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 ☒[X] No ☐[ ]

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yes ☒[X] No ☐[ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a ~~non- accelerated~~non-accelerated filer, 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.

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. ☒[X]

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

As of ~~May 14, 2018, 92,649,582~~August 8, 2019, 108,038,398 shares of the registrant’s common shares, without par value, were issued and outstanding.

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

Condensed unaudited interim consolidated statements of operations and comprehensive loss

For the three and six months ended ~~ended March 31,~~June 30, 2019 and 2018 ~~and 2017~~

(Stated in United States dollars)

Note

March 31,
2018

March 31,
2017

Expenses:
Research and development 14 $ 600,341 $ 616,449
General and administrative 14 1,160,171 827,025
Professional fees 14 371,947 381,536
Amortization 7 686 699
Depreciation 6 36,699 20,308
Loss from operations 2,169,844 1,846,017
Gain on settlement of liabilities - (5,000 )
Foreign exchange loss (gain) 1,484 (8,281 )
Loss before income taxes
2,171,328 1,832,736
Income tax expense - -
Net loss and comprehensive loss $ 2,171,328 $ 1,832,736

Weighted average number of common shares - basic and diluted 90,517,702 84,418,182

Loss per share - basic and diluted $ (0.02 ) $ (0.02 )

~~Nature of operations and going concern (Note 1)~~

~~Commitments and contingencies (Note 11)~~

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

~~Zomedica Pharmaceuticals Corp.~~

~~Condensed unaudited interim consolidated statements of shareholders’ equity~~

~~For the three months ended March 31, 2018 and 2017~~

~~(Stated in United States dollars)~~

Note

Number of
capital stock

Capital stock

Additional paid-in
capital

Accumulated
deficit

Total
Balance at December 31, 2016 83,964,569 $ 10,189,973 $ 1,205,456 $ (7,561,028 ) $ 3,834,401
Stock to be issued 9 - 250,000 - - 250,000
Stock issuance costs 9 - (8,864 ) - - (8,864 )
Stock issuance for services 9 43,613 45,000 - - 45,000
Stock-based compensation 10 - - 161,591 - 161,591
Stock issued due to exercise of options 9 410,000 25,523 (8,374 ) - 17,149
Net loss - - - (1,832,736 ) (1,832,736 )
Balance at March 31, 2017 84,418,182 $ 10,501,632 $ 1,358,673 $ (9,393,764 ) $ 2,466,541

Balance at December 31, 2017 90,225,869 18,244,659 1,768,526 (15,626,100 ) 4,387,085
Stock-based compensation - - 5,691 - 5,691
Stock issued due to exercise of options 10 1,627,996 1,759,224 (351,438 ) - 1,407,786
Net loss - - - (2,171,328 ) (2,171,328 )
Balance at March 31, 2018 91,853,865 20,003,883 1,422,779 (17,797,428 ) 3,629,234

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

Three months ended June 30, Six months ended June 30,
Note 2019 2018 2019 2018

Expenses:
Research and development 16 $ 1,061,507 $ 2,534,620 $ 8,592,882 $ 3,134,961
General and administrative 16 921,446 1,248,490 4,152,709 2,408,662
Professional fees 16 211,520 336,455 950,914 708,402
Amortization - right-of-use asset 8 127,345 -   254,690 -
Amortization - intangible asset 7 270 693 537 1,379
Depreciation 6 68,925 27,459 130,979 64,158
Loss from operations 2,391,013 4,147,717 14,082,711 6,317,562
Loss on fixed assets 1,308 -   1,308 -
Interest expense 12,164 -   18,338 -
Gain on settlement of liabilities 11 -   -   (19,737 ) -
Foreign exchange gain (58 ) (3,319 ) (1,283 ) (1,835 )
Loss before income taxes 2,404,427 4,144,398 14,081,337 6,315,727
Income tax expense -   -   -   -
Net loss and comprehensive loss $ 2,404,427 $ 4,144,398 $ 14,081,337 $ 6,315,727

Weighted average number of common shares - basic and diluted 108,038,398 92,527,470 104,528,705 91,527,862

Loss per share - basic and diluted $ (0.02 ) $ (0.04 ) $ (0.13 ) $ (0.07 )

~~Zomedica Pharmaceuticals Corp.~~

~~Condensed unaudited interim consolidated statements of cash flows~~

~~For the three months ended March 31, 2018 and 2017~~

~~(Stated in United States dollars)~~

Note

March 31,
2018

March 31,
2017

Cash flows used in operating activities:
Net loss $ (2,171,328 ) $ (1,832,736 )
Adjustments for
Depreciation 6 36,699 20,308
Amortization 7 686 699
Stock issued for services - 45,000
Stock-based compensation 5,691 161,591
Change in non-cash operating working capital
Trade and other receivable (41,109 ) (4,179 )
Prepaid expenses (6,494 ) (37,965 )
Deposits 30,474 (216,813 )
Accounts payable and accrued liabilities 437,587 310,293
(1,707,794 ) (1,553,802 )
Cash flows from financing activities:
Cash received for stock issuance - 250,000
Cash received from stock option exercises 1,407,786 17,149
Stock issuance costs - (8,864 )
Repayments (advances) of shareholder loan - (6,726 )
1,407,786 251,559
Cash flows used in investing activities:
Investment in property and equipment 6 (13,219 ) (157,402 )
(13,219 ) (157,402 )
Decrease in cash and cash equivalents (313,227 ) (1,459,645 )
Cash and cash equivalents, beginning of period 3,448,147 3,226,680
Cash and cash equivalents, end of period $ 3,134,920 $ 1,767,035

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

Zomedica Pharmaceuticals Corp.

Condensed unaudited interim consolidated statements of shareholders’ equity

For the three and six months ended June 30, 2019 and 2018

(Stated in United States dollars)

Series 1 preferred stock Common stock
Note Shares Amount Shares Amount Common stock subscribed Additional paid-in capital Accumulated deficit Total

Balance at December 31, 2017 -   $ -   90,225,869 $ 18,244,659 $ -   $ 1,768,526 $ (15,626,100 ) $ 4,387,085
Stock issuance for services -   -   641,717 1,238,513 -   -   -   1,238,513
Stock issuance for financing, net of cost -   -   1,861,627 3,978,690 -   -   -   3,978,690
Stock-based compensation 12 -   -   -   -   -   7,288 -   7,288
Stock issued due to exercise of options 11,12 -   -   1,781,996 1,796,262 -   (357,954 ) -   1,438,308
Net loss -   -   -   -   -   -   (6,315,727 ) (6,315,727 )
Balance at June 30, 2018 -   $ -   94,511,209 $ 25,258,124 $ -   $ 1,417,860 $ (21,941,827 ) $ 4,734,157

Balance at December 31, 2018 -   $ -   97,598,898 $ 30,410,648 $ 4,280,000 $ 1,240,139 $ (32,273,787 ) $ 3,657,000
Stock issuance for services �� 11 -   -   707,236 792,104 -   -   -   792,104
Stock-based compensation 12 -   -   -   -   -   2,341,104 -   2,341,104
Stock issuance for financing, net of cost 10,11 12 11,962,811 9,337,529 6,690,922 (4,280,000 ) -   -   14,373,733
Stock issued due to exercise of options 11,12 -   -   394,735 754,148 -   (154,148 ) -   600,000
Net loss -   -   -   -   -   -   (14,081,337 ) (14,081,337 )
Balance at June 30, 2019 12 $ 11,962,811 108,038,398 $ 38,647,822 $ -   $ 3,427,095 $ (46,355,124 ) $ 7,682,604

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

Zomedica Pharmaceuticals Corp.

Condensed unaudited interim consolidated statements of cash flows

For the three and six months ended June 30, 2019 and 2018

(Stated in United States dollars)

Three months ended June 30, Six months ended June 30,
Note 2019 2018 2019 2018

Cash flows used in operating activities:
Net loss for the period $ (2,404,427 ) $ (4,144,398 ) $ (14,081,337 ) $ (6,315,727 )
Adjustments for
Depreciation 6 68,925 27,459 130,979 64,158
Amortization - intangible assets 7 270 693 537 1,379
Amortization - right-of-use-asset 8 127,345 -   254,690 -
Loss on fixed assets 6 1,308 -   1,308 -
Stock issued for services 11 -   1,238,513 792,104 1,238,513
Stock-based compensation -   1,597 2,341,104 7,288
Change in non-cash operating working capital
Trade and other receivable (17,578 ) 19,754 (41,891 ) (21,355 )
Prepaid expenses 92,418 (241,270 ) 263,010 (247,764 )
Deposits (327,138 ) (60,320 ) (98,075 ) (29,846 )
Accounts payable and accrued liabilities (5,977,134 ) 417,477 (579,716 ) 855,065
(8,436,011 ) (2,740,495 ) (11,017,287 ) (4,448,289 )

Cash flows from financing activities:
Cash proceeds from financing of preferred shares 10 12,000,000 -   12,000,000 -
Cash proceeds from financing of common shares 11 -   4,002,496 3,000,000 4,002,496
Cash received from stock option exercises 12 -   30,522 600,000 1,438,308
Cash paid on stock issuance costs 10,11 (33,095 ) (23,806 ) (626,267 ) (23,806 )
11,966,905 4,009,212 14,973,733 5,416,998

Cash flows used in investing activities:
Investment in property and equipment 6 (5,477 ) (124,474 ) (74,563 ) (137,693 )
(5,477 ) (124,474 ) (74,563 ) (137,693 )

Increase in cash and cash equivalents 3,525,417 1,144,243 3,881,883 831,016

Cash and cash equivalents, beginning of period 2,296,731 3,134,920 1,940,265 3,448,147

Cash and cash equivalents, end of period $ 5,822,148 $ 4,279,163 $ 5,822,148 $ 4,279,163

Supplemental cash flow information:

Interest paid $ 12,164 -   $ 18,338 -

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

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended ~~March 31,~~June 30, 2019 and 2018 ~~and 2017~~

(Stated in United States dollars)

1.	~~Nature of operations and going concern~~

1. Nature of operations and going concern

Zomedica Pharmaceuticals Corp. ~~(the~~("Zomedica" or the “Company”) was incorporated on January 7, 2013 under the ~~Alberta~~ Business Corporations Act (Alberta) as Wise Oakwood Ventures Inc. (“WOW”) and was classified as a capital pool company, as defined in Policy 2.4 of the TSX Venture Exchange. ZoMedica Pharmaceuticals Inc. was incorporated on May 14, 2015 under the Canada Business Corporations Act.

On April 21, 2016, the Company closed its qualifying transaction (“Transaction”) ~~with~~, consisting of the acquisition of ZoMedica Pharmaceuticals Inc. (“ZoMedica”)~~, and filed Articles of Amalgamation and~~ pursuant to a three-cornered amalgamation, whereby ZoMedica was amalgamated with 9674128 Canada Inc. ~~which~~(which was wholly-owned by ~~WOW.~~WOW) and common shares and options of the Company were issued to former holders of ZoMedica securities as consideration. The amalgamated company changed its name to Zomedica Pharmaceuticals Ltd. and WOW subsequently changed its name to Zomedica Pharmaceuticals Corp. Prior to completion of the Transaction, WOW consolidated its common shares on the basis of the one post-consolidation common share for every 2.5 pre-consolidation common shares. The Transaction constituted WOW’s qualifying transaction under TSX Venture Exchange Policy 2.4 – Capital Pool Companies. The shares of Zomedica Pharmaceuticals Corp. began trading on the TSX Venture Exchange under the new symbol “ZOM” on Monday, May 2, ~~2016 on the TSX Venture Exchange.~~2016. On June 21, 2016, the Company filed Articles of Amalgamation and vertically amalgamated with its wholly-owned subsidiary, Zomedica Pharmaceuticals Ltd.

Zomedica has one corporate subsidiary, ~~ZoMedica~~Zomedica Pharmaceuticals, Inc., a Delaware company whose results and operations are included in these ~~condensed unaudited interim~~ consolidated financial statements. Zomedica Pharmaceuticals Corp. had no operations from May 14, 2015 to the qualifying transaction date on April 21, 2016. The January 1, 2016 to March 31, 2016 comparative period represent the results of the operations of the predecessor, Zomedica Pharmaceuticals Inc. The Company is a biopharmaceutical company targeting health and wellness solutions for the companion pet through a ground-breaking approach that focuses on the needs of the veterinarians themselves. Zomedica's head office is located at 100 Phoenix Drive, Suite 190, Ann Arbor, MI 48108 and its registered office is located at Suite 1250, 639 – 5th Avenue S.W., Calgary, Alberta T2P 0M9.

