BriaCell Therapeutics Corp 10-Q for FY2023 Q3
BriaCell Therapeutics Corp. (BCTX)
About this 10-Q
BriaCell Therapeutics Corp filed this 10-Q on June 14, 2023, covering the quarter ended April 30, 2023 (FY2023 Q3).
Headline figures
Quarter ended April 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $4.9M
- compared with a net loss of $10.02M a year earlier
- Diluted EPS
- -$0.32
- compared with -$0.65 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
For the transition period from to
Commission
File No.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices, including zip code) |
| (Registrant’s telephone number, including area code) |
| N/A |
| (Former name, former address and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| The Stock Market LLC | ||||
| The Stock Market LLC |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☐ Large accelerated filer | ☐Accelerated filer | |
| ☒
|
||
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
As of June 14, 2023, there were common shares, no par value per share, of the Company issued and outstanding.
BRIACELL THERAPEUTICS CORP.
Form 10-Q
Table of Contents
| 2 |
PART I-FINANCIAL
INFORMATION
Item 1. Financial Statements
BRIACELL THERAPEUTICS CORP.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| April 30, 2023 | July 31, 2022 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Amounts receivable | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| NON-CURRENT ASSETS: | ||||||||
| Investments | ||||||||
| Intangible assets, net | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Trade payables | $ | $ | ||||||
| Accrued expenses and other payables (Note 7) | ||||||||
| Total current liabilities | ||||||||
| NON-CURRENT LIABILITIES: | ||||||||
| Warrant liability | ||||||||
| Total non-current liabilities | ||||||||
| SHAREHOLDERS’ EQUITY: | ||||||||
| Share Capital of par value - Authorized: at April 30, 2023 and July 31, 2022 ; Issued and outstanding: and shares April 30, 2023 and July 31, 2022, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and shareholders’ equity (deficit) | $ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 3 |
BriaCell Therapeutics Corp.
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Three months ended April 30, | Nine months ended April 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Operating Expenses: | ||||||||||||||||
| Research and development expenses | $ | $ | $ | |||||||||||||
| General and administrative expenses (Note 7) | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Financial income (expenses), net | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss for the period | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss for the period | $ | ( | ) | $ | ( | ) | $ | ( | ) | ( | ) | |||||
| Loss per share – basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of shares used in computing net basic earnings per share of common stock | ||||||||||||||||
| Weighted average number of shares used in computing net diluted earnings per share of common stock | ||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 4 |
BRIACELL THERAPEUTICS CORP.
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity
| Number | Amount | capital | loss | deficit | Equity | |||||||||||||||||||
| Share capital | Additional paid in | Accumulated other comprehensive | Accumulated | Total shareholders’ | ||||||||||||||||||||
| Number | Amount | capital | loss | deficit | Equity | |||||||||||||||||||
| Balance, January 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| Exercise of public offering warrants | ||||||||||||||||||||||||
| Issuance of options | - | |||||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, April 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| Share capital | Additional paid in | Accumulated other comprehensive | Accumulated | Total shareholders’ equity | ||||||||||||||||||||
| Number | Amount | capital | loss | deficit | (deficit) | |||||||||||||||||||
| Balance, July 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Exercise of public offering warrants | ||||||||||||||||||||||||
| Issuance of options | - | |||||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, April 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| 5 |
| Share capital | Additional paid in | Accumulated other comprehensive | Accumulated | Total shareholders’ | ||||||||||||||||||||
| Number | Amount | capital | loss | deficit | equity | |||||||||||||||||||
| Balance, January 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Exercise of representation warrants | ||||||||||||||||||||||||
| Exercise of private placement warrants | ||||||||||||||||||||||||
| Exercise of public offering warrants | ||||||||||||||||||||||||
| Issuance of options | - | |||||||||||||||||||||||
| Shares cancelled | ( | ) | ||||||||||||||||||||||
| Expiration of options | - | ( | ) | |||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, April 30, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Share capital | Additional paid in | Accumulated other comprehensive | Accumulated | Total shareholders’ equity | ||||||||||||||||||||
| Number | Amount | capital | loss | deficit | (deficit) | |||||||||||||||||||
| Balance, July 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Beginning balance | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Exercise of representation warrants | ||||||||||||||||||||||||
| Exercise of private placement warrants | ||||||||||||||||||||||||
| Exercise of public offering warrants | ||||||||||||||||||||||||
| Issuance of options | - | |||||||||||||||||||||||
| Shares repurchased and canceled | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Expiration of options | - | ( | ) | |||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, April 30, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Ending balance | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 6 |
BriaCell Therapeutics Corp.
Unaudited Condensed Consolidated Statement of Cash Flows
| 2023 | 2022 | |||||||
| Nine months ended April 30, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash flow from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Share-based compensation | ||||||||
| Interest expense | ||||||||
| Gain from government grant | ( | ) | ||||||
| Change in fair value of warrants | ||||||||
| Changes in assets and liabilities: | ||||||||
| Decrease in amounts receivable | ( | ) | ||||||
| Increase in prepaid expenses | ( | ) | ( | ) | ||||
| Increase in accounts payable | ||||||||
| Decrease in accrued expenses and other payables | ( | ) | ( | ) | ||||
| Total cash flow from operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Share and warrant buyback program | ( | ) | ( | ) | ||||
| Repayment government grant | ( | ) | ||||||
| Total cash flow from financing activities | ( | ) | ( | ) | ||||
| Decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Cash and cash equivalents at end of the period | $ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 7 |
NOTE 1: GENERAL
| a. | BriaCell Therapeutics Corp. (“BriaCell” or the “Company”) was incorporated under the Business Corporations Act (British Columbia) on July 26, 2006 and is listed on the Toronto Stock Exchange (“TSX”). under the symbol “BCT” and on the Nasdaq Capital Market (“NASDAQ”) under the symbols “BCTX” and “BCTXW”. | |
| b. | BriaCell owns the U.S. and Japanese patents to SV-BR-1-GM (“Bria-IMT™”), a whole-cell targeted immunotherapy for cancer (U.S. Patent No. 7,674,456, U.S. Patent No. 11,559,574 B2, Japanese Patent No. 6901505), as well as patents related to PKCδ inhibitors (U.S. Patent Nos. 9,364,460 and 9,572,793). The Company is currently advancing its targeted immunotherapy program by prioritizing a Phase II clinical trial with Bria-IMT™ in combination with an immune checkpoint inhibitor. | |
| c. | Basis of presentation of the financial statements: |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X promulgated by the U.S Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments consisting of a normal recurring nature which are necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report for the year ended July 31, 2022, filed with the SEC on October 28, 2022. The interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
Prior to 2021, the Company prepared its financial statements, including its condensed financial statements, in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), as permitted in the United States based on the Company’s qualification as a “foreign private issuer” under the rules and regulations of the SEC. In connection with the loss of the Company’s status as a foreign private issuer effective on August 1, 2022, the Company, as a domestic filer, prepares its consolidated financial statements in accordance with U.S. GAAP, and restated its condensed consolidated financial statements as of April 30, 2022, to be prepared in accordance with U.S. GAAP.
| d. | The
Company continues to devote substantially all of its efforts toward research and development activities. In the course of such activities,
the Company has sustained operating losses and expects such losses to continue in the foreseeable future. The Company’s accumulated
deficit as of April 30, 2023, was $ |
| e. | The
Company has a wholly-owned U.S. subsidiary, BriaCell Therapeutics Corp. (“BTC”), which was incorporated in April 3, 2014,
under the laws of the state of Delaware. BTC has a wholly-owned subsidiary, Sapientia Pharmaceuticals, Inc. (“Sapientia”
and, together with BTC, the “Subsidiaries”), which was incorporated in September 20, 2012, under the laws of the state
of Delaware. The Company has |
| 8 |
| f. | The Company may face difficulties recruiting or retaining patients in our ongoing and planned clinical trials if patients are affected by COVID-19 or are fearful of visiting or traveling to our clinical trial sites because of a new outbreak of COVID-19, or of a new variant thereof, or of another pandemic. In the event that clinical trial sites are slowed down or closed to enrolment in our trials, this could have a material adverse impact on our clinical trial plans and timelines. The Company currently believes that the execution of our clinical trials and research programs were delayed by at least one quarter due to COVID-19. Although future delays appear unlikely, they cannot be ruled out. |
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
a. Use of estimates:
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company’s management believes that the estimates, judgments, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities at the dates of the consolidated financial statements and the reported amount of expenses during the reporting periods. Actual results could differ from those estimates.
b. Recently issued and adopted accounting standards:
The Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company as an “emerging growth company” to delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election.
| 1. | In June 2016, the FASB issued ASU No. 2016-13 (Topic 326), Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The guidance will be effective for the Company for fiscal years beginning after December 15, 2022. Early adoption is permitted. Effective August 1, 2021, the Company early adopted ASU 2016-13. Adoption of the new standard did not have a material impact on the financial statements. |
| 2. | In August 2020, the FASB issued 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The final guidance issued by the FASB for convertible instruments eliminates two of the three models in ASC 470-20 that require separate accounting for embedded conversion features. Separate accounting is still required in certain cases. Additionally, among other changes, the guidance eliminates some of the conditions for equity classification in ASC 815-40-25 for contracts in an entity’s own equity. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. ASU 2020-06 is effective for the Company for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020. Effective August 1, 2021, the Company early adopted ASU 2020-06. Adoption of the new standard did not have a material impact on the financial statements. |
| 9 |
| 3. | In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance (ASU 2021-10), which improves the transparency of government assistance received by most business entities by requiring disclosure of: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity’s financial statements. This guidance is effective for financial statements issued for annual periods beginning after December 15, 2021. Early adoption is permitted. Adoption of the new standard did not have a material impact on the financial statements. |
NOTE 3: CONTINGENT LIABILITIES AND COMMITMENTS
| a. | Legal proceedings: |
On
May 24, 2023, the Company reached a settlement agreement with an investor who made certain claims against the Company and was seeking
monetary and injunctive relief, and against which the Company had filed counterclaims. Pursuant to the settlement agreement, the Company
paid $
| b. | Lease |
The
Company is currently on a month-to-month lease arrangement for office and lab space in Philadelphia, PA, in the amount of approximately
$
NOTE 4: FAIR VALUE MEASUREMENTS
The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of April 30, 2023, and July 31, 2022:
SCHEDULE OF FAIR VALUE ON A RECURRING BASIS
| Fair Value Measurements at | ||||||||||||||||||||||||
| April 30, 2023 | July 31, 2022 | |||||||||||||||||||||||
| Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||||||||
| Financial Assets: | ||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||||||
| Warrants liability | ||||||||||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
We classify our cash and cash equivalents and the liability in respect of publicly traded warrants within Level 1 because we use quoted market prices in active markets.
The fair value of the warrant liability for non-public warrants is measured using inputs other than quoted prices included in Level 1 that are observable for the liability either directly or indirectly, and thus are classified as Level 2 financial instruments.
NOTE 5: SHAREHOLDERS’ EQUITY (DEFICIT)
| a. | Authorized share capital |
The
authorized share capital consists of an number of common shares with
| 10 |
| b. | Issued share capital |
During
the nine-month period ended April 30, 2023,
c. Share buyback program
On September 9, 2021, the Company approved a repurchase program whereby the Company may purchase through the facilities of the TSX or NASDAQ (i) up to common shares (the “Common Shares”) and (ii) up to publicly traded BCTXW warrants (the “Listed Warrants”) in total, representing % of the Common Shares and % of the Listed Warrants comprising the “public float” as of September 8, 2021, over the next 12 months (the “Buyback”). Independent Trading Group (ITG) Inc. acted as the Company’s advisor and dealer manager in connection with the Buyback. The Company received final regulatory approval on September 22, 2021. On September 27, 2022, the Company completed the share buyback program, repurchasing a total of shares with a value of $ (net of commissions), none of which were repurchased during the nine month period ended April 30, 2023, and publicly traded warrants for $ (net of commissions) with a fair value of $, of which were repurchased and cancelled during the nine-month period ended April 30, 2023. All of the warrants and shares repurchased have been cancelled.
