UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2022

☐ 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. 000-54318

ONCOSEC MEDICAL INCORPORATED

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

nevada		98-0573252
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

24 NORTH MAIN STREET
PENNINGTON, NJ		08534
(Address of principal executive offices)		(Zip Code)

(855) 662-6732

(Registrant’s telephone number, including area code)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		ONCS		Nasdaq Capital Market

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 ☒

The number of shares outstanding of the Registrant’s Common Stock, $0.0001 par value, was 39,350,363 as of March 15, 2022.

OncoSec Medical Incorporated

Form 10-Q

for the Quarterly Period Ended January 31, 2022

PART I—FINANCIAL INFORMATION		3
Item 1.	Financial Statements:	3
	Condensed Consolidated Balance Sheets as of January 31, 2022 (unaudited) and July 31, 2021	3
	Condensed Consolidated Statements of Operations for the three and six months ended January 31, 2022 and 2021 (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended January 31, 2022 and 2021 (unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended January 31, 2022 and 2021 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the six months ended January 31, 2022 and 2021 (unaudited)	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 4.	Controls and Procedures	35
PART II—OTHER INFORMATION		35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
SIGNATURES		38

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements:

OncoSec Medical Incorporated

Condensed Consolidated Balance Sheets

	January 31, 2022			July 31, 2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	25,230,993		$	45,951,233
Prepaid expenses and other current assets		2,696,899			3,228,191
Total Current Assets		27,927,892			49,179,424
Property and equipment, net		1,071,001			928,821
Intangible assets, net		413,471			448,412
Operating lease right-of-use assets		5,149,229			5,445,744
Other long-term assets		527,733			273,523
Total Assets	$	35,089,326		$	56,275,924

Liabilities and Stockholders’ Equity

Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	3,454,209		$	5,561,645
Accrued compensation related		582,842			320,655
Operating lease liabilities		1,037,252			845,483
Note payable		497,223			1,234,133
Total Current Liabilities		5,571,526			7,961,916
Operating lease liabilities, net of current portion		4,702,622			5,238,207
Liability under co-promotion agreement - related party		5,000,000			5,000,000
Total Liabilities		15,274,148			18,200,123

Commitments and Contingencies (Note 8)		-			-

Stockholders’ Equity
Common stock authorized – 100,000,000 common shares with a par value of $0.0001 as of January 31, 2022 and July 31, 2021, common stock issued and outstanding – 39,349,269 and 39,152,610 common shares as of January 31, 2022 and July 31, 2021, respectively		3,935			3,916
Additional paid-in capital		287,539,711			286,337,291
Warrants issued and outstanding – 1,706,190 warrants as of January 31, 2022 and July 31, 2021		3,591,734			3,591,734
Accumulated other comprehensive income (loss)		173,874			(79,109	)
Accumulated deficit		(271,494,076	)		(251,778,031	)
Total Stockholders’ Equity		19,815,178			38,075,801
Total Liabilities and Stockholders’ Equity	$	35,089,326		$	56,275,924

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

OncoSec Medical Incorporated

Condensed Consolidated Statements of Operations

(Unaudited)

	January 31, 2022			January 31, 2021			January 31, 2022			January 31, 2021
	Three Months Ended						Six Months Ended
	January 31, 2022			January 31, 2021			January 31, 2022			January 31, 2021
Revenue	$	-		$	-		$	-		$	-
Expenses:
Research and development		6,825,540			8,915,381			13,471,311			18,714,740
General and administrative		2,590,893			2,110,696			5,860,616			5,351,429
Loss from operations		(9,416,433	)		(11,026,077	)		(19,331,927	)		(24,066,169	)
Other expense, net		(2,583	)		(440	)		(4,594	)		(1,063	)
Interest expense		(5,382	)		(4,722	)		(13,427	)		(10,856	)
Foreign currency exchange gain (loss), net		(480,072	)		328,592			(363,147	)		151,674
Loss before income taxes		(9,904,470	)		(10,702,647	)		(19,713,095	)		(23,926,414	)
Income tax expense		2,950			1,450			2,950			2,950
Net loss	$	(9,907,420	)	$	(10,704,097	)	$	(19,716,045	)	$	(23,929,364	)
Basic and diluted net loss per common share	$	(0.25	)	$	(0.37	)	$	(0.50	)	$	(0.86	)
Weighted average shares used in computing basic and diluted net loss per common share		39,314,860			28,676,719			39,246,095			27,723,948

