeasured as of June 19, 2022 | $ 2,741,058 | $ 5,379,878 | |
Gain on extinguishment of convertible debt and derivative liability | $ 1,307,421 | ||
Convertible Notes | |||
Extinguishment of Debt [Line Items] | |||
Carrying value of convertible debt net of issuance costs and debt discount | 4,166,363 | ||
Derivative liability remeasured as of June 19, 2022 | 2,741,058 | ||
Total liabilities extinguished on conversion | 6,907,421 | ||
Fair value of Series 1 Convertible Preferred Shares recorded to additional paid-in-capital | 5,600,000 | ||
Gain on extinguishment of convertible debt and derivative liability | $ 1,307,421 |
CONVERTIBLE DEBT - Fair value o
CONVERTIBLE DEBT - Fair value of derivative liability (Details) - Derivative liability - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at the beginning | $ 5,379,878 | |
Derivative liability at issuance | $ 3,432,558 | |
Change in fair value of the derivative liability | $ (2,643,123) | $ 1,936,191 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) from Change in Fair Value of Financial Instruments | Gain (Loss) from Change in Fair Value of Financial Instruments |
Gain on extinguishment of the derivative liability | $ (2,741,058) | |
Foreign exchange loss | $ 4,303 | $ 11,129 |
Balance at the end | $ 5,379,878 |
EQUITY (Details)
EQUITY (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
EQUITY | ||
Common shares, shares issued | 8,579,284 | 7,195,529 |
Common shares, shares outstanding | 8,579,284 | 7,195,529 |
Preferred shares, shares issued | 70,000,000 | 0 |
Preferred shares, shares outstanding | 70,000,000 | 0 |
Common shares, par value | $ 0 | $ 0 |
Series S1 Convertible Preferred stock, Par value | $ 0 | $ 0 |
EQUITY - Future issuances (Deta
EQUITY - Future issuances (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
EQUITY | |||
Warrants | 1,873,622 | 1,560,588 | |
Series 1 Convertible Preferred Shares | 1,166,667 | ||
Convertible debt | 1,166,667 | ||
Options issued and outstanding under stock option plan | 1,043,025 | 738,037 | 646,195 |
Deferred share units | 1,061 | 1,061 | |
Common Shares available for grant under stock option plan | 396,080 | 281,798 | |
Total Common Shares reserved for future issuance | 4,480,455 | 3,748,151 |
EQUITY - Rights of the common s
EQUITY - Rights of the common shares gross proceeds (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 USD ($) Vote $ / shares shares | Jun. 21, 2022 | Jun. 17, 2022 shares | Dec. 31, 2021 shares | |
EQUITY | ||||
Number of vote per share | Vote | 1 | |||
Series S1 Convertible Preferred stock, Shares authorized | shares | 70,000,000 | 70,000,000 | 70,000,000 | |
Series S1 Convertible Preferred stock, Liquidation price per share | $ 6 | |||
Value divided to ascertain shares convertible | 0.10 | |||
Series S1 Convertible Preferred stock, conversion price per share | 0.10 | |||
Series S1 Convertible Preferred stock, conversion price per share after reverse stock split | $ 6 | |||
Reverse share split ratio | 60 | 60 | ||
Gross proceeds from sale of equity securities | $ | $ 30 |
EQUITY - Equity transactions (D
EQUITY - Equity transactions (Details) | 1 Months Ended | 12 Months Ended | ||||||
Aug. 31, 2021 USD ($) Y $ / shares shares | Oct. 31, 2022 USD ($) Y $ / shares shares | Aug. 31, 2021 USD ($) Y D $ / shares shares | Aug. 31, 2021 USD ($) Y $ / shares $ / shares shares | Dec. 31, 2022 USD ($) Y $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | |
COMMON SHARES | ||||||||
Gross proceeds from issuance allocated to common shares | $ 4,974,253 | $ 15,868,381 | ||||||
Gross proceeds from issuance allocated to common shares warrants | $ 1,520,401 | $ 2,739,221 | ||||||
Share price | $ / shares | $ 5.84 | $ 6 | ||||||
Issuance costs allocated to the warrants | $ 249,733 | $ 444,558 | ||||||
Compensation warrants | Intermediaries | ||||||||
COMMON SHARES | ||||||||
Warrants exercise price | $ / shares | $ 6.10 | $ 9.60 | ||||||