During the three month period ending April 30, 2022 a total of shares were canceled with a value of $ (net of commissions). All of these shares were recognized upon their repurchase within the three-month period ending January 31, 2022.
d. Share Purchase Warrants
SUMMARY OF CHANGES IN WARRANTS
| Number of warrants outstanding | Weighted average exercise price | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance, July 31, 2022 | $ | |||||||
| Exercised during the period | ( | ) | ( | ) | ||||
| Repurchased and cancelled during the period | ( | ) | ( | ) | ||||
| Balance, April 30, 2023 | ||||||||
SCHEDULE OF WARRANTS OUTSTANDING
| Number of Warrants | Exercise Price | Exercisable At April 30, 2023 | Expiry Date | |||||||||
| $ | ||||||||||||
| $ | – | |||||||||||
| $ | ||||||||||||
e) Compensation Warrants
| (i) | There were no changes to compensation warrants for the nine-month period ended April 30, 2023. | |
| (ii) | As at April 30, 2023, compensation warrants outstanding were as follows: |
SCHEDULE OF WARRANTS OUTSTANDING
| Number of Warrants | Exercise Price | Exercisable At April 30, 2023 | Expiry Date | |||||||||
| $ | ||||||||||||
| $ | ||||||||||||
| $ | ||||||||||||
| 11 |
f) Warrant liability continuity
The following table presents the summary of the changes in the fair value of the warrants:
SCHEDULE OF CHANGE IN FAIR VALUE OF WARRANTS
| Warrants liability | ||||
| Balance as of August 1, 2022 | $ | |||
| Exercise of warrants | $ | ( | ) | |
| Warrant buyback program | ( | ) | ||
| Change in fair value | $ | |||
| Balance as of April 30, 2023 | $ | |||
The key inputs used in the valuation of the warrants as of April 30, 2023 and at July 31, 2022 were as follows:
SCHEDULE OF VALUATION OF NON PUBLIC WARRANTS
| April 30, 2023 | July 31, 2022 | |||||||
| Share price | $ | $ | ||||||
| Exercise price | $ | - | $ | - | ||||
| Expected life (years) | - | - | ||||||
| Volatility | % | % | ||||||
| Dividend yield | % | % | ||||||
| Risk free rate | % | % | ||||||
| a. | On
August 2, 2022, the Company approved an omnibus equity incentive plan (“Omnibus Plan), which will permit the Company to grant
incentive stock options, preferred share units, restricted share units (“RSU’s”), and deferred share units (collectively,
the “Awards”) for the benefit of any employee, officer, director, or consultant of the Company or any subsidiary of the
Company. The maximum number of shares available for issuance under the Omnibus Plan shall not exceed |
| b. | The following table summarizes the number of options granted to directors, officers, employees and consultants under the option plan for nine-month period ended April 30, 2023 and related information: |
| Number of options | Weighted average exercise price | Weighted average remaining contractual term (in years) | Aggregate intrinsic value | |||||||||||||
| Balance as of July 31, 2022 | $ | $ | ||||||||||||||
| Granted(i & ii) | ||||||||||||||||
| Balance as of April 30, 2023 | $ | |||||||||||||||
| Exercisable as of April 30, 2023 | $ | $ | ||||||||||||||
| (i) | ||
| (ii) |
| 12 |
The weighted-average grant date per-share fair value of stock options granted during nine-month period ended April 30, 2023, was $. As of April 30, 2023, there are $ of total unrecognized costs related to share-based compensation that is expected to be recognized over a period of up to years.
| c. | The following table lists the inputs to the Black-Scholes option-pricing model used for the fair value measurement of equity-settled share options for the Company’s equity incentive plans for the three and nine months ended April 30, 2023, and 2022: |
Three months ended April 30, | Nine months ended April 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Dividend yield | % | % | % | % | ||||||||||||
| Expected volatility of the share prices | % | % | % | % | ||||||||||||
| Risk-free interest rate | % | %- | % | - | % | %- | % | |||||||||
| Expected term (in years) | ||||||||||||||||
| d. | The following table summarizes information about the Company’s outstanding and exercisable options granted to employees as of April 30, 2023: |
Exercise price | Options outstanding as of April 30, 2023 | Weighted average remaining contractual term (years) | Options exercisable as of April 30, 2023 | Weighted average remaining contractual term (years) | Expiry Date | |||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||
| 13 |
| e. | Restricted Share Unit Plan |
SCHEDULE OF RESTRICTED STOCK UNITS GRANTED
Number of RSU’s outstanding | Aggregate intrinsic value | |||||||
| Balance, July 31, 2022 | $ | |||||||
| Granted (i) | ||||||||
| Balance, April 30, 2023 | $ | |||||||
| (i) | On August 2, 2022, the Company issued RSU’s to the CEO. The RSU’s vested immediately and have an aggregate intrinsic value of $. |
SCHEDULE OF SHARE-BASED COMPENSATION EXPENSES
Three months ended April 30, | Nine months ended April 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Research and development expenses | $ | $ | $ | $ | ||||||||||||
| General and administrative expenses | ||||||||||||||||
| Total share-based compensation | $ | $ | $ | $ | ||||||||||||
NOTE 7: LOSS ON SETTLEMENT
On May 24, 2023, the Company reached a settlement
agreement with an investor who made certain claims against the Company and was seeking monetary and injunctive relief, and against which
the Company had filed counterclaims. Pursuant to the settlement agreement, the Company paid $
NOTE 8: FINANCIAL INCOME (EXPENSES), NET
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Three months ended April 30, | Nine months ended April 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Interest income | $ | $ | $ | $ | ||||||||||||
| Interest expense | ( | ) | ||||||||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ( | ) | ||||||||||
| Gain on government grant | ||||||||||||||||
| Foreign exchange gain (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Financial income (expenses), net | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
NOTE 9: SUBSEQUENT EVENTS
| a. | On May 12, 2023, subsequent
to the reporting period, the Company successfully completed a strategic investment by Prevail Partners, LLC (“Prevail Partners”), in
accordance with a stock purchase agreement (“Agreement”) entered into between BriaCell and Prevail Partners. Pursuant to the Agreement,
BriaCell issued common shares (“Shares”) to Prevail Partners at a price per share of $, resulting in aggregate gross proceeds
of $ |
| 14 |
| b. | On May 24, 2023, the Company entered into an Arrangement Agreement (the “Arrangement Agreement”) with BriaPro Therapeutics Corp., a British Columbia corporation and wholly-owned subsidiary of the Company, which was incorporated on May 15, 2023 (“SpinCo”), pursuant to which the Company will spin out certain of its pre-clinical pipeline assets, including Bria-TILsRx™ and protein kinase C delta (PKCδ) inhibitors for multiple indications including cancer (collectively, the “SpinCo Assets”), to SpinCo by way of a court-approved statutory plan of arrangement under Section 288 of the Business Corporations Act (British Columbia) (the “Arrangement”). |
Pursuant
to the Arrangement Agreement, SpinCo will acquire the entire right and interest in and to the SpinCo Assets in consideration for the
issuance by SpinCo to the Company of SpinCo common shares (the “SpinCo Shares”).
Following the Arrangement, the Company’s common shares shall remain listed on NASDAQ and the TSX, and the Company’s public warrants shall remain listed on NASDAQ. SpinCo shall be an unlisted reporting issuer in Canada.
The board of directors of the Company unanimously (a) determined that the Arrangement is in the best interests of the Company and fair, from a financial point of view, to shareholders, (b) approved the Arrangement and the Arrangement Agreement, and (c) recommended that shareholders vote in favor of the Arrangement at the special shareholder meeting described below.
In determining to support the Arrangement, the Company’s board relied in part on the opinion of BDO Canada LLP that the consideration to be received by BriaCell shareholders under the Arrangement is fair, from a financial point of view, to shareholders. The Arrangement requires approval by the Company’s shareholders at a special meeting of shareholders expected to be held in July 2023. Approval of the Arrangement must be obtained by a special resolution passed by a majority of not less than two-thirds of the votes cast by shareholders who vote in respect of the resolution. The Arrangement must also be approved by the TSX as well as the Supreme Court of British Columbia (the “Court”). An interim order of the Court will be applied for to prescribe certain procedural matters relating to the special meeting of shareholders, followed by an application for a final order to approve the Arrangement after the special meeting of shareholders.
Subject to the satisfaction of all conditions to closing set out in the Arrangement Agreement, it is anticipated that the Arrangement will be completed by August 2023. Conditions to closing include, inter alia, shareholder approval, required court orders and TSX and NASDAQ approvals.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to the “Company,” “our,” “us” or “we” refer to BriaCell Therapeutics Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Introduction
This Management’s Discussion and Analysis (“MD&A”) should be read together with other information, including our unaudited condensed interim consolidated financial statements and the related notes to those statements included in Part I, Item 1 of this Quarterly Report (the “Condensed Consolidated Financial Statements”), our consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended July 31, 2022 (the “Annual Report”), and Part I, Item 1A, Risk Factors, of the Annual Report. This MD&A provides additional information on our business, recent developments, financial condition, cash flows and results of operations, and is organized as follows:
| ● | Part 1 - Business Overview. This section provides a general description of our business, which we believe is important in understanding the results of our operations, financial condition, and potential future trends. |
| ● | Part 2 - Results of Operations. This section provides an analysis of our results of operations for the second quarter of fiscal 2023 in comparison to the second quarter of fiscal 2022. |
| ● | Part 3 - Financial Liquidity and Capital Resources. This section provides an analysis of our cash flows and outstanding debt and commitments. Included in this analysis is a discussion of the amount of financial capacity available to fund our ongoing operations and future commitments. |
We prepare and report our unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP. Our unaudited Condensed Consolidated Financial Statements, and the financial information contained herein, are reported in U.S Dollars.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.
Overview
BriaCell (the “Company”) is an immuno-oncology biotechnology company with a strong focus on cancer immunotherapy. Immunotherapies have come to the forefront in the fight against cancer since they harness the body’s own immune system to recognize and destroy cancer cells. BriaCell owns the U.S. and Japanese patents to SV-BR-1-GM (“Bria-IMT™”), a whole-cell targeted immunotherapy for cancer (U.S. Patent No. 7,674,456, U.S. Patent No. 11,559,574 B2, Japanese Patent No. 6901505), as well as patents related to PKCδ inhibitors (U.S. Patent Nos. 9,364,460 and 9,572,793). The Company is currently advancing our targeted immunotherapy program by prioritizing a Phase II clinical trial with Bria-IMT™ in combination with an immune checkpoint inhibitor. The Bria-IMT™ regimen was evaluated in four patients in a prior study in 2004-2006 by Dr. Charles Wiseman, the scientific founder, former member of the board of directors of the Company and principal scientific advisor. Encouraging results were obtained, especially in a patient who matched Bria-IMT™ at HLA-DR alleles and had a grade II tumor. In 2017-2018 BriaCell evaluated 23 patients with advanced breast cancer with the Bria-IMT™ regimen and obtained confirmation of the ability of the Bria-IMT™ regimen to induce regression of metastatic breast cancer in patients who match Bria-IMT™ at least at one HLA allele and/or if they had grade I or grade II tumors. A combination study with the immune checkpoint inhibitor pembrolizumab (KEYTRUDA®) was initiated and the first patient dosing in the “combination therapy” clinical trial occurred in September 2018. BriaCell purchased the KEYTRUDA® for this study as BriaCell does not have an agreement with Merck & Co., Inc. for the supply of KEYTRUDA®. Eleven patients were dosed in the combination therapy trial with Bria-IMT™ and the immune checkpoint inhibitor KEYTRUDA® and subsequently dosing with this combination was discontinued. The study was modified under an amended protocol which evaluates the combination of the Bria-IMT™ regimen with Incyte Corporation experimental drugs retifanlimab (anti-PD-1 antibody similar to pembrolizumab). The study completed Phase I and Phase II is ongoing. Bria-IMT™ has obtained Fast Track designation from the U.S. Food and Drug Administration, or FDA, and is progressing to a pivotal study in advanced breast cancer patients following an end of phase II meeting with the FDA with agreement on the primary endpoint. BriaCell is also developing Bria-OTS™, an off-the-shelf personalized approach to whole cell cancer immunotherapy.
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Recent Developments
On August 4, 2022, the Company announced that it has secured an exclusive license from University of Maryland, Baltimore County (UMBC) to develop and commercialize Soluble CD80, or sCD80, as a biologic agent for the treatment of cancer.
The novel technology, originally developed by Suzanne Ostrand-Rosenberg, Ph.D., Emeritus Faculty at UMBC, and member of BriaCell’s scientific advisory board, is titled “Soluble CD80 as a Therapeutic to Reverse Immune Suppression in Cancer Patients” and covered under U.S. Patent Number 8,956,619 B2, U.S. Patent Number 9,650,429 B2, and U.S. Patent Number 10,377,810 B2. In animal models, sCD80 was well-tolerated and stopped tumor growth by potentially restoring natural anti-tumor immunity. Importantly, as demonstrated in the same studies, sCD80’s unique actions may involve both awakening and boosting the immune system to recognize and destroy tumor cells.