On November 20, 2017, Zomedica announced that its registration statement on Form S-1 was declared effective by the U.S. Securities and Exchange Commission and on November 21, 2017, the Company’s common shares began trading on the NYSE American under the symbol “ZOM”.

Going concern

~~These condensed unaudited interim~~The consolidated financial statements ~~have been~~are prepared on a going concern basis, which ~~contemplates~~assumes that the Company will be able to ~~realize~~meet its ~~assets~~obligations and ~~discharge~~continue its ~~liabilities in~~operations for the ~~normal course~~next twelve months. The Company has incurred losses from operations since inception and has an accumulated deficit of ~~business. Accordingly, they do not give effect to adjustments~~$46,355,124 as at June 30, 2019 (December 31, 2018 - $32,273,787). The Company has funded its research and development (“R&D”) activities principally through the issuance of securities and loans from related parties. There is no certainty that ~~would~~such funding will be ~~necessary should the Company be unable~~available going forward. These conditions raise substantial doubt about its ability to continue as a going concern and ~~therefore be required to~~ realize its assets and ~~liquidate~~pay its liabilities as they become due.

In order for the Company to continue as a going concern and ~~commitments~~fund any significant expansion of its operation or R&D activities, the Company will require significant additional capital. The Company’s ultimate success will depend on whether its future product candidates receive the necessary regulatory approval and it is able to successfully market approved products. The Company cannot be certain that it will be able to receive regulatory approval for any of its future product candidates, or that it will reach the level of sales and revenues necessary to achieve and sustain profitability.

The availability of equity or debt financing will be affected by, among other things, the results of the Company’s research and development, its ability to obtain regulatory approvals, the market acceptance of its products, the state of the capital markets generally, strategic alliance agreements, and other relevant commercial considerations. In addition, if the Company raises additional funds by issuing equity securities,

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended June 30, 2019 and 2018

(Stated in ~~other than~~United States dollars)

1. Nature of operations and going concern (continued)

Going concern (continued)

its then existing security holders will likely experience dilution, and the ~~normal course~~incurring of indebtedness would result in increased debt service obligations and could require the Company to agree to operating and financial covenants that would restrict its operations. Any failure on its part to raise additional funds on terms favorable to the Company or at all, may require the Company to significantly change or curtail its current or planned operations in order to conserve cash until such time, if ever, that sufficient proceeds from operations are generated, and could result in the Company not taking advantage of business ~~and at amounts different from those in the accompanying condensed consolidated financial statements. Such adjustments could be material.~~opportunities.

2.	Basis of preparation

The accounting policies set out below have been applied consistently in the condensed unaudited interim consolidated financial statements.

Basis of consolidation

These condensed unaudited interim consolidated financial statements include the accounts of the Company and its wholly owned operating subsidiary, Zomedica Pharmaceuticals, Inc.

All inter-company accounts and transactions have been eliminated on consolidation.

~~Zomedica Pharmaceuticals Corp.~~

~~Notes to the condensed unaudited interim consolidated financial statements~~

~~For the three months ended March 31, 2018 and 2017~~

~~(Stated in United States dollars)~~

3.	Significant accounting policies

Use of estimates

The preparation of the condensed unaudited interim consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed unaudited interim consolidated financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates.

Areas where significant judgment is involved in making estimates are: the fair values of financial assets and liabilities; the determination of fair value of stock-based compensation; the useful lives of property and equipment; deferred income taxes and forecasting future cash flows for assessing the going concern assumption.

Basis of measurement

The condensed unaudited interim consolidated financial statements have been prepared on the historical cost basis except as otherwise noted.

Functional and reporting currencies

The Company’s and subsidiary’s functional currency, as determined by management, is US dollars, which is also the Company’s reporting currency.

The accounting policies set out below have been applied consistently to all periods and companies presented in the condensed unaudited interim consolidated financial statements.

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended June 30, 2019 and 2018

(Stated in United States dollars)

Significant accounting policies (continued)

Research and development

Research and development costs related to continued research and development programs are expensed as incurred in accordance with ASC topic 730.

Share issue costs

Share issue costs are recorded as a reduction of the proceeds from the issuance of capital stock.

Translation of foreign currencies

In respect of other transactions denominated in currencies other than the Company and its wholly owned operating subsidiaries’ functional currencies, the monetary assets and liabilities are translated at the period end rates. Revenue and expenses are translated at rates of exchange prevailing on the transaction dates. All of the exchange gains or losses resulting from these other transactions are recognized in the condensed unaudited interim consolidated statements of operations and comprehensive loss.

Stock-based compensation

The Company measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at the date at which they are granted if the fair value of the goods or services received by the Company cannot be reliably estimated.

~~Zomedica Pharmaceuticals Corp.~~

~~Notes to the condensed unaudited interim consolidated financial statements~~

~~For the three months ended March 31, 2018 and 2017~~

~~(Stated in United States dollars)~~

3.	~~Significant accounting policies (continued)~~

~~Stock-based compensation (continued)~~

The Company calculates stock-based compensation using the fair value method, under which the fair value of the options at the grant date is calculated using the Black-Scholes Option Pricing Model, and subsequently expensed over the vesting period of the option. The provisions of the Company's stock-based compensation plans do not require the Company to settle any options by transferring cash or other assets, and therefore the Company classifies the awards as equity. Stock-based compensation expense recognized during the period is based on the value of stock-based payment awards that are ultimately expected to vest.

The Company estimates forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Loss per share

Basic loss per share (“EPS”) is computed by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted EPS reflects the potential dilution that could occur from common shares issuable through the exercise or conversion of stock options, restricted stock awards, warrants and convertible securities. In certain circumstances, the conversion of options are excluded from diluted EPS if the effect of such inclusion would be anti-dilutive.

The dilutive effect of stock options is determined using the treasury stock method. Stock options to purchase common shares of the Company during the period were not included in the computation of diluted EPS because the Company has incurred a loss for the three and six months ended ~~March 31, 2018~~June 30, 2019 as the effect would be anti-dilutive.

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended June 30, 2019 and 2018

(Stated in United States dollars)

Significant accounting policies (continued)

Comprehensive loss

The Company follows ASC topic 220. This statement establishes standards for reporting and display of comprehensive (loss) income and its components. Comprehensive loss is net loss plus certain items that are recorded directly to shareholders' equity. The Company has no other comprehensive loss items.

~~Zomedica Pharmaceuticals Corp.~~

~~Notes to the condensed unaudited interim consolidated financial statements~~

~~For the three months ended March 31, 2018 and 2017~~

~~(Stated in United States dollars)~~

3.	~~Significant accounting policies (continued)~~

~~Future~~Recently adopted accounting pronouncements

In February 2016, the FASB issued new guidance, ASU No. 2016-02, Leases (Topic 842). The ~~main difference between current U.S. GAAP~~new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and ~~the new guidance is the recognition of~~ lease ~~liabilities based~~liability on the ~~present value~~balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of ~~remaining lease payments and corresponding lease assets for operating leases under current U.S. GAAP with limited exception.~~expense recognition in the income statement. Additional qualitative and quantitative disclosures are also required by the new guidance. Topic 842 is effective for annual reporting periods (including interim reporting periods) beginning after December 15, 2018. Early adoption is permitted.

A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. The Company ~~is in~~adopted the ~~process~~new standard with an initial application date of ~~evaluating~~January 1, 2019 and used the ~~amendments to determine if they have a material impact on~~effective date as its date of initial application. Consequently, financial information was not updated, and the ~~Company’s financial position, results of operations, cash flows or disclosures.~~disclosures required under the new standard were not provided for dates and periods before January 1, 2019.

~~In August 2016,~~The new standard provides a number of optional practical expedients in transition. The Company has elected the ~~FASB issued ASU 2016-15, Statement~~‘package of ~~Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments,~~practical expedients’, which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the Statement of Cash Flows. ASU 2016-15 will be effective on May 1, 2018 and will require adoption on a retrospective basis unless it is impracticable to apply, in which casepermits the Company ~~would be required~~not to ~~apply~~reassess under the ~~amendments prospectively as of the earliest date practicable.~~new standard prior conclusions about lease identification, lease classification and initial direct costs. The Company ~~is in~~has not elected the ~~process of evaluating~~use-of-hindsight or the ~~amendments~~practical expedient pertaining to ~~determine if they have a material impact on~~land easements; the ~~Company’s financial position, results of operations, cash flows or disclosures.~~latter not being applicable to the Company.

4.	Critical accounting judgments and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods.

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended June 30, 2019 and 2018

(Stated in United States dollars)

Critical accounting judgements and key sources of estimation uncertainty (continued)

Critical areas of estimation and judgements in applying accounting policies include the following:

Going concern

These condensed unaudited interim consolidated financial statements have been prepared in accordance with ~~U.S~~U.S. GAAP on a going concern basis, which assumes the realization of assets and discharge of liabilities in the normal course of business within the foreseeable future. Management uses judgment in determining assumptions for cash flow projections, such as anticipated financing, anticipated sales and future commitments to assess the Company’s ability to continue as a going concern. A critical judgment is that the Company continues to raise funds going forward and satisfy their obligations as they become due.

~~Zomedica Pharmaceuticals Corp.~~

~~Notes~~Stock-based payments

The Company estimates the fair value of convertible securities such as options using the Black-Scholes option-pricing model which requires significant estimation around assumptions and inputs such as expected term to ~~the condensed unaudited interim consolidated financial statements~~

~~For the three months ended March 31, 2018~~maturity, expected volatility and ~~2017~~expected dividends.

~~(Stated in United States dollars)~~

4.	~~Critical accounting judgments and key sources of estimation uncertainty (continued)~~

Useful lives of property and equipment

~~As described in Note 3 above, the~~The Company reviews the estimated useful lives of property and equipment with definite useful lives at the end of each year and assesses whether the useful lives of certain items should be shortened or extended, due to various factors including technology, competition and revised service offerings. During the three ~~month period~~and six months ended ~~March 31, 2018 and March 31, 2017,~~June 30, 2019, the Company was not required to adjust the useful lives of any assets based on the factors described above. Long-lived assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable.

Deferred income taxes

The calculation of deferred income taxes is based on assumptions which are subject to uncertainty as to timing and which tax rates are expected to apply when temporary differences reverse. Deferred tax recorded is also subject to uncertainty regarding the magnitude of non-capital losses available for carry forward and of the balances in various tax pools. By their nature, these estimates are subject to measurement uncertainty, and the effect on the financial statements from changes in such estimates in future period could be material. Deferred tax assets are recognized to the extent that it is probable that they will be able to be utilized against future taxable income. Deferred tax assets are reviewed at each balance sheet date and adjusted to the extent that it is no longer probable that the related tax benefit will be realized.

~~Stock-based payments~~

The Company estimates the fair value of convertible securities such as options using the Black-Scholes option-pricing model which requires significant estimation around assumptions and inputs such as expected term to maturity, expected volatility and expected dividends.

5.	~~Prepaid expenses and deposits~~

The Company entered into a lease agreement with Wickfield Phoenix LLC effective on August 23, 2016. The Company prepaid the full outstanding balance of $801,973 on August 26, 2016 and recorded the prepaid rent due within a year as current. As at March 31, 2018, the Company has classified $155,220 as a current asset in the condensed unaudited interim consolidated balance sheet (December 31, 2017 - $155,220).10

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended ~~March 31,~~June 30, 2019 and 2018 ~~and 2017~~

(Stated in United States dollars)

5.	Prepaid expenses and deposits

June 30, December 31,
2019 2018
Prepaid rent (i) $ - $ 1,613,038
Deposits (ii) 1,224,180 1,596,104
Prepaid FDA fees 62,995 -
Prepaid marketing (iii) 41,218 37,465
Prepaid insurance (iii) 780 33,372
Other (iv) 67,303 29,470
Total $ 1,396,476 $ 3,309,449

(i)

On July 31, 2018, the Company entered into an amended lease agreement with Wickfield Phoenix LLC for an additional 18,640 square feet of office space. The Company prepaid the full outstanding balance of $1,269,073. As of January 1, 2019 the balance of the prepaid rent, inclusive of the original and amended lease amounts was $1,613,038. In accordance with ASC 842, this amount was reclassified as a right-of-use asset in the consolidated balance sheet. As of December 31, 2018, the Company classified $509,380 as a current asset in the consolidated balance sheet;

~~Property~~(ii)

Deposits include payments made to vendors in advance and are primarily associated with research activity, design fees for additional office space, and equipment purchases. As of June 30, 2019 and December 31, 2018, the Company classified $1,389,176 and $1,867,034 as a current asset in the consolidated balance sheet, respectively;

(iii)

As of June 30, 2019 and December 31, 2018, all amounts were classified as a current asset in the consolidated balance sheet;

(iv)

Other is comprised of subscription payments and software licensing. As of June 30, 2019 and December 31, 2018, the Company classified all amounts as a current asset in the consolidated balance sheet.

