ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis
should be read in conjunction with our financial statements and related notes included elsewhere in this Annual Report. This discussion
and other parts of this Annual Report contain forward-looking statements based upon current expectations that involve risks and uncertainties.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements
as a result of several factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report.
The preparation of financial statements
in conformity with these accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent liabilities at the financial statement date and reported amounts of revenue and expenses during
the reporting period. On an on-going basis, we review our estimates and assumptions. The estimates were based on historical experience
and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates
or other forward-looking statements under different assumptions or conditions, but we do not believe such differences will materially
affect our financial position or results of operations. Our actual results may differ materially as a result of many factors, including
those set forth under the headings entitled “Special Note Regarding Forward-Looking Statements” and “Risk
Factors”.
Recent Developments
BriaCell
(the “Company”) is an immuno-oncology biotechnology company with a strong focus on cancer immunotherapy. Immunotherapies
have come to the forefront in the fight against cancer since they harness the body’s own immune system to recognize and destroy
cancer cells. BriaCell owns the U.S. patent to SV-BR-1-GM (“Bria-IMTTM”), a whole-cell targeted immunotherapy
for cancer (U.S. Patent No. 7,674,456), as well as patents related to PKCδ inhibitors (U.S. Patent Nos. 9,364,460 and 9,572,793).
The Company is currently advancing our targeted immunotherapy program by prioritizing a Phase I/IIa clinical trial with Bria-IMTTM
in combination with an immune checkpoint inhibitor and a companion diagnostic test, BriaDxTM, to identify patients most likely to
benefit from Bria-IMTTM. The Bria-IMTTM regimen was evaluated in four patients in a prior study in 2004-2006 by Dr. Charles
Wiseman, the scientific founder, former member of the board of directors of the Company (the “Board”) and principal
scientific advisor. Encouraging results were obtained, especially in a patient who matched Bria-IMTTM at HLA-DR alleles and had
a grade II tumor. In 2017-2018 BriaCell evaluated 23 patients with advanced breast cancer with the Bria-IMTTM regimen and obtained
confirmation of the ability of the Bria-IMTTM regimen to induce regression of metastatic breast cancer in patients who match Bria-IMTTM
at least at one HLA allele and/or if they had grade I or grade II tumors. A combination study with the immune checkpoint inhibitor pembrolizumab
(KEYTRUDA®) was initiated and the first patient dosing in the “combination therapy” clinical trial occurred in September
2018. BriaCell purchased the KEYTRUDA® for this study as BriaCell does not have an agreement with Merck & Co., Inc. for the supply
of KEYTRUDA®. Eleven patients were dosed in the combination therapy trial with Bria-IMTTM and the immune checkpoint inhibitor
KEYTRUDA® and subsequently dosing with this combination was discontinued. The study was modified under an amended protocol which
evaluates the combination of the Bria-IMTTM regimen with Incyte Corporation experimental drugs retifanlimab (anti-PD-1 antibody
similar to pembrolizumab). The study is ongoing.
It
is estimated by the National Cancer Institute that in 2022, approximately 287,500 women will be diagnosed with breast cancer in the United
States. That means that every two minutes an American woman is diagnosed with breast cancer and more than 43,000 are projected to die
in 2022. Although about 100 times less common than in women, breast cancer also affects men. It is estimated that the lifetime risk of
men getting breast cancer is about 1 in 1,000, and the American Cancer Society estimates that approximately 2,710 new cases of invasive
male breast cancer will be diagnosed and approximately 530 men will die from breast cancer in 2022.
According
to the May 2019 “Global Oncology Trends 2021” report by the IQVIA Institute, the global market for cancer drugs (including
immunotherapy drugs) is expected to reach nearly $269 billion by the end of 2025, growing at a compound annual growth rate (“CAGR”)
of 10% between 2021 and 2025, of which about 20% is expected to be immuno-oncology drugs.
About
12.9% percent of women will be diagnosed with breast cancer at some point during their lifetime. In 2018, there were an estimated 3,676,262
women living with female breast cancer in the United States. Approximately 81% of cases present as invasive breast cancer. Approximately
6% of new breast cancer diagnoses are Stage IV (metastatic breast cancer (“MBC”), which has already spread to other
organs). Twenty to thirty percent of all women diagnosed with breast cancer will develop MBC. Breast cancer can be subdivided based on
receptor status – the hormone receptors for estrogen (ER) and progesterone (PR), collectively referred to as hormone receptors
(HR), and the Her2/neu growth factor receptor (HER2). Based on the latest SEER statistics, 74.6% were found to be HR+/HER2−, 10.8%
were triple-negative (HR−/HER2−), 10.5% were HR+/HER2+, and 4.0% were HR−/HER2+.1
It
is estimated that over 150,000 women in the US are living with MBC. For those with metastatic disease at diagnosis, their 5-year survival
rate is 27%. For patients who develop MBC after initially having localized disease, if they had a good response to treatment (i.e. a
disease-free interval of more than 24 months), their survival rate is similar to that of patients with MBC at initial diagnosis, but
if their disease-free interval is less than 24 months, their prognosis is worse.4 We currently propose that Bria-IMT’sTM
indication will be for the treatment of patients with MBC who have failed at least two lines of therapy. Similarly, another study showed
that the median overall survival among patients with de novo stage IV MBC was 39.2 months, while for patients with relapsed disease it
was 27.2 months. Median progression free survival after first-line therapy is only 9 months and the survival benefit decreases with subsequent
lines of therapy. One study showed that of 386 patients with MBC, 374 (97%) received first-line therapy, 254 (66%) received second-line
therapy, 175 (45%) received third-line therapy, and 105 (27%) received therapy beyond third-line.
