BioVaxys Technology Corp. - Interim / Quarterly Report 2021

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BioVaxys Technology Corp. (formerly Lions Bay Mining Corp.)

Condensed Consolidated Interim Financial Statements For the Nine Months Ended July 31, 2021

(Expressed in Canadian dollars)

(Unaudited)

BioVaxys Technology Corp. (formerly Lions Bay Mining Corp.) Condensed Consolidated Interim Statements of Financial Position

(Expressed in Canadian dollars) (Unaudited)

As at July 31, 2021	October 31, 2020	October 31, 2020
ASSETS CURRENT ASSETS Cash $ 740,700 GST receivable 50,135 Prepaid expenses 1,477,471		$ 2,423,095 48,316 590,708
2,268,306 Intangible assets (notes 4 and 5) 7,396,821		3,062,119 7,396,821
TOTAL ASSETS $ 9,665,127		$ 10,458,940
LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable (note 6) $ 215,263 Accrued liabilities 36,136 Due to related parties (note 6) 40,866		$ 753,798 50,513 95,780
TOTAL LIABILITIES 292,265		900,091
SHAREHOLDERS' EQUITY Share capital (note 7) 14,124,459 Subscriptions receivable (note 7) (484,000) Reserves (note 7) 1,217,190 Accumulated other comprehensive income (loss) 17,897 Deficit (5,502,684)		10,751,647 - 372,988 (1,273) (1,564,513)
TOTAL SHAREHOLDERS' EQUITY 9,372,862		9,558,849
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 9,665,127		$ 10,458,940

Going concern (note 2)

Subsequent events (notes 7 and 10)

These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on September 29, 2021. They are signed on the Company's behalf by:

/s/ James Passin

/s/ Daren Hermiston

______, _______,

Director & Chief Executive Officer

Director

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

BioVaxys Technology Corp. (formerly Lions Bay Mining Corp.) Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (Expressed in Canadian dollars) (Unaudited)

Three months ended July 31, 2021 Three months ended July 31, 2020	Nine months ended July 31, 2021	Nine months ended July 31, 2020
OPERATING EXPENSES	$ 1,075,293 142,612 288,585 1,144,273 314,788 98,523 820,828 41,467 579	$ 84,510 2,139 12,450 25,100 129,203 - - 21,251 5,014
Advertising and promotion $ 224,906 $ 84,510 General and administrative (note 6) 55,197 (1,792) Investor relations 89,740 4,770 Management and consulting fees (note 6) 276,671 1,700 Professional fees (note 6) 92,849 82,244 Research and development (1,136) - Share-based payments (notes 6 and 7) 143,247 - Transfer agent, regulatory and listing fees 11,924 9,987 Travel and accommodation - 4,111
(893,398) (185,530)	(3,926,948)	(279,667)
OTHER INCOME (LOSS) Foreign exchange loss (11,983) (2,525) Interest income 296 -	(12,734) 1,511	(2,536) -
(11,687) (2,525)	11,223	(2,536)
Net loss from continuing operations (905,085) (188,055) Net loss from discontinued operation (note 9) - (66,800)	(3,938,171) -	(282,203) (71,688)
NET LOSS FOR THE PERIOD (905,085) (254,855) Other comprehensive income (loss) Foreign currency translation adjustment 1,794 -	(3,938,171) 19,170	(353,891) -
COMPREHENSIVE LOSS $ (903,291) $ (254,855)	$ (3,919,001)	$ (353,891)
	$ (0.05) $-	$ (0.00) $ (0.01)
Loss per share from continuing operations, basic and diluted $ (0.01) $ (0.00)
Loss per share from discontinued operation, basic and diluted $- $ (0.01)
	80,069,511	25,352,301
Weighted average number of common shares outstanding, basic and diluted 82,540,173 23,932,791

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

BioVaxys Technology Corp. (formerly Lions Bay Mining Corp.) Condensed Consolidated Interim Statements of Shareholders' Equity

(Expressed in Canadian dollars) (Unaudited)

