UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-40101

BRIACELL THERAPEUTICS CORP.

(Exact name of registrant as specified in its charter)

British Columbia, Canada

47-1099599

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

235 15^th Street, Suite 300, West Vancouver, BC, V7T 2X1

(Address of Principal Executive Offices, including zip code)

604-921-1810

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common shares, no par value	BCTX	The Nasdaq Stock Market LLC

Warrants to purchase common shares, no par value	BCTXW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	☐ Large accelerated filer	☐Accelerated filer
	☒ Non-accelerated filer	☒ Smaller reporting company
		☒ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☒ No ☐

As of March 18, 2024, there were 15,981,726 common shares, no par value per share, of the Company issued and outstanding.

BRIACELL THERAPEUTICS CORP.

Form 10-Q

Table of Contents

		Page
Part I. Financial Information		3

Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of January 31, 2024 (unaudited) and July 31, 2023 (unaudited)	3
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months ended January 31, 2024	4
	Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months ended January 31, 2024	5
	Unaudited Condensed Consolidated Statement of Cash Flows for the Six Months ended January 31, 2024	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures Regarding Market Risk	22
Item 4.	Controls and Procedures	23

Part II. Other Information		24

Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	24

Signatures		25

PART I-FINANCIAL

INFORMATION

Item 1. Financial Statements

BRIACELL THERAPEUTICS CORP.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	January 31, 2024			July 31, 2023

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	6,244,528		$	21,251,092
Amounts receivable		30,145			18,873
Prepaid expenses		5,467,286			5,678,542
Total current assets		11,741,959			26,948,507

NON-CURRENT ASSETS:
Investments		2			2
Equity investment in BC Therapeutics		281,655			-
Intangible assets, net		207,431			215,068
Total non-current assets		489,088			215,070

Total assets	$	12,231,047		$	27,163,577

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:
Trade payables	$	3,711,455		$	1,123,739
Accrued expenses and other payables		212,870			677,718
Total current liabilities		3,924,325			1,801,457

NON-CURRENT LIABILITIES:
Warrant liability		16,624,177			29,139,301
Total non-current liabilities		16,624,177			29,139,301

SHAREHOLDERS’ DEFICIT:
Share Capital of no par value - Authorized: unlimited at January 31, 2024 and July 31, 2023, Issued and outstanding: 15,981,726 shares January 31, 2024 and July 31, 2023, respectively		69,591,784			69,591,784
Share-based payment reserve		8,419,154			7,421,950
Accumulated other comprehensive loss		(138,684	)		(138,684	)
Non-controlling Interest		(244,418	)		-
Accumulated deficit		(85,945,291	)		(80,652,231	)
Total shareholders’ deficit		(8,317,455	)		(3,777,181	)

Total liabilities and shareholders’ deficit	$	12,231,047		$	27,163,577

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BRIACELL THERAPEUTICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2024

(Unaudited)

	2024			2023			2024			2023
	Three months ended January 31,						Six months ended January 31,
	2024			2023			2024			2023
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Operating Expenses:
Research and development expenses	$	8,257,455		$	3,053,357		$	15,114,712		$	6,308,572
General and administrative expenses		1,571,991			1,432,966			3,217,762			3,580,902
Total operating expenses		9,829,446			4,486,323			18,332,474			9,889,474

Operating loss		(9,829,446	)		(4,486,323	)		(18,332,474	)		(9,889,474	)
Financial expenses, net		(1,486,119	)		(7,395,439	)		12,975,781			(3,098,829	)
Share of loss on equity investment		(18,345	)		-			(18,345	)		-
Net loss for the period	$	(11,333,910	)	$	(11,881,762	)	$	(5,375,038	)		(12,988,303	)
Net loss attributable to non-controlling interest		(39,307	)		-			(81,978	)		-
Net loss and Comprehensive loss for the period attributable to BriaCell		(11,294,603	)		(11,881,762	)		(5,293,060	)		(12,988,303	)
Net loss per share attributable to BriaCell – basic and diluted	$	(0.71	)	$	(0.77	)	$	(0.33	)	$	(0.84	)
Weighted average number of shares used in computing net basic earnings per share of common stock		15,981,726			15,518,018			15,981,726			15,518,018
Weighted average number of shares used in computing net diluted earnings per share of common stock		15,981,726			15,518,018			15,981,726			15,518,018

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BRIACELL THERAPEUTICS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2024

