20-F: BetterLife Pharma Inc. Reports Financial Results for Fiscal Year Ended January 31, 2024

Sentiment:

Annual Report 30 May 2024 4:50 PM

BetterLife Pharma Inc. announces its financial results for the fiscal year ended January 31, 2024, highlighting a decrease in net loss compared to the previous year.

Capital raiseThe company intends to continue to pursue additional financing through issuances of equity or debentures.In March 2023, the company closed on private placements in which units, consisting of one common share and one share purchase warrant, were issued for gross proceeds of $1,857,143.In July, August and December 2023, the company closed on further private placements for gross proceeds of $715,000.In December 2023, the company issued $300,000 of convertible debentures.

Worse than expectedThe company has a significant accumulated deficit and working capital deficiency.The company has not earned any revenue.The company's future viability depends on its ability to raise capital and achieve profitable operations.

Summary

BetterLife Pharma Inc. reported its financial results for the fiscal year ended January 31, 2024.
The company experienced a net loss of $2,898,510, a decrease from the $9,372,772 net loss in the previous fiscal year.
Operating expenses decreased to $3,240,241 from $9,460,653 in the prior year.
The company recognized a gain on forgiveness of debts amounting to $469,129.
Basic and diluted net loss per share was $0.03, compared to $0.10 in the previous year.
As of January 31, 2024, the company's operating cash was $37,384 and the working capital deficiency was $6,502,136.
The company has an accumulated deficit of $115,075,713 as of January 31, 2024.
The company's future viability depends on its ability to raise capital and achieve profitable operations.

Sentiment

Score: 5

Explanation: The document presents mixed signals. While the net loss decreased and operating expenses were reduced, the company still faces significant financial challenges, including a large accumulated deficit and reliance on future financing.

Positives

Net loss decreased significantly compared to the previous year.
Operating expenses were substantially reduced.
The company secured additional financing through private placements and convertible debentures.
The company is progressing with key research studies for BETR-001.
The company recognized a gain on forgiveness of debts.

Negatives

The company has a significant accumulated deficit of $115,075,713.
The company has a working capital deficiency of $6,502,136.
The company has not earned any revenue.
The company's future viability depends on its ability to raise capital and achieve profitable operations.
The company is reassessing the development timing and path for MM-003 given the advent of effective SARS-CoV-2 vaccines.

Risks

There is substantial doubt as to whether the company will continue operations.
The company may need to significantly curtail or cease operations if additional funds are not available.
The company's inability to complete its development projects in a timely manner could have a material adverse effect.
The company may not commence or complete clinical testing for any of its prospective pharmaceutical products.
The company will rely on third parties to conduct its research, development and manufacturing activities.
The company's product candidates may never gain market acceptance.
The company faces potential product liability exposure.
The manufacturing of all of the company's products will be subject to ongoing regulatory requirements.
The company is highly dependent upon certain key personnel and their loss could adversely affect the company's ability to achieve its business objectives.

Future Outlook

The company's future viability depends on its ability to raise capital and achieve profitable operations. Management intends to continue to pursue additional financing through issuances of equity or debentures.

Industry Context

The company operates in the biopharmaceutical industry, which is characterized by high research and development costs, lengthy regulatory approval processes, and uncertainty regarding the commercial viability of new products. The company is focused on developing compounds for the treatment of mental disorders, an area of significant unmet medical need.

Legal Proceedings

In November 2019, the Company's former chief executive officer filed an originating application with the Superior Court in the province of Quebec for damages stemming from a termination of employment. In December 2023, this claim was settled for $120,000 to be paid in 12 equal monthly instalments beginning January 1, 2024.
In March 2021, Olymbec Development Inc. filed a judicial demand before the Superior Court (Civil Division) of Quebec and a judgement for a safeguard order was obtained by Olymbec against Pivot Pharmaceuticals Manufacturing Corp. (Pivot), a former subsidiary, and the Company, as guarantor of the lease at 285-295 Kesmark Street, Quebec (the Lease).
In October 2021, the Company filed an application for a bankruptcy order (Application) against Pivot in the Superior Court (Commercial Division) of Quebec.
In January 2022, a statement of claim was filed against the Company by a third party for breach of a marketing contract. In March 2023, this claim was settled for $30,000.
In March 2022, MedMelior filed a notice of civil claim against its former pre-Amalgamation directors in the Supreme Court of British Columbia for breach of fiduciary and statutory duties and breach of contract.

Related Party Transactions

In April 2023, $469,129 of amounts owing to officers in MedMelior were forgiven.
Pursuant to a brokered private placement in March 2023, the Company issued 2,000,000 units to its Chief Executive Officer for gross proceeds received of $200,000, of which $74,000 was received prior to January 31, 2023.
Pursuant to a non-brokered private placement in August 2023, the Company issued 1,000,000 units to its Chief Executive Officer for gross proceeds received of $100,000.
Pursuant to a non-brokered private placement in December 2023, the Company issued 1,000,000 units to its Chief Executive Officer for gross proceeds received of $100,000.
In December 2023, the Company issued convertible debentures of $125,000 to its Chief Executive Officer.
In March 2024, the Company issued convertible debentures of $100,000 to its Chief Executive Officer.
In April 2024, MedMelior granted 1,800,000 stock options to officers and directors of the Company.

Stakeholder Impact

Shareholders face the risk of dilution and potential loss of investment.
Employees face uncertainty regarding the company's future viability.
Customers may experience delays or disruptions in the development and commercialization of new products.
Suppliers and creditors face the risk of non-payment or delayed payment.
The company's financial performance and future prospects may impact the communities in which it operates.