Computer
equipment

Furniture and
equipment

Laboratory
equipment

Leasehold
improvements
Total
Cost
Balance at December 31, 2016 61,598 7,364 243,529 25,672 338,163
Additions 89,557 68,694 2,200 11,285 171,736
Balance at December 31, 2017 151,155 76,058 245,729 36,957 509,899
Additions 9,048 4,171 - - 13,219
Balance at March 31, 2018 160,203 80,229 245,729 36,957 523,118
Accumulated depreciation
Balance at December 31, 2016 13,858 1,490 29,783 3,998 49,129
Depreciation 28,944 10,355 45,092 5,222 89,613
Balance at December 31, 2017 42,802 11,845 74,875 9,220 138,742
Depreciation 8,149 2,837 11,119 14,594 36,699
Balance at March 31, 2018 50,951 14,682 85,994 23,814 175,441

Net book value as at:
December 31, 2017
$ 108,353 $ 64,213 $ 170,854 $ 27,737 $ 371,157
March 31, 2018 $ 109,252 $ 65,547 $ 159,735 $ 13,143 $ 347,677

7.	~~Intangible assets~~

Computer
software

Trademarks
Total
Cost
Balance at December 31, 2016 5,143 16,236 21,379
Additions - - -
Balance at December 31, 2017 5,143 16,236 21,379
Additions -- -
Balance at March 31, 2018 5,143 16,236 21,379
Accumulated amortization
Balance at December 31, 2016 2,428 1,013 3,441
Amortization 1,715 1,082 2,797
Balance at December 31, 2017 4,143 2,095 6,238
Amortization 419 267 686
Balance at March 31, 2018 4,562 2,362 6,924

Net book value as at:
December 31, 2017
$ 1,000 $ 14,141 $ 15,141
March 31, 2018 $ 581 $ 13,874 $ 14,455

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended ~~March 31,~~June 30, 2019 and 2018 ~~and 2017~~

(Stated in United States dollars)

6.	Property and equipment

Computer equipment Furniture and equipment Laboratory equipment Leasehold improvements Total
Cost
Balance at December 31, 2017 $ 151,155 $ 76,058 $ 245,729 $ 36,957 $ 509,899
Additions 18,847 105,821 246,375 256,954 627,997
Disposals -   -   (139,467 ) (10,936 ) (150,403 )
Balance at December 31, 2018 170,002 181,879 352,637 282,975 987,493
Additions 137,126 3,414 3,350 65,673 209,563
Disposals (2,210 ) -   -   -   (2,210 )
Balance at June 30, 2019 304,918 185,293 355,987 348,648 1,194,846

Accumulated depreciation
Balance at December 31, 2017 42,802 11,845 74,875 9,220 138,742
Depreciation 62,116 17,740 86,368 37,460 203,684
Disposals -   -   (61,547 ) (10,474 ) (72,021 )
Balance at December 31, 2018 104,918 29,585 99,696 36,206 270,405
Depreciation 38,683 13,153 33,785 45,358 130,979
Disposals (902 ) -   -   -   (902 )
Balance at June 30, 2019 142,699 42,738 133,481 81,564 400,482

Net book value as at:
December 31, 2018 $ 65,084 $ 152,294 $ 252,941 $ 246,769 $ 717,088
June 30, 2019 $ 162,219 $ 142,555 $ 222,506 $ 267,084 $ 794,364

In February 2019 the Company reclassified $135,000 out of prepaid assets into property and equipment.

7.	Intangible assets

Computer software Trademarks Total intangible assets
Cost
Balance at December 31, 2017 $ 5,143 $ 16,236 $ 21,379
Additions -   -   -
Balance at December 31, 2018 5,143 16,236 21,379
Additions -   -   -
Balance at June 30, 2019 5,143 16,236 21,379

Accumulated amortization
Balance at December 31, 2017 4,143 2,095 6,238
Amortization 1,000 1,083 2,083
Balance at December 31, 2018 5,143 3,178 8,321
Amortization -   537 537
Balance at June 30, 2019 5,143 3,715 8,858

Net book value as at:
December 31, 2018 $ -   $ 13,058 $ 13,058
June 30, 2019 $ -   $ 12,521 $ 12,521

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended June 30, 2019 and 2018

(Stated in United States dollars)

~~Loan Arrangements~~8.

Leases

As discussed in Note 3, the Company adopted ASC 842 with an initial application date of January 1, 2019. The Company is party to two lease agreements under which it rents office and laboratory space. The rent for both of these leases was prepaid upon inception and therefore at adoption the Company reclassified its prepaid lease balances of $1,613,038 to a right-of-use asset.

The Company amortizes the asset on a straight-line basis and records the expense in the consolidated statement of operations and comprehensive loss. During the three and six months ended June 30, 2019, the Company recognized $127,345 and $254,690 (2018 – nil) in amortization expense in the consolidated statements of operations and comprehensive loss.

9.	Loan arrangements

On October 17, 2017, the Company entered into a loan arrangement with a shareholder of the Company, pursuant to which such shareholder has agreed to provide a loan facility to the Company, whereby the Company may borrow up to $5,000,000, with the proceeds to be used for working capital and general corporate purposes. The term of the loan facility is five (5) years, with principal and interest payments being due only at the time of maturity. Under the loan agreement, the Company may borrow in one or more advances, provided however that a minimum amount of $250,000 must be borrowed at any one time and not more than two advances may occur per month. Interest shall accrue at a rate of fourteen percent (14%) per annum, payable upon maturity. As of ~~March 31, 2018,~~June 30, 2019, no amounts have been borrowed.

~~Capital~~10.

Preferred stock

The Company is authorized to issue 20 shares of our Series 1 Preferred Shares, all without par value, and each having a stated value of $1,000,000. The Series 1 Preferred Shares do not have voting rights except to the extent required by applicable law and are not convertible into the Company’s common shares. Holders of the Series 1 Preferred Shares will not be entitled to dividends but, in lieu thereof, will receive Net Sales Payments (“Net Sales Payments” is defined as annual payments equal to 9 percent of sales) until such time as the holders have received total Net Sales Payments equal to 9 times the aggregate stated value of the outstanding Series 1 Preferred Shares. The Company will have the right to redeem the outstanding Series 1 Preferred Shares at any time at a redemption price equal to 9 times the aggregate stated value of the Series 1 Preferred Shares outstanding less the aggregate amount of the Net Sales Payments paid (the “Redemption Amount”).

Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of Series 1 Preferred Shares will be entitled to a liquidation preference equal to the stated value of the Series 1 Preferred Shares less the Net Sales Payments paid on the Series 1 Preferred Shares..

In the event of a fundamental transaction (defined to include an amalgamation, merger or other business combination transaction involving our company in which our shareholders do not have the right to cast more than 50% of the votes that may be cast for the election of directors, or a sale, lease or other disposition of the properties and/or assets of our company as an entirety or substantially as an entirety to a third party), the holders of the Series 1 Preferred Shares will be entitled to receive consideration for their Series 1 Preferred Shares equal to a multiple of the stated value of the Series 1 Preferred Shares ranging from 5.0 to 9.0 depending on the timing of the fundamental transaction, subject to a cap equal to the redemption amount. The Company has assessed the likelihood of any Net Sales Payments to the Series 1 Preferred shareholders to be remote.

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended June 30, 2019 and 2018

(Stated in United States dollars)

10.

Preferred stock (continued)

Issued and outstanding preferred stock:

Number of
preferred Preferred
stock stock amount
Balance at December 31, 2018 - $ -
Stock issued from financing (i) 12 11,962,811
Balance at June 30, 2019 12 $ 11,962,811

(i)

On May 9, 2019, the Company entered into subscription agreements to sell $12,000,000 of its Series 1 Preferred Shares to an accredited investor in a private placement at a purchase price of $1,000,000 per Series 1 Preferred Share; $5,000,000 of the purchase price was paid on May 9, 2019 and the remaining $7,000,000 was paid on June 7, 2019. The Company recorded $37,189 of share issuance costs as an offset to preferred stock.

11.

Common stock

The Company is authorized to issue an unlimited number of common ~~stock,~~shares, all without par value.

Issued and outstanding common stock:

Issued and outstanding common stock:

Number of
common
stock

Capital
stock

Balance at December 31, 2016 83,964,569 10,189,973
Stock issuance for services 43,613 45,000
Stock issued due to exercise of options 410,000 25,523
Share issuance costs - (8,864 )
Stock to be issued - 250,000
Balance at March 31, 2017 84,418,182 $ 10,501,632

Balance at December 31, 2017 90,225,869 $ 18,244,659
Stock issued due to exercise of options (Note 10) 1,627,996 1,759,224
Balance at March 31, 2018 91,853,865 $ 20,003,883
Number of
common Common
stock stock amount
Balance at December 31, 2017 90,225,869 $ 18,244,659
Stock issuance for services 641,717 1,238,513
Stock issued due to exercise of options 1,781,996 1,796,262
Stock issuance for financing, net of costs 1,861,627 3,978,690
Balance at June 30, 2018 94,511,209 $ 25,258,124

Balance at December 31, 2018 97,598,898 $ 30,410,648
Stock issued for services (i and ii) 707,236 792,104
Stock issued from financing (iii and iv) 9,337,529 6,690,922
Stock issued due to exercise of options 394,735 754,148
Balance at June 30, 2019 108,038,398 $ 38,647,822

(i)

On January 14, 2019, the Company settled $75,000 of amounts due to a vendor by issuing 49,342 common shares valued at $55,263 at the date of issuance. The Company recorded a $19,737 gain on the settlement of liabilities;

(ii)

On January 14, 2019, the Company issued 657,894 common shares in satisfaction of $1,000,000 of all remaining milestones under a License and Supply Agreement with a third party. The Company recognized $736,841 as research and development expense, based on the value of the common stock on the date of issuance;

(iii)

On January 14, 2019, the Company completed a non-brokered private placement, and issued 2,815,789 common shares. Gross proceeds of $4,280,000 were received prior to December 31, 2018.The Company recorded $465 of share issuance costs as an offset to common stock;

(iv)

On March 28, 2019, the Company completed an underwritten public offering of its common stock pursuant to which the Company sold an aggregate 6,521,740 common shares for gross proceeds of $3,000,000. The Company recorded $592,707 of share issuance costs as an offset to common stock in the three month period ended March 31, 2019. A decrease of $4,094 in share issuance costs was recorded as an offset to common stock in the three month period ended June 30, 2019.

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended ~~March 31,~~June 30, 2019 and 2018 ~~and 2017~~

(Stated in United States dollars)

~~10.~~

12.

Stock-based compensation

During the three months ended ~~March 31, 2018, an aggregate of 1,627,996~~June 30, 2019, nil options were exercised. During the three months ended ~~March 31, 2017,~~June 30, 2018, 154,000 options were exercised. During the six months ended June 30, 2019, 394,735 options were exercised. During the six months ended June 30, 2018, 1,781,996 options were exercised. During the three months ended June 30, 2019, the Company issued ~~535,000~~nil stock options. During the six months ended June 30, 2019, the Company issued 5,995,000 stock options, each option entitling the holder to purchase one common share of the Company. During the three and six months ended ~~March 31, 2017, 10,000 options were exercised on February 15, 2017, and 400,000 options were exercised on February 21, 2017.~~June 30, 2018, the Company issued nil options.

