Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 30, 2022 | Jan. 17, 2023 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Nov. 30, 2022 | |
Entity File Number | 000-56456 | |
Entity Registrant Name | LEXAGENE HOLDINGS INC. | |
Entity Incorporation, State or Country Code | A1 | |
Entity Tax Identification Number | 00-0000000 | |
Entity Address State Or Province | MA | |
Entity Address, Address Line One | 500 Cummings Center | |
Entity Address, Address Line Two | Suite 4550 | |
Entity Address, City or Town | Beverly | |
Entity Address, Postal Zip Code | 01915 | |
City Area Code | 800 | |
Local Phone Number | 215-1824 | |
Title of 12(b) Security | None | |
Trading Symbol | true | |
Security Exchange Name | NONE | |
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 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 140,641,855 | |
Entity Central Index Key | 0001450416 | |
Current Fiscal Year End Date | --02-28 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Nov. 30, 2022 | Feb. 28, 2022 |
Current assets | ||
Cash and cash equivalents | $ 464,131 | $ 4,722,710 |
Accounts receivable | 51,643 | 14,375 |
Inventories | 1,445,094 | 1,396,223 |
Prepaid expenses and other current assets | 334,810 | 439,831 |
Total current assets | 2,295,678 | 6,573,139 |
Property and equipment, net | 250,146 | 369,449 |
Right-of-use asset, net | 910,287 | 1,161,956 |
Intangible license, net | 33,653 | 48,191 |
Other long-term assets | 48,087 | |
Total assets | 3,489,764 | 8,200,822 |
Current liabilities | ||
Accounts payable | 272,170 | 219,239 |
Accrued and other current liabilities | 187,171 | 352,175 |
Lease obligations - current | 350,550 | 325,271 |
Convertible note payable, net of issuance costs | 845,502 | |
Total current liabilities | 1,655,393 | 896,685 |
Lease liabilities - non-current | 561,160 | 838,108 |
Total Liabilities | 2,216,553 | 1,734,793 |
Commitments | ||
Shareholders' Equity | ||
Common shares, $nil par value; unlimited shares authorized as of November 30, 2022 and February 28, 2022; 140,496,730 and 138,106,860 issued | 41,376,221 | 40,384,516 |
Contributed surplus | 9,900,306 | 9,833,452 |
Accumulated deficit | (50,339,236) | (44,107,572) |
Accumulated other comprehensive income | 335,920 | 355,633 |
Total shareholders' equity | 1,273,211 | 6,466,029 |
Total liabilities and shareholders' equity | $ 3,489,764 | $ 8,200,822 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Nov. 30, 2022 | Feb. 28, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common shares, par value (in dollars per share) | $ 0 | $ 0 |
Common shares, shares issued (in shares) | 140,496,730 | 138,106,860 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||
Revenues | $ 42,912 | $ 48,309 | $ 117,886 | $ 88,934 |
Cost of revenues | ||||
Net shipping costs | 4,604 | 22,811 | ||
Cost of goods sold | 44,338 | 49,668 | 142,149 | 88,045 |
Manufacturing costs | 140,986 | 98,903 | 427,336 | 290,143 |
Cost of revenues, total | 189,928 | 148,571 | 592,296 | 378,188 |
Gross loss | (147,016) | (100,262) | (474,410) | (289,254) |
Selling, marketing and promotion expenses | 167,316 | 546,886 | 629,848 | 1,736,549 |
General and administrative expenses | 470,999 | 544,054 | 1,424,242 | 1,607,115 |
Research and development expenses | 887,336 | 1,506,024 | 3,357,090 | 4,709,756 |
Operating expenses, total | 1,525,651 | 2,596,964 | 5,411,180 | 8,053,420 |
Operating loss | (1,672,667) | (2,697,226) | (5,885,590) | (8,342,674) |
Other income | ||||
Foreign exchange gain (loss) | 99 | 5,546 | 99 | 32,000 |
Interest on convertible note payable | (5,787) | (5,787) | ||
Net loss | (1,678,355) | (2,691,680) | (5,891,278) | (8,310,674) |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments | (8,637) | (4,081) | (19,713) | 152,563 |
Net loss and comprehensive loss | $ (1,686,992) | $ (2,695,761) | $ (5,910,991) | $ (8,158,111) |
Net loss per common share, basic | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.07) |
Net loss per common share, diluted | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.07) |
Weighted average common shares used in computing net loss per common share, basic | 139,008,857 | 119,230,207 | 138,617,427 | 118,971,167 |
Weighted average common shares used in computing net loss per common share, diluted | 139,008,857 | 119,230,207 | 138,617,427 | 118,971,167 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Common Shares | Contributed Surplus | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Feb. 28, 2021 | $ 35,839,063 | $ 8,098,015 | $ (33,148,882) | $ 191,272 | $ 10,979,468 |
Beginning balance (in shares) at Feb. 28, 2021 | 118,566,834 | ||||
CONSOLIDATED STATEMENTS OF EQUITY | |||||
Share-based payment of stock options | 163,047 | 163,047 | |||
Share-based payment of restricted share units | 220,970 | 220,970 | |||
Restricted share units vested | $ 170,000 | (170,000) | |||
Restricted share units vested (in shares) | 268,438 | ||||
Warrants exercised | $ 28,490 | (4,302) | 24,188 | ||
Warrants exercised (in shares) | 41,200 | ||||
Comprehensive income (loss) for the period | (2,802,895) | 336,925 | (2,465,970) | ||
Ending balance at May. 31, 2021 | $ 36,037,553 | 8,307,730 | (35,951,777) | 528,197 | 8,921,703 |
Ending balance (in shares) at May. 31, 2021 | 118,876,472 | ||||
Beginning balance at Feb. 28, 2021 | $ 35,839,063 | 8,098,015 | (33,148,882) | 191,272 | 10,979,468 |
Beginning balance (in shares) at Feb. 28, 2021 | 118,566,834 | ||||
CONSOLIDATED STATEMENTS OF EQUITY | |||||
Comprehensive income (loss) for the period | (8,158,111) | ||||
Ending balance at Nov. 30, 2021 | $ 36,395,791 | 8,582,476 | (41,459,556) | 343,835 | 3,862,546 |
Ending balance (in shares) at Nov. 30, 2021 | 119,343,860 | ||||
Beginning balance at May. 31, 2021 | $ 36,037,553 | 8,307,730 | (35,951,777) | 528,197 | 8,921,703 |
Beginning balance (in shares) at May. 31, 2021 | 118,876,472 | ||||
CONSOLIDATED STATEMENTS OF EQUITY | |||||
Share-based payment of stock options | 144,792 | 144,792 | |||
Share-based payment of restricted share units | 231,516 | 231,516 | |||
Restricted share units vested | $ 140,904 | (140,904) | |||
Restricted share units vested (in shares) | 180,375 | ||||
Options exercised | $ 92,634 | (64,862) | 27,772 | ||
Options exercised (in shares) | 63,750 | ||||
Comprehensive income (loss) for the period | (2,816,099) | (180,281) | (2,996,380) | ||
Ending balance at Aug. 31, 2021 | $ 36,271,091 | 8,478,272 | (38,767,876) | 347,916 | 6,329,403 |
Ending balance (in shares) at Aug. 31, 2021 | 119,120,597 | ||||
CONSOLIDATED STATEMENTS OF EQUITY | |||||
Share-based payment of stock options | 73,082 | 73,082 | |||
Share-based payment of restricted share units | 155,822 | 155,822 | |||
Restricted share units vested | $ 124,700 | (124,700) | |||
Restricted share units vested (in shares) | 223,263 | ||||
Comprehensive income (loss) for the period | (2,691,680) | (4,081) | (2,695,761) | ||
Ending balance at Nov. 30, 2021 | $ 36,395,791 | 8,582,476 | (41,459,556) | 343,835 | 3,862,546 |
Ending balance (in shares) at Nov. 30, 2021 | 119,343,860 | ||||
Beginning balance at Feb. 28, 2022 | $ 40,384,516 | 9,833,452 | (44,107,572) | 355,633 | $ 6,466,029 |
Beginning balance (in shares) at Feb. 28, 2022 | 138,106,860 | 138,106,860 | |||
CONSOLIDATED STATEMENTS OF EQUITY | |||||
Share-based payment of stock options | 48,384 | $ 48,384 | |||
Share-based payment of restricted share units | 119,978 | 119,978 | |||
Restricted share units vested | $ 125,716 | (125,716) | |||
Restricted share units vested (in shares) | 240,513 | ||||
Comprehensive income (loss) for the period | (2,135,797) | (349) | (2,136,146) | ||
Ending balance at May. 31, 2022 | $ 40,510,232 | 9,876,098 | (46,243,369) | 355,284 | 4,498,245 |
Ending balance (in shares) at May. 31, 2022 | 138,347,373 | ||||
Beginning balance at Feb. 28, 2022 | $ 40,384,516 | 9,833,452 | (44,107,572) | 355,633 | $ 6,466,029 |
Beginning balance (in shares) at Feb. 28, 2022 | 138,106,860 | 138,106,860 | |||
CONSOLIDATED STATEMENTS OF EQUITY | |||||
Comprehensive income (loss) for the period | $ (5,910,991) | ||||
Ending balance at Nov. 30, 2022 | $ 41,376,221 | 9,900,306 | (50,339,236) | 335,920 | $ 1,273,211 |
Ending balance (in shares) at Nov. 30, 2022 | 140,496,730 | 140,496,730 | |||
Beginning balance at May. 31, 2022 | $ 40,510,232 | 9,876,098 | (46,243,369) | 355,284 | $ 4,498,245 |
Beginning balance (in shares) at May. 31, 2022 | 138,347,373 | ||||
CONSOLIDATED STATEMENTS OF EQUITY | |||||
Share-based payment of stock options | 35,075 | 35,075 | |||
Share-based payment of restricted share units | 108,072 | 108,072 | |||
Restricted share units vested | $ 225,878 | (225,878) | |||
Restricted share units vested (in shares) | 383,000 | ||||
Share issuance costs refund | $ 4,836 | 4,836 | |||
Comprehensive income (loss) for the period | (2,077,136) | (10,727) | (2,087,853) | ||
Ending balance at Aug. 31, 2022 | $ 40,740,946 | 9,793,367 | (48,320,495) | 344,557 | 2,558,375 |
Ending balance (in shares) at Aug. 31, 2022 | 138,730,373 | ||||
CONSOLIDATED STATEMENTS OF EQUITY | |||||
Share-based payment of stock options | 33,133 | 33,133 | |||
Share-based payment of restricted share units | 105,400 | 105,400 | |||
Restricted share units vested | $ 147,607 | (147,607) | |||
Restricted share units vested (in shares) | 230,088 | ||||
Warrant modification | 340,385 | (340,385) | |||
Warrants exercised | $ 487,668 | (224,372) | 263,296 | ||
Warrants exercised (in shares) | 1,536,269 | ||||
Comprehensive income (loss) for the period | (1,678,355) | (8,637) | (1,686,992) | ||
Ending balance at Nov. 30, 2022 | $ 41,376,221 | $ 9,900,306 | $ (50,339,236) | $ 335,920 | $ 1,273,211 |
Ending balance (in shares) at Nov. 30, 2022 | 140,496,730 | 140,496,730 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
Cash flows from (used in) operating activities: | ||
Net loss | $ (5,891,278) | $ (8,317,324) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of intangible license | 12,084 | 9,673 |
Depreciation of property and equipment | 119,303 | 123,817 |
Depreciation of right-of-use asset | 251,669 | 239,420 |
Interest on right-of-use asset | 39,408 | 51,657 |
Interest on convertible note payable | 5,787 | |
Share-based payments | 450,042 | 990,712 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (37,268) | 5,168 |
Inventories | (48,871) | (332,390) |
Prepaid expenses | 105,021 | (120,325) |
Other long-term asset | 48,087 | (87,387) |
Accounts payable and accrued liabilities | (117,855) | (372,589) |
Net cash used in operating activities | (5,063,871) | (7,809,568) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (17,860) | |
Net cash used in investing activities | (17,860) | |
Cash flows from financing activities | ||
Proceeds from warrant exercises, net of costs | 263,296 | 24,188 |
Proceeds from stock option exercises, net of costs | 27,772 | |
Refund of share issuance costs | 4,836 | |
Proceeds from convertible note, net of issuance costs | 832,436 | |
Principal payments on lease liability | (291,077) | (291,077) |
Net cash provided by (used in) financing activities | 809,491 | (239,117) |
Net decrease in cash | (4,254,380) | (8,066,545) |
Cash - beginning | 4,722,710 | 9,624,259 |
Effects of foreign exchange | (4,199) | 157,726 |
Cash - ending | $ 464,131 | $ 1,715,440 |
DESCRIPTION OF BUSINESS AND PRE
DESCRIPTION OF BUSINESS AND PRESENTATION OF FINANCIAL STATEMENTS | 9 Months Ended |
Nov. 30, 2022 | |
DESCRIPTION OF BUSINESS AND PRESENTATION OF FINANCIAL STATEMENTS | |
DESCRIPTION OF BUSINESS AND PRESENTATION OF FINANCIAL STATEMENTS | 1. DESCRIPTION OF BUSINESS AND PRESENTATION OF FINANCIAL STATEMENTS Description of Business LexaGene Holdings Inc. together with its subsidiaries, (collectively the “Company” or “LexaGene”) was incorporated on April 26, 2007, under the laws of the province of British Columbia, Canada. The head office and the principal address is located at 500 Cummings Ctr., Suite 4550, Beverly, Massachusetts, USA, 01915. The records office of the Company is located at 1055 West Georgia Street, Suite 1500, Vancouver, British Columbia, Canada, V6E 4N7. The Company’s common shares are publicly listed on the TSX Venture Exchange under the trading symbol “LXG” and quoted on the OTCQB under the symbol “LXXGF”. The principal business of the Company is to research, develop and commercialize automated genetic analyzer devices in veterinary, clinical and life science industries. Liquidity and Going Concern At November 30, 2022, the Company had cash of $464,131, an accumulated deficit of $(50,339,236), and has experienced cash outflows from operating activities over the past years. The Company’s operations are dependent on obtaining additional financing to further develop its genetic analyzer, the MiQLab® System, and generating cash flow from operations in the future. Management’s plans to meet the Company’s current and future obligations are to raise capital in equity and private debt markets, private placements, rely on the financial support of its shareholders and related parties as well as to further expand commercial sales of the MiQLab System. There can be no assurance that the Company will be successful in raising that additional capital or that such capital, if available, will be on terms that are acceptable to the Company. If the Company is unable to raise sufficient additional capital, the Company may be compelled to reduce the scope of its operations and planned capital expenditures. The Company is subject to a number of risks similar to other early commercial stage life science companies, including, but not limited to commercially launching the Company’s products, development and market acceptance of the Company’s product candidates, development by its competitors of new technological innovations, protection of proprietary technology, and raising additional capital. The COVID-19 pandemic has impacted and may continue to impact operations. The Company has established protocols for continued manufacturing, distribution and servicing of its products with safe social distancing and personal protective equipment measures and for remote work for certain employees not essential to on-site operations. To date, these measures have been mostly successful but may not continue to function should the pandemic escalate and impact personnel. In 2021, the Company’s veterinary customers restricted the sales team’s access to their facilities and as a result, the Company had significantly reduced its sales and marketing staffing levels in an effort to reduce expenses. Although the Company did not see any material impact to accounts receivable during the period ended November 30, 2022, the Company’s exposure may increase if its customers continue to be adversely affected by the COVID-19 pandemic and variants of the virus. Customers may reduce their purchases of products, depending on their needs and cash flow, which could negatively impact revenue. The ability of the Company’s shipping carriers to deliver products to customers may be disrupted. The Company has reviewed its suppliers and quantities of key materials and believes that it has sufficient stocks and, in some cases, have alternate sources of critical materials including personal protective equipment should the supply chains become disrupted, although raw materials and plastics for the manufacturing of reagents and consumables are in high demand, and interruptions in supply are difficult to predict. The Company believes that its cash of $464,131 as of November 30, 2022 will not be sufficient to fund its current operating plan at least one year from issuance of these condensed financial statements unless additional funds are raised. Certain elements of our operating plan cannot be considered probable. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued. Management has concluded the likelihood that its plan to successfully obtain sufficient funding from one or more of these sources or adequately reduce expenditures, while reasonably possible, is less than probable. Accordingly, the Company has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for a period of at least 12 months from the date of issuance of these condensed consolidated financial statements. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. Emerging Growth Company Status The Company is an emerging growth company (“EGC”), as defined in Section 2(a)(19) of the United States Securities Act of 1933, as amended (the “ U.S. Securities Act Smaller Reporting Company Status The Company is a “smaller reporting company” as defined in Exchange Act Rule 12b-2. As a result, the Company is eligible to take advantage of certain reduced disclosure and other requirements that are otherwise applicable to public companies including, but not limited to, not being subject to the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. The Company will remain a smaller reporting company until the last day of the fiscal year in which (1) the aggregate worldwide market value of its common shares held by non-affiliates equaled or exceeded $250 million as of the prior June 30th, or (2) its annual revenues equaled or exceeded $100 million during such completed fiscal year and the aggregate worldwide market value of its common shares held by non-affiliates equaled or exceeded $700 million as of the prior June 30th. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES | 9 Months Ended |
Nov. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the United States (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial statements. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board. The accompanying interim condensed consolidated financial statements as of November 30, 2022, and for the three and nine months ended November 30, 2022 and 2021, and information contained within the notes to these condensed consolidated financial statements, are unaudited. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s audited annual consolidated financial statements and in management's opinion contain all adjustments (including normal recurring adjustments) necessary for the fair presentation of the Company’s financial position as of November 30, 2022, results of operations for the three and nine months ended November 30, 2022 and 2021, statement of stockholders’ equity for the three and nine months ended November 30, 2022 and 2021 and its cash flows for the nine months ended November 31, 2022 and 2021. These interim condensed consolidated financial statements should be read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10 for the year ended February 28, 2022. The results for the nine months ended November 30, 2022, are not necessarily indicative of the results expected for the full fiscal year or any interim period. The condensed consolidated financial statements for the periods ended November 30, 2022 and 2021, include the accounts of the Company, the Company’s wholly-owned Canadian subsidiary Bionomics Diagnostics Inc. (“BDI”) and the Company’s wholly-owned US subsidiary LexaGene, Inc. All inter-company transactions and balances have been eliminated. The consolidated financial statements include the financial statements of LexaGene Holdings Inc. and its subsidiaries listed as follows: % Ownership Interest Name Country of Incorporation 2022 2021 Bionomics Diagnostics Inc. Canada 100 % 100 % LexaGene, Inc. United States of America 100 % 100 % Foreign Currency These condensed consolidated financial statements are expressed in US dollars (“USD”) and have been prepared on a historical cost basis except for certain financial instruments that have been measured at fair value. The functional currency of the Company and its Canadian subsidiary is the Canadian dollar (“CAD”), and the USD for the Company’s US subsidiary. The Company’s presentation currency is the USD which aligns the Company’s presentation currency with the functional currency of its operations in the United States. Under this method, the Canadian entities are translated to USD. Translation gains and losses resulting from the consolidation of operations in Canada are recognized in other comprehensive loss in the consolidated statements of comprehensive loss, and in accumulated other comprehensive loss as a separate component of shareholders’ equity on the consolidated statement of changes in equity. Foreign exchange rates used for currency translation in these consolidated financial statements include: Period end dates USD to CAD CAD to USD November 30,2022 1.3508 0.7403 February 28, 2022 1.2698 0.7875 Period averages USD to CAD CAD to USD Period ended November 30, 2022 1.3023 0.7685 Period ended November 30, 2021 1.2470 0.8021 Use of Estimates The preparation of these condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and related disclosures. We evaluate our estimates on an on-going basis, including those related to accounts receivable; inventory valuation; revenue recognition, share-based compensation. Our estimates are based on historical experience and on other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from these estimates. Significant judgments relate to the recognition of deferred income taxes, treatment of development costs, recoverability of the carrying value of intangible assets, and going concern. Management believes that there have been no significant changes during the nine months ended November 30, 2022 to the items that we disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10 for the fiscal year ended February 28, 2022. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company views its operations and manages its business in one operating segment, which is the business of developing and, launching commercially its diagnostic products. Geographic Information All sales to date were made in the United States of America. Cash The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. The Company maintains its cash and cash equivalents in accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. Accounts Receivable The Company’s accounts receivable consists of amounts due from product sales to commercial customers and goods and services tax (“GST”) receivable from the government of Canada. At each reporting period, management reviews historical loss information, characteristics of our customers, our credit practices and the economic conditions, along with all outstanding balances to determine if the facts and circumstances indicate the need for a credit loss allowance. Receivables are written off against these allowances in the period they are determined to be uncollectible. The Company does not require collateral and did not have an allowance for doubtful accounts as of November 30, 2022 and February 28, 2022. Inventories Raw materials, work in process, and finished goods inventories are stated at the lower of cost and net realizable value, with cost being determined using a first-in-first-out costing (“FIFO”) method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. At the end of each reporting period, management reviews inventory and determines whether a write-down is required based on the assumptions about future demand of the Company’s products, estimated future sales, remaining shelf life and market conditions. Fair Value Measurements The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC 820, Fair Value Measurements and Disclosures Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs: Level 1 — Quoted unadjusted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all observable inputs and significant value drivers are observable in active markets. Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. For certain financial instruments, including cash, accounts receivable, accounts payable and convertible note, the carrying amounts approximate their fair values as of November 30, 2022 and February 28, 2022 because of their short-term nature. The Company recognizes a loss allowance for expected credit losses on its financial assets when necessary. The amount of expected credit losses is updated at each reporting period to reflect changes in credit risk since initial recognition of the respective financial instruments. The Company did not recognize impairment losses during the periods ended November 30, 2022 and 2021. The Company has no hedging arrangements and does not apply hedge accounting. Property and Equipment Property and equipment are initially recognized at acquisition cost, including any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the Company. Property and equipment are subsequently measured using the cost model, cost less amortization and impairment. The costs of additions and improvements are capitalized, and the costs of maintenance and repairs are expensed as incurred. Amortization is recognized on a straight-line basis to amortize the cost over the estimated useful life of the property and equipment as follows: Computer equipment 3 years; Furniture and fixtures 7 years; Lab equipment 5 to 7 years; Laboratory and leasehold improvements Remaining lease term. Significant improvements that extend the useful life of an asset are capitalized. Repairs and maintenance which do not extend the useful lives of assets are expensed as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gains or losses are recognized. Impairment of Non-Financial Assets The Company reviews intangible assets with indefinite useful lives for impairment at least annually and reviews all intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. Long-lived assets, such as property and equipment and intangible assets subject to depreciation and amortization, as well as indefinite lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than the Company had originally estimated. Recoverability of these assets is measured by comparison of the carrying amount of each asset or asset group to the future undiscounted cash flows the asset or asset group is expected to generate over their remaining lives. If the asset or asset group is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset or asset group. If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the new shorter useful life. There were no impairment losses recognized for the periods ended November 30, 2022 and 2021. Leases At the inception of a contract, LexaGene assesses whether the arrangement may contain a lease. The Company recognizes a right-of-use asset and a corresponding lease liability for all arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases). Right-of-use assets are depreciated over the lease term from the commencement date of the lease over the shorter of the useful life of the right-of-use asset or the end of the lease term. The lease liability is initially measured at the present value of the future lease payments from the commencement date of the lease to the end of the lease term. The lease term includes the period of any lease extension that in management’s assessment is reasonably certain to be exercised by the Company. The lease liability is measured at amortized cost using effective interest method. The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever there is a change to the lease terms or a modification that is not accounted for as a separate lease. As changes in LexaGene’s lease payments are related to changes in the consumer price index, the lease liability is not remeasured due to the changes in lease payments unless the liability is remeasured for another reason. The excess of current lease payments over the lease payments at commencement date is recognized as rent expense. Revenue Recognition Revenues are recognized in accordance with ASC 606, Revenue from Contracts with Customers ● Identify contract with customer; ● Identify performance obligations; ● Determine transaction price; ● Allocate transaction price to performance obligations; ● Recognize revenue when performance obligations are satisfied. Performance obligations are considered satisfied when control of the products has transferred to the customer, and the customer has full discretion over the use of the products, generally upon delivery. Delivery occurs at a point in time when the products have been shipped to the specific location requested by the customer, the customer takes control of the goods at a designated warehouse, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied. As at the end of the reporting period, there are no unfulfilled performance obligations. The Company elected to use a practical expedient to expense sales commissions as they are incurred because the amortization period would have been less than one year. The Company’s products are sold without any subsequent pricing adjustments or contingencies related to occurrence or non-occurrence of future events. Accordingly, there has been no variable consideration assessment. LexaGene’s sales require an advance payment or payment within 30 to 60 days, which is why there is no financing component associated with sales. Accounts receivable are recognized when the goods are controlled by the customer at the point in time that the consideration is unconditional, and only the passage of time is required before payment is due. Any advance payments are recorded as a liability called deferred revenue. Product revenue is generated by the sale of instruments and consumable diagnostic tests predominantly through the Company’s direct sales force in the United States. The Company does not offer product return or exchange rights (other than those relating to defective goods under warranty) or price protection allowances to its customers. Revenue from the sale of consumable diagnostic tests (under instrument purchase agreements) is generally recognized upon shipment. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers by type of products and services, as it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The following table disaggregates total revenue by major source: Three Months Ended November, Nine Months Ended November, 2022 2021 2022 2021 Product revenue Instruments and consumables $ 42,912 $ 48,309 $ 117,886 $ 88,934 Total revenue $ 42,912 $ 48,309 $ 117,886 $ 88,934 Revenue earned during the periods ended November 30, 2022 and 2021 was derived from the customers located in the United States. Warranty Obligations The Company provides for the estimated cost of standard product warranties for a period of twelve months from installation date. Due to limited sales history, warranty obligation is based on the Company’s best estimate of potential repair costs and is recognized at the time of revenue recognition. Accrual for warranty obligations is included in accrued and other liabilities in the consolidated balance sheet. Extended warranty agreements are considered service contracts. Contract-Related Balances The Company has current contract liabilities (deferred revenue) in the amount of $282 as of November 30, 2022 (February 28, 2022 - $23,560). Amount recognized in revenue during the nine months period ended November 30, 2022 in connection with the contract liabilities was $23,278. Research and Development Costs Costs incurred in the research and development of the Company’s product candidates are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, costs associated with the enhancements of developed products and include salaries and benefits, stock compensation, research-related facility and overhead costs, laboratory supplies, equipment and contract services. Stock-Based Compensation and Value of Warrants The Company issues stock-based awards to employees, generally in the form of stock options and restricted stock units (“RSUs”). The Company accounts for stock-based awards in accordance with FASB ASC Topic 718, Compensation-Stock Compensation The Company estimates the fair value of the stock-based awards to employees using the Black-Scholes-Merton option pricing model, which requires the input of highly subjective assumptions, including (a) the expected volatility of the stock, (b) the expected term of the award, (c) the risk-free interest rate and (d) expected dividends. The Company estimates expected volatility based on the historical volatility of the stock using the daily closing prices during the equivalent period of the calculated expected term of its stock-based awards. Expected life is estimated on the actual exercise and expiries of options. Risk-free rate is based on the Bank of Canada interest rate with a term that represents expected life of the options at grant date. The Company has not paid, and does not anticipate paying, cash dividends on shares of common stock; therefore, the expected dividend yield is assumed to be zero. These assumptions used to determine stock compensation expense represent the Company’s best estimates, but the estimates involve inherent uncertainties and the application of judgment. As a result, if factors change and the Company uses significantly different assumptions or estimates, stock-based compensation expense could be materially different. Refer to Note 10 for further details on the Company’s share-based compensation plan. The fair value of warrants issued as units in private placements is estimated using the relative fair value method whereby the value of the warrants issued is estimated using the Black-Scholes Pricing Model and the value of the shares issued is based on the market price at the time of issuance. Total private placement proceeds are then allocated to shares and warrants based on their relative fair values. Income Taxes The Company applies ASC 740, Income Taxes Income tax expense comprises of current and deferred tax. Current tax and deferred tax are recognized in profit or loss, except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income (loss). Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current period and any adjustment to income taxes payable in respect of previous periods. Current tax expense is the expected tax payable on the taxable income for the period using tax rates enacted at year-end, adjusted for amendments to tax payable with regard to previous years. Deferred tax assets and liabilities are recognized for deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized or the liability settled. A deferred tax asset is recognized to the extent that is probable that future taxable profits will be available against which the asset can be utilized. The Company realizes deferred income tax assets to the extent that it is more likely than not to be realized and provides a valuation allowance against any excess that may not be realized. Basic and Diluted Net Loss per Share Basic loss per share is calculated using the weighted average number of common shares outstanding during the period. The Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method the dilutive effect on earnings per share is calculated presuming the exercise of outstanding options, warrants and similar instruments. It assumes that the proceeds of such exercise would be used to repurchase common shares at the average market price during the period. However, the calculation of diluted loss per share excludes the effects of various conversions and exercise of options and warrants that would be antidilutive. Shares held in escrow, other than where their release is subject to the passage of time, are not included in the calculation of the weighted average number of common shares outstanding. As the Company incurred losses since inception, basic and diluted loss per share presented are the same. Securities that may potentially dilute earnings per share in the future that were not included in the calculation are as follows as of November 30, 2022: Warrants 26,352,247 Stock Options 1 3,490,750 Restricted Share Units 2,222,027 Total 32,065,024 1 These securities were not included in the calculation as they are anti-dilutive. Recent Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Effective September 1, 2022, the Company elected to adopt ASU 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) In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”) In July 2021, the FASB issued ASU 2021-05— Leases Certain Leases with Variable Lease Payments In November 2021, the FASB issued ASU No. 2021-10, Government Assistance Accounting Standards Issued, To Be Adopted In October 2021, the FASB issued ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Topic 606 In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. Fair Value Measurement ● Restrictions being a characteristic of the equity security (e.g. unregistered securities), which should be included in the calculation of the fair value of the security ● Restrictions being a characteristic of the holder of the security, which should not be included in the calculation of the fair value of the security. The amendments also clarify that an entity cannot recognize a contractual sale restriction as a separate unit of account (i.e. as a contra-asset or separate liability); and require new disclosures for all entities with equity securities subject to contractual sale restrictions. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, and early adoption is permitted. Management is still assessing the impact of the adoption of the standard on the Company’s financial statements. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Nov. 30, 2022 | |
ACCOUNTS RECEIVABLE | |
ACCOUNTS RECEIVABLE | 3. ACCOUNTS RECEIVABLE Accounts receivable are recognized when the goods are controlled by the customer at the point in time that the consideration is unconditional, and only the passage of time is required before payment is due. Any advance payments are recorded as a liability called deferred revenue. Accounts receivable consists of the following: November 30, 2022 February 28, 2022 Accounts receivable $ 51,643 $ 14,375 Less: loss allowance — — Total accounts receivable, net $ 51,643 $ 14,375 The Company assesses, on a forward-looking basis, the expected credit losses associated with its assets carried at fair value. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables only, the Company applies the approach permitted by ASU 2016-13, which requires expected lifetime losses to be recognized from initial recognition of the receivables. The Company recognizes a loss allowance for expected credit losses on its financial assets when necessary. The amount of expected credit losses is updated at each reporting period to reflect changes in credit risk since initial recognition of the respective financial instruments. The Company did not recognize impairment losses during the period ended November 30, 2022 or the year ended February 28, 2022. Trade receivables are non-interest bearing and are on 30- to 60-day terms. The ageing analysis of trade receivables is as follows: November 30, 2022 February 28, 2022 Amounts Past Due: Current $ 43,806 $ 7,368 Past due 1-30 days — — Past due 31-60 days 1,250 — Past due 61-120 days — 2,965 Past due more than 120 days 6,587 4,042 Total accounts receivable $ 51,643 $ 14,375 Amounts in accounts receivable are based on customer sales, and goods and service tax refunds due to the Company from the Canadian Revenue Agency. As of November 30, 2022, the amount receivable of $12,146 was in relation to GST refunds. Amounts due for more than 120 days relate to GST receivable from the Canada Revenue Agency. These amounts were collected subsequent to November 30, 2022. As of February 28, 2022, $14,375 was in relation to GST refunds. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Nov. 30, 2022 | |
INVENTORIES | |
INVENTORIES | 4. INVENTORIES Inventories consist of the following: November 30, 2022 February 28, 2022 Raw materials $ 735,808 $ 724,584 Work-in-process 542,833 584,243 Finished goods 166,453 87,396 Total inventories $ 1,445,094 $ 1,396,223 Cost comprises of direct materials and delivery costs, direct labor, import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity. Costs of purchased inventory are determined after deducting rebates and discounts received or receivable. The costs are reflected in Cost of goods sold in the Statement of operations and comprehensive loss as cost of inventory sold at the time of sale of the related inventories. |
INTANGIBLE LICENSE
INTANGIBLE LICENSE | 9 Months Ended |
Nov. 30, 2022 | |
INTANGIBLE LICENSE | |
INTANGIBLE LICENSE | 5. INTANGIBLE LICENSE On February 4, 2015, the Company and Lawrence Livermore National Security (“LLNS”) entered into a license agreement, whereby the Company has exclusive right to develop, manufacture and sell pathogen detection devices designed to identify bacteria and viruses that can cause disease with applications in both food safety and healthcare. As consideration for the license agreement, the Company paid a non-refundable License Issue Fee of $60,000. In addition, the Company is required to pay to LLNS a non-refundable US Maintenance Patent Fee of $45,000 as follows: ● $15,000 (paid) on or before February 29, 2016; ● $15,000 (paid) on or before February 28, 2019; and ● $15,000 to be paid on or before February 28, 2023. In the event that the Company grants sublicenses, the Company will collect an issue fee equal to or greater than the License Issue Fee mentioned above. The Company will pay to LLNS 50% of any License Issue Fee from sublicensing. In addition, the Company will pay LLNS a minimum annual royalty. This minimum annual royalty will be credited against the earned royalty of 3% due on all net sales. The minimum annual royalty is due as follows: ● $5,000 (paid) on or before February 28, 2017; ● $10,000 (paid) on or before February 28, 2018; ● $10,000 (paid) on or before February 28, 2019; ● $25,000 on or before February 28, 2021 and each year thereafter (paid according to the schedule). The license agreement will remain in effect until the expiration or abandonment of the last of the patent rights. Patent US 8,298,763 B2 expires on February 27, 2028 and patent US 8,828,716 B2 expires on February 28, 2028. A continuity schedule of changes in carrying value of the intangible license: Cost Balance, February 28, 2022 $ 115,420 Additions — Effect of foreign exchange differences (6,918) Balance November 30, 2022 $ 108,502 Accumulated amortization Balance, February 28, 2022 $ 67,229 Additions 12,084 Effect of foreign exchange differences (4,464) Balance November 30, 2022 $ 74,849 Carrying values February 28, 2022 $ 48,191 November 30, 2022 $ 33,653 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Nov. 30, 2022 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 6. PROPERTY AND EQUIPMENT As of November 30, 2022, the continuity schedule of changes in the net book value of property and equipment is as follows: Computer Lab Furniture & Leasehold Cost Equipment Equipment Fixtures Improvements Total Balance, February 28, 2022 $ 15,577 $ 448,936 $ 88,062 $ 419,443 $ 972,018 Additions — — — — — Balance, November 30, 2022 $ 15,577 $ 448,936 $ 88,062 $ 419,443 $ 972,018 Accumulated amortization Balance, February 28, 2022 $ 14,729 $ 302,835 $ 56,898 $ 228,107 $ 602,569 Additions 848 61,378 11,058 46,019 119,303 Balance, November 30, 2022 $ 15,577 $ 364,213 $ 67,956 $ 274,126 $ 721,872 Carrying values February 28, 2022 $ 369,449 November 30, 2022 $ 250,146 |