On
September 14, 2022, the Company signed an agreement with Caris Life Sciences ® (Caris), a leading molecular science and technology
company actively developing and delivering innovative solutions to revolutionize healthcare.
Under the terms of the agreement, Caris will help
BriaCell with efficient patient identification, accelerating enrollment for its current Phase I/II clinical trial in advanced metastatic
breast cancer of certain genetically defined subgroups. The partnership between BriaCell and Caris leverages Caris’ Right-In-Time
(RIT) Clinical Trial Network, a group of over 495 oncology sites that are able to quickly identify and enroll eligible patients in biomarker-directed
clinical trials. This service offers patients and physicians access to the most cutting-edge precision medicine in development. Additionally,
through Caris’ comprehensive molecular profiling (Whole Exome and Whole Transcriptome Sequencing), Caris will perform tumor profiling
for the patients enrolled in the clinical trial.
On August 2, 2022, the Company
secured an exclusive license from University of Maryland, Baltimore County (“UMBC”) to develop and commercialize Soluble
CD80 (“sCD80”) as a biologic agent for the treatment of cancer. The novel technology, originally developed by Suzanne
Ostrand-Rosenberg, PhD, Faculty at UMBC, and BriaCell’s scientific advisory board member, is entitled “Soluble CD80 as a Therapeutic
to Reverse Immune Suppression in Cancer Patients” (Patent No. US 9,650,429 B2). In animal models, sCD80 has been shown to be safe
and effective in stopping the tumor growth in animal models by potentially restoring natural anti-tumor immunity. Importantly, sCD80’s
unique actions may involve both awakening and boosting the immune system to recognize and destroy tumor cells.
Under the terms of the agreement, BriaCell gains the
worldwide rights to develop and commercialize sCD80 as a therapeutic agent for the treatment of cancer, while UMBC holds all rights, title
and interest in the inventions and the patent, except for certain rights retained by the United States Government. BriaCell will pay 2%
royalties to UMBC upon the commercialization of the product plus other development costs. The licensing agreement was coordinated by UMBC.
On October 12, 2022, the Company
announced it has added Mayo Clinic, Jacksonville, Florida as a clinical site in the Phase I/II study of BriaCell’s lead candidate,
Bria-IMTTM, with Incyte’s PD-1 inhibitor, retifanlimab, in advanced breast cancer.
On October 21, 2022, the Company
announced the completion of the Phase I part of the clinical trial of its lead candidate, Bria-IMTTM, in combination with Incyte’s
PD-1 inhibitor, retifanlimab, in advanced breast cancer. The efficacy and survival data of the treated patients is being evaluated in
the Phase II part of the study which was recently awarded the FDA’s fast track designation. Under an FDA approved protocol, another
arm has recently been added to the Phase II study to evaluate the effects of dosing schedules for patients in the study.
The Phase I portion of the trial,
with the primary goal of assessing safety and tolerability of the combination, enrolled 12 subjects who had previously failed at least
two prior lines of therapy, characterized as a difficult-to-treat patient population. The combination treatment had a favorable safety
profile and appeared well-tolerated with no dose-limiting toxicities.
Progressing through the Phase
II part of the clinical trial, a randomized controlled design will be used to allow comparison of the effectiveness of the treatment regimens
between the two arms of the study with different dosing schedules.
BriaCell noted it is on schedule to meet with the
FDA later this year to discuss the design of a key registration study.
Approval
of Omnibus Incentive Plan
On
August 2, 2022, the Company approved an omnibus equity incentive plan (“Omnibus Plan), which will permit the Company to grant incentive
stock options, preferred share units, restricted share units (“RSU’s”), and deferred share units (collectively, the
“Awards”) for the benefit of any employee, officer, director, or consultant of the Company or any subsidiary of the Company.
The maximum number of Shares available for issuance under the Omnibus Plan shall not exceed 15% of the issued and outstanding Shares,
from time to time, less the number of Shares reserved for issuance under all other security-based compensation arrangements of the Company,
including the existing Stock Option Plan. The Omnibus Plan remains subject to approval by the shareholders of the Company (the “Shareholders”)
and final approval of the Toronto Stock Exchange (“Exchange”) and will replace the Company’s existing Stock Option
Plan upon receipt of such approvals (“Approvals”).
The
Company may make grants under the Omnibus Plan, however, the grants cannot be settled until the Approvals have been received.
Stock Option and RSU Grants
On
September 1, 2021, the Company issued 100,000 options to a consultant with an exercise price of $5.74, which vest immediately and expire
on September 1, 2026.
On
November 1, 2021, the Company issued 12,600 options with an exercise price of $7.94, and expire on November 1, 2026. 10,000 of the options
were issued to a director and vest immediately, and 2,600 options were issued to members of the Company’s scientific advisory board and
vest in five equal instalments every six months, with the first instalment vesting immediately.
On
January 13, 2022, the Company issued 524,700 options to directors, officers, and employees with an exercise price of $8.47 and expire
on January 13, 2027. 482,300 of the options were granted to Insiders, as such term is defined in the Securities Act (British Columbia)
and vest in four equal instalments every 90 days, with the first instalment vesting immediately. The remaining 42,400 options vest in
eight equal instalments every 90 days, with the first installment vesting immediately.