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

OncoSec Medical Incorporated

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

	January 31, 2022			January 31, 2021			January 31, 2022			January 31, 2021
	Three Months Ended						Six Months Ended
	January 31, 2022			January 31, 2021			January 31, 2022			January 31, 2021

Net Loss	$	(9,907,420	)	$	(10,704,097	)	$	(19,716,045	)	$	(23,929,364	)
Foreign currency translation adjustments		383,376			(358,134	)		252,983			(265,819	)
Comprehensive Loss	$	(9,524,044	)	$	(11,062,231	)	$	(19,463,062	)	$	(24,195,183	)

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

OncoSec Medical Incorporated

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

Three Months Ended January 31, 2022

	Shares		Amount		Capital			Shares		Amount		Loss			Deficit			Equity
	Common Stock				Additional Paid-In			Warrants				Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Shares		Amount		Loss			Deficit			Equity
Balance, October 31, 2021		39,202,590	$	3,921	$	286,979,197			1,706,190	$	3,591,734	$	(209,502	)	$	(261,586,656	)	$	28,778,694
Stock-based compensation expense		15,179		1		356,666			—		—		—			—			356,667
Tax withholdings paid on equity awards		—		—		(4,886	)		—		—		—			—			(4,886	)
Tax shares sold to pay for tax withholdings on equity awards		—		—		4,762			—		—		—			—			4,762
Common stock issued for services
Common stock issued for services, shares
Exercise of common stock warrants
Exercise of common stock warrants, shares
Cancellation of expired warrants
Cancellation of expired warrants, shares
January 2021 Public Offering, net of $2,970,165 issuance costs
January 2021 Public Offering, net of $2,970,165 issuance costs, shares
Dividends declared ($0.00 per share)
August 2020 Registered Direct Offering, net of $1,464,276 issuance costs
August 2020 Registered Direct Offering, net of $1,464,276 issuance costs, shares
Exercise of common stock warrants
Exercise of common stock warrants, shares
Exercise of common stock options		130,000		13		202,787			—		—		—			—			202,800
Common stock issued for employee stock purchase plan		1,500		—		1,185			—		—		—			—			1,185
Other comprehensive income		—		—		—			—		—		383,376			—			383,376
Net loss		—		—		—			—		—		—			(9,907,420	)		(9,907,420	)
Balance, January 31, 2022		39,349,269	$	3,935	$	287,539,711			1,706,190	$	3,591,734	$	173,874		$	(271,494,076	)	$	19,815,178

Six Months Ended January 31, 2022

	Common Stock				Additional Paid-In			Warrants				Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Shares		Amount		Loss			Deficit			Equity
Balance, July 31, 2021		39,152,610	$	3,916	$	286,337,291			1,706,190	$	3,591,734	$	(79,109	)	$	(251,778,031	)	$	38,075,801
Stock-based compensation expense		52,659		5		956,569			—		—		—			—			956,574
Tax withholdings paid on equity awards		—		—		(33,005	)		—		—		—			—			(33,005	)
Tax shares sold to pay for tax withholdings on equity awards		—		—		32,385			—		—		—			—			32,385
Common stock issued for services		12,500		1		42,499			—		—		—			—			42,500
Exercise of common stock options		130,000		13		202,787			—		—		—			—			202,800
Common stock issued for employee stock purchase plan		1,500		—		1,185			—		—		—			—			1,185
Other comprehensive income		—		—		—			—		—		252,983			—			252,983
Net loss		—		—		—			—		—		—			(19,716,045	)		(19,716,045	)
Balance, January 31, 2022		39,349,269	$	3,935	$	287,539,711			1,706,190	$	3,591,734	$	173,874		$	(271,494,076	)	$	19,815,178