Under the terms of the agreement, BriaCell gains the worldwide rights to develop and commercialize sCD80, while UMBC maintains ownership of the patents. BriaCell will pay royalties to UMBC upon the commercialization of the product plus patent management costs. The licensing agreement was coordinated by UMBC’s Office of Technology Development.
Bria-IMT™ regimen combined with Incyte’s retifanlimab
The Company’s data showed clinical benefit including extended survival time and tumor reductions in heavily pre-treated advanced breast cancer patients who matched our lead candidate, Bria-IMT™, at HLA type/s, and these findings guided the development of further optimized off-the-shelf personalized immunotherapies for advanced breast cancer and other cancers.
On September 14, 2022, the Company signed an agreement with Caris Life Sciences® (“Caris”), a leading molecular science and technology company actively developing and delivering innovative solutions to revolutionize healthcare.
Under the terms of the agreement, Caris will help BriaCell with efficient patient identification, accelerating enrollment for its current Phase I/II clinical trial in advanced metastatic breast cancer of certain genetically defined subgroups. The partnership between BriaCell and Caris leverages Caris’ Right-In-Time (RIT) Clinical Trial Network, a group of over 495 oncology sites that are able to quickly identify and enroll eligible patients in biomarker-directed clinical trials. This service offers patients and physicians access to the most cutting-edge precision medicine in development. Additionally, through Caris’ comprehensive molecular profiling (Whole Exome and Whole Transcriptome Sequencing), Caris will perform tumor profiling for the patients enrolled in the clinical trial.
On October 12, 2022, the Company added Mayo Clinic, Jacksonville, Florida as a clinical site in the Phase I/II study of BriaCell’s lead candidate, Bria-IMT™, with Incyte’s PD-1 inhibitor, retifanlimab, in advanced breast cancer.
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On November 10, 2022, the Company announced positive initial efficacy data in its 2021-2022 cohort of 12 advanced breast cancer patients. Disease control, tumor shrinkage, and potential survival benefit were observed amongst 12 patients in the Phase I/IIa clinical study of Bria-IMT™ in combination with Incyte’s retifanlimab. Researchers also noted that:
| ● | Bria-IMT™ regimen in combination with Incyte’s retifanlimab produced evidence of disease control, tumor shrinkage, and potential survival benefit amongst BriaCell’s recent 12 patient cohort in advanced breast cancer. |
| ● | The regimen remains well tolerated as recently reported in Phase I evaluation. |
| ● | 70% of patients showed either disease control or progression-free survival (PFS) benefits compared with their last therapy. |
| ● | Prior to enrollment, the 12 patients in the cohort had already been unsuccessfully heavily pre-treated with at least 2 prior therapy regimens, further underscoring BriaCell’s positive patient outcomes. |
Similarly positive data was presented at the San Antonio Breast Cancer meeting in December 2022. Briefly,
| ● | Positive clinical data reported included tumor shrinkage, disease control, progression free survival, and potential long term survival benefit in advanced metastatic breast cancer patients treated with the Bria-IMT™ combination regimen. | |
| ● | “Better quality of life” and “less pain” were reported by many gravely ill advanced metastatic breast cancer patients treated with the Bria-IMT™ combination regimen. | |
| ● | Notably, many patients remained in our study longer than other prior therapies, suggesting excellent tolerability and clinical effectiveness of the Bria-IMT™ combination regimen. | |
| ● | Treatment remained well-tolerated with no dose-limiting toxicities. |
In summary, these findings show evidence of clinical and survival benefits in heavily pre-treated advanced breast cancer patients, suggesting an additive or synergistic effect of Bria-IMT™ in combination with PD-1 inhibitors, and supporting the strategy of using the Bria-IMT™ combination regimen with retifanlimab for the treatment of advanced breast cancer patients.
Evidence of immune system activation by Bria-OTS+™ and Bria-PROS™
BriaCell’s poster presentation at the SITC meeting in November 2022 highlighted the development details and activities of BriaCell’s next generation (enhanced version) off-the-shelf personalized immunotherapies.
BriaCell has recently developed its novel next generation off-the-shelf personalized immunotherapies, including Bria-OTS+™, and Bria-PROS™, that are designed to produce several immune activating molecules in addition to their original immune activating mechanisms for increased efficacy. This represents a significant advancement in BriaCell’s novel off-the-shelf personalized immunotherapy technology.
Both Bria-OTS+™ for advanced breast cancer, and Bria-PROS™ for advanced prostate cancer, were able to activate naïve T cells, suggesting their potential capabilities to produce very strong immune responses in patients. Results show that the very strong immune responses observed may be due to: 1) direct activation of the components of the immune system such as naïve T cells, and 2) indirect activation of the immune system components via production of immune activating molecules.
We expect both Bria-OTS+™ and Bria-PROS™ to boost the immune system response and produce strong anti-tumor responses in patients with advanced breast cancer and prostate cancer, respectively.
Patent Issuance
On January 10, 2023, the Company announced that it received an Issue Notification from the United States Patent and Trademark Office for the composition of matter and method of use of our personalized off-the-shelf cell-based immunotherapy for cancer. The patent was issued on January 24, 2023 as US Patent No. 11,559,574, with a term extending to May 25, 2040. Additionally, BriaCell was awarded an Australian patent (Patent No. 2017224232, valid until February 27, 2037) covering composition of matter and method of use for its whole-cell cancer immunotherapy technology in Australia.
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US Patent No. 11,559,574, titled “Whole-cell cancer vaccines and methods for selection thereof,” was issued on January 24, 2023, and covers the composition of matter and method of use of BriaCell’s personalized off-the-shelf whole-cell immunotherapies. The novel technology involves the development of several HLA specific whole-cell immunotherapies in advance, and selection of the appropriate off-the-shelf (i.e. pre-made) immunotherapies for each patient (i.e. personalized therapy) based on the patient’s HLA type using a fast and easy saliva test. Once issued, the patent will provide intellectual property protection through May 25, 2040, and a patent term extension under Hatch-Waxman potentially applies (which would extend such protection for an additional five years).
On November 24, 2022, BriaCell was awarded Australian Patent No. 2017224232, titled “Whole-cell cancer vaccines and methods for selection thereof,” for claims covering composition of matter and method of use for BriaCell’s whole-cell immunotherapy for cancer in Australia.
BriaCell currently holds multiple patents and pending patent applications to cover its whole-cell immunotherapy’s composition of matter and method of use worldwide. For a summary of BriaCell’s issued patents, please visit https://briacell.com/patents/.
Bria-OTS™ Program Timelines
The FDA has provided guidance regarding the development of cells and final cell-bank testing for BriaCell’s Bria-OTS™ clinical-grade cell lines. Once completed in accordance with the FDA’s requirements, BriaCell expects to initiate the Bria-OTS™ study under an Investigational New Drug Application (IND) in the second half of 2023.
Clinical Sites
The following clinical sites are actively enrolling patients for BriaCell’s ongoing Phase II combination study:
| ● | Carle Cancer Institute, Urbana, Illinois |
| ● | American Oncology Network, LLC (AON), Baltimore, Maryland |
| ● | Mayo Clinic, Jacksonville, Florida |
| ● | Hoag, Newport Beach, California |
| ● | Sylvester Comprehensive Cancer Center, part of UHealth – the University of Miami Health System, Miami, Florida |
| ● | Atlantic Health System, Morristown and Overlook Hospitals, Morristown and Summit, New Jersey |
| ● | Tranquil Clinical Research, Webster, Texas |
| ● | Mary Crowley Cancer Research center, Dallas, Texas |
| ● | Providence Medical Group, Santa Rosa, California |
| ● | Cancer Center of Kansas, Wichita, Kansas |
End of Phase II Meeting with the Food and Drug Administration
On January 18, 2023, BriaCell received agreement and positive feedback from its End of Phase II meeting with the FDA regarding BriaCell’s lead clinical candidate, Bria-IMT™ in combination with a checkpoint inhibitor (under Fast Track designation), in advanced metastatic breast cancer.
BriaCell and the FDA have agreed on the primary end point, the essential elements of the study design, and the type of patients to be enrolled in BriaCell’s upcoming pivotal clinical study. This study will enroll advanced metastatic breast cancer patients for whom no approved treatment options exist.
Registration study success could lead to a Biologics License Application (BLA) submission for the approval of the combination regimen for commercialization in advanced metastatic breast cancer.
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Updated Clinical Data
On February 23, 2023, BriaCell reported updated survival data from its previously disclosed group of 12 patients (11 patients enrolled in 2021/2022) in the ongoing Phase II clinical trial evaluating Bria-IMT™ in combination with Incyte’s retifanlimab for the treatment of advanced metastatic breast cancer, sharing that:
| ● | The regimen remains well tolerated with no dose limiting toxicities. | |
| ● | 9 of 11 (82%) patients remain alive from 2021/2022 dosing, suggesting strong survival benefits. | |
| ● | 7 of 11 (64%) patients showed either disease control or progression-free survival (“PFS”) benefits compared with their most recent prior therapy regimen, suggesting clinical benefits, including survival and delayed cancer progression in this very difficult to treat patient population. |
The median PFS of 3.5 months (with one subject ongoing) compares favorably with other recent studies of patients with advanced disease including other approved agents in earlier lines of therapy (Cortes J, et al. Annals of Oncology 2018; O’Shaughnessy J et al. Breast Cancer Res Treat. 2022; Tripathy D, et al. JAMA Oncol. 2022).
This clinical data from BriaCell’s combination regimen highlights survival benefits in a cohort (3rd line or later) with a life expectancy of merely months or weeks in some cases. Patients in this cohort had failed a median of 5 other treatments prior to enrolling in BriaCell’s study. Other reportable benefits such as less pain and better quality of life were also observed in these patients.
There were also identified subsets of top-responding patients, This included 4 of 5 patients with Grade I/II cancer, and 6 of 8 patients with hormone receptor positive (HR+) cancer who had either disease control or improved progression free survival compared to their last therapy, suggesting these may represent potentially better responding subgroup/s of patients. These subgroups represent large segments of the advanced breast cancer patient population.
On January 24, 2023, Dr. William V. Williams, BriaCell’s CEO, issued a letter to shareholders, sharing that positive FDA feedback on our pivotal study from the end of Phase II meeting for lead clinical candidate Bria-IMT™ in combination with a checkpoint inhibitor could greatly accelerate the path to commercialization. Successful completion of the pivotal study could be followed by a Biologics License Application submission and commercialization. The pivotal study’s primary endpoint is to be linked to survival improvement compared to treatment of physician’s choice.
On March 15, 2023, BriaCell announced that it would present four posters at the American Association for Cancer Research (AACR) 2023 Annual Meeting. On April 17, 2023, the data presented at the AACR meeting was announced. This included positive data demonstrating survival and clinical benefits in advanced metastatic breast cancer:
| ● | 15 of 18 patients remained alive of those recruited since the study reopened in 2021. | |
| ● | Longer than expected patient survival data highlights tolerability and clinical effectiveness of BriaCell’s combination treatment. | |
| ● | The Bria-IMT ™ combination regimen activated the immune system even in anergic patients with very weak immune systems. | |
| ● | Continued positive clinical data suggests more meaningful survival and clinical benefits in advanced metastatic breast cancer. |
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Results of Operations for the Three Months Ended April 30, 2023, and 2022
| Three months ended April 30, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Operating Expenses: | ||||||||
| Research and development expenses | $ | 3,860,568 | $ | 2,268,805 | ||||
| General and administrative expenses | 1,816,461 | 1,854,455 | ||||||
| Total operating expenses | 5,677,029 | 4,123,260 | ||||||
| Operating loss | (5,677,029 | ) | (4,123,260 | ) | ||||
| Financial income (expenses), net | ||||||||
| Interest income | 253,489 | 35,987 | ||||||
| Change in fair value of warrant liability | 539,427 | (5,928,528 | ) | |||||
| Foreign exchange gain | (11,323 | ) | 228 | |||||
| Total financial income (expenses), net | 781,593 | (5,892,313 | ) | |||||
| Loss and Comprehensive loss for the period | $ | (4,895,436 | ) | $ | (10,015,573 | ) | ||
| Net loss per share – basic and diluted | $ | (0.32 | ) | $ | (0.65 | ) | ||
| Weighted average number of shares used in computing net basic and diluted earnings per share of common stock | 15,518,072 | 15,358,947 | ||||||
Research and Development Costs
Research costs are comprised primarily of (i) salaries and wages to Company employees at our laboratory and (ii) clinical trials and investigational drug costs, which include the testing and manufacture of our investigational drugs and costs of our clinical trials.