	Number		Amount		capital		loss			deficit			interest			(deficit)
	Share capital				Additional paid in		Accumulated other comprehensive			Accumulated			Non- controlling			Total shareholders’ equity
	Number		Amount		capital		loss			deficit			interest			(deficit)
Balance, October 31, 2023		15,981,726	$	69,591,784	$	7,918,999	$	(138,684	)	$	(74,650,688	)	$	(205,111	)	$	2,516,300
Issuance of options		-		-		500,155		-			-			-			500,155
Loss for the period		-		-		-		-			(11,294,603	)		(39,307	)		(11,333,910	)
Balance, January 31, 2024		15,981,726	$	69,591,784	$	8,419,154	$	(138,684	)	$	(85,945,291	)	$	(244,418	)	$	(8,317,455	)

	Share capital				Additional paid in			Accumulated other comprehensive			Accumulated			Non- controlling			Total shareholders’
	Number		Amount		capital			loss			deficit			interest			deficit
Balance, July 31, 2023		15,981,726	$	69,591,784	$	7,421,950		$	(138,684	)	$	(80,652,231	)		-		$	(3,777,181	)
Instruments issued to minority shareholders at the Arrangement Date		-		-		(36,767	)		-			-			(162,440	)		(199,207	)
Issuance of options		-		-		1,033,971			-			-			-			1,033,971
Loss for the period		-		-		-			-			(5,293,060	)		(81,978	)		(5,375,038	)
Balance, January 31, 2024		15,981,726	$	69,591,784	$	8,419,154		$	(138,684	)	$	(85,945,291	)	$	(244,418	)	$	(8,317,455	)

	Number		Amount		capital		loss			deficit			(deficit)
	Share capital				Additional paid in		Accumulated other comprehensive			Accumulated			Total shareholders’ equity
	Number		Amount		capital		loss			deficit			(deficit)
Balance, October 31, 2022		15,518,018	$	65,589,293	$	6,340,101	$	(138,684	)	$	(61,456,378	)	$	10,334,332

Issuance of options		-		-		266,844		-			-			266,844
Loss for the period		-		-		-		-			(11,881,762	)		(11,881,762	)
Balance, January 31, 2023		15,518,018	$	65,589,293	$	6,606,945	$	(138,684	)	$	(73,338,140	)	$	(1,280,586	)

	Share capital				Additional paid in		Accumulated other comprehensive			Accumulated			Total shareholders’ equity
	Number		Amount		capital		loss			deficit			(deficit)
Balance, July 31, 2022		15,518,018	$	65,589,293	$	5,228,160	$	(138,684	)	$	(60,349,837	)	$	10,328,932
Balance		15,518,018	$	65,589,293	$	5,228,160	$	(138,684	)	$	(60,349,837	)	$	10,328,932
Issuance of options		-		-		1,378,785		-			-			1,378,785
Loss for the period		-		-		-		-			(12,988,303	)		(12,988,303	)
Income (loss) for the period		-		-		-		-			(12,988,303	)		(12,988,303	)
Balance, January 31, 2023		15,518,018	$	65,589,293	$	6,606,945	$	(138,684	)	$	(73,338,140	)	$	(1,280,586	)
Balance		15,518,018	$	65,589,293	$	6,606,945	$	(138,684	)	$	(73,338,140	)	$	(1,280,586	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

BRIACELL THERAPEUTICS CORP.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JANUARY 31, 2024

(Unaudited)

	2024			2023
	Six months ended January 31,
	2024			2023
Cash flow from operating activities
Net loss	$	(5,375,038	)	$	(12,988,303	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		7,637			7,635
Share-based compensation		1,033,971			1,378,785
Share of loss on equity investment		18,345			-
Change in fair value of warrants		(12,714,331	)		3,511,712
Changes in assets and liabilities:
Increase in amounts receivable		(11,272	)		15,175
Decrease in prepaid expenses		(88,744	)		851,548
Increase in trade payable		2,587,716			119,171
Decrease in accrued expenses and other payables		(464,848	)		(389,845	)
Total cash flow from operating activities		(15,006,564	)		(7,494,122	)

Cash flows from investing activities
Equity Investment in BC Therapeutics (*)		-			-
Total cash flow from investing activities		-			-
Cash flows from financing activities
Share and warrant buyback program		-			(47,294	)
Total cash flow from financing activities		-			(47,294	)

Decrease in cash and cash equivalents		(15,006,564	)		(7,541,416	)
Cash and cash equivalents at beginning of the period		21,251,092			41,041,652
Cash and cash equivalents at end of the period	$	6,244,528		$	33,500,236

(*)	$125,000 of this amount was loaned to BC Therapeutics during the year ended July 31, 2023 and an additional $175,000 was loaned to BC Therapeutics between August 1, 2023 and December 20, 2023. The total amount ($300,000) was converted into an investment).

