Exhibit 99.2
IMMUNOPRECISE ANTIBODIES LTD.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended October 31, 2023 and 2022
(Unaudited - Expressed in Canadian Dollars)
IMMUNOPRECISE ANTIBODIES LTD. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited - Expressed in Canadian dollars) |
(in thousands) | Note | October 31, 2023 $ | April 30, 2023 $ | ||||
ASSETS | |||||||
Current assets | |||||||
Cash | 6,017 | 8,280 | |||||
Amounts receivable, net | 3,618 | 3,247 | |||||
Sales tax receivable | 368 | 358 | |||||
Income taxes receivable | - | 178 | |||||
Inventory | 2,452 | 2,060 | |||||
Unbilled revenue | 1,066 | 632 | |||||
Prepaid expenses | 1,885 | 2,037 | |||||
15,406 | 16,792 | ||||||
Restricted cash | 87 | 86 | |||||
Deposit on equipment | 375 | 332 | |||||
Investment at fair value through profit and loss | - | 115 | |||||
Property and equipment | 5, 7 | 11,864 | 10,392 | ||||
Intangible assets | 6 | 28,953 | 30,925 | ||||
Goodwill | 18,923 | 19,171 | |||||
Total assets | 75,608 | 77,813 | |||||
LIABILITIES | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | 10 | 4,113 | 3,388 | ||||
Deferred revenue | 1,611 | 977 | |||||
Income taxes payable | 565 | - | |||||
Leases | 7 | 954 | 1,116 | ||||
Deferred acquisition payments | 291 | 439 | |||||
7,534 | 5,920 | ||||||
Leases | 7 | 8,620 | 6,151 | ||||
Deferred acquisition payments | 279 | 278 | |||||
Deferred income tax liability | 7,143 | 7,661 | |||||
Total liabilities | 23,576 | 20,010 | |||||
SHAREHOLDERS' EQUITY | |||||||
Share capital | 8 | 117,470 | 117,470 | ||||
Contributed surplus | 8 | 11,916 | 10,796 | ||||
Accumulated other comprehensive loss | 1,927 | 2,625 | |||||
Accumulated deficit | (79,281 | ) | (73,088 | ) | |||
52,032 | 57,803 | ||||||
Total liabilities and shareholders' equity | 75,608 | 77,813 |
Nature of operations (Note 1)
Approved and authorized on behalf of the Board of Directors on December 13, 2023.
"Mitch Levine" Director "Dirk Witters" Director
The accompanying notes are an integral part of these condensed interim consolidated financial statements |
2 |
IMMUNOPRECISE ANTIBODIES LTD. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited - Expressed in Canadian dollars) |
Three months ended October 31, | Six months ended October 31, | ||||||||||||
(in thousands, except share data) | Note | 2023 $ | 2022 $ | 2023 $ | 2022 $ | ||||||||
REVENUE | 6,150 | 5,184 | 11,837 | 9,873 | |||||||||
COST OF SALES | 3,196 | 2,405 | 6,090 | 4,615 | |||||||||
GROSS PROFIT | 2,954 | 2,779 | 5,747 | 5,258 | |||||||||
EXPENSES | |||||||||||||
Research and development | 1,037 | 5,002 | 2,114 | 11,626 | |||||||||
Sales and marketing | 921 | 817 | 1,984 | 1,838 | |||||||||
General and administrative | 3,308 | 3,831 | 7,295 | 7,626 | |||||||||
Amortization of intangible assets | 6 | 711 | 953 | 1,558 | 2,064 | ||||||||
5,977 | 10,603 | 12,951 | 23,154 | ||||||||||
Loss before other income (expenses) and income taxes | (3,023 | ) | (7,824 | ) | (7,204 | ) | (17,896 | ) | |||||
OTHER INCOME (EXPENSES) | |||||||||||||
Accretion | (5 | ) | - | (10 | ) | (3 | ) | ||||||
Grant income | 12 | 16 | 14 | 299 | 284 | ||||||||
Interest and other income | 213 | 36 | 356 | 34 | |||||||||
Unrealized foreign exchange gain | 209 | 297 | 136 | 320 | |||||||||
433 | 347 | 781 | 635 | ||||||||||
Loss before income taxes | (2,590 | ) | (7,477 | ) | (6,423 | ) | (17,261 | ) | |||||
Income taxes | (32 | ) | 126 | 230 | 529 | ||||||||
NET LOSS FOR THE PERIOD | (2,622 | ) | (7,351 | ) | (6,193 | ) | (16,732 | ) | |||||
OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||
Items that will be reclassified subsequently to loss | |||||||||||||
Exchange difference on translating foreign operations | 516 | 1,999 | (698 | ) | 142 | ||||||||
COMPREHENSIVE LOSS FOR THE PERIOD | (2,106 | ) | (5,352 | ) | (6,891 | ) | (16,590 | ) | |||||
LOSS PER SHARE - BASIC AND DILUTED | (0.10 | ) | (0.30 | ) | (0.25 | ) | (0.67 | ) | |||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 25,050,260 | 24,874,455 | 25,050,260 | 24,806,791 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements |
3 |
IMMUNOPRECISE ANTIBODIES LTD. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited - Expressed in Canadian dollars) |
(in thousands, except share data) | Number of Shares | Share Capital $ | Convertible Debentures - Equity Component $ | Contributed Surplus $ | Accumulated Other Comprehensive (Loss) Income $ | Accumulated Deficit $ | Total $ | ||||||||||||||
Balance, July 31, 2022 | 24,836,723 | 116,183 | - | 10,303 | (4,336 | ) | (55,909 | ) | 66,241 | ||||||||||||
