CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED
SEPTEMBER 30, 2022
(UNAUDITED)
TO OUR SHAREHOLDERS
The accompanying unaudited condensed interim consolidated financial statements of Cybin Inc. ("Cybin") have been prepared by and are the responsibility of Cybin's management in accordance with International Accounting Standards ("IAS") 34, Interim Financial Reporting as issued by the International Accounting Standards Board ("IASB''). These unaudited condensed interim consolidated financial statements do not include all the information and notes required by International Financial Reporting Standards ("IFRS'') for annual financial statements and should be read in conjunction with Cybin's annual financial statements and notes for the year ended March 31, 2022, which are available on SEDAR at www.sedar.com.
|
CYBIN INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(All amounts expressed in thousands of Canadian dollars)
(Unaudited)
|
|
As at
|
Notes
|
September 30, 2022
|
March 31, 2022
|
|
ASSETS
|
Current
|
Cash
|
29,937
|
53,641
|
Accounts receivable
|
2,839
|
2,102
|
Prepaid expenses
|
3,169
|
1,271
|
Other current assets
|
2,073
|
1,341
|
Investments
|
3
|
278
|
-
|
|
Total Current Assets
|
38,296
|
58,355
|
|
Non-current
|
Investments
|
3
|
-
|
242
|
Equipment
|
4
|
565
|
491
|
Intangible assets
|
5
|
5,141
|
2,083
|
Goodwill
|
6
|
25,111
|
22,892
|
|
Total Non-Current Assets
|
30,817
|
25,708
|
|
TOTAL ASSETS
|
69,113
|
84,063
|
|
LIABILITIES
|
Current
|
Accounts payable and accrued liabilities
|
4,882
|
5,262
|
Current portion of contingent consideration payable
|
7
|
-
|
2,646
|
|
Total Current Liabilities
|
4,882
|
7,908
|
|
|
TOTAL LIABILITIES
|
4,882
|
7,908
|
|
SHAREHOLDERS' EQUITY
|
Share capital
|
8
|
149,558
|
141,451
|
Contributed surplus
|
694
|
525
|
Options reserve
|
8
|
26,835
|
23,783
|
Warrants reserve
|
8
|
11,270
|
11,423
|
Accumulated other comprehensive loss
|
(437)
|
(366)
|
Deficit
|
(123,689)
|
(100,661)
|
|
TOTAL SHAREHOLDERS' EQUITY
|
64,231
|
76,155
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
69,113
|
84,063
|
Corporate information (note 1)
Contracts and commitments (note 12)
Subsequent events (note 16)
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
These consolidation financial statements were approved for issue on November 14, 2022 by the board of directors and signed on its behalf by:
/s/ Paul Glavine Director /s/ Eric So Director
|
CYBIN INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts)
(Unaudited)
|
|
Three months ended September 30,
|
Six months ended September 30,
|
Notes
|
2022
|
2021
|
2022
|
2021
|
|
EXPENSES
|
Research
|
11
|
5,141
|
3,818
|
11,189
|
6,794
|
General and administrative costs
|
10
|
6,114
|
7,831
|
11,306
|
14,021
|
Share-based compensation
|
8, 9
|
1,072
|
5,457
|
3,227
|
10,230
|
|
TOTAL EXPENSES
|
12,327
|
17,106
|
25,722
|
31,045
|
|
OTHER INCOME (EXPENSES)
|
Foreign currency translation gain
|
2,189
|
155
|
2,714
|
106
|
Interest income
|
174
|
51
|
298
|
95
|
Change in fair value of investments measured at fair value through profit or loss
|
3, 14
|
12
|
-
|
24
|
-
|
Contingent consideration accretion
|
7
|
-
|
(70)
|
(13)
|
(231)
|
Change in fair value of contingent consideration
|
7
|
(21)
|
(637)
|
(329)
|
(1,249)
|
|
TOTAL OTHER INCOME (EXPENSES)
|
2,354
|
(501)
|
2,694
|
(1,279)
|
|
NET LOSS FOR THE PERIOD
|
(9,973)
|
(17,607)
|
(23,028)
|
(32,324)
|
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
Foreign currency translation differences for foreign operations
|
(187)
|
515
|
(71)
|
(177)
|
COMPREHENSIVE LOSS FOR THE PERIOD
|
(10,160)
|
(17,092)
|
(23,099)
|
(32,501)
|
|
Basic loss per share for the period attributable to common shareholders
|
(0.06)
|
(0.11)
|
(0.13)
|
(0.20)
|
Weighted average number of common shares outstanding - basic
|
180,837,176
|
165,783,294
|
178,372,616
|
161,750,053
|
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
|
CYBIN INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the six months ended September 30, 2022 and 2021
(All amounts expressed in thousands of Canadian dollars, except share amounts)
(Unaudited)
|
|
Share capital
|
Reserves
|
Note
|
Number of shares
|
Amount
|
Warrants
|
Options
|
Contributed surplus
|
Deficit
|
Accumulated other comprehensive income (loss)
|
Total
|
#
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
Balance at March 31, 2021
|
|
157,454,415
|
100,676
|
11,166
|
7,158
|
124
|
(33,030)
|
24
|
86,118
|
Bought deal share offering - net of share issuance costs
|
10,147,600
|
31,508
|
-
|
-
|
-
|
-
|
-
|
31,508
|
Shares issued on contingent liability Adelia milestones
|
439,583
|
1,237
|
-
|
-
|
-
|
-
|
-
|
1,237
|
Warrants exercised
|
1,930,176
|
3,538
|
(946)
|
-
|
-
|
-
|
-
|
2,592
|
Options exercised
|
450,000
|
360
|
-
|
(150)
|
-
|
-
|
-
|
210
|
Finders' warrants
|
-
|
(1,299)
|
1,299
|
-
|
-
|
-
|
-
|
-
|
Share-based compensation
|
|
-
|
-
|
178
|
10,052
|
-
|
-
|
-
|
10,230
|
Unrealized loss on translation of foreign operations
|
-
|
-
|
-
|
-
|
-
|
-
|
(177)
|
(177)
|
Net loss for the period
|
|
-
|
-
|
-
|
-
|
-
|
(32,324)
|
-
|
(32,324)
|
Balance at September 30, 2021
|
|
170,421,774
|
136,020
|
11,697
|
17,060
|
124
|
(65,354)
|
(153)
|
99,394
|
|
Balance at March 31, 2022
|
175,111,654
|
141,451
|
11,423
|
23,783
|
525
|
(100,661)
|
(366)
|
76,155
|
At-the-market offering - net of share issuance costs
|
8
|
5,331,630
|
4,598
|
-
|
-
|
-
|
-
|
-
|
4,598
|
Shares issued on Adelia milestones
|
7, 8
|
3,603,742
|
2,988
|
-
|
-
|
-
|
-
|
-
|
2,988
|
Warrants exercised
|