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BriaCell Therapeutics Corp

Notes to the Condensed Consolidated Financial Statements

(Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated)

NOTE 1: GENERAL AND GOING CONCERN

BriaCell Therapeutics Corp. (“BriaCell” or the “Company”) was incorporated under the Business Corporations Act (British Columbia) on July 26, 2006 and is listed on the Toronto Stock Exchange (“TSX”) under the symbol “BCT” and on the Nasdaq Capital Market (“NASDAQ”) under the symbols “BCTX” and “BCTXW”.

BriaCell Therapeutics Corporation. (the “Company”), is an immuno-oncology biotechnology company. The Company is currently advancing its Bria-IMT targeted immunotherapy program against end-stage breast cancer to Phase 3 study which has been approved by the FDA and is expected to start before end of 2023. BriaCell is also developing a personalized off-the-shelf immunotherapy, Bria-OTS™, and a soluble CD80 protein therapeutic which acts both as a stimulator of the immune system as well as an immune checkpoint inhibitor.

Basis of presentation of the financial statements:

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X promulgated by the U.S Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments consisting of a normal recurring nature which are necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report for the year ended July 31, 2023, filed with the SEC on October 25, 2023. The interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.

The Company continues to devote substantially all of its efforts toward research and development activities. In the course of such activities, the Company has sustained operating losses and expects such losses to continue in the foreseeable future. The Company’s accumulated deficit as of January 31, 2024 was $85,945,291 and negative cash flows from operating activities during the six-month period ended January 31, 2024 was $15,006,564. The Company is planning to finance its operations from its existing and future working capital resources and to continue to evaluate additional sources of capital and financing. The Company’s ability to continue as a going concern is dependent upon its ability to attain future profitable operations and to obtain the necessary financing to meet its obligations arising from normal business operations when they come due. The uncertainty of the Company’s ability to raise such financial capital casts significant doubt on the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company not be able to continue as a going concern.

BriaCell Therapeutics Corp

Notes to the Condensed Consolidated Financial Statements

(Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated)

NOTE 1: GENERAL AND GOING CONCERN (Cont.)

The Company has two wholly-owned U.S. subsidiaries: (i) BriaCell Therapeutics Corp. (“BTC”), which was incorporated in April 3, 2014, under the laws of the state of Delaware. (ii) BTC has a wholly-owned subsidiary, Sapientia Pharmaceuticals, Inc. (“Sapientia”), which was incorporated in September 20, 2012, under the laws of the state of Delaware. The Company also has one Canadian subsidiary: BriaPro Therapeutics Corp, (“BriaPro”) which was incorporated on May 15, 2023, was incorporated under the Business Corporations Act (British Columbia). As of July 31, 2023, BriaPro was a wholly-owned subsidiary.

On August 31, 2023, the Company closed a plan of arrangement spinout transaction (the “Arrangement”) pursuant to which certain pipeline assets of the Company, including Bria-TILsRx™ and protein kinase C delta (PKCδ) inhibitors for multiple indications including cancer (the “BriaPro Assets”), were spun-out to BriaPro Therapeutics Corp. (“BriaPro”), resulting in a 2/3rd owned subsidiary of the Company with the remaining 1/3rd held by BriaCell shareholders (“BriaCell Shareholders”).

Pursuant to the terms of the Arrangement, BriaPro has acquired the entire right and interest in and to the BriaPro Assets in consideration for the issuance by BriaPro to the Company of BriaPro common shares. Under the terms of the Arrangement, for each BriaCell share held immediately prior to closing, BriaCell Shareholders receive one (1) common share of BriaPro, and one (1) new common share of BriaCell (retiring their old share) having the same terms and characteristics as the existing BriaCell common shares. The Company will remain listed on the NASDAQ Stock Market and Toronto Stock Exchange, and BriaPro is an unlisted reporting issuer in Canada.

Immediately following the closing of the Arrangement, the Company controls 2/3rd of the BriaPro common shares representing approximately 66.6% of the issued and outstanding common shares of BriaPro.

