Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations
Introduction to Management's Discussion and Analysis
This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") comments on our business operations, performance, financial position and other matters for the three-month period ended March 31, 2022 and 2021.
Unless otherwise indicated, all financial and statistical information included herein relates to continuing operations of the Company. Unless otherwise indicated or the context otherwise requires, the words, "IntelGenx, "Company", "we", "us", and "our" refer to IntelGenx Technologies Corp. and its subsidiaries, including IntelGenx Corp.
This MD&A should be read in conjunction with the accompanying unaudited Consolidated Financial Statements and Notes thereto. We also encourage you to refer to the Company's MD&A for the year ended December 31, 2021. In preparing this MD&A, we have taken into account information available to us up to May 12, 2022, the date of this MD&A, unless otherwise indicated.
Additional information relating to the Company, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the "2021 Form 10-K"), is available on SEDAR at www.sedar.com and on the U.S. Securities and Exchange Commission (the "SEC") website at www.sec.gov.
All dollar amounts are expressed in U.S. dollars, unless otherwise noted.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements included or incorporated by reference in this MD&A constitute forward-looking statements within the meaning of applicable securities laws. All statements contained in this MD&A that are not clearly historical in nature are forward-looking, and the words "anticipate", "believe", "continue", "expect", "estimate", "intend", "may", "plan", "will", "shall" and other similar expressions are generally intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All forward-looking statements are based on our beliefs and assumptions based on information available at the time the assumption was made. These forward-looking statements are not based on historical facts but on management's expectations regarding future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Forward-looking statements involve significant known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those implied by forward-looking statements. These factors should be considered carefully and you should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this MD&A or incorporated by reference herein are based upon what management believes to be reasonable assumptions, there is no assurance that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this MD&A or as of the date specified in the documents incorporated by reference herein, as the case may be. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements were made or to reflect the occurrence of unanticipated events, except as may be required by applicable securities laws. The factors set forth in Item 1A., "Risk Factors" of the 2021 Form 10-K, as well as any cautionary language in this MD&A, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Before you invest in the common stock, you should be aware that the occurrence of the events described as risk factors and elsewhere in this report could have a material adverse effect on our business, operating results and financial condition.
Company Background
We are a drug delivery company established in 2003 and headquartered in Montreal, Quebec, Canada. Our focus is on the contract development and manufacturing of novel oral thin film products for the pharmaceutical market. More recently, we have made the strategic decision to enter the Canadian cannabis market with non-prescription cannabis infused oral film that launched in early 2021 and in 2020 we made the decision to enter the psychedelic market. As a full service CDMO, we are offering partners a comprehensive portfolio of pharmaceutical services, including pharmaceutical R&D, clinical monitoring, regulatory support, tech transfer, manufacturing scale-up and commercial manufacturing.
Our business strategy is to leverage our proprietary drug delivery technologies and develop pharmaceutical products with tangible benefits for patients, for our partners and, once a developed product launches, retain the exclusive manufacturing rights.
Our primary growth strategy is based on providing CDMO services to the pharmaceutical industry by focusing on three key strategic areas: (1) psychedelics, (2) cannabis, and (3) animal health.
We have established a state-of-the-art manufacturing facility for the future manufacture of our VersaFilm™ and VetaFilm™ products. We believe that this (1) represents a profitable business opportunity, (2) will reduce our dependency upon third-party contract manufacturers, thereby protecting our manufacturing process know-how and intellectual property, and (3) allows us to offer our development partners a full service from product conception through to supply of the finished product.
With our current manufacturing equipment, we are only able to manufacture products that do not contain flammable organic solvents. We initiated a project to expand the existing manufacturing facility, the timing of which will be dictated in part by the completion of agreements with our commercial partners. This expansion became necessary following requests by commercial partners to increase manufacturing capacity and provide solvent film manufacturing capabilities. The new facility should create a fivefold increase of our production capacity in addition to offering a one-stop shopping opportunity to our partners and provide better protection of our Intellectual Property.
Product Opportunities that provide Tangible Patient Benefits
In addition to our three key strategic areas we will offer our services to develop oral film products leveraging our VersaFilm™ technology that provide tangible patient benefits versus existing drug delivery forms. Patients with difficulties swallowing medication, pediatrics or geriatrics may benefit from oral films due to the ease of use. Similarly, we are working on oral films to improve bio-availability and/or response time versus existing drugs and thereby reducing side effects.