On
February 16, 2022, the Company issued 150,000 options to an officer with an exercise price of $7.51 and expire on February 16, 2027.
The options vest in eight equal instalments every 90 days, with the first instalment vesting immediately.
On
May 20, 2022, the Company issued 31,000 options with an exercise price of $4.71 and expire on May 20, 2027. The options vest in eight
equal instalments every 90 days, with the first instalment vesting immediately. 20,000 options were issued to the Company’s CFO.
On
August 2, 2022, the Company issued 180,100 options with an exercise price of C$8.38 and expire on August 2, 2027. The options vest in
eight equal instalments every 90 days, with the first instalment vesting immediately. 142,100 of the options were issued to the Company’s
officers. In addition, the Company issued RSU
On
August 2, 2022, the Company also granted, under the Omnibus Plan, 19,200 RSU’s to the CEO. The RSU’s vested immediately.
Exercise of warrants
During the year ended July 2022,
1,615,645 warrants with an weighted aggregate exercise price of $5.98 were exercised for gross proceeds of $6,509,767.
Securities Repurchase Program
As noted in a press release
dated September 9, 2021, BriaCell announced that the Board has authorized the Company’s securities repurchase program whereby the
Company may purchase through the facilities of the TSX Venture Exchange (“TSXV”) or The NASDAQ Capital Market (“NASDAQ”)
(i) up to 1,341,515 common shares (the “Common Shares”) and (ii) up to 411,962 publicly traded BCTXW warrants (the “Listed
Warrants”) in total, representing 10% of the 13,415,154 Common Shares and 10% of the 4,119,622 Listed Warrants comprising the “public
float” as of September 8, 2021, over the next 12 months (the “Buyback”). Independent Trading Group (ITG), Inc. will
act as the Company’s advisor and dealer manager in respect of the Buyback. The Company received final regulatory approval on September
22, 2021.
The repurchase program will in no way interfere with BriaCell’s ambitious growth plans to expand into previously-announced
areas of cancer immunotherapy and/or advance its current breast cancer clinical trials. BriaCell’s proposed repurchases may be conducted
through open market transactions at prevailing market prices, in privately negotiated transactions, in block trades, and/or through other
legally permissible means, subject to the market conditions and in compliance with applicable rules and regulations. The timing and dollar
amount of repurchase transactions will be subject to the SEC’s Rule 10b-18 and/or Rule 10b5-1 requirements. Purchases of Common Shares
or Listed Warrants through the NASDAQ will not, during the 12-month period, exceed 5% of the outstanding Common Shares or Listed Warrants
in the aggregate, as at the commencement of the Buyback. BriaCell’s
Board of Directors will be reviewing the program periodically and may revise the terms and/or size or suspend or discontinue the program.
As of October 27, 2022, the
company has repurchased 1,031,672 common shares and 259,059 publicly traded warrants. All of the warrants and shares repurchased
have been cancelled.
Changes in the Board of Directors
On September 1, 2021, Mr. Marc
Lustig was appointed to the Company’s Board of Directors. Mr. Lustig is a highly regarded investor, entrepreneur, and corporate
finance veteran with a deep understanding of the life sciences industry, including biotechnology and pharmaceuticals, as well as the legal
cannabis industry. Marc holds MSc and MBA degrees from McGill University. His professional experience includes working at Merck &
Co., and his capital markets career includes roles in biotechnology equity research and corporate finance. Mr. Lustig was the founder
and CEO of Origin House, which was sold to Cresco Labs Inc. (CSE: CL; OTCQX: CRLBF) in 2020, where he currently serves as a director and
as Head of Capital Markets. In addition to being a director of a number of public companies, Marc founded the Lustig Family Medical Cannabis
Research & Care Fund of the Cedars Cancer Foundation that provides cannabis to palliative cancer patients.
Shareholder Meeting
On May 19, 2021, BriaCell
announced the results of its annual general and special meeting of shareholders of the Company (the “Shareholders”) for the
years ended July 31, 2019 and July 31, 2020, held on May 18, 2021 (the “Meeting”). A total of 1,685,180 common shares of
the Company (the “Common Shares”) were voted, representing 22.36% of the Company’s issued and outstanding Common Shares.
At the Meeting, the Shareholders overwhelmingly voted in favor of all proposed resolutions that consisted of the following:
● The number of directors set at six;
● Renewal of the Company’s stock option plan;
Having received shareholder approval,
the Company’s stock option plan remains subject to approval from the TSX Venture Exchange. The formal report on voting results with
respect to all matters voted upon during the Meeting will be filed on the Company’s SEDAR profile at www.sedar.com and will
be filed with the SEC at www.sec.gov.
Overview
Critical Accounting Policies and Estimates
1. Critical Estimates and Judgements
The preparation of these consolidated
financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from
these estimates. The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive
throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates
are recognized in the period in which the estimate is revised and also in future periods when the revision affects both current and future
periods.
The critical judgments and significant
estimates in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial
statements are:
2. New Accounting Policies Adopted
No new accounting policies were
adopted during the year ended July 31, 2022.
Results of Operations
Comparison of the year ended July 31, 2022,
compared to the year ended July 31, 2021
Research 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.