The following is a breakdown of our research and development costs by project:
| Three months ended April 30, | ||||||||
| 2023 | 2022 | |||||||
| Clinical trials | $ | 1,617,172 | $ | 1,400,942 | ||||
| Pre-clinical projects | 901,800 | 387,952 | ||||||
| Chemical, Manufacturing and Control Costs (“CMC Costs”) | 674,591 | 220,514 | ||||||
| Other | 667,006 | 259,397 | ||||||
| $ | 3,860,568 | $ | 2,268,805 | |||||
Our clinical trial expenses include our immunotherapy program, Bria-IMT™, a 46-subject Phase I/IIa clinical trial. Clinical trial expenses increased in 2023 as we recruited more patients into the Bria-IMT™ trial and began setting up the Bria-OTS™ trial.
Pre-clinical projects include expenses incurred in our off-the-shelf personalized immunotherapies, including Bria-OTS+™, and Bria-PROS™. Our pre-clinical costs have increased in 2023 as we hired more staff to accelerate our existing pre-clinical program and added an additional pre-clinical program (sCD80).
CMC costs include the manufacturing of Bria-IMT™ and Bria-OTS™ and all quality control and quality assurance testing on the investigational product. CMC costs increased in 2023 to support the additional patients in our trials.
Other costs are ancillary expenses we incur such as costs to maintain our patents, investigation of early-stage projects, scientific advisory board expenses, contracts with vendors for pre-clinical work, and administration costs associated with all our research and development expenditure. Other costs increased in 2023 as we investigated additional potential pre-clinical projects.
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The following is a breakdown of our research and development costs by nature of expenses:
| Three months ended April 30, | ||||||||
| 2023 | 2022 | |||||||
| Clinical trial sites and investigational drug costs | $ | 2,469,105 | $ | 1,364,090 | ||||
| Wages and salaries | 947,509 | 580,506 | ||||||
| Laboratory Rent | 49,440 | 34,400 | ||||||
| Supplies | 155,079 | 131,605 | ||||||
| Share-based compensation | 239,435 | 158,204 | ||||||
| $ | 3,860,568 | $ | 2,268,805 | |||||
For the three-month period ended April 30, 2023, research costs totaled $3,860,568, compared to $2,268,805 for the same period in 2022. The increase primarily resulted from the expansion of the Company’s Bria-IMT™ trial and higher clinical trials and investigational drug costs, which rose from $1,364,090 in 2022 to $2,469,105 in 2023. Laboratory costs also increased due to the hiring of additional employees and higher supplies, growing from $580,506 to $947,509 and $131,605 to $155,079, respectively. Additionally, non-cash share-based compensation expenses rose from $158,204 in 2022 to $239,435 in 2023, contributing to the overall increase in research and development expenses.
General and Administrative Expenses
For the three-month period ended April 30, 2023, general and administrative expenses totaled $1,816,461, compared to $1,854,455 for the same period in 2022. The decrease is primarily attributed to a reduction in non-cash share-based compensation expenses, which declined from $705,423 in 2022 to $41,754 in 2023.
Financial income (expenses), net
For the three-month period ended April 30, 2023, financial income, net, amounted to $781,593, as compared to a loss of $5,892,313 for the three-month period ended April 30, 2022. The large difference is due to the change in value of the Company’s warrant liability which amounted to a gain of $539,427 in the three-month period ended April 30, 2023, and a loss of $5,928,528 in the three-month period ended April 30, 2022.
Loss for the period
For the three-month period ended April 30, 2023, the Company reported a loss of $4,895,436, compared to a loss of $10,015,573 for the same period in 2022. The loss in 2023 primarily resulted from increased operational spending, partially offset by a small gain due to the decrease in fair value of the warrant liability. In contrast, the significant loss in the prior period was primarily due to a large change in the value of the Company’s warrant liability.
Results of Operations for the Nine Months Ended April 30, 2023 and 2022
| Nine months ended April 30, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Operating Expenses: | ||||||||
| Research and development expenses | 10,169,140 | 4,852,620 | ||||||
| General and administrative expenses | 5,397,363 | 5,202,258 | ||||||
| Total operating expenses | 15,566,503 | 10,054,878 | ||||||
| Operating loss | (15,566,503 | ) | (10,054,878 | ) | ||||
| Interest income | 682,437 | 54,373 | ||||||
| Interest expense | - | (979 | ) | |||||
| Change in fair value of warrant liability | (2,972,285 | ) | (16,384,676 | ) | ||||
| Gain of government grant | - | 3,388 | ||||||
| Foreign exchange loss | (27,388 | ) | (5,779 | ) | ||||
| Total financial expenses, net | (2,317,236 | ) | (16,333,673 | ) | ||||
| Loss and Comprehensive loss for the period | $ | (17,883,739 | ) | $ | (26,388,551 | ) | ||
| Net loss per share – basic and diluted | $ | (1.15 | ) | $ | (1.70 | ) | ||
| Weighted average number of shares used in computing net basic and diluted earnings per share of common stock | 15,518,036 | 15,486,028 | ||||||
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Research and Development Costs
Research costs are comprised primarily of (i) salaries and wages to Company employees at our laboratory; and (ii) Clinical trials and investigational drug costs, which include the testing and manufacture of our investigational drugs and costs of our clinical trials.
The following is a breakdown of our research and development costs by project:
| Nine months ended April 30, | ||||||||
| 2023 | 2022 | |||||||
| Clinical trials | $ | 4,656,919 | $ | 2,996,397 | ||||
| Pre-clinical projects | 2,513,141 | 829,768 | ||||||
| CMC Costs | 1,416,198 | 471,645 | ||||||
| Other | 1,582,882 | 554,809 | ||||||
| $ | 10,169,140 | $ | 4,852,620 | |||||
Our clinical trial expenses include our immunotherapy program, Bria-IMT™, a 46-subject Phase I/IIa clinical trial. Clinical trial expenses increased in 2023 as we recruited more patients into the Bria-IMT™ trial and began setting up the Bria-OTS™ trial.
Pre-clinical projects include expenses incurred in our off-the-shelf personalized immunotherapies, including Bria-OTS+™, and Bria-PROS™. Our pre-clinical costs have increased in 2023 as we hired more staff to accelerate our existing pre-clinical program and added an additional pre-clinical program (sCD80).
CMC costs include the manufacturing of Bria-IMT™ and Bria-OTS™. CMC costs increased in 2023 to support the additional patients in our trials.
Other costs are ancillary expenses we incur such as costs to maintain our patents, investigation of early-stage projects, scientific advisory board expenses, contracts with vendors for pre-clinical work, and administration costs associated with all our research and development expenditure. Other costs increased in 2023 as we investigated additional potential pre-clinical projects.
The following is a breakdown of our research and development costs by nature of expenses:
| Nine months ended April 30, | ||||||||
| 2023 | 2022 | |||||||
| Clinical trial sites and Investigational drug costs | $ | 5,799,621 | $ | 2,861,870 | ||||
| Wages and salaries | 2,946,494 | 1,390,154 | ||||||
| Laboratory Rent | 145,440 | 90,354 | ||||||
| Supplies | 455,504 | 211,996 | ||||||
| Professional fees | 7,299 | 30,589 | ||||||
| Share-based compensation | 814,782 | 267,657 | ||||||
| $ | 10,169,140 | $ | 4,852,620 | |||||
For the nine-month period ended April 30, 2023, research costs amounted to $10,169,140, compared to $4,852,620 for the nine-month period ended April 30, 2022. The increase in research costs is primarily attributed to the continued expansion of the Company’s clinical trials, specifically the Bria-IMT™ trial. Clinical trials and investigational drug costs rose from $2,861,870 in 2022 to $5,799,621 in 2023, reflecting a substantial increase. Laboratory costs also experienced growth during 2023, including the addition of new lab personnel, resulting in an increase from $1,390,154 in 2022 to $2,946,494 in 2023. Furthermore, supplies expenses rose from $211,996 in 2022 to $455,504 in 2023. Finally, the increase in share-based compensation (non-cash) expenses contributed to the overall rise in research and development expenses, with expenses increasing from $267,657 in 2022 to $814,782 in 2023.
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General and Administrative Expenses
For the nine-month period ended April 30, 2023, general and administrative expenses amounted to $5,397,363, compared to $5,202,258 for the nine-month period ended April 30, 2022. The increase in general and administrative expenses primarily stems from higher insurance premiums, professional fees, and salaries, offset by a decrease in share-based compensation expenses.
Financial income (expenses), net
For the nine-month period ended April 30, 2023, financial expense, net, amounted to $2,317,236, in contrast to $16,333,673 for the nine-month period ended April 30, 2022. The substantial variance primarily arises from the fluctuation in the value of the Company’s warrant liability, resulting in a loss of $2,972,285 in the nine-month period ended April 30, 2023, and a loss of $16,384,676 in the nine-month period ended April 30, 2022. Additionally, interest income recorded for the nine-month period ended April 30, 2023, amounted to $682,437, compared to $54,373 for the nine-month period ended April 30, 2022.
Loss for the period
The Company recorded a loss of $17,883,739 for the period ended April 30, 2023, compared to a loss of $26,388,551 for the period ended April 30, 2022. The loss in 2023 primarily stems from a substantial increase in the fair value of the warrant, along with higher operational spending. Conversely, the higher loss in the prior period can be attributed to a larger increase in the fair value of the warrant liability. These factors account for the variance in the reported losses between the two periods, highlighting the impact of changes in warrant valuation and operational spending on the Company’s financial performance.
Going Concern Uncertainty
The Company continues to devote substantially all of its efforts toward research and development activities. In the course of such activities, the Company has sustained operating losses and expects such losses to continue in the foreseeable future. The Company’s accumulated deficit as of April 30, 2023, was $78,233,576 and negative cash flows from operating activities during the nine-month period ended April 30, 2023 was $12,825,853. The Company is planning to finance its operations from its existing and future working capital resources and to continue to evaluate additional sources of capital and financing. The Company believes that its existing capital resources will be adequate to satisfy its expected liquidity requirements for at least twelve months from the issuance of the condensed consolidated financial statements.
As of April 30, 2023, the Company has total assets of $29,721,868 (July 31, 2022 - $42,577,041) and a positive working capital balance of $28,119,886 (July 31, 2022 -$41,405,613).
Liquidity and Capital Resources
As of April 30, 2023, the Company has working capital of $29,119,886 (July 31, 2022 - $41,405,613) and an accumulated deficit of $78,233,576 (July 31, 2022 - $60,349,837).
As of April 30, 2023, the Company’s capital resources consist primarily of cash and cash equivalents, comprised mostly of cash on deposit with banks, investments in money market funds, investments in U.S. government securities, U.S. government agency securities, and investment grade corporate debt securities. Our investment policy and strategy are focused on preservation of capital and supporting our liquidity requirements.
| 24 |
Historically, the Company has financed its operation through private and public placement of equity securities, as well as debt financing. The Company’s ability to fund its longer-term cash requirements is subject to multiple risks, many of which are beyond its control. The Company intends to raise additional capital, either through debt or equity financings in order to achieve its business plan objectives. Management believes that it can be successful in obtaining additional capital; however, there can be no assurance that the Company will be able to do so. There is no assurance that any funds raised will be sufficient to enable the Company to attain profitable operations or continue as a going concern. To the extent that the Company is unsuccessful, the Company may need to curtail or cease its operations and implement a plan to extend payables or reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful
During the nine-month period ended April 30, 2023, the Company’s overall position of cash and cash equivalents decreased by $12,871,553 from the nine-month period ended April 30, 2022 (including effects of foreign exchange). This decrease in cash can be attributed to the following:
The Company’s net cash used in operating activities during the nine-month period ended April 30, 2023, was $12,825,853, as compared to $9,158,647 for the nine-month period ended April 30, 2022.
Cash used in financing activities for the nine-month period ended April 30, 2023, was $45,700, as compared to $3,582,874 for the nine-month period ended April 30, 2022.
Off-Balance Sheet Arrangements
None.
Tabular Disclosure of Contractual Obligations
None.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates from the information provided in the MD&A section in our Annual Report.