Development of New Drug Delivery Technologies
The rapidly disintegrating film technology contained in our VersaFilm™, and our AdVersa® mucosal adhesive tablet, are two examples of our efforts to develop alternate technology platforms. As we work with various partners on different products, we seek opportunities to develop new proprietary technologies.
COVID-19
Our operations and financial condition have been affected by the COVID-19 pandemic. Though we were granted an exemption by local authorities which permitted us to continue operations during the COVID-19 pandemic, we nevertheless faced multiple operational and financial challenges. Despite these challenges, we have continually been able to minimize the impact on our overall performance.
In response to the COVID-19 pandemic, we partially reorganized our operations and adopted a remote work policy for employees and management. We also benefited from the Canada Emergency Wage Subsidy as well as the Canada Emergency Commercial Rent Assistance program from our landlord in fiscal year 2020.
Throughout the COVID-19 pandemic, we have been, and remain, in compliance with all federal, provincial, and municipal regulations that have been put in place since the beginning of the pandemic. We will continue to monitor any further developments in this regard, with the health and safety of our employees and management as the primary concern.
Most recent key developments
On January 20, 2022, the Company announced that patient dosing has resumed in the ongoing Phase 2a BUENA clinical trial in patients with mild to moderate Alzheimer's Disease under a previously amended protocol using higher doses of Montelukast VersaFilm®.
On February 01, 2022, the Company announced that its wholly-owned subsidiary, IntelGenx Corp. received a third term loan in the amount of U.S. $3 million pursuant to its amended and restated secured loan agreement with atai Life Sciences. The obligations under the Third Loan are guaranteed by the Company.
All amounts are expressed in thousands of U.S. dollars unless otherwise stated.
Currency rate fluctuations
Our operating currency is Canadian dollars, while our reporting currency is U.S. dollars. Accordingly, our results of operations and balance sheet position have been affected by currency rate fluctuations. In summary, our financial statements for the three-month period ended March 31, 2022 report an accumulated other comprehensive loss mainly due to foreign currency translation adjustments of $1,703 primarily due to the fluctuations in the rates used to prepare our financial statements, $17 of which positively impacted our comprehensive loss for the three-month period ended March 31, 2022. The following Management Discussion and Analysis takes this into consideration whenever material.
Reconciliation of Comprehensive Loss to Adjusted Earnings (Loss) before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA (Loss))
Adjusted EBITDA is a non-US GAAP financial measure. A reconciliation of the Adjusted EBITDA is presented in the table below. The Company uses adjusted financial measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than US-GAAP do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. The Company uses Adjusted EBITDA to measure its performance from one period to the next without the variation caused by certain adjustments that could potentially distort the analysis of trends in our operating performance, and because the Company believes it provides meaningful information on the Company's financial condition and operating results.
IntelGenx obtains its Adjusted EBITDA measurement by adding / (deducting) to comprehensive loss, finance income and costs, depreciation and amortization, income taxes and foreign currency translation adjustment incurred during the period. IntelGenx also excludes the effects of certain non-monetary transactions recorded, such as share-based compensation, for its Adjusted EBITDA calculation. The Company believes it is useful to exclude these items as they are either non-cash expenses, items that cannot be influenced by management in the short term, or items that do not impact core operating performance. Excluding these items does not imply they are necessarily nonrecurring. Share-based compensation costs are a component of employee and consultant's remuneration and can vary significantly with changes in the market price of the Company's shares. Foreign currency translation adjustments are a component of other comprehensive income and can vary significantly with currency fluctuations from one period to another. In addition, other items that do not impact core operating performance of the Company may vary significantly from one period to another. As such, Adjusted EBITDA provides improved continuity with respect to the comparison of the Company's operating results over a period of time. Our method for calculating Adjusted EBITDA may differ from that used by other corporations.