For the year ended July 31, 2022,
research costs amounted to $8,021,489 as compared to $2,020,899 for the year ended July 31, 2021. The increase is attributed to the recommencing
of the Company’s clinical trials and the increased activity in the lab, including the hiring of additional lab employees.
General and Administrative Expenses
For the year ended July 31, 2022,
general and administrative expenses amounted to $7,267,452 as compared to $ 4,955,136 for the year ended July 31, 2021. The increase in
2022 is mainly due to a significant ramp up of activity in the Company, following the financings completed in 2021. These increases relate
primarily to share based compensation (i.e. non-cash), increase in salaries due to hiring more personnel, and consulting and professional
fees incurred by the Company.
Financial expenses, net
For the year ended July 31, 2022,
financial expense, net amounted to $11,549,962 as compared to $6,840,165 for the year ended July 31, 2021. Financial expense, net in 2022
is the result of the revaluation of warrant liability at period end offset slightly by interest income earned during the period on funds
held in interest bearing accounts. The higher expense in 2021 can be attributed to a larger adjustment to the warrant liability from the
issuance of warrants and the revaluation of warrants at period end.
Loss for the period
The Company reported a loss for
the year ended July 31, 2022, of $26,838,903 as compared to $13,816,200 for the year ended July 31, 2021. The primary reason for reduced
losses in 2022 is due to the decrease in fair value of the warrant liability.
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 July 31, 2022, the Company
has total assets of $42,577,041 (July 31, 2021 - $58,043,762) and a positive working capital balance of $41,405,614 (July 31, 2021 –$57,241,355).
The Company is planning to finance
its research and developmental activities from its existing and future working capital resources and to continue to evaluate additional
sources of capital and financing. The Company believes that its existing capital resources will be adequate to satisfy its expected liquidity
requirements for at least twelve months from the issuance of the consolidated financial statements.
Liquidity and Capital Resources
As of July 31, 2022, the
Company has a working capital of $41,405,614 (July 31, 2021 – $57,241,355) and an accumulated deficit of $60,349,837 (July 31,
2021 - $29,141,897). In June 2021, the Company completed a private placement of gross proceeds of $27.2 million.
As of July 31, 2022, 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, no assurance can be provided 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
During the year ended
July 31, 2022, the Company’s overall position of cash and cash equivalents decreased by $16,227,033 from the year ended July 31,
2021 (including effects of foreign exchange). This decrease in cash can be attributed to the following:
The Company’s net cash used
in operating activities during the year ended July 31, 2022 was $12,484,376 as compared to $7,750,188 for year ended July 31, 2021. This increase is mostly due to company growth and increased expenditures
during the period.
Cash used in
financing activities for the year ended July 31, 2022 was $3,742,657 as compared to $64,997,624 for the year ended July 31, 2021. Cash
used in 2022 is attributed to the money spent on the buyback program offset by warrant exercise proceeds. Cash provided in 2021
was mainly from the Nasdaq Financing in February 2021, the private placement proceeds in June 2021, and the exercise of warrants
offset by the repayment of these loans.
Off-balance Sheet Arrangements
None.
Tabular Disclosure of Contractual Obligations
None.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
We are a smaller reporting company, as defined by
Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information required under this Item
7A.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
The report of independent registered public accounting firm with PCAOB ID: 1930 and financial information required
by this Item is attached hereto at the end of this report beginning on page F-1 and is hereby incorporated by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of 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 Exchange Act), as of the end of the period covered by this Annual
Report on Form 10-K. 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 July 31, 2022, our disclosure controls and
procedures were not effective as of such date as a result of material weaknesses in our internal control over financial reporting.
Management’s Report on Internal Control
Over Financial Reporting
Our management is responsible for establishing and
maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Internal control
over financial reporting is a process designed under the supervision and with the participation of our management, including our principal
executive officer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the U.S..
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement preparation and presentation.
As of July 31, 2022, under the supervision
and with the participation of our management, including our principal executive officer and principal financial officer, we
conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal
Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on
this assessment, our management concluded that, as of July 31, 2022, our internal control over financial reporting lacked adequate
segregation of duties within account processes, and systems, inadequate documentation to evidence the operation of controls,
inconsistent procedures and approvals, lack of periodic user access reviews, lack of assessment of controls of financially
significant vendors and insufficient written policies and procedures for accounting, IT and financial
reporting and record keeping. We are implementing plans to improve such internal control.
Changes in Internal Control Over Financial Reporting
There has been material changes in our internal control over
financial reporting during the quarter ended July 31, 2022 that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting. Independent review and approval of transactions and reconciliations has been implemented in some processes by hiring
personnel and segregating duties amongst the team. Management is implementing processes to document and retain evidence to support reviews
and reconciliations.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
Executive Officers, Directors and Key Employees
The following table sets forth the name, age and position
of each of our executive officers, key employees and directors as of October 27, 2022. All directors hold office until the next annual
meeting of shareholders and the election and qualification of their successors. Officers serve at the discretion of the board.