8
|
1,164,638
|
527
|
(165)
|
-
|
-
|
-
|
-
|
362
|
Options forfeited
|
8
|
-
|
-
|
(169)
|
169
|
-
|
-
|
-
|
Finders' warrants
|
8
|
-
|
(6)
|
6
|
-
|
-
|
-
|
-
|
-
|
Share-based compensation
|
8, 9
|
-
|
-
|
6
|
3,221
|
-
|
-
|
-
|
3,227
|
Unrealized loss on translation of foreign operations
|
-
|
-
|
-
|
-
|
-
|
-
|
(71)
|
(71)
|
Net loss for the period
|
|
-
|
-
|
-
|
-
|
-
|
(23,028)
|
-
|
(23,028)
|
Balance at September 30, 2022
|
|
185,211,664
|
149,558
|
11,270
|
26,835
|
694
|
(123,689)
|
(437)
|
64,231
|
The accompanying notes are an integral part of these condensed interim consolidated financial statements
|
CYBIN INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(All amounts expressed in thousands of Canadian dollars)
(Unaudited)
|
|
Three months ended September 30,
|
Six months ended September 30,
|
Notes
|
2022
|
2021
|
2022
|
2021
|
|
OPERATING ACTIVITIES
|
Net loss for the period
|
(9,973)
|
(17,607)
|
(23,028)
|
(32,324)
|
Adjustments for items not affecting cash:
|
Interest income
|
3, 14
|
(6)
|
-
|
(12)
|
-
|
Depreciation and amortization
|
4, 5
|
59
|
42
|
112
|
80
|
Share-based compensation
|
1,072
|
5,457
|
3,227
|
10,230
|
Change in fair value of investments measured at fair value through profit or loss
|
3, 14
|
(12)
|
-
|
(24)
|
-
|
Contingent consideration accretion
|
7
|
-
|
70
|
13
|
231
|
Change in fair value of contingent consideration
|
7
|
21
|
637
|
329
|
1,249
|
Unrealized foreign currency translation loss
|
(2,167)
|
(190)
|
(2,692)
|
(159)
|
(11,006)
|
(11,591)
|
(22,075)
|
(20,693)
|
Net changes in non-cash working capital items:
|
Accounts receivable
|
(575)
|
(606)
|
(737)
|
(952)
|
Prepaid expenses
|
(1,909)
|
(1,172)
|
(1,898)
|
(863)
|
Other current assets
|
(137)
|
-
|
(732)
|
-
|
Accounts payable and accrued liabilities
|
(1,056)
|
(423)
|
(380)
|
(164)
|
Net cash flows used in operating activities
|
(14,683)
|
(13,792)
|
(25,822)
|
(22,672)
|
|
INVESTING ACTIVITIES
|
Purchase of investment
|
3
|
-
|
-
|
-
|
(250)
|
Purchase of intangible assets
|
5
|
(2,676)
|
(67)
|
(2,742)
|
(163)
|
Purchase of equipment
|
4
|
-
|
(21)
|
(142)
|
(70)
|
Net cash flows used in investing activities
|
(2,676)
|
(88)
|
(2,884)
|
(483)
|
|
FINANCING ACTIVITIES
|
Proceeds on issuance of common shares, net
|
4,598
|
31,508
|
4,598
|
31,508
|
Shares issued for cash - warrant exercise
|
8
|
48
|
2,393
|
362
|
2,592
|
Shares issued for cash - options exercise
|
8
|
-
|
80
|
-
|
210
|
Net cash flows from financing activities
|
4,646
|
33,981
|
4,960
|
34,310
|
|
Effects of exchange rate changes on cash
|
190
|
3
|
42
|
(2)
|
|
Change in cash
|
(12,523)
|
20,104
|
(23,704)
|
11,153
|
Cash, beginning of period
|
42,460
|
55,075
|
53,641
|
64,026
|
Cash, end of period
|
29,937
|
75,179
|
29,937
|
75,179
|
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
1. CORPORATE INFORMATION
Cybin Inc. ("Cybin"), was incorporated under the Business Corporations Act (British Columbia) on October 13, 2016. These condensed interim consolidated financial statements include the accounts of Cybin's six subsidiaries (together, with Cybin, the "Company"): Cybin Corp., Natures Journey Inc. ("Journey"), Serenity Life Sciences Inc. ("Serenity"), Cybin US Holdings Inc. ("Cybin US"), Adelia Therapeutics Inc. ("Adelia") and Cybin IRL Limited ("Cybin IRL"). Cybin's head office, principal address and registered address and records office is 100 King Street West, Suite 5600, Toronto, Ontario M5X 1C9.
The Company is a biotechnology company focused on progressing psychedelic therapeutics. The Company is structuring and supporting clinical studies in North America and other regions, through strategic academic and institutional partnerships and plans to launch psilocybin-based products in jurisdictions where the substance is not banned.
These condensed interim consolidated financial statements as at, and for the three and six months ended, September 30, 2022 were approved and authorized for issue by the board of directors on November 14, 2022.
COVID 19
In March 2020, the outbreak of the novel strain of coronavirus, specifically identified as "COVID-19", resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company in future periods.
The Company is not currently aware of any changes in laws, regulations or guidelines, including tax and accounting requirements, arising from COVID-19 which would be reasonably anticipated to materially affect the Company's business.
Stock exchange listing
Cybin's common shares ("Common Shares") are listed for trading on the Neo Exchange Inc., and NYSE American LLC under the symbol "CYBN" and are quoted on the Frankfurt Stock Exchange under the symbol "R7E1".
Going Concern
These condensed interim consolidated financial statements are prepared on a going concern basis, which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. At present, the Company's operations do not generate cash flow. The Company has incurred losses since inception and had an accumulated deficit of $123,689 as at September 30, 2022 (March 31, 2022 - $100,661). As at September 30, 2022, the Company had a cash balance of $29,937 (March 31, 2022 - $53,641) and working capital of $33,414 (March 31, 2022 - $50,447). In order to continue as a going concern and meet its corporate objectives, the Company is dependent on its ability to obtain additional financing. Although the Company has been successful
Page 7 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
in the past in obtaining financing, there is no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company.