Shares issued pursuant to option exercise | 98,725 | 871 | - | (373 | ) | - | - | 498 | |||||||||||||
Share-based payments | - | - | - | 355 | - | - | 355 | ||||||||||||||
Comprehensive loss for the period | - | - | - | - | 1,999 | (7,351 | ) | (5,352 | ) | ||||||||||||
Balance, October 31, 2022 | 24,935,448 | 117,054 | - | 10,285 | (2,337 | ) | (63,260 | ) | 61,742 | ||||||||||||
Balance, July 31, 2023 | 25,050,260 | 117,470 | - | 11,619 | 1,409 | (76,658 | ) | 53,840 | |||||||||||||
Share-based payments | - | - | - | 297 | - | - | 297 | ||||||||||||||
Comprehensive loss for the period | - | - | - | - | 518 | (2,623 | ) | (2,105 | ) | ||||||||||||
Balance, October 31, 2023 | 25,050,260 | 117,470 | - | 11,916 | 1,927 | (79,281 | ) | 52,032 |
(in thousands, except share data) | Number of Shares | Share Capital $ | Convertible Debentures - Equity Component $ | Contributed Surplus $ | Accumulated Other Comprehensive (Loss) Income $ | Accumulated Deficit $ | Total $ | ||||||||||||||
Balance, April 30, 2022 | 24,476,846 | 114,559 | 103 | 9,630 | (2,479 | ) | (46,528 | ) | 75,285 | ||||||||||||
Shares issued pursuant to option exercise | 148,725 | 1,077 | - | (459 | ) | - | - | 618 | |||||||||||||
Shares issued pursuant to conversion of convertible debentures | 309,877 | 1,418 | (103 | ) | - | - | - | 1,315 | |||||||||||||
Share-based payments | - | - | - | 1,114 | - | - | 1,114 | ||||||||||||||
Comprehensive loss for the period | - | - | - | - | 142 | (16,732 | ) | (16,590 | ) | ||||||||||||
Balance, October 31, 2022 | 24,935,448 | 117,054 | - | 10,285 | (2,337 | ) | (63,260 | ) | 61,742 | ||||||||||||
Balance, April 30, 2023 | 25,050,260 | 117,470 | - | 10,796 | 2,625 | (73,088 | ) | 57,803 | |||||||||||||
Share-based payments | - | - | - | 1,120 | - | - | 1,120 | ||||||||||||||
Comprehensive loss for the period | - | - | - | - | (698 | ) | (6,193 | ) | (6,891 | ) | |||||||||||
Balance, October 31, 2023 | 25,050,260 | 117,470 | - | 11,916 | 1,927 | (79,281 | ) | 52,032 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements |
4 |
IMMUNOPRECISE ANTIBODIES LTD. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
(in thousands) | Note | 2023 $ | 2022 $ | ||||
Operating activities: | |||||||
Net loss for the period | (6,193 | ) | (16,731 | ) | |||
Items not affecting cash: | |||||||
Amortization and depreciation | 5, 6, 13 | 2,847 | 3,014 | ||||
Deferred income taxes | (416 | ) | (418 | ) | |||
Accretion | 10 | 3 | |||||
Foreign exchange | 49 | (238 | ) | ||||
Gain on investment | - | (8 | ) | ||||
Share-based payments | 8, 9, 10 | 1,120 | 1,114 | ||||
(2,583 | ) | (13,264 | ) | ||||
Changes in non-cash working capital related to operations: | |||||||
Amounts receivable | (45 | ) | (655 | ) | |||
Inventory | (75 | ) | 29 | ||||
Unbilled revenue | (429 | ) | (76 | ) | |||
Prepaid expenses | 150 | 534 | |||||
Accounts payable and accrued liabilities | 10 | 679 | (127 | ) | |||
Sales and income taxes payable and receivable | 736 | (642 | ) | ||||
Deferred revenue | 630 | 147 | |||||
Net cash used in operating activities | (937 | ) | (14,054 | ) | |||
Investing activities: | |||||||
Purchase of equipment | 5 | (435 | ) | (788 | ) | ||
Security deposit on leases | (49 | ) | 40 | ||||
Deferred acquisition payments | (146 | ) | (610 | ) | |||
Sale of QVQ Holdings BV shares | 121 | 61 | |||||
Net cash used in investing activities | (509 | ) | (1,297 | ) | |||
Financing activities: | |||||||
Proceeds on share issuance, net of transaction costs | 8 | - | 618 | ||||
Repayment of leases | 7 | (715 | ) | (576 | ) | ||
Net cash (used in) provided by financing activities | (715 | ) | 42 | ||||
Decrease in cash during the period | (2,161 | ) | (15,309 | ) | |||
Foreign exchange | (101 | ) | 407 | ||||
Cash - beginning of the period | 8,366 | 30,047 | |||||
Cash - end of the period | 6,104 | 15,145 | |||||
Cash is comprised of: | |||||||
Cash | 6,017 | 15,059 | |||||
Restricted cash | 87 | 86 | |||||
6,104 | 15,145 | ||||||
Cash paid for interest | - | 263 | |||||
Cash paid for income tax | - | 445 |
Supplemental cash flow information (Note 14)
The accompanying notes are an integral part of these condensed interim consolidated financial statements |
5 |
IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
1. NATURE OF OPERATIONS
ImmunoPrecise Antibodies Ltd. (the "Company" or "IPA") was incorporated under the laws of Alberta on November 22, 1983. The Company is listed on the NASDAQ Global Market under the trading ticker symbol "IPA". The Company is a supplier of custom antibody discovery services. The address of the Company's corporate office is 3304-4464 Markham Street, Victoria, BC, Canada V8Z 7X8.