Warrants exercisable term | 5 years | 5 years | 5 years | 5 years | ||||
Amount of compensation paid | $ 597,780 | $ 1,408,750 | ||||||
Number of warrants issued | shares | 69,188 | 146,744 | ||||||
Fair value of warrants | $ 957,947 | $ 317,000 | $ 957,947 | $ 957,947 | ||||
IPO | ||||||||
COMMON SHARES | ||||||||
Number of units issued | shares | 2,096,357 | |||||||
Price per unit | $ / shares | $ 9.60 | |||||||
Gross proceeds from offering | $ 20,125,000 | |||||||
Issuance costs of units | $ 2,109,657 | |||||||
Number of common share per unit | shares | 1 | 1 | 1 | |||||
Number of warrants per unit | shares | 0.25 | 0.25 | 0.25 | |||||
Warrants exercise price | $ / shares | $ 12.60 | $ 12.60 | $ 12.60 | |||||
Warrants exercisable term | 5 years | 5 years | 5 years | |||||
Term for acceleration of warrants | 30 days | |||||||
Toronto Stock Exchange trading price | $ / shares | $ 37.80 | |||||||
Number of consecutive trading days | D | 10 | |||||||
Private Placement | ||||||||
COMMON SHARES | ||||||||
Number of units issued | shares | 1,383,755 | |||||||
Price per unit | $ / shares | $ 5.40 | |||||||
Gross proceeds from offering | $ 7,472,278 | |||||||
Issuance costs of units | $ 1,227,357 | |||||||
Number of common share per unit | shares | 1 | |||||||
Number of warrants per unit | shares | 0.25 | |||||||
Number of common share per warrant | shares | 0.25 | |||||||
Warrants exercise price | $ / shares | $ 7.50 | |||||||
Warrants exercisable term | 5 years | |||||||
Risk free interest rate | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | 0.84 | 4.10 | 0.84 | 0.84 | ||||
Risk free interest rate | Compensation warrants | Intermediaries | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | 1.21 | 4.10 | 1.21 | 1.21 | ||||
volatility | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | 95.6 | 94 | 95.6 | 95.6 | ||||
volatility | Compensation warrants | Intermediaries | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | 95.6 | 94 | 95.6 | 95.6 | ||||
Expected life | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | Y | 5 | 5 | 5 | 5 | ||||
Expected life | Compensation warrants | Intermediaries | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | Y | 5 | 5 | 5 | 5 | ||||
Accelerated warrants | ||||||||
COMMON SHARES | ||||||||
Number of warrants per unit | shares | 0.25 | 0.25 | 0.25 | |||||
Issuance costs allocated to the common shares | $ 1,665,099 | |||||||
Gross proceeds from issuance allocated to common shares warrants | $ 2,739,221 | |||||||
Share price | $ / shares | $ 8.28 | $ 8.28 | $ 8.28 | |||||
Common share purchase warrants price | $ / shares | 1.32 | |||||||
Outstanding balance of warrants | $ 931,000 | |||||||
Accelerated warrants | Risk free interest rate | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | 4.14 | |||||||
Accelerated warrants | volatility | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | 87.5 | |||||||
Accelerated warrants | Expected life | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | Y | 3.65 | |||||||
Warrants. | ||||||||
COMMON SHARES | ||||||||
Price per unit | $ / shares | $ 5.40 | $ 9.60 | ||||||
Number of warrants per unit | shares | 0.25 | |||||||
Gross proceeds from issuance allocated to common shares | $ 17,533,480 | $ 5,951,877 | ||||||
Issuance costs allocated to the common shares | 977,624 | |||||||
Gross proceeds from issuance allocated to common shares warrants | $ 1,520,401 | |||||||
Share price | $ / shares | $ 4.30 | |||||||
Common share purchase warrants price | $ / shares | $ 1.10 | |||||||
Outstanding balance of warrants | $ 928,500 | |||||||
Warrants. | Risk free interest rate | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | 4 | |||||||
Warrants. | volatility | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | 86 | |||||||
Warrants. | Expected life | ||||||||
COMMON SHARES | ||||||||
Warrants, measurement input | Y | 4.8 |
EQUITY - Fair value of warrants
