CLEARMIND MEDICINE INC. (Unaudited) Condensed Interim Consolidated Statements of Financial Position (Expressed in United States Dollars) (Unaudited) Alan Rootenberg, Director, CFO Adi Zuloff-Shani, Director, CEO F-2 Condensed Interim Consolidated Statements of Operations and Comprehensive Loss (Expressed in United States Dollars) (Unaudited) On November 14, 2022, the Company completed a public offering for aggregate gross proceeds of US$7.5 million and up listing to the Nasdaq Capital Market ("Nasdaq"), see ...

[Condensed Interim Consolidated Financial Statements](index=1&type=section&id=Condensed%20Interim%20Consolidated%20Financial%20Statements) [Condensed Interim Consolidated Statements of Financial Position](index=2&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Financial%20Position) The company's financial position significantly improved, with total assets increasing to C$6.21 million and shareholders' equity becoming positive Consolidated Statement of Financial Position (Unaudited) | Financial Metric | Jan 31, 2023 (C$) | Oct 31, 2022 (C$) | | :--- | :--- | :--- | | **Total Current Assets** | 5,981,245 | 593,312 | | Cash and cash equivalents | 4,498,048 | 175,768 | | **Total Non-Current Assets** | 233,192 | 534,662 | | **Total Assets** | **6,214,437** | **1,127,974** | | **Total Liabilities** | **1,071,721** | **2,637,546** | | Accounts payable and accrued liabilities | 900,872 | 1,906,706 | | Derivative liability | - | 396,597 | | **Total Shareholders' Equity (Deficit)** | **5,142,716** | **(1,509,572)** | | Share capital and share premium | 17,691,059 | 9,153,900 | | Accumulated deficit | (16,309,417) | (13,849,949) | [Condensed Interim Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported no revenue and a net loss of C$2.46 million for the quarter, driven by increased R&D expenses Statement of Operations Highlights (Three months ended Jan 31) | Metric | 2023 (C$) | 2022 (C$) | | :--- | :--- | :--- | | General and administrative expenses | 1,679,546 | 1,660,157 | | Research and development expenses | 792,460 | 424,262 | | **Total operating expenses** | **2,472,006** | **2,084,419** | | **Net Loss** | **(2,459,468)** | **(2,090,883)** | | **Comprehensive loss** | **(2,464,086)** | **(2,090,883)** | | **Loss per share, basic and diluted** | **(1.07)** | **(1.67)** | - On September 30, 2022, the company executed a **1-for-30 reverse share split**, and all share amounts have been retroactively restated[35](index=35&type=chunk) [Condensed Interim Statements of Changes in Shareholders' Equity (Deficit)](index=5&type=section&id=Condensed%20Interim%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20(Deficit)) Shareholders' equity turned positive to C$5.14 million, primarily driven by C$8.47 million in net proceeds from a public offering Changes in Shareholders' Equity (Three months ended Jan 31, 2023) | Item | Amount (C$) | | :--- | :--- | | **Balance, October 31, 2022** | **(1,509,572)** | | Public offering (net) | 8,466,602 | | Net loss for the period | (2,459,468) | | Share-based compensation & other | 745,154 | | **Balance, January 31, 2023** | **5,142,716** | [Condensed Interim Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows) Financing activities provided C$8.45 million in cash, resulting in a net cash increase of C$4.32 million for the quarter Cash Flow Summary (Three months ended Jan 31) | Cash Flow Activity | 2023 (C$) | 2022 (C$) | | :--- | :--- | :--- | | Net cash used in operating activities | (4,118,018) | (1,786,855) | | Net cash provided by financing activities | 8,445,321 | – | | **Net increase (decrease) in cash** | **4,322,280** | **(1,787,259)** | | **Cash at end of period** | **4,498,048** | **2,812,178** | - The primary source of financing cash flow was **C$8,466,602 in net proceeds** from the issuance of shares in a public offering[45](index=45&type=chunk)[57](index=57&type=chunk) [Notes to the Condensed Interim Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Consolidated%20Financial%20Statements) The notes detail the company's going concern risk, public offering, share split, and other key accounting policies and transactions [1. Nature of Operations and Going Concern](index=8&type=section&id=1.