Reconciliation of Non-US-GAAP Financial Information
|
|
Three-month period |
|
|
|
|
|
|
ended November 31 ended March 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
Comprehensive loss |
|
(3,018 |
) |
|
(2,297 |
) |
|
|
|
|
|
|
Add (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
195 |
|
|
192 |
|
|
|
|
|
|
|
Finance costs |
|
377 |
|
|
334 |
|
|
|
|
|
|
|
Finance income |
|
(1 |
) |
|
- |
|
|
|
|
|
|
|
Share-based compensation |
|
32 |
|
|
31 |
|
|
|
|
|
|
|
Other comprehensive loss |
|
332 |
|
|
36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (Loss) |
|
(2,083 |
) |
|
(1,704 |
) |
|
|
|
|
|
|
Adjusted Earnings (Loss) before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA Loss)
Adjusted EBITDA (Loss) increased by $379 for the three-month period ended March 31, 2022 to ($2,083) compared to ($1,704) for the three-month period ended March 31, 2021. The increase in Adjusted EBITDA (Loss) of $379 for the three-month period ended March 31, 2022 is mainly attributable to a increase in R&D expenses of $325 before consideration of stock-based compensation, an increase in SG&A expenses of $150 before consideration of stock-based compensation, and a decrease in revenues of $49, offset by a decrease in Manufacturing expenses of $145 before consideration of stock-based compensation.
Results of operations for the three-month period ended March 31, 2022 compared with the three-month period ended March 31, 2021.
|
|
Three-month period |
|
|
|
|
|
|
ended March 31, |
|
|
|
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
Revenue |
|
237 |
|
|
286 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development Expenses |
|
798 |
|
|
471 |
|
|
|
|
|
|
|
Manufacturing Expenses |
|
470 |
|
|
621 |
|
|
|
|
|
|
|
Selling, General and Administrative Expenses |
|
1,084 |
|
|
929 |
|
|
|
|
|
|
|
Depreciation of tangible assets |
|
195 |
|
|
192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(2,310 |
) |
|
(1,927 |
) |
|
|
|
|
|
|
Net loss |
|
(2,686 |
) |
|
(2,261 |
) |
|
|
|
|
|
|
Comprehensive loss |
|
(3,018 |
) |
|
(2,297 |
) |
|
|
|
|
|
|
Revenue
Total revenues for the three-month period ended March 31, 2022 amounted to $237, representing a decrease of $49 or 17% compared to $286 for the three-month period ended March 31, 2021. The decrease for the three-month period ended March 31, 2022 compared to the last year's corresponding period is attributable to an decrease in Product revenues of $160, offset by increases in R&D revenues of $99 and Royalties of $12.
Research and development ("R&D") expenses
R&D expenses for the three-month period ended March 31, 2022 amounted to $798, representing an increase of $327 or 69%, compared to $471 for the three-month period ended March 31, 2021.
The increase in R&D expenses for the three-month period ended March 31, 2022 is mainly attributable to increases in study costs of $202, salary expenses of $112 due to new hires, the allocation of the 20% credit of $111 as per the strategic development agreement with atai and a decrease in R&D estimated tax credits of $24, offset by decreases in analytical costs of $87 and R&D batch development expenses of $37.
In the three-month period ended March 31, 2022 we recorded estimated Research and Development Tax Credits of $39, compared with $63 that was recorded in the same period of the previous year.
Manufacturing expenses
Manufacturing expenses for the three-month period ended March 31, 2022 amounted to $470, representing a decrease of $151 or 24%, compared to $621 for the three-month period ended March 31, 2021.
The decrease in Manufacturing expenses for the three-month period ended March 31, 2022 is mainly attributable to decreases in supplies and consumables of $200 and salary expenses of $17, offset by increases in quality expenses of $33 and repairs and maintenance expenses of $30.
Selling, general and administrative ("SG&A") expenses
SG&A expenses for the three-month period ended March 31, 2022 amounted to $1,084, representing an increase of $155 or 17%, compared to $929 for the three-month period ended March 31, 2021.
The increase in SG&A expenses for the three-month period ended March 31, 2022 is mainly attributable to increases in professional fees of $123, leasehold expenses of $45, insurance expense of $26, business development expenses of $20 and general office expenses of $8, offset by a decrease salary expenses of $75
Depreciation of tangible assets
In the three-month period ended March 31, 2022 we recorded an expense of $195 for the depreciation of tangible assets, compared with an expense of $192 for the same period of the previous year.