As a result of the Arrangement, there are 47,945,178 BriaPro common shares issued and outstanding. The Company now beneficially owns or controls approximately 31,963,452 BriaPro common shares, representing 2/3rd of the issued and outstanding BriaPro common shares.

Pursuant to the Arrangement, each BriaCell warrant shall, in accordance with its terms, entitle the holder thereof to receive, upon the exercise thereof, one BriaCell Share and one BriaPro Share for the original exercise price.

Upon the exercise of BriaCell Warrants, BriaCell shall, as agent for BriaPro, collect and pay to BriaPro an amount for each one (1) BriaPro Share so issued that is equal to the exercise price under the BriaCell Warrant multiplied by the fair market value of one (1) BriaPro Share at the Effective Date divided by the total fair market value of one (1) BriaCell Share and one (1) BriaPro Share at the Effective Date (“BriaPro Warrant Shares”).

Pursuant to the Arrangement, all Briacell option holders received the same amount of BriaPro options (“BriaPro Option”) and under the BriaPro incentive plan. The exercise price of the BriaCell options was apportioned between the BriaCell options and the BriaPro options, as follows:

Each one (1) BriaPro Option to acquire one (1) Share shall have an exercise price equal to the product obtained by multiplying the original exercise price of the BriaCell Option by the quotient obtained by dividing (A) the fair market value of a BriaPro Share at the Effective Date by (B) the aggregate fair market value of a BriaCell Share and a BriaPro Share at the Effective Date.

Pursuant to the Arrangement, all BriaCell Restricted Shares Units (“RSU”) holders received the same amount of BriaPro RSU’s under the BriaPro incentive plan.

Transition Services Agreement

On August 31, 2023, the Company and BriaPro executed a transition services agreement (the “Agreement”), pursuant to which BriaCell will provide certain research and development and head office services (the “Services”) to BriaPro for a fixed monthly fee of $20,000.

Briacell and BriaPro acknowledged the transitional nature of the Services and accordingly, as promptly as practicable, BriaPro agreed to use commercially reasonable efforts to transition each Service to its own internal organization or to obtain alternate third party providers to provide the Services.

In accordance with US GAAP’s Accounting Standards Codification 505 “Equity”, the Arrangement was determined to be a spinoff of nonmonetary assets which did not constitute a business. However, since the assets were transferred to an entity under the Company’s control, the assets is being recorded on the Company’s basis (carry value) and not at fair market value.

BriaCell Therapeutics Corp

Notes to the Condensed Consolidated Financial Statements

(Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated)

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

a. Use of estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the consolidated financial statements, and the reported amount of expenses during the reporting periods. Actual results could differ from those estimates.

b. Equity method investments:

Investments in entities over which the Company does not have a controlling financial interest but has significant influence, are accounted for using the equity method, with the Company’s share of losses reported in loss from equity method investments on the statements of loss and comprehensive loss. Equity method investments are recorded at cost, plus the Company’s share of undistributed earnings or losses, and impairment, if any, within interest in equity investees on the statements of financial position.

c. Recently issued and adopted accounting standards:

As an “emerging growth company,” the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflects this election. The pronouncements below relate to standards that impact the Company.

In March 2022, the FASB issued ASU 2022-02 - Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. This standard eliminates the accounting guidance on TDRs for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under ASC 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, for any entities that have adopted ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The adoption of this standard did not result in amended disclosures in the Company’s Condensed Consolidated Financial Statements, nor did this standard have a material impact the Company’s results of operations.

BriaCell Therapeutics Corp

Notes to the Condensed Consolidated Financial Statements

(Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated)

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)

In July 2023, the FASB issued 2023-03 — Presentation of Financial Statements (Topic 205), Income Statement — Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation — Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022, EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 — General Revision of Regulation S-X: Income or Loss Applicable to Common Stock (SEC Update). The adoption of this standard did not result in amended disclosures in the Company’s Condensed Consolidated Financial Statements, nor did this standard have a material impact the Company’s results of operations.

NOTE 3: INVESTMENT IN BC THERAPEUTICS INC.

On December 21, 2021, the Company and BC Therapeutics, Inc. (“BC Therapeutics” or “the Investee”) entered a share purchase agreement (“SPA”), pursuant to which the Company invested $300,000 at $1.25 per BC Therapeutics share for a 37.5% interest in the Investee. Pursuant to the SPA, Briacell also received two options to invest an additional $225,000 per option at $1.25 per BC Therapeutics share. The first option expires on February 15, 2024 and the second option expires on June 30, 2024 (“BC Therapeutics Options”). In accordance with ASC 321 and ASC 815, the BC Therapeutics Options were valued at $76,350 in accordance with the Black Scholes Option Price Model, using the following assumptions: Share price: $1.25, Exercise price: $1.25, Dividend yield: 0%, Risk free interest rate: $4.902%, Volatility: 100%.