RIGHT-OF-USE ASSET AND LEASE LI
RIGHT-OF-USE ASSET AND LEASE LIABILITY | 9 Months Ended |
Nov. 30, 2022 | |
RIGHT-OF-USE ASSET AND LEASE LIABILITY | |
RIGHT-OF-USE ASSET AND LEASE LIABILITY | 7. RIGHT-OF-USE ASSET AND LEASE LIABILITY As of November 30, 2022, the balance of the lease liability is as follows: Carrying Value Balance February 28, 2022 $ 1,163,379 Interest expense 39,408 Lease payments (291,077) Balance, November 30, 2022 $ 911,710 Current portion of the lease liability (350,550) Non -current portion of the lease liability, November 30, 2022 $ 561,160 As of November 30, 2022, the balance of the right-of-use asset is as follows: Carrying Value Balance, February 28, 2022 $ 1,161,956 Depreciation (251,669) August, November 30, 2022 $ 910,287 The property lease expires on May 30, 2025 and the lease payments were discounted with a 5% interest rate . Maturities of operating lease liabilities are as follows: November 30, 2022 2023 $ 97,026 2024 388,103 2025 388,103 2026 97,026 Total lease payments 970,258 Less imputed interest (58,548) Total lease liability (current and long-term) $ 911,710 |
CREDIT AGREEMENTS
CREDIT AGREEMENTS | 9 Months Ended |
Nov. 30, 2022 | |
CREDIT AGREEMENTS | |
CREDIT AGREEMENTS | 8. CREDIT AGREEMENTS Convertible Note Payable On November 1, 2022, the Company issued a secured convertible note payable (the “Note”) to Meridian LGH Holdings 2, LLC, (the “Lender”) an affiliate of an insider of the Company, in the aggregate principal amount of up to $1,600,000. The Note matures on March 1, 2023 and has an interest rate of 12%, unless an event of default has occurred and is continuing, at which time at the election of the Meridian LGH Holdings, interest would accrue at a rate equal to the lesser of 16% per annum or the maximum rate permitted under applicable law. The Note contains customary events of default, which accelerate the maturity date of the Note. The Note also contains an accelerated maturity clause if the Company obtains equity financing of not less than $5,000,000, completes a merger, an amalgamation or a sale of all or substantially all assets of the Company. The Note is convertible in full or in part at any time at the discretion of Meridian LGH Holdings 2, LLC, into common shares of the Company at the rate of $0.17 (CAD$0.23) per share. Accrued interest is converted at the last closing price of the Company’s Shares on the TSX-V on the day prior to issuing a news release announcing the conversion. The Note is collateralized by the assets of the Company and is guaranteed by the subsidiaries of the Company. The Company accounted for the Note in accordance with ASC 815, Derivatives and Hedging As of November 30, 2022, the Company received a total of $900,000 from the Lender. The Company paid $67,564 in issuance costs related to the debenture, which were recorded as a reduction of the balance of the Note. Debt issuance costs are being amortized using the straight-line method over the term of the Note, which matures on March 1, 2023. As of November 30, 2022, the net carrying value of the Note is as follows: November 30, 2022 Principal $ 900,000 Unamortized debt issuance costs (54,498) Convertible note payable, net $ 845,502 The Company recognized Interest expense recorded under the Note was $5,787 for the three and nine-month periods ended November 30, 2022. As of January 17, 2023, the Company was in compliance with the terms of the Note. |
EQUITY
EQUITY | 9 Months Ended |
Nov. 30, 2022 | |
EQUITY | |
EQUITY | 9. EQUITY As of November 30, 2022, the Company’s share capital consists of issued and outstanding shares of Common Shares. Common Shares As of November 30, 2022, the Company was authorized to issue an unlimited number of common shares, which have no par value. Dividend Rights Voting Rights Liquidation Rights Share Offering Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity In February 2022, the Company issued 18,500,000 units at a price of CAD$0.35 per unit for an aggregate purchase price of $4,995,000 (CAD$6,475,000). Each unit consists of one common share of the Company and one common share purchase warrant. Each warrant is exercisable into one common share of the Company at the price of CAD$0.45 (approximately $0.36) per share for a period of 36 months. The value of the warrants of $1,139,791 was calculated using Black- Scholes Model and relative fair value method using the following assumptions: annualized volatility – 80%; risk-free rate – 1.35%; expected life – 1.58 years; expected dividend rate – 0%. On October 27, 2022, the Company modified 7,776,893 warrants by extending their term by one month and reducing their exercise price from CAD$0.75 to CAD$0.23. This resulted in an amount of $340,385 being recognized as an additional value related to the warrants. The value was calculated using the Black-Scholes Model with the following assumptions: annualized volatility – 278%; risk-free rate – 3.85%; expected life – 0.08 years; expected dividend rate – 0%. The following summarizes the number of warrants outstanding as of November 30, 2022: Weighted-Average Exercise Price per Number of Warrants Warrant, CAD$ Outstanding as of February 28, 2022 34,579,760 $ 0.66 Granted — $ — Exercised (1,536,269) $ 0.23 Expired (6,691,244) $ 0.25 Outstanding as of November 30, 2022 26,352,247 $ 0.64 Details of warrants outstanding as of November 30, 2022, are as follows: Number of Exercise Price Warrants (CAD$) Expiry Date 7,852,247 $ 1.10 September 9, 2023 13,115,275 $ 0.45 February 7, 2025 5,384,725 $ 0.45 February 18, 2025 26,352,247 As of November 30, 2022, the weighted average remaining contractual life of warrants outstanding was 1.77 years (February 28, 2022 – 2.08 years) with a weighted average exercise price of $0.47 (CAD$0.64) (February 28, 2022 - $0.52 (CAD$0.66)). |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Nov. 30, 2022 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 10. SHARE-BASED COMPENSATION Share Incentive Plans Omnibus incentive plan (“OIP”) The Shareholders and Board previously approved the OIP on July 25, 2017. After Shareholder approvals, the OIP was amended on August 23, 2019, November 10, 2020 and on December 16, 2021. The Company increased the number of Common Shares reserved for the Company’s OIP and increased the number of Common Shares reserved for the issuance as share incentive options. As of November 30, 2022, the amended OIP grants the Company 8,354,070 Common Shares reserved for stock options and 8,354,070 reserved for restricted share units. Stock options Stock options vest over a prescribed service period and are approved by the Board of Directors on an award-by-award basis. Options have a prescribed service period generally lasting up to ten years, with certain options vesting immediately upon issuance. Upon the exercise of any stock options, the Company issues shares to the award holder from the pool of authorized but unissued common shares. On July 29, 2022, the Company granted 935,000 stock options to non-insider employees with an expiration date of July 29, 2027 and 150,000 stock options to an officer of the Company with an expiration date of July 29, 2032. Each Option is exercisable into one common share of the Company at a price of CAD$0.20 per Share. Employee options are exercisable for a period of five years and officer options are exercisable for ten years from the date of grant. The CAD$0.13 per share was at the close price of the Company’s stock on the TSX Venture Exchange on July 28, 2022. The Options vest 10% on the grant date, and 15% every six months thereafter. The Chief Executive Officer, Chief Financial Officer and the board of directors were excluded from this grant. Details of the number of stock options outstanding for the period ended November 30, 2022 are as follows: Weighted- Average Weighted-Average Remaining Number of Exercise Price per Contract Term Aggregate Options Option, CAD$ (in years) Intrinsic Value Outstanding as of February 28, 2022 4,266,000 $ 0.61 5.08 $ — Granted 1,085,000 $ 0.20 5.69 — Exercised — $ — — — Forfeited (and expired) (1,860,250) $ 0.53 — — Outstanding as of November 30, 2022 3,490,750 $ 0.53 6.12 $ — Exercisable /vested as of November 30, 2022 1,654,600 $ 0.64 6.49 $ — The average share price during the nine months period ended November 30, 2022 was $0.13 (CAD$0.18) (2021 - $0.50 (CAD$0.62)). As of November 30, 2022, the weighted average remaining contractual life of options outstanding was 6.12 years (February 28, 2022 – 5.08 years), with a weighted average exercise price of $0.39 (CAD$0.53) (February 28, 2022 - $0.48 CAD$0.61)). As of November 30, 2022, 1,654,600 stock options were exercisable (February 28, 2022 – 1,987,300). The following table summarizes information on stock options outstanding as of November 30, 2022: Options Options Exercise Expiry Outstanding Exercisable Price, CAD$ Date 17,500 12,250 0.82 December 9, 2023 294,000 123,000 0.79 December 10, 2024 306,750 182,550 0.49 May 28, 2025 100,000 100,000 0.81 September 17, 2025 183,500 23,750 0.285 January 10, 2027 650,000 — 0.20 July 29, 2027 225,000 168,750 0.72 February 19, 2030 100,000 75,000 0.63 April 24, 2030 350,000 350,000 0.66 September 17, 2030 324,000 199,800 0.66 May 11, 2031 690,000 379,500 0.59 May 28, 2031 100,000 40,000 0.66 November 11, 2031 150,000 — 0.20 July 29, 2032 3,490,750 1,654,600 Restricted share units The Company has issued time-based restricted share awards to certain employees as permitted under the OIP Plan. The restricted share units granted vest in accordance with the Board-approved vesting schedules with expiry dates less than or equal to three years. Upon vesting, one of the Company’s common shares is issued for each restricted share awarded. The fair value of each restricted share award granted is equal to the market price of the Company’s shares at the date of the grant. The total fair value of shares vested and total intrinsic value of the RSUs released during the nine-month period ended November 30, 2022 were $502,591 and $134,478 respectively. On July 29, 2022, the Company granted 1,275,000 restricted share units to employees and 250,000 restricted share units to an officer of the Company with vesting dates of 10% on December 29, 2022, 15% on May 29, 2023, 15% on October 29, 2023, 15% on March 29, 2024, 15% on August 29, 2024, 15% on December 29, 2024 and 15% on February 28, 2025 and have an expiry date of February 28, 2025. The Chief Executive Officer, Chief Financial Officer and the board of directors were excluded from this grant. Details of the number of restricted share awards outstanding under the OIP Plan is as follows: Weighted-Average Grant Number of Shares Date Value CAD$ Outstanding as of February 28, 2022 2,339,928 $ 0.62 Granted 1,525,000 $ 0.14 Forfeited (767,300) $ 0.30 Vested (875,601) $ 0.77 Outstanding as of November 30, 2022 2,222,027 $ 0.35 |
RESEARCH AND DEVELOPMENT EXPENS
RESEARCH AND DEVELOPMENT EXPENSES | 9 Months Ended |
Nov. 30, 2022 | |
RESEARCH AND DEVELOPMENT EXPENSES | |
RESEARCH AND DEVELOPMENT EXPENSES | 11. RESEARCH AND DEVELOPMENT EXPENSES LexaGene’s product research and development plan was divided into three phases: alpha prototype, beta prototype, and commercialization of its finished product the MiQLab System. On occasion, the Company engages various contractors to assist the Company in the development of its MiQLab System and other technologies. The significant components of research and development expense are as follows: Three Months Ended November 30, Nine Months Ended November 30, 2022 2021 2022 2021 Product development consulting expense $ — $ — $ 40,456 $ 48,630 Depreciation of lab related equipment 26,251 28,389 82,523 87,108 Depreciation of the intangible license 3,890 4,177 12,084 9,673 Depreciation of right-of-use asset 31,011 29,448 91,884 87,364 Lab administration and supplies 101,100 141,042 428,564 395,768 Materials 60,232 327,210 415,735 999,528 Rent expense 2,821 754 7,522 1,508 Travel 482 5,109 12,282 17,554 Salaries 630,764 886,232 2,146,302 2,699,286 Share-based compensation 30,785 83,663 119,738 363,337 Total research and development expenses $ 887,336 $ 1,506,024 $ 3,357,090 $ 4,709,756 |
GENERAL AND ADMINISTRATIVE EXPE
GENERAL AND ADMINISTRATIVE EXPENSES | 9 Months Ended |
Nov. 30, 2022 | |
GENERAL AND ADMINISTRATIVE EXPENSES | |
GENERAL AND ADMINISTRATIVE EXPENSES | 12. GENERAL AND ADMINSTRATIVE EXPENSES The significant components of general and administrative expenses are as follows: Three Months Ended November 30, Nine Months Ended November 30, 2022 2021 2022 2021 Office and administration $ 12,144 $ 12,565 $ 31,703 $ 44,037 Depreciation of property and equipment 12,196 12,382 36,780 36,708 Depreciation of right-of-use asset 53,927 51,356 159,785 152,056 Consulting 156 430 392 3,119 Promotional services 8,611 110,776 25,614 257,040 Professional fees 189,308 101,743 591,889 258,194 Insurance 9,237 5,008 24,315 12,352 Interest expense (right-of-use asset) 12,087 16,221 39,408 51,657 Rent expense 4,905 1,311 15,655 2,622 Transfer agent and filing fees 7,693 27,533 20,082 66,097 Travel 399 2,467 3,497 3,055 Salaries 52,780 62,764 144,212 134,889 Share-based compensation 107,556 139,498 330,910 585,289 Total general and administrative expenses $ 470,999 $ 544,054 $ 1,424,242 $ 1,607,115 |
SALES, MARKETING AND PROMOTIONA
SALES, MARKETING AND PROMOTIONAL EXPENSES | 9 Months Ended |
Nov. 30, 2022 | |
SALES, MARKETING AND PROMOTIONAL EXPENSES | |
SALES, MARKETING AND PROMOTIONAL EXPENSES | 13. SALES, MARKETING AND PROMOTIONAL EXPENSES The significant components of marketing and promotional expenses are as follows: Three Months Ended November 30, Nine Months Ended November 30, 2022 2021 2022 2021 Sales, marketing and promotion $ 58,238 $ 131,950 $ 200,433 $ 509,670 Office and miscellaneous 5,170 7,000 10,523 7,096 Travel 7,182 20,604 26,135 31,561 Salaries 96,534 381,589 403,700 1,157,571 Share-based compensation 192 5,743 (10,943) 30,651 Total sales, marketing and promotional expenses $ 167,316 $ 546,886 $ 629,848 $ 1,736,549 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Nov. 30, 2022 | |
