クリアマインドメディシンの適時開示

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of June 2023

Commission file number: 001-41557

Clearmind Medicine Inc.

(Translation of registrant’s name into English)

101 – 1220 West 6th Avenue

Vancouver, British Columbia
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

CONTENTS

On June 14, 2023, the registrant filed in Canada its unaudited condensed interim consolidated financial statements and Management’s Discussion and Analysis for the three and six months ended April 30, 2023, with the Canadian Securities Administration and each of the Ontario Securities Commission, British Columbia Securities Commission and Alberta Securities Commission.

EXHIBIT INDEX

Exhibit No.
99.1		Condensed Interim Consolidated Financial Statements for the three and six months ended April 30, 2023.
99.2		Management’s Discussion and Analysis for the for the three and six months ended April 30, 2023.
101.INS		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Clearmind Medicine Inc.

Date: June 14, 2023	By:	/s/ Adi Zuloff-Shani
		Name:	Adi Zuloff-Shani
		Title:	Chief Executive Officer

Exhibit 99.1

CLEARMIND MEDICINE INC.

Condensed Interim Consolidated Financial Statements

For The Three and Six Months Ended April 30, 2023

(Expressed in United States Dollars)

(Unaudited)

CLEARMIND MEDICINE INC.

Condensed Interim Consolidated Statements of Financial Position

(Expressed in United States Dollars)

(Unaudited)

	April 30, 2023			October 31, 2022
Assets
Current assets
Cash and cash equivalents	$	5,245,707		$	128,777
Other receivables		109,625			50,933
Short-term investment (Note 3)		135,001			193,750
Prepaid expenses		263,273			14,245
Related parties (Note 4b)		88,493			46,988

Total current assets		5,842,099			434,693

Non-current assets

Property and equipment		9,773			12,902
Intangible assets		125,289			130,264
Restricted cash		14,730			14,653
Right-of-use asset		4,343			35,730
Deferred offering costs		-			198,173

Total non-current assets		154,135			391,722

Total assets	$	5,996,234		$	826,415

Liabilities

Current liabilities

Accounts payable and accrued liabilities	$	805,453		$	1,396,960
Due to related parties (Note 4)		48,321			206,494
Derivative warrants liability (Note 5)		1,795,499			-
Derivative liability (Note 6c (i))		-			290,569
Lease liability		4,941			38,390

Total liabilities	$	2,654,214		$	1,932,413

Shareholders’ equity (deficit)

Share capital and share premium (Note 6)		14,758,127			6,706,644
RSU reserve (Note 9)		460,969			493,036
Warrants (Note 7)		741,628			459,110
Share-based payment reserve (Note 8)		1,525,623			1,403,688
Accumulated other comprehensive loss		(21,250	)		(21,250	)
Accumulated deficit		(14,123,077	)		(10,147,226	)

Total shareholders’ equity (deficit)		3,342,020			(1,105,998	)

Total liabilities and shareholders’ equity (deficit)	$	5,996,234		$	826,415

Approved and authorized for issuance on behalf of the Board on June 14, 2023:

/s/ “Alan Rootenberg”		/s/ “Adi Zuloff-Shani”
Alan Rootenberg, Director, CFO		Adi Zuloff-Shani, Director, CEO

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

F-2

CLEARMIND MEDICINE INC.

Condensed Interim Consolidated Statements of Operations and Comprehensive Loss

(Expressed in United States Dollars)

(Unaudited)

	Three months ended						Six months ended
	April 30,						April 30,
	2023			2022			2023			2022

Operating expenses
General and administrative	$	1,338,445		$	1,059,881		$	2,583,873		$	2,276,202
Research and development		317,572			1,160,758			905,202			1,471,595
Total operating expenses		1,656,017			2,220,639			3,489,075			3,747,797
Loss before other expenses		(1,656,017	)		(2,220,639	)		(3,489,075	)		(3,747,797	)

Finance expenses

Changes in fair value of warrants (Note 5)		(360,557	)		–			(360,557	)		–
Unrealized gain (loss) on short-term investment (Note 3)		4,445			(95,812	)		(58,749	)		(95,812	)
Foreign exchange loss		(60,952	)		(9,334	)		(95,356	)		(14,070	)
Finance income, net		5,966			–			23,981			–
Total finance expenses		(411,098	)		(105,146	)		(490,681	)		(109,882	)

Other incomes
Dividend received		–			–			16,555			–
Total other incomes		–			–			16,555			–

Loss before taxes		(2,067,115	)		(2,325,785	)		(3,963,201	)		(3,857,679	)
Tax expenses		(9,267	)		–			(12,650	)		–
Net Loss and Comprehensive loss	$	(2,076,382	)	$	(2,325,785	)	$	(3,975,851	)	$	(3,857,679	)
Loss per share (*), basic and diluted	$	(0.55	)	$	(1.78	)	$	(1.32	)	$	(3.01	)
Weighted average number of shares (*) for the purposes of basic and diluted loss per share		3,747,333			1,309,115			3,010,522			1,279,977

(*)	On September 30, 2022, the Company effected a 1-for-30 share consolidation (reverse share split) of its issued and outstanding shares. All share amounts have been retroactively restated for all periods presented.

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

F-3

CLEARMIND MEDICINE INC.