Subsequent to January 31, 2024, the Company exercised the first option on February 1, 2024 and now holds 51% of BC Therapeutics.

BC Therapeutics has a board of four representatives, with two representatives appointed by BriaCell and two representatives appointed by the existing shareholders. All significant decisions related to BC Therapeutics require the approval of at least a majority of the board members.

Changes in the Company’s Investment in BC Therapeutics is summarized as follows:

SCHEDULE OF CHANGES IN INVESTMENT


Balance – August 1, 2023	$	-
Funding (including the value of the BC Therapeutics Options)		300,000
Share of losses:
Operating expenses		(18,345	)
Balance – January 1, 2024	$	281,655

The following amounts represent the Company’s 37.5% share of the assets and liabilities of BC Therapeutics:

As of

January 31, 2024

Current assets: Cash

4,196

Net assets

4,196

NOTE 4: CONTINGENT LIABILITIES AND COMMITMENTS

BriaPro Warrants

As detailed in note 1(f), upon the exercise of BriaCell Warrants, BriaCell shall, as agent for BriaPro, collect and pay to BriaPro an amount of up to $241,164.

Lease

The Company is currently in a 12-month commitment (ending August 31, 2024) for office and lab space in Philadelphia, PA, costing the company approximately $36,000 per month.

BriaCell Therapeutics Corp

Notes to the Condensed Consolidated Financial Statements

(Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated)

NOTE 5: FAIR VALUE MEASUREMENTS

The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of January 31, 2024, and July 31, 2023:

	Fair Value Measurements at
	January 31, 2024						July 31, 2023
	Level 1		Level 2		Total		Level 1		Level 2		Total
Financial Assets:
Cash and cash equivalents		6,244,528		-		6,244,528		21,251,092		-		21,251,092

Total assets measured at fair value	$	6,244,528	$	-	$	6,244,528	$	21,251,092	$	-	$	21,251,092

Financial liabilities:
Warrants liability		6,936,320		9,687,857		16,624,177		9,742,023		19,397,278		29,139,301

Total liabilities measured at fair value	$	6,936,320	$	9,687,857	$	16,624,177	$	9,742,023	$	19,397,278	$	29,139,301

The Company classifies its cash and cash equivalents and the liability in respect of publicly traded warrants within Level 1 because we use quoted market prices in active markets.

The fair value of the warrant liability for non-public warrants is measured using inputs other than quoted prices included in Level 1 that are observable for the liability either directly or indirectly, and thus are classified as Level 2 financial instruments.

NOTE 6: SHAREHOLDERS’ EQUITY

a. Authorized share capital

The authorized share capital consists of an unlimited number of common shares with no par value.

b. Issued share capital

No shares were issued during the six-month period ended January 31, 2024.

c. Share Purchase Warrants

SUMMARY OF CHANGES IN WARRANTS

(i)

There were no changes in share purchase warrants for the six-month period ended January 31, 2024 as presented below:

Number of

warrants

outstanding

Weighted

average exercise

price

Balance, July 31, 2023 and January 31, 2024

8,121,650

5.76

SCHEDULE OF WARRANTS OUTSTANDING

(ii)

As of January 31, 2024, warrants outstanding were as follows:

Number of Warrants		*Exercise Price()**		Exercisable At January 31, 2024		Expiry Date
	51,698	$	3.91		51,698	November 16, 2025
	3,896,809	$	5.31		3,896,809	February 26, 2026 – April 26, 2026
	4,173,143	$	6.19		4,173,143	December 7, 2026
	8,121,650				8,121,650

(*)	See note 4(a).

BriaCell Therapeutics Corp

Notes to the Condensed Consolidated Financial Statements

(Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated)

NOTE 6: SHAREHOLDERS’ EQUITY (Cont.)

d. Compensation Warrants

(i)

There were no changes to compensation warrants for the six-month period ended January 31, 2024.

