EX-99.1 2 nymx_ex991.htm QUARTERLY REPORT FOR THE QUARTER ENDED nymox_ex991.htm

EXHIBIT 99.1

 

 

MANAGEMENT'S DISCUSSION AND ANALYSIS (in US dollars)

 

This Management’s discussion and analysis (“MD&A”) comments on the Corporation’s operations, performance and financial condition as at and for the three months ended March 31, 2018 and 2017. This MD&A should be read together with the unaudited condensed interim Consolidated Financial Statements and the related notes. This MD&A is dated May15, 2018. All amounts in this report are in U.S. dollars, unless otherwise noted.

 

Except as otherwise indicated, all financial information contained in this MD&A and in the unaudited condensed interim Consolidated Financial Statements has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The unaudited condensed interim Consolidated Financial Statements and this MD&A were reviewed by the Corporation’s Audit Committee and were approved by our Board of Directors.

 

Additional information about the Corporation can be obtained on EDGAR at www.sec.gov or on SEDAR at www.sedar.com.

 

Overview

 

Corporate Profile

 

Nymox Pharmaceutical Corporation is a biopharmaceutical company focused on developing its drug candidate, NX-1207, for the treatment of BPH and the treatment of low-grade localized prostate cancer. Since 1989, the Corporation’s activities and resources have been directed primarily on developing certain pharmaceutical technologies. Since 2002, Nymox has been developing its novel proprietary drug candidate, NX-1207, for the treatment of benign prostatic hyperplasia (“BPH”). NX-1207 showed positive results for the treatment of BPH in Phase 1 and 2 clinical trials in the U.S. and in follow-up studies of available subjects from the completed clinical trials. In 2009, Nymox started two pivotal double blind placebo controlled Phase 3 trials for NX-1207, NX02-0017 and NX02-0018, that were conducted at investigational sites across the U.S. with a total enrollment of approximately 1,000 patients. Nymox also initiated subsequent open-label U.S. re-injection Phase 3 safety studies, NX02-0020 and NX02-0022. The NX02-0017 study completed patient enrollment and participation in December 2013 and the NX02-0018 study in May 2014. Top-line results of the Phase 3 NX02-0017 and NX02-0018 U.S. clinical trials of NX-1207 for BPH at 12 months post-treatment were not statistically significant compared to placebo.

 

The Corporation is in the process of further data analysis and assessments of the two studies, and expects to continue its efforts to work on the development program. Nymox is also developing NX-1207 for the treatment of low-grade localized prostate cancer. A Phase 2 study of NX-1207 for low grade localized prostate cancer was started in 2012 with positive results reported in 2014. The Corporation is in the process of working towards definitive studies for this indication. The Corporation also has an extensive patent portfolio covering its marketed products, its investigational drug as well as other therapeutic and diagnostic indications. Nymox developed the AlzheimAlert™ test, which is certified with a CE Mark in Europe. Nymox developed and markets NicAlert™ and TobacAlert™; which are tests that use urine or saliva to detect use of and exposure to tobacco products. NicAlert™ has received clearance from the FDA and is also certified with a CE Markin Europe. TobacAlert™ is the first test of its kind to accurately measure second and third hand smoke exposure in individuals.

 

 
1
 
 

  

During the second half of 2015, the Corporation has filed an F-3 Registration Statement made effective on August 4, 2015. The Company plans to utilize proceeds from the F-3 registration along with private placements and other types of financings, collaboration agreements, and revenues from product sales to fund its operations and research programs. In order to achieve its business plan and the realization of its assets and liabilities in the normal course of operations, the Corporation anticipates the need to raise additional debt or capital in the near term and/or achieve sales and other revenue-generating activities. Management has taken steps to reduce expenditures going forward in the short term by staff reductions, deferral of management salaries, and operational changes.

 

The top-line failure of the two Phase 3 studies of NX-1207 for BPH materially affects the Corporation’s current ability to fund its operations, meet its cash flow requirements, realize its assets and discharge its obligations. Management believes that current cash balances as of March 31, 2018 and anticipated funds from product sales are not sufficient to fund substantially all of its planned business operations and research and development programs over the next year. The Corporation intends to access financing through other sources of capital in order to fund these operations and activities over the next year.

 

We have incurred operating losses throughout our history. Management believes that such operating losses will continue for at least the next few years as a result of expenditures relating to research and development of our potential therapeutic products.

 

On July 27, 2015 Nymox announced initial clinical results from its ongoing analysis and assessment of its Phase 3 development program in BPH. The Company announced that the U.S. long-term extension prospective double-blind Phase 3 BPH studies NX02-0017 and NX02-0018 of fexapotide triflutate (NX-1207) for BPH had successfully met the pre-specified primary endpoint of long-term symptomatic statistically significant benefit superior to placebo. Fexapotide showed an excellent safety profile with no evidence of drug-related short-term or long-term toxicity nor any significant related molecular side effects in the 2 studies. As a result of the clinical benefits observed in the long-term extension trial, the Company announced that it intends to meet with regulatory authorities in various jurisdictions around the world and in due course explore the possibility to proceed to file for approval where possible.

 

Forward Looking Statements

 

Certain statements included in this MD&A may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities legislation and regulations, and are subject to important risks, uncertainties and assumptions. This forward-looking information includes amongst others, information with respect to our objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe” or “continue” or the negatives of these terms or variations of them or similar terminology. We refer you to the Corporation’s filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission, and of our Form 20-F, for a discussion of the various factors that may affect the Corporation’s future results. The results or events predicted in such forward-looking information may differ materially from actual results or events.

 

 
2
 
 

 

Results of Operations

 

Three Months Ended March 31

 

2018

 

 

2017

 

Total revenues

 

 $ 152,165

 

 

 $ 78,394

 

Net loss

 

 $ (2,664,089 )

 

 $ (2,813,703 )

Loss per share (basic & diluted)

 

 $ (0.05 )

 

 $ (0.06 )

 

Results of Operations – Q1 2018 compared to Q1 2017

 

Net loss was $2,664,089, or $0.05 per share, for the quarter ended March 31, 2018, compared to net loss of $2,813,703, or $0.06 per share, for the quarter ended March 31, 2017. The decrease in net losses for the three months ended March 31, 2018 compared to the same period in 2017 is primarily due to stock compensation charges of $1,006,805 in 2018 compared to $1,532,053 in 2017 and an increase of $239,990 in various professional fees. The weighted average number of common shares outstanding for the three months ended March 31, 2018 was 57,055,742 compared to 49,702,744 for the same period in 2017.

 

Revenues

 

Revenues from sales of goods amounted to $152,165 for the quarter ended March 31, 2018, compared with $78,394 for the quarter ended March 31, 2017.

 

Research and Development

 

Research and development expenditures were $1,956,786 for the quarter ended March 31, 2018, compared with $1,676,340 for the quarter ended March 31,2017. Research and development expenditures mainly include costs incurred in advancing Nymox’s BPH product candidate NX-1207 through clinical trials, as well as costs related to its R&D pipeline. Research and development expenditures also include stock compensation charges of $503,403 in the three months ended March 31, 2018 and $748,226 in the comparative period in 2017.

 

Marketing Expenses

 

Marketing expenditures were $52 for the quarter ended March 31, 2018, compared with $227 for the quarter ended March 31, 2017. The Corporation expects that marketing expenditures will increase if and when new products are launched on the market.

 

General and Administrative Expenses

 

General and administrative expenses were $793,861 for the quarter ended March 31, 2018, compared with $1,118,879 for the quarter ended March 31, 2017. General and administrative expenditures also include stock compensation charges of $503,402 for the three months ended March 31, 2018 and $783,827 in the comparative period in 2017. The decrease of $325,019 for the quarter ended March 31, 2018 is mainly attributable to a decrease of $280,425 in stock compensation compared to 2017. The Corporation expects that general and administrative expenditures will increase as new product development leads to expanded operations.

 

Finance costs

 

Net finance costs were $5,782 for the quarter ended March 31, 2018, compared with net finance costs of $51,470 for the quarter ended March 31, 2017. The decrease of $45,688 for the quarter ended March 31, 2018 is mainly attributable to a decrease of 49,260 in a fully converted convertible note related accretion and interest expense.

 

 
3
 
 

  

The Corporation incurs expenses in the local currency of the countries in which it operates, which include the United States, Canada and the Bahamas. Foreign exchange fluctuations had no meaningful impact on the Corporation’s results in 2018 or 2017.

 

Inflation

 

The Corporation does not believe that inflation has had a significant impact on its results of operations.

 

Contractual Obligations

 

Nymox has no contractual obligations of significance other than its accounts payable, accrued liabilities and the following:

 

Contractual Obligations

 

Total

 

 

Less than 1 year

 

 

1-3 years

 

 

4-5 years

 

Rent for laboratory and office space

 

 $ 335,088

 

 

 $ 145,128

 

 

 $ 189,960

 

 

 $ 0

 

Insurance premium installments

 

 $ 23,168

 

 

 $ 23,168

 

 

 $ 0

 

 

 $ 0

 

Operating leases

 

 $ 2,494

 

 

 $ 2,494

 

 

 $ 0

 

 

 $ 0

 

Total Contractual Obligations other than accounts payable and accrued liabilities

 

 $ 360,750

 

 

 $ 170,790

 

 

 $ 189,960

 

 

 $ 0

 

 

Off-Balance Sheet Arrangements

 

The Corporation has no binding commitments for the purchase of property, equipment or intellectual property. The Corporation has no commitments that are not reflected in the statement of financial position except for operating leases and insurance premium installments.

 

Transactions with Related Parties

 

The Corporation had no transactions with related parties in 2018 and 2017 other than those disclosed for key management personnel in note 5 of the unaudited condensed interim Consolidated Financial Statements.

 

Financial Position

 

Liquidity, Capital Resources

 

As of March 31,2018, cash and receivables including tax credits receivable totaled $872,348 compared with $937,500 at December 31, 2017. The decrease is mainly due to cash used for general and administrative purposes and to support the preparation of the regulatory submissions of Fexapotide.

 

We used cash in our operating activities in the amounts of $1,833,127 and $739,085 for the quarter ended March 31, 2018 and 2017, respectively.

 

Investing activities have been insignificant and substantially all cash flows have been provided by financing activities, specifically proceeds from the issuance of common stock.

 

On January 26, 2018, the Corporation completed one private placement to an accredited investor for an amount of $322,000 and 123,846 shares were issued.

  

On February 1st, 2018, the Corporation completed one private placement to an accredited investor for an amount of $1,000,002 and 384,616 shares were issued.

  

 
4
 
 

  

On February 22, 2018, the Corporation completed one private placement to an accredited investor for an amount of $130,000 and 50,000 shares were issued.

 

On February 28, 2018, the Corporation completed one private placement to an accredited investor for an amount of $380,000 and 146,154 shares were issued.

 

Other than the financing discussed above, the Corporation does not have arranged sources of financing.

 

We have incurred substantial operating losses since our inception due in large part to expenditures for our research and development activities and expense charges related to the issuance of stock options to our key employees. As at March 31, 2018, we had an accumulated deficit of $147,183,518, and we have negative cash flows from operations. The Corporation’s working capital deficiency is $1,062,577 at March 31, 2018. Our current level of annual expenditures exceeds the anticipated revenues from sales of goods and may not be covered by additional sources of funds.

 

In response to the top-line twelve month failure of the two Phase 3 trials of NX-1207 for BPH, Management has implemented steps to reduce expenditures, including staff reductions for the U.S. BPH development program for NX-1207, deferral of management salaries, and other operational changes. While management believes the use of the going concern assumption is appropriate, there is no assurance the above actions will be successful. The Condensed Unaudited Interim Consolidated Financial Statements for the three months ended March 31, 2018, do not include any adjustments or disclosures that may be necessary should the Corporation not be able to continue as a going concern. If the going concern assumption is not appropriate for the Condensed Unaudited Interim Consolidated Financial Statements for the three months ended March 31, 2018, then adjustments may be necessary to the carrying value and classification of assets and liabilities and reported results of operations and such adjustments could be material.

 

Capital disclosures

 

The Corporation's objective in managing capital is to ensure a sufficient liquidity position to finance its research and development activities, general and administrative expenses, working capital and overall capital expenditures, including those associated with patents. The Corporation makes every attempt to manage its liquidity to minimize shareholder dilution when possible.

  

The capital management objectives remain the same as for the previous fiscal year. When possible, the Corporation tries to optimize its liquidity needs by non-dilutive sources, including sales, collaboration agreements, research tax credits and interest income. The Corporation's general policy on dividends is to retain cash to keep funds available to finance its research and development and operating expenses.

 

The Corporation is not subject to any capital requirements imposed by external parties other than the Nasdaq Capital Market requirements related to the Listing Rules.

 

 
5
 
 

  

Disclosure Controls and Procedures

 

Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed is accumulated and communicated to senior management on a timely basis so that appropriate decisions can be made regarding public disclosure. The Corporation’s Chief Executive Officer and its Chief Financial Officer are responsible for establishing and maintaining disclosure controls and procedures. They are assisted in this responsibility by the Corporation’s audit committee. Based on an evaluation of the Corporation’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 and National Instrument 52-109), the Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures is effective as of March, 31 2018.

 

ThayerONeal expressed an opinion on the effectiveness of the Corporation’s internal control over financial reporting for the year ended December 31,2017.

 

Changes in Internal Controls over Financial Reporting

 

We have made significant improvements in Internal Controls over Financial Reporting since year 2017.

 

Management believes that proper segregation of duties is critical to a properly designed and operating internal control environment for financial reporting. The Corporation developed a remediation plan, with oversight from the Audit Committee, to remediate the following material weaknesses in internal controls over financial reporting, first identified in 2015:

 

The Corporation did not employ a sufficient complement of finance and accounting personnel to ensure that there was proper segregation of duties related to certain processes, primarily impacting the expenditures/disbursements processes and information technology general controls (“ITGC”) and sufficient compensating controls did not exist in these areas.

 

The Corporation’s remediation plan included hiring an external accounting expert, functioning in a Controller role, at the beginning of 2017 to assist in the accounting of non-routine complex accounting matters and to enhance oversight of the financial reporting process. The accounting system was transferred to a new general ledger software system on a secure cloud platform. Additionally, we contracted with a Managed Service Provider to maintain our IT infrastructure. These changes allowed for proper segregation of duties and strengthened the controls related to the expenditures/disbursements approval process, financial statement review and information technology general controls (“ITGC”). This remediation plan was implemented and functioning as of September 30, 2017.

 

Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate this risk.

 

 
6
 
 

 

NYMOX PHARMACEUTICAL CORPORATION

Consolidated Condensed Financial Statements (Unaudited)

 

Consolidated Condensed Financial Statements

 

 

Consolidated Condensed Statements of Operations (Unaudited)

8

 

Consolidated Condensed Statements of Financial Position as of March 31, 2018 and December 31, 2017 (Unaudited)

9

 

Consolidated Condensed Statements of Cash Flow (Unaudited)

10

 

Consolidated Condensed Statements of Changes in Equity (Unaudited)

11

 

Notes to Condensed Interim Consolidated Financial Statements

 

1.

Basis of preparation

12

2.

Liquidity, going concern and management's response

12

3.

Share capital

12

4.

Earnings per share

14

5.

Related party transactions

14

6.

Subsequent events

15

 

 
7
 
 

 

NYMOX PHARMACEUTICAL CORPORATION
Consolidated Condensed Statements of Operations (Unaudited)
Three-month periods ended March 31, 2018 and 2017
(In Thousands of US dollars Other Than Per Share Amounts and Thousands of Shares)

 

 

 

 

 

 

Three months ended

March 31,

 

 

 

Note

 

 

2018

 

 

2017

 

Revenues

 

 

 

 

 

 

 

 

 

Sales of goods

 

 

 

 

 $ 152

 

 

 $ 78

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

 

 

 

 1,957

 

 

 

 1,676

 

General and administrative and Marketing

 

 

 

 

 

 794

 

 

 

 1,119

 

Cost of sales

 

 

 

 

 

 59

 

 

 

 45

 

Total expenses

 

 

 

 

 

 2,810

 

 

 

 2,840

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

 

 

 

 (2,658 )

 

 

 (2,762 )

 

 

 

 

 

 

 

 

 

 

 

 

Other expense

 

 

 

 

 

 

 

 

 

 

 

Finance costs

 

 

 

 

 

 (6 )

 

 

 (52 )

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income tax

 

 

 

 

 

 (2,664 )

 

 

 (2,664 )

Income tax provision(recovery)

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 

 

 

 $ (2,664 )

 

 $ (2,814 )

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share Basic & Diluted

 

4

 

 

 $ (0.05 )

 

 $ (0.06 )

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding Basic & Diluted

 

4

 

 

 

 57,056

 

 

 

 49,702

 

 

See accompanying notes to the unaudited consolidated condensed financial statements.

  

 
8
 
 

  

NYMOX PHARMACEUTICAL CORPORATION

Consolidated Condensed Statements of Financial Position (Unaudited)

March 31, 2018 and December 31, 2017

(In Thousands of US Dollars and Thousands of Shares)

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

Note

 

 

2018

 

 

2017

 

Assets

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash

 

 

 

 

 $ 850

 

 

 $ 851

 

Accounts receivable

 

 

 

 

 

 15

 

 

 

 79

 

Other receivables

 

 

 

 

 

 8

 

 

 

 8

 

Inventory

 

 

 

 

 

 14

 

 

 

 15

 

Security deposit

 

 

 

 

 

 7

 

 

 

 7

 

Prepaid expenses and other current assets

 

 

 

 

 

 42

 

 

 

 1

 

Total current assets

 

 

 

 

 

 936

 

 

 

 961

 

Non-current assets

 

 

 

 

 

 

 

 

 

 

 

Property and equipment

 

 

 

 

 

 1

 

 

 

 1

 

Security deposit

 

 

 

 

 

 17

 

 

 

 17

 

Total assets

 

 

 

 

 $ 954

 

 

 $ 979

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

3

 

 

 $ 1,998

 

 

 $ 2,230

 

Total liabilities

 

 

 

 

 

 1,998

 

 

 

 2,230

 

Equity

 

 

 

 

 

 

 

 

 

 

 

Share capital – unlimited authorized shares at no par value 57,843 and 56,378 shares outstanding at March 31, 2018 and December 31, 2017, respectively

 

3

 

 

 

 110,060

 

 

 

 108,196

 

Share capital subscription receivable

 

3

 

 

 

 (718 ))

 

 

 (718 )

Additional paid-in capital

 

3

 

 

 

 36,797

 

 

 

 35,790

 

Accumulated deficit

 

3

 

 

 

 (147,183 )

 

 

 (144,519 )

Total stockholders’ equity (deficit)

 

 

 

 

 

 (1,044 )

 

 

 (1,251 )

Total liabilities, equity and stockholders’ equity (deficit)

 

 

 

 

 $ 954

 

 

 $ 979

 

  

See accompanying notes to the unaudited condensed consolidated financial statements.

  

 
9
 
 

 

NYMOX PHARMACEUTICAL CORPORATION
Consolidated Condensed Statements of Cash Flows (Unaudited)

Three-month periods ended March 31, 2018 and 2017
(In Thousands of US Dollars)

 

 

 

Note

 

 

2018

 

 

2017

 

Cash flows used in operating activities

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 $ (2,664 )

 

 $ (2,814 )

Adjustments for:

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

3

 

 

 

 1,007

 

 

 

 1,532

 

Issued stock for commission

 

 

 

 

 

 32

 

 

 

 0

 

Convertible note related accretion expense

 

 

 

 

 

 0

 

 

 

 33

 

Changes in non-cash operating balances:

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable and other receivables

 

 

 

 

 

 64

 

 

 

 (6 )

Prepaid expenses

 

 

 

 

 

 (41 )

 

 

 (30 )

Inventories

 

 

 

 

 

 1

 

 

 

 1

 

Accounts payable and accrued liabilities

 

 

 

 

 

 (232 )

 

 

 544

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash flows used in operating activities

 

 

 

 

 

 (1,833 )

 

 

 (740 )

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from (used in) financing activities

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of share capital

 

3

 

 

 

 1,832

 

 

 

 -

 

Warrants Exercise

 

 

 

 

 

 

 

 

 

 354

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash flows provided by financing activities

 

 

 

 

 

 1,832

 

 

 

 354

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows used in investing activities

 

 

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash

 

 

 

 

 

 (1 )

 

 

 (386 )

Cash, beginning of the period

 

 

 

 

 

 851

 

 

 

 2,018

 

Cash, end of the period

 

 

 

 

 $ 850

 

 

 $ 1,632

 

  

See accompanying notes to the unaudited condensed consolidated financial statements

 

 
10
 
 

 

NYMOX PHARMACEUTICAL CORPORATION
Consolidated Condensed Statement of Changes in Equity (Unaudited)  

Three-month period ended March 31, 2018

(In Thousands of US Dollars and Thousands of Shares)

 

 

 

Common Shares

 

 

Dollars

 

 

Share capital Subscription

 

 

Additional Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Total

 

Balance, December 31, 2017

 

 

 56,378

 

 

 $ 108,196

 

 

 $ (718 )

 

 $ 35,790

 

 

 $ (144,519 )

 

 $ (1,251 )

Share issuance for cash

 

 

 705

 

 

 

 1,832

 

 

 

 -

 

 

 

 -

 

 

 

 –

 

 

 

 1,832

 

Stock-based commission

 

 

 10

 

 

 

 32

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 32

 

Stock-based compensation

 

 

 750

 

 

 

 -

 

 

 

 –

 

 

 

 1,007

 

 

 

 –

 

 

 

 1,007

 

Net loss

 

 

 –

 

 

 

 –

 

 

 

 –

 

 

 

 –

 

 

 

 (2,664 )

 

 

 (2,664 )

Balance, March 31, 2018

 

 

 57,843

 

 

 $ 110,060

 

 

 $ (718 )

 

 $ 36,797

 

 

 $ (147,183 )

 

 $ (1,044 )

 

See accompanying notes to the unaudited condensed consolidated financial statements

  

 
11
 
 

 

NYMOX PHARMACEUTICAL CORPORATION

Notes to Unaudited Consolidated Financial Statements

(in US dollars)

  

1.

Basis of preparation:

 

 

(a)

Statement of compliance:

 

The consolidated condensed unaudited interim consolidated financial statements of the Corporation have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and its interpretations as issued by the International Accounting Standards Board (“IASB”) and in accordance with IAS 34, Interim Financial Reporting. The condensed unaudited interim consolidated financial statements do not include all of the information required for full annual financial statements and accordingly should be read in conjunction with the previously issued annual financial statements of the Corporation for the fiscal year ended December 31, 2017 and notes thereto contained in the Corporation’s Annual Report on Form 20-F.

 

The consolidated condensed interim consolidated financial statements were authorized for issuance by the Board of Directors on May 12, 2018.

 

(b)

Basis of measurement:

 

The condensed unaudited interim consolidated financial statements have been prepared as a going concern and on the historical cost basis. The functional currency of the Corporation is the US dollar.

 

2.

Liquidity, Going Concern and Management’s Response

 

Management believes that current cash balances at March 31, 2018 and anticipated funds from product sales are not sufficient to fund substantially all of its planned business operations and research and development programs over the next year. The Corporation intends to access financing through other sources of capital in order to fund these operations and activities over the next year.

 

The Corporation will have to seek other sources of financing in order to be able to pay its obligations as they become due, which could have an impact on its ability to continue as a going concern. Considering recent developments and the need for additional financing, there exists a material uncertainty that casts substantial doubt about the Corporation’s ability to continue as a going concern. These financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate. If the going concern assumption is not appropriate, then adjustments may be necessary to the carrying value and classification of assets and liabilities and reported results of operations and such adjustments could be material.

 

3.

Share capital:

 

The holders of common shares are entitled to receive dividends as declared, which is at the discretion of the Corporation, and are entitled to one vote per share at the annual general meeting of the Corporation. The Corporation has never paid any dividends.

 

(a)

Private placements:

 

In the first quarter of 2018, the Corporation completed four private placements for a total of $1,832,002. A total of 704,616 common shares were issued at an average price of $2.60 per share.

 

 
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NYMOX PHARMACEUTICAL CORPORATION

Notes to Unaudited Consolidated Financial Statements

(in US dollars)

    

(b)

Stock options:

 

The Corporation has established a stock option plan (the “Plan”) for its key employees, its officers and directors, and certain consultants. The Plan is administered by the Board of Directors of the Corporation. The Board may from time to time designate individuals to whom options to purchase common shares of the Corporation may be granted, the number of shares to be optioned to each, and the option price per share. The option price per share cannot involve a discount to the market price at the time the option is granted. The maximum number of shares which may be optioned under the stock option plan is 7,500,000. The maximum number of shares which may be optioned to any one individual is 15% of the total issued and outstanding common shares. Options under the Plan expire ten years after the grant date and vest either immediately or over periods up to six years, and are equity-settled. As of March 31, 2018, 1,790,000 options could still be granted by the Corporation.

 

The following table provides the activity of stock option awards during the three-month period ended March 31, 2018 and for options outstanding and exercisable at the end of the three-month period ended March 31, 2018, the weighted average exercise price and the weighted average years to expiration.

 

 

 

 

 

 

Options

 

 

 

 

 

 

 

 

 

 outstanding

 

 

Weighted

 

 

 

 

 

 

 Weighted

 

 

average

 

 

 

 

 

 

 average

 

 

remaining

 

 

 

 

 

 

 exercise

 

 

contractual life

 

 

 

Number

 

 

 Price

 

 

(in years)

 

Outstanding, December 31, 2017

 

 

 5,710,000

 

 

 $ 1.75

 

 

 

 7.39

 

Expired

 

 

 –

 

 

 

 –

 

 

 

 

 

Cancelled

 

 

 –

 

 

 

 –

 

 

 

 

 

Granted

 

 

 –

 

 

 

 –

 

 

 

 

 

Outstanding, March 31, 2018

 

 

 5,710,000

 

 

 $ 1.75

 

 

 

 7.14

 

Options exercisable

 

 

 5,710,000

 

 

 $ 1.75

 

 

 

 7.14

 

 

 

(c)

Stock-based compensation:

 

 

 

Three months

 

 

 

ended March 31,

 

Employee expenses

 

2018

 

 

 2017

 

Stock options granted in 2015

 

 

 1,006,805

 

 

 

 1,496,453

 

Stock options granted in 2017

 

 

 –

 

 

 

 35,600

 

Total stock-based compensation expense recognized

 

 $ 1,006,805

 

 

 $ 1,532,053

 

  

 
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NYMOX PHARMACEUTICAL CORPORATION

Notes to Unaudited Consolidated Financial Statements

(in US dollars)

   

 

 (c) Stock based compensation continued:

 

The stock-based compensation expense is disaggregated in the statements of operations and comprehensive loss as follows:

 

 

 

Three months

 

 

 

ended March 31,

 

Description

 

2018

 

 

2017

 

Stock-based compensation pertaining to general and administrative

 

 $ 503,402

 

 

 $ 783,827

 

Stock-based compensation pertaining to research and development

 

 

 503,403

 

 

 

 748,226

 

 Total

 

 $ 1,006,805

 

 

 $ 1,532,053

 

 

No options were granted during the three-month period ended March 31, 2018 and 2017.

 

4.

Earnings per share:

 

Weighted average number of common shares outstanding:

 

 

 

Three months

 

 

 

ended March 31,

 

 

 

2018

 

 

2017

 

Issued common shares at beginning of period

 

 

 56,378,306

 

 

 

 49,115,518

 

Effect of shares issued

 

 

 677,436

 

 

 

 587,226

 

Weighted average number of common shares outstanding - basic

 

 

 57,055,742

 

 

 

 49,702,744

 

Weighted average number of shares outstanding – diluted

 

 

 57,055,742

 

 

 

 49,702,744

 

 

There is no difference in diluted as compared to basic earnings per share as the impact would be antidilutive as a result of the net loss.

 

5. Related Party Transactions:

 

The only transactions we have with related parties are compensation arrangements for current compensation, share based compensation and compensation under options for our officers and directors

 

Executive officers and directors participate in the Corporation’s stock option plan. Certain Executive officers are covered under the Corporation’s health plan.

 

 
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NYMOX PHARMACEUTICAL CORPORATION

Notes to Unaudited Consolidated Financial Statements

(in US dollars)

 

Key management personnel compensation is comprised of:

 

 

 

Three months

 

 

 

ended March 31,

 

 

 

2018

 

 

2017

 

Salaries

 

 $ -

 

 

 $ -

 

Short-term employee benefits

 

 

 486

 

 

 

 465

 

Stock-based compensation

 

 

 1,006,805

 

 

 

 1,496,453

 

 

 

 $ 1,007,291

 

 

 $ 1,496,918

 

 

Total honorariums to the independent directors of the Corporation for participating in Board and Committee meetings were nil for the period ended March 31, 2018 and 2017, respectively.

 

Our Chief Financial Officer receives no compensation as an individual and receives no deferred or incentive compensation. We do make payments in the form of contract for services rendered to a corporation controlled by him. Amounts paid under this arrangement were $nil for the period ended March 31, 2018 and $60,000 for the period ended March 31, 2017, respectively.

 

Our Corporate Legal Counsel receives no compensation as an individual and receives no deferred or incentive compensation. We do make payments in the form of contract for services rendered to a corporation controlled by him. Amounts paid under this arrangement were $48,376 for the period ended March 31, 2018 and $45,000 for the period ended March 31, 2017, respectively.

 

6.

Subsequent events:

 

The corporation has determined there are no subsequent events except below:

 

After March 31, 2018, Nymox Pharmaceutical Corporation has made agreements for the following financings (all amounts in US$) as of April 30, 2018. Different prices per share reflect different market share price at the times the different financings were negotiated. 

 

1. James G. Robinson, Independent Director, two million dollars ($2,000,000.) at three dollars ($3.00) per share, with total number restricted common shares six hundred, sixty-six thousand, six hundred and sixty-six (666,666).

 

2. Erik Danielsen, Chief Financial Officer, one hundred fifty thousand dollars ($150,000) at three dollars ($3.00) per share, with total number restricted common shares fifty thousand (50,000).

 

The following agreements have been signed for additional capital contributions through the date these financial statements were available to be released

 

An accredited investor signed a subscription agreement to invest one million dollars ($1,000,000) at two dollars and fifty cents ($2.50) per share. Total number of restricted common shares four hundred thousand (400,000).

 

An accredited investor signed a subscription agreement to invest one million dollars ($1,000,000) at three dollars ($3.00) per share. Total number restricted common shares three hundred, thirty-three thousand, three hundred and thirty-three (333,333).

 

An accredited investor signed a subscription agreement to invest one hundred thousand dollars ($100,000) at three dollars ($3.00) per share. Total number restricted common shares thirty-three thousand, three hundred and thirty-three (33,333).

 

An accredited investor signed a subscription agreement to invest twelve million dollars ($12,000,000) at two dollars and forty-eight cents ($2.48) per share. Total number restricted common shares four million, eight hundred thirty-three thousand, three hundred and thirty-three (4,833,333). The investor will receive two million five hundred thousand (2,500,000) warrants at a strike price of eight dollars ($8.00) per share. The warrants are exercisable within three (3) years of funding.

 

A total of $4,099,940 has been received under the above stock subscription agreements as of May 15, 2018.

 

 

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