Condensed Interim Statements of Changes in Shareholders’ Equity (Deficit)

(Expressed in United States Dollars)

(Unaudited)

	Share capital and share premium					RSU and					Share-based		Accumulated other						Total
	Number of shares (*)		Amount			share reserve			Warrants		payment reserve		comprehensive income			Accumulated deficit			shareholders’ equity (deficit)
Balance, October 31, 2021		1,250,858	$	5,792,009		$	112,829		$	250,567	$	615,031	$	–		$	(3,259,364	)	$	3,511,072
Shares issuable for vested RSU’s		–		–			86,600			–		–		–			–			86,600
Shares issued and issuable for services		2,667		38,684			45,913			–		–		–			–			84,597
Units issued for cash		39,747		698,897			–			–		–		–			–			698,897
Issuance costs		–		(69,890	)		–			–		–		–			–			(69,890	)
Units issued for short-term investment		26,498		372,745			–			82,742		–		–			–			455,487

Share-based compensation		–		–			–			–		424,107		–			–			424,107
Net loss for the period		–					–			–		–		–			(3,857,679	)		(3,857,679	)
Balance, April 30, 2022		1319,770	$	6,832,445		$	245,342		$	333,309	$	1,039,138	$	–		$	(7,117,043	)	$	1,333,191

Balance, October 31, 2022		1,319,770	$	6,706,644		$	493,036		$	459,110	$	1,403,688	$	(21,250	)	$	(10,147,226	)	$	(1,105,998	)
Net loss for the period		–		–			–			–		–		–			(3,975,851	)		(3,975,851	)
Issuance of shares (Note 6c(i))		1,153,847		6,081,619			–			282,287		–		–			–			6,363,906
Shares and warrants issuable to Medigus (Note 6c(i))		–		296,845			–			231		–		–			–			297,076
Issuance of shares, pre-funded warrants and warrants (Note 6c(iii))		4,505,718		1,522,948			–			–		–		–			–			1,522,948
Shares issued from RSUs (Note 6c(ii))		16,830		150,071			(150,071	)		–		–		–			–			–
Shares for services (Notes 12a, 12f)		–		–			40,372			–		–		–			–			40,372
RSU’s vested (Note 9(i))		–		–			77,632			–		–		–			–			77,632
Share-based compensation (Note 8)		–		–			–			–		121,935		–			–			121,935
Balance, April 30, 2023		6,996,165	$	14,758,127		$	460,969		$	741,628	$	1,525,623	$	(21,250	)	$	(14,123,077	)	$	3,342,020

(*)	On September 30, 2022, the Company effected a 1-for-30 share consolidation (reverse share split) of its issued and outstanding shares. All share amounts have been retroactively restated for all periods presented.

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

F-4

CLEARMIND MEDICINE INC.

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in United States Dollars)

(Unaudited)

	Six months ended			Six months ended
	April 30,			April 30,
	2023			2022
Operating activities
Net loss	$	(3,975,851	)	$	(3,857,679	)

Adjustments for:
Amortization of intangible assets		4,975			9,823
Amortization of right-of-use asset		26,789			–
Interest on lease liability		2,682			–
Depreciation of property and equipment		3,813			2,895
Exchange rate differences		(77	)		–
Changes in fair value of warrants		360,557			–
Share-based compensation		246,446			595,303
Unrealized loss on short-term investment		58,749			95,812
Tax expenses		12,650			–

Movements in working capital:
Increase in other receivables		(100,197	)		(62,806	)
Decrease (increase) in prepaid expenses		(249,028	)		87,373
Decrease in accounts payable and accrued liabilities		(405,984	)		(145,085	)
Increase (decrease) in due to related parties		(158,173	)		18,287
Net cash used in operating activities		(4,172,649	)		(3,256,077	)

Financing activities
Proceeds from issuance of shares, net of issuance costs (Note 6c (i))		6,363,906			–
Proceeds from issuance of shares, pre-funded warrants and warrants, net of issuance costs (Note 6c (iii))		2,957,890			–
Proceeds from issuance of shares and warrants, net of issuance costs (Note 6d (iii))		–			629,007
Repayment of lease liabilities		(30,984	)		–

Net cash provided by financing activities		9,290,812			629,007
Effect of foreign exchange rate changes on cash and cash equivalents		(1,233	)		213
Net increase (decrease) in cash and cash equivalents		5,116,930			(2,626,857	)
Cash and cash equivalents at beginning of period		128,777			3,369,798
Cash and cash equivalents at end of period	$	5,245,707		$	742,941

Supplementary disclosure of cash flow information:
Cash received for interest	$	26,663		$	–
Non-cash financing and investing activities
Derivative liability converted to equity (Note 6c(i))	$	290,569		$	–
Units issued for short-term investment		–			223,904

F-5

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

1.	Nature of Operations and Going Concern

Clearmind Medicine Inc. (formerly Cyntar Ventures Inc.) (the “Company”) was incorporated in the province of British Columbia on July 18, 2017. The Company changed its name from Cyntar Ventures Inc. to Clearmind Medicine Inc. on March 24, 2021. The Company’s previous business was carrying out mining exploration operations and was involved in the exploration of the Lorn mineral property located in the Clinton and Lillooet Mining Divisions of British Columbia. Effective May 18, 2021, the Company is in the business of researching, developing and marketing proprietary formulations of psychedelic designer therapeutics with an initial focus of developing products. The Company’s head office is located at Suite 101, 1220 West 6th Avenue, Vancouver, BC, V6H 1A5. The Company’s Israeli subsidiary (Clearmindmed Ltd.) provides research and development services to the Company.

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 note 6c (i). The Company trades under the symbol CMND on both the Nasdaq and the Canadian Securities Exchange (“CSE”) in Toronto.

On April 6, 2023, the Company completed an underwritten public offering for aggregate gross proceeds of US$3.5 million. Net proceeds of US$2.9 million. See note 6c (iii).

Going concern

These condensed interim consolidated financial statements have been prepared on the 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 six months ended April 30, 2023, the Company has not generated any revenues and has negative cash flow from operations of $4,172,649. As of April 30, 2023, the Company has an accumulated deficit of $14,123,077. The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional financing through debt or equity. Management is of the opinion that sufficient working capital will be obtained from external financing to meet the Company’s liabilities and commitments as they become due, although there is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company. These factors may cast substantial doubt on the Company’s ability to continue as a going concern. These condensed interim consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

Reverse share split

On September 30, 2022, the Company’s Board of Directors approved a 1-for-30 reverse split of its issued and outstanding ordinary shares, effective as of September 30, 2022, pursuant to which holders of the Company’s ordinary shares received 0.0333 of an ordinary share for every one ordinary share.