New Accounting Policies Adopted
The Company did not adopt any new accounting policies during the three and nine-month periods ended April 30, 2023.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company’s financial instruments consist of cash and cash equivalents, amounts receivable, investments, trade payable, and accrued expenses and other payables. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values, unless otherwise noted.
Management understands that the Company is exposed to financial risk arising from fluctuations in foreign exchange rates and the degree of volatility of these rates as a portion of the Company’s transactions occur in Canadian Dollars (mainly costs relating to being a public company in Canada), and the Company’s functional and presentation currency is the US dollar. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management process. The overall objectives of the Board are to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility.
The type of risk exposure and the way in which such exposure is managed is as follows:
| 25 |
Credit risk
The Company has no significant concentration of credit risk arising from operations. Management believes that the credit risk concentration with respect to financial instruments is remote.
Liquidity Risk
The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities as they come due. As of April 30, 2023, the Company has total assets of $29,502,980 (July 31, 2022 - $42,346,700) and a positive working capital balance of $28,119,886 (July 31, 2022 –$41,405,613).
Market Risk
Interest rate risk
Interest Rate risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market interest rates. The Company does not believe it is exposed to material interest rate risk as it has no interest-bearing debt.
Price risk
As the Company has no revenues, price risk is remote.
Exchange risk
The Company is exposed to foreign exchange risk as a portion of the Company’s transactions occur in Canadian Dollars (mainly costs relating to being a public company in Canada) and, therefore, the Company is exposed to foreign currency risk at the end of the reporting period through its Canadian denominated trade payable and cash. As of April 30, 2023, a 5% depreciation or appreciation of the Canadian dollar against the US dollar would not have a material effect on the in total loss and comprehensive loss.
Fair Values
The carrying values of cash and cash equivalents, amounts receivable, trade payable, and accrued expenses and other payables approximate their fair values due to their short terms to maturity.
The cash and cash equivalents are valued using quoted market prices in active markets.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Our management, with the participation of our principal executive officer and principal accounting and financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, our principal executive officer and principal accounting and financial officer have concluded that as of April 30, 2023, our disclosure controls and procedures were not effective as a result of material weaknesses in our internal control over financial reporting. We continue to implement plans that are improving these material weaknesses, including implementation of independent review and approval of transactions and reconciliations in certain processes through hiring additional personnel and segregating duties amongst our team. We have instituted processes to document and retain evidence to support reviews and reconciliations.
Changes in Internal Control over Financial Reporting
There have not been material changes in our internal control over financial reporting during the quarter ended April 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except for our remediation efforts described above.
| 26 |
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On May 24, 2023, the Company reached a settlement agreement with an investor who made certain claims against the Company and was seeking monetary and injunctive relief, and against which the Company had filed counterclaims. Pursuant to the settlement agreement, the Company paid $230,000 for the full and final settlement of all of the investor’s claims, in full and final settlement of any and all existing claims that the Company and investor had or may have had against each other.
Item 1A. Risk Factors.
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes from the risk factors previously disclosed in our Annual Report for the year ended July 31, 2022.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Except as previously disclosed by the Company, there were no unregistered sales of equity securities during the three months ended April 30, 2023.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
None.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
EXHIBIT INDEX
| * | Filed herewith. |
| 27 |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BRIACELL THERAPEUTICS CORP. | ||
| June 14, 2023 | By: | /s/ William V. Williams |
| Name: | William V. Williams | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| June 14, 2023 | By: | /s/ Gadi Levin |
| Name: | Gadi Levin | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
| 28 |
Exhibit 10.1
Master Service and Technology Agreement
THIS AGREEMENT is effective as of May 9, 2023 (this “Agreement”).
Parties
| (1) | Prevail InfoWorks, Inc. is a corporation having its principal place of business at 211 North 13th Street, Suite 600, Philadelphia, PA 19107-1610, USA (“Prevail”); and |
| (2) | BriaCell Therapeutics Corp. is a corporation having its principal place of business at 2929 Arch Street, 3rd Floor, Philadelphia, PA 19104 (“Company”). |
| (3) | Prevail and Company may be individually referred to as a “Party” or collectively as the “Parties.” |
Background
| (1) | Prevail provides clinical research services to life science companies and has developed certain software applications and platforms, which it makes available as a service to customers via the Internet for a fee for the purpose of managing the customers’ clinical trials and analyzing the data from them. |
| (2) | Company wishes to use Prevail’s services and software in its business operations. |
| (3) | Prevail has agreed to provide and Company has agreed to use and pay for Prevail’s services and technologies subject to the terms and conditions of this Agreement. |
Agreed terms
| 1. | Definitions |
The definitions in this clause apply in this Agreement.
Applicable Laws: all supranational, national, state, and local laws and regulations including, without limitation, the regulations and guidelines of the United States Federal Food, Drug and Cosmetic Act (21 U.S.C. 301, et. seq.) (the “FDA Act”), the Canadian Food and Drugs Act, RSC 1985, C F-27 and its associated regulations (the “CA FDA Act”) and, as applicable, accepted standards of practice that may be applicable to a Study or the Services including but not limited to:
(a) the FDA Act, the CA FDA Act and associated legislation and Health Canada regulations, policies, and guidelines in effect from time-to-time governing investigational drugs;
(b) all International Conference on Harmonization (ICH) guidance documents as appropriate including ICH E6: Guidelines on Good Clinical Practice (ICH/GCP);
(c) United States Federal anti-kickback statutes and related safe harbor regulations and associated Canadian legislation;
(d) all relevant anti-corruption and anti-bribery laws (including, without limitation, the Federal Corrupt Practices Act)
Company Data: the data generated in the clinical trial or trials referenced in an executed SOW if applicable, as well as data imported or inputted by Company, Authorized Users, or Prevail or others on Company’s behalf in connection the Services or facilitating Company’s use of the Services.
Authorized Users: those officers, directors, employees, agents, and independent contractors of Company who are authorized by Company to use the Services and the Documentation, as further described in clause 3.
Business Day: any day which is not a Saturday, Sunday or public holiday in the USA.
| Confidential | 1 |
Confidential Information: is defined in clause 10.
Debarment Act: the Generic Drug Enforcement Act of 1992, as amended, 21 U.S.C. §§ 306.
Documentation: the documents made available to Company by Prevail from time to time which sets out a description of the Services and the user instructions for the Services, including any executed SOWs.
Effective Date: the effective date of this Agreement as specified above.
Initial Term: the initial term of this Agreement is 28 months.
Normal Business Hours: 8:00 a.m. to 5:00 p.m. Eastern Time, USA, each Business Day.
Renewal Period: the period described in clause 14.1.
Services: the services provided by Prevail to Company under this Agreement as set forth in a Statement of Work attached hereto and any other executed Statements of Work.
Software: the online software applications provided by Prevail as part of the Services.
Study Invention: any (a) trade secrets, discovery, invention, technology, copyright, moral rights, trademarks, trade names, logos, know how, method, result, data, material, information, concept, ideas, concepts, processes, works, formulas, source and object codes, programs, other works of authorship, improvements, developments, designs, techniques and any other intellectual or proprietary assets whether or not patentable or protectable by any other intellectual property law, that Company or Prevail or their respective employees, agents, and/or subcontractors, either alone or jointly with others, makes conceives, creates, develops, or reduces to practice or causes to be conceived, developed or reduced to practice as a result of, (a) the use of the Company’s investigational product in a Study, (b) conducting a Study, (c) performing any obligations or activities assigned to such Party or Parties in connection with this Agreement or any Study, or (d) using Company’s investigational product or Confidential Information. “Study Invention” shall not include any inventions, processes, patents, know-how, trade secrets, improvements, other intellectual property and assets, including but not limited to analytical methods, procedures and techniques, procedure manuals, data, computer technical expertise, hardware and/or software, which (i) have been independently developed by Prevail, (ii) relate to Prevail’s business or operations, and (iii) are used, improved, modified or developed by Prevail during the term of this Agreement, without the use of any of Company’s resources or equipment, or any reference to Company’s investigational product or Confidential Information.
Subscription Fees: the subscription fees payable by Company to Prevail for the Software and Services, as set forth in Schedule 1 attached hereto and any other executed SOWs.
Term: period of time between the commencement of this Agreement and its expiration or termination, whichever is earlier.
User Subscriptions: the user subscriptions purchased by Company pursuant to clause 5 which entitle Authorized Users to access and use the Services and the Documentation in accordance with this Agreement.
| 2. | Scope of Services |
During the Initial Term and any Renewal Period, and from time to time, Company may purchase Services from Prevail that will be set forth in a Statement of Work (“SOW”) agreed by and duly executed by both Parties, beginning with SOW 1 attached hereto. Each executed SOW shall be governed by this Agreement and include: (i) description of Services to be provided, (ii) fee and payment schedule for the Services and a reasonably detailed budget, (iii) description of deliverables to be delivered by Prevail and their intended use, and (iv) a project timeline. Any changes or modifications to the SOW shall be mutually agreed upon in writing by the Parties as provided for in this Agreement. Once executed by both Parties, each SOW shall be deemed incorporated into this Agreement by reference. There will be no limit to the number of SOWs that may be added to this Agreement. In the event that the terms of an executed SOW conflict with the terms of this Agreement, the terms of this Agreement shall govern unless the SOW specifically references Section 2 of this Agreement and indicates such specific terms of the SOW shall govern.
| Confidential | 2 |
| 3. | Changes to Scope of Services |
In the event that Company would like Prevail to alter the Services under a given SOW or the assumptions underlying the budget, the Parties shall agree upon a signed written amendment to the SOW prior to the provision of said Services. Prevail has no obligation to perform and Company has no obligation to pay for any additional or modified Services absent written amendment to the SOW by the Parties with respect thereto.
| 4. | Investigators |
If the Services described in a particular SOW require Prevail to pay Sites and/or Investigators to perform a Study on Company’s behalf, Company acknowledges and agrees Prevail will only pay Investigators from advances or pre-payments received from Company for Investigators’ services, and that Prevail will not make payments to Investigators prior to receipt of sufficient funds from Company. Company further acknowledges and agrees that payments for Investigators’ services are expenses payable to third parties, are their sole responsibility and are separate from payments for Prevail Services.
| 5. | Technology User subscriptions |
Subject to terms and conditions set forth in this Agreement and SOWs duly signed by both Parties (including the attached SOW 1), Prevail hereby grants to Company a non-exclusive, non-transferable right to permit Authorized Users to use the Services and the Documentation during the Term solely for Company’s product research, development and commercialization and business operations (which, for the avoidance of doubt, shall include use by Company’s Authorized Users in connection with Company’s clinical studies). Company may, from time to time during any Subscription Term, purchase additional User Subscriptions in excess of the number set out in a SOW and Prevail shall grant access to the Services and the Documentation to such additional Authorized Users in accordance with the provisions of this Agreement.