Share-based compensation expense, warrants and stock-based payments
Share-based payments expense for the three-month period ended March 31, 2022 amounted to $32 compared to $31 for the three-month period ended March 31, 2021.
We expensed approximately $29 in the three-month period ended March 31, 2022 for options granted to our employees in 2020, 2021, and 2022 under the 2016 Stock Option Plan and $3 for options granted to a consultant in 2021, compared with $31 and $Nil, respectively that was expensed in the same period of the previous year.
There remains approximately $120 in stock-based compensation to be expensed in fiscal 2022 and 2023, of which $21 relates to the issuance of options to a consultant during 2021. We anticipate the issuance of additional options and warrants in the future, which will continue to result in stock-based compensation expense
Key items from the balance sheet
|
|
March 31, 2022 |
|
|
December 31, 2021 |
|
|
Increase/ (Decrease) |
|
|
Percentage Increase/ (Decrease) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
$ |
11,656 |
|
$ |
11,437 |
|
$ |
219 |
|
|
2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leasehold improvements and equipment, net |
|
5,163 |
|
|
5,213 |
|
|
(50 |
) |
|
(1%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security deposits |
|
256 |
|
|
252 |
|
|
4 |
|
|
2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease right-of-use asset |
|
961 |
|
|
1,003 |
|
|
(42 |
) |
|
(4%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities (excluding convertible debentures) |
|
2,778 |
|
|
2,773 |
|
|
5 |
|
|
0.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
5,500 |
|
|
2,500 |
|
|
3,000 |
|
|
120% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible debentures |
|
4,327 |
|
|
4,247 |
|
|
80 |
|
|
2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible notes |
|
4,138 |
|
|
3,709 |
|
|
429 |
|
|
12% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease liability |
|
604 |
|
|
642 |
|
|
(38 |
) |
|
(6%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease liability |
|
75 |
|
|
84 |
|
|
(9 |
) |
|
(11%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Stock |
|
1 |
|
|
1 |
|
|
0 |
|
|
0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in-capital |
|
62,842 |
|
|
63,104 |
|
|
(262 |
) |
|
(0.4%) |
|
Current assets
Current assets totaled $11,656 as at March 31, 2022 compared with $11,437 as at December 31, 2021. The increase of $219 is mainly attributable to increases in cash of $2,669, accounts receivable of $74, prepaid expenses of $27, security deposits of $3 and inventory of $26, offset by decreases in short-term investments of $2,369 and investment tax credits receivable of $211.
Cash
Cash totaled $6,614 as at March 31, 2022 representing an increase of $2,669 compared with the balance of $3,945 as at December 31, 2021. The increase in cash on hand relates to net cash provided by financing activities of $2,991 and investing activities of $1,955 and a positive foreign exchange effect of $4, offset by net cash used in operating activities of $2,281.
Accounts receivable
Accounts receivable totaled $754 as at March 31, 2022 representing an increase of $74 compared with the balance of $680 as at December 31, 2021. The main reason for the increase is related to the revenues accounted for as at March 31, 2022 offset by the collection in 2022 of revenues accounted for as at December 31, 2021.
Prepaid expenses
As at March 31, 2022 prepaid expenses totaled $132 compared with $105 as of December 31, 2021. The increase may be explained by advance payments made in January 2022.
Investment tax credits receivable
R&D investment tax credits receivable totaled approximately $225 as at March 31, 2022 compared with $436 as at December 31, 2021. The decrease is attributable to the fact that the 2020 amount was collected in the three month period ended March 31, 2022.
Leasehold improvements and equipment
As at March 31, 2022, the net book value of leasehold improvements and equipment amounted to $5,163, compared to $5,213 at December 31, 2021. In the three-month period ended March 31, 2022 additions to assets totaled $64 and mainly comprised of $31 for lab equipment, $29 for manufacturing equipment and $4 for computer equipment, and variation of foreign exchange fluctuation, offset by depreciation expense of $195.