Going concern basis
The condensed interim consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern. The Company has incurred operating losses since its inception, including $2.6 million for the six months ended October 31, 2023, and has accumulated a deficit of $79.3 million as of October 31, 2023. The Company had $6.1 million cash on hand as of October 31, 2023. The Company expects its cash on hand as of October 31, 2023 will be insufficient to fund the Company's operations for at least one year from the date these financial statements are available to be issued. These conditions raise material uncertainties which cast significant doubt as to whether the Company will be able to continue as a going concern should it not be able to obtain financing necessary to fund its planned revenue growth and working capital requirements.
The Company will need to raise additional funds to finance its operations and strategic goals and there can be no assurances that sufficient funding, including adequate financing, will be available. The ability of the Company to arrange additional financing in the future depends in part on the prevailing capital market conditions and profitability of its operations. If the Company is unable to raise sufficient funds, reductions in expenditures will be required, and this may impact the future growth plans of the Company.
2. BASIS OF PRESENTATION
(a) Statement of compliance
These condensed interim consolidated financial statements have been prepared in conformity with International Accounting Standard ("IAS") 34, Interim Financial Reporting, using the same accounting policies as detailed in the Company's audited annual financial statements for the year ended April 30, 2023. They do not include all the information required for complete annual financial statements in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board ("IFRS") and interpretations of the International Financial Reporting Interpretations Committee and therefore should be read together with the audited annual financial statements for the year ended April 30, 2023.
Certain items have been reclassified in the prior year financial statements to conform to the presentation and classification used in the current year. These reclassifications had no effect on the Company's consolidated operating results, financial position or cash flows.
These condensed interim consolidated financial statements were approved by the Company's Board of Directors.
(b) Basis of measurement
These condensed interim consolidated financial statements have been prepared on the historical cost basis. In addition, these condensed interim consolidated financial statements have been prepared using the accrual basis of accounting, except for cashflow information.
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
(c) Basis of consolidation
These condensed interim consolidated financial statements include the financial statements of the Company and the following subsidiaries which are wholly owned and subject to control by the Company:
Name of Subsidiary | % Equity Interest - October 31, 2023 and April 30, 2023 | Country of Incorporation | Functional Currency |
ImmunoPrecise Antibodies (Canada) Ltd. | 100% | Canada | Canadian dollar |
ImmunoPrecise Antibodies (USA) Ltd. ("IPA USA") | 100% | USA | US dollar |
ImmunoPrecise Antibodies (N.D.) Ltd. | 100% | USA | US dollar |
ImmunoPrecise Antibodies (MA) LLC | 100% | USA | US dollar |
Talem Therapeutics LLC ("Talem") | 100% | USA | US dollar |
ImmunoPrecise Netherlands B.V. | 100% | Netherlands | Euro |
ImmunoPrecise Antibodies (Europe) B.V. ("IPA Europe") | 100% | Netherlands | Euro |
BioStrand B.V. | 100% | Belgium | Euro |
Idea Family B.V. | 100% | Belgium | Euro |
BioKey B.V. | 100% | Belgium | Euro |
BioClue B.V. | 100% | Belgium | Euro |
ImmunoPrecise Antibodies (Quebec), Ltd. | 100% | Canada | Canadian dollar |
9438-9244 Quebec, Inc. | 100% | Canada | Canadian dollar |
Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with an entity and has the ability to affect those returns through its power over the investee. Subsidiaries are fully consolidated from the date on which control is obtained and continue to be consolidated until the date that such control ceases. Intercompany balances, transactions and unrealized intercompany gains and losses are eliminated upon consolidation.
(d) Functional and presentation currency
The functional currency of a company is the currency of the primary economic environment in which the company operates. The presentation currency for a company is the currency in which the company chooses to present its financial statements. The presentation currency of the Company is the Canadian dollar.