~~During~~The continuity of stock options are as follows:

Number of options Weighted avg exercise price (US$)(i)
Balance at December 31, 2018 422,004 $ 1.95
Stock options granted January 10, 2019 5,995,000 1.52
Stock options expired February 24, 2019 (35,000 ) 1.12
Stock options exercised March 8, 2019 (164,473 ) 1.52
Stock options exercised March 15, 2019 (164,473 ) 1.52
Stock options exercised March 29, 2019 (65,789 ) 1.52
Stock options expired May 23, 2019 (10,000 ) 1.52
Stock options expired June 16, 2019 (40,000 ) 1.52
Balance at June 30, 2019 5,937,269 $ 1.56

⁽ⁱ⁾As of the year ended December 31, ~~2017,~~2018, the Company issued 1,815,000 stock options, each option entitling the holder to purchase one common share of the Company. During the year ended December 31, 2017, an aggregate of 1,700,000 options were exercised.

The continuity of stock options are as follows: Number of
Weighted Avg
Exercise Price

Options (CDN$)
Balance at December 31, 2016 7,975,000 $ 0.84
Stock options exercised on February 21, 2017 (10,000 ) $ 0.25
Stock options exercised on February 21, 2017 (400,000 ) $ 0.05
Options issued on February 24, 2017 535,000 $ 1.50
Stock options exercised on May 8, 2017 (7,060 ) $ 1.50
Stock options cancelled on May 17, 2017 (10,000 ) $ 1.50
Stock options exercised on May 23, 2017 (80,000 ) $ 0.25
Stock options exercised on July 6, 2017 (200,000 ) $ 0.05
Stock options exercised on July 17, 2017 (220,000 ) $ 0.25
Options issued on August 14, 2017 1,280,000 $ 2.75
Stock options exercised on August 29, 2017 (7,940 ) $ 1.50
Stock options exercised on December 19, 2017 (25,000 ) $ 0.25
Stock options exercised on December 19, 2017 (750,000 ) $ 1.50
Balance at December 31, 2017 8,080,000 $ 1.21
Stock options exercised on January 8, 2018 (124,000 ) $ 0.25
Stock options exercised on January 26, 2018 (100,000 ) $ 0.25
Stock options exercised on March 8, 2018 (50,000 ) $ 0.25
Stock options exercised on March 13, 2018 (176,000 ) $ 0.25
Stock options exercised on March 22, 2018 (50,000 ) $ 0.25
Stock options exercised on March 26, 2018 (240,000 ) $ 0.25
Stock options exercised on March 28, 2018 (325,000 ) $ 0.25
Stock options exercised on March 29, 2018 (562,996 ) $ 2.75
Balance at March 31, 2018 6,452,004 $ 1.23
14
~~Zomedica Pharmaceuticals Corp.~~
~~Notes to the condensed unaudited interim consolidated financial statements~~
~~For the three months ended March 31, 2018 and 2017~~
~~(Stated~~weighted average exercised price in ~~United States dollars)~~CDN$ was $2.65.
~~10.~~
~~Stock-based compensation (continued)~~

As at ~~March 31, 2018,~~June 30, 2019, details of the issued and outstanding stock options ~~are~~were as follows:

Grant date

Exercise
price
(CDN$)

Number of
options issued
and outstanding

Number of
vested options
outstanding

Weighted Avg
Remaining Life
(years)

March 28, 2016 $ 0.25 2,100,000 2,100,000 0.06
December 21, 2016 $ 1.50 3,100,000 3,100,000 0.73
February 24, 2017 $ 1.50 535,000 535,000 0.90
August 14, 2017 (a) $ 2.75 642,004 642,004 1.37
August 14, 2017 (b) $ 2.75 75,000 71,978 0.37
Grant date
Exercise price
(US$)

Number of
options issued
and outstanding

Number of
vested options
outstanding
Weighted avg remaining life (years)
August 14, 2017 $ 2.16 387,004 387,004 0.12
January 10, 2019 $ 1.52 5,550,265 5,550,265 1.53

The fair value of options granted during the three and six months ended ~~March 31, 2018~~June 30, 2019 was estimated using the Black-Scholes option pricing model to determine the fair value of options granted using the following assumptions:

March 28, 2016 April 21, 2016 December 21, 2016
Volatility 63% 63% 58%
Risk-free interest rate 0.56% 1.12% 0.81%
Expected life (in years) 2.06 1 2
Dividend yield 0% 0% 0%
Common share price CDN $0.20 CDN $0.20 CDN $1.45
Strike price CDN $0.25 CDN $0.25 CDN $1.50
Forfeiture rate nil nil nil
February 24, 2017 August 14, 2017 (a) August 14, 2017 (b)
Volatility 59% 59% 83%
Risk-free interest rate 0.81% 1.22% 1.22%
Expected life (in years) 2 2 1
Dividend yield 0% 0% 0%
Common share price CDN $1.35 CDN $2.40 CDN $2.40
Strike price CDN $1.50 CDN $2.75 CDN $2.75
Forfeiture rate nil nil nil
The Company recorded $5,691 of stock-based compensation for the three months ended March 31, 2018. The Company recorded the cash receipt of $1,407,786 as capital stock and reclassified $351,438 of stock- based compensation to capital stock due to the exercise of 1,627,996 options disclosed above.
Volatility is determined based on volatilities of comparable companies when the Company does not have its own sufficient trading history. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on an average of the term of the options.
The risk-free rate assumed in valuing the options is based on the Canadian treasury yield curve in effect at the time of grant for the expected term of the option. The expected dividend yield percentage at the date of grant is Nil as the Company is not expected to pay dividends in the foreseeable future. The Company has estimated its stock option forfeitures to be Nil for the three months ended March 31, 2018 (three months ended March 31, 2017 - $Nil).

	15
	January 10, 2019
Volatility	68%
Risk-free interest rate	2.56%
Expected life	2 years
Dividend yield	0%
Common share price	$1.23
Strike price	$1.52
Forfeiture rate	nil

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended ~~March 31,~~June 30, 2019 and 2018 ~~and 2017~~

(Stated in United States dollars)

~~11.~~

~~Commitments and Contingencies~~12.

Stock-based compensation (continued)

The Company recorded nil of stock-based compensation for the three months ended June 30, 2019 (three months ended June 30, 2018 - $1,597). The Company recorded $2,341,104 of stock-based compensation for the six months ended June 30, 2019 (six months ended June 30, 2018 - $7,288). The Company recorded nil in cash receipts due to the exercise of options during the three months ended June 30, 2019. The Company recorded the cash receipt of $600,000 and reclassified $154,148 of stock-based compensation to common stock due to the exercise of options during the six months ended June 30, 2019. The Company recorded the cash receipt of $30,522 and reclassified $6,517 of stock-based compensation to common stock due to the exercise of 154,000 options during the three months ended June 30, 2018. The Company recorded the cash receipt of $1,438,308 and reclassified $357,954 of stock-based compensation to common stock due to the exercise of 1,781,996 options during the six months ended June 30, 2018.

The Company has estimated its stock option forfeitures to be nil for the three and six months ended June 30, 2019 (three and six months ended June 30, 2018 - nil).

13.	Commitments and contingencies

On October 1, 2018, the Company entered into a one-year rental agreement. The Company elected not to disclose this lease in accordance with ASC 842 as it is a one-year term. Total future annual lease payments for the premises are as follows:

2018		21,740
2019			$	5,940
Total	$	21,740	$	5,940

On November 26, 2018, the Company entered into a Development and Supply Agreement and as part of this agreement, the Company has contingent future outflows as follows:

•	1st payment: At the later of the achievement of a future milestone event or September 12, 2019, can decide to receive payment as follows:

	°	$3,000,000 in cash or

	°	$1,500,000 in cash and $1.95 million in equity

•	2nd payment: At the later of the achievement of a future milestone or February 19, 2020 - $2,000,000 in cash.

As at June 30, 2019, neither of the future development milestones related to the above agreement have been met.

On May 10, 2018, the Company entered into a Development, Commercialization and Exclusive Distribution Agreement. As part of the agreement, the Company is required to make the following future milestone payments:

	•	1st payment: $3,500,000 in cash payment upon the achievement of future development milestones

	•	2nd payment: $3,500,000 in equity based on the number of the Company’s common stock determined by dividing the amount due by the volume-weighted average price of the Company’s common stock on the NYSE American exchange over the 10 trading days prior to the achievement of the milestone event.

As at June 30, 2019, neither of the future development milestones related to the above agreement have been met.

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended June 30, 2019 and 2018

(Stated in United States dollars)

~~12.~~

14.

Financial instruments

(a)

Fair values

The Company follows ASC topic 820, “Fair Value Measurements” which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of ASC topic 820 apply to other accounting pronouncements that require or permit fair value measurements. ASC topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date; and establishes a three level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refers broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. To increase consistency and comparability in fair value measurements and related disclosures, the fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of the hierarchy are defined as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly for substantially the full term of the financial instrument.

Level 3 inputs are unobservable inputs for asset or liabilities.

The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

~~(i) The Company calculates expected volatility based on historical volatility of the Company’s peer group that is publicly traded for options.~~

(i)

The Company calculates expected volatility based on historical volatility of the Company’s peer group that is publicly traded for options.

An increase/decrease in the volatility would have resulted in an increase/decrease in the fair value of the options.

The carrying values of cash, trade and other receivable, accounts payable and accrued liabilities and shareholder loans payable approximates their fair values because of the short-term nature of these instruments.

~~Zomedica Pharmaceuticals Corp.~~

~~Notes to the condensed unaudited interim consolidated financial statements~~

~~For the three months ended March 31, 2018 and 2017~~

~~(Stated in United States dollars)~~

~~12.~~

~~Financial instruments (continued)~~

(b)

Interest rate and credit risk

Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in interest rates. The Company does not believe that the results of operations or cash flows would be affected to any significant degree by a sudden change in market interest rates, relative to interest rates on cash and cash equivalents, due to related parties due to the short-term nature of these balances.

The Company is also exposed to credit risk at period end from the carrying value of its cash. The Company manages this risk by maintaining bank accounts with a Canadian Chartered Bank. The Company’s cash is not subject to any external restrictions.

(c)

Foreign exchange risk

The Company has balances in Canadian dollars that give rise to exposure to foreign exchange (“FX”) risk relating to the impact of translating certain non-U.S. dollar balance sheet accounts as these statements are presented in U.S. dollars. A strengthening U.S. dollar will lead to a FX loss while a weakening U.S. dollar will lead to a FX gain. For each Canadian dollar balance of $1.0 million, a +/- 10% movement in the Canadian currency held by the Company versus the U.S. dollar would affect the Company’s loss and other comprehensive loss by $0.1 million.

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended June 30, 2019 and 2018

(Stated in United States dollars)

~~(d)~~14.

Financial instruments (continued)

(d)

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty raising liquid funds to meet commitments as they fall due. In meeting its liquidity requirements, the Company closely monitors its forecasted cash requirements with expected cash drawdown.

The following are the contractual maturities of the undiscounted cash flows of financial liabilities as at ~~March 31, 2018~~June 30, 2019 and December 31, ~~2017:~~2018:

March 31, 2018
Less than
3 months 3 to 6
months 6 to 9
months 9 months
1 year Greater than
1 year Total
$ $ $ $ $ $
Third parties
Accounts payable and accrued liabilities 1,266,324 - - - - 1,266,324
1,266,324 - - - - 1,266,324

December 31, 2017
																									June 30, 2019
									Less than				3 to 6				6 to 9				9 months				Greater than
	Less than 3 months	3 to 6 months	6 to 9 months	9 months 1 year	Greater than 1 year	Total	3 months				months				months				1 year				1 year				Total
	$	$	$	$	$	$	$				$				$				$				$				$
Third parties
Accounts payable and accrued liabilities	828,737	-	-	-	-	828,737		1,796,803				-				-				-				-				1,796,803
	828,737	-	-	-	-	828,737		1,796,803				-				-				-				-				1,796,803

																										December 31, 2018
										Less than				3 to 6				6 to 9				9 months				Greater than
										3 months				months				months				1 year				1 year			Total
										$				$				$				$				$			$
Third parties
Accounts payable and accrued liabilities										2,376,519				-				-				-				-			2,376,519
										2,376,519				-				-				-				-			2,376,519

~~Zomedica Pharmaceuticals Corp.~~

~~Notes to the condensed unaudited interim consolidated financial statements~~

~~For the three months ended March 31, 2018 and 2017~~

~~(Stated in United States dollars)~~

~~13.~~

15.

Segmented information

The Company's operations comprise a single reportable segment engaged in the research, development targeting health and wellness solutions for the companion ~~pet.~~animal. As the operations comprise a single reportable segment, amounts disclosed in the financial statements for loss for the period, depreciation and total assets also represent segmented amounts. In addition, all of the Company's long-lived assets are in the United States of America (“US”).