All issued and outstanding ordinary shares or instruments convertible into ordinary shares contained in these financial statements prior to the reverse share split have been retroactively adjusted to reflect the reverse share split for all periods presented, unless explicitly stated otherwise.

Functional Currency and Presentation Currency

The financial statements of each company within the consolidated group are measured using their functional currency which is the currency of the primary economic environment in which an entity operates. The Company changed its functional currency from the Canadian dollar (C$) to the United States dollar (US$) as of November 1, 2022. The change in presentation currency is a voluntary change which is accounted for retrospectively. For comparative reporting purposes, historical financial information has been translated to United States dollars using the exchange rate as of November 1, 2022, which is the date of the change in the functional and presentation currency.

Translation of Foreign Currency

These consolidated financial statements are presented in United States dollars. As of November 1, 2022, the functional currency of Clearmind is the US dollar (as described above). The functional currency of Clearmindmed Ltd. is the United States dollar.

F-6

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

2.	Significant Accounting Policies

Basis of Presentation

The accompanying condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) on a going concern basis.

These condensed interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Clearmindmed Ltd. and Clearmind Labs Corp. (inactive). All inter-company balances and transactions have been eliminated on consolidation.

These condensed interim consolidated financial statements have been prepared on a historical cost basis, except for financial assets and liabilities (including derivatives) which are presented at fair value through profit or loss (“FVTPL”), and are presented in United States dollars, which is the Company’s functional currency.

Unaudited Interim Financial Information

Certain information and footnote disclosures normally included in financial statements prepared in accordance with IFRS have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed financial statements should be read in conjunction with the audited financial statements as of and for the year ended October 31, 2022 and the notes thereto (the “2022 Annual Report”).

The unaudited condensed financial statements have been prepared on the same basis as the audited financial statements, except for the change in functional and presentational currency (note 1d). In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all adjustments that are necessary to present fairly the Company’s financial position and results of operations for the interim periods presented. The results for the six months ended April 30, 2023 are not necessarily indicative of the results for the year ending October 31, 2023, or for any future period.

As of April 30, 2023, there have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2022 Annual Report, except for the change in functional and presentational currency (note 1d).

Significant Accounting Estimates and Judgments

The preparation of consolidated financial statements in accordance with IFRS requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts of assets, liabilities, income, and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

F-7

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

2.	Significant Accounting Policies (continued)

Significant Accounting Estimates and Judgments (continued)

Significant Estimates

Share-based Compensation

Fair values are determined using the Black-Scholes option pricing model. Estimating fair value requires determining the most appropriate valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. Option-pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates and, therefore, existing models do not necessarily provide reliable measurement of the fair value of the Company’s stock options.

Warrant Liability

The Company uses the Black-Scholes option-pricing model to estimate fair value of options and the warrant liability at each reporting date. The key assumptions used in the model are the expected future volatility in the price of the Company’s shares and the expected life of the options and warrants.

Significant Judgments

The critical judgments that the Company’s management has made in the process of applying the Company’s accounting policies that have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:

Going Concern

The application of the going concern assumption requires management to take into account all available information about the future, which is at least but not limited to, 12 months from the year end of the reporting period. The Company is aware that material uncertainties related to events or conditions may cast significant doubt upon the Company’s ability to continue as a going concern.

3.	Short-term Investment

As of April 30, 2023, the Company holds 27,778 common shares of Medigus Ltd (“Medigus”) (approximately 0.11%) with a total fair value of $135,001. The fair value of common shares held was determined by reference to public price quotations in an active market.

	October 31, 2022		Additions		Unrealized loss			April 30, 2023

Medigus Ltd. – Shares	$	193,750	$	-	$	(58,749	)	$	135,001

F-8

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

4.	Related Party Transactions

Compensation to key management personnel

(i)

The compensation to key management personnel for employment services they provide to the Company is as follows:

	Three months ended		Three months ended		Six months ended		Six months ended
	April 30,		April 30,		April 30,		April 30,
	2023		2022		2023		2022

Officers:
Consulting fees	$	78,622	$	101,822	$	202,718	$	195,504
Share based compensation		34,279		122,184		78,721		230,201
	$	112,901	$	225,005	$	281,439	$	425,705
Directors:
Directors’ fees	$	41,834	$	17,775	$	80,976	$	35,360
Share based compensation		34,029		7,767		78,124		18,742
	$	75,863	$	25,542	$	159,100	$	54,102

(ii)

Balances with related parties

	April 30,		October 31,
	2023		2022
Amounts owed to officers	$	27,085	$	136,149
Amounts owed to directors		21,236		70,345
	$	48,321	$	206,494

On March 7, 2022, the Company signed an agreement with SciSparc, pursuant to which the Company and SciSparc agreed to cooperate in conducting a feasibility study using certain molecules developed by each party (the “Cooperation Agreement”). Certain of the Company’s officers and directors currently operate, manage or are engaged as officers and/or directors of SciSparc, which may have similar or different objectives than the Company’s. Such activities could detract from the time these people have to allocate to the Company’s affairs. To date, no determination has been made to pursue the joint venture and the development of the research activities with SciSparc remains in a very early stage. For the six months ended April 30, 2023, the Company received $nil as a reimbursement for research and development expenses conducted within the framework of the Cooperation Agreement. As of April 30, 2023, $88,493 is owed to the Company.