Foreign currency translation
Entities whose functional currencies differ from the presentation currency are translated into Canadian dollars as follows: assets and liabilities - at the closing rate as at the reporting date, and income and expenses - at the average rate of the period. All resulting changes are recognized in other comprehensive income as cumulative translation differences.
Foreign currency transactions
Transactions in foreign currencies are translated into the functional currency at exchange rates at the date of the transactions. Foreign currency monetary assets and liabilities are translated at the functional currency exchange rate at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. All gains and losses on translation of these foreign currency transactions are included in profit or loss.
When the Company disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary are reallocated between controlling and non-controlling interests.
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
3. ADOPTION OF NEW ACCOUNTING STANDARDS
Standards not yet adopted
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
The amendments to IAS 1 provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date. The Company does not expect the amendments to IAS 1 to have a material impact on the Company's financial statements.
These amendments are effective for reporting periods beginning on or after January 1, 2024.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of the condensed interim consolidated financial statements in conformity with IFRS required estimates and judgments that affect the amounts reported in the financial statements. Actual results could differ from these estimates and judgments. Estimates are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised. Estimates and judgments applied in the preparation of the condensed interim consolidated financial statements are the same as those presented in the Company's audited annual financial statements for the year ended April 30, 2023.
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
5. PROPERTY AND EQUIPMENT
The table below includes both property and equipment and right-of-use assets.
(in thousands) | Computer Hardware $ | Furniture & Equipment $ | Computer Software $ | Building $ | Automobile $ | Leasehold Improvements $ | Lab Equipment $ | WIP - Leasehold Improvements $ | Total $ | ||||||||||||||||||
Cost: | |||||||||||||||||||||||||||
Balance, April 30, 2022 | 136 | 35 | 47 | 2,586 | 239 | 353 | 5,672 | 138 | 9,206 | ||||||||||||||||||
Additions | 138 | - | - | 7,593 | - | 101 | 1,064 | 28 | 8,924 | ||||||||||||||||||
Completion of work-in-process | - | - | - | - | - | 166 | - | (166 | ) | - | |||||||||||||||||
Disposals | (3 | ) | - | - | (1,290 | ) | (95 | ) | - | (700 | ) | - | (2,088 | ) | |||||||||||||
Foreign exchange | 17 | 18 | 3 | 196 | 23 | 6 | 437 | - | 700 | ||||||||||||||||||
Balance, April 30, 2023 | 288 | 53 | 50 | 9,085 | 167 | 626 | 6,473 | - | 16,742 | ||||||||||||||||||
Additions | 20 | - | - | 2,729 | - | - | 153 | 18 | 2,920 | ||||||||||||||||||
Disposals | (1 | ) | - | - | (89 | ) | - | - | - | - | (90 | ) | |||||||||||||||
Foreign exchange | (2 | ) | - | (1 | ) | (115 | ) | (2 | ) | (1 | ) | (58 | ) | - | (179 | ) | |||||||||||
Balance, October 31, 2023 | 305 | 53 | 49 | 11,610 | 165 | 625 | 6,568 | 18 | 19,393 | ||||||||||||||||||
Accumulated Depreciation: | |||||||||||||||||||||||||||
Balance, April 30, 2022 | 70 | 29 | 47 | 1,736 | 46 | 348 | 3,371 | - | 5,647 | ||||||||||||||||||
Depreciation | 84 | 3 | - | 1,109 | 58 | 40 | 977 | - | 2,271 | ||||||||||||||||||
Disposals | (3 | ) | - | - | (1,274 | ) | (57 | ) | - | (507 | ) | - | (1,841 | ) | |||||||||||||
Foreign exchange | 6 | 1 | 3 | 181 | 10 | - | 72 | - | 273 | ||||||||||||||||||
Balance, April 30, 2023 | 157 | 33 | 50 | 1,752 | 57 | 388 | 3,913 | - | 6,350 | ||||||||||||||||||
Depreciation | 51 | 2 | - | 753 | 28 | 28 | 426 | - | 1,288 | ||||||||||||||||||
Disposals | - | - | - | (62 | ) | - | - | - | - | (62 | ) | ||||||||||||||||
Foreign exchange | - | - | (1 | ) | (13 | ) | (1 | ) | - | (32 | ) | (47 | ) | ||||||||||||||
Balance, October 31, 2023 | 208 | 35 | 49 | 2,430 | 84 | 416 | 4,307 | - | 7,529 | ||||||||||||||||||
Net Book Value: | |||||||||||||||||||||||||||
April 30, 2023 | 131 | 20 | - | 7,333 | 110 | 238 | 2,560 | - | 10,392 | ||||||||||||||||||
October 31, 2023 | 97 | 18 | - | 9,180 | 81 | 209 | 2,261 | 18 | 11,864 |
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
6. INTANGIBLE ASSETS
Changes in the value of the intangible assets during the six months ended October 31, 2023 and the year ended April 30, 2023 are as follows:
(in thousands) | Internally Generated Development Costs $ | Intellectual Property $ | Proprietary Processes $ | Certifications $ | Customer List $ | Total $ | ||||||||||||
Cost: | ||||||||||||||||||