EQUITY - Fair value of warrants (Details) - Warrants. - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at the beginning | $ 1,871,687 | |
Warrant liability and accelerated warrant liability at issuance | 1,520,401 | $ 2,739,221 |
Change in fair value of the warrant liability and accelerated warrant liability | (1,533,644) | (840,555) |
Foreign exchange loss (gain) | 930 | (26,979) |
Balance at the end | $ 1,859,374 | $ 1,871,687 |
WARRANTS (Details)
WARRANTS (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
WARRANTS | ||
Number of Warrants | 1,873,622 | 1,560,588 |
Exercise Price 28.80 | April 2023 | ||
WARRANTS | ||
Exercise Price | $ 28.80 | |
Number of Warrants | 100,073 | |
Exercise Price 28.80 | January 2024 | ||
WARRANTS | ||
Exercise Price | $ 28.80 | |
Number of Warrants | 139,659 | |
Exercise Price 18.00 | June 2024 | ||
WARRANTS | ||
Exercise Price | $ 18 | |
Number of Warrants | 68,334 | |
Exercise Price 18.00 | November 2024 | ||
WARRANTS | ||
Exercise Price | $ 18 | |
Number of Warrants | 150,818 | |
Exercise Price 18.00 | December 2024 | ||
WARRANTS | ||
Exercise Price | $ 18 | |
Number of Warrants | 49,167 | |
Exercise Price 12.00 | November 2025 | ||
WARRANTS | ||
Exercise Price | $ 12 | |
Number of Warrants | 279,613 | |
Exercise Price USD 12.60 | August 2026 | ||
WARRANTS | ||
Exercise Price | $ 12.60 | |
Number of Warrants | 524,088 | |
Exercise Price USD 9.60 | August 2026 | ||
WARRANTS | ||
Exercise Price | $ 9.60 | |
Number of Warrants | 146,744 | |
Exercise Price USD 7.50 | April 2028 | ||
WARRANTS | ||
Exercise Price | $ 7.50 | |
Number of Warrants | 345,938 | |
Exercise Price USD 6.10 | April 2028 | ||
WARRANTS | ||
Exercise Price | $ 6.10 | |
Number of Warrants | 69,188 |
WARRANTS - Additional informati
WARRANTS - Additional information (Details) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 shares | Nov. 30, 2020 USD ($) EquityInstruments $ / shares shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | |
WARRANTS | ||||
Number of warrants expired | 102,092 | |||
Proceeds from issuance of warrants | $ | $ 1,520,401 | $ 2,739,221 | ||
Special Warrants | ||||
WARRANTS | ||||
Exercise Price | $ / shares | $ 12 | |||
Number of warrants issued | 270,326 | |||
Proceeds from issuance of warrants | $ | $ 1,483,531 | |||
Proceeds from issuance of warrants net of issuance costs | $ | $ 1,256,828 | |||
Number of common share per special warrant | EquityInstruments | 1 | |||
Number of common share warrant per Special Warrant | EquityInstruments | 1 | |||
Number of shares by each warrant entitles | 1 | |||
Expiry term (in years) | 60 months | |||
Conversion period for warrants after issuance | 4 months 1 day | |||
Cash fee (in percent) | 7% | |||
Cash paid to intermediaries | $ | $ 53,929 | |||
Number of warrants issued as compensation | 9,287 | |||
Number of Special Warrants converted to common shares | 270,326 | |||
Number of special warrants converted to warrants | 270,326 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - shares | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2022 | Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | |||
Common Shares available for grant under stock option plan | 396,080 | 281,798 | |
Stock Option Plan 2007 | |||
SHARE-BASED COMPENSATION | |||
Options authorized as percentage of issued and outstanding common shares | 20% | ||
Expiration term | 10 years | ||
Common Shares available for grant under stock option plan | 396,080 | 281,798 |
SHARE-BASED COMPENSATION - Shar
SHARE-BASED COMPENSATION - Share options (Details) | 12 Months Ended | |||||
Dec. 31, 2022 $ / shares | Dec. 31, 2022 CAD ($) shares | Dec. 31, 2021 $ / shares | Dec. 31, 2021 CAD ($) shares | Dec. 31, 2020 CAD ($) shares | Dec. 31, 2022 CAD ($) shares | |
Number of Share Options | ||||||
Outstanding at the beginning | 738,037 | 646,195 | ||||
Granted | 360,000 | 197,291 | ||||
Forfeited | (55,012) | (104,166) | ||||
Expired | (1,283) | |||||
Outstanding at the end | 1,043,025 | 738,037 | 646,195 | |||