On July 1, 2021, the Company entered into a lease agreement (“2021 Lease”) with Scisparc Ltd, a related party (“Scisparc”) and a third party for a total area of approximately 240m2 , of which the Company occupies approximately 120m2 for the Company’s offices, in Tel Aviv, Israel. The lease expires on June 30, 2023. The Company, Scisparc and the third party have an option to extend the 2021 Lease for an additional three-year period. The Company’s base rent was ILS11,000 per month ($3,080) during the term of the 2021 Lease. The lease liability was discounted using the Company’s estimated incremental borrowing rate of 20%. On December 31, 2021, the third party elected to leave the office space, and a new lease agreement was signed with the Company and the related party. As a result, the Company’s base rent was increased to ILS 18,200 per month ($5,094).

F-9

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

5.	Warrant liability

On April 6, 2023, the Company issued 4,505,718 warrants in connection with its April 2023 Public Offering financing. At the time of the grant, these warrants were recorded at their fair value as a derivative liability as the terms of the warrant include a cashless exercise provision, under certain circumstances, and are revalued at the end of each reporting period. During the three and six month periods ended April 30, 2023, the Company recorded a loss on the revaluation of the total warrant liability of $360,557, in the Condensed Interim Consolidated Statements of Operations and Comprehensive Loss.

The Black-Scholes option pricing model was used to measure the derivative warrant liability with the following assumptions:

	April 30, 2023

Share Price	$	0.46 - $0.56
Exercise Price	$	0.78
Expected life		4.94 years
Risk-free interest rate		4.22% - 3.94	%
Dividend yield		0.00	%
Expected volatility		99	%
Value of warrants	$	1,434,942 - $1,795,499

The following table presents the changes in the warrants liability during the period:

Balance as of November 1, 2022	$	-
Issuance of April 2023 Warrants		1,434,942
Changes in fair value		360,557
Balance as of April 30, 2023	$	1,795,499

F-10

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

6.	Share Capital

The Company’s authorized share capital is unlimited common shares without par value share. As of April 30, 2023, the number of shares issued and outstanding are 6,996,165 (October 31, 2022 - 1,319,770).

On September 30, 2022, the Company effected a 1-for-30 share consolidation (reverse share split) of its issued and outstanding shares. All share amounts and instruments convertible into shares have been retroactively restated for all periods presented.

Share transactions during the six months ended April 30, 2023:

(i)

On November 14, 2022, the Company completed an underwritten public offering of 1,153,847 shares at a price to the public of US$6.50 per share, for aggregate gross proceeds of US$7.5 million, prior to deducting underwriting discounts and offering expenses. The offering closed on November 17, 2022. Net proceeds received were $6,363,906.

In addition, the Company granted Aegis Capital Corp. (“Aegis”), who acted as the underwriters for the deal, a 45-day option to purchase up to 173,077 additional common shares, equal to 15% of the number of shares sold in the offering solely to cover over-allotments, if any (“Over-Allotment”). The public purchase price per additional common share would have been US$6.50 per share. The Over-Allotment was not exercised.

Aegis received 57,692 underwriter warrants, each such warrant entitling the agents to receive one common share upon payment of US $8.125 per share, exercisable six months after the commencement of sales of this offering and expiring on a date which is no more than five years after the commencement of sales of the offering. The fair value for underwriter warrants total of $282,287 and have been credited to the warrant reserve. The fair value has been estimated using the Black-Scholes option pricing model assuming no expected dividends or forfeitures and the following weighted average assumptions:

Risk-free interest rate	1.43	%
Expected life (in years)	5
Expected volatility	107	%

In connection with the offering, the Company’s common shares were approved for listing on the Nasdaq and began trading on the Nasdaq under the symbol “CMND” on November 15, 2022.

Following the public offering, Medigus were entitled to receive 44,829 shares and 2,241 warrants pursuant to an anti-dilution clause included in the agreement signed between the Company and Medigus on June 29, 2022. On May 23, 2023, the Company issued the 44,829 shares and 2,241 warrants.

The anti-dilution feature was recorded as a derivative liability as of October 31, 2022 and has been classified to equity upon completion of the IPO.

(ii)

On January 16, 2023, 4,824 shares were issued in respect of RSU’s that had been fully vested. The RSU’s had a fair value of $39,975 at the time of issuance.

On February 22, 2023, 12,006 shares were issued in respect of fully vested RSU’s that had been fully vested. The RSU’s had a fair value of $110,096 at the time of issuance.

F-11

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

6.	Share Capital (continued)

(iii)

On April 6, 2023 the Company completed an underwritten public offering of 3,097,459 shares at a price to the public of US$0.78 per share and pre-funded warrants to purchase 1,398,959 Common Shares at a price to the public of US$0.779 per pre-funded warrant (“Pre-Funded Warrants”), for aggregate gross proceeds of US$3.5 million. The Pre-Funded Warrants were exercisable at $0.001 into one common share, and all the Pre-Funded Warrants were exercised by April 30, 2023. In addition, each April 2023 Public Offering shareholder and each Pre-Funded Warrant holder received a common warrant, which is immediately exercisable, will expire five years from the date of issuance and have an exercise price of US$0.78 per common share (“April 2023 Public Offering Warrant”). Net proceeds received were $2,931,207.

Share transactions during the six months ended April 30, 2022:

(i)

On November 26, 2021, the Company issued 1,333 common shares with a fair value of $21,100 to the CSO as per the agreement.

(ii)

On February 14, 2022, the Company issued 1,334 common shares with a fair value of $17,584 to the CSO.

(iii)

On February 14, 2022, the Company closed a share purchase agreement with Medigus, whereby the Company issued a total of 66,244 units to Medigus in consideration for US$750,000 (“Cash Financing”) and 27,778 common shares of Medigus (“Share Exchange”). Each unit is comprised of one common share and one warrant, with each warrant exercisable for a period of 18 months at CAD$60.00 per share.