Security deposit
A security deposit in the amount of CAD$300 ($240) in respect of an agreement to lease approximately 17,000 square feet in a property located at 6420 Abrams, St-Laurent, Quebec, Canada was recorded as at March 31, 2022. Security deposits in the amount of CAD$15 ($12) for utilities and CAD$5 ($4) for Cannabis license were also recorded as at March 31, 2022. Security deposit in the amount of CAD$260 ($208) for the Company credit cards was also recorded as at March 31, 2022 but classified as short-term.
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities totaled $2,351 as at March 31, 2022 compared with $2,299 as at December 31, 2021.
Loan payable
Loan payable totaled $5,500 as at March 31, 2022 compared with $2,500 as at December 31, 2021. atai has granted the to the Company a secured loan in the amount of $5,500, bearing interest at 8%. In September 2021, the Company entered into an amended and restated secured loan agreement with atai pursuant to which atai has made two additional term loans available to the Company for $3,000,000 each, which will mature on January 5, 2024. The first loan was received on January 7, 2022 and the second loan will be made available on January 6, 2023, subject to the satisfaction of customary conditions. The Loan Agreement also extends the maturity date for the current loans, in an aggregate amount of $2,500, to January 2024. The loan is guaranteed by the Company and secured by all present and future movable property, rights and assets of the Company, excluding any intellectual property or technology controlled or owned by the Company. The loan bears interest at 8%. The interest for the three-month period ended March 31, 2022 amounts to $91 (2021: $10) and is recorded in financing and interest expense.
Convertible debentures
Convertible debentures totaled $4,327 as at March 31, 2022 as compared to $4,247 as at December 31, 2021. The Corporation issued a total aggregate principal amount of CAD$7,600,000 ($6,082,000) of debentures at a price of CAD$1,000 ($800) per debenture in July 2017 and August 2017. On June 25, 2021, the debenture holders approved the extension of the maturity date of the convertible debentures from June 30, 2021 to June 30, 2022 and the conversion price was reduced from CAD$1.35 ($1.08) to CAD$0.50 ($0.40). The convertible debentures have been recorded as a liability as at March 31, 2022. The accretion expense for the three-month period ended March 31, 2022 amounts to CAD$62,000 ($49,000) ((CAD$73,000) ($58,000) in Q1-2021). The interest on the convertible debentures as at March 31, 2022 amounts to CAD$110,000 ($87,000) ((CAD$146,000) ($115,000) in Q1-2021) and is recorded in Financing and interest expense.
During the three-month period ended March 31, 2022, CAD$40,000 ($32,000) of convertible debentures were converted into 80,000 common shares at the option of the holders, resulting in an increase in additional paid-in capital of $31,000.
Convertible notes
Convertible notes totaled $4,138 as at March 31, 2022 as compared to $3,709 as at December 31, 2021. The convertible notes have been recorded as a liability. The accretion expense for the period ended March 31, 2022 amounts to $42 ($80 in 2021). The interest on the convertible notes as at March 31, 2022 amounts to $95 ($59 in 2021) and is recorded in Financing and interest expense.
Shareholders' equity
As at March 31, 2022 we had accumulated a deficit of $60,526 compared with an accumulated deficit of $57,863 as at December 31, 2021. Total assets amounted to $18,036 and shareholders' equity totaled $614 as at March 31, 2022, compared with total assets and shareholders' equity of $17,905 and $3,871 respectively, as at December 31, 2021.
Capital stock
As at March 31, 2022 capital stock amounted to $1.5465 (December 31, 2021: $1.5457). Capital stock is disclosed at its par value with the excess of proceeds shown in Additional Paid-in-Capital.
Additional paid-in-capital
Additional paid-in capital totaled $62,842 as at March 31, 2022, as compared to $63,104 as at December 31, 2021. Additional paid in capital decreased by $262. The decrease is explained by the adoption of ASU 606-20 where the previously accounted beneficial conversion feature in the amount of $325 was derecognized from the value of the convertible notes on a retroactive basis as at January 1, 2022, offset by $63 from which $31 was the value of the conversion of the convertible debentures and $32 from stock based compensation attributable to the amortization of stock options granted to employees.
Taxation
As at December 31, 2021, the date of our latest annual tax return, we had Canadian and provincial net operating losses of approximately $39,823 (December 31, 2020: $31,673) and $43,482 (December 31, 2020: $33,905) respectively, which may be applied against earnings of future years. Utilization of the net operating losses is subject to significant limitations imposed by the change in control provisions. Canadian and provincial losses will be expiring between 2027 and 2041. A portion of the net operating losses may expire before they can be utilized.