Vested and exercisable at the end | 665,185 | |||||
Weighted Average Exercise Price Per Share | ||||||
Outstanding at the beginning (in dollars per share) | $ / shares | $ 8.40 | $ 7.80 | ||||
Granted (in dollars per share) | $ / shares | 7.54 | 12 | ||||
Forfeited (in dollars per share) | $ / shares | 15.98 | 14.40 | ||||
Expired (in dollars per share) | $ / shares | 18 | |||||
Outstanding at the end (in dollars per share) | $ / shares | 5.60 | $ 8.40 | ||||
Vested and exercisable at the end (in dollars per share) | $ / shares | $ 5.35 | |||||
Weighted Average Remaining Contractual Term (years) and Aggregate Intrinsic Value | ||||||
Outstanding at the beginning (in years) | 6 years 1 month 6 days | 5 years 1 month 6 days | 4 years 9 months 18 days | |||
Outstanding at the end (in years) | 6 years 1 month 6 days | 5 years 1 month 6 days | 4 years 9 months 18 days | |||
Vested and exercisable at the end (in years) | 4 years 3 months 18 days | |||||
Outstanding at the beginning (in dollars) | $ | $ 2,231,293 | $ 1,155,145 | ||||
Outstanding at the end (in dollars) | $ | 1,183,860 | 2,231,293 | $ 1,155,145 | |||
Vested and exercisable at the end (in dollars) | $ | $ 1,183,860 | |||||
Grant date fair value of share options granted | $ | $ 2,103,016 | $ 1,225,433 | ||||
Number of options exercised | 0 | 0 |
SHARE-BASED COMPENSATION - Fair
SHARE-BASED COMPENSATION - Fair value of the share options granted (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair value of share options granted estimated using Black Scholes | ||
Weighted average fair value of Common Shares | $ 5.84 | $ 6 |
Expected volatility | 95% | 92% |
Risk-free interest rate | 2.71% | 0.95% |
Expected term (years) | 6 years | 4 years 6 months |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional information (Details) | Dec. 31, 2022 shares |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of shares authorized | 1,617,412 |
DSU plan | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of shares authorized | 16,666 |
Number of shares per unit | 1 |
Number of units outstanding | 1,061 |
SHARE-BASED COMPENSATION - Stat
SHARE-BASED COMPENSATION - Statements of operations and comprehensive loss (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation | $ 487,630 | $ 515,629 |
Unrecognized share-based compensation related to options outstanding expected to be recognized over weighted-average remaining service period | 3 years 2 months 12 days | |
Research and development | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation | $ 297,933 | 144,905 |
General and administrative | ||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation | $ 189,697 | $ 370,724 |
INCOME TAXES - Deferred taxes (
INCOME TAXES - Deferred taxes (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
INCOME TAXES | ||
Non-capital losses carried forward | $ 17,614,000 | $ 11,640,000 |
Research and development expenditures | 3,346,000 | 3,421,000 |
Investment tax credits | 2,152,000 | 2,201,000 |
Tax value of technology rights and property and equipment in excess of accounting basis | 250,000 | 287,000 |
Unrealized foreign exchange loss on convertible debt | 12,000 | |
Share issue costs | 656,000 | 550,000 |
Total deferred income tax assets | 24,018,000 | 18,111,000 |
Valuation allowance | $ (24,018,000) | $ (18,111,000) |
INCOME TAXES - Credit carryforw
INCOME TAXES - Credit carryforwards (Details) | Dec. 31, 2022 USD ($) |
Credit carryforwards | |
Tax credits | $ 12,625,000 |
Non-capital income tax loss carry-forwards | |
Credit carryforwards | |
Tax credits | 66,467,000 |
Investment Tax Credit Carryforward | |
Credit carryforwards | |
Tax credits | $ 2,152,000 |
INCOME TAXES - Reconciliation (
INCOME TAXES - Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of the combined federal and provincial statutory income tax rate applied to the net loss for the year to the income tax recovery | ||
Basic combined Canadian statutory income tax rate | 26.50% | 26.50% |