Balance, April 30, 2022 | 33 | 31,914 | 7,359 | 126 | 180 | 39,612 | ||||||||||||
Foreign exchange | - | 3,229 | 744 | 13 | 18 | 4,004 | ||||||||||||
Balance, April 30, 2023 | 33 | 35,143 | 8,103 | 139 | 198 | 43,616 | ||||||||||||
Foreign exchange | - | (455 | ) | (105 | ) | (2 | ) | (2 | ) | (564 | ) | |||||||
Balance, October 31, 2023 | 33 | 34,688 | 7,998 | 137 | 196 | 43,052 | ||||||||||||
Accumulated Amortization: | ||||||||||||||||||
Balance, April 30, 2022 | 8 | 1,693 | 5,491 | - | 30 | 7,222 | ||||||||||||
Amortization | 7 | 2,710 | 1,477 | 128 | 92 | 4,414 | ||||||||||||
Foreign exchange | (1 | ) | 372 | 665 | 9 | 10 | 1,055 | |||||||||||
Balance, April 30, 2023 | 14 | 4,775 | 7,633 | 137 | 132 | 12,691 | ||||||||||||
Amortization | 4 | 1,330 | 174 | 3 | 48 | 1,559 | ||||||||||||
Foreign exchange | - | (50 | ) | (97 | ) | (3 | ) | (1 | ) | (151 | ) | |||||||
Balance, October 31, 2023 | 18 | 6,055 | 7,710 | 137 | 179 | 14,099 | ||||||||||||
Net Book Value: | ||||||||||||||||||
April 30, 2023 | 19 | 30,368 | 470 | 2 | 66 | 30,925 | ||||||||||||
October 31, 2023 | 15 | 28,633 | 288 | - | 17 | 28,953 |
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
7. LEASES
The Company has leases for lab and office space and automobiles. Each lease is reflected in the consolidated statement of financial position as a right-of-use asset and a lease liability. The Company classifies right-of-use assets in a consistent manner to its property and equipment. The following is a schedule of the Company's future minimum lease payments related to the equipment and automobiles under finance lease and the office lease obligation:
(in thousands) | $ | ||
2024 (remainder) | 827 | ||
2025 | 1,426 | ||
2026 | 1,386 | ||
2027 | 1,383 | ||
2028 | 1,376 | ||
More than 5 years | 6,267 | ||
Total minimum lease payments | 12,665 | ||
Less: imputed interest | (3,091 | ) | |
Total present value of minimum lease payments | 9,574 | ||
Less: Current portion | (954 | ) | |
Non-current portion | 8,620 |
Total cash outflow for leases during the six months ended October 31, 2023 was $0.7 million (2022 - $0.3 million).
The nature of the Company's leases by type of right-of-use asset as at October 31, 2023 is as follows:
Right-of-use asset type | No. of right- of-use assets leased | Range of remaining term | Average remaining lease term | No. of leases with extension options | No. of leases with options to purchase | No. of leases with variable payments linked to an index | No. of leases with termination options | ||||||||||||||
Lab and office facilities | 4 | 0.5 - 10.5 years | 5.0 years | 3 | - | 2 | 1 | ||||||||||||||
Automobiles | 6 | 1.0 - 3.5 years | 2 years | - | - | 6 | 6 |
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
Right-of-use assets
The changes in the value of right-of-use assets during the six months ended October 31, 2023 and the year ended April 30, 2023 are as follows:
(in thousands) | Building $ | Automobile $ | Lab Equipment $ | Total $ | ||||||||
Cost: | ||||||||||||
Balance, April 30, 2022 | 2,586 | 239 | 651 | 3,476 | ||||||||
Additions | 7,593 | - | - | 7,593 | ||||||||
Disposals | (1,290 | ) | (95 | ) | (687 | ) | (2,072 | ) | ||||
Foreign exchange | 196 | 23 | 36 | 255 | ||||||||
Balance, April 30, 2023 | 9,085 | 167 | - | 9,252 | ||||||||
Additions | 2,729 | - | - | 2,729 | ||||||||
Disposals | (89 | ) | - | - | (89 | ) | ||||||
Foreign exchange | (115 | ) | (2 | ) | - | (117 | ) | |||||
Balance, October 31, 2023 | 11,610 | 165 | - | 11,775 | ||||||||
Accumulated Depreciation: | ||||||||||||
Balance, April 30, 2022 | 1,736 | 46 | 460 | 2,242 | ||||||||
Depreciation | 1,109 | 58 | 198 | 1,365 | ||||||||
Disposals | (1,274 | ) | (57 | ) | (507 | ) | (1,838 | ) | ||||
Foreign exchange | 181 | 10 | (151 | ) | 40 | |||||||
Balance, April 30, 2023 | 1,752 | 57 | - | 1,809 | ||||||||
Depreciation | 753 | 28 | - | 781 | ||||||||
Disposals | (62 | ) | - | - | (62 | ) | ||||||
Foreign exchange | (13 | ) | (1 | ) | - | (14 | ) | |||||
Balance, October 31, 2023 | 2,430 | 84 | - | 2,514 | ||||||||
Net Book Value: | ||||||||||||
April 30, 2022 | 7,333 | 110 | - | 7,443 | ||||||||
October 31, 2022 | 9,180 | 81 | - | 9,261 |
Lease payments not recognized as a liability
The Company has elected not to recognize a lease liability for leases with an expected term of 12 months or less. Additionally, certain variable lease payments are not permitted to be recognized as lease liabilities and are recognized in profit and loss as incurred. The expense relating to payments not included in the measurement of the lease liability during the six months ended October 31, 2023 and 2022 are as follows:
(in thousands) | 2023 $ | 2022 $ | ||||
Leases of low value assets | (20 | ) | 19 | |||
Variable lease payments | 280 | 122 | ||||
260 | 141 |
8. SHARE CAPITAL
a) Authorized:
Unlimited common shares without par value.