Name Age Position
Gadi Levin, CA, MBA 49 Chief Financial Officer and Corporate Secretary
Giuseppe Del Priore, MD, MPH 60 Chief Medical Officer
Miguel A. Lopez-Lago, PhD 53 Chief Scientific Officer
Jamieson Bondarenko, CFA, CMT 38 Chairman of the Board of Directors
Vaughn C. Embro-Pantalony, MBA, FCPA, FCMA, CDIR, ACC 65 Director
Marc Lustig, MSC, MBA 50 Director
Martin E. Schmieg 60 Director
Rebecca Taub, MD 70 Director
Jane A. Gross, PhD 66 Director
Biographies
William V. Williams, MD, President, Chief Executive
Officer and Director, is a seasoned biopharmaceutical executive with over 35 years of industry and academic expertise, including significant
clinical management in multinational pharmaceutical companies. Dr. Williams has served as President, Chief Executive Officer and Director
of the Company since November 1, 2016. Dr. Williams served as Vice President of Exploratory Development at Incyte Corporation from March
2005 through November 2016. There he facilitated entry of over 20 compounds into the clinic, including ruxolitinib (Jakafi), baricitinib
(Olumiant), and epacadostat. Dr. Williams held several positions at GlaxoSmithKline Pharmaceuticals, including Head of Experimental Medicine
and Vice President of Clinical Pharmacology from December 2000 through March 2002; Director and Head of Clinical Pharmacology, Oncology,
Musculoskeletal and Inflammation from March 2002 through December 2004 and Director and Head of Clinical Pharmacology, Musculoskeletal,
Inflammation, Gastrointestinal and Urology from December 2004 through March 2005. He has also served as Assistant Professor of Medicine
and the Director of Rheumatology Research at the University of Pennsylvania from July 1991 through January 1998. Dr. Williams earned his
BSc in Chemistry and Biotechnology from Massachusetts Institute of Technology and Medical Doctorate from Tufts University School of Medicine.
We believe that Dr. Williams is qualified to serve as a member of our Board because of his experience
as our President and Chief Executive Officer, as well as his depth of academic and industry experience.
Gadi Levin, CA, MBA, Chief Financial Officer
and Secretary, was appointed Chief Financial Officer and Secretary of the Company on February 1, 2016. Mr. Levin has also served as Chief
Financial Officer and Director of Vaxil Bio Ltd since March 1, 2016, and as the Finance Director of Eco (Atlantic) Oil & Gas Ltd.
since December 1, 2016. Mr. Levin has over 15 years of experience working with public U.S., Canadian and multi-jurisdictional public companies.
Previously, Mr. Levin served as Chief Financial Officer of DarioHeath Corp from November 2013 through January 2015. Mr. Levin also served
as the Vice President of Finance and Chief Financial Officer for two Israeli investment firms specializing in private equity, hedge funds
and real estate. Mr. Levin began his CPA career at the accounting firm Arthur Andersen, where he worked for nine years, specializing in
U.S. listed companies involved in initial public offerings. Mr. Levin has a Bachelor of Commerce degree in Accounting and Information
Systems from the University of Cape Town, South Africa, and a post graduate diploma in Accounting from the University of South Africa.
He received his Chartered Accountant designation in South Africa and has an MBA from Bar Ilan University in Israel.
Giuseppe Del Priore, MD, MPH, Chief Medical
Officer, was appointed Chief Medical Officer on February 16, 2022. Dr. Del Priore is a seasoned healthcare executive with over 25 years
of experience in research, drug development, and clinical trial management. Dr. Del Priore’s prior work experience includes serving
as a biotechnology company Chief Medical Officer, a National Director at the Cancer Treatment Centers of America, and faculty at Indiana
University School of Medicine, Weill Cornell Medicine, and New York University School of Medicine. Dr. Del Priore completed his MPH degree
in Biostatistics and Epidemiology at the University of Illinois Chicago School of Public Health, his medical degree with Distinction at
The State University of New York, and his BA, magna cum laude, in Philosophy, at The City University of New York, with additional training
at Memorial Sloan Kettering Cancer Center, The University of Chicago, Northwestern University, and the University of Rochester. He has
authored numerous publications, was named on several patents, and was listed as the “Best Doctors” by the U.S. News &
World Report. He regularly appears in various media outlets as a Key Opinion Leader in oncology. We believe that Dr. Del Priore is qualified
to serve as Chief Medical Officer because of his medical and clinical trial experience.
Miguel A. Lopez-Lago, PhD, Chief Scientific
Officer, was appointed Chief Scientific Officer on May 26, 2022, a promotion from his prior title of Senior Director, Research and Development.
Since 2000, Dr. Lopez-Lago has been working as a cancer scientist at Memorial Sloan Kettering Cancer Center, New York. Specifically, he
has investigated various aspects of tumor biology, including the development of targeted therapies for mesothelioma and the characterization
of the biological mechanisms underlying cancer metastasis. More recently, Dr. Lopez-Lago has been interested in the study of the tumor
immune-microenvironment and in the development of immunotherapies for thoracic cancers using chimeric antigen receptor T cell technologies.
Since 2013, Dr. Lopez-Lago has been working as Senior Research Scientist at MSKCC. Dr. Lopez-Lago received his Bachelor of Science in
Bio-Sciences and his doctorate in Molecular Biology from Santiago of Compostela University, Spain. We believe that Dr. Lopez-Lago is qualified
to serve as Chief Scientific Officer because of his scientific training, especially in immunology
and cellular therapies.
Jamieson Bondarenko, CFA, CMT, Chairman
of the Board, was appointed as a Director of the Company on February 12, 2019 and elected as Chairman on April 24, 2019. Mr. Bondarenko
provides strategic capital markets & corporate development advice to early-stage life sciences companies through his merchant capital
company, JGRNT Capital Corp., a company he founded in November 2016. From December 2016 through October 2017, he served as Principal and
Managing Director of the Equity Capital Markets group of Eight Capital. He also held several positions in the Capital Markets division
of Dundee Securities Ltd., including Managing Director from July 2016 through December 2016, Director from October 2015 through July 2016,
Vice President from December 2012 through October 2015 and Associate from February 2010 through December 2012. We believe that Mr. Bondarenko
is qualified to serve as a member of our Board because of his industry-specific and capital markets
experience.