(ii)

As of January 31, 2024, compensation warrants outstanding were as follows:

SCHEDULE OF WARRANTS OUTSTANDING

Number of Warrants		Exercise Price(*)		Exercisable At January 31, 2024		Expiry Date
	4,890	$	3.91		4,890	November 16, 2025
	17,074	$	5.31		17,074	February 26, 2026
	24,688	$	6.19		24,688	June 7, 2026
	46,652				46,652

(*)	See note 4(a).

e. Warrant liability continuity

The following table presents the summary of the changes in the fair value of the warrants:

	Warrants liability

Balance as of August 1, 2023	$	29,139,301
Fair value of BriaPro Warrant Shares at Effective Date	$	199,207
Change in fair value during the period	$	(12,714,331	)

Balance as of January 31, 2024	$	16,624,177

The key inputs used in the valuation of the non-public warrants as of January 31, 2024 and at July 31, 2023 were as follows:

BriaCell Therapeutics Corp

Notes to the Condensed Consolidated Financial Statements

(Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated)

NOTE 6: SHAREHOLDERS’ EQUITY (Cont.)

SCHEDULE OF VALUATION OF WARRANTS

	January 31, 2024			July 31, 2023

Share price	$	4.12		$	6.69
Exercise price	$	5.31-6.19		$	5.31-6.19
Expected life (years)		1.79-2.85			2.58-3.35
Volatility		100	%		100	%
Dividend yield		0	%		0	%
Risk free rate		3.99-4.21	%		4.51	%

The key inputs used in the valuation of the of the BriaPro Warrant Shares as of January 31, 2024 were as follows:

SCHEDULE OF VALUATION OF WARRANTS

	January 31, 2024			August 31, 2023 (Effective Date)

Share price	$	0.0365		$	0.0365
Exercise price	$	0.0206-0.0308		$	0.0206-0.0308
Expected life (years)		1.79-2.85			2.21-3.27
Volatility		100	%		100	%
Dividend yield		0	%		0	%
Risk free rate		3.99-4.00	%		4.40	%

NOTE 7: SHARE-BASED COMPENSATION

On August 2, 2022, the Company approved an omnibus equity incentive plan (“Omnibus Plan), which will permit the Company to grant incentive stock options, preferred share units, RSU, and deferred share units (collectively, the “Awards”) for the benefit of any employee, officer, director, or consultant of the Company or any subsidiary of the Company. The maximum number of shares available for issuance under the Omnibus Plan shall not exceed 15% of the issued and outstanding Shares, from time to time, less the number of Shares reserved for issuance under all other security-based compensation arrangements of the Company, including the existing Stock Option Plan. On February 9, 2023, the Omnibus Plan was approved by the shareholders.

The following table summarizes the number of options granted to directors, officers, employees and consultants under the option plan for six-month period ended January 31, 2023 and related information:

SUMMARY OF NUMBER OF OPTIONS GRANTED

	Number of options		Weighted average exercise price		Weighted average remaining contractual term (in years)		Aggregate intrinsic value

Balance as of July 31, 2023		2,131,400	$	6.19		3.55	$	1,065,700

Balance as of January 31, 2024		2,131,400		6.18		3.05		-

Exercisable as of January 31, 2024		1,797,000	$	6.19		2.83	$	-

As of January 31, 2024 there are $1,556,676 of total unrecognized costs related to share-based compensation that is expected to be recognized over a period of up to 1.25 years.

BriaCell Therapeutics Corp

Notes to the Condensed Consolidated Financial Statements

(Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated)

NOTE 7: SHARE-BASED COMPENSATION (Cont.)

c.	The following table summarizes information about the Company’s outstanding and exercisable options granted to employees as of January 31, 2024.

Exercise price		Options outstanding as of January 31, 2024		Weighted average remaining contractual term (years)		Options exercisable as of January 31, 2024		Weighted average remaining contractual term (years)		Expiry Date

$	6.03		440,000		4.39		165,000		4.39	June 20, 2028
$	7.16		21,000		4.08		10,500		4.08	February 27, 2028
$	6.04		180,100		3.51		135,075		3.51	August 02, 2027
$	4.71		31,000		3.31		27,125		3.31	May 20, 2027
$	7.51		150,000		3.04		150,000		3.04	February 16, 2027
$	8.47		524,700		2.95		524,700		2.95	January 13, 2027
$	7.15		12,600		2.75		12,600		2.75	November 01, 2026
$	5.74		100,000		2.59		100,000		2.59	September 01, 2026
$	4.24		60,000		2.22		60,000		2.22	April 19, 2026
$	4.24		612,000		2.16		612,000		2.16	March 29, 2026
			2,131,400				1,797,000

d.	As result of the Arrangement, 2,131,400 BriaPro Options were issued and are outstanding as of January 31, 2024:

Exercise Price		Options outstanding as of January 31, 2024		Options exercisable as of January 31, 2024		Expiry Date

$	0.0933		440,000		165,000	June 20, 2028
$	0.1108		21,000		10,500	February 27, 2028
$	0.0984		180,100		135,075	August 02, 2027
$	0.0729		31,000		27,125	May 20, 2027
$	0.1162		150,000		150,000	February 16, 2027
$	0.1310		524,700		524,700	January 13, 2027
$	0.1165		12,600		12,600	November 01, 2026
$	0.0888		100,000		100,000	September 01, 2026
$	0.0656		60,000		60,000	April 19, 2026
$	0.0656		612,000		612,000	March 29, 2026
			2,131,400		1,797,000

e.	Restricted Share Unit Plan

The following table summarizes the number of RSU’s granted to directors under the Omnibus plan as of January 31, 2024:

Number of

RSU’s

outstanding

Aggregate

intrinsic value

Balance, July 31, 2023

19,200

123,072

Balance, January 31, 2024

19,200

79,104

BriaCell Therapeutics Corp

Notes to the Condensed Consolidated Financial Statements

(Unaudited, expressed in US Dollars, except share and per share data and unless otherwise indicated)

NOTE 7: SHARE-BASED COMPENSATION (Cont.)

f. The total share-based compensation expense related to all of the Company’s equity-based awards, recognized for the three and six-month period ended January 31, 2024 and 2023 is comprised as follows:

	2024		2023		2024		2023
	Three months ended January 31,				Six months ended January 31,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Research and development expenses	$	234,253		225,091	$	492,062		575,347
General and administrative expenses		265,902		41,753		541,909		803,438
Total share-based compensation	$	500,155		266,844	$	1,033,971		1,378,785

NOTE 8: FINANCIAL INCOME (EXPENSES), NET

	2024			2023			2024			2023
	Three months ended January 31,						Six months ended January 31,
	2024			2023			2024			2023
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Interest income	$	81,595			240,595		$	272,410			428,948
Change in fair value of warrant liability		(1,567,747	)		(7,629,502	)		12,714,331			(3,511,712	)
Foreign exchange gain (loss)		33			(6,532	)		(10,960	)		(16,065	)
Financial income (expenses), net	$	(1,486,119	)	$	(7,395,439	)	$	12,975,781		$	(3,098,829	)

NOTE 9: SUBSEQUENT EVENT

The Company evaluated the possibility of subsequent events existing in the Company’s unaudited condensed consolidated financial statements through March 18, 2024, the date that the condensed consolidated financial statements were available for issuance. The Company is not aware of any subsequent events which would require recognition or disclosure in the consolidated financial statements, except as follows:

As disclosed in note 3, subsequent to January 31, 2024, on February 1, 2024 the Company exercised an option to acquire an additional interest in BC Therapeutics and now owns 51%.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References to the “Company,” “our,” “us” or “we” refer to BriaCell Therapeutics Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Introduction

This Management’s Discussion and Analysis (“MD&A”) should be read together with other information, including our unaudited condensed interim consolidated financial statements and the related notes to those statements included in Part I, Item 1 of this Quarterly Report (the “Condensed Consolidated Financial Statements”), our consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended July 31, 2023 (the “Annual Report”) and Part I, Item 1A, Risk Factors, of the Annual Report. This MD&A provides additional information on our business, recent developments, financial condition, cash flows and results of operations, and is organized as follows:

	●	Part 1 - Business Overview. This section provides a general description of our business, which we believe is important in understanding the results of our operations, financial condition, and potential future trends.

	●	Part 2 - Results of Operations. This section provides an analysis of our results of operations for the first half and second quarter of fiscal 2024 in comparison to the first half and second quarter of fiscal 2023.

	●	Part 3 - Financial Liquidity and Capital Resources. This section provides an analysis of our cash flows and outstanding debt and commitments. Included in this analysis is a discussion of the amount of financial capacity available to fund our ongoing operations and future commitments.