These condensed interim consolidated financial statements do not reflect the adjustments or reclassifications of assets and liabilities which would be necessary if the Company were unable to continue as a going concern and therefore were required to realize its assets and liquidate its liabilities and commitments in the normal course of business operations and at amounts different from those in the accompanying condensed interim consolidated financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION
Statement of compliance
These condensed interim consolidated financial statements for the three and six months ended September 30, 2022 have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting". Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") have been omitted or condensed.
The accounting policies adopted in the preparation of the condensed interim consolidated financial statements are consistent with those set out in note 2 "Significant accounting policies and basis of preparation" of the Company's annual consolidated financial statements for the year ended March 31, 2022.
These condensed interim consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended March 31, 2022.
Basis of measurement
These condensed interim consolidated financial statements have been prepared on a going concern basis, under the historical cost convention, except for certain financial instruments classified at fair value upon initial recognition.
Consolidation and Currency
The functional currency of a company is the currency of the primary economic environment in which the company operates. The presentation currency for a company is the currency in which the company chooses to present its financial statements.
These condensed interim consolidated financial statements are presented in Canadian dollars, the Company's presentation currency. The Company's and its subsidiaries functional currencies are as follows:
|
Entity
|
Currency
|
Ownership
|
Cybin Corp.
|
Canadian dollars
|
100%
|
Journey
|
Canadian dollars
|
100%
|
Serenity
|
Canadian dollars
|
100%
|
Cybin US
|
Canadian dollars
|
100%1
|
Adelia
|
U.S. dollars
|
100%
|
Cybin IRL
|
U.S. dollars
|
100%
|
1 For accounting purposes, Cybin US is a wholly-owned subsidiary of Cybin. Certain Former Adelia Shareholders hold Class B Shares (defined below) in Cybin US.
Page 8 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
Significant accounting policies
These condensed interim consolidated financial statements have been prepared using the same accounting policies and methods as those used in the Company's annual consolidated financial statements for the year ended March 31, 2022.
Use of significant estimates and assumptions
The preparation of financial statements in accordance with IAS 34 requires the use of certain significant estimates and assumptions. It also requires management to exercise judgment when applying the Company's accounting policies. The critical accounting estimates and judgments have been set out in note 3 of the Company's annual consolidated financial statements for the year ended March 31, 2022.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are not yet effective at September 30, 2022, and have not been applied in preparing these condensed interim consolidated financial statements. Management has determined that none of these will have a significant effect on the condensed interim consolidated financial statements of the Company.
3. INVESTMENTS
On June 8, 2021, the Company entered into a subscription agreement with RxLive Limited ("RxLive") whereby the Company purchased $250 of 10.0% unsecured convertible redeemable debentures (the "Rx Debentures"). RxLive is a UK-based online platform that connects pharmacists and patients through a secure app that allows for pharmacist consultations, initial or renewal prescription fulfilment and delivery of prescription medication. The Rx Debentures mature and become due on June 8, 2022. The Rx Debentures were to be exchangeable or convertible into units at a price of equal to 80% of the offering price of any equity financing completed by 1301376 B.C. Ltd. ("Finco") concurrent with a go public transaction. Each unit was to consist of one common share of Finco (a "Finco Share") and one Finco Share purchase warrant, with each warrant being exercisable to acquire one Finco Share at a price equal to 125% of the conversion price (the "Rx Conversion Feature"). As a result of the transaction, the Company recorded a hybrid financial instrument representing the Rx Debentures and the Rx Conversion Feature (the "Rx Hybrid Instrument"). The initial fair value of the Rx Hybrid Instrument was $250 determined by the sum of the fair values of the Rx Debenture and Rx Conversion Feature derived respectively using the discounted cash flow approach and the Black-Scholes model.
The go public transaction did not occur, and the Rx Debentures did not convert into units prior to the initial maturity date. As a result, the maturity date of the Rx Debentures was amended to December 31, 2022. Furthermore, the Rx Debentures were amended to be convertible into units at a price of equal to 70% of the offering price of any equity financing. As at September 30, 2022, the amount of $278 was determined to represent the fair value of the Rx Debentures.
Page 9 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
4. EQUIPMENT
Equipment consists as follows:
|
Cost
|
Lab Equipment
|
Computer Equipment
|
Total
|
$000's
|
$000's
|
$000's
|
Balance as at March 31, 2022
|
475
|
238
|
713
|
Additions
|
142
|
-
|
142
|
Effect of foreign exchange
|
55
|
1
|
56
|
Balance as at September 30, 2022
|
672
|
239
|
911
|
|
Accumulated Depreciation
|
Balance as at March 31, 2022
|
139
|
83
|
222
|
Depreciation charge
|
66
|
40
|
106
|
Effect of foreign exchange
|
18
|
-
|
18
|
Balance as at September 30, 2022
|
223
|
123
|
346
|
|
Net book value as at March 31, 2022
|
336
|
155
|
491
|
Net book value as at September 30, 2022
|
449
|
116
|
565
|
5. INTANGIBLE ASSETS
|
Cost
|
IP Research & Development
|
Patents
|
Software
|
Total
|
$000's
|
$000's
|
$000's
|
$000's
|
Balance as at March 31, 2022
|
1,566
|
443
|
74
|
2,083
|
Additions
|
1,342
|
1,400
|
-
|
2,742
|
Effect of foreign exchange
|
208
|
114
|
-
|
322
|
Balance as at September 30, 2022
|
3,116
|
1,957
|
74
|
5,147
|
|
Accumulated Amortization
|
Balance as at March 31, 2022
|
-
|
-
|
-
|
-
|
Amortization charge
|
-
|
-
|
6
|
6
|
Effect of foreign exchange
|
-
|
-
|
-
|
-
|
Balance as at September 30, 2022
|
-
|
-
|
6
|
6
|
|
Net book value as at March 31, 2022
|
1,566
|
443
|
74
|
2,083
|
Net book value as at September 30, 2022
|
3,116
|
1,957
|
68
|
5,141
|
On July 11, 2022, the Company completed the acquisition of a Phase 1 N,N-dimethyltryptamine ("DMT") study (the "Asset Acquisition") from Entheon Biomedical Corp. to accelerate the clinical development path for
Page 10 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
CYB004, Cybin's proprietary deuterated DMT molecule for the potential treatment of anxiety disorders. The Company paid $1,000 for the Asset Acquisition, and assumed liabilities of $342.
During the three-month period ended September 30, the Company entered into multiple licensing agreements that provide Cybin with additional access to IP from over 15 more patents or patent applications, including the acquisition of an exclusive license to a targeted class of tryptamine-based molecules from Mindset Pharma Inc. ("Mindset"), for which it paid a one-time license fee of $680 (US$500). The licensing agreements collectively provide the Company with access to a broad range of preclinical molecule combinations for its library of psychedelic derivative drug development candidates. In addition to the exclusive license with Mindset, the Company spent an additional $650 on a licensing agreement and $70 on expanding its IP portfolio.