March 31,
2018 December 31,
2017
Total assets $ $
Canada 3,189,706 3,519,918
US 1,705,852 1,695,904

Total property and equipment
US 347,677 371,157

June 30, December 31,
2019 2018
$ $
Total assets
Canada 711,142 383,567
US 8,768,265 5,649,952

Total US property and equipment 794,364 717,088
Tota US right-of-use asset 1,358,348 -
2,152,712 717,088

~~14.~~

~~Schedule of expenses~~

For the three months ended March 31,
2018
Research and Development Professional Fees General and Administrative

Salaries, bonus and benefits $ 152,372 $ - $ 643,288
Contracted expenditures 269,523 - -
Marketing and investor relations - - 81,193
Travel and accommodation 1,789 - 121,404
Insurance 15,960 - 80,460
License fees 25,000 - -
Office 6,517 - 76,947
Consultants 37,116 371,947 -
Regulatory 18,788 - 103,558
Rent 7,826 - 43,019
Supplies 65,450 - 10,302
Total $ 600,341 $ 371,947 $ 1,160,171

For the three months ended March 31,
2017
Research and Development Professional Fees General and Administrative

Salaries, bonus and benefits $ 170,912 $ - $ 556,863
Contracted expenditures 247,845 - 5,610
Marketing and investor relations - - 40,097
Travel and accommodation 1,967 - 78,342
Insurance 17,467 - 41,520
Office 8,100 - 30,268
Consultants 92,444 381,536 -
Regulatory 25,775 - 14,454
Rent 7,224 - 43,621
Supplies 44,715 - 16,250
Total $ 616,449 $ 381,536 $ 827,025

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended ~~March 31,~~June 30, 2019 and 2018 ~~and 2017~~

(Stated in United States dollars)

16.

Schedule of expenses

For the three months ended June 30, For the three months ended June 30,
2019 2018
Research and Professional General and Research and Professional General and
Development Fees Administrative Development Fees Administrative

Salaries, bonus and benefits $ 232,929 $ -   $ 643,519 $ 174,067 $ -   $ 859,268
Contracted expenditures 557,719 -   -   438,689 -   -
Marketing and investor relations -   -   78,905 -   -   41,962
Travel and accommodation 2,727 -   62,473 3,547 -   70,463
Insurance 26,994 -   49,887 28,284 -   77,282
License fees 50,000 -   -   1,738,513 -   -
Office 13,169 -   50,342 3,129 -   61,460
Consultants 89,094 211,520 -   52,073 336,455 -
Regulatory 42,647 -   26,066 19,388 -   90,142
Rent -   -   5,940 7,825 -   43,019
Supplies 46,228 -   4,314 69,105 -   4,894
Total $ 1,061,507 $ 211,520 $ 921,446 $ 2,534,620 $ 336,455 $ 1,248,490

For the six months ended June 30, For the six months ended June 30,
2019 2018
Research and Professional General and Research and Professional General and
Development Fees Administrative Development Fees Administrative

Salaries, bonus and benefits $ 449,791 $ -   $ 3,573,022 $ 326,440 $ -   $ 1,502,556
Contracted expenditures 1,812,566 -   -   708,212 -   -
Marketing and investor relations -   -   131,415 -   -   123,155
Travel and accommodation 12,776 -   119,737 5,336 -   191,868
Insurance 56,905 -   113,338 44,244 -   157,743
License fees 5,936,841 -   -   1,738,513 -   -
Office 19,597 -   136,489 34,646 -   138,406
Consultants 148,880 950,914 -   89,189 708,402 -
Regulatory 63,645 -   50,170 38,175 -   193,700
Rent -   -   11,880 15,652 -   86,038
Supplies 91,881 -   16,658 134,554 -   15,196
Total $ 8,592,882 $ 950,914 $ 4,152,709 $ 3,134,961 $ 708,402 $ 2,408,662

~~15.~~

17.

Capital risk management

The capital of the Company includes equity, which is comprised of issued common capital stock, additional paid-in capital, and accumulated deficit. The Company's objective when managing its capital is to safeguard the ability to continue as a going concern in order to provide returns for its shareholders, and other stakeholders and to maintain a strong capital base to support the Company's core activities.

Zomedica Pharmaceuticals Corp.

Notes to the condensed unaudited interim consolidated financial statements

For the three and six months ended June 30, 2019 and 2018

(Stated in United States dollars)

~~16.~~

18.

Loss per share

							For the three months ended June 30,						For the six months ended June 30,
	For the three months ended March 31, 2017			For the three months ended March 31, 2018			2019			2018			2019			2018

Numerator
Net loss for the period	$	2,171,328			$1,832,736		$	2,404,427		$	4,144,398		$	14,081,337		$	6,315,727
Denominator
Weighted average shares - basic		90,517,702			84,418,182			108,038,398			92,527,470			104,528,705			91,527,862
Stock options		-			-			-			-			-			-
Denominator for diluted loss per share		90,517,702			84,418,182			108,038,398			92,527,470			104,528,705			91,527,862

Loss per share - basic and diluted	$	(0.02	)	$	(0.02	)	$	(0.02	)	$	(0.04	)	$	(0.13	)	$	(0.07	)

For the above-mentioned periods, the Company had securities outstanding which could potentially dilute basic earnings per share in the future but were excluded from the computation of diluted loss per share in the periods presented, as their effect would have been anti-dilutive.

~~17.~~

19.

Related party transactions and key management compensation

Key management personnel are comprised of the Company’s directors and executive officers. In addition to their salaries, key management personnel also receive share-based compensation. Key management personnel compensation is as follows:

					For the three months ended June 30,				For the six months ended June 30,
		For the three months ended March 31, 2018		For the three months ended March 31, 2017	2019		2018		2019		2018
Salaries and benefits, including bonuses	$	344,891	$	322,786	$	375,177	$	381,046	$	635,898	$	721,665
Stock-based compensation		-		151,020		-		-		1,644,325		-
Total	$	344,891	$	473,806	$	375,177	$	381,046	$	2,280,223	$	721,665

Subsequent to March 31, 2018, 154,000 stock options were exercised for cash proceeds of $24,005. On May 10, 2018, the Company entered into a development, commercialization and exclusive distribution agreement with Seraph Biosciences, Inc. Under the terms of this agreement, the Company will have exclusive global veterinary industry rights to develop and market a novel pathogen detection system in the form of an innovative point-of-care diagnostic instrument. On May 15, 2018, the Company announced it commenced a private offering of its common shares offering an aggregate of up to 4,651,162 common shares at a price of $2.15 per share (for aggregate gross proceeds of up to $10,000,000 in the United States to accredited investors). The offering is also being made in Canada in reliance upon prospectus and registration exemptions in accordance with applicable Canadian securities laws. As of May 15, 2018, the Company had sold an aggregate of 255,815 common shares for gross proceeds of $550,000 in the offering. The Company expects to close the offering in one or more tranches on or before~~June 28, 2018.~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and the other financial information included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report, and those set forth in our most recent Annual Report on Form 10-K particularly those under “Risk Factors” discussed below and in our most recent Annual Report on Form 10-K.

This report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as ~~amended. Forward-looking~~amended, that are based on management’s beliefs and assumptions and on information currently available to management. Some of the statements ~~include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions~~under “Risk Factors,” “Management’s Discussion and ~~future performance,~~Analysis of Financial Condition and ~~involve known~~Results of Operations” and ~~unknown risks, uncertainties~~“Business” and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by suchelsewhere in this Form 10-Q contain forward-looking statements. ~~All statements other than statements of historical fact are statements that could be forward-looking statements. You~~In some cases, you can identify ~~these~~ forward-looking statements through our use of words such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.

There are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include, but are not limited to:

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipate in our forward-looking statements. Please see “Risk Factors” below and in our most recent Annual Report on Form 10-K for additional risks which could adversely impact our business and financial performance.

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this report or the date of the document incorporated by reference into this report. We have no obligation, and expressly disclaim any obligation, to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or ~~otherwise.~~otherwise, except as required by law. We have expressed our expectations, beliefs and projections in good faith and we believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will result or be achieved or accomplished.

We are a development stage veterinary diagnostic and pharmaceutical company creating products for companion animals (canine, feline, and equine) by focusing on the unmet needs of clinical veterinarians. We believe that we have identified and are developing diagnostics and therapeutics that have the potential to significantly improve the diagnosis and treatment of various diseases affecting companion animals. We believe that there are significant unmet medical needs for pets, and that the pet diagnostic and therapeutic segments of the animal health industry are likely to grow substantially as new diagnostic tools and treatments are identified, developed, and marketed specifically for companion animals.

Together with our strategic partners, we are developing three diagnostic platforms, a Bulk Acoustic Wave sensor-based veterinary point-of-care diagnostic platform for performing immunodiagnostic testing, a Raman spectroscopy-based point-of-care diagnostic platform for the detection of pathogens, and liquid biopsy assays for the detection of cancer, ~~and~~along with related consumables. ~~The~~We believe that the regulatory pathway to ~~obtain pre-market regulatory~~ approval of companion animal diagnostics is significantly shorter than for similar diagnostic products intended for human use. In certain cases, pre-market ~~regulatory approval~~clearance may be unnecessary, depending on the intended use of the diagnostic.

We also have identified a number of drugs that have proven safe and effective in humans that we are developing for use in ~~companion animals.~~canines and felines. We believe this development approach enables us to reduce the risks associated with obtaining regulatory approval for unproven product candidates and shortens the development timeline necessary to bring our product candidates to market. We have four drug product candidates in early development and have identified several other potential product candidates for further investigation.

In addition, we are investigating the development of alternative drug delivery technologies for our drug product candidates. Many of the human-approved therapeutics used in companion animals are only available in pill or injectable form. However, it can be difficult to give a companion animal an injection or to assure that the animal has swallowed a pill. As a result, we believe that compliance with treatment regimens is a significant problem for veterinarians and pet owners. The challenges associated with medicating pets are unique, and we believe that developing product candidates that can be easily taken by the pet or easily administered by pet owners will help increase compliance.

We are a development-stage company with no products approved for marketing and sale, and we have not generated any revenue. We have incurred significant net losses since our inception. We incurred net losses of ~~$2,171,328~~$2,404,427 and ~~$1,832,736~~$4,144,398 for the three months ended ~~March 31,~~June 30, 2019 and June 30, 2018, ~~and March 31, 2017,~~ respectively, and ~~$8,065,072~~$14,081,337 and ~~$5,740,492~~$6,135,727 for the ~~year~~six months ended ~~December 31, 2017~~June 30, 2019 and ~~December 31, 2016,~~June 30, 2018, respectively. These losses have resulted principally from costs incurred in connection with investigating and developing our product candidates, research and development activities and general and administrative costs associated with our operations. As of ~~March 31, 2018,~~June 30, 2019, we had an accumulated deficit of ~~$17,797,428~~$46,355,124 and cash and cash equivalents of ~~$3,134,920.~~$5,822,148.

For the foreseeable future, we expect to continue to incur losses, which will increase significantly from historical levels as we expand our product development activities, commercialize them if they do not require U.S. Food and Drug Administration’s Center for Veterinary Medicine, or FDA-CVM, pre-market approval, ~~and~~ seek regulatory approvals for our product candidates where required from the FDA-CVM or the United States Department of Agriculture Center for Veterinary Biologics, or the USDA-CVB.

For further information on the regulatory, business and product pipeline, please see the “Business” section of ~~the~~this Annual Report on Form 10-K. For further information on the risk factors, please see the “Risk Factors” section of the Annual Report on Form ~~10-K and Quarterly Report on Form 10-Q.~~10-K.

We do not have any products approved for sale, have not generated any revenue from product sales since our inception and do not expect to generate any revenue from the sale of products in the near future. If our development efforts result in clinical success and regulatory approval or collaboration agreements with third parties for any of our product candidates, we may generate revenue from those product candidates.

The majority of our operating expenses to date have been for the general and administrative activities related to general business activities, capital market activities and stock-based compensation, and research and development activities related to our lead product candidates.

All costs of research and development are expensed in the period in which they are incurred. Research and development costs primarily consist of salaries and related expenses for personnel, ~~stock-based compensation expense,~~ fees paid to consultants, outside service providers, professional services, travel costs and materials used in clinical trials and research and development.