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
b) Share capital transactions:
2023 Transactions
During the year ended April 30, 2023, the Company issued 263,537 common shares pursuant to the exercise of stock options for total gross proceeds of $0.7 million. A value of $0.8 million was transferred from contributed surplus to share capital as a result.
During the year ended April 30, 2023, the Company issued 309,877 common shares with a value of $1.3 million pursuant to the conversion of $1.3 million principal balance of convertible debentures.
2024 Transactions
The Company did not issue common shares during the six months ended October 31, 2023.
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
c) Options:
The following table summarizes stock option awards during the six months ended October 31, 2023 and the year ended April 30, 2023, including the grant date fair value determined using the Black-Scholes option pricing model:
Black-Scholes Option Pricing Model Inputs | |||||||||||||||||||||||||
Grant date | Stock options granted | Exercisable price/option $ | Awarded to | Share price on grant date $ | Dividend yield | Expected volatility | Risk-free rate | Expected life | Fair value | ||||||||||||||||
May 15, 2022(1) | 80,000 | 5.79 | Employees | 5.79 | 0% | 77% | 2.73% | 5.0 years | $ | 0.3 million | |||||||||||||||
February 19, 2023(2) | 29,060 | 4.10 | (3) | Directors | 4.10 | (3) | 0% | 77% | 3.57% | 4.0 years | $ | 0.1 million | |||||||||||||
February 19, 2023(1) | 609,452 | 4.10 | (3) | Officers and employees | 4.10 | (3) | 0% | 77% | 3.57% | 5.0 years | $ | 2.2 million |
(1) Vesting conditions are as follows: one-third 6 months after grant date; one-third 12 months after grant date; and one-third 18 months after grant date.
(2) Vesting conditions are as follows: one-quarter 3 months after grant date; one-quarter 6 months after grant date; one-quarter 9 months after grant date; and one-quarter 12 months after grant date.
(3) Priced in US dollars
Expected volatility of options granted is based on the historical volatility of the company from January 1, 2019 to the option grant date.
During the six months ended October 31, 2023 the Company has recorded $1.1 million (2022 - $1.1 million) of share-based payments expense.
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
The changes in the stock options for the six months ended October 31, 2023 and the year ended April 30, 2023 are as follows:
Number of options # | Weighted average exercise price $ | Weighted average life remaining (years) | |||||||
Balance, April 30, 2022 (outstanding) | 1,624,150 | 7.93 | 3.11 | ||||||
Granted | 718,512 | 7.98 | - | ||||||
Exercised | (318,725 | ) | 3.26 | - | |||||
Expired | (115,174 | ) | 10.75 | - | |||||
Forfeited | (24,335 | ) | 20.30 | - | |||||
Balance, April 30, 2023 (outstanding) | 1,884,428 | 8.29 | 2.88 | ||||||
Expired | (47,332 | ) | 9.55 | - | |||||
Forfeited | (55,756 | ) | 4.20 | - | |||||
Balance, October 31, 2023 (outstanding) | 1,781,340 | 8.09 | 2.75 | ||||||
Unvested | (395,566 | ) | 5.68 | 4.22 | |||||
Exercisable, October 31, 2023 | 1,385,774 | 8.77 | 2.33 |
Details of the options outstanding as of October 31, 2023 are as follows:
Expiry Date | Exercise price $ | Remaining life (year) | Options outstanding | Unvested | Vested | ||||||||||
November 7, 2023 | 4.10 | 0.02 | 20,000 | - | 20,000 | ||||||||||
December 31, 2023 | 5.00 | 0.17 | 180,000 | - | 180,000 | ||||||||||
January 11, 2024 | 5.00 | 0.20 | 60,000 | - | 60,000 | ||||||||||
September 1, 2025 | 8.50 | 1.84 | 250,000 | - | 250,000 | ||||||||||
January 6, 2026 | 20.30 | 2.19 | 199,000 | - | 199,000 | ||||||||||
May 9, 2026(1) | 10.59 | 2.52 | 10,000 | 3,333 | 6,667 | ||||||||||
January 2, 2026 | 6.89 | 2.18 | 28,250 | - | 28,250 | ||||||||||
January 7, 2027 | 7.94 | 3.19 | 314,000 | - | 314,000 | ||||||||||
January 13, 2027 | 8.30 | 3.21 | 31,000 | - | 31,000 | ||||||||||
February 22, 2024 | 6.35 | 0.31 | 25,000 | - | 25,000 | ||||||||||
May 15, 2027 | 5.79 | 3.54 | 80,000 | 26,667 | 53,333 | ||||||||||
February 19, 2027(2) | 5.63 | 3.31 | 26,638 | 7,265 | 19,373 | ||||||||||
February 19, 2028(2) | 5.63 | 4.31 | 557,452 | 358,301 | 199,151 | ||||||||||
8.09 | 2.75 | 1,781,340 | 395,566 | 1,385,774 |
(1) Exercise price of US $7.72. The figure in the table above is translated at the October 31, 2023 rate.