6. GOODWILL
|
Cost
|
$000's
|
Balance as at March 31, 2022
|
22,892
|
Effect of foreign exchange
|
2,219
|
Balance as at September 30, 2022
|
25,111
|
7. CONTINGENT CONSIDERATION PAYABLE
Former Adelia Shareholders
The Company had commitments to the former shareholders of Adelia ("Former Adelia Shareholders") based on the achievement of certain milestones (the "Milestones") as set out in the contribution agreement entered in connection with Cybin's acquisition of Adelia (the "Contribution Agreement"). These Milestones were paid in class B common shares of Cybin US ("Class B Shares") at a price per Class B Share equal to ten times the current trading price of the Common Shares on the relevant pricing date (note 8). The final Milestone was achieved on August 31, 2022. The Company does not have any further commitments to the Former Adelia Shareholders as it relates to the issuance of Class B Shares for the achievement of Milestones, other than the exchange of such shares into Common Shares in accordance with their terms.
The following table presents the change in the carrying value of the contingent consideration for the six-month period ended September 30, 2022:
|
$000's
|
Balance as at March 31, 2022
|
2,646
|
Milestone achieved
|
(2,988)
|
Change in fair value
|
329
|
Accretion expense
|
13
|
Balance as at September 30, 2022
|
-
|
As a result of changes in fair value of the contingent consideration, for the three and six months ended September 30, 2022, the Company recorded an expense of $21 and $329 ,respectively, in the statement of loss and comprehensive loss as "change in fair value of contingent consideration". In addition, for the six-month period ended September 30, 2022, the Company recorded an accretion expense of $13 in the statement of loss and comprehensive loss as "contingent consideration accretion".
Page 11 of 25
|
CYBIN INC.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
8. SHARE CAPITAL
a)Authorized share capital
Unlimited number of Common Shares and an unlimited number of preferred shares without par value. The board of directors of Cybin would determine the designation, rights, privileges, and conditions attached to any preferred shares prior to issuance.
b)Issued share capital
Common Shares
On August 8, 2022, the Company established an at-the-market equity program (the "ATM Program") that allows the Company to issue and sell up to US$35,000 of Common Shares from treasury to the public, from time to time. Distributions of Common Shares under the ATM Program, are made pursuant to the terms and conditions of an at-the-market equity distribution agreement (the "Distribution Agreement") dated August 8, 2022 among the Company, Cantor Fitzgerald Canada Corporation and Cantor Fitzgerald & Co. The ATM Program is effective until the earlier of the issuance and sale of all of the Common Shares issuable pursuant to the ATM Program and August 5, 2023 unless earlier terminated in accordance with the terms of the Distribution Agreement.
Up to September 30, 2022, the Company had sold 5,331,630 Common Shares under the ATM program, of which 213,452 were not yet settled, at an average price of $0.9666 (US$0.7317) per Common Share, for aggregate gross proceeds of $5,154 (US$3,901), of which $392 (US$285) was receivable at September 30, 2022.
Preferred Shares
As at September 30, 2022 the Company has nil preferred shares outstanding (March 31, 2022 - nil).
Cybin US Class B Shares
|
Number of Class B Shares
|
Balance as at March 31, 2022
|
1,047,135.1
|
Issued on achievement of milestones
|
360,374.2
|
Converted into Common Shares
|
(38,023.0)
|
Balance as at September 30, 2022
|
1,369,486.3
|
As at September 30, 2022, 1,369,486.3 Class B Shares were outstanding (March 31, 2022 - 1,047,135.1), which are exchangeable for a total of 13,694,863 Common Shares (March 31, 2022 - 10,471,351) (note 7). No Class B Shares were exchangeable prior to December 14, 2021, and not more than: (i) 33 1/3% of the Class B Shares are to be exchangeable prior to December 14, 2022; (ii) 66 2/3% of the Class B Shares are to be exchangeable prior to December 14, 2023; and (iii) thereafter, 100% of the Class B Shares are to be exchangeable. These condensed interim consolidated financial statements reflect all of the issued Class B Shares on an as-converted basis.
Page 12 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
During the six-month period ended September 30, 2022, the Company completed the following Class B Shares issuances and conversions:
On April 1, 2022, pursuant to the terms of the Contribution Agreement, 22,428.3 Class B Shares were issued to Former Adelia Shareholders due to the achievement of the Milestone identified as Year 2 Q2 (iv), as contemplated by the terms of the Contribution Agreement, having an aggregate value of $229 at a price per Class B Share of $10.20. These Class B Shares are exchangeable for a total of 224,283 Common Shares, representing an effective issue price of $1.02 per Common Share. In consideration for the Milestone achieved, on June 22, 2022, an additional 456.5 Class B Shares having an aggregate value of $5 were issued to Former Adelia Shareholders.
On May 5, 2022, a Former Adelia Shareholder exchanged 38,023 Class B Shares for 380,230 Common Shares.
On June 24, 2022, pursuant to the terms of the Contribution Agreement, 266,933.1 Class B Shares were issued to Former Adelia Shareholders due to the achievement of certain Milestones identified as Y2, Q2 (i), (vi), Y2, Q3 (ii), Year 2 Q4 (i) and Year 3 Q1 (i), (ii), (iii), as contemplated by the terms of the Contribution Agreement, having an aggregate value of $2,033 at a price per Class B Share of $7.62. These Class B Shares are exchangeable for a total of 2,669,331 Common Shares, representing an effective issue price of $0.762 per Common Share.
On June 27, 2022, pursuant to the terms of the Contribution Agreement, 37,366.2 Class B Shares were issued to Former Adelia Shareholders due to the achievement of the Milestone identified as Y2, Q3 (i), as contemplated by the terms of the Contribution Agreement, having an aggregate value of $280 at a price per Class B Share of $7.50. These Class B Shares are exchangeable for a total of 373,662 Common Shares, representing an effective issue price of $0.75 per Common Share.
On August 31, 2022, pursuant to the terms of the Contribution Agreement, 33,190.1 Class B Shares were issued to Former Adelia Shareholders due to the achievement of the Milestone identified as Y2, Q4 (ii), as contemplated by the terms of the Contribution Agreement, having an aggregate value of $468 at a price per Class B Share of $14.10. These Class B Shares are exchangeable for a total of 331,901 Common Shares, representing an effective issue price of $1.41 per Common Share.