Vaughn C. Embro-Pantalony, MBA, FCPA, FCMA, CDIR,
ACC, Director, has been a Director of the Company since his appointment on March 18, 2019. In February 2018, he joined the Board of
Directors of Soricimed Biopharma Inc., a private clinical-stage biopharma company developing targeted cancer therapies, and in August
2018 he was appointed Chairman of the Board of Soricimed, where he continues to serve in this capacity. He is also a Director of Microbix
Biosystems Inc., a public company and leading manufacturer of viral and bacterial antigens and reagents for the global diagnostics industry.
He originally joined the Microbix Board in February 2007, and he also served as its President and Chief Executive Officer from November
2012 to July 2017. He is President of Stratpath Management Inc., consulting on strategy and governance to the life sciences sector. He
has held other executive positions in life sciences with responsibility for finance, business development, strategic planning and information
technology, including Vice President, Finance, and Chief Financial Officer of Novopharm Limited from May 2003 through April 2006; Vice
President, Information Technology, and Chief Information Officer of Bayer Inc. from July 1999 through April 2003; Vice President, Finance
and Administration of Bayer Healthcare from October 1996 through June 1999; and Director, Finance and Administration and Chief Financial
Officer of Zeneca Pharma Inc. from March 1995 through August 1996. He received his bachelor’s degree from Wilfrid Laurier University
and his master of business administration degree from University of Windsor. He is a Fellow Chartered Professional Accountant and a Chartered
Director (C. Dir.) and is Audit Committee Certified (A.C.C.) through the Directors College, McMaster University. We believe that Mr. Embro-Pantalony
is qualified to serve as a member of our Board due to his extensive experience as a pharmaceutical and life sciences executive.
Marc Lustig, Director, was appointed to the
Company’s Board on September 1, 2021. Mr. Lustig is a highly regarded investor, entrepreneur, and corporate finance veteran with
a deep understanding of the life sciences industry, including biotechnology and pharmaceuticals, as well as the legal cannabis industry.
He holds MSc and MBA degrees from McGill University. His professional experience includes working at Merck & Co., and his capital
markets career includes roles in biotechnology equity research and corporate finance. Mr. Lustig was the founder and CEO of Origin House,
which was sold to Cresco Labs Inc. (CSE: CL; OTCQX: CRLBF) in 2020, where he currently serves as a director and as Head of Capital Markets.
In addition to being a director of a number of public companies, he founded the Lustig Family Medical Cannabis Research & Care Fund
of the Cedars Cancer Foundation that provides cannabis to palliative cancer patients. We believe that Mr. Lustig is qualified to serve
as a member of our Board because of his industry-specific and capital markets experience.
Martin Schmieg, Director, rejoined the Company’s
Board on November 24, 2020. Having served as a member of BriaCell’s Board from 2016 to March 2019, Mr. Schmieg is a “C”
level executive with a diversified background in the global biotech, med-tech and pharmaceutical industries, with 40 years of business
experience. He currently serves as Co-Founder and CEO of ClearIt, LLC, a private company based in Massachusetts. As a hands-on leader,
Mr. Schmieg’s early career focused on accounting and financial management responsibilities, serving as Chief Financial Officer to
privately held Cytometrics, Inc. and Advanced Bionics Corporation, and publicly traded Sirna Therapeutics, Inc. and Isolagen, Inc. We
believe that Mr. Schmeig is qualified to serve as a member of our Board because of his long-term
familiarity with the Company and his perspective and experience in relevant industries.
Rebecca Taub, MD, Director, has been a Director
of the Company since her appointment on March 18, 2019. Dr. Taub currently serves as the President of Research and Development for Madrigal
Pharmaceuticals, a clinical-stage biopharmaceutical company. She previously served as Vice President of Research and Development from
July 2016 through her recent promotion to President of Research and Development on June 27, 2019. She has also served as Madrigal’s
Chief Medical Officer since July 2016. Dr. Taub served as the CEO and a Director of Madrigal from September 2011 through Madrigal’s
merger with Synta Pharmaceuticals Corp. in July 2016. Prior to joining Madrigal, Dr. Taub served as Senior Vice President, Research and
Development of VIA Pharmaceuticals from 2008 to 2011 and as Vice President, Research, Metabolic Diseases at Hoffmann-LaRoche from 2004
to 2008. In those positions, Dr. Taub oversaw clinical development and drug discovery programs in cardiovascular and metabolic diseases,
including the conduct of a series of Phase I and II proof of conduct clinical trials. Dr. Taub led drug discovery programs, including
target identification, lead optimization and advancement of preclinical candidates into clinical development. From 2000 through 2003,
Dr. Taub worked at Bristol-Myers Squibb Co. and DuPont Pharmaceutical Company, in a variety of positions, including Executive Director
of CNS and metabolic diseases research. Before becoming a pharmaceutical executive, Dr. Taub was a tenured Professor of Genetics and Medicine
at the University of Pennsylvania, and remains an adjunct professor. Dr. Taub is the author of more than 120 research articles. Before
joining the faculty of the University of Pennsylvania, Dr. Taub served as an Assistant Professor at the Joslin Diabetes Center of Harvard
Medical School, Harvard University and an associate investigator with the Howard Hughes Medical Institute. Dr. Taub received her M.D.
from Yale University School of Medicine and her B.A. from Yale College. We believe that Dr. Taub is qualified to serve as a member of
our Board due to her extensive experience as a pharmaceutical executive heading up major development programs in non-alcoholic steatohepatitis.