(2) Exercise price of US $4.10. The figure in the table above is translated at the October 31, 2023 rate.
d) Finder's Warrants
There were no changes in the finder's warrants during the six months ended October 31, 2023 or the year ended April 30, 2023. Details of the finder's warrants outstanding as of October 31, 2023 are as follows:
Expiry Date | Exercise price $ | Remaining life (year) | Warrants outstanding | ||||||
February 3, 2026(1) | 23.07 | 2.26 | 130,111 |
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
(1) Exercise price of US $16.81. The figure in the table above is translated at the October 31, 2023 rate.
9. EMPLOYEE REMUNERATION
Expenses recognized for employee benefits for the six months ended October 31, 2023 and 2022 are detailed below:
(in thousands) | 2023 $ | 2022 $ | ||||
Wages, salaries | 2,747 | 2,704 | ||||
Employee benefits | 264 | 150 | ||||
Payroll taxes | 183 | 246 | ||||
Severance | - | 60 | ||||
Share-based payments | 297 | 355 | ||||
3,491 | 3,515 |
10. RELATED PARTY TRANSACTIONS
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. Key management consists of Dr. Jennifer Bath, President and CEO; Brad McConn, former Chief Financial Officer; Dr. Stefan Lang, former Chief Business Officer; Dr. Ilse Roodink, Chief Scientific Officer; Lisa Helbling, former Chief Financial Officer; and Directors of the Company. During the six months ended October 31, 2023 and 2022, the compensation for key management is as follows:
(in thousands) | 2023 $ | 2022 $ | ||||
Salaries and other short-term benefits | 1,573 | 1,408 | ||||
Severance (included in salaries) | 60 | 60 | ||||
Share-based payments | 1,120 | 431 | ||||
Director compensation (included in salaries) | 171 | 167 | ||||
2,924 | 2,066 |
At October 31, 2023, included in accounts payable and accrued liabilities is $1.4 million (April 30, 2023 - $0.9 million) due to related parties. The amounts payable are non-interest bearing and unsecured.
These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties, unless otherwise noted.
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
11. COMMITMENTS
The Company entered into a lease agreement for a new facility for its Oss, the Netherlands location on October 16, 2021. The lease will have a five-year term with an optional five-year extension, and is estimated to commence March 1, 2024 at an estimated annual cost of €0.5 million indexed for inflation.
The share purchase agreement related to the acquisition of BioStrand includes contingent earnout payments based on 20% of the EBITDA of BioStrand, as defined in the share purchase agreement, over a 7-year period, which shall not exceed in total €12.0 million. The Company has determined these payments relate to post-acquisition services because they are contingent on the employment of two key employees and will be expensed in the period earned. As of October 31, 2023, the Company's unpaid commitment related to the BioStrand earnout is €12.0 million.
12. GRANT AND SUBSIDY INCOME
During May 2022, the Company received a €0.5 million round of grant funding from VLAIO (Flanders Innovation & Entrepreneurship), the research fund of the Flemish regional government in Belgium. During the six months ended October 31, 2023, the Company recorded €0.3 million in grant income related to this funding compared to the €0.2 million recorded in the six months ended October 31, 2022.
13. SEGMENTED INFORMATION AND ECONOMIC DEPENDENCE
At October 31, 2023 and April 30, 2023, the Company has one reportable segment, being antibody production and related services.
