Company Overview
We are a pre-clinical-stage, platform technology biopharmaceutical company which
has developed proprietary innovative medicines in areas of significant unmet
medical needs in oncology, with a current focus on colorectal cancer ("CRC").
Our drug candidate under development for colon cancer is RCC-33, a
first-in-class therapy being developed primarily in two settings: one to reduce
tumor cell activity in colon cancer patients as a standalone in neoadjuvant
treatment or "window of opportunity" at the time after colonoscopy, prior to
cancer staging; and another for patients with refractory to therapy and adjuvant
to surgery also at the time after colonoscopy. The Company hopes to start first
in human Phase I/II clinical trials in 2023. Neoadjuvant treatment is the
administration of a therapy before the surgical treatment to improve patient
outcome, and our business strategy is to advance our programs through clinical
studies including with partners, and to opportunistically add programs in areas
of high unmet medical needs through acquisition, collaboration, or internal
development.
Results of Operations
For the Three Months Ended May 31st, 2022 and 2021
Operating Expenses
For the three months ended May 31st, 2022, our total operating expenses were
$635,006 compared to $676,252 for the three months ended May 31, 2021, resulting
in a decrease of $41,246. The decrease is attributable to a total increase of
$260,535 in general administration, and sales and marketing expenses and a
decrease of $301,781 in research and development expenses.
We realized financial loss of $46,646 for the three months ended May 31st, 2022,
compared to incurring financial loss of $647,532 for the three months ended May
31, 2021. The decrease in financial expense was mainly attributable to a
convertible loan valuation expense of $612,421. As a result, the net loss was
$681,652 for the three months ended May 31st, 2022, compared to a net loss of
$1,323,775 for the three months ended May 31, 2021.
Net Loss
Net loss was $681,652 compared to net loss $1,323,775 for the three months ended
May 31st, 2022, for the reasons noted supra.
For the nine Months Ended May 31st, 2022 and 2021
Operating Expenses
For the nine months ended May 31st, 2022, our total operating expenses were
$2,475,617 compared to $2,003,853 for the nine months ended May 31, 2021,
resulting in an increase of $471,764. The increase is attributable to a total
increase of $752,613 in general administration, and sales and marketing expenses
mostly due to share based payment of $ 635,587 and partially offset by an
decrease of $280,848 in research and development expenses.
We realized financial loss of $767,926 for the nine months ended May 31st, 2022,
compared to financial loss of $705,412 for the nine months ended May 31, 2021.
The increase in financial expense was mainly attributable to exchange
differences in total of $48,484 and a convertible loan valuation expenses of
$718,392, As a result, the net loss was $3,243,543 for the nine months ended May
31st, 2022, compared to a net loss of $2,513,297 for the three months ended May
31, 2021.
Net loss
Net loss was $3,243,543 compared to net income of $2,513,297 for the nine months
ended May 31st, 2022 and May 31, 2021, for the reasons explained supra.
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Other comprehensive profit
We incurred another comprehensive gain of $605,740 for the nine months ended May
31st, 2022. The gain was mainly attributable to a valuation of a financial
asset, consisting of the Company's shares held in Sativus, in the total amount
of $239,478 As a result; the total comprehensive gain was $3,849,283 for the
nine months ended May 31st, 2022.
Liquidity and Capital Resources
Overview
As of May 31st, 2022, we had $96,277 in cash compared to $1,968,291 on August
31, 2021. We expect to incur a minimum of $1,000,000 in expenses during the next
twelve months of operations. We estimate that these expenses will be comprised
primarily of general expenses including overhead, legal and accounting fees,
research and development expenses, and fees payable to outside medical centers
for clinical studies.
Liquidity and Capital Resources during the nine Months Ended May 31st, 2022
compared to the nine Months Ended May 31, 2021
We used cash in operations of $1,529,683 for the nine months ended May 31st,
2022 compared to cash used in operations of $1,911,094 for the nine months ended
May 31, 2021. The negative cash flow from operating activities for the nine
months ended May 31st, 2022 is primarily attributable to the Company's net loss
from operations of $3,243,543, offset by depreciation of $151,239, an increase
in accounts payables and accrued liabilities of $142,082, a decrease of $66,560
in account receivables and prepaid expenses, convertible loan valuation of
$718,392, and share based payment in a total of $635,587.
We had cash used from investing activities of $513 during the nine months ended
May 31st, 2022, compared to cash flow from investing activities of $645,968 for
the nine months ended May 31, 2021. The cash flow from investing activities is
due to the Company's Realization of Wize Pharma Inc shares of $645,968 and its
purchase of fixed assets in the aggregate amount of $943.
We had cash flow from financing activities of $240,000 during the nine months
ended May 31st, 2022, compared to $2,456,750 for the nine months ended May 31,
2021. The reason for the increase in cash flow from financing activities is due
to the Company's issuance of a convertible loan.
We will have to raise funds to pay for our expenses. We may have to borrow money
from shareholders, issue equity or enter into a strategic arrangement with a
third party. There can be no assurance that additional capital will be available
to us. We currently have no arrangements or understandings with any person to
obtain funds through bank loans, lines of credit or any other sources. Since we
have no such arrangements or plans currently in effect, our inability to raise
funds for our operations will have a severe negative impact on our ability to
remain a viable company.
Going Concern
Due to the uncertainty of our ability to meet our current operating and capital
expenses, our independent auditors included an explanatory paragraph in their
report on the audited financial statements for the year ended August 31, 2021
regarding concerns about our ability to continue as a going concern. Our
financial statements contain additional note disclosures describing the
circumstances that lead to this disclosure by our independent auditors.
Our unaudited financial statements have been prepared on a going concern basis,
which assumes the realization of assets and settlement of liabilities in the
normal course of business. Our ability to continue as a going concern is
dependent upon our ability to generate profitable operations in the future
and/or to obtain the necessary financing to meet our obligations and repay our
liabilities arising from normal business operations when they become due. The
outcome of these matters cannot be predicted with any certainty at this time and
raise substantial doubt that we will be able to continue as a going concern. Our
unaudited financial statements do not include any adjustments to the amount and
classification of assets and liabilities that may be necessary should we be
unable to continue as a going concern.
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There is no assurance that our operations will be profitable. Our continued
existence and plans for future growth depend on our ability to obtain the
additional capital necessary to operate either through the generation of revenue
or the issuance of additional debt or equity.
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires us to make a number
of estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. Such estimates and assumptions affect the reported
amounts of revenues and expenses during the reporting period. We base our
estimates on historical experiences and on various other assumptions that we
believe to be reasonable under the circumstances. Actual results may differ
materially from these estimates under different assumptions and conditions. We
continue to monitor significant estimates made during the preparation of our
financial statements. On an ongoing basis, we evaluate estimates and assumptions
based upon historical experience and various other factors and circumstances. We
believe our estimates and assumptions are reasonable in the circumstances;
however, actual results may differ from these estimates under different future
conditions.
See Item 7, "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 2, "Summary of Significant Accounting Policies"
in our audited consolidated financial statements for the year ended August 31,
2021, included in our Annual Report on Form 10-K as filed on November 4th, 2021,
for a discussion of our critical accounting policies and estimates.
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