		Subscriptions	Accumulated	Accumulated	Total Shareholders'
			Other
	Number of		Comprehensive
	Shares*	Share Capital Reserves receivable		Income (Loss)	Deficit Equity
Balance, October 31, 2019	21,454,856	$ 571,309 $ 10,150 $ - - (1,145) - 230,750 - - - - -	$	-	$ (391,347) $ 190,112 1,145 - - 230,750 (353,891) (353,891)
Forfeiture of stock options	- 4,615,000			- -
Exercise of warrants
Netlossforthe period	-			-
		802,059 9,005 -			(744,093) 66,971
Balance, July 31, 2020	26,069,856			-

Balance, October 31, 2020	74,074,611	10,751,647 372,988 - 3,033,487 26,747 (484,000) 2,395 (1,145) - 256,930 (2,228) - 80,000 - - - 820,828 - - - - - - -		(1,273)	(1,564,513) 9,558,849 - 2,576,234 - 1,250 - 254,702 - 80,000 - 820,828 - 19,170 (3,938,171) (3,938,171)
Shares issued in private placement, net	13,579,261			-
Exercise of stock options Exercise of warrants Shares issued for service Share-based payments Foreign currency translation adjustment Net loss for the period	100,000 2,860,816 255,454 - - -			- - - - 19,170 -
	90,870,142	$ 14,124,459 $ 1,217,190$ (484,000)	$	17,897	$ (5,502,684) $ 9,372,862

Balance, July 31, 2021

The numbers of shares in the above table have been restated to retrospectively reflect the effect of the two-for-one stock split (note 7) effective April 29, 2020.

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

BioVaxys Technology Corp. (formerly Lions Bay Mining Corp.) Condensed Consolidated Interim Statements of Cash Flows (Expressed in Canadian dollars) (Unaudited)

For the nine months ended July 31, 2021		July 31, 2020
OPERATING ACTIVITIES Net loss from continuing operations $ (3,938,171) Non-cash items Share-based payments 820,828 Shares issued for services 80,000 Net changes in non-cash working capital items GST receivable (1,819) Prepaid expenses (887,818) Accounts payable and accrued liabilities (552,279) Due to related parties (54,914)	$
		(282,203)


		-
		-

		(12,009)
		(1,500)
		86,697
		(46,000)
Cash used in operating activities of continuing operations (4,534,173)		(255,015)
INVESTING ACTIVITY Funds advanced -

		(160,848)
Cash used in investing activity of continuing operations -		(160,848)
FINANCING ACTIVITIES Proceeds from shares issued in private placement, net 2,576,234 Proceeds from warrants exercised 254,702 Proceeds from stock options exercised 1,250 Subscriptions received

		-
		230,750
		-
		582,941
Cash provided by financing activities of continuing operations 2,832,186		813,691
Net cash used in operating activities of discontinued operation - Net cash provided by investing activities of discontinued operations -
		(16,688)
		10,000
Net change in cash, discontinued operation -		(6,688)
Effect of foreign exchange rate change on cash 19,592 Net change in cash, continuing operations (1,682,395) Net change in cash, discontinued operation -
		-

		397,828
		(6,688)
Net change in cash (1,682,395) Cash, beginning of the period 2,423,095		391,140

		228,980
Cash, end of theperiod $ 740,700	$	620,120

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

BioVaxys Technology Corp. (formerly Lions Bay Mining Corp.) Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended July 31, 2021 (Expressed in Canadian dollars, unless otherwise noted) (Unaudited)

1. NATURE OF OPERATIONS

BioVaxys Technology Corp. (formerly Lions Bay Mining Corp.) (the “Company”) was incorporated on April 25, 2018, pursuant to the provisions of the Business Corporations Act of British Columbia and was a wholly owned subsidiary of Bearing Lithium Corp. (“Bearing”). The registered and records office is located at Suite 503, 905 West Pender Street, Vancouver, British Columbia, V6C 1L6.

As a clinical stage biotechnology company, BioVaxys Technology Corp. is developing viral and oncology vaccine platforms, as well as immuno-diagnostics. The Company is advancing a SARS-CoV-2 vaccine based on its haptenized viral protein technology. The Company’s haptenized autologous cell vaccine will also be developed for Stage III/Stage IV ovarian cancer. Also, the Company is developing is CoviDTH®, a diagnostic for evaluating the presence or absence of a T-cell immune response to SARS-CoV-2, the virus that causes COVID-19. Prior to the share exchange agreement described below, the Company was a mineral exploration company (note 10). The Company’s shares are traded on the Canadian Securities Exchange (“CSE”) under the symbol “BIOV” and on the OTCQB under the symbol "BVAXF”.

Share Exchange

On June 2, 2020, the Company and BioVaxys Inc. (“BioVaxys”) entered into a share exchange agreement (“Share Exchange Agreement”) (note 4). Pursuant to the Share Exchange Agreement, the Company acquired all the issued and outstanding shares of BioVaxys by way of a share exchange with BioVaxys’ shareholders (“Transaction”). Upon completion of the Transaction on September 30, 2020, BioVaxys became a wholly owned subsidiary of the Company, and the Company changed its name to BioVaxys Technology Corp.

COVID-19 Impact

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies and financial markets globally, potentially leading to an economic downturn.

The Company has initiated the study and development of BVX-0320, its proprietary vaccine candidate for COVID-19. The extent to which the coronavirus may further impact the Company's business activities will depend on future developments, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, business disruptions, and the effectiveness of actions taken in the United States, Canada and other countries to contain and treat the disease. These events remain highly uncertain and, as such, the Company cannot determine their financial impact at this time.

2. BASIS OF PREPARATION

(a) Statement of compliance

These condensed interim financial statements, including comparatives have been prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) applicable to the preparation of interim financial statements, including International Accounting Standard 34 Interim Financial Reporting . The accounting policies followed in these condensed consolidated interim financial statements are consistent with those of the previous financial year. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the years ended October 31, 2020 and 2019, which have been prepared in accordance with IFRS as issued by IASB.

These condensed consolidated interim financial statements were approved and authorized by the Board of Directors on September 29, 2021.

2. BASIS OF PREPARATION (continued)

(b) Basis of preparation

These condensed consolidated interim financial statements have been prepared on a historical cost basis, except for certain financial instruments that have been measured at fair value. In addition, these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for the cash flow information. These condensed consolidated interim financial statements have been prepared on the basis of accounting policies and methods of computation consistent with those applied in the Company’s audited annual financial statement for the fiscal years ended October 31, 2020 and 2019.

(c) Basis of consolidation

These condensed consolidated interim financial statements include the accounts of the Company and its wholly owned subsidiary. The financial statements of the subsidiary are included in the condensed consolidated interim financial statements from the date that control commences until the date that control ceases. All intercompany transactions, balances, income and expenses are eliminated in full upon consolidation.

The legal subsidiary of the Company as of July 31, 2021 is as follows:

Name of Subsidiary	Place of Incorporation	Ownership Interest	Functional Currency
BioVaxys Inc.	USA	100%	US Dollar

(d) Functional and presentation currency

These condensed consolidated interim financial statements are presented in Canadian dollars, which is the Company’s functional and reporting currency. The functional currency of the Company’s subsidiary is noted above and the financial statement balances and transactions of the subsidiary are measured using that functional currency.

(e) Going concern

These condensed consolidated interim financial statements have been prepared on the basis of accounting principles applicable to a going concern, which presumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business in the foreseeable future. The Company’s ability to continue as a going concern and realize the carrying value of its assets is dependent on its ability to raise capital through equity and debt financing, the outcome of which cannot be predicted at this time. These matters indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. These condensed consolidated interim financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. BASIS OF PREPARATION (continued)

(f) Significant accounting estimates and judgments

The preparation of these condensed consolidated interim financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated interim financial statements and the reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These condensed consolidated interim financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the condensed consolidated interim 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 future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Significant Judgments

The following are critical judgments that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the condensed consolidated interim financial statements:

(i) Management is required to assess the functional currency of the Company. In concluding that the Canadian dollar is the functional currency of the Company, management considered the currency that mainly influences the operating expenditures in the jurisdiction in which the Company operates.
(ii) The Company’s ability to execute its strategy by funding future working capital requirements requires judgment. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, such as expectations of future events that are believed to be reasonable under the circumstances.
(iii) The determination of whether a set of assets acquired and liabilities assumed in an acquisition constitute a business may require the Company to make certain judgments, taking into account all facts and circumstances. A business is presumed to be an integrated set of activities and assets capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or economic benefits. The acquisition of BioVaxys was determined to constitute an asset acquisition.
(iv) Impairment of intangible assets or cash-generating units are evaluated at each reporting date to determine whether there are any indications of impairment. The Company considers both internal and external sources of information when making the assessment of whether there are indications of impairment for the Company’s intangible assets.

Estimation Uncertainty

The following are key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the current and next fiscal financial years:

(i) Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realize the net deferred tax assets recorded at the date of the condensed consolidated interim statement of financial position could be impacted.

2. BASIS OF PREPARATION (continued)

(f) Significant accounting estimates and judgments (continued)

Estimation Uncertainty (continued)

(ii) The measurement of identifiable assets acquired pursuant to the Transaction, assumed at fair value on the date of acquisition and the allocation of the purchase consideration over the fair value of the assets acquired, is subject to management estimation and judgment.

3. RECENT ADOPTED ACCOUNTING STANDARDS

Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s condensed interim consolidated financial statements.

4. ACQUISITION

On June 2, 2020, the Company and BioVaxys entered into a Share Exchange Agreement (note 1). Pursuant to the Share Exchange Agreement, the Company acquired all of the issued and outstanding shares of BioVaxys by way of a share exchange with the shareholders of BioVaxys on September 30, 2020 (the “Transaction”), specifically, each shareholder of BioVaxys transferred their shares of BioVaxys to the Company in exchange for fully paid and non-assessable common shares of the Company. As a result, the Company issued 31,100,000 common shares at an agreed price of $0.28 per share in exchange for all of the issued and outstanding securities of BioVaxys, which included 6,788,800 common shares issued to certain advisors and 1,160,000 common shares issued to Thomas Jefferson University (“TJU”) (note 5).

The Company agreed to provide BioVaxys with a secured bridge loan facility of up to US$200,000 bearing interest at a rate of 9% per annum. At the date of the Transaction, $160,068 (US$120,000) had been advanced to BioVaxys, which was eliminated on consolidation upon the completion of the Transaction as an intercompany balance.

The Company determined that BioVaxys did not meet the criteria for a business primarily due to lack of process and operations and accordingly the transaction was recorded as an asset acquisition under IFRS 2 Sharebased Payments at the following fair values:

Purchase price:
Consideration paid in shares with fair value of $0.22 per share	$	6,842,000
Legal fees incurred		68,613
Elimination of intercompany balance		160,068
	$	7,070,681
Assets less liabilities acquired:
Cash	$	41,364
Prepaid expenses		23,697
Accounts payable and accrued liabilities		(336,015)
Due to related parties		(55,186)
Value allocated to intangible assets (note 5)		7,396,821
	$	7,070,681

5. INTANGIBLE ASSETS

The intangible assets comprise several patents, licensed patents, patent applications, and the related inprocess research and development work (collectively, “IPR&D”) incurred up to the date of the Transaction (note 4). The Company has continued to carry on these in-process research and development projects. Therefore, these patents are classified as indefinite-lived intangible assets and are not amortized until they are available for use.

Balance as at October 31, 2019	$	-
Additions from BioVaxys acquisition (note 4)		7,396,821
Balance as at October 31,2020 and July31,2021	$	7,396,821

The IPR&D intangible assets include the following:

Thomas Jefferson University License

BioVaxys entered into an exclusive license agreement dated April 25, 2018 with TJU for four US patents (“TJU License”) related to a haptenized cancer vaccine using a single hapten vaccine technology (“Licensed Technology”). Pursuant to the agreement, BioVaxys was granted the exclusive right to use the TJU License to develop, make and sell products worldwide for the term from the agreement date to five years after the expiry of the patent. As a partial royalty for the license granted by TJU, BioVaxys issued to TJU a warrant at an exercise price of $10, which was automatically exercised and exchanged for the Company’s shares on the date of the Transaction (note 4).

Under the agreement, BioVaxys is also required to pay to TJU the following payments when achieving the corresponding milestones (“Milestone Payment”):

US$25,000 following enrollment of the first patient in a phase 3 clinical trial (or foreign equivalent if outside US) for a product utilizing the Licensed Technology;
US$25,000 following US Food and Drug Administration allowance for a product utilizing the Licensed Technology; and
US$100,000 once BioVaxys reaches US$5,000,000 in net sales of a product utilizing the Licensed Technology.

In addition, BioVaxys is required to pay to TJU a running royalty (“Royalty Payment”) based on 2% of net sales of products under the TJU License, and 0.25% of net sales of such products during the period after the expiry of the patent.

As at July 31, 2021, BioVaxys has not been required to make any payments towards either Milestone Payment or Royalty Payment. Among the four patents under the TJU License, two have expired and the other two expire in 2023 and 2026, respectively.

Bihaptenized Cancer Vaccines Patent

On September 24, 2018, Dr. David Berd, Chief Medical Officer of the Company, filed a patent application for bihaptenized autologous vaccines and the use thereof. The application, together with another application amended from it on October 16, 2018, form the technology platform for “bihaptenized cancer vaccines”. On October 4, 2019, Dr. Berd assigned these patent applications to BioVaxys for $nil consideration, which form part of the intangible assets acquired in the Transaction (note 4).

5. INTANGIBLE ASSETS (continued)

Diagnostic Patent Application

In August 2020, BioVaxys began preparing a provisional patent application with the United States Patent and Trademark Office (USPTO) for a novel diagnostic platform invented by BioVaxys ("Diagnostic Platform"). The Diagnostic Platform is designed to screen for an immune system T-cell response in patients who may have been exposed to SARS-CoV-2, and a T-cell response in those patients who have received a vaccine for SARSCoV-2 (not limited to the SARS-CoV-2 Vaccine Candidate), to evaluate, amongst others, viral infection status and vaccine efficacy. BioVaxys filed the US provisional patent application on October 28, 2020.

Haptenized Viral Protein Vaccine Patent Application

On March 3, 2020, BioVaxys filed another US provisional patent application, which is the basis of BXV-0320, BioVaxys’ SARS-CoV-2 vaccine candidate.

6. RELATED PARTY TRANSACTIONS

Key management compensation

Key management consists of the officers and directors who are responsible for planning, directing and controlling the activities of the Company. The following expenses were incurred by the Company’s key management:

For the nine months ended		July 31, 2021		July 31, 2020
Management and consulting fees	$	520,565	$	40,500
Professional fees		14,956		-
General and administrative expenses		13,960		-
Rent		13,500		-
Share-based payments		324,096		-
	$	887,077	$	40,500

As at July 31, 2021, the Company was indebted to the related parties for a total of $40,866 (October 31, 2020 - $95,780) for management fees and reimbursable expenses. The amount is non-interest bearing and has no terms of repayment.

As at July 31, 2021, accounts payable included $21,781 (October 31, 2020 - $8,262) due to related parties relating to professional fees.

7. SHARE CAPITAL

(a) Authorized

Unlimited number of common shares without par value authorized for issue.

(b) Stock split

Effective April 29, 2020, the Company completed a forward split of its issued and outstanding common shares on the basis of a two-for-one stock split of the Company’s common shares. Shareholders received two new common shares for every one common share held. All references to share and per share amounts in these condensed consolidated interim financial statements have been retroactively restated to reflect the effect from the stock split.

7. SHARE CAPITAL (continued)

(c) Issued

Share capital activities for the nine months ended July 31, 2021:

(i) The Company issued 255,454 common shares pursuant to a consulting agreement with a director of the Company. The shares were issued in exchange for $80,000 of consulting fees.
(ii) The Company issued 2,860,816 common shares pursuant to the exercise of warrants for proceeds of $254,702. Upon exercise, the fair value of warrants at $2,228 was reclassified from reserves to share capital.
(iii) The Company issued 100,000 common shares pursuant to the exercise of stock options for proceeds of $1,250. Upon exercise, the fair value of stock options at $1,145 was reclassified from reserves to share capital.
(iv) On February 5, 2021, the Company issued 4,417,647 units at a price of $0.255 per unit for total proceeds of $1,126,500. Each unit consists of one common share and one whole common share purchase warrant. Each warrant is exercisable to acquire one common share at an exercise price of $0.50 for a period of two years. In connection with the private placement, the Company paid a cash finder's fee equal to $60,000. The Company has applied residual method in valuing the shares and the share purchase warrants included in the units, therefore, these warrants have been recorded at $nil value.
(v) During July 2021, the Company issued 9,161,614 units at a price of $0.22 per unit for total proceeds of $2,015,555. Each unit consists of one common share and one whole common share purchase warrant. Each warrant is exercisable for one additional common share at an exercise price of $0.50 for a period of 30 months. In connection with the private placement, the Company paid a cash finder's fee equal to $21,806. The Company has applied residual method in valuing the shares and the share purchase warrants included in the units, therefore, these warrants have been recorded at $26,747.

Share capital activities for the year ended October 31, 2020:

(i) On August 26, 2020 and September 3, 2020, the Company issued 13,738,235 units for gross proceeds of $3,022,412, net of share issuance costs of $71,282. Each unit is comprised of one common share and one-half of one full warrant. Each warrant entitles the holder to acquire one common share at a price of $0.50 for two years. The Company paid cash commissions of $37,379 and issued 233,874 brokers’ warrants with a fair value of $21,902.
(ii) On September 30, 2020, the Company issued 31,100,000 common shares pursuant to the Transaction (notes 1 and 4)
(iii) The Company issued 7,581,520 common shares pursuant to the exercise of warrants for proceeds of $379,076. Upon exercise, the fair value of warrants at $3,342 was reclassified from reserves to share capital.
(iv) The Company issued 200,000 common shares pursuant to the exercise of stock options for proceeds of $2,500. Upon exercise, the fair value of stock options at $2,290 was reclassified from reserves to share capital.

7. SHARE CAPITAL (continued)

(d) Stock options

The Company has a stock option plan (the “Plan”) that permits the grant of share purchase options of up to 10% of the issued and outstanding common shares of the Company to directors, officers, key employees and consultants. Terms and pricing of options are determined at the date of grant in accordance with the Plan. Stock option transactions and the number of stock options outstanding are summarized below:

		Weighted Average
	Number	Exercise Price ($)
Balance, October 31, 2019	716,996	0.018
Granted	3,600,000	0.420
Forfeited	(240,280)	0.028
Exercised	(200,000)	0.013
Balance, October 31, 2020	3,876,716	0.393
Granted	1,100,000	0.537
Exercised	(100,000)	0.013
Balance,July31,2021	4,876,716	0.432

Share-based payment expense is determined using the Black-Scholes option pricing model. During the nine months ended July 31, 2021, the Company recognized share-based payments of $820,828 (Nine months ended July 31, 2020 - $nil) in equity reserves, which pertains to options granted to directors, officers and advisors of the Company. Weighted average assumptions used in calculating the fair value of share-based compensation expense are as follows:

compensation expense are as follows:
	July 31, 2021	July 31, 2020
Risk-free interest rate	0.39%	0.36%
Dividend yield	0%	0%
Expected volatility	94.05%	92.99%
Expected life (years)	5	5
Forfeiturerate	0%	0%

The expected volatility used for the stock options granted during the nine months ended July 31, 2021 is based on the historical share prices of comparable companies.

Additional information regarding stock options outstanding as at July 31, 2021 is as follows:

	Exercise	Number of Options	Number of Options
Expiry Date	Price ($)	Issued	Exercisable
October 6, 2021	N/A(1)	86,860	86,860
October 24, 2021	N/A(1)	4,992	4,992
December 2, 2021	N/A(1)	12,480	12,480
January 4, 2022	N/A(1)	12,480	12,480
January 5, 2022	N/A(1)	12,480	12,480
May 4, 2022	N/A(1)	32,448	32,448
May 25, 2022	N/A(1)	14,976	14,976
September 3, 2025	0.280	600,000	600,000
October 20, 2025	0.450	3,000,000	1,000,000
February 12, 2026	0.465	350,000	175,000
February 12, 2026	0.570	750,000	750,000
		4,876,716	2,701,716

(1) As part of the Arrangement with Bearing (note 10), Bearing options were issued to Bearing stock option holders, which are exercised concurrently when the related Bearing stock options are exercised. The related Bearing stock options have exercise prices ranging from $0.26 to $0.83 per share.

As at July 31, 2021, the weighted average remaining life for outstanding stock options was 4.14 (October 31, 2020 - 4.71) years.

7. SHARE CAPITAL (continued)

(e) Share purchase warrants

Share purchase warrants transactions and the number of share purchase warrants outstanding are summarized below:

	Number of	Weighted Average
	WarrantsIssued	ExercisePrice ($)
Balance, October 31, 2019	9,950,000	0.05
Exercised	(7,435,000)	(0.05)
Granted	6,869,116	0.50
Balance, October 31, 2020	9,384,116	0.38
Granted	13,579,261	0.50
Exercised	(2,763,136)	(0.09)
Balance,July31,2021	20,200,241	0.50

Additional information regarding share purchase warrants outstanding as at July 31, 2021 is as follows:

	Exercise	Number of Warrants
Expiry Date	Price ($)	Issued and Exercisable
August 26, 2022	0.50	5,143,689
September 3, 2022	0.50	1,477,291
February 5, 2023	0.50	4,417,647
January 14, 2024	0.50	3,812,159
January 28, 2024	0.50	5,349,455
		20,200,241

(f) Brokers’ warrants

Brokers’ warrants transactions and the number of brokers’ warrants outstanding are summarized below:

	Number of Brokers’	Weighted Average
	Warrants	Exercise Price ($)
Balance, October 31, 2019	244,200	0.05
Granted	233,874	0.50
Exercised	(146,520)	(0.05)
Balance, October 31, 2020	331,554	0.37
Exercised	(97,680)	(0.05)
Balance,July31,2021	233,874	0.50

Additional information regarding broker’s warrants outstanding as at July 31, 2021, is as follows:

	Exercise	Number of Warrants
Expiry Date	Price ($)	Issued and Exercisable
August 26, 2022	0.50	233,874
		233,874

7. SHARE CAPITAL (continued)

(f) Brokers’ warrants

The brokers’ warrants granted during the period ended July 31, 2020 were valued using the following BlackScholes option pricing model assumptions:

Scholes option pricing model assumptions:
	July 31, 2020
Risk-free interest rate	0.29%
Dividend yield	0%
Expected volatility	91.82%
Expected life (years)	2
Forfeiture rate	0%

(g) Escrow shares

As at July 31, 2021, 17,616,263 shares (October 31, 2020 - 23,483,503) were subject to escrow conditions and 3,522,525 shares will be released from escrow every six months until September 30, 2023.

(h) Reserves

The reserve records items recognized as share-based payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital.

8. FINANCIAL INSTRUMENTS

Fair Value

As at July 31, 2021, the Company’s financial instruments consist of cash, accounts payable and due to related parties. The fair values of these financial instruments approximate their carrying values due to their current nature.

IFRS 13 Fair Value Measurement establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

IFRS 13 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities.
Level 2 – Inputs that are observable, either directly or indirectly, but do not qualify as Level 1 inputs (i.e., quoted prices for similar assets or liabilities).
Level 3 – Prices or valuation techniques that are not based on observable market data and require inputs that are both significant to the fair value measurement and unobservable market data.

The Company is exposed in varying degrees to a variety of financial instrument related risks:

Foreign Exchange Risk

The Company is exposed to currency fluctuations. From time to time, the Company has US dollar balances in cash and accounts payable, and is therefore exposed to gains or losses on foreign exchange. A significant change in the currency exchange rate between the Canadian dollar relative to the US dollar could have an effect on the Company’s profit or loss, financial position and/or cash flows. The Company has not hedged its exposure to currency fluctuations at July 31, 2021.

8. FINANCIAL INSTRUMENTS (continued)

As at July 31, 2021, the Company had a foreign currency cash balance of US$99,013 and accounts payable of US$76,890. A 10% change in the Canadian dollar versus the US dollar would give rise to a gain/loss of approximately $2,764, based on the Company’s current net exposure. In practice, the actual results may differ from this sensitivity analysis, and the difference may be material. Management considers foreign exchange to be a moderate risk.

Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company’s cash is exposed to credit risk. The Company reduces its credit risk on cash by placing this instrument with institutions of high credit worthiness. The Company does not have significant exposure to credit risk.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. As at July 31, 2021, the Company is not exposed to significant interest rate risk.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company manages liquidity risk by maintaining sufficient cash balances to enable settlement of transactions on the due date.

As of July 31, 2021, the Company had cash of $740,700 (October 31, 2020 - $2,423,095), accounts payable of $215,263 (October 31, 2020 - $753,798), accrued liabilities of $36,136 (October 31, 2020 - $50,513) and due to related parties of $40,866 (October 31, 2020 - $95,780). The Company’s accounts payable and accrued liabilities are due within 90 days. Amounts due to related parties are due on demand. The Company addresses its liquidity through debt and equity financing obtained through the sale of common shares and the exercise of warrants and options. There is no assurance that it will be able to do so in the future. Liquidity risk is assessed as high.

9. DISCONTINUED OPERATION

On September 27, 2017, Bearing entered into an option agreement with FenixOro Gold Corp. (“Fenix”), formerly American Battery Metals Corp., whereby Fenix has the option to acquire a 50% interest in the Fish Lake Valley Project located in central-western Nevada (the “Option Agreement"). Bearing transferred its interest in the Fish Lake Valley Project and the Option Agreement to the Company under the Asset Purchase Agreement dated July 19, 2018.

During the year ended October 31, 2020, the Company initiated a plan to dispose of its interest in the Fish Lake Valley Project mineral properties. Accordingly, the Company’s interest in the Fish Lake Valley Project is classified as asset held for sale, and the related operating result related to the project is presented as a discontinued operation.

During the year ended October 31, 2020, the Company terminated the Option Agreement with Fenix and impaired the mineral property by $55,000, as the recoverable amount was determined to be less than the carrying value. The Company then sold the interest in the Fish Lake Valley Project for $10,000 to Bearing.

9. DISCONTINUED OPERATION (continued)

The results of the discontinued operation are as follows:

For the nine months ended	July 31, 2021	July 31, 2020
Operating expenses:	$ - - - -	$ 15,400 250 1,038 55,000
Management and consulting fees Professional fees Travel and accommodation Other expenses: Impairment of mineral property
Net loss from discontinued operation	$ -	$ 71,688

10. SUBSEQUENT EVENTS

a) Subsequent to July 31, 2021, the Company issued 85,754 common shares pursuant to a consulting agreement with a director of the Company.
b) Subsequent to July 31, 2021, the Company granted 1,000,000 stock options to a consultant with an exercise price of $0.25 and a maturity date of September 3, 2026. The stock options vested immediately.
c) Subsequent to July 31, 2021, the Company issued 550,000 common shares pursuant to the exercise of stock options and 660,000 common shares pursuant to the exercise of common share purchase warrants.

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BioVaxys Technology Corp. — Interim / Quarterly Report 2021

47641_rns_2021-09-29_9fce7812-5f60-4fc3-a8ad-6561a946988b.pdf

/s/ James Passin

BioVaxys Technology Corp. (formerly Lions Bay Mining Corp.) Condensed Consolidated Interim Statements of Shareholders' Equity

1. NATURE OF OPERATIONS

Share Exchange

COVID-19 Impact

2. BASIS OF PREPARATION

(a) Statement of compliance

2. BASIS OF PREPARATION (continued)

(b) Basis of preparation

(c) Basis of consolidation

(d) Functional and presentation currency

(e) Going concern

2. BASIS OF PREPARATION (continued)

(f) Significant accounting estimates and judgments

Significant Judgments

Estimation Uncertainty

2. BASIS OF PREPARATION (continued)

(f) Significant accounting estimates and judgments (continued)

Estimation Uncertainty (continued)

3. RECENT ADOPTED ACCOUNTING STANDARDS

4. ACQUISITION

5. INTANGIBLE ASSETS

Thomas Jefferson University License

Bihaptenized Cancer Vaccines Patent

5. INTANGIBLE ASSETS (continued)

Haptenized Viral Protein Vaccine Patent Application

6. RELATED PARTY TRANSACTIONS

Key management compensation

7. SHARE CAPITAL

(a) Authorized

(b) Stock split

7. SHARE CAPITAL (continued)

(c) Issued

7. SHARE CAPITAL (continued)

(d) Stock options

7. SHARE CAPITAL (continued)

(e) Share purchase warrants

(f) Brokers’ warrants

7. SHARE CAPITAL (continued)

(f) Brokers’ warrants

(g) Escrow shares

(h) Reserves

8. FINANCIAL INSTRUMENTS

Fair Value

Foreign Exchange Risk

8. FINANCIAL INSTRUMENTS (continued)

Credit Risk

Interest Rate Risk

Liquidity Risk

9. DISCONTINUED OPERATION

9. DISCONTINUED OPERATION (continued)

10. SUBSEQUENT EVENTS

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BioVaxys Technology Corp. Interim / Quarterly Report 2021