| 6. | Company data |
| 6.1 | As between Company and Prevail, Company shall solely own all rights, title, and interest in and to all of Company Data and shall have sole responsibility for the legality, reliability, integrity (as collected, but not as stored in the Software), accuracy and quality of Company Data. |
| 6.2 | Company Data will be hosted, under Prevail’s responsibility, in a secure data center certified as ISO/IEC 27001:2013 and SOC 2 compliant, for computing infrastructures and security. Prevail shall follow its archiving procedures for Company Data as set out in its standard operating procedures (SOPs) and back-up policy which include hosting Company Data at another location in a second secure data center, as such documents may be amended by Prevail in its sole discretion from time to time provided that such amendments do not result in a lower standard for secured hosting of Company Data or adding exceptions to Prevail’s responsibility to store Company Data in two secured data centers in different locations. Prevail shall store Company Data in Canada or in the USA. Upon Company’s written request, Prevail shall allow Company to review such SOPs and back-up policies relating to hosting of Company’s Data. Except in case of breach of its obligations under this Agreement or under applicable law, gross negligence or willful misconduct, in the event of any loss or damage to Company Data, Company’s sole and exclusive remedy shall be for Prevail to use reasonable commercial endeavors to restore the lost or damaged Company Data from the latest back-up of such Company Data maintained by Prevail in accordance with the archiving procedure described in its SOPs and back-up policy, a summary of which is set forth in Schedule 1. |
| Confidential | 3 |
| 6.3 | Prevail will ensure that no Company Data is used for any purposes whatsoever other than to provide the Services hereunder. |
| 7. | Prevail’s obligations |
| 7.1 | Prevail shall, during the Term, provide the Services and make available the Documentation to Company subject to the terms of this Agreement, Applicable Laws, and Prevail’s applicable Standard Operating Procedures unless other SOPs are identified within a SOW. |
| 7.2 | Prevail undertakes that the Services will be performed substantially in accordance with the Documentation and with reasonable skill and care. |
| 7.3 | Prevail represents and warrants that it has not been debarred and has not been convicted of a crime which could lead to debarment, under the Debarment Act. In the event that Prevail or any of its officers, directors, or employees becomes debarred or receives notice of action or threat of action with respect to its debarment, Prevail shall notify Company immediately in writing. |
| 7.4 | Prevail shall make the Software available in accordance with the Availability service level described below in Section 7.6. |
| 7.5 | Prevail will, as part of the Services and at no additional cost to Company, provide Company with Prevail’s standard customer support services in accordance with Prevail’s support services policy in effect at the time that the Services are provided. Prevail may amend the support services policy in its sole and absolute discretion from time to time, provided that Prevail will provide Company notice if the change is material and will not reduce an agreed upon support level during the effective period of a SOW for Services. Unless stated otherwise in an applicable SOW, Prevail’s standard support includes phone support for Authorized Users in the geographies where the clinical study(ies) identified in the SOW is being conducted. The support is provided by trained Tier 1 support staff on a 24/7/365 basis, who can escalate to Tier 2 support when needed during Normal Business Hours, and all support is governed by Prevail’s internal Quality Assurance SOPs. Company may elect to purchase enhanced support services separately at Prevail’s then current rates. |
| 7.6 | Prevail will provide the following technical service levels (“Service Levels”): |
(a) Availability:
The Software Availability for any given month shall be at least 99.9% (“Availability”) uptime, and is measured by subtracting from the total minutes in a given month, the total minutes of Service Interruption in such month, divided by the total minutes in such month and then multiplied by 100.
For purposes of the foregoing “Service Interruption” means, except for Scheduled Maintenance, the period of time that the Software is either: (i) not available for Company log-in; or (ii) substantially not functioning. By way of example: If in a given 30 day month there are 60 minutes of Service Interruption, then the Service Availability for such month would be calculated as follows:
= (43,200 being the total minutes in a 30 day month) – (60 minutes of Service Interruption) / 43,200
= 43,140 / 43,200
= 0.999
Service Availability for the month would be 99.9%
For purposes of the foregoing “Scheduled Maintenance” means routine, planned maintenance for the Software as made known to Company in advance.
| Confidential | 4 |
If Prevail does not meet the Availability for a given month, then Prevail will provide a credit (each, a “Service Credit”) to Company equal to the percentages as set forth in the table below of the prior one (1) month’s Subscription Fees paid to Prevail for the impacted Software: Such Service Credits, if applicable, will be applied to any monies owed by Company in the following month or if no such monies are owed, then Prevail shall refund the amount of the Service Credit to Company.
| Availability | Service Credit | |
| < 99.9% - >= 98.0% | 5% | |
| < 97.9% - >= 95.0% | 10% | |
| < 94.9% | 25% |
(b) Priority Level Definitions:
(i) Critical: defined as any problem that completely prevents the operation of the Software or Services and for which there is no work-around.
(ii) Priority: defined as any problem that substantially restricts the operations of the Software or Services for which there is no alternative solution or work- around.
(iii) General: defined as any problem that does not substantially restrict the operations of the Software or Services or any other error for which there is an alternative solution or work-around.
| Priority Level | Description | Initial Response Time from Notification | Status Updates | Targeted Resolution | ||||
| Critical | See Definition | 15 minutes | Every Hour | As soon as possible not to exceed 4 hours | ||||
| Priority | See Definition |
30 minutes |
4 Hours |
8 Business hours | ||||
| General | See Definition |
60 minutes |
24 Hours |
48 hours unless otherwise agreed upon by both parties |
The Initial Response Times in the above chart commence from the time Company first notifies Prevail of the problem or failure, while the other times commence from the earlier of first notification by Company of the problem or failure or Prevail otherwise becoming aware of the problem or failure.
In the event that (a) Prevail fails to meet the same Service Level in each of three consecutive months, or (b) Prevail fails to meet any Service Levels in any of four months within a six month rolling period, then Company may terminate this Agreement for material breach, and Prevail shall not have any right to cure such breach.
| Confidential | 5 |
| 7.7 | Prevail represents and warrants that it has implemented, uses, and will maintain: |
| (a) | such level of security measures, consistent with up-to-date industry standards, to (i) defend against viruses, worms, Trojan horses or other harmful computer code, files, scripts, agents or software that may hinder Company access to and/or damage, interfere with or disrupt the integrity of the Company Data; (ii) help to avoid risk of any third party’s unauthorized access to Company Data (including anti-malware controls); and (iii) protect against loss of Company Data due to power supply failure or line interference; |
| (b) | appropriate technical and organizational measures, internal controls, and information security routines intended to protect Company Data against accidental loss, destruction, or alteration; unauthorized disclosure or access; or unlawful destruction; |
| (c) | data recovery procedures, including regular and multiple copies of Company Data (in different places) from which Company Data may be recovered; such redundant storage and Prevail procedures for recovering data are designed to attempt to reconstruct Company Data in its original or last-replicated state from before the time it was lost or destroyed; |
| (d) | reviews of data recovery procedures at least every twelve months; and |
| (e) | measures aimed at protecting Company Data against accidental or unlawful destruction or accidental loss, alteration, unauthorized disclosure, or access, and against all unlawful forms of processing; in addition, Prevail agrees that only Prevail’s or its subcontractors’ technical support personnel are permitted to have access to Company Data when required to perform their job functions. |
If Prevail becomes aware of any unlawful access to any Company Data stored by and/or on behalf of Prevail, or unauthorized access to such equipment or facilities resulting in loss, disclosure, or alteration of Company Data (“Security Incident”), Prevail will promptly (1) notify Company of the Security Incident; (2) investigate the Security Incident and provide Company with detailed information about the Security Incident; and (3) promptly take reasonable steps to mitigate the effects and to minimize any damage resulting from the Security Incident. Prevail shall cooperate fully with Company, with its authorized agent and with any regulatory agency and/or any law enforcement agency in the investigation and remediation of such Security Incident. All notices and communications to Company relating to a suspected, alleged, or actual Security Incident shall be the Confidential Information of Company.
| 7.8 | Prevail represents and warrants that, to the extent applicable, it shall comply with the U.S. Health Insurance Portability and Accountability Act, as amended (“HIPAA”), with respect to protected health information as defined under HIPAA, and any other applicable data privacy and protection laws relevant to the Services. Prevail shall limit its use, onward transfer, and further disclosure of any protected personal information to only those activities specified in this Agreement, an executed SOW, or otherwise expressly authorized by Company. |
| 7.9 | If the Services will involve the collection or processing of personal data (as defined by applicable data protection legislation) within the European Union, then Sponsor (or its designee) shall serve as the Data Controller and Prevail shall serve as the Data Processor of such personal data, as defined by the General Data Protection Regulation (Regulation (EU) 2016/679 Regulation of the European Parliament and the Council on the Protection of individuals with regard to the processing of personal data and on the free movement of such data) (“GDPR”), and Prevail shall act only under the instructions of the Sponsor in regard to such personal data. Within their respective roles, the Parties agree to comply with the requirements of the GDPR. |
| Confidential | 6 |
| 8. | Company’s obligations |
Company shall:
| (a) | comply with all Applicable Laws; |
| (b) | remain responsible for any regulatory obligations not specifically and expressly transferred to Prevail under the applicable SOW or “transfer of obligations” form, which Prevail may provide under Applicable Law; |
| (c) | provide Prevail with reasonably necessary co-operation in relation to this Agreement, including access to such information as may be reasonably necessary for Prevail to render the Services; and |
| (d) | be solely responsible for procuring and maintaining its network connections and telecommunications links from its systems to Prevail’s data centers, and all problems, conditions, delays, delivery failures and all other loss or damage arising from or relating to Company’s network connections or telecommunications links or caused by the Internet. |
| 9. | Fees and payment |
Company shall pay the Fees to Prevail for the Services and Software in accordance with the executed SOW(s).
| 10. | Intellectual Property |
| 10.1 | Company owns all right, title, and interest in and to any Study Inventions, regardless of the Party that makes, discovers, creates, or invents such Study Invention. Prevail hereby irrevocably and unconditionally hereby assigns, and agrees to assign, to Company all of its right, title, and interest in and to all such Study Inventions including those that are made, conceived, created, developed, or reduced to practice by Prevail, any of its employees or permitted subcontractors and any other intellectual property rights therein so as to vest in Company such right, title, and interest in and to such Study Inventions and any related patent claims and other intellectual property rights therein. For clarity, this assignment includes a present conveyance to the Company of all right, title and interest in and to all Study Inventions not yet in existence. If any intellectual property rights or other rights, including moral rights, in the Study Inventions cannot (as a matter of law) be assigned by Prevail to Company, then (i) Prevail unconditionally and irrevocably waives the enforcement of such rights and all claims and causes of action of any kind against Company with respect to such rights, and (ii) to the extent Prevail cannot (as a matter of law) make such waiver, Prevail unconditionally grants to Company an exclusive, perpetual, irrevocable, worldwide, fully-paid license, with the right to sublicense through multiple levels of sublicensees, under any and all such rights (1) to reproduce, create derivative works of, distribute, publicly perform, publicly display, digitally transmit, and otherwise use the Study Inventions in any medium or format, whether now known or hereafter discovered, (2) to use, make, have made, sell, offer to sell, import, and otherwise exploit any product or service based on, embodying, incorporating, or derived from the Study Inventions, and (3) to exercise any and all other present or future rights in the Study Inventions. |
| 10.2 | Company acknowledges and agrees that Prevail and/or its licensors own all intellectual property rights in the Services and the Documentation. Except as expressly stated herein, this Agreement does not grant Company any rights to, or in, patents, copyrights, database rights, trade secrets, trade names, trademarks (whether registered or unregistered), or any other rights or licenses in respect to the Services or the Documentation. |
| Confidential | 7 |
| 10.3 | Prevail represents and warrants that it has all the rights in relation to the Software, Services and the Documentation that are necessary to grant all the rights it purports to grant under, and in accordance with, the terms of this Agreement, and that the Software, Services, and Documentation, and Company’s access to and use of the Software, Services, and Documentation as contemplated by this Agreement, shall not infringe or misappropriate the intellectual property of any third party. |
| 11. | Confidentiality |
For the purposes herein, “Confidential Information” shall mean any non-public information relating to the business, operations and, more generally, any activities of a Party, whether or not marked or identified as confidential or proprietary, which the receiving Party should reasonably understand to be confidential information under the circumstances, including know-how, trade secret and, in the case of Company, Company Data and Study Inventions.