INCOME TAXES | |
INCOME TAXES | 14. INCOME TAXES Our effective income tax rate was 0.00% for the nine months ended November 30, 2022 was consistent with the rate of 0.00% for the same period of 2021. The effective tax rate for the nine months ended November 30, 2022 was different from the U.S. statutory tax rate of 21% due to increase in valuation allowance in the periods. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Nov. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES Legal Contingencies From time to time, the Company may be a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. Although the ultimate aggregate amount of monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not predictable with assurance, management believes that as of November 30, 2022, there are no litigations pending that could have, individually and in the aggregate, a material adverse effect on the Company’s financial position, results of operations or cash flows. Accrued Liabilities: Accrued expenses consist of the following: November 30, 2022 February 28, 2022 Accrued payroll, compensation and benefits $ 80,657 $ 182,367 Accrued professional services 92,982 133,088 Other accrued expenses 13,532 36,720 Total accrued expenses and other current liabilities $ 187,171 $ 352,175 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Nov. 30, 2022 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
SUPPLEMENTAL CASH FLOW INFORMATION | 16. SUPPLEMENTAL CASH FLOW INFORMATION November 30, 2022 November 30, 2021 Interest paid $ — $ — Taxes paid — — Total $ — $ — |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (Policies) | 9 Months Ended |
Nov. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the United States (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial statements. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board. The accompanying interim condensed consolidated financial statements as of November 30, 2022, and for the three and nine months ended November 30, 2022 and 2021, and information contained within the notes to these condensed consolidated financial statements, are unaudited. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company’s audited annual consolidated financial statements and in management's opinion contain all adjustments (including normal recurring adjustments) necessary for the fair presentation of the Company’s financial position as of November 30, 2022, results of operations for the three and nine months ended November 30, 2022 and 2021, statement of stockholders’ equity for the three and nine months ended November 30, 2022 and 2021 and its cash flows for the nine months ended November 31, 2022 and 2021. These interim condensed consolidated financial statements should be read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10 for the year ended February 28, 2022. The results for the nine months ended November 30, 2022, are not necessarily indicative of the results expected for the full fiscal year or any interim period. The condensed consolidated financial statements for the periods ended November 30, 2022 and 2021, include the accounts of the Company, the Company’s wholly-owned Canadian subsidiary Bionomics Diagnostics Inc. (“BDI”) and the Company’s wholly-owned US subsidiary LexaGene, Inc. All inter-company transactions and balances have been eliminated. The consolidated financial statements include the financial statements of LexaGene Holdings Inc. and its subsidiaries listed as follows: % Ownership Interest Name Country of Incorporation 2022 2021 Bionomics Diagnostics Inc. Canada 100 % 100 % LexaGene, Inc. United States of America 100 % 100 % |
Foreign Currency | Foreign Currency These condensed consolidated financial statements are expressed in US dollars (“USD”) and have been prepared on a historical cost basis except for certain financial instruments that have been measured at fair value. The functional currency of the Company and its Canadian subsidiary is the Canadian dollar (“CAD”), and the USD for the Company’s US subsidiary. The Company’s presentation currency is the USD which aligns the Company’s presentation currency with the functional currency of its operations in the United States. Under this method, the Canadian entities are translated to USD. Translation gains and losses resulting from the consolidation of operations in Canada are recognized in other comprehensive loss in the consolidated statements of comprehensive loss, and in accumulated other comprehensive loss as a separate component of shareholders’ equity on the consolidated statement of changes in equity. Foreign exchange rates used for currency translation in these consolidated financial statements include: Period end dates USD to CAD CAD to USD November 30,2022 1.3508 0.7403 February 28, 2022 1.2698 0.7875 Period averages USD to CAD CAD to USD Period ended November 30, 2022 1.3023 0.7685 Period ended November 30, 2021 1.2470 0.8021 |
Use of Estimates | Use of Estimates The preparation of these condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and related disclosures. We evaluate our estimates on an on-going basis, including those related to accounts receivable; inventory valuation; revenue recognition, share-based compensation. Our estimates are based on historical experience and on other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from these estimates. Significant judgments relate to the recognition of deferred income taxes, treatment of development costs, recoverability of the carrying value of intangible assets, and going concern. Management believes that there have been no significant changes during the nine months ended November 30, 2022 to the items that we disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10 for the fiscal year ended February 28, 2022. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company views its operations and manages its business in one operating segment, which is the business of developing and, launching commercially its diagnostic products. |
Geographic Information | Geographic Information All sales to date were made in the United States of America. |
Cash | Cash The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. The Company maintains its cash and cash equivalents in accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. |
Accounts Receivable | Accounts Receivable The Company’s accounts receivable consists of amounts due from product sales to commercial customers and goods and services tax (“GST”) receivable from the government of Canada. At each reporting period, management reviews historical loss information, characteristics of our customers, our credit practices and the economic conditions, along with all outstanding balances to determine if the facts and circumstances indicate the need for a credit loss allowance. Receivables are written off against these allowances in the period they are determined to be uncollectible. The Company does not require collateral and did not have an allowance for doubtful accounts as of November 30, 2022 and February 28, 2022. |
Inventories | Inventories Raw materials, work in process, and finished goods inventories are stated at the lower of cost and net realizable value, with cost being determined using a first-in-first-out costing (“FIFO”) method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. At the end of each reporting period, management reviews inventory and determines whether a write-down is required based on the assumptions about future demand of the Company’s products, estimated future sales, remaining shelf life and market conditions. |
Fair Value Measurements | Fair Value Measurements The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC 820, Fair Value Measurements and Disclosures Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs: Level 1 — Quoted unadjusted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all observable inputs and significant value drivers are observable in active markets. Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable, including assumptions developed by the Company. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. For certain financial instruments, including cash, accounts receivable, accounts payable and convertible note, the carrying amounts approximate their fair values as of November 30, 2022 and February 28, 2022 because of their short-term nature. The Company recognizes a loss allowance for expected credit losses on its financial assets when necessary. The amount of expected credit losses is updated at each reporting period to reflect changes in credit risk since initial recognition of the respective financial instruments. The Company did not recognize impairment losses during the periods ended November 30, 2022 and 2021. The Company has no hedging arrangements and does not apply hedge accounting. |
Property and Equipment | Property and Equipment Property and equipment are initially recognized at acquisition cost, including any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the Company. Property and equipment are subsequently measured using the cost model, cost less amortization and impairment. The costs of additions and improvements are capitalized, and the costs of maintenance and repairs are expensed as incurred. Amortization is recognized on a straight-line basis to amortize the cost over the estimated useful life of the property and equipment as follows: Computer equipment 3 years; Furniture and fixtures 7 years; Lab equipment 5 to 7 years; Laboratory and leasehold improvements Remaining lease term. Significant improvements that extend the useful life of an asset are capitalized. Repairs and maintenance which do not extend the useful lives of assets are expensed as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gains or losses are recognized. |
Impairment of Non-Financial Assets | Impairment of Non-Financial Assets The Company reviews intangible assets with indefinite useful lives for impairment at least annually and reviews all intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. Long-lived assets, such as property and equipment and intangible assets subject to depreciation and amortization, as well as indefinite lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than the Company had originally estimated. Recoverability of these assets is measured by comparison of the carrying amount of each asset or asset group to the future undiscounted cash flows the asset or asset group is expected to generate over their remaining lives. If the asset or asset group is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset or asset group. If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the new shorter useful life. There were no impairment losses recognized for the periods ended November 30, 2022 and 2021. |
Leases | Leases At the inception of a contract, LexaGene assesses whether the arrangement may contain a lease. The Company recognizes a right-of-use asset and a corresponding lease liability for all arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases). Right-of-use assets are depreciated over the lease term from the commencement date of the lease over the shorter of the useful life of the right-of-use asset or the end of the lease term. The lease liability is initially measured at the present value of the future lease payments from the commencement date of the lease to the end of the lease term. The lease term includes the period of any lease extension that in management’s assessment is reasonably certain to be exercised by the Company. The lease liability is measured at amortized cost using effective interest method. The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever there is a change to the lease terms or a modification that is not accounted for as a separate lease. As changes in LexaGene’s lease payments are related to changes in the consumer price index, the lease liability is not remeasured due to the changes in lease payments unless the liability is remeasured for another reason. The excess of current lease payments over the lease payments at commencement date is recognized as rent expense. |
Revenue Recognition | Revenue Recognition Revenues are recognized in accordance with ASC 606, Revenue from Contracts with Customers ● Identify contract with customer; ● Identify performance obligations; ● Determine transaction price; ● Allocate transaction price to performance obligations; ● Recognize revenue when performance obligations are satisfied. Performance obligations are considered satisfied when control of the products has transferred to the customer, and the customer has full discretion over the use of the products, generally upon delivery. Delivery occurs at a point in time when the products have been shipped to the specific location requested by the customer, the customer takes control of the goods at a designated warehouse, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied. As at the end of the reporting period, there are no unfulfilled performance obligations. The Company elected to use a practical expedient to expense sales commissions as they are incurred because the amortization period would have been less than one year. The Company’s products are sold without any subsequent pricing adjustments or contingencies related to occurrence or non-occurrence of future events. Accordingly, there has been no variable consideration assessment. LexaGene’s sales require an advance payment or payment within 30 to 60 days, which is why there is no financing component associated with sales. Accounts receivable are recognized when the goods are controlled by the customer at the point in time that the consideration is unconditional, and only the passage of time is required before payment is due. Any advance payments are recorded as a liability called deferred revenue. Product revenue is generated by the sale of instruments and consumable diagnostic tests predominantly through the Company’s direct sales force in the United States. The Company does not offer product return or exchange rights (other than those relating to defective goods under warranty) or price protection allowances to its customers. Revenue from the sale of consumable diagnostic tests (under instrument purchase agreements) is generally recognized upon shipment. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers by type of products and services, as it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The following table disaggregates total revenue by major source: Three Months Ended November, Nine Months Ended November, 2022 2021 2022 2021 Product revenue Instruments and consumables $ 42,912 $ 48,309 $ 117,886 $ 88,934 Total revenue $ 42,912 $ 48,309 $ 117,886 $ 88,934 Revenue earned during the periods ended November 30, 2022 and 2021 was derived from the customers located in the United States. Warranty Obligations The Company provides for the estimated cost of standard product warranties for a period of twelve months from installation date. Due to limited sales history, warranty obligation is based on the Company’s best estimate of potential repair costs and is recognized at the time of revenue recognition. Accrual for warranty obligations is included in accrued and other liabilities in the consolidated balance sheet. Extended warranty agreements are considered service contracts. Contract-Related Balances The Company has current contract liabilities (deferred revenue) in the amount of $282 as of November 30, 2022 (February 28, 2022 - $23,560). Amount recognized in revenue during the nine months period ended November 30, 2022 in connection with the contract liabilities was $23,278. |
Research and Development Costs | Research and Development Costs Costs incurred in the research and development of the Company’s product candidates are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, costs associated with the enhancements of developed products and include salaries and benefits, stock compensation, research-related facility and overhead costs, laboratory supplies, equipment and contract services. |
Stock-Based Compensation and Value of Warrants | Stock-Based Compensation and Value of Warrants The Company issues stock-based awards to employees, generally in the form of stock options and restricted stock units (“RSUs”). The Company accounts for stock-based awards in accordance with FASB ASC Topic 718, Compensation-Stock Compensation The Company estimates the fair value of the stock-based awards to employees using the Black-Scholes-Merton option pricing model, which requires the input of highly subjective assumptions, including (a) the expected volatility of the stock, (b) the expected term of the award, (c) the risk-free interest rate and (d) expected dividends. The Company estimates expected volatility based on the historical volatility of the stock using the daily closing prices during the equivalent period of the calculated expected term of its stock-based awards. Expected life is estimated on the actual exercise and expiries of options. Risk-free rate is based on the Bank of Canada interest rate with a term that represents expected life of the options at grant date. The Company has not paid, and does not anticipate paying, cash dividends on shares of common stock; therefore, the expected dividend yield is assumed to be zero. These assumptions used to determine stock compensation expense represent the Company’s best estimates, but the estimates involve inherent uncertainties and the application of judgment. As a result, if factors change and the Company uses significantly different assumptions or estimates, stock-based compensation expense could be materially different. Refer to Note 10 for further details on the Company’s share-based compensation plan. The fair value of warrants issued as units in private placements is estimated using the relative fair value method whereby the value of the warrants issued is estimated using the Black-Scholes Pricing Model and the value of the shares issued is based on the market price at the time of issuance. Total private placement proceeds are then allocated to shares and warrants based on their relative fair values. |
Income Taxes | Income Taxes The Company applies ASC 740, Income Taxes Income tax expense comprises of current and deferred tax. Current tax and deferred tax are recognized in profit or loss, except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income (loss). Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current period and any adjustment to income taxes payable in respect of previous periods. Current tax expense is the expected tax payable on the taxable income for the period using tax rates enacted at year-end, adjusted for amendments to tax payable with regard to previous years. Deferred tax assets and liabilities are recognized for deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply when the asset is realized or the liability settled. A deferred tax asset is recognized to the extent that is probable that future taxable profits will be available against which the asset can be utilized. The Company realizes deferred income tax assets to the extent that it is more likely than not to be realized and provides a valuation allowance against any excess that may not be realized. |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share Basic loss per share is calculated using the weighted average number of common shares outstanding during the period. The Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method the dilutive effect on earnings per share is calculated presuming the exercise of outstanding options, warrants and similar instruments. It assumes that the proceeds of such exercise would be used to repurchase common shares at the average market price during the period. However, the calculation of diluted loss per share excludes the effects of various conversions and exercise of options and warrants that would be antidilutive. Shares held in escrow, other than where their release is subject to the passage of time, are not included in the calculation of the weighted average number of common shares outstanding. As the Company incurred losses since inception, basic and diluted loss per share presented are the same. Securities that may potentially dilute earnings per share in the future that were not included in the calculation are as follows as of November 30, 2022: Warrants 26,352,247 Stock Options 1 3,490,750 Restricted Share Units 2,222,027 Total 32,065,024 1 These securities were not included in the calculation as they are anti-dilutive. |
Recent Accounting Standards | Recent Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Effective September 1, 2022, the Company elected to adopt ASU 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) In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”) In July 2021, the FASB issued ASU 2021-05— Leases Certain Leases with Variable Lease Payments In November 2021, the FASB issued ASU No. 2021-10, Government Assistance Accounting Standards Issued, To Be Adopted In October 2021, the FASB issued ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Topic 606 In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. Fair Value Measurement ● Restrictions being a characteristic of the equity security (e.g. unregistered securities), which should be included in the calculation of the fair value of the security ● Restrictions being a characteristic of the holder of the security, which should not be included in the calculation of the fair value of the security. The amendments also clarify that an entity cannot recognize a contractual sale restriction as a separate unit of account (i.e. as a contra-asset or separate liability); and require new disclosures for all entities with equity securities subject to contractual sale restrictions. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, and early adoption is permitted. Management is still assessing the impact of the adoption of the standard on the Company’s financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES | |
Schedule of list of wholly-owned subsidiaries | % Ownership Interest Name Country of Incorporation 2022 2021 Bionomics Diagnostics Inc. Canada 100 % 100 % LexaGene, Inc. United States of America 100 % 100 % |
Schedule of foreign exchange rates used for currency translation | Period end dates USD to CAD CAD to USD November 30,2022 1.3508 0.7403 February 28, 2022 1.2698 0.7875 Period averages USD to CAD CAD to USD Period ended November 30, 2022 1.3023 0.7685 Period ended November 30, 2021 1.2470 0.8021 |
Schedule of useful life of the property and equipment | Computer equipment 3 years; Furniture and fixtures 7 years; Lab equipment 5 to 7 years; Laboratory and leasehold improvements Remaining lease term. |
Schedule of disaggregation total revenue by major source | Three Months Ended November, Nine Months Ended November, 2022 2021 2022 2021 Product revenue Instruments and consumables $ 42,912 $ 48,309 $ 117,886 $ 88,934 Total revenue $ 42,912 $ 48,309 $ 117,886 $ 88,934 |
Schedule of securities that may potentially dilute earnings per share in the future that were not included in the calculation | Warrants 26,352,247 Stock Options 1 3,490,750 Restricted Share Units 2,222,027 Total 32,065,024 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
ACCOUNTS RECEIVABLE | |
Schedule of accounts receivable | November 30, 2022 February 28, 2022 Accounts receivable $ 51,643 $ 14,375 Less: loss allowance — — Total accounts receivable, net $ 51,643 $ 14,375 |
Schedule of ageing analysis of trade receivables | November 30, 2022 February 28, 2022 Amounts Past Due: Current $ 43,806 $ 7,368 Past due 1-30 days — — Past due 31-60 days 1,250 — Past due 61-120 days — 2,965 Past due more than 120 days 6,587 4,042 Total accounts receivable $ 51,643 $ 14,375 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
INVENTORIES | |
Schedule of inventories | November 30, 2022 February 28, 2022 Raw materials $ 735,808 $ 724,584 Work-in-process 542,833 584,243 Finished goods 166,453 87,396 Total inventories $ 1,445,094 $ 1,396,223 |
INTANGIBLE LICENSE (Tables)
INTANGIBLE LICENSE (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
INTANGIBLE LICENSE | |
Schedule of changes in carrying value of the intangible license | Cost Balance, February 28, 2022 $ 115,420 Additions — Effect of foreign exchange differences (6,918) Balance November 30, 2022 $ 108,502 Accumulated amortization Balance, February 28, 2022 $ 67,229 Additions 12,084 Effect of foreign exchange differences (4,464) Balance November 30, 2022 $ 74,849 Carrying values February 28, 2022 $ 48,191 November 30, 2022 $ 33,653 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
PROPERTY AND EQUIPMENT | |
Schedule of changes in the net book value of property and equipment | Computer Lab Furniture & Leasehold Cost Equipment Equipment Fixtures Improvements Total Balance, February 28, 2022 $ 15,577 $ 448,936 $ 88,062 $ 419,443 $ 972,018 Additions — — — — — Balance, November 30, 2022 $ 15,577 $ 448,936 $ 88,062 $ 419,443 $ 972,018 Accumulated amortization Balance, February 28, 2022 $ 14,729 $ 302,835 $ 56,898 $ 228,107 $ 602,569 Additions 848 61,378 11,058 46,019 119,303 Balance, November 30, 2022 $ 15,577 $ 364,213 $ 67,956 $ 274,126 $ 721,872 Carrying values February 28, 2022 $ 369,449 November 30, 2022 $ 250,146 |
RIGHT-OF-USE ASSET AND LEASE _2
RIGHT-OF-USE ASSET AND LEASE LIABILITY (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
RIGHT-OF-USE ASSET AND LEASE LIABILITY | |
Schedule of balance of the lease liability | Carrying Value Balance February 28, 2022 $ 1,163,379 Interest expense 39,408 Lease payments (291,077) Balance, November 30, 2022 $ 911,710 Current portion of the lease liability (350,550) Non -current portion of the lease liability, November 30, 2022 $ 561,160 |
Schedule of balance of the right-of-use asset | Carrying Value Balance, February 28, 2022 $ 1,161,956 Depreciation (251,669) August, November 30, 2022 $ 910,287 |
Schedule of maturities of operating lease liabilities | November 30, 2022 2023 $ 97,026 2024 388,103 2025 388,103 2026 97,026 Total lease payments 970,258 Less imputed interest (58,548) Total lease liability (current and long-term) $ 911,710 |
CREDIT AGREEMENTS (Tables)
CREDIT AGREEMENTS (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
CREDIT AGREEMENTS | |
Schedule of net carrying value of the Note | November 30, 2022 Principal $ 900,000 Unamortized debt issuance costs (54,498) Convertible note payable, net $ 845,502 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
EQUITY | |
Schedule of warrants outstanding | The following summarizes the number of warrants outstanding as of November 30, 2022: Weighted-Average Exercise Price per Number of Warrants Warrant, CAD$ Outstanding as of February 28, 2022 34,579,760 $ 0.66 Granted — $ — Exercised (1,536,269) $ 0.23 Expired (6,691,244) $ 0.25 Outstanding as of November 30, 2022 26,352,247 $ 0.64 Details of warrants outstanding as of November 30, 2022, are as follows: Number of Exercise Price Warrants (CAD$) Expiry Date 7,852,247 $ 1.10 September 9, 2023 13,115,275 $ 0.45 February 7, 2025 5,384,725 $ 0.45 February 18, 2025 26,352,247 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
SHARE-BASED COMPENSATION | |
Schedule of details of the number of stock options outstanding for the period | Weighted- Average Weighted-Average Remaining Number of Exercise Price per Contract Term Aggregate Options Option, CAD$ (in years) Intrinsic Value Outstanding as of February 28, 2022 4,266,000 $ 0.61 5.08 $ — Granted 1,085,000 $ 0.20 5.69 — Exercised — $ — — — Forfeited (and expired) (1,860,250) $ 0.53 — — Outstanding as of November 30, 2022 3,490,750 $ 0.53 6.12 $ — Exercisable /vested as of November 30, 2022 1,654,600 $ 0.64 6.49 $ — |
Summary of information on stock options outstanding | The following table summarizes information on stock options outstanding as of November 30, 2022: Options Options Exercise Expiry Outstanding Exercisable Price, CAD$ Date 17,500 12,250 0.82 December 9, 2023 294,000 123,000 0.79 December 10, 2024 306,750 182,550 0.49 May 28, 2025 100,000 100,000 0.81 September 17, 2025 183,500 23,750 0.285 January 10, 2027 650,000 — 0.20 July 29, 2027 225,000 168,750 0.72 February 19, 2030 100,000 75,000 0.63 April 24, 2030 350,000 350,000 0.66 September 17, 2030 324,000 199,800 0.66 May 11, 2031 690,000 379,500 0.59 May 28, 2031 100,000 40,000 0.66 November 11, 2031 150,000 — 0.20 July 29, 2032 3,490,750 1,654,600 |