The Company's revenues are allocated to geographic regions for the three and six months ended October 31, 2023 and 2022 as follows:
Three months ended October 31, | Six months ended October 31, | |||||||||||
(in thousands) | 2023 $ | 2022 $ | 2023 $ | 2022 $ | ||||||||
United States of America | 3,206 | 2,043 | 5,639 | 3,936 | ||||||||
Europe | 2,401 | 2,788 | 5,366 | 4,927 | ||||||||
Canada | 118 | 131 | 244 | 397 | ||||||||
Australia | 65 | 0 | 148 | 0 | ||||||||
Other | 360 | 222 | 440 | 613 | ||||||||
6,150 | 5,184 | 11,837 | 9,873 |
The Company's revenues are allocated according to revenue types for the three and six months ended October 31, 2023 and 2022 as follows:
Three months ended October 31, | Six months ended October 31, | |||||||||||
(in thousands) | 2023 $ | 2022 $ | 2023 $ | 2022 $ | ||||||||
Project revenue | 5,518 | 4,729 | 10,734 | 9,063 | ||||||||
Product sales revenue | 577 | 395 | 976 | 691 | ||||||||
Cryostorage revenue | 55 | 60 | 127 | 119 | ||||||||
6,150 | 5,184 | 11,837 | 9,873 |
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
The Company's non-current assets are allocated to geographic regions as of October 31, 2023 and April 30, 2023 as follows:
October 31, 2023 $ | April 30, 2023 $ | |||||
North America - Corporate | 86 | 89 | ||||
North America | 3,313 | 1,025 | ||||
Belgium | 38,637 | 40,406 | ||||
Netherlands | 18,166 | 19,501 | ||||
60,202 | 61,021 |
Geographic segmentation of the Company's net income (loss) for the three and six months ended October 31, 2023 and 2022 is as follows:
Three months ended October 31, | Six months ended October 31, | |||||||||||
(in thousands) | 2023 $ | 2022 $ | 2023 $ | 2022 $ | ||||||||
North America - Corporate | (1,141 | ) | (1,744 | ) | (2,687 | ) | (3,880 | ) | ||||
North America | (15 | ) | (4,473 | ) | (715 | ) | (11,181 | ) | ||||
Belgium | (1,372 | ) | (1,081 | ) | (2,341 | ) | (2,009 | ) | ||||
Netherlands | (94 | ) | (53 | ) | (450 | ) | 338 | |||||
(2,622 | ) | (7,351 | ) | (6,193 | ) | (16,732 | ) |
Geographic segmentation of the interest and accretion, and amortization and depreciation for the three and six months ended October 31, 2023 and 2022 is as follows:
Three months ended October 31, | Six months ended October 31, | |||||||||||
Interest and accretion (in thousands) | 2023 $ | 2022 $ | 2023 $ | 2022 $ | ||||||||
North America - Corporate | (16 | ) | (2 | ) | (10 | ) | 15 | |||||
North America | 48 | 3 | 80 | 11 | ||||||||
Belgium | 34 | 4 | 37 | 9 | ||||||||
Netherlands | 120 | 40 | 238 | 58 | ||||||||
186 | 45 | 345 | 93 |
Three months ended October 31, | Six months ended October 31, | |||||||||||
Amortization and depreciation (in thousands) | 2023 $ | 2022 $ | 2023 $ | 2022 $ | ||||||||
North America - Corporate | 3 | 4 | 6 | 7 | ||||||||
North America | 145 | 188 | 302 | 368 | ||||||||
Belgium | 604 | 505 | 1,209 | 1,163 | ||||||||
Netherlands | 601 | 767 | 1,330 | 1,476 | ||||||||
1,353 | 1,464 | 2,847 | 3,014 |
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
14. SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash investing and financing transactions (in thousands) | October 31, 2023 $ | October 31, 2022 $ | ||||
Acquisition of building and equipment by lease | 2,729 | 6,247 | ||||
Settlement of convertible debentures | - | 1,315 |
The following changes in liabilities arose from financing activities:
Non-cash changes | |||||||||||||||||||||
(in thousands) | April 30, 2023 $ | Cash Flows $ | Acquisition $ | Settlement / Disposal $ | Accretion $ | Foreign exchange movements and change in estimates $ | October 31, 2023 $ | ||||||||||||||
Deferred acquisition payments | 717 | - | - | (146 | ) | 10 | (11 | ) | 570 | ||||||||||||
Leases | 7,267 | (715 | ) | 2,729 | - | - | 293 | 9,574 | |||||||||||||
Total | 7,984 | (715 | ) | 2,729 | (146 | ) | 10 | 282 | 10,144 |
Non-cash changes | |||||||||||||||||||||
(in thousands) | April 30, 2022 $ | Cash Flows $ | Acquisition $ | Debt forgiven / Settlement / Disposal $ | Accretion $ | Foreign exchange movements and change in estimates $ | October 31, 2022 $ | ||||||||||||||
Deferred acquisition payments | 1,237 | (610 | ) | - | - | - | - | 627 | |||||||||||||
Convertible debentures | 1,312 | - | - | (1,315 | ) | 3 | - | - | |||||||||||||
Leases | 1,455 | (576 | ) | 5,827 | - | - | (21 | ) | 6,685 | ||||||||||||
Total | 4,004 | (1,186 | ) | 5,827 | (1,315 | ) | 3 | (21 | ) | 7,312 |
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IMMUNOPRECISE ANTIBODIES LTD. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the three and six months ended October 31, 2023 and 2022 (Unaudited - Expressed in Canadian dollars) |
15. SUBSEQUENT EVENTS
On December 8, 2023, the Company closed an underwritten public offering of 1,265,000 common shares, including 165,000 common shares issued pursuant to the full exercise by the underwriter of its over-allotment option. The public offering price for each common share, before the underwriter's discount and commissions, was U.S.$1.00. The Company intends to use the estimated net proceeds of approximately $1.1 million from the offering for research and development; capital expenditures, including expansion of existing laboratory facilities; and working capital and general corporate purposes. The common shares were offered and sold pursuant to a shelf registration statement on Form F-3 (File No. 333-273197) that was declared effective by the United States Securities and Exchange Commission on July 14, 2023.
20