Jane Gross, Director, was appointed to the
Company’s Board in November 2021. Dr. Gross is a highly experienced biotech executive with
over 30 years in leading research and development teams from discovery through preclinical evaluation and clinical development of therapeutics
for the treatment of cancer and autoimmune and inflammatory diseases. Dr. Gross currently serves as an Independent Director for aTyr Pharmaceuticals
(Nasdaq: LIFE), a biotechnology company developing novel therapeutics for respiratory diseases and multiple cancer indications. Dr. Gross’s
experience includes roles as Chief Scientific Officer and SVP, Research and Non-Clinical Development at Aptevo Therapeutics (Nasdaq: APVO),
during which she led the discovery of novel antibody-based, bispecific protein therapeutics as immunotherapies to treat diseases like
cancer. Previously, Dr. Gross served as VP, Applied Research and Non-Clinical Development at Emergent BioSolutions (NYSE: EBS), during
which she successfully introduced a drug to patients from the design stage into the clinic stage. Formerly, as VP, Immunology Research
at ZymoGenetics, Dr. Gross discovered and developed 30+ new product candidates, completed partnerships and out-licensing of assets, and
helped position ZymoGenetics for a successful acquisition by Bristol Myers Squibb (NYSE: BMY) in 2010. Dr. Gross earned her Ph.D. in Immunology
from the University of California, Berkeley and her Post-Doctoral Fellowship from the University of Washington in Immunology. We
believe that Dr. Gross is qualified to serve as a member of our Board due to her extensive industry experience and academic background.
Family Relationships and Other Arrangements
There are no family relationships among our directors
and executive officers. There are no arrangements or understandings between or among our executive officers and directors pursuant to
which any director or executive officer was or is to be selected as a director or executive officer.
Composition of our Board6
Under
our amended articles of incorporation, our Board consists of a minimum of three directors and up to that number which was last set by
ordinary resolution of the shareholders. Our Board is currently comprised of seven directors, and under the Business Corporations Act
(British Columbia) (“BCBCA”), as a reporting issuer, we must have no fewer than three directors. Under the BCBCA, a
director may be removed with or without cause by a resolution passed by at least two-thirds of the votes cast by shareholders present
in person or by proxy at a meeting and who are entitled to vote. The directors are appointed at the annual general meeting of shareholders
and the term of office for each of the directors will expire at the time of our next annual shareholders meeting. Our amended articles
of incorporation provide that, between annual general meetings of our shareholders, the directors may appoint one or more additional directors,
but the number of additional directors may not at any time exceed one-third of the number of directors who held office at the expiration
of the last meeting of our shareholders. Under the BCBCA, there is no minimum number of directors required to be resident Canadians as
defined in the BCBCA.
Director Term Limits and Other Mechanisms of Board Renewal
Our Board
has not adopted director term limits or other automatic mechanisms of Board renewal. Rather than adopting formal term limits, mandatory
age-related retirement policies and other mechanisms of Board renewal, the nominating and corporate governance committee of our Board
will develop a skills and competencies matrix for our Board as a whole and for individual directors. The nominating and corporate governance
committee conducts a process for the assessment of our board of directors, each committee and each director regarding his or her effectiveness
and contribution, and reports evaluation results to our Board on a regular basis.
Director Independence
Under
the Nasdaq Rules, independent directors must comprise a majority of a listed company’s board of directors. For purposes of the Nasdaq
Rules, an independent director means a person other than an executive officer or employee of the company who, in the opinion of the board
of directors, has no relationship with the company that would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. Under NI 58-101, a director is considered to be independent if he or she is independent within the meaning
of Section 1.4 of National Instrument 52-110—Audit Committees. Section 1.4 of NI 52-110 generally provides that a director
is independent if he or she has no direct or indirect relationship with the issuer which could, in the view of the issuer’s board
of directors, be reasonably expected to interfere with the exercise of the director’s independent judgment.
Our
Board has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her
background, employment and affiliations, our Board has determined that Dr. Gross, Dr. Taub, Mr. Embro-Pantalony, Mr. Schmieg, and Mr.
Bondarenko, representing five of the seven members of our Board, are “independent” as that term is defined under the Nasdaq
Rules. In making this determination, our Board considered the current and prior relationships that each non-employee director has with
our company and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial
ownership of our shares by each non-employee director. Dr. Williams is not independent by virtue of being the Company’s Chief Executive
Officer. Mr. Lustig is not independent by virtue of being a significant securityholder of the Company.
Certain
members of our Board are also members of the boards of other public companies. Our Board has not adopted a director interlock policy,
but is kept informed of other public directorships held by its members.
Mandate of the Board
of Directors
Our Board
is responsible for supervising the management of our business and affairs, including providing guidance and strategic oversight to management.
Our Board’s mandate includes, among other things, the following matters:
Meetings of Independent
Directors
Our Board
holds regularly-scheduled quarterly meetings as well as ad hoc meetings from time to time. The independent members of our Board
also meet, as required, without the non-independent directors and members of management after each regularly scheduled board meeting.