Income tax recovery based on statutory rate | $ (4,887,000) | $ (2,457,000) |
Permanent differences | (1,164,000) | 396,000 |
Share issue costs recorded, net of equity | (271,000) | (443,000) |
Unrecognized benefit of current year tax losses | $ 6,322,000 | $ 2,504,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Payments made for consulting services | $ 557,665 | $ 393,341 |
Cost incurred | 557,665 | 393,341 |
Consulting services | ||
Related Party Transaction [Line Items] | ||
Payments made for consulting services | 397,691 | 290,656 |
Cost incurred | 397,691 | 290,656 |
Consulting services | General and administrative expenses | ||
Related Party Transaction [Line Items] | ||
Payments made for consulting services | 365,247 | 322,639 |
Cost incurred | $ 365,247 | $ 322,639 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional information (Details) | 1 Months Ended | 12 Months Ended | ||||||||||||
Oct. 31, 2022 USD ($) shares | Jun. 30, 2022 EquityInstruments shares | Aug. 31, 2021 USD ($) shares | Mar. 31, 2021 USD ($) $ / shares | Sep. 30, 2019 CAD ($) | Feb. 28, 2019 CAD ($) | Apr. 30, 2016 CAD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 01, 2022 CAD ($) | Nov. 30, 2021 CAD ($) | Feb. 28, 2021 $ / shares | Jul. 31, 2018 CAD ($) | Mar. 31, 2018 CAD ($) | |
Related Party Transaction [Line Items] | ||||||||||||||
Term of agreement | 3 years | |||||||||||||
Funding commitment | $ 2,630,000 | $ 2,130,000 | $ 1,130,000 | $ 892,500 | ||||||||||
Additional term of agreement | 1 year | 2 years | ||||||||||||
Additional grant | $ 3,430,000 | $ 800,000 | ||||||||||||
Cash payments | $ 461,516 | $ 499,533 | ||||||||||||
Cost incurred | 557,665 | 393,341 | ||||||||||||
Recorded expense | 0 | 413,555 | ||||||||||||
Number of shares issued, value | 4,974,253 | 15,868,381 | ||||||||||||
Research and development | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Recorded expense | 257,619 | |||||||||||||
General and administrative expenses | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Recorded expense | 137,936 | |||||||||||||
Title 19 Promis | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Number of shares issued | shares | 206,250 | |||||||||||||
Number of warrants to purchase common shares | shares | 51,562 | |||||||||||||
Aggregate purchase price of warrant | $ 1,980,000 | |||||||||||||
Title 19 Promis | Private Placement | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Number of shares issued | shares | 106,391 | |||||||||||||
Number of warrants to purchase common shares | shares | 26,597 | |||||||||||||
Aggregate purchase price of warrant | $ 574,511 | |||||||||||||
Title 19 Promis | Title 19 Debenture | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Debentures converted amount | $ 3,000,000 | |||||||||||||
Conversion price | $ / shares | $ 6 | $ 6 | ||||||||||||
Number of Series 1 Preferred shares to be issued on conversion of debentures | EquityInstruments | 30,000,000 | |||||||||||||
Debt conversion, shares issued | shares | 500,000 | |||||||||||||
Title 19 Acies, an affiliate of Title 19 Promis | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Number of shares issued | shares | 48,333 | |||||||||||||
Number of shares issued, value | $ 463,996 | |||||||||||||
Crocker Mountain LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Number of shares issued | shares | 340,833 | |||||||||||||
Number of warrants to purchase common shares | shares | 85,208 | |||||||||||||
Aggregate purchase price of warrant | $ 3,272,000 | |||||||||||||
Crocker Mountain LLC | Private Placement | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Number of shares issued | shares | 104,869 | |||||||||||||
Number of warrants to purchase common shares | shares | 26,217 | |||||||||||||
Aggregate purchase price of warrant | $ 566,292 | |||||||||||||
Crocker Mountain LLC | Crocker Mountain Debenture | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Debentures converted amount | $ 900,000 | |||||||||||||
Conversion price | $ / shares | $ 6 | $ 6 | ||||||||||||
Number of Series 1 Preferred shares to be issued on conversion of debentures | EquityInstruments | 9,000,000 | |||||||||||||
Debt conversion, shares issued | shares | 150,000 | |||||||||||||
Collaborative research agreement | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Funding commitment | $ 787,500 | |||||||||||||
Management services | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Cash payments | $ 0 | $ 1,187,886 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2019 CAD ($) | Feb. 28, 2019 CAD ($) | Apr. 30, 2016 | Dec. 31, 2022 CAD ($) | Dec. 31, 2021 CAD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jul. 31, 2018 CAD ($) | Mar. 31, 2018 CAD ($) | Apr. 30, 2006 CAD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Accruals for royalty payments | $ 0 | |||||||||
Payments of annual license | $ 25,000 | $ 25,000 | ||||||||
Term of agreement | 3 years | |||||||||
Funding commitment | $ 2,630,000 | $ 2,130,000 | $ 1,130,000 | $ 892,500 | ||||||
Additional term of agreement | 1 year | 2 years | ||||||||
UBC Agreement | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Accruals for royalty payments | 0 | |||||||||
University Health Network Agreement | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Accruals for royalty payments | $ 0 | $ 0 | ||||||||
Maximum milestone payments | $ 3,325,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Leases (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |||
Short-term lease payments | $ 68,870 | $ 20,806 | |
Commitment for future payments under its lease agreements for the remainder of the year ended 2022 | $ 22,912 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | ||
Net loss attributable to common shareholders | $ 18,062,263 | $ 9,790,106 |
Denominator: | ||
Weighted-average shares outstanding used in computing net loss per share attributable to common shareholders, basic | 7,502,609 | 5,785,617 |
Weighted-average shares outstanding used in computing net loss per share attributable to common shareholders, diluted | 7,502,609 | 5,785,617 |
Net loss per share attributable to common shareholders, basic | $ (2.41) | $ (1.69) |
Net loss per share attributable to common shareholders, diluted | $ (2.41) | $ (1.69) |
NET LOSS PER SHARE - Outstandin
NET LOSS PER SHARE - Outstanding potentially dilutive common shares (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive common shares equivalents excluded from computation of diluted net loss per share for periods presented because including them would have been antidilutive | 4,084,375 | 3,466,453 |
Options issued and outstanding under stock option plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive common shares equivalents excluded from computation of diluted net loss per share for periods presented because including them would have been antidilutive | 1,043,025 | 738,037 |
Warrants. | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive common shares equivalents excluded from computation of diluted net loss per share for periods presented because including them would have been antidilutive | 1,873,622 | 1,560,688 |
Convertible debt. | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive common shares equivalents excluded from computation of diluted net loss per share for periods presented because including them would have been antidilutive | 1,166,667 | |
Series 1 Convertible Preferred Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive common shares equivalents excluded from computation of diluted net loss per share for periods presented because including them would have been antidilutive | 1,166,667 | |
Deferred share units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive common shares equivalents excluded from computation of diluted net loss per share for periods presented because including them would have been antidilutive | 1,061 | 1,061 |