We have a point-of-care ~~diagnostic~~biosensor platform, ~~ZM-020,~~TRUFORMA™ that we are developing for ~~the detection~~diagnosis and treatment management of ~~pathogens in urine~~disorders such as thyroid and ~~fecal samples, and~~adrenal disorders, a non-invasive diagnostic assay or blood test, ~~ZM-017,~~ that we are developing as an aid for veterinarians in diagnosing cancer in ~~canines.~~canines, and a diagnostic instrument and related assays, for the detection of pathogens in urine and fecal samples at the point-of-care.

We have four drug product candidates in development. Our lead drug product candidate is ~~ZM-012, a novel tablet~~ZM-007, an oral suspension formulation of metronidazole targeting the treatment of acute diarrhea in ~~dogs. Our second drug product candidate is ZM-007, an oral suspension formulation of metronidazole and a complementary formulation to ZM-012, targeting the treatment of acute diarrhea in~~ small dog breeds and puppies under nine pounds or four kilograms. Our second drug product candidate is ZM-012, a novel tablet formulation of metronidazole, most commonly known as Flagyl™, its human pharmaceutical brand name, and a complementary formulation to ZM-007, targeting the treatment of acute diarrhea in larger dogs. Our third drug product candidate is ZM-006, a transdermal gel formulation of methimazole, most commonly known as Tapazole™, its human pharmaceutical brand name, and Felimazole™, its feline pharmaceutical brand name, targeting hyperthyroidism in cats. Our fourth drug product candidate is ZM-011, a transdermal gel formulation of fluoxetine, most commonly known as ~~Prozac®~~Prozac™, its human pharmaceutical brand name.

We typically use our employee and infrastructure resources across multiple development programs. We track outsourced development costs by product candidate. We allocate personnel and other internal costs related to development of ZM-020 and ZM-017.

General and administrative expense consists primarily of personnel costs, including salaries, related benefits and stock-based compensation for employees, consultants and directors. General and administrative expenses also include rent and other facilities costs and professional and consulting fees for legal, accounting, tax services and other general business services.

Professional fees include attorney’s fees, accounting fees and consulting fees incurred in connection with product investigation and analysis, regulatory analysis, government relations, audit, securities offerings, investor relations, and general corporate and intellectual property advice.

As of December 31, ~~2017,~~2018, we had net operating loss carryforwards for federal and state income tax purposes of ~~$5,008,180~~$11,522,620 and non-capital loss carryforwards for Canada of approximately ~~$6,526,850 respectively,~~$13,353,870, which will begin to expire in fiscal year ~~2035.~~2036. We have evaluated the factors bearing upon the realizability of our deferred tax assets, which are comprised principally of net operating loss carryforwards and non-capital loss carryforwards. We concluded that, due to the uncertainty of realizing any tax benefits as of December 31, ~~2017,~~2018, a valuation allowance was necessary to fully offset our deferred tax assets.

Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and revenue, costs and expenses and related disclosures during the reporting periods. On an ongoing basis, we evaluate our estimates and judgments, including those described below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are more fully described in Note 3 of the notes to our consolidated financial statements appearing elsewhere in this document, we believe that the estimates and assumptions involved in the following accounting policies may have the greatest potential impact on our financial statements.

The Jumpstart Our Business Startups Act, or the JOBS Act, contains provisions that, among other things, reduce certain reporting requirements for an “emerging growth company.” We have irrevocably elected not to avail ourselves of the JOBS Act provision that an emerging growth company may delay adopting new or revised accounting standards until such times as those standards apply to private companies.

In addition, we are in the process of evaluating the benefits of relying on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if as an “emerging growth company” we choose to rely on such exemptions, we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, and (ii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis). These exemptions will apply until December 31, 2022 or until we no longer meet the requirements of being an “emerging growth company,” whichever is earlier.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make 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 and the reported amounts of expenses during the year. Actual results could differ from those estimates.

Areas where significant judgment is involved in making estimates are: the ~~determination of the functional currency; the~~ fair values of financial assets and liabilities; the determination of fair value of stock-based compensation; the useful lives and recoverability of property and equipment; deferred income taxes and forecasting future cash flows for assessing the going concern assumption.

Research and development expenses comprise costs incurred in performing research and development activities, including salaries and benefits, safety and efficacy studies and contract manufacturing costs, contract research costs, patent procurement costs, materials and supplies and occupancy costs. Research and development activities include internal and external activities associated with research and development studies of current product candidates and advancing product candidates towards a goal of obtaining regulatory approval to manufacture and market the product candidate.

Research and development costs related to continued research and development programs are expensed as incurred in accordance with ASC topic 730.

The functional currency, as determined by management, is U.S. dollars, which is also our reporting currency. Transactions denominated in currencies other than U.S. dollars and the monetary value of assets and liabilities are translated at the period end exchange rates. Revenue and expenses are translated at rates of exchange prevailing on the transaction dates. All of the exchange gains or losses resulting from these other transactions are recognized in the consolidated statements of operations and comprehensive loss.

We measure the cost of equity-settled transactions by reference to the fair value of the equity instruments at the date at which they are granted if the fair value of the goods or services received by us cannot be reliably estimated.

We calculate stock-based compensation using the fair value method, under which the fair value of the options at the grant date is calculated using the Black-Scholes Option Pricing Model, and subsequently expensed over the vesting period of the option. The provisions of our stock-based compensation plans do not require us to settle any options by transferring cash or other assets, and therefore we classify the awards as equity. Stock-based compensation expense recognized during the period is based on the value of stock-based payment awards that are ultimately expected to vest. We estimate forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Volatility is determined based on volatilities of comparable companies aswhen the Company does not have its own trading history. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on an average of the term of the options. The risk-free rate assumed in valuing the options is based on the Canadian treasury yield curve in effect at the time of grant for the expected term of the option. The expected dividend yield percentage at the date of grant is ~~Nil~~nil as we are not expected to pay dividends in the foreseeable future.

Basic loss per share, or EPS, is computed by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted EPS reflects the potential dilution that could occur from common shares issuable through the exercise or conversion of stock options, restricted stock awards, warrants and convertible securities. In certain circumstances, the conversion of options, warrants and convertible securities are excluded from diluted EPS if the effect of such inclusion would be anti-dilutive.

The dilutive effect of stock options is determined using the treasury stock method. Stock options and warrants to purchase our common shares issued during the period were not included in the computation of diluted EPS, as the effect would be anti-dilutive.

We follow ASC topic 220. This statement establishes standards for reporting and display of comprehensive (loss) income and its components. Comprehensive loss is net loss plus certain items that are recorded directly to shareholders' equity. We currently have no other comprehensive loss items.

Three and six months ended ~~March 31, 2018~~June 30, 2019 compared to three and six months ended ~~March 31, 2017~~June 30, 2018

Our results of operations for the three and six months ended ~~March 31,~~June 30, 2019 and June 30, 2018 ~~and March 31, 2017~~ are as follows:

We did not generate any revenue during the three and six months ended ~~March 31, 2018~~June 30, 2019 and ~~March 31, 2017.~~June 30, 2018.

Research and development expense for the three months ended ~~March 31, 2018~~June 30, 2019 was ~~$600,341~~$1,061,507 compared to ~~$616,449~~$2,534,620 for the three months ended ~~March 31, 2017,~~June 30, 2018, a decrease of ~~$16,108~~$1,473,113 or 3%58%. The decrease was primarily due to ~~a reduction~~the payment in ~~consulting expenses as we increased our internal R&D activities with~~ the ~~hiring~~2018 period of ~~additional fulltime employees as part~~an up-front licensing fee of $1,738,513 to Seraph Biosciences, Inc. (“Seraph”) upon the execution of our development, commercialization and exclusive distribution agreement and $333,247 of ~~ZM-017. However, there~~additional development costs due to Seraph. This decrease was ~~also~~partially offset by a ~~reduction~~$119,030 increase in contract expenditures principally related to development of the five assays for TRUFORMA™ in the June 2019 period, as well as a $58,862 increase in salaries, ~~bonuses~~bonus and benefits ~~as we did not have a Chief Medical Officer~~and $50,000 in ~~the three months ended March 31, 2018. Significant expenditures include contracted outsourced activities of $269,523, salaries of $152,372, supplies of $65,450, consultant fees of $37,116, and~~additional licensing fees upon the achievement of ~~$25,000. These relate to an increased level of lab~~milestone activities ~~including in vitro~~under our license and in vivo work, to support the further development of our product candidates ZM-017, ZM-012, ZM-006, ZM-007 and ZM-011. We expect that our R&D expenditures in 2018 will be significantly higher than in 2017, due to the initiation of pilot and pivotal studies related to our four investigational new animal drug applications, work related to verification and validation of ZM-020 and ZM-017, and additional veterinary pharmaceutical candidates, diagnostic developments and technologies.supply agreement with Celsee, Inc. (“Celsee”).

Research and development expense for the six months ended June 30, 2019 was $8,592,882 compared to $3,134,961 for the six months ended June 30, 2018, an increase of $5,457,921 or 174%. The increase was primarily due to $5,000,000 of expenses recognized upon the achievement of development milestones relating to TRUFORMA™ under our development and supply agreement with Qorvo Biotechnologies, LLC. (“Qorvo”) and $736,841 of additional milestone expenses relating to our development of ZM-017 under our license and supply agreement with Celsee, as well as a $123,351 increase in salaries, bonus and benefits and an increase of $59,691 in consulting expenses. The increase was partially offset by expenses in the 2018 period of an up-front licensing fee of $1,738,513 to Seraph upon the execution of our development, commercialization and exclusive distribution agreement and $333,247 of additional development fees due to Seraph.

General and administrative expense for the three months ended ~~March 31, 2018~~June 30, 2019 was ~~$1,160,171,~~$921,446, compared to ~~$827,025~~$1,248,490 for the three months ended ~~March 31, 2017,~~June 30, 2018, a decrease of $327,044 or 26%. The decrease was primarily due to $215,749 of accrued severance payments incurred in the 2018 period to a former officer of the Company, and the reclassification of rent expense to amortization of right-of-use asset of $127,345.

General and administrative expense for the six months ended June 30, 2019 was $4,152,709, compared to $2,408,662 for the six months ended June 30, 2018, an increase of ~~$333,146~~$1,744,047 or ~~40%~~72%. The increase was primarily due to ~~significant expenses related to the addition of personnel, accounting for~~a $2,070,466 increase in salaries, ~~of $643,288. Other expenses~~bonus and benefits, which included ~~travel and accommodation of $121,404, regulatory~~share–based compensation expense of ~~$103,558, marketing and investor relations costs of $81,193, insurance costs of $80,460, office expenses of $76,947, and rent of $43,019. We expect that~~$2,341,104. After adjusting for the share-based compensation expense, general and administrative expense ~~will increase~~decreased $597,057 or 25% primarily as a result of a $270,638 decrease in ~~2018~~salaries, bonus and ~~future periods as we increase our level~~benefits, and the reclassification of ~~activity.~~rent expense to amortization of right-of-use asset of $254,690.

Professional fees for the three months ended ~~March 31, 2018~~June 30, 2019 were ~~$371,947~~$211,520 compared to ~~$381,536~~$336,455 for the three months ended ~~March 31, 2017,~~June 30, 2018, a decrease of ~~$9,589~~$124,935 or 3%37%. The decrease was ~~primarily~~ due to ~~completion of the listing of our common shares on the NYSE American on November 21, 2017.~~ a reduction in legal and consulting fees associated with SEC and related filings.

Professional fees for the six months ended June 30, 2019 were $950,914 compared to $708,402 for the six months ended June 30, 2018, ~~period consisted~~an increase of $242,512 or 34%. The increase was primarily due to increased expenses related to the filing of ~~consulting fees incurred in connection with preparation~~our S-3 resale registration statement and ~~completion of additional SEC filings and updates, and costs incurred in being a public company across two jurisdictions, Canada and U.S.~~our S-8 registration statement.

Our net loss for the three months ended ~~March 31, 2018~~June 30, 2019 was ~~$2,171,328,~~$2,404,427 or $0.02 per share, compared with a net loss of ~~$1,832,736,~~$4,144,398 or ~~$0.02~~$0.04 per share, for the three months ended ~~March 31, 2017,~~June 30, 2018, a decrease of $1,739,971or 42%. The net loss in each period was attributed to the matters described above.