Page 13 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
c)Warrants
The continuity of the outstanding warrants for the six-month period ended September 30, 2022 is as follows:
|
Number of Warrants
|
Weighted average exercise price
|
$
|
Common Share Purchase Warrants
|
As at March 31, 2022
|
25,548,836
|
1.22
|
Exercised
|
(1,164,638)
|
0.31
|
Outstanding as at September 30, 2022
|
24,384,198
|
1.26
|
Exercisable as at September 30, 2022
|
24,184,198
|
1.25
|
|
Unit Purchase Warrants(1)
|
As at March 31, 2022
|
868,740
|
2.25
|
Exercised
|
-
|
-
|
Outstanding as at September 30, 2022
|
868,740
|
2.25
|
Exercisable as at September 30, 2022
|
868,740
|
2.25
|
(1) Each unit consists of one Common Share and one half of one Common Share purchase warrant, with each Common Share purchase warrant being exercisable to acquire one Common Share at an exercise price of $3.25 per Common Share.
During the three and six months ended September 30, 2022, 65,000 and 1,164,638 Common Share purchase warrants were exercised by various holders for aggregate proceeds to the Company of $48 and $362, respectively.
The following summarizes information about warrants outstanding at September 30, 2022:
|
Date of Expiry
|
Warrants outstanding
|
Warrants exercisable
|
Weighted average of exercisable price
|
Estimated grant date fair value
|
Weighted average of remaining outstanding contractual life
|
$
|
$000's
|
Years
|
Common Share Purchase Warrants
|
October 19, 2022
|
113,713
|
113,713
|
0.75
|
42
|
0.05
|
November 3, 2022
|
1,040,000
|
1,040,000
|
0.75
|
376
|
0.09
|
August 3, 2023
|
658,860
|
658,860
|
3.4
|
1,229
|
0.84
|
February 1, 2024
|
7,146,500
|
7,146,500
|
3.25
|
5,454
|
1.34
|
June 15, 2025
|
12,800,000
|
12,600,000
|
0.25
|
2,318
|
2.71
|
August 20, 2025
|
1,475,125
|
1,475,125
|
0.64
|
680
|
2.89
|
November 15, 2025
|
1,150,000
|
1,150,000
|
0.25
|
220
|
3.13
|
24,384,198
|
24,184,198
|
1.26
|
10,319
|
2.14
|
Page 14 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
|
Date of Expiry
|
Warrants outstanding
|
Warrants exercisable
|
Weighted average of exercisable price
|
Estimated grant date fair value
|
Weighted average of remaining outstanding contractual life
|
$
|
$000's
|
Years
|
|
Unit Purchase Warrants
|
February 4, 2024
|
868,740
|
868,740
|
2.25
|
970
|
1.35
|
868,740
|
868,740
|
2.25
|
970
|
1.35
|
The Company recognized share-based payments compensation related to the issuance of Common Share purchase warrants for the three and six month periods ended September 30, 2022 of $2 and $6 respectively.
d)Stock options
On November 5, 2020, Cybin adopted an equity incentive plan. Under the plan, the board of directors may grant share-based awards to acquire such number of Common Shares as is equal to up to 20% of the total number of issued and outstanding Common Shares at the time such awards are granted. Options granted under the plan vest over a period of time at the discretion of the board of directors. On August 16, 2021, the board of directors and the shareholders approved an amendment to the equity incentive plan to modify certain provisions for awards granted to residents of the United States, to increase the fixed number of Incentive Stock Options (as defined in the plan) and certain other housekeeping amendments.
The changes in options for the six-month period ended September 30, 2022 are as follows:
|
Number of Options
|
Weighted average exercise price
|
$
|
As at March 31, 2022
|
28,885,002
|
1.01
|
Granted
|
1,900,000
|
0.94
|
Forfeited
|
(365,250)
|
3.02
|
Outstanding as at September 30, 2022
|
30,014,752
|
1.40
|
Exercisable as at September 30, 2022
|
25,607,462
|
1.31
|
During the six-month period ended September 30, 2022, the Company completed the following option issuances:
On June 30, 2022, the Company granted options to purchase up to: 65,000 Common Shares to employees, with an exercise price of $1.00 per Common Share and vesting over two years. The options will expire on June 30, 2027. The aggregate estimated grant date fair value was determined to be $32, calculated using the Black-Scholes option pricing model with the following assumptions:
Page 15 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
|
Risk-free interest rate
|
3.10%
|
Expected annual volatility, based on comparable companies
|
95.00%
|
Expected life (in years)
|
5.00
|
Expected dividend yield
|
0.00%
|
Share price
|
$
|
0.72
|
Exercise price
|
$
|
1.00
|
On June 30, 2022, the Company granted options to purchase up to 500,000 Common Shares to consultants, with an exercise price of $0.90 per Common Share. The options vested immediately and will expire on June 30, 2025. The estimated grant date fair value was determined to be $183, calculated using the Black-Scholes option pricing model with the following assumptions:
|
Risk-free interest rate
|
3.14%
|
Expected annual volatility, based on comparable companies
|
85.00%
|
Expected life (in years)
|
3
|
Expected dividend yield
|
0.00%
|
Share price
|
$
|
0.72
|
Exercise price
|
$
|
0.90
|
On August 15, 2022, the Company granted options to purchase up to 800,000 Common Shares to consultants, with an exercise price of $1.00 per Common Share and vesting over two years. The options will expire on August 15, 2025. The estimated grant date fair value was determined to be $429, calculated using the Black-Scholes option pricing model with the following assumptions:
|
Risk-free interest rate
|
3.11%
|
Expected annual volatility, based on comparable companies
|
85.00%
|
Expected life (in years)
|
3
|
Expected dividend yield
|
0.00%
|
Share price
|
$
|
0.97
|
Exercise price
|
$
|
1.00
|
On August 15, 2022, the Company granted options to purchase up to 20,000 Common Shares to an employee, with an exercise price of $1.00 per Common Share and vesting over two years. The options will expire on August 15, 2027. The estimated grant date fair value was determined to be $14, calculated using the Black-Scholes option pricing model with the following assumptions:
|
Risk-free interest rate
|
2.88%
|