We prepare and report our unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP. Our unaudited Condensed Consolidated Financial Statements, and the financial information contained herein, are reported in U.S Dollars.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

Overview

BriaCell Therapeutics Corp. (the “Company”), is a clinical-stage biotechnology company that is developing novel immunotherapies to transform cancer care. Immunotherapies have come to the forefront in the fight against cancer as they harness the body’s own immune system to recognize and destroy cancer cells. The Company is currently advancing its Bria-IMT™ targeted immunotherapy in combination with an immune check point inhibitor (Retifanlimab) in a pivotal¹ Phase 3 study in advanced metastatic breast cancer. Bria-IMT™ is currently under Fast Track Designation by the U.S. FDA intended to accelerate the review process of novel treatments that address unmet medical needs. Positive completion of the pivotal study, following review by FDA, could lead to full approval of the Bria-IMT™ immune checkpoint inhibitor combination in advanced metastatic breast cancer. BriaCell reported benchmark-beating patient survival and clinical benefit in advanced metastatic breast cancer with median overall survival of 13.4 months in BriaCell’s advanced metastatic breast cancer patients vs. 6.7-9.8 months for similar patients reported in the literature in its Phase 2 study of Bria-IMT™ combination study with retifanlimab at the 2023 San Antonio Breast Cancer Symposium. A completed Bria-IMT™ Phase 1 combination study with retifanlimab (an anti-PD1 antibody manufactured by Incyte) confirmed tolerability and early-stage efficacy. BriaCell is also developing a personalized off-the-shelf immunotherapy, Bria-OTS™, which provides a platform technology to develop personalized off-the-shelf immunotherapies for numerous types of cancer, and a soluble CD80 protein therapeutic which acts both as a stimulator of the immune system as well as an immune checkpoint inhibitor.

¹“Pivotal” is an industry term referring to a Phase 3 clinical study intended to show and confirm the safety and efficacy of a treatment.

Recent Developments

On August 31, 2023, the Company closed the previously announced plan of arrangement spinout transaction (the “Arrangement”) pursuant to which certain pipeline assets of the Company, including Bria-TILsRx™ and protein kinase C delta (PKCδ) inhibitors for multiple indications including cancer (the “BriaPro Assets”), were spun-out to BriaPro Therapeutics Corp. (“BriaPro”), resulting in a 2/3rd owned subsidiary of the Company with the remaining 1/3rd held by BriaCell shareholders (“BriaCell Shareholders”).

As noted above, immediately following the closing of the Arrangement, the Company controlled 2/3rd of the BriaPro common shares representing approximately 66.6% of the issued and outstanding common shares of BriaPro As a result of the Arrangement, there were approximately 47,945,178 BriaPro common shares issued and outstanding immediately following consummation of the Arrangement. The Corporation now beneficially owns or controls approximately 31,963,452 BriaPro common shares, representing 2/3rd of the issued and outstanding BriaPro common shares.

On October 3, 2023, BriaCell initiated its pivotal Phase 3 Study of Bria-IMT™ in advanced metastatic breast Cancer. The study will evaluate the efficacy and safety of the Bria-IMT™ combination regimen with an immune check point inhibitor (Retifanlimab) in patients who have failed at least two approved therapies for the disease. Bria-IMT™ is currently under Fast Track Designation by the U.S. FDA intended to accelerate the review process of novel treatments that address unmet medical needs. Positive completion of the pivotal study, following review by FDA, could lead to full approval of the Bria-IMT™ immune checkpoint inhibitor combination in advanced metastatic breast cancer. FDA has agreed that improvement in overall survival in the Bria-IMT™ combination arm as compared to the physician’s choice of treatment arm will be the primary endpoint of the study. The study will enroll 177 patients in the Bria-IMT™ combination therapy arm and 177 patients in the treatment of physician’s choice arm. To gather additional information on the Bria-IMT™ regimen alone, 50 patients will be enrolled in this regimen and will be eligible for combination therapy following their initial post treatment evaluation. BriaCell expects frequent and responsive FDA communication under its Fast Track status during the pivotal Phase 3 study. The successful completion of the pivotal Phase 3 study would allow BriaCell to subsequently submit a Biologics License Application and accelerate the path to commercialization.

Results of Operations for the Three Months Ended January 31, 2024 and 2023

	Three months ended January 31,
	2024			2023
	(Unaudited)			(Unaudited)
Operating Expenses:
Research and development expenses	$	8,257,455		$	3,053,357
General and administrative expenses		1,571,991			1,432,966
Total operating expenses		9,829,446			4,486,323

Operating loss		(9,829,446	)		(4,486,323	)
Financial expenses, net		(1,486,119	)		(7,395,439	)
Share of loss on equity investments		(18,345	)		-

SEC Form 10-Q filed by BriaCell Therapeutics Corp.