Three Months Ended January 31, 2021

	Common Stock				Additional Paid-In			Warrants						Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Shares			Amount			Income (Loss)			Deficit			Equity
Balance, October 31, 2020		27,694,604	$	2,769	$	230,282,585			3,114,288		$	5,708,127		$	72,811		$	(219,835,567	)	$	16,230,725
Common stock issued for employee stock purchase plan		1,538		—		5,798			—			—			—			—			5,798
Exercise of common stock warrants		882,261		88		4,178,747			(882,261	)		(1,135,035	)		—			—			3,043,800
Exercise of common stock options		158,248		16		261,710			—			—			—			—			261,726
Stock-based compensation expense		6,541		1		478,158			—			—			—			—			478,159
Tax withholdings paid on equity awards		—		—		(12,927	)		—			—			—			—			(12,927	)
Tax shares sold to pay for tax withholdings on equity awards		—		—		13,937			—			—			—			—			13,937
Cancellation of expired warrants		—		—		242,143			(10,712	)		(242,143	)		—			—			—
January 2021 Public Offering, net of $2,970,165 issuance costs		7,711,284		771		39,055,561			—			—			—			—			39,056,332
Common stock issued for services		37,500		4		127,496			—			—			—			—			127,500
Dividends declared ($0.00 per share)		—		—		—			—			—			—			—			—
Other comprehensive loss		—		—		—			—			—			(358,134	)		—			(358,134	)
Net loss		—		—		—			—			—			—			(10,704,097	)		(10,704,097	)
Balance, January 31, 2021		36,491,976	$	3,649	$	274,633,208			2,221,315		$	4,330,949		$	(285,323	)	$	(230,539,664	)	$	48,142,819

Six Months Ended January 31, 2021

	Common Stock				Additional Paid-In			Warrants						Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Shares			Amount			Income (Loss)			Deficit			Equity
Balance, July 31, 2020		23,054,474	$	2,305	$	214,789,808			3,114,288		$	5,708,127		$	(19,504	)	$	(206,610,300	)	$	13,870,436
Balance		23,054,474	$	2,305	$	214,789,808			3,114,288		$	5,708,127		$	(19,504	)	$	(206,610,300	)	$	13,870,436
Common stock issued for employee stock purchase plan		1,538		—		5,798			—			—			—			—			5,798
Exercise of common stock warrants		882,261		88		4,178,747			(882,261	)		(1,135,035	)		—			—			3,043,800
Exercise of common stock options		158,248		16		261,710						—			—			—			261,726
Stock-based compensation expense		13,082		1		2,372,180			—			—			—			—			2,372,181
Tax withholdings paid on equity awards		—		—		(26,459	)		—			—			—			—			(26,459	)
Tax shares sold to pay for tax withholdings on equity awards		—		—		28,049			—			—			—			—			28,049
Cancellation of expired warrants		—		—		242,143			(10,712	)		(242,143	)		—			—			—
August 2020 Registered Direct Offering, net of $1,464,276 issuance costs		4,608,589		461		13,513,177			—			—			—			—			13,513,638
January 2021 Public Offering, net of $2,970,165 issuance costs		7,711,284		771		39,055,561			—			—			—			—			39,056,332
Common stock issued for services		62,500		7		212,494			—			—			—			—			212,501
Dividends declared ($0.00 per share)		—		—		—			—			—			—			—			—
Other comprehensive loss		—		—		—			—			—			(265,819	)		—			(265,819	)
Net loss		—		—		—			—			—

SEC Form 10-Q filed by OncoSec Medical Incorporated