A director
who has a material interest in a matter before our Board or any committee on which he or she serves is required to disclose such interest
as soon as the director becomes aware of it. In situations where a director has a material interest in a matter to be considered by our
Board or any committee on which he or she serves, such director may be required to absent himself or herself from the meeting while discussions
and voting with respect to the matter are taking place. Directors are also required to comply with the relevant provisions of the BCBCA
regarding conflicts of interest.
Position Descriptions
Our Board
has adopted written terms of reference for the chairman which set out his or her key responsibilities, including duties relating to determining
the frequency, dates and locations of meetings and setting Board meeting agendas, chairing Board and shareholder meetings and carrying
out any other or special assignments or any functions as may be requested by our Board or management, as appropriate.
Our Board
has also adopted written terms of reference for each of the committee chairs which set out each of the committee chair’s key responsibilities,
including duties relating to determining the frequency, dates and locations of meetings and setting committee meeting agendas, chairing
committee meetings, reporting to our Board and carrying out any other special assignments or any functions as may be requested by our
Board.
In addition,
our Board, in conjunction with our Chief Executive Officer, will develop and implement a written position description for the role of
our Chief Executive Officer.
Orientation and Continuing
Education
We have
implemented an orientation program for new directors under which a new director meets separately with the chairman of our Board, members
of the senior executive team and the secretary.
The nominating
and corporate governance committee will be responsible for coordinating orientation and continuing director development programs relating
to the committee’s mandate. The chairman of our Board will be responsible for overseeing director continuing education designed
to maintain or enhance the skills and abilities of our directors and to ensure that their knowledge and understanding of our business
remains current.
Code of Conduct
Our board
of directors has adopted a Code of Ethics that applies to all of our directors, officers and employees. We have made the Code of Ethics
available on our website https://briacell.com/corporate/corporate-governance/. We intend to disclose future amendments to, or waivers
of, our Code of Ethics, as and to the extent required by SEC regulations, at the same location on our website identified above or in public
filings.
Monitoring Compliance
with the Code of Conduct
Our nominating
and corporate governance committee will be responsible for reviewing and evaluating the code of conduct at least annually and will recommend
any necessary or appropriate changes to our Board for consideration. The nominating and corporate governance committee will assist our
Board with the monitoring of compliance with the code of conduct, and will be responsible for considering any waivers therefrom (other
than waivers applicable to members of the nominating and corporate governance committee, which shall be considered by the audit committee,
or waivers applicable to our directors or executive officers, which shall be subject to review by our Board as a whole).
Requirement for Directors
and Officers to Disclose Interest in a Contract or Transaction
In accordance
with the BCBCA, each director and officer must disclose the nature and extent of any interest that he or she has in a material contract
or material transaction whether made or proposed with us, if the director or officer is a party to the contract or transaction, is a director
or an officer or an individual acting in a similar capacity of a party to the contract or transaction, or has a material interest in a
party to the contract or transaction. Subject to certain limited exceptions under the BCBCA, no director may vote on a resolution to approve
a material contract or material transaction which is subject to such disclosure requirement.
As of
the date hereof, except as otherwise disclosed in this Annual Report on Form 10-K, to the knowledge of the Board or the management of
the Company, there are no material interests, whether direct or indirect, of any informed person of the Company, any proposed director
of the Company, or any associate or affiliate of any informed person or proposed director, in any transaction since the commencement of
the Company’s most recently completed financial year or in any proposed transaction which has materially affected or would materially
affect the Company of any of its subsidiaries.
Benefits upon Termination
of Employment
The service
contracts with our directors do not provide for any benefits upon termination of employment, other than a “tail” directors
and officers insurance policy.
Complaint Reporting
In order
to foster a climate of openness and honesty in which any concern or complaint pertaining to a suspected violation of the law, our code
of conduct or any of our policies, or any unethical or questionable act or behavior, our code of conduct will require that our employees
promptly report the violation or suspected violation. In order to ensure that violations or suspected violations can be reported without
fear of retaliation, harassment or an adverse employment consequence, we will adopt a whistleblowing policy which will contain procedures
that are aimed to facilitate confidential, anonymous submissions of complaints by our directors, officers, employees and others.
Committees of the Board
We currently
have an audit committee, a compensation committee and a nominating and corporate governance committee, with each committee having a written
charter.
Audit Committee
Our Audit
Committee is currently comprised of Vaughn C. Embro-Pantalony, Martin Schmieg and Jane A. Gross, and chaired by Mr. Embro-Pantalony.
Our Board has determined that each of Mr. Schmieg and Mr. Embro-Pantalony is financially literate and meets the independence requirements
for directors, including the heightened independence standards for members of the audit committee under Rule 10A-3 under the Exchange
Act and NI 52-110. Our Board has determined that Mr. Embro-Pantalony is “financially sophisticated” within the meaning of
the Nasdaq Rules, “financially literate” within the meaning of NI 52-110, and a “financial expert” as defined
by Rule 10A-3 under the Exchange Act.
We have
adopted an Audit Committee Charter setting forth the purpose, composition, authority and responsibility of the audit committee. The primary
function of the audit committee is to assist the Board in fulfilling its financial oversight responsibilities by reviewing the financial
reports and other financial information provided by the company to regulatory authorities and the Company’s shareholders, the Company’s