Pursuant to the Cash Financing, the Company issued 39,747 units at $24.00 per unit for proceeds of $698,897.

In connection with the Cash Financing, the Company incurred finder’s fees of $69,890, which have been charged to the condensed interim statement of changes in equity.

Pursuant to the Share Exchange, the Company issued 26,498 units with a fair value of $455,487, consisting of common shares with a fair value of $372,745 and warrants with a fair value of $82,742. The fair value of the warrants was determined using the Black-Scholes option pricing model with the following assumptions: Risk-free rate of 1.43%, expected life of 1.5 years, and volatility of 107.46%.

In connection with the Share Exchange, the Company incurred finder’s fees of $50,000, which were allocated to the base cost of the shares in Medigus.

In addition, Medigus will be entitled to 10% of the initial equity of a potential venture in the area of psychedelics, in connection with a research project currently conducted according to an agreement between the Company and the commercialization arm of a leading Israeli academic institution.

F-12

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

7.	Share Purchase Warrants

The following table summarizes the changes in the Company’s share purchase warrants:

	Number of warrants			Weighted average exercise price (US$)

Balance, October 31, 2021 and April 30, 2022		526,666		$	16.08

Issued		66,245			44.19	(*)

Balance, October 31, 2022		592,911			19.22

Issuance of underwriter warrants (note 6c(i))		57,692			8.125
Issuance of April 2023 warrants (note 5)		4,505,718			0.78
Expiration of warrants		(276,667	)		27.62

Balance, April 30, 2023		4,879,654		$	1.59

(*) Warrants issued with an exercise price of C$60.00.

As of April 30, 2023, the following share purchase warrants were outstanding:

Number of warrants outstanding		Exercise price		Exercise price (USD)		Expiry date

	66,245	C$	60.00	$	44.19	August 14, 2023
	250,000	C$	4.50	$	3.31	April 22, 2024
	57,692	$	8.125	$	8.125	November 17, 2027
	4,505,718	$	0.78	$	0.78	April 6, 2028
	4,879,654

F-13

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

8.	Stock Options

On September 1, 2021, the Company implemented a stock option plan pursuant to which stock options may be granted to directors, officers, employees, and consultants of the Company. The Board of directors is authorized to grant the maximum number of common shares reserved for issuance in any 12-month period to anyone, optionee, other than a consultant may not exceed 5% of the issued and outstanding common shares at the date of the grant. The maximum number of common shares reserved for issuance in any 12-month period to any consultant may not exceed 2% of the issued and outstanding common shares at the date of the grant and the maximum number of common shares reserved for issuance in any 12-month period to all persons engaged in investor relations activities may not exceed 2% of the issued and outstanding number of common shares at the date of the grant.

The following table summarizes the changes in the Company’s stock options for the periods ended April 30, 2023 and October 31, 2022:

	Number of options			Weighted average exercise price (C$)		Weighted average exercise price (USD$)

Outstanding, October 31, 2021		111,889		C$	20.67	$	15.18

Granted		86,333			20.68		15.19

Cancelled		(40,556	)		21.56		15.84

Outstanding, October 31, 2022 and April 30, 2023		157,666		C$	20.45	$	15.06

Exercisable, April 30, 2023		82,389		C$	20.33	$	14.97

F-14

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

8.	Stock Options (continued)

Additional information regarding stock options outstanding as of April 30, 2023, is as follows:

Outstanding								Exercisable
Number of stock options		Weighted average remaining contractual life (years)		Weighted average exercise price (C$)		Weighted average exercise price (USD$)		Number of stock options		Weighted average exercise price (C$)		Weighted average exercise price (USD$)

	16,000		3.07	C$	5.55	$	4.09		9,333	C$	5.55	$	4.09
	29,333		8.76		16.80		12.37		16,278		16.80		12.37
	12,667		8.61		20.40		15.02		12,667		20.40		15.02
	35,000		3.07		22.50		16.57		21,666		22.50		16.57
	6,000		6.00		23.40		17.23		3,250		23.40		17.23
	31,333		8.76		24.00		17.68		13,056		24.00		17.68
	4,000		3.39		24.90		18.34		4,000		24.90		18.34
	20,000		3.18		25.20		18.56		11,667		25.20		18.56
	3,333		8.61		30.00		22.09		1,666		30.00		22.09

	157,666		5.96	C$	20.45		15.06		93,583	C$	20.35		14.99

The fair value for stock options previously granted to certain consultants for ongoing services measured during the period have been estimated using the Black-Scholes option pricing model assuming no expected dividends or forfeitures and the following weighted average assumptions:

	2023			2022

Risk-free interest rate		3.89	%		2.32	%
Expected life (in years)		5.13			7.49
Expected volatility		113%-118	%		93%-94	%

The portion of the total fair value of stock options expensed during the six months ended April 30, 2023, was $121,935 (2022 - $424,107) which was recorded as share-based payment reserve and charged to operations. The weighted average fair value of stock options granted during the six months ended April 30, 2023 was CAD$0.33 per share (weighted average fair value of stock options granted during the six months ended April 30, 2022 was CAD$0.38).

F-15

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

9.	Restricted Share Units

On August 4, 2021, the Company approved an RSU plan, which is designed to provide certain directors, officers, employees, and consultants of the Company with the opportunity to acquire RSU’s of the Company. Each unit is equivalent in value to a common share and upon vesting results in the holder thereof being issued, at the discretion of the Board, either (i) a common share, or (ii) an amount of cash equal to the fair market value of a common share.

During the six months ended April 30, 2023, the Company recognized share-based compensation of $118,004, being the fair value of the RSU’s vesting during the period. This amount was charged against the RSU reserve in the Condensed Interim Consolidated Statement of Changes in Shareholders’ Equity (2022 - $132,513).