Expected annual volatility, based on comparable companies
|
95.00%
|
Expected life (in years)
|
5
|
Expected dividend yield
|
0.00%
|
Share price
|
$
|
0.97
|
Exercise price
|
$
|
1.00
|
Page 16 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
On September 30, 2022, the Company granted options to purchase up to 270,000 Common Shares to consultants, with an exercise price of $0.75 per Common Share and vesting over two years. The options will expire on September 30, 2025. The estimated grant date fair value was determined to be $102, calculated using the Black-Scholes option pricing model with the following assumptions:
|
Risk-free interest rate
|
3.72%
|
Expected annual volatility, based on comparable companies
|
85.00%
|
Expected life (in years)
|
3
|
Expected dividend yield
|
0.00%
|
Share price
|
$
|
0.67
|
Exercise price
|
$
|
0.75
|
On September 30, 2022, the Company granted options to purchase up to 245,000 Common Shares to employees, with an exercise price of $1.00 per Common Share and vesting over two years. The options will expire on September 30, 2027. The estimated grant date fair value was determined to be $98, calculated using the Black-Scholes option pricing model with the following assumptions:
|
Risk-free interest rate
|
3.32%
|
Expected annual volatility, based on comparable companies
|
95.00%
|
Expected life (in years)
|
5
|
Expected dividend yield
|
0.00%
|
Share price
|
$
|
0.67
|
Exercise price
|
$
|
1.00
|
The following summarizes information about stock options outstanding on September 30, 2022:
|
Exercise Price
|
Number of options outstanding
|
Number of options exercisable
|
Weighted average remaining life
|
Recognized estimated grant date fair value
|
Expiry date
|
$
|
Years
|
$000's
|
October 11, 2022
|
3.15
|
93,750
|
93,750
|
0.03
|
183
|
November 27, 2022
|
0.91
|
200,000
|
200,000
|
0.16
|
91
|
December 11, 2022
|
0.67
|
59,952
|
59,952
|
0.20
|
23
|
December 31, 2022
|
2.78
|
700,000
|
700,000
|
0.25
|
715
|
June 30, 2023
|
2.78
|
20,000
|
20,000
|
0.75
|
24
|
November 5, 2023
|
2.90
|
156,250
|
125,000
|
1.10
|
326
|
June 15, 2025
|
0.25
|
2,350,000
|
2,350,000
|
2.71
|
420
|
June 30, 2025
|
0.90
|
500,000
|
500,000
|
2.75
|
183
|
August 14, 2025
|
1.00
|
800,000
|
200,000
|
2.87
|
159
|
September 30, 2025
|
0.75
|
270,000
|
33,750
|
3.00
|
3
|
October 12, 2025
|
0.75
|
3,000,000
|
3,000,000
|
3.04
|
1,607
|
November 4, 2025
|
0.75
|
6,000,000
|
6,000,000
|
3.10
|
3,125
|
November 13, 2025
|
0.88
|
500,000
|
500,000
|
3.12
|
315
|
December 11, 2025
|
1.48
|
700,000
|
675,000
|
3.20
|
738
|
Page 17 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
|
Exercise Price
|
Number of options outstanding
|
Number of options exercisable
|
Weighted average remaining life
|
Recognized estimated grant date fair value
|
December 14, 2025
|
1.74
|
2,264,100
|
2,261,599
|
3.21
|
2,809
|
December 28, 2025
|
1.89
|
760,000
|
760,000
|
3.25
|
1,027
|
January 2, 2026
|
1.89
|
225,000
|
196,875
|
3.26
|
304
|
February 15, 2026
|
2.03
|
170,000
|
139,375
|
3.38
|
240
|
February 16, 2026
|
2.03
|
150,000
|
131,250
|
3.38
|
215
|
March 10, 2026
|
1.39
|
1,272,600
|
1,205,611
|
3.44
|
1,262
|
March 15, 2026
|
1.55
|
300,000
|
262,500
|
3.46
|
354
|
March 28, 2026
|
1.36
|
1,575,000
|
1,484,375
|
3.49
|
1,525
|
March 29, 2026
|
1.32
|
37,500
|
37,500
|
3.50
|
36
|
March 31, 2026
|
1.35
|
345,000
|
251,875
|
3.50
|
311
|
June 28, 2026
|
2.90
|
3,360,000
|
2,315,625
|
3.75
|
6,675
|
August 16, 2026
|
2.48
|
215,000
|
134,375
|
3.88
|
340
|
August 18, 2026
|
2.48
|
300,000
|
187,500
|
3.88
|
461
|
September 27, 2026
|
3.15
|
545,000
|
272,500
|
3.99
|
904
|
September 27, 2026
|
2.87
|
195,000
|
121,875
|
3.99
|
355
|
September 30, 2026
|
3.15
|
200,000
|
100,000
|
4.00
|
319
|
December 31, 2026
|
3.15
|
40,000
|
20,000
|
4.25
|
29
|
December 31, 2026
|
1.50
|
1,250,000
|
262,500
|
4.25
|
757
|
March 4, 2027
|
1.13
|
1,075,600
|
537,800
|
4.43
|
662
|
March 4, 2027
|
3.15
|
60,000
|
22,500
|
4.43
|
25
|
March 8, 2027
|
1.02
|
400,000
|
400,000
|
4.44
|
295
|
June 30, 2027
|
1.00
|
65,000
|
11,250
|
4.75
|
10
|
August 14, 2027
|
1.00
|
20,000
|
5,000
|
4.87
|
5
|
September 30, 2027
|
1.00
|
245,000
|
28,125
|
5.00
|
2
|
30,419,752
|
25,607,462
|
3.24
|
26,834
|
The Company recognized share-based payments expense related to the issuance of stock options for the three and six months ended September 30, 2022 of $1,070 and $3,221, respectively.
The outstanding options and warrants disclosed above were anti-dilutive for the three and six months ended September 30, 2022 and did not impact the calculation of the loss per share.
Page 18 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
9. RELATED PARTY TRANSACTIONS AND BALANCES
Key management personnel include persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined its key management personnel to be executive officers and directors of the Company.
At September 30, 2022, accounts payable and accrued liabilities include accrued executive bonuses of $1,036 payable on future achievements of the Company.
The remuneration of key management personnel for the three and six months ended September 30, 2021 and 2022 are as follows:
|
Three-months ended September 30,
|
Six-months ended
September 30,
|
2022
|
2021
|
2022
|
2021
|
$000's
|
$000's
|
$000's
|
$000's
|
Payroll, consulting and benefits(1)
|
1,400
|
1,840
|
2,780
|
2,963
|
Share-based compensation
|
Options
|
678
|
2,868
|
1,763
|
4,979
|
Warrants
|
-
|
28
|
3
|
69
|
Total
|
2,078
|
4,736
|
4,546
|
8,011
|
(1) For the three-month period ended September 30, 2022, includes $649 presented in the statement of loss and comprehensive loss as a part of "General and administrative costs" and $751 presented in the statement of loss and comprehensive loss as a part of "Research". For the six-month period ended September 30, 2022, includes $1,304 presented in the statement of loss and comprehensive loss as a part of "General and administrative costs" and $1,476 presented in the statement of loss and comprehensive loss as a part of "Research".