Our net loss for the six months ended June 30, 2019 was $14,081,337 or $0.13 per share, compared with a net loss of $6,315,727 or $0.07 per share, an increase of ~~$338,592~~$7,765,610 or ~~18%~~123%. The net loss in each period was attributed to the matters described above. We expect to continue to record net losses in future periods until such time as we have sufficient revenue from our product candidates to offset our operating expenses.

Three and six months ended ~~March 31, 2018~~June 30, 2019 compared to three and six months ended ~~March 31, 2017~~June 30, 2018

The following table shows a summary of our cash flows for the periods set forth below:


100 Phoenix Drive, Suite 190
Ann Arbor, Michigan	48108
(Address of principal executive offices)	(Zip code)

~~(734) 369-2555~~
~~(Registrant’s telephone number, including area code)~~

Large accelerated filer	☐[ ]	Accelerated filer	☐[ ]

Non-accelerated filer	~~☐ (Do not check if a smaller reporting company)~~[X]	Smaller reporting company	☒[X]

		Emerging growth company	☒[X]

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, without par value	ZOM	NYSE American

	Page
PART I

FINANCIAL INFORMATION

1. Condensed Financial Statements	1
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
3. Quantitative and Qualitative Disclosures about Market Risk	31
4. Controls and Procedures	31

PART II

OTHER INFORMATION

1. Legal Proceedings	32
1A. Risk Factors	32
2. Unregistered Sales of Equity Securities and Use of Proceeds	35
3. Defaults Upon Senior Securities	35
4. Mine Safety Disclosures	35
5. Other Information	35
6. Exhibits	35

		Zomedica Pharmaceuticals Corp.

By:	/s/ Gerald Solensky, Jr.
Name:	Gerald Solensky, Jr.
Title:	Chief Executive Officer


By:	/s/ Shameze Rampertab
Name:	Shameze Rampertab
Title:	Chief Financial Officer

		Page
	PART I

	FINANCIAL INFORMATION

1.	Condensed Financial Statements	3
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
3.	Quantitative and Qualitative Disclosures about Market Risk	29
4.	Controls and Procedures	29

	PART II


	OTHER INFORMATION

1.	Legal Proceedings	30
1A.	Risk Factors	30
2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
3.	Defaults Upon Senior Securities	35
4.	Mine Safety Disclosures	35
5.	Other Information	35
6.	Exhibits	35

										June 30,			December 31,
	Note		March 31, 2018			December 31, 2017		Note		2019			2018

Assets

Current assets:
Cash and cash equivalents		$	3,134,920		$	3,448,147				$	5,822,148		$	1,940,265
Prepaid expenses and deposits	5		810,839			786,273			5		1,389,176			1,867,034
Trade and other receivable			69,381			28,272					95,550			53,659
			4,015,140			4,262,692					7,306,874			3,860,958

Prepaid expenses and deposits	5		518,286			566,832			5		7,300			1,442,415
Property and equipment	6		347,677			371,157			6		794,364			717,088
Right-of-use asset									8		1,358,348			-
Intangible assets	7		14,455			15,141			7		12,521			13,058
										$	9,479,407		$	6,033,519
		$	4,895,558		$	5,215,822

Liabilities and shareholders' equity

Current liabilities:
Accounts payable and accrued liabilities		$	1,266,324			828,737				$	1,796,803		$	2,376,519
			1,266,324			828,737					1,796,803			2,376,519

Shareholders' equity:
Capital stock
Authorized
Unlimited common shares without par value
Series 1 preferred shares, without par value;
20 shares authorized (2018 - nil)
Issued and outstanding
91,853,865 common shares (2017 - 90,225,869)	9		20,003,883			18,244,659
12 series 1 preferred shares (2018 - nil)									10		11,962,811			-
Unlimited common shares without par value;
Issued and outstanding
108,038,398 common shares (2018 - 97,598,898)									11		38,647,822			30,410,648
Common stock subscribed											-			4,280,000
Additional paid-in capital	10		1,422,779			1,768,526			12		3,427,095			1,240,139
Accumulated deficit			(17,797,428	)		(15,626,100	)				(46,355,124	)		(32,273,787	)
			3,629,234			4,387,085					7,682,604			3,657,000

		$	4,895,558		$	5,215,822				$	9,479,407		$	6,033,519

	Note		March 31, 2018			March 31, 2017
Expenses:
Research and development	14	$	600,341		$	616,449
General and administrative	14		1,160,171			827,025
Professional fees	14		371,947			381,536
Amortization	7		686			699
Depreciation	6		36,699			20,308
Loss from operations			2,169,844			1,846,017
Gain on settlement of liabilities			-			(5,000	)
Foreign exchange loss (gain)			1,484			(8,281	)
Loss before income taxes			2,171,328			1,832,736
Income tax expense			-			-
Net loss and comprehensive loss		$	2,171,328		$	1,832,736

Weighted average number of common shares - basic and diluted			90,517,702			84,418,182

Loss per share - basic and diluted		$	(0.02	)	$	(0.02	)

	Note	Number of capital stock		Capital stock			Additional paid-in capital			Accumulated deficit			Total
Balance at December 31, 2016		83,964,569	$	10,189,973		$	1,205,456		$	(7,561,028	)	$	3,834,401
Stock to be issued	9	-		250,000			-			-			250,000
Stock issuance costs	9	-		(8,864	)		-			-			(8,864	)
Stock issuance for services	9	43,613		45,000			-			-			45,000
Stock-based compensation	10	-		-			161,591			-			161,591
Stock issued due to exercise of options	9	410,000		25,523			(8,374	)		-			17,149
Net loss		-		-			-			(1,832,736	)		(1,832,736	)
Balance at March 31, 2017		84,418,182	$	10,501,632		$	1,358,673		$	(9,393,764	)	$	2,466,541

Balance at December 31, 2017		90,225,869		18,244,659			1,768,526			(15,626,100	)		4,387,085
Stock-based compensation		-		-			5,691			-			5,691
Stock issued due to exercise of options	10	1,627,996		1,759,224			(351,438	)		-			1,407,786
Net loss		-		-			-			(2,171,328	)		(2,171,328	)
Balance at March 31, 2018		91,853,865		20,003,883			1,422,779			(17,797,428	)		3,629,234

			Three months ended June 30,						Six months ended June 30,
	Note		2019			2018			2019			2018

Expenses:
Research and development		16	$	1,061,507		$	2,534,620		$	8,592,882		$	3,134,961
General and administrative		16		921,446			1,248,490			4,152,709			2,408,662
Professional fees		16		211,520			336,455			950,914			708,402
Amortization - right-of-use asset		8		127,345			-			254,690			-
Amortization - intangible asset		7		270			693			537			1,379
Depreciation		6		68,925			27,459			130,979			64,158
Loss from operations				2,391,013			4,147,717			14,082,711			6,317,562
Loss on fixed assets				1,308			-			1,308			-
Interest expense				12,164			-			18,338			-
Gain on settlement of liabilities		11		-			-			(19,737	)		-
Foreign exchange gain				(58	)		(3,319	)		(1,283	)		(1,835	)
Loss before income taxes				2,404,427			4,144,398			14,081,337			6,315,727
Income tax expense				-			-			-			-
Net loss and comprehensive loss			$	2,404,427		$	4,144,398		$	14,081,337		$	6,315,727

Weighted average number of common shares - basic and diluted				108,038,398			92,527,470			104,528,705			91,527,862

Loss per share - basic and diluted			$	(0.02	)	$	(0.04	)	$	(0.13	)	$	(0.07	)

				Series 1 preferred stock				Common stock
		Note		Shares		Amount		Shares		Amount		Common stock subscribed			Additional paid-in capital			Accumulated deficit			Total

Balance at December 31, 2017					-	$	-		90,225,869	$	18,244,659	$	-		$	1,768,526		$	(15,626,100	)	$	4,387,085
Stock issuance for services					-		-		641,717		1,238,513		-			-			-			1,238,513
Stock issuance for financing, net of cost					-		-		1,861,627		3,978,690		-			-			-			3,978,690
Stock-based compensation			12		-		-		-		-		-			7,288			-			7,288
Stock issued due to exercise of options			11,12		-		-		1,781,996		1,796,262		-			(357,954	)		-			1,438,308
Net loss					-		-		-		-		-			-			(6,315,727	)		(6,315,727	)
Balance at June 30, 2018					-	$	-		94,511,209	$	25,258,124	$	-		$	1,417,860		$	(21,941,827	)	$	4,734,157

Balance at December 31, 2018					-	$	-		97,598,898	$	30,410,648	$	4,280,000		$	1,240,139		$	(32,273,787	)	$	3,657,000
Stock issuance for services	��		11		-		-		707,236		792,104		-			-			-			792,104
Stock-based compensation			12		-		-		-		-		-			2,341,104			-			2,341,104
Stock issuance for financing, net of cost			10,11		12		11,962,811		9,337,529		6,690,922		(4,280,000	)		-			-			14,373,733
Stock issued due to exercise of options			11,12		-		-		394,735		754,148		-			(154,148	)		-			600,000
Net loss					-		-		-		-		-			-			(14,081,337	)		(14,081,337	)
Balance at June 30, 2019					12	$	11,962,811		108,038,398	$	38,647,822	$	-		$	3,427,095		$	(46,355,124	)	$	7,682,604

		Computer equipment		Furniture and equipment		Laboratory equipment		Leasehold improvements		Total
Cost
Balance at December 31, 2016		61,598		7,364		243,529		25,672		338,163
Additions		89,557		68,694		2,200		11,285		171,736
Balance at December 31, 2017		151,155		76,058		245,729		36,957		509,899
Additions		9,048		4,171		-		-		13,219
Balance at March 31, 2018		160,203		80,229		245,729		36,957		523,118
Accumulated depreciation
Balance at December 31, 2016		13,858		1,490		29,783		3,998		49,129
Depreciation		28,944		10,355		45,092		5,222		89,613
Balance at December 31, 2017		42,802		11,845		74,875		9,220		138,742
Depreciation		8,149		2,837		11,119		14,594		36,699
Balance at March 31, 2018		50,951		14,682		85,994		23,814		175,441

Net book value as at:
December 31, 2017	$	108,353	$	64,213	$	170,854	$	27,737	$	371,157
March 31, 2018	$	109,252	$	65,547	$	159,735	$	13,143	$	347,677

		Computer software		Trademarks		Total
Cost
Balance at December 31, 2016		5,143		16,236		21,379
Additions		-		-		-
Balance at December 31, 2017		5,143		16,236		21,379
Additions		--				-
Balance at March 31, 2018		5,143		16,236		21,379
Accumulated amortization
Balance at December 31, 2016		2,428		1,013		3,441
Amortization		1,715		1,082		2,797
Balance at December 31, 2017		4,143		2,095		6,238
Amortization		419		267		686
Balance at March 31, 2018		4,562		2,362		6,924

Net book value as at:
December 31, 2017	$	1,000	$	14,141	$	15,141
March 31, 2018	$	581	$	13,874	$	14,455

	Computer equipment			Furniture and equipment		Laboratory equipment			Leasehold improvements			Total
Cost
Balance at December 31, 2017	$	151,155		$	76,058	$	245,729		$	36,957		$	509,899
Additions		18,847			105,821		246,375			256,954			627,997
Disposals		-			-		(139,467	)		(10,936	)		(150,403	)
Balance at December 31, 2018		170,002			181,879		352,637			282,975			987,493
Additions		137,126			3,414		3,350			65,673			209,563
Disposals		(2,210	)		-		-			-			(2,210	)
Balance at June 30, 2019		304,918			185,293		355,987			348,648			1,194,846

Accumulated depreciation
Balance at December 31, 2017		42,802			11,845		74,875			9,220			138,742
Depreciation		62,116			17,740		86,368			37,460			203,684
Disposals		-			-		(61,547	)		(10,474	)		(72,021	)
Balance at December 31, 2018		104,918			29,585		99,696			36,206			270,405
Depreciation		38,683			13,153		33,785			45,358			130,979
Disposals		(902	)		-		-			-			(902	)
Balance at June 30, 2019		142,699			42,738		133,481			81,564			400,482

Net book value as at:
December 31, 2018	$	65,084		$	152,294	$	252,941		$	246,769		$	717,088
June 30, 2019	$	162,219		$	142,555	$	222,506		$	267,084		$	794,364

	Computer software		Trademarks		Total intangible assets
Cost
Balance at December 31, 2017	$	5,143	$	16,236	$	21,379
Additions		-		-		-
Balance at December 31, 2018		5,143		16,236		21,379
Additions		-		-		-
Balance at June 30, 2019		5,143		16,236		21,379

Accumulated amortization
Balance at December 31, 2017		4,143		2,095		6,238
Amortization		1,000		1,083		2,083
Balance at December 31, 2018		5,143		3,178		8,321
Amortization		-		537		537
Balance at June 30, 2019		5,143		3,715		8,858

Net book value as at:
December 31, 2018	$	-	$	13,058	$	13,058
June 30, 2019	$	-	$	12,521	$	12,521

	Number of
	preferred		Preferred
	stock		stock amount
Balance at December 31, 2018		-	$	-
Stock issued from financing (i)		12		11,962,811
Balance at June 30, 2019		12	$	11,962,811

Issued and outstanding common stock:	Number of common stock		Capital stock
Balance at December 31, 2016	83,964,569		10,189,973
Stock issuance for services	43,613		45,000
Stock issued due to exercise of options	410,000		25,523
Share issuance costs	-		(8,864	)
Stock to be issued	-		250,000
Balance at March 31, 2017	84,418,182	$	10,501,632

Balance at December 31, 2017	90,225,869	$	18,244,659
Stock issued due to exercise of options (Note 10)	1,627,996		1,759,224
Balance at March 31, 2018	91,853,865	$	20,003,883

	Number of
	common		Common
	stock		stock amount
Balance at December 31, 2017		90,225,869	$	18,244,659
Stock issuance for services		641,717		1,238,513
Stock issued due to exercise of options		1,781,996		1,796,262
Stock issuance for financing, net of costs		1,861,627		3,978,690
Balance at June 30, 2018		94,511,209	$	25,258,124

Balance at December 31, 2018		97,598,898	$	30,410,648
Stock issued for services (i and ii)		707,236		792,104
Stock issued from financing (iii and iv)		9,337,529		6,690,922
Stock issued due to exercise of options		394,735		754,148
Balance at June 30, 2019		108,038,398	$	38,647,822

	Number of options			Weighted avg exercise price (US$)(i)
Balance at December 31, 2018		422,004		$	1.95
Stock options granted January 10, 2019		5,995,000			1.52
Stock options expired February 24, 2019		(35,000	)		1.12
Stock options exercised March 8, 2019		(164,473	)		1.52
Stock options exercised March 15, 2019		(164,473	)		1.52
Stock options exercised March 29, 2019		(65,789	)		1.52
Stock options expired May 23, 2019		(10,000	)		1.52
Stock options expired June 16, 2019		(40,000	)		1.52
Balance at June 30, 2019		5,937,269		$	1.56

The continuity of stock options are as follows:	Number of			Weighted Avg Exercise Price
	Options			(CDN$)
Balance at December 31, 2016	7,975,000		$	0.84
Stock options exercised on February 21, 2017	(10,000	)	$	0.25
Stock options exercised on February 21, 2017	(400,000	)	$	0.05
Options issued on February 24, 2017	535,000		$	1.50
Stock options exercised on May 8, 2017	(7,060	)	$	1.50
Stock options cancelled on May 17, 2017	(10,000	)	$	1.50
Stock options exercised on May 23, 2017	(80,000	)	$	0.25
Stock options exercised on July 6, 2017	(200,000	)	$	0.05
Stock options exercised on July 17, 2017	(220,000	)	$	0.25
Options issued on August 14, 2017	1,280,000		$	2.75
Stock options exercised on August 29, 2017	(7,940	)	$	1.50
Stock options exercised on December 19, 2017	(25,000	)	$	0.25
Stock options exercised on December 19, 2017	(750,000	)	$	1.50
Balance at December 31, 2017	8,080,000		$	1.21
Stock options exercised on January 8, 2018	(124,000	)	$	0.25
Stock options exercised on January 26, 2018	(100,000	)	$	0.25
Stock options exercised on March 8, 2018	(50,000	)	$	0.25
Stock options exercised on March 13, 2018	(176,000	)	$	0.25
Stock options exercised on March 22, 2018	(50,000	)	$	0.25
Stock options exercised on March 26, 2018	(240,000	)	$	0.25
Stock options exercised on March 28, 2018	(325,000	)	$	0.25
Stock options exercised on March 29, 2018	(562,996	)	$	2.75
Balance at March 31, 2018	6,452,004		$	1.23

Grant date		Exercise price (CDN$)	Number of options issued and outstanding	Number of vested options outstanding	Weighted Avg Remaining Life (years)
March 28, 2016	$	0.25	2,100,000	2,100,000	0.06
December 21, 2016	$	1.50	3,100,000	3,100,000	0.73
February 24, 2017	$	1.50	535,000	535,000	0.90
August 14, 2017 (a)	$	2.75	642,004	642,004	1.37
August 14, 2017 (b)	$	2.75	75,000	71,978	0.37

March 31, 2018
	Less than 3 months	3 to 6 months	6 to 9 months	9 months 1 year	Greater than 1 year	Total
	$	$	$	$	$	$
Third parties
Accounts payable and accrued liabilities	1,266,324	-	-	-	-	1,266,324
	1,266,324	-	-	-	-	1,266,324

	March 31, 2018	December 31, 2017
Total assets	$	$
Canada	3,189,706	3,519,918
US	1,705,852	1,695,904


Total property and equipment
US	347,677	371,157

	For the three months ended June 30,						For the three months ended June 30,
	2019						2018
	Research and		Professional		General and		Research and		Professional		General and
	Development		Fees		Administrative		Development		Fees		Administrative

Salaries, bonus and benefits	$	232,929	$	-	$	643,519	$	174,067	$	-	$	859,268
Contracted expenditures		557,719		-		-		438,689		-		-
Marketing and investor relations		-		-		78,905		-		-		41,962
Travel and accommodation		2,727		-		62,473		3,547		-		70,463
Insurance		26,994		-		49,887		28,284		-		77,282
License fees		50,000		-		-		1,738,513		-		-
Office		13,169		-		50,342		3,129		-		61,460
Consultants		89,094		211,520		-		52,073		336,455		-
Regulatory		42,647		-		26,066		19,388		-		90,142
Rent		-		-		5,940		7,825		-		43,019
Supplies		46,228		-		4,314		69,105		-		4,894
Total	$	1,061,507	$	211,520	$	921,446	$	2,534,620	$	336,455	$	1,248,490

	For the six months ended June 30,						For the six months ended June 30,
	2019						2018
	Research and		Professional		General and		Research and		Professional		General and
	Development		Fees		Administrative		Development		Fees		Administrative

Salaries, bonus and benefits	$	449,791	$	-	$	3,573,022	$	326,440	$	-	$	1,502,556
Contracted expenditures		1,812,566		-		-		708,212		-		-
Marketing and investor relations		-		-		131,415		-		-		123,155
Travel and accommodation		12,776		-		119,737		5,336		-		191,868
Insurance		56,905		-		113,338		44,244		-		157,743
License fees		5,936,841		-		-		1,738,513		-		-
Office		19,597		-		136,489		34,646		-		138,406
Consultants		148,880		950,914		-		89,189		708,402		-
Regulatory		63,645		-		50,170		38,175		-		193,700
Rent		-		-		11,880		15,652		-		86,038
Supplies		91,881		-		16,658		134,554		-		15,196
Total	$	8,592,882	$	950,914	$	4,152,709	$	3,134,961	$	708,402	$	2,408,662

												Three months ended June 30,												Six months ended June 30,
	Three months ended March 31, 2018		Three months ended March 31, 2017			Change						2019			2018			Change						2019			2018			Change
	$		$			$			%			$			$			$			%			$			$			$			%
Expenses
Research and development		600,341		616,449			(16,108	)		-3	%		1,061,507			2,534,620			(1,473,113	)		-58	%		8,592,882			3,134,961			5,457,921			174	%
General and administrative		1,160,171		827,025			333,146			40	%		921,446			1,248,490			(327,044	)		-26	%		4,152,709			2,408,662			1,744,047			72	%
Professional fees		371,947		381,536			(9,589	)		-3	%		211,520			336,455			(124,935	)		-37	%		950,914			708,402			242,512			34	%
Amortization		686		699			(13	)		-2	%
Amortization - right-of-use asset													127,345			-			127,345			N/A			254,690			-			254,690			N/A
Amortization - intangible													270			693			(423	)		-61	%		537			1,379			(842	)		-61	%
Depreciation		36,699		20,308			16,391			81	%		68,925			27,459			41,466			151	%		130,979			64,158			66,821			104	%
Loss from operations		2,169,844		1,846,017			323,827			18	%		2,391,013			4,147,717			(1,756,704	)		-42	%		14,082,711			6,317,562			7,765,149			123	%

Loss on fixed assets													1,308			-			1,308			N/A			1,308			-			1,308			N/A
Interest expense													12,164			-			12,164			N/A			18,338			-			18,338			N/A
Gain on settlement of liabilities		-		(5,000	)		5,000			N/A			-			-			-			N/A			(19,737	)		-			(19,737	)		N/A
Foreign exchange loss (gain)		1,484		(8,281	)		9,765			-118	%
Foreign exchange gain													(58	)		(3,319	)		3,261			-98	%		(1,283	)		(1,835	)		552			-30	%
Loss before income taxes		2,171,328		1,832,736			338,592			18	%		2,404,427			4,144,398			(1,739,971	)		-42	%		14,081,337			6,315,727			7,765,610			123	%

Income tax expense		-		-			-			N/A			-			-			-			N/A			-			-			-			N/A

Net loss and comprehensive loss		2,171,328		1,832,736			338,592			18	%		2,404,427			4,144,398			(1,739,971	)		-42	%		14,081,337			6,315,727			7,765,610			123	%

	Three months ended			Three months ended
	March 31, 2018			March 31, 2017			Change
	$			$			$			%
Cash flows used in operating activities		(1,707,794	)		(1,553,802	)		(153,992	)		10	%
Cash flows provided by financing activities		1,407,786			251,559			1,156,227			460	%
Cash flows used in investing activities		(13,219	)		(157,402	)		144,183			-92	%
Increase (decrease) in cash		(313,227	)		(1,459,645	)		1,146,418			-79	%
Cash and cash equivalents, beginning of period		3,448,147			3,226,680			221,467			7	%
Cash and cash equivalents, end of period		3,134,920			1,767,035			1,367,885			77	%

	•	the successful completion of clinical validation of our diagnostic product candidates, which may take significantly longer than we anticipate and will depend, in part, upon the satisfactory performance of third-party contractors;

	•	the successful completion of pilot testing and pivotal efficacy and safety trials of one or more of our drug product candidates, which may take significantly longer than we anticipate and will depend, in part, upon the satisfactory performance of third-party contractors;

Exhibit No.		Description

3.1		Articles of Amalgamation of Zomedica Pharmaceuticals Corp. (incorporated by reference to Exhibit 3.1 to the ~~Company's~~Company’s Registration Statement on Form S-1 filed with the Commission on November 20, 2017 (File No. 333-217409)).

3.2		Amended and Restated By-Law No. 1 of Zomedica Pharmaceuticals Corp. (incorporated by reference to Exhibit 3.2 to the ~~Company's~~Company’s Registration Statement on Form S-1 filed with the Commission on November 20, 2017 (File No. 333-217409)).

3.3		Certificate of Amendment and Registration of Restated Articles of Zomedica Pharmaceuticals Corp. (incorporated by reference to Exhibit 3.3 to the ~~Company's~~Company’s Registration Statement on Form S-1 filed with the Commission on November 20, 2017 (File No. 333-217409)).

3.4		Certificate of Amalgamation of Zomedica Pharmaceuticals Corp. (incorporated by reference to Exhibit 3.4 to the ~~Company's~~Company’s Registration Statement on Form S-1 filed with the Commission on November 20, 2017 (File No. 333-217409)).

3.5		Articles of Amendment to the Articles of Incorporation of Zomedica Pharmaceuticals Corp. (incorporated by reference to Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 10, 2019 (File No. 001-38298))

10.29		Form of Preferred Share Subscription Agreement for May 2019 Offering (incorporated by reference to Exhibit 10.29 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 10, 2019 (File No. 001-38298))

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the ~~Sarbannes-Oxley~~Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the ~~Sarbannes-Oxley~~Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

101.INS		XBRL Instance Document.*

101.SCH		XBRL Taxonomy Extension Schema Document.*

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.*

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.*

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.*

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.*