The following table summarizes the continuity of RSUs:

	Number of RSUs			Weighted average issue price (C$)		Weighted average issue price (USD$)

Balance, October 31, 2021		–		$	–	$	–

Granted		35,328			10.55		7.75
Vested		(35,328	)		10.55		7.75

Balance, October 31, 2022		–		$	–	$	–

Granted (i)		34,630			1.67		1.23
Vested		(34,630	)		1.67		1.23

Balance, April 30, 2023		–		$	–	$	–

(i)	During the six months ended April 30, 2023, the Company issued 34,630 RSU’s with a fair value of $77,632 to consultants.

F-16

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

10.	Financial Instruments and Risk Management

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s statement of financial position as of April 30, 2023, as follows:

	Fair Value Measurements Using
	Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Balance April 30, 2023
Short-term investment	$	135,001	$	–	$	–	$	135,001
Derivative warrants liability		–		1,795,499		–		1,795,499

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s statement of financial position as of October 31, 2022, as follows:

	Fair Value Measurements Using
	Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Balance October 31, 2022
Short-term investment	$	193,750	$	–	$	–	$	193,750
Derivative liability		–		290,569		–		290,569

The fair value of other assets and liabilities, which include cash, amounts receivable, accounts payable and accrued liabilities, and amounts due to related parties, approximate their carrying values due to the relatively short-term maturity of these instruments.

Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. The carrying amount of financial assets represents the maximum credit exposure.

Foreign Exchange Rate Risk

Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent that monetary assets and liabilities are denominated in a foreign currency. The Company’s subsidiary operates in Israel and has certain monetary financial instruments denominated in NIS and CAD. The Company has not entered into foreign exchange rate contracts to mitigate this risk.

The following table indicates the impact of foreign currency exchange risk on net working capital as of April 30, 2023. The table below also provides a sensitivity analysis of a 10% strengthening of the foreign currency against functional currencies identified which would have increased (decreased) the Company’s net loss by the amounts shown in the table below. A 10% weakening of the foreign currency against the functional currencies would have had the equal but opposite effect as of April 30, 2023.

F-17

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

10.	Financial Instruments and Risk Management (continued)

Foreign Exchange Rate Risk (continued)

Cash	$	250,024
Amounts receivable		49,235
Accounts payable and accrued liabilities		(676,001	)
Due to related parties		(18,764	)
Total foreign currency financial assets and liabilities	$	(395,506	)

Impact of a 10% strengthening or weakening of foreign exchange rate	$	39,551

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to significant interest rate risk as it does not have any liabilities with variable rates.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s objective to managing liquidity risk is to ensure that it has sufficient liquidity available to meet its liabilities when due. The Company relies on raising debt or equity financing in a timely manner.

The following amounts are the contractual maturities of financial liabilities as of April 30, 2023 and October 31, 2022:

April 30, 2023	Total		Within 1 year		Within 2-5 years

Accounts payable and accrued liabilities	$	805,453	$	805,453	$	–
Due to related parties		48,321		48,321		–
Derivative warrants liability		1,795,499		1,795,499		–
Lease liability		4,941		4,941		–
	$	2,654,214	$	2,654,214	$	–

October 31, 2022	Total		Within 1 year		Within 2-5 years

Accounts payable and accrued liabilities	$	1,396,960	$	1,396,960	$	–
Due to related parties		206,494		206,494		–
Derivative liability		290,569		290,569
Lease liability		38,390		38,390
	$	1,932,413	$	1,932,413	$	–

F-18

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

11.	Capital Management

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash and equity comprised of issued share capital, RSU reserve, warrants reserve, and options reserve.

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issuances or by undertaking other activities as deemed appropriate under the specific circumstances.

The Company is not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged from the six months ended April 30, 2023.

12.	Commitments

On November 1, 2020 (as amended on May 12, 2021), the Company entered into an agreement to acquire the rights, title, and interest in certain patents and patent applications in exchange for entering into a consulting services agreement with the consultant. The consultant will become the Company’s scientific consultant and will be compensated with a monthly fee of $5,000 starting on February 1, 2021. The Company is to issue the consultant 16,000 common shares in equal instalments, at the end of each quarter, commencing with the ending of the first complete quarter after the date on which the Canadian Securities Exchange (“Listing Date”) has provided its final approval to the Company’s change of business, over a period of three years.

Effective January 1, 2022, the Company entered into advisory agreements with an advisor of the Company, whereby the Company agreed to issue each consultant 667 RSU’s at the end of each month commencing January 1, 2022, for an initial term of 12 months.

Effective January 1, 2022, the Company entered into advisory agreements with two advisors of the Company, whereby the Company agreed to issue each consultant 667 RSU’s at the end of each month commencing January 31, 2022, for an initial term of 24 months.

On March 1, 2022, the Company entered into an advisory agreement with a consultant, whereby the Company agreed to pay the consultant ILS 20,000 ($5,600) and 667 RSU’s per month for a period of 12 months. The agreement has been extended for an additional year.

On March 14, 2022, the Company entered an agreement with a consultant, whereby the Company agreed to issue the consultant RSU’s equivalent to $10,000 per month for a period of three months. The term is automatically renewed unless terminated by the Company with three days’ written notice within the initial term or thirty days in a subsequent term. From January 1, 2023, the agreement was amended to $5,000 per month. His agreement is still in effect.

On May 23, 2022, the Company entered an agreement with a consultant, whereby the Company agreed to issue the consultant common shares equivalent to $10,000 per month for a period of three months. The term is automatically renewed unless terminated by the Company with three days’ written notice within the initial term or thirty days in a subsequent term.

F-19

CLEARMIND MEDICINE INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Expressed in United States Dollars)

(Unaudited)

13.	Segmented Information

As of April 30, 2023, the Company has one operating segment, research and development of psychedelic medicine, which takes place primarily in Israel.

