BriaCell Therapeutics Corp.: Form 10-Q for the period ended Apr 30, 2025

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

Introduction

This Management’s Discussion and Analysis (“MD&A”) should be read together with other information, including our unaudited condensed interim consolidated financial statements and the related notes to those statements included in Part I, Item 1 of this Quarterly Report (the “Condensed Consolidated Financial Statements”), our consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended July 31, 2024 (the “Annual Report”) and Part I, Item 1A, Risk Factors, of the Annual Report. This MD&A provides additional information on our business, recent developments, financial condition, cash flows and results of operations, and is organized as follows:

• Part 1 - Business Overview. This section provides a general description of our business, which we believe is important in understanding the results of our operations, financial condition, and potential future trends.
• Part 2 - Results of Operations. This section provides an analysis of our results of operations for the first half and second quarter of fiscal 2025 in comparison to the first half and second quarter of fiscal 2024.
• Part 3 - Financial Liquidity and Capital Resources. This section provides an analysis of our cash flows and outstanding debt and commitments. Included in this analysis is a discussion of the amount of financial capacity available to fund our ongoing operations and future commitments.

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

Cautionary Note Regarding Forward-Looking Statements

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

Overview

BriaCell Therapeutics Corp. (the “Company”), is a clinical-stage biotechnology company that is developing novel immunotherapies to transform cancer care. Immunotherapies have come to the forefront in the fight against cancer as they harness the body’s own immune system to recognize and destroy cancer cells. The Company is currently advancing its Bria-IMT™ targeted immunotherapy in combination with an immune check point inhibitor (Retifanlimab, manufactured and supplied by Incyte) in a pivotal1 Phase 3 study (ClinicalTrials.gov identifier: NCT06072612) in metastatic breast cancer. The pivotal Phase 3 study of Bria-IMT™ is currently under Fast Track Designation by the U.S. FDA intended to accelerate the review process of novel treatments that address unmet medical needs. Positive completion of the pivotal Phase 3 study, following review by FDA, could lead to full approval of the Bria-IMT™ plus an immune checkpoint inhibitor in metastatic breast cancer.

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

Additionally, BriaCell is conducting a Phase 1/2 study (ClinicalTrials.gov identifier: NCT06471673) to evaluate the safety and efficacy of Bria-OTS™, BriaCell’s personalized next generation immunotherapy, in metastatic breast cancer and other cancers. The study will investigate Bria-OTS™ alone and in combination with immune check point inhibitor tislelizumab ® (manufactured and supplied by BeiGene, Ltd.) for the treatment of metastatic breast cancer. Bria-OTS™/Bria-OTS+™, provides a platform technology to develop personalized off-the-shelf immunotherapies for numerous types of cancer.

Recent Developments

On January 3, 2025, the Company announced that the board of directors has approved the consolidation (the “Consolidation”) of the Company’s issued and outstanding common shares (the “Common Shares”) on the basis of one (1) post-Consolidation Common Share for every fifteen (15) pre-Consolidation Common Shares. The Consolidation is being implemented to ensure that the Company continues to comply with the listing requirements of The Nasdaq Capital Market (the “Nasdaq”). The effective date of the consolidation was January 29, 2025.

On February 3, 2025, the Company announced an unprecedented clinical response including resolution of a lung metastasis (breast cancer tumor that spread to the lung) with stable disease elsewhere, The patient is the first metastatic breast cancer (MBC) patient treated with Bria-OTS™. Bria-OTS™ is a personalized off-the-shelf immunotherapy, currently under investigation in a Phase 1/2a dose escalation study (ClinicalTrials.gov identifier: NCT06471673) in metastatic recurrent breast cancer. Bria-OTS™ represents a personalized, next generation, advancement of BriaCell’s lead candidate Bria-IMT™ which is currently in a pivotal Phase 3 study for metastatic breast cancer.

On February 5, 2025, the Company closed a public offering for the purchase and sale of 762,500 common shares of the Company for aggregate gross proceeds of approximately $3.05 million before deducting placement agent fees and other offering expenses (the “February 2025 Offering”). Each common share was sold at a public offering price of $4.00 per share. In addition, the Company issued 38,125 agent warrants. The agent warrants are immediately exercisable for a period of five years from the closing date at an exercise price of $5.00 per share.

On April 10, 2025, the Company announced that its majority owned subsidiary, BriaPro Therapeutics Corp. (“BriaPro”), is developing novel, high affinity antibodies to B7-H3, a key player in cancer progression, using molecular modeling techniques. BriaPro has filed provisional US patent applications for the corresponding technology and plans on filing an international patent application under the Patent Cooperation Treaty (PCT).

As both an immune checkpoint molecule that regulates T cell activity and a cell surface molecule expressed on many types of cancer cells, B7-H3 is a promising drug target. BriaPro plans on developing anti-B7-H3 antibodies for multiple cancer indications and plans to incorporate them into its Bria-TILsRx™ platform—a proprietary antibody platform designed to redirect and activate T cells within the tumor microenvironment. This platform integrates both T cell engagers, which promote T cell-mediated tumor killing, and tumor-targeted immune checkpoint modulators, which selectively block inhibitory signals on tumor infiltrating lymphocytes (TILs) to enhance their anti-tumor activity.

On April 16, 2025, the Company announced new positive survival data in its Phase 2 study of Bria-IMT plus check point inhibitors (CPI), outperforming ADC drugs in hormone receptor positive (HR+) metastatic breast cancer (MBC) patients. In BriaCell’s Phase 2 clinical study in late-stage MBC, 25 of 37 patients treated with the ongoing pivotal Phase 3 Bria-IMT formulation were identified as having HR+ breast cancer. As shown in Table 1, the survival data of these 25 patients (17.3 months) exceeds those of the current ADC standard of care TRODELVY® (14.4 months). The survival data for the Bria-IMT regimen + immune check point inhibitor in the triple negative breast cancer (TNBC), characterized by the absence of estrogen (ER), progesterone (PR) and human epidermal growth factor (HER2) receptors, was similar to TRODELVY® but still markedly higher (70%) than those of chemotherapy.Table 1: Comparable Analysis of median overall survival (estimated using the Kaplan-Meier method) for the BriaCell Phase 2 study of BriaCell’s Bria-IMT™ plus CPI versus other drugs in MBC patient subsets

* Patients treated with the Phase 3 formulation

** Number of prior chemotherapy-containing regimens

1. https://www.gilead.com/-/media/files/pdfs/medicines/oncology/trodelvy/trodelvy\_pi.pdf

Abbreviations:

HR+: hormone receptor-positive

TNBC: Triple-negative breast cancer (lacks the estrogen receptor, progesterone receptor, and lacks or has low levels of human epidermal growth factor receptor 2 (HER2))

On April 22, 2025, the Company announced its ongoing pivotal Phase 3 clinical study (listed on ClinicalTrials.gov as NCT06072612) has consented over 100 and has enrolled over 75 patients. BriaCell anticipates completing patient enrollment in late 2025 or early 2026, and may report top line data as early as H1-2026.

On April 24, 2025, BriaCell Confirmed 100% Resolution of Lung Metastasis with Bria-OTS (Figure 1). Complete resolution of lung metastasis confirmed at 4 months follow-up in a hormone receptor positive (HR+) breast cancer patient. Treatment well-tolerated and the patient remained on study with stable disease elsewhere. Sustained clinical response supports Bria-OTS personalized, off-the-shelf immunotherapy approach in Phase 1/2a metastatic breast cancer study.Figure 1: Treatment with Bria-OTS monotherapy resulted in 100% resolution of tumor in the lung of the MBC patient following 2 months of therapy and confirmed at 4 months of therapy1 (axial and coronal views)

1 Note that the other white dots in the lungs are blood vessels.

As shown, the lesion in the patient’s right lung is undetectable after two months and confirmed resolved at 4 months. The updated images supersede those previously reported.

On April 28, 2025, the Company closed an underwritten public offering for the purchase and sale of 3,066,666 units for aggregate gross proceeds of approximately $13.8 million before deducting underwriting discounts, commissions, and other offering expenses (the “April 2025 Offering”). Of those units, 2,405,966 were “regular” units, each consisting of one common share and one five-year publicly traded warrant at a combined purchase price of $4.50 per unit, and 660,700 were “pre-funded” units, each consisting of one pre-funded warrant (at a $0.001 strike) and one five-year publicly traded warrant at a combined purchase price of $4.499 per unit. All warrants have an exercise price of $5.25 per share, are immediately exercisable, and expire five years from the date of issuance (“April 2025 Warrants”). The April 2025 Warrants trade on the NASDAQ under the symbol “BCTXZ.”

In connection with the April 2025 Offering, the Company issued 153,333 representative’s warrants. The representative’s warrants are immediately exercisable at an exercise price of $5.625 per share and expire five years from the date of issuance.

On April 30, 2025, BriaCell reported “Late-Breaker” Phase 3 data at AACR 2025. Positive tolerability profile and potential response biomarkers were identified. Phase 3 clinical data showed potential predictive biomarkers for treatment response, first identified in Phase 2 study. Biomarkers could be utilized to predict and provide better patient outcomes, including response rates and survival benefits. Positive delayed-type hypersensitivity (DTH) (p = 0.001) and a favorable Neutrophil-to-Lymphocyte Ratio (NLR) (p = 0.02) were linked to longer progression-free survival (PFS) in Phase 3 patients. Presence of Circulating Tumor Cells (CTC) after patients’ initial Phase 3 treatment supports their role as negative prognostic marker (p = 0.04). The Bria-IMT Phase 3 regimen was well-tolerated with a preferred tolerability profile.

On May 23, 2025, BriaCell reported that its abstracts showcased positive survival and clinical benefit data at ASCO 2025. Phase 2 survival and clinical benefit data met or exceeded outcomes of FDA-approved therapies in comparable metastatic breast cancer patients, with no treatment-related discontinuations. Successful completion of the pivotal Phase 3 study may support Biologics License Application, Priority Review, Full Approval, and Commercialization.

On May 27, 2025, BriaCell announced that the Bria-OTS Phase 1/2 Study cleared safety evaluation, and BriaCell dosed its first patient in Bria-OTS combination with an immune checkpoint inhibitor. Specifically, Bria-OTS has cleared its safety evaluation in the Phase 1/2 study monotherapy dosage setting. Phase 1/2 study has now transitioned to dosing patients in combination with checkpoint inhibitor in metastatic breast cancer. The first Bria-OTS monotherapy patient remains on study with confirmed resolution of lung metastasis.

Results of Operations for the Three Months Ended April 30, 2025 and 2024

(Unaudited)

(Unaudited)

Research, Development, and Clinical Trial Costs

Research costs are comprised primarily of (i) salaries and wages to Company employees at our laboratory and in clinical development; and (ii) clinical trials and investigational drug costs, which include the testing and manufacture of our investigational drugs and costs of our clinical trials.

The following is a breakdown of our research, development, and clinical trial costs by nature of expenses:

For the three-month period ended April 30, 2025, total research, development, and clinical trial costs amounted to $4,810,196 as compared to $7,657,632 for the three-month period ended April 30, 2024. This reduction was primarily driven by lower clinical trial sites and investigational drug costs, which decreased from $6,165,072 in 2024 to $3,175,543 in 2025. The decrease reflects the conclusion of the Bria-IMT™ Phase 1/2a trial and a focus on optimizing expenditures for the pivotal Phase 3 trial. Wages and salaries increased considerably, from $1,090,902 in 2024 to $1,303,157 in 2025, reflecting the hiring of additional employees. Laboratory rent increased to $114,330 in 2025, up from $109,500 in 2024, due to expanded use of facilities to support ongoing research. Supplies decreased, from $165,264 in 2024 to $157,184 in 2025, driven by lowered spending. Depreciation expenses of $22,839 were recognized in 2025, reflecting investments in capital assets to support research activities. Professional fees increased to $650 in 2025, compared to $581 in 2024. Notably, share-based compensation expenses decreased significantly, from $126,313 in 2024 to $36,493 in 2025, contributing to the overall reduction in research, development, and clinical trial expenses.

Clinical trial expenses for the period are as follows:

Clinical trial expenses for the three months ended April 30, 2025, were $3,190,751, compared to $4,359,850 during the same period in 2024. The slight decrease is primarily attributable to the conclusion of the Bria-IMT™ Phase 1/2a clinical trial in fiscal 2024, resulting in lower associated costs. As expenses for the Bria-IMT™ Phase 1/2a trial declined, resources have been increasingly directed toward the pivotal Phase 3 study, which remains our primary focus. At the same time, we have begun incurring costs related to the Bria-OTS™ Phase 1/2a trial, which commenced in August 2024.

For the three-month period ended April 30, 2025, Bria-IMT™ Pivotal Phase 3 Study costs amounted to $2,708,394, a decrease from $3,764,521 in 2024. This decrease reflects the planned phasing of expenditures within the pivotal study; the prior-year quarter included higher up-front activities, whereas current spending is concentrated on ongoing patient recruitment, treatment, and data-management costs as we push toward key milestones.

For the three-month period ended April 30, 2025, Bria-IMT™ Phase 1/2a costs were $300,013, a significant decline from $898,528 in 2024, as the trial has now concluded. The remaining expenses primarily relate to final data analysis and study close-out activities.

For the three-month period ended April 30, 2025, Bria-OTS™ Phase 1/2a costs totaled $182,344, compared to $nil in 2024. The increase is due to the initiation of the Bria-OTS™ Phase 1/2a trial in August 2024.

General and Administrative Expenses

For the three-month period ended April 30, 2025, general and administrative expenses amounted to $1,518,059, compared to $1,572,016 for the same period in 2024. The slight decrease was primarily due to operational efficiencies, which offset other cost fluctuations, resulting in overall stable general and administrative expenses quarter over quarter.

Financial income (expenses), net

For the three-month period ended April 30, 2025, financial expense amounted to $9,762, compared to income of $13,215 for the three-month period ended April 30, 2024. Financial expense for the 2025 period consisted of $26,632 in interest income offset by $585 foreign exchange loss and interest expense of $36,979 . In comparison, financial income for the 2024 period included $15,606 in interest income and a $2,391 foreign exchange loss. The decrease in financial income to a loss from 2024 to 2025 was primarily due to higher interest expense in 2025 compared to nil in 2024.

Loss for the period

The Company reported a loss of $6,224,929 for the three-month period ended April 30, 2025, compared to income of $1,692,242 for the same period in 2024. The swing to a net loss was primarily driven by a significantly smaller non-cash gain from the change in fair value of the warrant liability, which declined from $10,945,672 in 2024 to $175,826 in 2025. Additionally, research, development, and clinical trial expenses decreased from $7,657,632 in 2024 to $4,810,196 in 2025, mainly due to lower clinical-trial and investigational-drug costs following the completion of the Bria-IMT™ Phase 1/2a trial, partially offsetting the impact of the reduced warrant-liability gain.

Results of Operations for the Nine Months Ended April 30, 2025 and 2024

(Unaudited)

(Unaudited)

Research, Development, and Clinical Trial Costs

Research costs are comprised primarily of (i) salaries and wages to Company employees at our laboratory; and (ii) Clinical trials and investigational drug costs, which include the testing and manufacture of our investigational drugs and costs of our clinical trials.

The following is a breakdown of our research, development, and clinical trial costs by nature of expenses:

For the nine-month period ending April 30, 2025, research, development and clinical trial costs amounted to $14,160,314, a significant decrease from the $22,772,344 incurred during the same period in 2024. This reduction was primarily driven by lower clinical trial sites and investigational drug costs, which decreased from $17,763,490 in 2024 to $9,732,786 in 2025. The decrease reflects the conclusion of the Bria-IMT™ Phase 1/2a trial and a focus on optimizing expenditures for the pivotal Phase 3 trial. Wages and salaries increased slightly, from $3,513,306 in 2024 to $3,544,267 in 2025, reflecting the hiring of additional employees. Laboratory rent increased to $342,990 in 2025, up from $305,980 in 2024, due to expanded use of facilities to support ongoing research. Supplies decreased, from $566,830 in 2024 to $341,878 in 2025, driven by lowered spending. Depreciation expenses of $68,517 were recognized in 2025, reflecting investments in capital assets to support research activities. Professional fees increased to $9,826 in 2025, compared to $4,363 in 2024, primarily due to consulting and support for clinical operations. Notably, share-based compensation expenses decreased significantly, from $618,375 in 2024 to $120,050 in 2025, contributing to the overall reduction in research, development, and clinical trial expenses.

Clinical trial expenses for the period are as follows:

Clinical trial expenses for the nine-month period ended April 30, 2025, were $9,822,400, compared to $12,650,189 during the same period in 2024. This decrease reflects the completion of the Bria-IMT™ Phase 1/2a trial and the planned phasing of expenditures within the pivotal Phase 3 study, which remains our primary focus. While resources have been increasingly directed toward Phase 3, we have also begun incurring costs related to the Bria-OTS™ Phase 1/2a trial, which commenced in August 2024.

For the nine-month period ended April 30, 2025, Bria-IMT™ Pivotal Phase 3 Study costs totaled $8,797,505, up from $8,651,728 in 2024. The increase highlights our commitment to accelerating trial progress, with efforts focused on expanding patient recruitment, treatment, site activation, and data-management activities to support the study’s advancement.

Bria-IMT™ Phase 1/2a costs declined to $699,356, a sharp reduction from $3,998,461 in 2024, reflecting the trial’s conclusion. The remaining costs are tied to final reporting, regulatory submissions, and study close-out activities.

For the nine-month period ended April 30, 2025, Bria-OTS™ Phase 1/2a costs totaled $325,539, compared to $nil in 2024. The increase is due to the initiation of the Bria-OTS™ Phase 1/2a trial in August 2024.

We remain committed to advancing the pivotal Phase 3 study of Bria-IMT™ in advanced breast cancer and continue to allocate resources strategically to ensure its successful execution.

General and Administrative Expenses

For the nine-month period ended April 30, 2025, general and administrative expenses amounted to $4,490,216, compared to $4,789,778 for the same period in 2024. The slight decrease was primarily due to operational efficiencies, which offset other cost fluctuations, resulting in overall stable general and administrative expenses period over period.

Financial income (expenses), net

For the nine-month period ended April 30, 2025, financial income amounted to $69,310, compared to $274,665 for the nine-month period ended April 30, 2024. Financial income for the 2025 period consisted of $86,514 in interest income and a $19,775 foreign exchange gain offset by interest expense of $36,979. In comparison, financial income for the 2024 period included $288,016 in interest income, offset by a $13,351 foreign exchange loss. The decrease in financial income from 2024 to 2025 was primarily due to lower interest income, reflecting reduced cash and cash equivalents available for investment in interest-bearing funds.

Loss for the period

The Company reported a loss of $18,392,033 for the nine-month period ended April 30, 2025, compared to $3,682,796 in 2024. The increase was primarily due to a significantly smaller gain on the fair value of the warrant liability, which was $366,024 in 2025 compared to $23,660,003 in 2024. This impact outweighed the reduction in research, development, and clinical trial expenses, which decreased from $22,772,344 in 2024 to $14,160,314 in 2025, mainly due to lower clinical-trial and investigational-drug costs following the completion of the Bria-IMT™ Phase 1/2a trial.

Liquidity, Capital Resources and Going Concern Uncertainty

The financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future.

As of April 30, 2025, and a positive working capital balance of $10,454,565 (July 31, 2024 negative balance of $3,807,303).

As of April 30, 2025, the Company has total assets of $17,001,798 (July 31, 2024 - $5,872,261), a positive working capital of $10,454,565 (July 31, 2024 – negative balance of $3,807,303) and an accumulated deficit of $103,664,194 (July 31, 2024 - $85,443,697).

As of April 30, 2025, the Company’s capital resources consist primarily of cash and cash equivalents, comprising mostly of cash on deposit with banks, investments in money market funds, investments in U.S. government securities, U.S. government agency securities, and investment grade corporate debt securities. Our investment policy and strategy are focused on preservation of capital and supporting our liquidity requirements.

Historically, the Company has financed its operation through private and public placement of equity securities, as well as debt financing. The Company’s ability to fund its longer-term cash requirements is subject to multiple risks, many of which are beyond its control. The Company intends to raise additional capital, either through debt or equity financings in order to achieve its business plan objectives. Management believes that it can be successful in obtaining additional capital; however, there can be no assurance that the Company will be able to do so. There is no assurance that any funds raised will be sufficient to enable the Company to attain profitable operations or continue as a going concern. To the extent that the Company is unsuccessful, the Company may need to curtail or cease its operations and implement a plan to extend payables or reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. To this end, for several months during calendar year 2024, certain directors and officers agreed to defer payment of their directors’ fees/compensation until we completed a financing, after which, these fees were paid in full. Further, certain officers have indicated their willingness to receive a portion of their compensation in equity of the Company, subject to applicable Nasdaq rules. In addition, we continue to reduce expenditure on certain non-core activities whilst maintaining our focus on our Phase 3 Bria-IMT™ pivotal study in advanced metastatic breast cancer.

During the period ended April 30, 2025, the Company’s overall position of cash and cash equivalents increased by $11,598,164 from the period ended July 31, 2024 (including effects of foreign exchange). This increase in cash can be attributed to the following:

The Company’s net cash used in operating activities during the period ended April 30, 2025, was $20,038,075 as compared to $20,090,398 for the period ended April 30, 2024.

Cash gained in financing activities for the period ended April 30, 2025, was 31,891,239 as compared to nil for the period ended April 30, 2024.

Off-Balance Sheet Arrangements

None.

Tabular Disclosure of Contractual Obligations

None.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from the information provided in the MD&A section in our Annual Report.

New Accounting Policies Adopted

The Company did not adopt any new accounting policies during the period ended April 30, 2025.

The Company’s financial instruments consist of cash and cash equivalents, investments, warrant liability, short term loans, trade payable, and accrued expenses and other payables. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values, unless otherwise noted.

Management understands that the Company is exposed to financial risk arising from fluctuations in foreign exchange rates and the degree of volatility of these rates as a portion of the Company’s transactions occur in Canadian Dollars (mainly costs relating to being a public company in Canada), and the Company’s functional and presentation currency is the US dollar. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management process. The overall objectives of the Board are to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility.

The type of risk exposure and the way in which such exposure is managed is as follows:

Credit Risk

The Company has no significant concentration of credit risk arising from operations. Management believes that the credit risk concentration with respect to financial instruments is remote.

Liquidity Risk

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities as they come due. As of April 30, 2025, the Company has total assets of $17,001,798 (July 31, 2024 - $5,872,261) and a positive working capital balance of $10,454,565 (July 31, 2024 - negative working capital balance of $3,807,303).

Market Risk

Interest rate risk

Interest Rate risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market interest rates. Loans payable include both fixed and variable interest rates; however, the Company does not believe it is exposed to material interest rate risk.

Price risk

As the Company has no revenues, price risk is remote.

Exchange risk

The Company is exposed to foreign exchange risk as a portion of the Company’s transactions occur in Canadian Dollars (mainly costs relating to being a public company in Canada) and, therefore, the Company is exposed to foreign currency risk at the end of the reporting period through its Canadian denominated accounts payable and cash. As of April 30, 2025, a 5% depreciation or appreciation of the Canadian dollar against the US dollar would not have a material effect on the in total loss and comprehensive loss.

Fair Values

The carrying values of cash and cash equivalents, trade payable, warrant liability, short term loans, and accrued expenses and other payables approximate their fair values due to their short terms to maturity.

Cash and cash equivalents are valued using quoted market prices in active markets. The fair value of the warrant liability is determined based on the nature of the warrant. For publicly traded warrants we use the quoted market price and for all other warrants we use the Black-Scholes pricing model.

Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our principal executive officer and principal accounting and financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, our principal executive officer and principal accounting and financial officer have concluded that as of April 30, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have not been material changes in our internal control over financial reporting during the quarter ended April 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes from the risk factors previously disclosed in our Annual Report for the year ended July 31, 2024.