%20Nature%20of%20Operations%20and%20Going%20Concern) The company faces substantial going concern risk due to recurring losses and negative cash flow, despite a recent public offering - The company has not generated revenues, had a **negative cash flow from operations of $4,118,018**, and an **accumulated deficit of $16,309,417**, casting substantial doubt on its ability to continue as a going concern[48](index=48&type=chunk) - In November 2022, the company completed a public offering for **gross proceeds of US$7.5 million** and was uplisted to the Nasdaq Capital Market under the symbol 'CMND'[47](index=47&type=chunk) - A **1-for-30 reverse share split** of its ordinary shares was approved and became effective on September 30, 2022[49](index=49&type=chunk)[67](index=67&type=chunk) [2. Significant Accounting Policies](index=9&type=section&id=2.%20Significant%20Accounting%20Policies) Financials are prepared under IFRS, with key management estimates related to going concern and share-based compensation - The financial statements are prepared under International Financial Reporting Standards (IFRS) and should be read with the audited 2022 Annual Report[68](index=68&type=chunk)[70](index=70&type=chunk) - Significant management estimates include the fair value of share-based compensation (using the **Black-Scholes model**) and the assessment of the company's ability to continue as a **going concern**[73](index=73&type=chunk)[74](index=74&type=chunk)[99](index=99&type=chunk) [3. Short-term Investment](index=10&type=section&id=3.%20Short-term%20Investment) The company's short-term investment in Medigus Ltd incurred an unrealized loss of C$84,224 during the quarter Short-term Investment in Medigus Ltd. (Shares) | Date | Value (C$) | | :--- | :--- | | October 31, 2022 | 264,449 | | Unrealized loss | (84,224) | | **January 31, 2023** | **180,225** | - As of January 31, 2023, the company holds **27,778 common shares of Medigus Ltd.**, representing approximately 0.11% of Medigus[54](index=54&type=chunk) [4. Related Party Transactions](index=11&type=section&id=4.%20Related%20Party%20Transactions) Related party transactions include C$383,353 in key management compensation and a cooperation agreement with SciSparc Compensation to Key Management (Three months ended Jan 31) | Recipient Group | 2023 (C$) | 2022 (C$) | | :--- | :--- | :--- | | Key Management (Consulting & SBC) | 250,307 | 275,283 | | Directors (Fees & SBC) | 133,046 | 38,979 | - The company has a cooperation agreement with SciSparc, which has overlapping officers and directors, and received **$13,180 as reimbursement for R&D expenses** from SciSparc during the quarter[56](index=56&type=chunk) [5. Share Capital](index=12&type=section&id=5.%20Share%20Capital) Share capital was impacted by a US$7.5 million public offering, a Nasdaq listing, and a 1-for-30 reverse share split - On November 14, 2022, the company completed an underwritten public offering of 1,153,847 shares at US$6.50 per share, for **aggregate gross proceeds of US$7.5 million** and net proceeds of $8,466,602[57](index=57&type=chunk) - In connection with the offering, the company's common shares were listed on the **Nasdaq under the symbol 'CMND'** starting November 15, 2022[81](index=81&type=chunk) - As of January 31, 2023, the number of issued and outstanding shares was **2,478,441**[79](index=79&type=chunk) [6. Share Purchase Warrants](index=13&type=section&id=6.%20Share%20Purchase%20Warrants) The company had 650,603 outstanding warrants at period-end, including 57,692 new underwriter warrants issued Continuity of Share Purchase Warrants | Date / Event | Number of Warrants | Weighted Avg. Exercise Price (C$) | | :--- | :--- | :--- | | Balance, Oct 31, 2022 | 592,911 | 26.10 | | Issued (underwriter warrants) | 57,692 | 10.85 | | **Balance, Jan 31, 2023** | **650,603** | **24.75** | - Underwriter warrants issued (57,692) are exercisable at **US$8.125 per share** and expire five years after the offering sales commenced[8](index=8&type=chunk)[107](index=107&type=chunk) [7. Stock Options](index=14&type=section&id=7.