As at December 31, 2021, we had non-refundable tax credits of $2,912 thousand (2020: $2,802 thousand) of which $8 thousand is expiring in 2026, $10 thousand is expiring in 2027, $177 thousand is expiring in 2028, $155 thousand is expiring in 2029, $132 thousand is expiring in 2030, $141 thousand is expiring in 2031, $176 thousand is expiring in 2032, $117 thousand is expiring in 2033, $89 thousand expiring in 2034, $104 thousand is expiring in 2035, $144 thousand expiring in 2036, $275 thousand is expiring in 2037, $594 thousand expiring in 2038, $359 thousand expiring in 2039, $298 thousand expiring in 2040, and $183 expiring in 2041 and undeducted research and development expenses of $16,566 thousand (2020: $15,302 thousand) with no expiration date.
The deferred tax benefit of these items was not recognized in the accounts as it has been fully provided for.
Key items from the statement of cash flows
|
|
March 31, 2022 |
|
|
March 31, 2021 |
|
|
Increase/ (Decrease) |
|
|
Percentage Increase/ (Decrease) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities |
$ |
(2,287 |
) |
$ |
(1,469 |
) |
$ |
(818 |
) |
|
56% |
|
Financing Activities |
|
2,991 |
|
|
1,257 |
|
|
1,734 |
|
|
138% |
|
Investing Activities |
|
1,955 |
|
|
615 |
|
|
1,340 |
|
|
218% |
|
Cash - end of period |
|
6,614 |
|
|
1,572 |
|
|
5,042 |
|
|
321% |
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Statement of cash flows
Net cash used in operating activities was $2,287 for the three-month period ended March 31, 2022, compared to $1,469 for the three-month period ended March 31, 2021. For the three-month period ended March 31, 2022, net cash used by operating activities consisted of a net loss of $2,686 (2021: $2,261) before depreciation, accretion expense, stock-based compensation, DSU expense and lease non-cash expense in the amount of $387 (2021: $477) and an increase in non-cash operating elements of working capital of $12 (2021: $315).
The net cash provided by financing activities was $2,991 for the three-month period ended March 31, 2022, compared to $1,257 for the same period of 2021. For the three-month period ended March 31, 2022, an amount of $3,000 derives from the issuance of a loan, offset by finance lease payments of $9. For the three-month period ended March 31, 2021, an amount of $2,000 derives from issuance of a loan, offset by repayment of term loans for an amount of $737 and finance lease payments for an amount of $6.
Net cash provided by investing activities amounted to $1,955 for the three-month period ended March 31, 2022 compared to net cash used in investing activities of $615 for the three-month period ended March 31, 2021. The net cash used in investing activities for the three-month period ended March 31, 2022 relates to the redemption of short-term investments of $5,719, offset by the acquisition of short-term investments of $3,700 and the purchase of fixed assets of $64. The net cash provided by investing activities for the three-month period ended March 31, 2021 relates to the redemption of short-term investments of $627, offset by the purchase of fixed assets of $12.
The balance of cash as at March 31, 2022 amounted to $6,614, compared to $1,572 as at March 31, 2021.
Subsequent Events
On May 10, 2022, the shareholders of the Company approved the 2022 Amendment Resolution to amend and restate the 2016 Stock Option Plan. The Board had previously approved the amendment of the 2016 Stock Option Plan to make certain amendments to align the plan with evolving industry practice and shareholder expectations, as well as amendments of a housekeeping nature, which amendments were subject to ratification by Shareholders.
As a result of the adoption of the 2022 Stock Option Plan, no additional options will be granted under the 2016 Stock Option Plan and all previously granted options will be governed by the 2022 Stock Option Plan. Similar to the 2016 Stock Option Plan, the 2022 Stock Option Plan permits the granting of options to officers, employees, directors and eligible consultants of the Company. An aggregate number of up to 10% of the Company's issued and outstanding shares (on a non-diluted basis) or 15,465,129 will be issuable under the amended plan less 6,157,389 stock options already granted under previous versions of the Company's Stock Option Plan.