Each Party shall (i) maintain the confidentiality of the other Party’s Confidential Information, using, at a minimum, the same safeguards afforded its own confidential, proprietary trade secrets, but in no event no less than reasonable care; (ii) use the other Party’s Confidential Information only to the extent required for the performance of this Agreement; (iii) restrict disclosure and access to the other Party’s Confidential Information only to its employees, suppliers, permitted subcontractors, advisors and consultants who have a need to know for the performance of this Agreement, provided that they are bound by confidentiality and restricted use obligations no less restrictive than those contained herein; and (iv) not disclose, provide, transfer, rent, sublicense, or otherwise make available any portion of the other Party’s Confidential Information to any third party except as permitted under (iii) above. The non-disclosure and restricted use obligations shall not apply to information which receiving Party can prove through competent proof (i) is now or hereafter known to the public through no fault of the receiving Party, (ii) was in the possession of the receiving Party prior to disclosure by the disclosing Party, (iii) has been properly obtained without restriction from a third party who is not bound by an obligation of confidentiality, (iv) is independently developed by receiving Party without reference to, use of or reliance upon the disclosing Party’s Confidential Information or (v) information disclosed by court order or as otherwise required by law or regulation, provided that the Party required to disclose the information provides prompt advance notice to enable the other Party to seek a protective order or otherwise to prevent such disclosure. The obligations in this article 11 shall continue indefinitely after the expiration or termination of this Agreement.
| 12. | Indemnification and Limitation of liability |
| 12.1 | Prevail shall indemnify, defend, and hold harmless Company and its affiliates, and their respective employees, officers, directors (or their equivalent), agents, assigns and successors-in-interest (each an “Indemnified Party”) from and against any and all losses, damages, liabilities, costs (including reasonable legal fees) (“Losses”) incurred by an Indemnified Party resulting from any third-party claim, suit, action, demand, or proceeding for damages or losses (“Third-Party Claim”) caused by (i) the Software, the Services, any deliverables to the extent provided by Prevail, or any use thereof in accordance with this Agreement, infringing or misappropriating such third party’s intellectual property rights (an “IP Infringement Claim”), and (ii) the use of the Company Data in a manner not authorized by this Agreement. |
| 12.2 | NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES, OR ANY LOSS OF REVENUE OR PROFITS (EXCLUDING FEES UNDER THE AGREEMENT), DATA, OR DATA USE. PREVAIL’S MAXIMUM LIABILITY FOR ANY DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE SOFTWARE OR SERVICES, WHETHER IN CONTRACT OR TORT, OR OTHERWISE, SHALL IN NO EVENT EXCEED, IN THE AGGREGATE, THE TOTAL AMOUNTS ACTUALLY PAID TO PREVAIL FOR THE SOFTWARE AND SERVICES UNDER THIS AGREEMENT THAT IS THE SUBJECT OF THE CLAIM IN THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO SUCH CLAIM. |
| Confidential | 8 |
| 12.3 | THE EXCLUSIONS AND LIMITS ON LIABILITY SET FORTH IN SECTIONS 12.1 AND 12.2 ABOVE WILL NOT APPLY TO EXCLUDE OR LIMIT: (i) PREVAIL’S INDEMNIFICATION OBLIGATIONS; (ii) A PARTY’S LIABILITY ARISING IN CONNECTION WITH ITS BREACH OF CONFIDENTIALITY; (iii) A PARTY’S LIABILITY ARISING FROM SUCH PARTY’S FRAUD OR WILLFUL MISCONDUCT; (iv) A BREACH BY A PARTY OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS ; OR (v) A PARTY’S LIABILITY ARISING IN CONNECTION WITH ITS BREACH OF PRIVACY OR INFORMATION SECURITY OBLIGATIONS, PROVIDED THAT, PREVAIL’S MAXIMUM LIABILITY FOR ANY DAMAGES ARISING OUT OF OR RELATED TO SUCH A BREACH SHALL IN NO EVENT EXCEED, IN THE AGGREGATE, THE TOTAL AMOUNTS ACTUALLY PAID TO PREVAIL FOR THE SOFTWARE AND SERVICES UNDER THIS AGREEMENT THAT IS THE SUBJECT OF THE CLAIM IN THE THIRTY-SIX MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO SUCH CLAIM. |
| 13. | Insurance |
Each Party shall maintain in effect during the Term of this Agreement adequate forms and levels of insurance as may reasonably be expected by a going concern in the jurisdictions in which it conducts business.
| 14. | Term and termination |
| 14.1 | This Agreement shall commence on the Effective Date and shall continue for the Initial Term and, thereafter, this Agreement shall be automatically renewed for successive periods of 12 months (each a Renewal Period), unless: |
| (a) | either Party notifies the other Party of termination, in writing, at least 60 days before the end of the Initial Term or any Renewal Period, in which case this Agreement shall terminate upon the expiry of the applicable Initial Term or Renewal Period; or |
| (b) | otherwise terminated in accordance with the provisions of this Agreement; |
and the Initial Term together with any subsequent Renewal Periods shall constitute the Term.
| 14.2 | Without prejudice to any other rights or remedies to which the parties may be entitled, either Party may terminate this Agreement without liability to the other if the other Party commits a material breach of any of the terms of this Agreement and (if such a breach is remediable) fails to remedy that breach within 30 days of that Party being notified in writing of the breach. |
| 14.3 | Company may terminate this Agreement, or any SOW (or a portion thereof) at any time prior to completion by giving 30 days prior written notice to Prevail. Prevail shall promptly comply with the terms of such notice(s) to terminate work on the SOW (as applicable) and use its best efforts to limit any further cost to Company. |
| 14.4 | On termination of this agreement for any reason: |
| (a) | Company shall pay Prevail all direct expenses and fees for Services completed (or its prorated amount if partially completed) and of its costs incurred or irrevocably obligated as of the date of termination, in each case pursuant to this Agreement, and such other reasonable costs incurred to close out its work in the Study. If there are additional costs associated with any winding down period, those costs will be agreed to in writing by the Parties; |
| (b) | all licenses granted under this Agreement shall immediately terminate; |
| (c) | each Party shall return and make no further use of any equipment, property, Documentation, and other items (and all copies of them) belonging to the other Party; |
| Confidential | 9 |
| (d) | Company shall provide Prevail written instructions within 30 days, with which Prevail shall comply, to either return Company Data and Study Inventions or dispose of Company Data and Study Inventions at Company’s reasonable expense. If Company Data is being returned to Company, Prevail shall use reasonable commercial endeavors to deliver the then most recent back-up of Company Data to Company within 60 days of its receipt of such a written request, provided that Company has, at that time, paid all fees and charges outstanding at and resulting from termination (whether or not due at the date of termination); and |
| (e) | the accrued rights of the parties as of the time of termination, and the continuation after termination of any provision expressly stated to survive or implicitly surviving termination, shall not be affected or prejudiced. |
| 15. | Entire agreement and Counterparts |
This agreement, and any documents referred to in it, constitute the whole agreement between the parties and supersede any previous arrangement, understanding or agreement between them relating to the subject matter they cover.
This Agreement (including its SOWs) may be executed in any number of counterparts, all of which together shall constitute a single document. This Agreement and its SOWs may be executed by facsimile or digital file showing a Party’s signature (e.g., a .pdf). Such facsimile or digital file shall be deemed an original and fully enforceable and admissible in any legal proceeding.
| 16. | Modification and Assignment |
No supplement or modification of this Agreement shall be binding unless executed in writing by both parties.
Neither Party shall, without the prior written consent of the other Party, assign, transfer, charge, or sub-contract all or any of its rights or obligations under this Agreement; provided that either Party may assign its rights and delegate its duties under this Agreement, in whole or in part, to an affiliate or to a successor to such Party’s business by merger, acquisition, purchase of the business related to this Agreement or other similar corporate transaction.
| 17. | Governing Law |
This Agreement shall be governed by the laws of the Commonwealth of Pennsylvania, U.S.A. without regard to the conflicts of law provisions thereof.
| 18. | Notices |
Any notice required to be given under this Agreement shall be in writing and shall be delivered by hand or overnight delivery to the other Party at its address set out in this Agreement, or such other address as may have been notified by that Party for such purposes.
This Agreement has been entered into on the date stated at the beginning of it.
| BriaCell Therapeutics Corp. | Prevail InfoWorks, Inc. | |||
| By: | /s/ William V. Williams | By: | /s/ Jack Houriet | |
| Name: | William V. Williams | Name: | Jack Houriet | |
| Title: | CEO | Title: | CEO | |
| Date: | May 9, 2023 | Date: | May 9, 2023 | |
| Confidential | 10 |
Schedule 1— Summary of Business Continuity and Disaster Recovery Plan
All employees are trained and retrained annually on BC/DR procedures.
Prevail’s Production, Test and Development Systems data backup and recovery process is as follows:
| ● | All back up processes are automated with system confirmations/errors sent to IT staff. | |
| ● | Databases are backed up nightly in the primary data center and copied to secondary data center. | |
| ● | Transaction logs are backed up hourly, with local copies done once a minute. | |
| ● | Full monthly backups are maintained indefinitely. | |
| ● | Daily backups are maintained for two weeks. | |
| ● | Backups are also done before any system upgrades. Scheduled system maintenance is done overnight on the first Sunday of each month. | |
| ● | Virtual Server Images are backed up daily, and copied to secondary data center, and a third off-site location. (This actually includes all data in the system at that time.) | |
| ● | Virtual Server Images are maintained for 10 days. | |
| ● | Data can be fully restored from a point in time no greater than 60 seconds prior to an event. | |
| ● | Virtual Severs themselves can be restored from a point in time no greater than 24 hours from an event. | |
| ● | All systems can be restored at the primary or secondary sites in the event of a disaster. |
All Primary systems are virtualized in a physical hosting facility that is certified as ISO/IEC 27001:2013 and SOC 2. Both Primary and Secondary physical hosts are globally-redundant systems providers.
All business systems are fully virtualized with a large multi-national company with globally-redundant storage.
In the event of a disaster that prevents physical office access or limits use, all business and production systems are fully accessible to remote users via secure VPN tunnels.
| Confidential | 11 |
STATEMENT OF WORK NO. 1
THIS STATEMENT OF WORK NO. 1 (“SOW 1”) is effective as of May 9, 2023 (the “Effective Date”).
Parties
| (1) | Prevail InfoWorks, Inc. is a corporation having its principal place of business at 211 North 13th Street, Suite 600, Philadelphia, PA 19107-1610, USA (“Prevail”); and |
| (2) | BriaCell Therapeutics Corp. is a corporation having its principal place of business at 2929 Arch Street, 3rd Floor, Philadelphia, PA 19104, USA (“Company”). |
| (3) | Prevail and Company may be individually referred to as a “Party” or collectively as the “Parties.” |
Background
| (1) | Prevail and Company (the “Parties”) entered into a Master Service and Technology Agreement on May 9, 2023 (the “Agreement”). |
| (2) | Section 2 of the Agreement permits the Parties to enter into Statements of Work. |
| (3) | The Parties seek to enter into this Statement of Work. |
WHEREFORE
The Parties herein agree that this SOW 1 is herein incorporated into the Agreement by reference as follows:
| A. | PROJECT ASSUMPTIONS |
| Overall Assumptions | ||
| Protocol Number | BC-IMT-04 | |
| Indication | Metastatic Breast Cancer | |
| Phase | Phase III | |
| Number of Sites | 75 | |
| Number of Patients Screened | 472 | |
| Number of Patients Enrolled | 404 | |
| Number of Patients Completed | 324 | |
| Number of Countries | 2 (US, CAN) | |
| Timeline Assumptions | (Months) | |
| Startup (Project Start to FPI) | 3 | |
| Enrollment (FPI to LPI) | 12 | |
| Treatment (LPI to LPO) | 12 | |
| Database Lock (LPO to DBL) | 0.5 | |
| Closeout (DBL to CSR) | 2 | |
| Total Project Duration | 29.5 |
| Confidential | 12 |
| Technology Assumptions | ||
| Duration (System Live Period) | 24 | |
| Minimum Duration (months) | 6 | |
| Number of Users | 200 | |
| Number of Live Data Sources to be Integrated | 2 | |
| Live Data Sources to be Integrated | Labs, Imaging | |
| Lead Project Management Assumptions | (Up to) | |
| Project Overview | ||
| Project Team Training / Familiarization | Included | |