Schedule of details of the number of restricted share awards outstanding under the OIP Plan | Weighted-Average Grant Number of Shares Date Value CAD$ Outstanding as of February 28, 2022 2,339,928 $ 0.62 Granted 1,525,000 $ 0.14 Forfeited (767,300) $ 0.30 Vested (875,601) $ 0.77 Outstanding as of November 30, 2022 2,222,027 $ 0.35 |
RESEARCH AND DEVELOPMENT EXPE_2
RESEARCH AND DEVELOPMENT EXPENSES (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
RESEARCH AND DEVELOPMENT EXPENSES | |
Schedule of significant components of research and development expense | Three Months Ended November 30, Nine Months Ended November 30, 2022 2021 2022 2021 Product development consulting expense $ — $ — $ 40,456 $ 48,630 Depreciation of lab related equipment 26,251 28,389 82,523 87,108 Depreciation of the intangible license 3,890 4,177 12,084 9,673 Depreciation of right-of-use asset 31,011 29,448 91,884 87,364 Lab administration and supplies 101,100 141,042 428,564 395,768 Materials 60,232 327,210 415,735 999,528 Rent expense 2,821 754 7,522 1,508 Travel 482 5,109 12,282 17,554 Salaries 630,764 886,232 2,146,302 2,699,286 Share-based compensation 30,785 83,663 119,738 363,337 Total research and development expenses $ 887,336 $ 1,506,024 $ 3,357,090 $ 4,709,756 |
GENERAL AND ADMINISTRATIVE EX_2
GENERAL AND ADMINISTRATIVE EXPENSES (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
GENERAL AND ADMINISTRATIVE EXPENSES | |
Significant components of general and administrative expenses | Three Months Ended November 30, Nine Months Ended November 30, 2022 2021 2022 2021 Office and administration $ 12,144 $ 12,565 $ 31,703 $ 44,037 Depreciation of property and equipment 12,196 12,382 36,780 36,708 Depreciation of right-of-use asset 53,927 51,356 159,785 152,056 Consulting 156 430 392 3,119 Promotional services 8,611 110,776 25,614 257,040 Professional fees 189,308 101,743 591,889 258,194 Insurance 9,237 5,008 24,315 12,352 Interest expense (right-of-use asset) 12,087 16,221 39,408 51,657 Rent expense 4,905 1,311 15,655 2,622 Transfer agent and filing fees 7,693 27,533 20,082 66,097 Travel 399 2,467 3,497 3,055 Salaries 52,780 62,764 144,212 134,889 Share-based compensation 107,556 139,498 330,910 585,289 Total general and administrative expenses $ 470,999 $ 544,054 $ 1,424,242 $ 1,607,115 |
SALES, MARKETING AND PROMOTIO_2
SALES, MARKETING AND PROMOTIONAL EXPENSES (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
SALES, MARKETING AND PROMOTIONAL EXPENSES | |
Significant components of marketing and promotional expenses | Three Months Ended November 30, Nine Months Ended November 30, 2022 2021 2022 2021 Sales, marketing and promotion $ 58,238 $ 131,950 $ 200,433 $ 509,670 Office and miscellaneous 5,170 7,000 10,523 7,096 Travel 7,182 20,604 26,135 31,561 Salaries 96,534 381,589 403,700 1,157,571 Share-based compensation 192 5,743 (10,943) 30,651 Total sales, marketing and promotional expenses $ 167,316 $ 546,886 $ 629,848 $ 1,736,549 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of accrued liabilities | November 30, 2022 February 28, 2022 Accrued payroll, compensation and benefits $ 80,657 $ 182,367 Accrued professional services 92,982 133,088 Other accrued expenses 13,532 36,720 Total accrued expenses and other current liabilities $ 187,171 $ 352,175 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Nov. 30, 2022 | |
SUPPLEMENTAL CASH FLOW INFORMATION | |
Schedule of supplemental cash flow information | November 30, 2022 November 30, 2021 Interest paid $ — $ — Taxes paid — — Total $ — $ — |
DESCRIPTION OF BUSINESS AND P_2
DESCRIPTION OF BUSINESS AND PRESENTATION OF FINANCIAL STATEMENTS (Details) - USD ($) | Nov. 30, 2022 | Feb. 28, 2022 |
DESCRIPTION OF BUSINESS AND PRESENTATION OF FINANCIAL STATEMENTS | ||
Cash and cash equivalents | $ 464,131 | $ 4,722,710 |
Accumulated deficit | $ (50,339,236) | $ (44,107,572) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES - Basis of Presentation (Details) | Nov. 30, 2022 | Nov. 30, 2021 |
Bionomics Diagnostics Inc. | ||
Basis of Presentation | ||
% Ownership Interest | 100% | 100% |
LexaGene, Inc. | ||
Basis of Presentation | ||
% Ownership Interest | 100% | 100% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES - Foreign Currency (Details) | Nov. 30, 2022 | Feb. 28, 2022 | Nov. 30, 2021 |
USD to CAD | |||
Foreign Currency | |||
Foreign exchange rate, Period end dates | 1.3508 | 1.2698 | |
Foreign exchange rate, Period averages | 1.3023 | 1.2470 | |
CAD to USD | |||
Foreign Currency | |||
Foreign exchange rate, Period end dates | 0.7403 | 0.7875 | |
Foreign exchange rate, Period averages | 0.7685 | 0.8021 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES - Segment Information (Details) | 9 Months Ended |
Nov. 30, 2022 item | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES | |
Number of operating segments | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES - Additional Information (Details) - USD ($) | 9 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES | ||
Fair value impairments | $ 0 | $ 0 |
Impairment losses | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES - Property and Equipment (Details) | 9 Months Ended |
Nov. 30, 2022 | |
Computer Equipment | |
Property and Equipment | |
Estimated useful life (in years) | 3 years |
Furniture and Fixtures | |
Property and Equipment | |
Estimated useful life (in years) | 7 years |
Lab Equipment | Minimum | |
Property and Equipment | |
Estimated useful life (in years) | 5 years |
Lab Equipment | Maximum | |
Property and Equipment | |
Estimated useful life (in years) | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES - Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | Feb. 28, 2022 | |
Revenue Recognition | |||||
Revenues | $ 42,912 | $ 48,309 | $ 117,886 | $ 88,934 | |
Current contract liabilities (deferred revenue) | 282 | 282 | $ 23,560 | ||
Amount recognized in revenue in connection with the contract liabilities | $ 23,278 | ||||
Minimum | |||||
Revenue Recognition | |||||
Advance payment or payment period for sales (in days) | 30 days | ||||
Maximum | |||||
Revenue Recognition | |||||
Advance payment or payment period for sales (in days) | 60 days | ||||
Product | |||||
Revenue Recognition | |||||
Revenues | $ 42,912 | $ 48,309 | $ 117,886 | $ 88,934 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES - Basic and Diluted Net Loss per Share (Details) | 9 Months Ended |
Nov. 30, 2022 shares | |
Securities that may potentially dilute earnings per share in the future that were not included in the calculation | |
Total | 32,065,024 |
Vested (in shares) | 1,654,600 |
Warrants | |
Securities that may potentially dilute earnings per share in the future that were not included in the calculation | |
Total | 26,352,247 |
Stock Options | |
Securities that may potentially dilute earnings per share in the future that were not included in the calculation | |
Total | 3,490,750 |
Restricted Share Units | |
Securities that may potentially dilute earnings per share in the future that were not included in the calculation | |
Total | 2,222,027 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | 9 Months Ended | |
Nov. 30, 2022 | Feb. 28, 2022 | |
Accounts receivable | ||
Accounts receivable | $ 51,643 | $ 14,375 |
Total accounts receivable, net | $ 51,643 | $ 14,375 |
Minimum | ||
Accounts receivable | ||
Advance payment or payment period for sales (in days) | 30 days | |
Maximum | ||
Accounts receivable | ||
Advance payment or payment period for sales (in days) | 60 days |
ACCOUNTS RECEIVABLE - Ageing an
ACCOUNTS RECEIVABLE - Ageing analysis of trade receivables (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2022 | Feb. 28, 2022 | |
Ageing analysis of trade receivables | ||
Total accounts receivable, net | $ 51,643 | $ 14,375 |
Amount receivable in relation to GST refunds | $ 12,146 | |
Amount received | 14,375 | |
Period related to GST receivable (in days) | 120 days | |
Financial Asset, Not Past Due | ||
Ageing analysis of trade receivables | ||
Total accounts receivable, net | $ 43,806 | 7,368 |
Past due 31-60 days | ||
Ageing analysis of trade receivables | ||
Total accounts receivable, net | 1,250 | |
Past due 61-120 days | ||
Ageing analysis of trade receivables | ||
Total accounts receivable, net | 2,965 | |
Past due more than 120 days | ||
Ageing analysis of trade receivables | ||
Total accounts receivable, net | $ 6,587 | $ 4,042 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Nov. 30, 2022 | Feb. 28, 2022 |
INVENTORIES | ||
Raw materials | $ 735,808 | $ 724,584 |
Work-in-process | 542,833 | 584,243 |
Finished goods | 166,453 | 87,396 |
Total inventories | $ 1,445,094 | $ 1,396,223 |
INTANGIBLE LICENSE - schedule o
INTANGIBLE LICENSE - schedule of changes in carrying value of the intangible license (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | Feb. 28, 2022 | |
Cost | |||||
Balance, February 28, 2022 | $ 115,420 | ||||
Effect of foreign exchange differences | (6,918) | ||||
Balance November 30, 2022 | $ 108,502 | 108,502 | |||
Accumulated amortization | |||||
Balance, February 28, 2022 | 67,229 | ||||
Additions | 3,890 | $ 4,177 | 12,084 | $ 9,673 | |
Effect of foreign exchange differences | (4,464) | ||||
Balance November 30, 2022 | 74,849 | 74,849 | |||
Carrying values | |||||
Intangible assets caring value | $ 33,653 | $ 33,653 | $ 48,191 |
INTANGIBLE LICENSE (Details)
INTANGIBLE LICENSE (Details) - USD ($) | 9 Months Ended | |||||||
Feb. 28, 2023 | Feb. 28, 2021 | Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 29, 2016 | Feb. 04, 2015 | Nov. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||||||
Payment of US Maintenance Patent Fee | $ 15,000 | $ 15,000 | $ 45,000 | |||||
payment of license issue fee from Sublicensing | 50% | |||||||
Percentage of Annual royalty due on net sales | 3% | |||||||
Payment of Minimum annual Royalty | $ 25,000 | $ 10,000 | $ 10,000 | $ 5,000 | ||||
Forecast | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Payment of US Maintenance Patent Fee | $ 15,000 | |||||||
License agreement with LLNS | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Payment of license Issue Fee | $ 60,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 9 Months Ended | |
Nov. 30, 2022 | Feb. 28, 2022 | |
Cost | ||
Balance at the beginning | $ 972,018 | |
Balance at the ending | 972,018 | |
Accumulated amortization | ||
Balance at the beginning | 602,569 | |
Additions | 119,303 | |
Balance at the ending | 721,872 | |
Property and equipment, net | 250,146 | $ 369,449 |
Computer Equipment | ||
Cost | ||
Balance at the beginning | 15,577 | |
Balance at the ending | 15,577 | |
Accumulated amortization | ||
Balance at the beginning | 14,729 | |
Additions | 848 | |
Balance at the ending | 15,577 | |
Lab Equipment | ||
Cost | ||
Balance at the beginning | 448,936 | |
Balance at the ending | 448,936 | |
Accumulated amortization | ||
Balance at the beginning | 302,835 | |
Additions | 61,378 | |
Balance at the ending | 364,213 | |
Furniture and Fixtures | ||
Cost | ||
Balance at the beginning | 88,062 | |
Balance at the ending | 88,062 | |
Accumulated amortization | ||
Balance at the beginning | 56,898 | |
Additions | 11,058 | |
Balance at the ending | 67,956 | |
Leasehold Improvements | ||
Cost | ||
Balance at the beginning | 419,443 | |
Balance at the ending | 419,443 | |
Accumulated amortization | ||
Balance at the beginning | 228,107 | |
Additions | 46,019 | |
Balance at the ending | $ 274,126 |
RIGHT-OF-USE ASSET AND LEASE _3
RIGHT-OF-USE ASSET AND LEASE LIABILITY - Lease liability (Details) - USD ($) | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Feb. 28, 2022 | |
RIGHT-OF-USE ASSET AND LEASE LIABILITY | |||
Balance February 28, 2022 | $ 1,163,379 | ||
Interest expense | 39,408 | $ 51,657 | |
Lease payments | (291,077) | $ (291,077) | |
Balance, November 30, 2022 | 911,710 | ||
Current portion of the lease liability | (350,550) | $ (325,271) | |
Non -current portion of the lease liability, November 30, 2022 | $ 561,160 | $ 838,108 |
RIGHT-OF-USE ASSET AND LEASE _4
RIGHT-OF-USE ASSET AND LEASE LIABILITY - Right-of-use asset (Details) - USD ($) | 9 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2021 | |
RIGHT-OF-USE ASSET AND LEASE LIABILITY | ||
Balance, February 28, 2022 | $ 1,161,956 | |
Depreciation | (251,669) | $ (239,420) |
Balance, November 30, 2022 | $ 910,287 | |
Lease interest rate | 5% |
RIGHT-OF-USE ASSET AND LEASE _5
RIGHT-OF-USE ASSET AND LEASE LIABILITY - Maturities of operating lease liabilities (Details) - USD ($) | Nov. 30, 2022 | Feb. 28, 2022 |
RIGHT-OF-USE ASSET AND LEASE LIABILITY | ||
2023 | $ 97,026 | |
2024 | 388,103 | |
2025 | 388,103 | |
2026 | 97,026 | |
Total lease payments | 970,258 | |
Less imputed interest | (58,548) | |
Total lease liability (current and long-term) | $ 911,710 | $ 1,163,379 |
CREDIT AGREEMENTS (Details)
CREDIT AGREEMENTS (Details) | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2022 USD ($) | Nov. 01, 2022 USD ($) $ / shares | Nov. 30, 2022 USD ($) | Nov. 30, 2022 USD ($) | Nov. 01, 2022 $ / shares | |
CREDIT AGREEMENTS | |||||
Interest expense | $ 5,787 | $ 5,787 | |||
Convertible note payable | |||||
CREDIT AGREEMENTS | |||||
Aggregate principal amount | $ 900,000 | $ 1,600,000 | 900,000 | 900,000 | |
Amount of issuance costs paid | $ 67,564 | ||||
Interest rate (in percentage) | 12% | ||||
Conversion rate, per share | (per share) | $ 0.17 | $ 0.23 | |||
Interest rate, accrual percentage per annum | 16% | ||||
Interest expense | $ 5,787 | $ 5,787 | |||
Convertible note payable | Maximum | |||||
CREDIT AGREEMENTS | |||||
Equity financing received | $ 5,000,000 |
CREDIT AGREEMENTS - Net carryin
CREDIT AGREEMENTS - Net carrying value of the Note (Details) - USD ($) | Nov. 30, 2022 | Nov. 01, 2022 |
CREDIT AGREEMENTS | ||
Convertible note payable, net | $ 845,502 | |
Convertible note payable | ||
CREDIT AGREEMENTS | ||
Principal | 900,000 | $ 1,600,000 |
Unamortized debt issuance costs | (54,498) | |
Convertible note payable, net | $ 845,502 |
EQUITY - Common Shares (Details
EQUITY - Common Shares (Details) | 9 Months Ended | |
Nov. 30, 2022 Vote $ / shares | Feb. 28, 2022 $ / shares | |
EQUITY | ||
Common shares, par value (in dollars per share) | $ / shares | $ 0 | $ 0 |
Number of votes per common share | Vote | 1 |
EQUITY - Share Offering Warrant
EQUITY - Share Offering Warrants (Details) | 1 Months Ended | |||||