The Company’s non-current assets by geographical location are as follows:

April 30, 2023	Canada		United States		Europe		Asia		Total

Intangible assets	$	–	$	37,587	$	37,587	$	50,115	$	125,289
Property and equipment		–		–		–		9,773		9,773
Restricted cash		14,730		–		–		–		14,730
ROU asset		–		–		–		4,343		4,343
	$	14,730	$	37,587	$	37,587	$	64,231	$	154,135

October 31, 2022	Canada		United States		Europe		Asia		Total

Intangible assets	$	–	$	39,079	$	39,079	$	52,106	$	130,264
Property and equipment		–		–		–		12,902		12,902
Restricted cash		14,653		–		–		–		14,653
ROU asset		–		–		–		35,730		35,730
Deferred offering costs		–		198,173		–		–		198,173
	$	14,653	$	237,252	$	39,079	$	100,738	$	391,722

14.	Subsequent Events

On May 23, 2023, the Company granted 1,832 stock options to a consultant of the Company. The options are exercisable at CAD$10.5 per share and 687 vesting immediately on Grant Date and 229 at the end of each quarter thereafter for 5 consecutive quarters. The options expire on the May 22, 2033.

On May 23, 2023, 7,166 shares were issued to consultants and 44,817 were issued to providers of investor services.

On June 1, 2023, 7,337 shares were issued in respect of RSU’s that had been fully vested.

F-20

EX-99.2 3 ea180126ex99-2_clearmind.htm MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 2023

Exhibit 99.2

CLEARMIND MEDICINE INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the Three and Six Months Ended April 30, 2023

(Unaudited)

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

Expressed in United States Dollars This Management’s Discussion and Analysis (“MD&A”) of Clearmind Medicine Inc. (“Clearmind” or the “Company”), prepared as of June 14, 2023, should be read in conjunction with the unaudited condensed interim consolidated financial statements and the notes thereto for the three and six months ended April 30, 2023, which were prepared in accordance with International Financial Reporting Standards (“IFRS”). All amounts are expressed in United States dollars unless otherwise indicated.

Additional information about the Company is available on SEDAR at www.sedar.com.

Cautionary Statement Regarding Forward-Looking Information

This MD&A may contain “forward-looking statements” which reflect the Company’s current expectations regarding future results of operations, performance and achievements of the Company. The Company has tried, wherever possible, to identify these forward-looking statements by, among other things, using words such as “anticipate,” “believe,” “estimate,” “expect” and similar expressions. The statements reflect the current beliefs of the management of the Company, and are based on currently available information. Accordingly, these statements are subject to known and unknown risks, uncertainties and other factors, which could cause the actual results, performance, or achievements of the Company to differ materially from those expressed in, or implied by, these statements.

The Company undertakes no obligation to publicly update or review the forward-looking statements whether as a result of new information, future events or otherwise.

Historical results of operations and trends that may be inferred from the following discussions and analysis may not necessarily indicate future results from operations.

Description of Business and Company Overview

Corporate Information

The Company was incorporated under the name Cyntar Ventures Inc. on July 18, 2017, pursuant to the provisions of the Business Corporations Act (British Columbia). On March 24, 2021, the name of the Company was changed to Clearmind Medicine Inc. The Company’s principal executive offices are located at 101 – 1220 W. 6th Ave, Vancouver, BC V6H1A5 and its operational offices are located at 20 Rahul Wallenberg, Tel Aviv, Israel.

Originally, the Company operated as a mineral resource exploration operations company. In September 2020, the Company announced a shift of the focus of the business to the development of innovative psychedelic therapies. This process involved the acquisition of all rights, title and interests in several patent applications for the treatment of alcohol abuse disorder and various other non-controlled binge behaviors. As part of this process, the Company announced a Change of Business, or COB listing, on the CSE. The COB became effective in November 2020. In May 2021, the Company completed all of the requirements of the CSE for a COB listing. The Company’s common shares trade on the Canadian Securities Exchange under the symbol “CMND”.

Functional Currency and Presentation Currency

Translation of Foreign Currency

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”). Net proceeds of $6.4 million. As a result, the Company also trades under the symbol CMND on the Nasdaq.

On April 6, 2023, the Company completed an underwritten public offering for aggregate gross proceeds of US$3.5 million. Net proceeds of $2.9 million (“April 2023 Public Offering”)

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

Company Overview

The Company is a pre-clinical pharmaceutical company approaching phase 1 clinical trials, that develops novel psychedelic medicines to solve widespread, yet under-served, health problems. The Company’s goal is to develop and provide a new type of treatment for mental health disorders, including alcohol use disorders, or AUD, binge drinking and eating disorders, where there is significant unmet need and lack of innovation. The Company sees psychedelic therapies, which previously may have been overlooked or underused, as the future of treatment for a variety of indications. The Company believes that its solution for AUD can help solve one of the world’s biggest health problems, which costs the United States alone roughly $250 billion each year.

The Company’s flagship treatment and focus for the short term is on AUD, which is incredibly common. It varies from mild to excessive and describes a person’s inability to restrict their alcohol consumption, despite negative social, occupational, or health consequences. Alcohol consumption contributes to 3 million deaths each year globally and is the third most common preventable cause of death in the United States. Apart from potentially changing people’s lives, the Company believes that the Company’s treatment could potentially reduce the amount currently being spent on the consequences of AUD in the United States, Europe, India, China and other countries around the world. The Company also believes that its treatment may address binge drinking. 95,000 people die every year in the United States alone due to binge drinking.