Next Steps

The company plans to complete GMP manufacturing of BETR-001 oral capsules.
The company plans to complete all the necessary preclinical and investigational new drug (IND) enabling toxicology studies.
Upon clearance of the IND, the company plans to conduct a randomized placebo controlled Phase 1A clinical trial in healthy volunteers, which will then be followed with a randomized placebo controlled Phase 1B-2 trial in patients with depression or anxiety disorders.
The company intends to set up GMP manufacturing of BETR-002, and alongside complete all the necessary preclinical and IND enabling toxicology studies.
The timing of BETR-002 IND and clinical trials is currently under assessment.
The company plans to file a new IND under which the MM-001 Phase 2b will be conducted in US.
The timing of MM-001 IND and clinical trials is currently under reassessment.
The manufacturing and formulation work for MM-003 is currently ongoing.
The timing of MM-003 IND and clinical trials is currently under reassessment.

Key Dates

Date	Description
2002-06-10	BetterLife Pharma Inc. was incorporated.
2018-12-17	The Company entered into a joint venture arrangement whereby the Company holds 50% of the issued and outstanding shares of Pivot-Cartagena Joint Venture Inc.
2019-11	The Company's former chief executive officer filed an originating application with the Superior Court in the province of Quebec for damages stemming from a termination of employment.
2019-10-01	Effective date of the adoption of a long-term incentive plan.
2020-08-31	The Company completed an amalgamation with MedMelior Inc.
2020-12-18	The Company acquired 100% of the assets in Nutraneeds LLC.
2021-03	Olymbec Development Inc. filed a judicial demand before the Superior Court (Civil Division) of Quebec.
2021-04-03	5,589,735 special warrants were exercised pursuant to which the Company issued 6,372,298 common shares, valued at $2,794,868, and 6,372,298 warrants with an exercise price of $0.60 and expiry date of December 1, 2023.
2021-04-26	The Company filed and obtained a receipt for a final base shelf prospectus (the 'Shelf Prospectus') filed with the securities regulatory authorities in British Columbia, Alberta and Ontario, Canada.
2021-05-14	The Company issued, pursuant to a non-brokered private placement, 1,142,857 common shares at price of US$0.70 per share for gross proceeds of $972,000 (US$800,000).
2021-05-28	The Company closed on a bought-deal public offering and issued, under the Shelf Prospectus, 15,812,500 units at price of $0.40 per unit for gross proceeds of $6,325,000.
2021-06-07	The Company closed on a marketed public offering and issued, under the Shelf Prospectus, 6,525,000 units at price of $0.40 per unit for gross proceeds of $2,610,000.
2021-06-25	The Company closed on a partial exercise of the over-allotment option in conjunction with its marketed public offering and issued, under the Shelf Prospectus, 500,000 units at price of $0.40 per unit and 478,750 share purchase warrants at a price of $0.0563 per share purchase warrant for gross proceeds of $226,954.
2021-10	The Company filed an application for a bankruptcy order against Pivot in the Superior Court (Commercial Division) of Quebec.
2021-10-27	The Pivot-Cartagena JV was dissolved.
2021-12-17	The Company signed a share contract with an unrelated third party for the sale of 100% of the issued and outstanding common shares of BetterLife Europe Pharmaceuticals AG.
2022-01	A statement of claim was filed against the Company by a third party for breach of a marketing contract.
2022-03	The Company and Pivot signed a settlement agreement pursuant to which Pivot would make a lump sum payment of $300,000 to the Company.
2022-03	MedMelior filed a notice of civil claim against its former pre-Amalgamation directors in the Supreme Court of British Columbia for breach of fiduciary and statutory duties and breach of contract.
2022-04-29	In response to the Companys then-pending motion to dismiss, the former director filed a separate, parallel action, naming the Company and MedMelior before the United States District Court for the Southern District of New York, asserting substantially the same claims as in the State Court action.
2022-06-13	The Application was withdrawn by the Company.
2022-12	The Company formally ceased development of its AP-002 program.
2023-03	The Company closed on private placements in which units, consisting of one common share and one share purchase warrant, were issued for gross proceeds of $1,857,143.
2023-03	The claim filed against the Company by a third party for breach of a marketing contract was settled for $30,000.
2023-04	$469,129 of amounts owing to officers in MedMelior were forgiven.
2023-07	The Company closed on further private placements for gross proceeds of $715,000.
2023-08	The Company closed on further private placements for gross proceeds of $715,000.
2023-12	The Company closed on further private placements for gross proceeds of $715,000.
2023-12	The Company issued $300,000 of convertible debentures.
2023-12	The claim filed against the Company by its former chief executive officer was settled for $120,000 to be paid in 12 equal monthly instalments beginning January 1, 2024.
2023-12-11	An order for Pivots bankruptcy (Pivot Bankruptcy) was granted by the Superior Court (Commercial Division) of Quebec.
2023-12-31	The Company issued unsecured convertible debentures for $300,000.
2024-01-31	End of fiscal year.
2024-04	$107,904 of outstanding advisory fees to directors were forgiven.
2024-05-28	23,316,250 warrants of the Company with exercise price of $0.50 expired unexercised. On the same date, 2,015,625 compensation options of the Company expired unexercised.
2024-05-29	Date of this Management's Discussion and Analysis.

Keywords

Financial Results, Biopharmaceutical, Mental Disorders, BETR-001, BETR-002, MM-001, MM-003, Clinical Trials, Research and Development, Pharmaceuticals

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