%20Stock%20Options) There were 157,666 stock options outstanding at period-end, with a related compensation expense of C$132,338 for the quarter Stock Options Outstanding | Status | Number of Options | Weighted Avg. Exercise Price (C$) | | :--- | :--- | :--- | | **Outstanding, Jan 31, 2023** | **157,666** | **20.45** | | Exercisable, Jan 31, 2023 | 82,389 | 20.33 | - Share-based compensation expense for stock options during the three months ended January 31, 2023, was **$132,338**[88](index=88&type=chunk) [8. Restricted Share Units](index=16&type=section&id=8.%20Restricted%20Share%20Units) During the quarter, the company granted and vested 14,774 RSUs with a fair value of C$74,005 to consultants RSU Activity (Three months ended Jan 31, 2023) | Activity | Number of RSUs | Weighted Avg. Price (C$) | | :--- | :--- | :--- | | Granted | 14,774 | 5.01 | | Vested | (14,774) | 5.01 | | **Balance, Jan 31, 2023** | **–** | **–** | - During the quarter, the company issued **14,774 RSUs with a fair value of $74,005** to consultants[90](index=90&type=chunk) [9. Financial Instruments and Risk Management](index=17&type=section&id=9.%20Financial%20Instruments%20and%20Risk%20Management) The company is exposed to significant liquidity and foreign exchange risks, managed through capital raising and currency monitoring - **Liquidity Risk:** The company relies on raising debt or equity financing to meet its financial obligations as they fall due[123](index=123&type=chunk) - **Foreign Exchange Risk:** The company is exposed to currency risk from its Israeli subsidiary (NIS and USD); a 10% change in exchange rates would impact financials by approximately **$365,237**[20](index=20&type=chunk)[92](index=92&type=chunk)[122](index=122&type=chunk) - **Credit Risk:** Risk is concentrated in cash and other receivables and is mitigated by placing cash with high credit quality financial institutions[114](index=114&type=chunk) [10. Capital Management](index=19&type=section&id=10.%20Capital%20Management) The company's capital management focuses on maintaining its going concern status through equity issuances - The company's capital structure consists of cash and equity, and its main objective is to maintain its ability to continue as a **going concern**[22](index=22&type=chunk) - The company manages its capital structure by balancing it through **new share issuances** or other activities as approved by the Board[118](index=118&type=chunk) - The company is **not subject to externally imposed capital requirements**[29](index=29&type=chunk) [11. Commitments](index=19&type=section&id=11.%20Commitments) The company has ongoing commitments to issue shares, stock options, and RSUs to consultants and service providers - The company has an agreement to acquire patent rights in exchange for a consulting services agreement, which includes issuing **16,000 common shares and granting 16,000 stock options** over three years[125](index=125&type=chunk) - The company has advisory agreements to issue **RSUs to various consultants on a monthly basis**, with compensation tied to fixed RSU amounts or a US dollar equivalent[23](index=23&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - During the three months ended January 31, 2023, the Company is committed to issue **9,386 shares with a fair value of $46,832** to two service providers[6](index=6&type=chunk) [12. Segmented Information](index=20&type=section&id=12.%20Segmented%20Information) The company operates in a single R&D segment based in Israel, with non-current assets distributed globally - The company has one operating segment: **research and development of psychedelic medicine**, which primarily occurs in Israel[126](index=126&type=chunk) Non-Current Assets by Geographical Location (Jan 31, 2023) | Location | Amount (C$) | | :--- | :--- | | Canada | 20,000 | | United States | 52,152 | | Europe | 52,152 | | Asia | 108,888 | | **Total** | **233,192** | [13. Subsequent Events](index=20&type=section&id=13.%20Subsequent%20Events) Following the end of the reporting period, the company issued 12,006 shares related to fully vested RSUs - On February 22, 2023, **12,006 shares were issued for fully vested RSUs**, which had a fair value of $141,071 at issuance[127](index=127&type=chunk)

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Emerging Growth Company ☒ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐ †The term "new or revised financial accounting standard" refers to any update issued by ...