Oct. 27, 2022 USD ($) | Feb. 28, 2022 USD ($) Y $ / shares shares | Feb. 28, 2022 CAD ($) $ / shares shares | Oct. 27, 2022 $ / shares shares | Oct. 26, 2022 $ / shares | Feb. 28, 2022 $ / shares | |
Class of Warrant or Right [Line Items] | ||||||
Number of units issued | 18,500,000 | 18,500,000 | ||||
Unit price | $ / shares | $ 0.35 | |||||
Aggregate purchase price | $ 4,995,000 | $ 6,475,000 | ||||
Number of shares per unit | 1 | 1 | ||||
Number of warrants per unit | 1 | 1 | ||||
Number of shares per warrant | 1 | |||||
Exercise price | (per share) | $ 0.36 | $ 0.23 | $ 0.75 | $ 0.45 | ||
Warrants term | 36 months | |||||
Value of the warrants | $ | $ 1,139,791 | |||||
Warrant modification, number of warrants of which term is extended | 7,776,893 | |||||
Warrant modification, period extended | 1 month | |||||
Warrant modification, additional value recognized related to warrants | $ | $ 340,385 | |||||
Measurement Input, Price Volatility | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants, measurement input | 80 | 278 | ||||
Measurement Input, Risk Free Interest Rate | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants, measurement input | 1.35 | 3.85 | ||||
Measurement Input, Expected Term | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants, measurement input | 1.58 | 0.08 | ||||
Measurement Input, Expected Dividend Rate | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants, measurement input | 0 | 0 |
EQUITY - Number of warrants out
EQUITY - Number of warrants outstanding (Details) | 9 Months Ended | |
Nov. 30, 2022 $ / shares shares | Nov. 30, 2022 $ / shares shares | |
EQUITY | ||
Warrants at beginning of the period | 34,579,760 | 34,579,760 |
Exercised | (1,536,269) | (1,536,269) |
Expired | (6,691,244) | (6,691,244) |
Warrants at end of the period | 26,352,247 | 26,352,247 |
Weighted Average Exercise Price Per Warrant, at the beginning of the period | (per share) | $ 0.66 | $ 0.52 |
Exercised | $ / shares | 0.23 | |
Expired | $ / shares | 0.25 | |
Weighted Average Exercise Price Per Warrant, at the end of the period | (per share) | $ 0.64 | $ 0.47 |
EQUITY - Warrants outstanding (
EQUITY - Warrants outstanding (Details) | 9 Months Ended | 12 Months Ended | ||||
Nov. 30, 2022 $ / shares shares | Feb. 28, 2022 $ / shares shares | Nov. 30, 2022 $ / shares shares | Oct. 27, 2022 $ / shares | Oct. 26, 2022 $ / shares | Feb. 28, 2022 $ / shares shares | |
Class of Warrant or Right [Line Items] | ||||||
Number of warrants | 26,352,247 | 34,579,760 | 26,352,247 | 34,579,760 | ||
Exercise price | (per share) | $ 0.45 | $ 0.23 | $ 0.75 | $ 0.36 | ||
Weighted average remaining contractual life of warrants | 1 year 9 months 7 days | 2 years 29 days | ||||
Weighted average exercise price | (per share) | $ 0.64 | $ 0.66 | $ 0.47 | $ 0.52 | ||
Warrants, Expiring At Nineth September Twenty Twenty Three | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of warrants | 7,852,247 | 7,852,247 | ||||
Exercise price | $ / shares | $ 1.10 | |||||
Warrants, Expiring At Seventh February Twenty Twenty Five | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of warrants | 13,115,275 | 13,115,275 | ||||
Exercise price | $ / shares | $ 0.45 | |||||
Warrants, Expiring At Eighteenth February Twenty Twenty Five | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of warrants | 5,384,725 | 5,384,725 | ||||
Exercise price | $ / shares | $ 0.45 |
SHARE-BASED COMPENSATION - Omni
SHARE-BASED COMPENSATION - Omnibus incentive plan (Details) | 9 Months Ended | ||||||||||||||
Feb. 28, 2025 | Dec. 29, 2024 | Aug. 29, 2024 | Mar. 29, 2024 | Oct. 29, 2023 | May 29, 2023 | Dec. 29, 2022 | Jul. 29, 2022 $ / shares shares | Nov. 30, 2022 USD ($) | Nov. 30, 2022 $ / shares shares | Nov. 30, 2022 $ / shares shares | Jul. 28, 2022 $ / shares | Feb. 28, 2022 shares | Nov. 30, 2021 $ / shares | Nov. 30, 2021 $ / shares | |
SHARE-BASED COMPENSATION | |||||||||||||||
Number of shares exercisable for each option | 1 | ||||||||||||||
Exercise price of option exercisable | $ / shares | $ 0.20 | $ 0.64 | |||||||||||||
Term of option to be exercised | 6 years 5 months 26 days | ||||||||||||||
Close Price of share in Stock exchange | $ / shares | $ 0.13 | ||||||||||||||
Options Exercisable (in shares) | 1,654,600 | 1,654,600 | 1,987,300 | ||||||||||||
Employees | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Term of option to be exercised | 5 years | ||||||||||||||
Officer of the Company | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Term of option to be exercised | 10 years | ||||||||||||||
Tranche One | Non insider employees | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Vesting rights (in percentage) | 10% | ||||||||||||||
Tranche Two | Non insider employees | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Vesting rights (in percentage) | 15% | ||||||||||||||
Average | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Share price (in dollars/CAD per share) | (per share) | $ 0.18 | $ 0.13 | $ 0.62 | $ 0.50 | |||||||||||
Options | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Common stock reserved for issuance (in shares) | 8,354,070 | 8,354,070 | |||||||||||||
Requisite service period (in years) | 10 years | ||||||||||||||
Options | Officer of the Company | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Options granted | 150,000 | ||||||||||||||
Options | Non insider employees | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Options granted | 935,000 | ||||||||||||||
RSU | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Common stock reserved for issuance (in shares) | 8,354,070 | 8,354,070 | |||||||||||||
Threshold expiration period (in years) | 3 years | ||||||||||||||
Number of shares issued for each award (in shares) | 1 | 1 | |||||||||||||
Total fair value of shares vested | $ | $ 502,591 | ||||||||||||||
Total intrinsic value of the RSUs released | $ | $ 134,478 | ||||||||||||||
RSU | Employees | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Options granted | 1,275,000 | ||||||||||||||
Vesting rights (in percentage) | 15% | 15% | 15% | 15% | 15% | 15% | 10% | ||||||||
RSU | Officer of the Company | |||||||||||||||
SHARE-BASED COMPENSATION | |||||||||||||||
Options granted | 250,000 |
SHARE-BASED COMPENSATION - Numb
SHARE-BASED COMPENSATION - Number of Stock Options Outstanding (Details) | 9 Months Ended | 12 Months Ended | |||
Nov. 30, 2022 $ / shares shares | Nov. 30, 2022 $ / shares $ / shares shares | Feb. 28, 2022 $ / shares shares | Feb. 28, 2022 $ / shares shares | Jul. 29, 2022 $ / shares | |
Number of Options (in shares) | |||||
Outstanding as of the beginning | 4,266,000 | 4,266,000 | |||
Granted | 1,085,000 | 1,085,000 | |||
Forfeited (and expired) | (1,860,250) | (1,860,250) | |||
Outstanding as of the end | 3,490,750 | 3,490,750 | 4,266,000 | 4,266,000 | |
Exercisable / vested as of the end | 1,654,600 | 1,654,600 | 1,987,300 | 1,987,300 | |
Weighted-Average Exercise Price per Option (in CAD$ per share) | |||||
Outstanding as of the beginning | (per share) | $ 0.61 | $ 0.48 | |||
Granted | $ / shares | 0.20 | ||||
Forfeited (and expired) | $ / shares | 0.53 | ||||
Outstanding as of the end | (per share) | 0.53 | $ 0.39 | $ 0.61 | $ 0.48 | |
Exercise price of option exercisable | $ / shares | $ 0.64 | $ 0.64 | $ 0.20 | ||
Weighted-Average Remaining Contract Term (in years) | |||||
Outstanding Period | 6 years 1 month 13 days | 6 years 1 month 13 days | 5 years 29 days | 5 years 29 days | |
Granted | 5 years 8 months 8 days | 5 years 8 months 8 days | |||
Exercisable / vested | 6 years 5 months 26 days | 6 years 5 months 26 days |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Stock Options Outstanding (Details) - $ / shares | Nov. 30, 2022 | Feb. 28, 2022 |
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 3,490,750 | 4,266,000 |
Options Exercisable (in shares) | 1,654,600 | 1,987,300 |
Stock options expiring on December 9, 2023 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 17,500 | |
Options Exercisable (in shares) | 12,250 | |
Exercise Price (in CAD$ per share) | $ 0.82 | |
Stock options expiring on December 10, 2024 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 294,000 | |
Options Exercisable (in shares) | 123,000 | |
Exercise Price (in CAD$ per share) | $ 0.79 | |
Stock options expiring on May 28, 2025 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 306,750 | |
Options Exercisable (in shares) | 182,550 | |
Exercise Price (in CAD$ per share) | $ 0.49 | |
Stock options expiring on September 17, 2025 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 100,000 | |
Options Exercisable (in shares) | 100,000 | |
Exercise Price (in CAD$ per share) | $ 0.81 | |
Stock options expiring on January 10, 2027 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 183,500 | |
Options Exercisable (in shares) | 23,750 | |
Exercise Price (in CAD$ per share) | $ 0.285 | |
Stock options expiring on July 29, 2027 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 650,000 | |
Exercise Price (in CAD$ per share) | $ 0.20 | |
Stock options expiring on February 19, 2030 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 225,000 | |
Options Exercisable (in shares) | 168,750 | |
Exercise Price (in CAD$ per share) | $ 0.72 | |
Stock options expiring on April 24, 2030 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 100,000 | |
Options Exercisable (in shares) | 75,000 | |
Exercise Price (in CAD$ per share) | $ 0.63 | |
Stock options expiring on September 17, 2030 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 350,000 | |
Options Exercisable (in shares) | 350,000 | |
Exercise Price (in CAD$ per share) | $ 0.66 | |
Stock options expiring on May 11, 2031 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 324,000 | |
Options Exercisable (in shares) | 199,800 | |
Exercise Price (in CAD$ per share) | $ 0.66 | |
Stock options expiring on May 28, 2031 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 690,000 | |
Options Exercisable (in shares) | 379,500 | |
Exercise Price (in CAD$ per share) | $ 0.59 | |
Stock options expiring on November 11, 2031 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 100,000 | |
Options Exercisable (in shares) | 40,000 | |
Exercise Price (in CAD$ per share) | $ 0.66 | |
Stock options expiring on July 29, 2032 | ||
SHARE-BASED COMPENSATION | ||
Options Outstanding (in shares) | 150,000 | |
Exercise Price (in CAD$ per share) | $ 0.20 |
SHARE-BASED COMPENSATION - Nu_2
SHARE-BASED COMPENSATION - Number of restricted share awards outstanding under the OIP Plan (Details) | 9 Months Ended |
Nov. 30, 2022 $ / shares shares | |
Number of Shares (in shares) | |
Outstanding as of the beginning | shares | 2,339,928 |
Granted | shares | 1,525,000 |
Forfeited | shares | (767,300) |
Vested | shares | (875,601) |
Outstanding as of the end | shares | 2,222,027 |
Weighted-Average Grant Date Value (in CAD$ per share) | |
Outstanding as of the beginning | $ / shares | $ 0.62 |
Granted | $ / shares | 0.14 |
Forfeited | $ / shares | 0.30 |
Vested | $ / shares | 0.77 |
Outstanding as of the end | $ / shares | $ 0.35 |
RESEARCH AND DEVELOPMENT EXPE_3
RESEARCH AND DEVELOPMENT EXPENSES (Details) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 USD ($) | Nov. 30, 2021 USD ($) | Nov. 30, 2022 USD ($) item | Nov. 30, 2021 USD ($) | |
RESEARCH AND DEVELOPMENT EXPENSES | ||||
Number of phases in Company's product research and development plan | item | 3 | |||
Product development consulting expense | $ 40,456 | $ 48,630 | ||
Depreciation of lab related equipment | $ 26,251 | $ 28,389 | 82,523 | 87,108 |
Depreciation of intangible license | 3,890 | 4,177 | 12,084 | 9,673 |
Depreciation of right-of-use asset | 31,011 | 29,448 | 91,884 | 87,364 |
Lab administration and supplies | 101,100 | 141,042 | 428,564 | 395,768 |
Materials | 60,232 | 327,210 | 415,735 | 999,528 |
Rent expense | 2,821 | 754 | 7,522 | 1,508 |
Travel | 482 | 5,109 | 12,282 | 17,554 |
Salaries | 630,764 | 886,232 | 2,146,302 | 2,699,286 |
Share-based compensation | 30,785 | 83,663 | 119,738 | 363,337 |
Total research and development expenses | $ 887,336 | $ 1,506,024 | $ 3,357,090 | $ 4,709,756 |
GENERAL AND ADMINISTRATIVE EX_3
GENERAL AND ADMINISTRATIVE EXPENSES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
GENERAL AND ADMINISTRATIVE EXPENSES | ||||
Office and administration | $ 12,144 | $ 12,565 | $ 31,703 | $ 44,037 |
Depreciation of property and equipment | 12,196 | 12,382 | 36,780 | 36,708 |
Depreciation of right-of-use asset | 53,927 | 51,356 | 159,785 | 152,056 |
Consulting | 156 | 430 | 392 | 3,119 |
Promotional services | 8,611 | 110,776 | 25,614 | 257,040 |
Professional fees | 189,308 | 101,743 | 591,889 | 258,194 |
Insurance | 9,237 | 5,008 | 24,315 | 12,352 |
Interest expense (right-of-use asset) | 12,087 | 16,221 | 39,408 | 51,657 |
Rent expense | 4,905 | 1,311 | 15,655 | 2,622 |
Transfer agent and filing fees | 7,693 | 27,533 | 20,082 | 66,097 |
Travel | 399 | 2,467 | 3,497 | 3,055 |
Salaries | 52,780 | 62,764 | 144,212 | 134,889 |
Share-based compensation | 107,556 | 139,498 | 330,910 | 585,289 |
Total general and administrative expenses | $ 470,999 | $ 544,054 | $ 1,424,242 | $ 1,607,115 |
SALES, MARKETING AND PROMOTIO_3
SALES, MARKETING AND PROMOTIONAL EXPENSES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Nov. 30, 2021 | Nov. 30, 2022 | Nov. 30, 2021 | |
SALES, MARKETING AND PROMOTIONAL EXPENSES | ||||
Sales, marketing and promotion | $ 58,238 | $ 131,950 | $ 200,433 | $ 509,670 |
Office and miscellaneous | 5,170 | 7,000 | 10,523 | 7,096 |
Travel | 7,182 | 20,604 | 26,135 | 31,561 |
Salaries | 96,534 | 381,589 | 403,700 | 1,157,571 |
Share-based compensation | 192 | 5,743 | (10,943) | 30,651 |
Total sales, marketing and promotional expenses | $ 167,316 | $ 546,886 | $ 629,848 | $ 1,736,549 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2022 | Nov. 30, 2021 | |
INCOME TAXES | |||
Effective income tax rate | 0% | 0% | |
Statutory income tax rate | 21% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Nov. 30, 2022 USD ($) item | Feb. 28, 2022 USD ($) |
COMMITMENTS AND CONTINGENCIES | ||
Number of pending litigations | item | 0 | |
Accrued Liabilities | ||
Accrued payroll, compensation and benefits | $ 80,657 | $ 182,367 |
Accrued professional services | 92,982 | 133,088 |
Other accrued expenses | 13,532 | 36,720 |
Total accrued expenses and other current liabilities | $ 187,171 | $ 352,175 |