10. GENERAL AND ADMINISTRATIVE EXPENSES
|
Three-months ended September 30,
|
Six-months ended
September 30,
|
2022
|
2021
|
2022
|
2021
|
$000's
|
$000's
|
$000's
|
$000's
|
Payroll, consulting and benefits
|
1,559
|
2,349
|
3,245
|
3,573
|
Capital market
|
1,918
|
1,451
|
2,264
|
3,192
|
Office and administration
|
1,290
|
1,071
|
2,150
|
1,909
|
Professional and consulting fees
|
663
|
725
|
1,651
|
1,793
|
Marketing media
|
90
|
405
|
803
|
755
|
Business development
|
288
|
917
|
538
|
1,432
|
Investor relations
|
169
|
677
|
423
|
1,030
|
Listing fees
|
137
|
236
|
232
|
337
|
Total
|
6,114
|
7,831
|
11,306
|
14,021
|
Page 19 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
11. RESEARCH EXPENSES
|
Three-months ended September 30,
|
Six-months ended
September 30,
|
For the three-month period ended
|
2022
|
2021
|
2022
|
2021
|
$000's
|
$000's
|
$000's
|
$000's
|
Advancement of development programs
|
2,400
|
1,892
|
5,992
|
3,058
|
Payroll and benefits
|
2,089
|
1,570
|
4,116
|
2,543
|
Lab and administration
|
379
|
60
|
570
|
195
|
Professional and consulting fees
|
273
|
296
|
511
|
998
|
Total
|
5,141
|
3,818
|
11,189
|
6,794
|
12. CONTRACTS AND COMMITMENTS
As at September 30, 2022, the Company had entered into agreements for various studies which may require the Company to spend up to an additional $9,728 (US$7,097). The Company expects to pay this amount within the 15 months ending December 31, 2023, however the timing and certainty of the payments are contingent on availability of materials and successful completion of certain milestones. The Company has the right to cancel the studies at its discretion, in which case a cancellation fee may apply, however the Company is not liable to pay the full amount of the studies.
The Company has entered into an exclusive license agreement with Mindset to acquire an extensive targeted class of tryptamine-based molecules. Upon the successful completion of certain milestones contemplated in the agreement, the Company may have to pay additional consideration of up to $13,022 (US$9,500). At the sole discretion of Cybin, the milestones may be paid in cash or in Common Shares, or a combination thereof, subject to the approval of the Neo Exchange Inc. Due to the nature of the arrangement, the timing and probability of future potential payments cannot be determined at this time, and no accrual has been recorded. Further, there is no assurance that the aforementioned milestones will be met at all. The agreement also contemplates a sales royalty of approximately 2% for all commercialized licensed products within the scope of the agreement.
13. CAPITAL MANAGEMENT
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue business opportunities and to maintain a flexible capital structure that optimizes the costs of capital at an acceptable risk. The Company's intentions are to (i) provide financial capacity and flexibility in order to preserve its ability to meet its strategic objectives and financial obligations; (ii) maintain a capital structure which allows the Company to respond to changes in economic and marketplace conditions and affords the Company the ability to participate in new investments; (iii) optimize the use of its capital to provide an appropriate investment return to its shareholders equal with the level of risk; and (iv) maintain a flexible capital structure which optimizes the cost of capital at acceptable levels of risk.
The Company's financial strategy is formulated and adapted according to market conditions in order to maintain a flexible capital structure that is consistent with its objectives and the risk characteristics of its underlying assets. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of its underlying assets. The Company maintains or adjusts its capital level to enable it to meet its objectives by raising capital through the issuance of securities.
Page 20 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
The Company's capital management objectives, policies and processes generally remained unchanged during the three-month period ended September 30, 2022.
The Company requires capital to fund existing and future operations and meet regulatory capital requirements. The Company's policy is to maintain adequate levels of capital at all times.
The Company's capital structure includes the following:
|
As at
|
September 30, 2022
|
March 31, 2022
|
$000's
|
$000's
|
Shareholders' equity comprised of:
|
Share capital
|
149,558
|
141,451
|
Contributed surplus
|
694
|
525
|
Options reserve
|
26,835
|
23,783
|
Warrants reserve
|
11,270
|
11,423
|
Accumulated other comprehensive income (loss)
|
(437)
|
(366)
|
Deficit
|
(123,689)
|
(100,661)
|
Total
|
64,231
|
76,155
|
14. FINANCIAL INSTRUMENTS
The Company's financial instruments are exposed to certain financial risks, which include currency risk, credit risk, liquidity risk and interest rate risk.
The Company has classified its financial instruments as follows:
|
As at
|
September 30, 2022
|
March 31, 2022
|
$000's
|
$000's
|
Financial assets, measured at fair value:
|
Cash
|
29,937
|
53,641
|
Investments
|
278
|
242
|
Financial assets, measured at amortized cost:
|
Accounts receivable
|
430
|
28
|
Financial liabilities, measured at fair value:
|
Contingent consideration payable
|
-
|
2,646
|
Financial liabilities, measured at amortized cost:
|
Accounts payable and accrued liabilities
|
4,882
|
5,262
|
The carrying value of the Company's financial instruments approximate their fair value.
Fair value Hierarchy of Financial Instruments
The Company has categorized its financial instruments that are carried at fair value, based on the priority of the inputs to the valuation techniques used to measure fair value, into a three-level fair value hierarchy as follows:
Page 21 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
Level 1: Fair value is based on unadjusted quoted prices for identical assets or liabilities in an active market. The types of assets and liabilities classified as Level 1 generally included cash.
Level 2: Fair value is based on quoted prices for similar assets or liabilities in active markets, valuation that is based on significant observable inputs, or inputs that are derived principally from or corroborated with observable market data through correlation or other means. Currently, the Company has no financial instruments that would be classified as Level 2.
Level 3: Fair value is based on valuation techniques that require one or more significant inputs that are not based on observable market inputs. These unobservable inputs reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability. The investments and the contingent liabilities are classified as Level 3.
There were no transfers between levels of the fair value hierarchy for the three and six months ended September 30, 2022.