| Kickoff Meetings Planning, Coordination, Attendance | 1 | |
| Investigator Meetings Planning, Coordination, Attendance | 1 | |
| Project Management Plan (review cycles) | 2 | |
| Timeline Development (review cycles) | 2 | |
| Communication Plan (review cycles) | 1 | |
| Risk Management Plan (review cycles) | 1 | |
| CRF Review & System Specification Review (1 Drafts, 1 Final) | Included | |
| Single Interface Review | Included | |
| Vendors to Manage | 3 | |
| Startup Activities | ||
| Project Management Plan & Activities (Months) | 3 | |
| Ongoing Activities | ||
| Team Meeting Teleconference (agenda & minutes) | 111 | |
| Face-to-Face Meetings (agenda & minutes) | 24 | |
| Project Management Activities (Months) | 24 | |
| Closeout Activities | ||
| Project Management (Months) | 2.5 | |
| Contracting & Contract Administration Assumptions | (Up to) | |
| Number of vendors to review contract or contract | 3 | |
| Number of sites to review contract or contract | 75 | |
| Number of revisions per site or vendor | 1 | |
| Months to manage contracts | 28.5 | |
| Number of countries to manage the contract law | 2 | |
| Clinical Project Accounting | (Up to) | |
| Number of vendor budgets to reconcile or administer | 3 | |
| Number of site budgets to reconcile or administer | 75 | |
| Number of procurement currencies | 2 | |
| Active Financial Management and Project Accounting (Months) | 28.5 |
| Confidential | 13 |
| Site Management Assumptions | (Up to) | |
| Project Team Training / Familiarization | Included | |
| Site Identification and Feasibility | 112.5 | |
| Site Qualification and Approval | 90 | |
| Site Initiation | 75 | |
| Central IRB | 1 | |
| Local IRB | 25 | |
| Trial Master File (per Site) | 75 | |
| Essential Document Collection (per Site) | 75 | |
| Regulatory Site Binder Preparation (per Site) | 75 | |
| Newsletters | 4 | |
| Ongoing Site Management (Months) | 25.5 | |
| Study Teleconference Attendance | 111 | |
| Monitoring Assumptions | (Up to) | |
| Development & Management of Clinical Monitoring Plan (review cycle) | 2 | |
| CRA Training, Meeting and Conference Call (CRAs) | 11 | |
| Lead CRA Management and Trip Report Review (trip reports) | 1215 | |
| Source Document Verification (Risk-Based Monitoring) | 100% | |
| Number of Qualification Visits | 90 | |
| Number of Initiation Visits | 75 | |
| Number of 1-Day In-Person Interim Visits | 975 | |
| Number of 2-Day In-Person Interim Visits | 0 | |
| Number of Remote Interim Visits | 0 | |
| Number of Additional Days on Site | 0 | |
| Number of Closeout Visits | 75 | |
| Total Number of Monitoring Visits | 1215 | |
| Information and Data Management Assumptions | (Up to) | |
| Project Overview | ||
| Total CRF Pages per Patient | 266 | |
| Unique CRF Pages per Patient | 31 | |
| Total CRF Pages | 98,322 | |
| Total Number of Queries | 29,496 | |
| Total Number of Coded Terms | 6,060 | |
| Total Number of Edit Checks | 620 | |
| Total Number of EDC Users (Study Team & Sites) | 158 | |
| Total Number of Interim Analyses | 1 | |
| Total Number of DSMB datasets | 8 | |
| Project Team Training / Familiarization | Included | |
| Kickoff Meeting Attendance | Included | |
| Investigator Meeting Attendance | Included |
| Confidential | 14 |
| Startup Activities | ||
| Single Interface Setup | Included | |
| Data Management Plan (cycles) | 2 | |
| CRF Development | Included | |
| CRF Specification (review cycles) | 2 | |
| Data Review Guidelines (cycles) | 2 | |
| Data Coding Guidelines (cycles) | 2 | |
| Study Documentation Setup (Binders/Network Folders) | Included | |
| AE/Conmed Customization | Included | |
| Application Dependency Programming | Included | |
| CRF Completion Guidelines (cycles) | 2 | |
| Data Management Training Document (cycles) | 2 | |
| Dataset Specification/Annotated CRFs (cycles) | 2 | |
| CRF Validation | Included | |
| Dataset Configuration & Validation | Included | |
| Edit Check Specification Configuration (cycles) | 2 | |
| Ongoing Activities | ||
| Data Cleaning (edit checks, manual review of CRF data) | Included | |
| Attend Weekly Teleconferences | 111 | |
| Support (months) | 24.5 | |
| Closeout Activities | ||
| Database Lock Preparation | Included | |
| Database Lock | Included | |
| SDTM Domains | 33 | |
| ADaM Domains | 11 | |
| CD Archive Preparation | Included | |
| Locked Data Transfer | Included | |
| Pharmacovigilance Assumptions | (Up to) | |
| Safety Management Plan (Review Cycles) | 2 | |
| Project Team Training / Familiarization | Included | |
| Project Kick-Off Meeting | Included | |
| Team Meeting Teleconferences | 111 | |
| Safety Database | 1 | |
| SAE Receipt / Processing | 101 | |
| SUSAR Processing | 8 | |
| SAE Reporting to Required Bodies | 101 | |
| Safety Coding | 2020 | |
| DSMB/DMC Charter Development (Review Cycles) | 1 | |
| DSMB/DMC Member Identification (Members) | Not Included | |
| DSMB/DMC Meeting Coordination | 8 | |
| DSMB/DMC Meeting Attendance | 8 | |
| DSMB/DMC Meetings Reporting | 8 |
| Confidential | 15 |
| Technology Deliverables | ||
| ● | Platform license for users of the Single Interface® (21CFRPart11 Compliant) | |
| ● | Fully hosted, searchable Central Data Repository dedicated to your data | |
| ● | Core Integrations Platform with integration of Live Systems and Databases | |
| ● | Setup of Platform, Systems, and all Modules | |
| ● | Setup of integration of Live Systems and Closed Databases | |
| ● | Web-based training all users | |
| ● | Web-accessible Analytics and Reporting Platform, including but not limited to: | |
| ● | Dataset Viewer | |
| ● | Visual Demographic reports | |
| ● | Visual Subject Visit reports | |
| ● | Visual Subject Status reports | |
| ● | AE/SAE Subject Profile reports | |
| ● | Visual AE/SAE Body System reports | |
| ● | Visual Subject Vital Signs report | |
| ● | Visual Subject ECG reports | |
| ● | Visual Subject Labs reports | |
| ● | Visual Patient Profile reports | |
| ● | Visual Efficacy reports | |
| ● | Operational Metrics reports | |
| ● | Up to 5 additional Custom “On-tap” reporting engines | |
| ● | Project Administration | |
| ● | Electronic Data Capture (EDC) with CDM System | |
| ● | Site Monitoring System | |
| ● | Interactive Voice/Web Randomization System | |
| ● | Trial Supply Management System | |
| ● | Site Launch Logistics System with eTMF | |
| ● | Safety Management System | |
| ● | Investigator Grant Navigator | |
| ● | Alert Messaging | |
| ● | Phone support during Normal Business Hours for users | |
| ● | Ongoing maintenance and QC of Single Interface and integrations | |
| ● | Updates to Platform, Systems and Modules | |
| Confidential | 16 |
| B. | PROJECT BUDGET |
| DIRECT EXPENSES | ||||
| The Single Interface® Integrated Analytics Platform | ||||
| SI Platform Setup, Configuration, and Validation/QA | $ | 15,000 | ||
| SI Platform License | $ | 72,000 | ||
| External System Integrations | $ | 33,600 | ||
| Single Interface™ Subtotal | $ | 120,600 | ||
| Additional Modules | ||||
| Electronic Data Capture (EDC) with CDM System | $ | 240,000 | ||
| Site Monitoring System | $ | 24,000 | ||
| Interactive Web Randomization System | $ | 45,000 | ||
| Trial Supply Management System | $ | 252,000 | ||
| Site Launch Logistics System with eTMF | $ | 114,000 | ||
| Safety Management System | $ | 30,000 | ||
| Investigator Grant Navigator | $ | 225,000 | ||
| Additional Modules Subtotal | $ | 930,000 | ||
| Services | ||||
| Lead Project Management | $ | 969,675 | ||
| Contracting and Contract Administration | $ | 118,800 | ||
| Clinical Project Accounting | $ | 404,250 | ||
| Information and Data Management | $ | 2,095,893 | ||
| Statistical Programming | $ | 93,950 | ||
| Trial Supply Management | $ | 181,500 | ||
| Site Management | $ | 2,071,313 | ||
| Monitoring | $ | 7,197,512 | ||
| Pharmacovigilance | $ | 437,400 | ||
| Services Subtotal | $ | 13,570,293 | ||
| Total Professional Fees (Prevail Technology and Services) | $ | 14,620,893 | ||
| INDIRECT/PASSTHROUGH EXPENSES (ESTIMATED) | ||||
| Investigator Fees | $ | 14,577,925 | ||
| Biostatistics | $ | 204,800 | ||
| Medical Writing | $ | 82,060 | ||
| Medical Monitoring | $ | 180,000 | ||
| Investigator Meeting Organization | $ | 225,000 | ||
| Investigator Meeting Travel | $ | 281,250 | ||
| Monitor Travel | $ | 1,336,500 | ||
| Audits | $ | 117,000 | ||
| Travel to Training Meetings | $ | 45,000 | ||
| Travel to Client Meetings | $ | 12,000 | ||
| Travel to Audit Visits | $ | 9,900 | ||
| Meetings and Teleconferences | $ | 3,600 | ||
| Printing, Software and Other | $ | 18,750 | ||
| Regulatory and EC Fees | N/A | |||
| Central Lab Fees | $ | 405,000 | ||
| Imaging (CT/MRI) | $ | 4,830,000 | ||
| Shipping and Supplies | TBD | |||
| Total Indirect/Passthrough Expenses (Estimated) | $ | 22,813,585 | ||
| TOTAL ESTIMATED BUDGET | $ | 37,434,478 | ||
| Confidential | 17 |
| C. | PAYMENT TERMS AND INFORMATION |
Direct Expenses: All Direct Expenses will be invoiced and paid in accordance the below payment schedule. Upfront Payment for the Study shall be paid upon the signing of this agreement. The installment payments are monthly and are due on the first of each month, commencing on the signing of this agreement. Milestone payments are due upon the completion of the milestone. In the event the final data transfer occurs prior to the projected timeline in the Study, the entire balance of the Direct Expenses for the Study will be immediately due and payable.
| Payments | Trigger | Unit Amount | Total Amount | |||||||
| Upfront Payment | Contract signature | $ | 5,379,945 | $ | 5,379,945 | |||||
| Enrollment Milestone | 25% Enrollment | $ | 365,000 | $ | 365,000 | |||||
| Enrollment Milestone | 50% Enrollment | $ | 365,000 | $ | 365,000 | |||||
| Enrollment Milestone | 75% Enrollment | $ | 365,000 | $ | 365,000 | |||||
| Enrollment Milestone | 100% Enrollment* | $ | 365,000 | $ | 365,000 | |||||
| Installments 1 - 28 | Monthly (May ‘23 – Sep ‘25) | $ | 278,080 | $ | 7,780,948 | |||||
| $ | 14,620,893 | |||||||||
If
the study is fully enrolled (404 patients) within 12 months of the first patient screened, then Company agrees to pay Prevail an incentive
bonus of $100,000, payable within 30 days of the enrollment of the 404th patient.
Indirect/Passthrough Expenses: Indirect/Passthrough Expenses shall be invoiced to Company as they are incurred and Prevail InfoWorks shall provide Company with supporting documentation of such Indirect/Passthrough Expenses. Regarding any Indirect/Passthrough Expenses that Prevail will be expected to incur and/or process the payments of on behalf of Company in the Study, an upfront payment in the amount of 20% of those estimated Indirect/Passthrough Expenses will be invoiced by Prevail upon contract signature, which payment will be applied to the final Indirect/Passthrough Expenses incurred in the Study.
Invoices and Payment: Invoices shall include the protocol/project number and a detailed description of the deliverables for which the Prevail is seeking payment, and payment shall be made in accordance with the above payment schedule. Prevail will email invoices to: BriaCell Therapeutics Corp. Attention:___________@briacell.com. Company will pay Prevail by wire transfer, EFT, ACH and/or check as instructed on the invoice.
Satisfaction Guarantee
All Subscription Fees are subject to an unconditional 100% satisfaction guarantee. If Company is not fully satisfied with any Software and Service Deliverables under this Agreement during a monthly payment period, it has no obligation to pay Prevail the monthly fee for that period. All Company must do to invoke this guarantee is notify Prevail in writing, with a brief description of its dissatisfaction with the Software and Services, at least 5 business days before the due date of the monthly fee payment.
| BriaCell Therapeutics Corp. | Prevail InfoWorks, Inc. | |||
| By: | /s/ William V. Williams | By: | /s/ Jack Houriet | |
| Name: | William V. Williams | Name: | Jack Houriet | |
| Title: | CEO | Title: | CEO | |
| Date: | May 9, 2023 | Date: | May 9, 2023 | |
| Confidential | 18 |
Exhibit 31.1
CERTIFICATIONS
I, William V. Williams, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of BriaCell Therapeutics Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| June 14, 2023 | /s/ William V. Williams |
| William V. Williams | |
President and Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATIONS
I, Gadi Levin, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of BriaCell Therapeutics Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| June 14, 2023 | /s/ Gadi Levin |
| Gadi Levin | |
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, William V. Williams, President and Chief Executive Officer of BriaCell Therapeutics Corp. (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| 1. | The Quarterly Report on Form 10-Q of the Company for the period ended April 30, 2023 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| June 14, 2023 | /s/ William V. Williams |
| William V. Williams | |
President and Chief Executive Officer (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Gadi Levin, Chief Financial Officer of BriaCell Therapeutics Corp. (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| 1. | The Quarterly Report on Form 10-Q of the Company for the period ended April 30, 2023 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| June 14, 2023 | /s/ Gadi Levin |
| Gadi Levin | |
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |