Sernova : 2023 Q3

SERNOVA CORP.

INTERIM CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED

JULY 31, 2023 AND 2022

1

SERNOVA CORP.

Interim Condensed Consolidated Statements of Financial Position (Expressed in Canadian Dollars)

(Unaudited)

			As at		As at
	Note	July 31, 2023	October 31, 2022
ASSETS
Current assets		$	17,778,323
Cash		$	3,776,054
Marketable securities			13,260,073		46,000,000
Amounts receivable			759,307		1,146,542
Prepaid expenses			201,744		168,012
Total current assets			31,999,447		51,090,608
Non-current assets			259,164
Deposits				223,860
Property and equipment, net			429,286		402,421
Intangible assets, net			366,727		516,752
Right-of-use asset, net			148,483		251,280
Total non-current assets			1,203,660		1,394,313
TOTAL ASSETS		$	33,203,107	$	52,484,921
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities		$	9,761,351	$	4,600,277
Lease liabilities			159,102		139,856
Total current liabilities			9,920,453		4,740,133
Non-current liabilities
Lease liabilities			14,386		136,123
Total liabilities			9,934,839		4,876,256
SHAREHOLDERS' EQUITY			110,987,766
Common shares	4			110,987,766
Warrants	4		-		3,296,332
Contributed surplus	4		18,743,851		12,494,054
Deficit		(106,463,349)	(79,169,487)
Total shareholders' equity			23,268,268		47,608,665
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	33,203,107	$	52,484,921
Commitments and Contingencies (Note 7)

See accompanying notes to the interim condensed consolidated financial statements.

2

SERNOVA CORP.

Interim Condensed Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars)

(Unaudited)

		Three months ended July 31,		Nine months ended July 31,
	Note		2023		2022		2023		2022
EXPENSES
Research and development	6	$	8,427,684	$	4,005,508	$	22,366,685	$	10,353,048
General and administrative	6		1,845,980		1,905,441		6,323,313		5,948,886
Total expenses			10,273,664		5,910,949		28,689,998		16,301,934
OTHER EXPENSE (INCOME)
Interest income			(340,258)		(120,101)		(1,204,914)		(159,490)
Finance costs			7,395		13,919		26,029		45,486
Foreign exchange loss (gain)			(9,097)		26,725		(217,251)		22,184
Net other expense (income)			(341,960)		(79,457)		(1,396,136)		(91,820)
LOSS AND COMPREHENSIVE LOSS		$	9,931,704	$	5,831,492	$	27,293,862	$	16,210,114
Weighted average number of common		303,332,686				303,332,686
shares outstanding - basic and diluted		270,312,346			262,681,311
Basic and diluted loss per common share	8	$	0.03	$	0.02	$	0.09	$	0.06

See accompanying notes to the interim condensed consolidated financial statements.

3

SERNOVA CORP.

Interim Condensed Consolidated Statements of Cash Flows (Expressed in Canadian Dollars)

(Unaudited)

		Nine months ended	Nine months ended
	Note	July 31, 2023	July 31, 2022
OPERATING ACTIVITIES
Loss for the period		$	(27,293,862)	$ (16,210,114)
Adjustments for items not affecting cash:			325,216
Amortization and depreciation				322,377
Share-based compensation	4		2,953,465		6,157,670
Research collaboration advances recognized as cost	7		(195,986)		(306,331)
recoveries
Interest income accrued on marketable securities			(221,770)		(21,056)
Interest on lease liabilities			26,029		40,043
Changes in non-cash working capital balances:			394,991
Amounts receivable				(283,275)
Prepaid expenses			(33,732)		(351,543)
Accounts payable and accrued liabilities			5,057,944		984,306
Cash used in operating activities			(18,987,705)		(9,667,923)
INVESTING ACTIVITIES			32,739,927
Marketable securities, net			(39,000,000)
Deposits			(35,304)		(12,312)
Purchase of property and equipment			(99,259)		(310,454)
Cash provided by (used in) investing activities			32,605,364	(39,322,766)
FINANCING ACTIVITIES			-
Proceeds from private placement of shares, net	4			20,279,178
Proceeds from exercise of warrants	4		-		3,705,254
Proceeds from exercise of stock options	4		-		51,750
Grant contribution receipts	7		347,908		224,168
Research collaboration advances	7		165,222		-
Lease liabilities payments			(128,520)		(126,000)
Cash provided by financing activities			384,610		24,134,350
Net increase (decrease) cash during the period			14,002,269	(24,856,339)
Cash, beginning of period			3,776,054		27,874,198
CASH, END OF PERIOD		$	17,778,323	$	3,017,859
SUPPLEMENTAL CASH FLOW DISCLOSURES		$	-
Income taxes paid		$	-
Interest received		$	1,351,696	$	138,434

See accompanying notes to the interim condensed consolidated financial statements.

4

SERNOVA CORP.

Interim Condensed Consolidated Statements of Changes in Equity (Expressed in Canadian Dollars)

(Unaudited)

	Common Shares	Warrants	Contributed	Deficit		Total
		Surplus
	(Note 4)		(Note 4)		(Note 4)
Balance, October 31, 2022	303,332,686	$	110,987,766	$	3,296,332	$	12,494,054	$ (79,169,487)	$	47,608,665
Loss and comprehensive loss for the period	-		-		-		-	(27,293,862)	(27,293,862)
Transactions with owners of the Company,
recognized directly in equity:
Expiry of warrants	-		-	(3,296,332)		3,296,332	-		-
Share-based compensation	-		-		-		2,953,465	-		2,953,465
Balance, July 31, 2023	303,332,686	$	110,987,766	$	-	$	18,743,851	$(106,463,349)	$	23,268,268
Balance, October 31, 2021	261,133,258	$	74,010,694	$	3,693,248	$	5,113,503	$ (54,748,951)	$	28,068,494
Loss and comprehensive loss for the period	-		-		-		-	(16,210,114)	(16,210,114)
Transactions with owners of the Company,
recognized directly in equity:
Shares issued for private placement, net	12,944,904		20,279,178		-		-	-		20,279,178
Exercise of warrants	8,941,588		3,866,297		(161,043)		-	-		3,705,254
Exercise of stock options	237,500		92,250		-		(40,500)	-		51,750
Share-based compensation	-		-		-		6,157,670	-		6,157,670
Balance, July 31, 2022	283,257,250	$	98,248,419	$	3,532,205	$	11,230,673	$ (70,959,065)	$	42,052,232

See accompanying notes to the interim condensed consolidated financial statements.

5