The following table presents the changes in level 3 financial instruments for the six-month period ended September 30, 2022.
|
$000's
|
Balance as at March 31, 2022
|
242
|
Interest income
|
12
|
Change in fair value of investments measured at fair value through profit or loss
|
24
|
Balance as at September 30, 2022
|
278
|
The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements:
|
Description
|
Fair Value as at
|
Unobservable inputs
|
Range of inputs
|
Relationship of unobservable inputs to fair value
|
September 30, 2022
|
March 31, 2022
|
000's
|
000's
|
Rx Hybrid Instrument
|
278
|
242
|
Fair value interest rate of loan and conversion feature
|
10%
|
Increase/decrease in the fair value rate by 1% would not have a material effect on the fair value of the investment
|
Financial risk management
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company's cash is exposed to credit risk. The Company reduces its credit risk on cash by placing these instruments with institutions of high credit worthiness. As at September 30, 2022, the Company's maximum exposure to credit risk is the carrying value of its financial assets.
Page 22 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments. The Company manages liquidity by maintaining adequate cash balances to meet liabilities as they become due.
As at September 30, 2022, the Company had cash of $29,937 (March 31, 2022 - $53,641) in order to meet current liabilities. Accounts payable and accrued liabilities include trade payables and other obligations of $4,882 (March 31, 2022 - $5,262), all amounts are due within the next 12 months.
Market risk
The significant market risks to which the Company is exposed are interest rate risk and currency risk.
Interest rate risk
Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rate. In seeking to minimize the risks from interest rate fluctuations, the Company manages exposure through its normal operating and financing activities. As at September 30, 2022, the Company has determined its exposure to interest rate risk is minimal.
Currency risk
The Company is exposed to currency risk to the extent that monetary operational expenses are denominated in both CAD and USD while functional currency of CAD in used for reporting. The Company has not entered into any foreign currency contracts to mitigate this risk.
The Company had the following balances in monetary assets and monetary liabilities which are subject to fluctuation against CAD:
|
Denominated in:
|
US$000's
|
GBP 000's
|
EUR 000's
|
Cash
|
2,683
|
1,158
|
994
|
Accounts receivable
|
276
|
-
|
-
|
Accounts payable and accrued liabilities
|
(244)
|
(53)
|
(1,766)
|
2,715
|
1,105
|
(772)
|
Foreign currency rate
|
1.3707
|
1.5098
|
1.3383
|
Equivalent in Canadian dollars
|
$
|
3,721
|
$
|
1,668
|
$
|
(1,033)
|
Impact of 10% change in foreign currency rate
|
$
|
372
|
$
|
167
|
$
|
(103)
|
Based on the above net exposures as at September 30, 2022, and assuming that all other variables remain constant, a 10% change of the USD, GBP and EUR, against the CAD would impact net loss by approximately by $642.
Page 23 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
15. INCOME TAX
Major items causing the Company's income tax rate to differ from the Canadian statutory rate of approximately 26.50% are as follows:
|
Three-months ended September 30,
|
Six-months ended September 30,
|
For the six-month period ended
|
2022
|
2021
|
2022
|
2021
|
Net loss before income taxes
|
(9,973)
|
(17,607)
|
(23,028)
|
(32,324)
|
|
Expected recovery at statutory rate
|
(2,642)
|
(4,666)
|
(6,102)
|
(8,566)
|
Difference between Canadian and foreign tax rates
|
224
|
537
|
1,295
|
653
|
Non-deductible expenses
|
567
|
1,675
|
851
|
3,206
|
Change in unrecognized deferred tax assets
|
1,851
|
2,454
|
3,956
|
4,707
|
Income tax recovery
|
-
|
-
|
-
|
-
|
The significant components of the Company's deferred tax assets, resulting from temporary differences, unused tax credits and unused tax losses, that have not been included on the consolidated statements of financial position, are as follows:
|
As at
|
September 30, 2022
|
March 31, 2022
|
Non-capital loss carryforwards
|
20,012
|
16,307
|
Share issuance costs
|
1,446
|
1,526
|
Depreciation/CCA differences
|
588
|
227
|
Other
|
13
|
43
|
22,059
|
18,103
|
Valuation allowance
|
(22,059)
|
(18,103)
|
-
|
-
|
These deferred tax assets have not been recognized because it is not probable that future taxable profit will be available against which the Company will be able to use these potential benefits.
Non-capital loss balance
As at September 30, 2022, the Company has non-capital losses in Canada, which under certain circumstances can be used to reduce the taxable income of future years. The non-capital losses expire as follows:
|
Year of expiry
|
$
|
2040
|
740
|
2041
|
19,193
|
2042
|
30,112
|
2043
|
8,909
|
58,954
|
Page 24 of 25
|
CYBIN INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended September 30, 2022 and September 30, 2021
(All amounts expressed in thousands of Canadian dollars, except share and per share amounts, and those amounts indicated as being in US dollars, which are in thousands of US dollars)
(Unaudited)
|
As at September 30, 2022, the Company has non-capital losses in the United States, which under certain circumstances can be used to reduce the taxable income of future years. The non-capital losses, stated in Canadian dollars, that will expire as follows:
|
Year of expiry
|
$
|
2041 - Pre-acquisition loss generated up to December 4, 2020
|
1,004
|
2041 - Loss generated in the period from December 4, 2020 to March 31, 2022
|
1,340
|
2042 - Loss generated in the year ended March 31, 2022
|
5,629
|
2043 - Loss generated in the six-month period ended September 30, 2022
|
1,175
|
9,148
|
Although the US federal losses carryforward indefinitely, they are subject to restrictions on their deductibility. The deductibility of the pre-acquisition loss and the post-acquisition loss is restricted to 80% of taxable income in the year of deduction. The pre-acquisition loss is further restricted to an annual limitation under Section 382. As at September 30, 2022, the annual limitation was $136.
Massachusetts allows for a 20-year carryforward period for restricted and unrestricted losses without limitation.
As at September 30, 2022, the Company has non-capital losses in Ireland, which under certain circumstances can be used to reduce the taxable income of future years. The non-capital losses, stated in Canadian dollars, expire as follows:
|
Year of expiry
|
$
|
2042
|
11,042
|
2043
|
8,701
|
19,743
|
16. SUBSEQUENT EVENTS
(a) ATM Program
During the period from October 1, 2022 to November 14, 2022, the Company sold an additional 4,587,685 Common Shares, at an average price of US$0.4784 per Common Share, for aggregate gross proceeds of US$2,195, through its ATM Program.
(b) Expired Securities
During the period from October 1, 2022 to November 14, 2022, 93,750 options and 1,153,713 warrants expired.
(c) Exchange of Class B Shares
On October 7, 2022, Former Adelia Shareholders exchanged 91,257.2 Class B Shares for 912,572 Common Shares.
Page 25 of 25