The Company has completed a series of pre-clinical, investigational new drug—, or IND—, enabling studies in the United States and China that are required before the Company can study its compound for the first time in humans. These studies include pharmacokinetic and toxicological studies in rats and dogs in order to assess the safety profile of the Company’s compound and characterization of the drug metabolism. The Company has conducted several metabolism studies designed to better understand the way 5-Methoxy-2-aminoindane, or MEAI, is digested in several species. In addition, the Company has conducted a pre-clinical animal model of AUD to characterize the effect of MEAI on alcohol consumption. This study involved testing the effect of MEAI’s ability to curb alcohol cravings after exposing mice to prolonged alcohol consumption over a short period, mimicking binge alcohol consumption in humans.

The Company intends to submit the Company’s IND request and to initiate the Phase I/IIa clinical study in the first quarter of 2023. As part of this strategy, the Company had a pre-IND meeting with the U.S. Food and Drug Administration, or FDA, in May 2022. The Company plans to submit applications to conduct the Phase I/IIa study in Europe, the United States and Israel. Upon completion of the Phase I/IIa studies, if successful, the Company will be required to conduct additional clinical trials subject to securing additional financing.

Research and development work

In addition to the Company’s research programs on the uses of MEAI, the Company has plans to conduct 12 other research programs on different molecules, which are to be led by the Company’s highly skilled, focused team, with deep expertise in their respective fields, several of whom have taken products from the discovery phase to clinical trials in the United States in their previous respective roles, as well as key members of the Company’s scientific advisory board who have participated in numerous clinical trials in the areas of alcoholism and addiction.

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

These 12 additional drug programs can be separated into two categories. Nine of these programs are in the pre-discovery phase, and are primarily aimed at discovering innovative molecules designed for the treatment of mental health diseases such as depression, anxiety and post-traumatic stress disorder, or PTSD. Of the remaining three of these programs which are all in the discovery phase, one is aimed at the treatment of depression and treatment resistant depression, or TRD, while the other two are aimed at studying substances that can replicate the effects of 3,4-methylenedioxymethamphetamine, or MDMA, for therapeutic purposes.

In the Company’s research program aimed at treating depression and TRD, the Company has been studying the effects of administering 2-fluorodeschloroketamine, or 2-FDCK. The Company investigated 2-FDCK in a pre-clinical proof-of-concept study. In the Company’s two research programs aimed at finding substances that can be utilized for the same therapeutic purposes as MDMA, the Company will be studying 1-(Benzofuran-5-yl)-N-methylpropan-2-amine, or 5-MAPB and 1-Benzofuran-6-yl propan-2-amine, or 6-APB. The Company believes these treatments may be beneficial for fail-safes for MDMA based on a September 2016 article from Naunyn-Schmiedeberg’s Archives of Pharmacology, which reported the receptor binding profiles of 5-MAPB and 6-APB are different enough from MDMA to effectively perform a substitute role in the therapy while being similar enough so as not to have to change the therapeutic protocol.

Strategy

With respect to the Company’s AUD programs, the Company developed MEAI as a new chemical entity (NCE) drug candidate. The Company intends to seek regulatory approval through the FDA’s 505(b)(1) regulatory path. The FDA’s 505(b)(1) regulatory path is typically used for novel drugs that have not previously been studied or approved, and drug development pursuant to this path requires drug developers to conduct all studies needed to demonstrate the safety and efficacy of the drug. Given its nature, this type of submission requires extensive research, including both clinical and nonclinical studies, to prove the product’s safety and efficacy for the indication being sought.

Pursuant to the Company’s pre-IND meeting correspondence with the FDA, the FDA informed the Company that the Phase I portion of the Company’s Phase I/IIa study could not include only AUD patients (i.e., the Company’s target population). Accordingly, at the pre-IND meeting, the Company discussed a hybrid model for the Phase I portion of the study, where the Company would study both healthy volunteers and AUD patients, and the FDA did not rule this out as a possibility. While the Company cannot guarantee that the FDA will approve the Company’s request, if approved, such special accommodation would allow the Company’s to start the first in-human study with the target population rather than with healthy volunteers. If the FDA grants the Company the ability to use the hybrid model that includes AUD patients, the Company’s timeline for the clinical development of MEAI could be accelerated as it will potentially allow the Company’s to submit only one IND application, IRB application and one set of study reports for both Phase I and Phase IIa of the Company’s clinical trial. Furthermore, this model allows the Company to reach the Company’s target population quicker, hence getting more substantial safety data on the Company’s target population at an earlier stage.

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

Selected Financial Information

The following financial data prepared in accordance with IFRS in United States dollars is presented for the three and six month periods ended April 30, 2023 and 2022.

	Three months ended						Six months ended
	April 30,						April 30,
	2023			2022			2023			2022
Operating expenses
General and administrative	$	1,338,445		$	1,059,881		$	2,583,873		$	2,276,202
Research and development		317,572			1,160,758			905,202			1,471,595
Total operating expenses		1,656,017			2,220,639			3,489,075			3,747,797
Loss before other expenses		(1,656,017	)		(2,220,639	)		(3,489,075	)		(3,747,797	)

Finance expenses

Changes in fair value of warrants		(360,557	)		–			(360,557	)		–
Unrealized gain (loss) on short-term investment		4,445			(95,812	)		(58,749	)		(95,812	)
Foreign exchange loss		(60,952	)		(9,334	)		(95,356	)		(14,070	)
Finance income, net		5,966			–			23,981			–
Total finance expenses		(411,098	)		(105,146	)		(490,681	)		(109,882	)

Other incomes
Dividend received		–			–			16,555			–
Total other incomes		–			–			16,555			–

Loss before taxes		(2,067,115	)		(2,325,785	)		(3,963,201	)		(3,857,679	)
Tax expenses		(9,267	)		–			(12,650	)		–
Net Loss and Comprehensive loss	$	(2,076,382	)	$	(2,325,785	)	$	(3,975,851	)	$	(3,857,679	)
Loss per share (*), basic and diluted	$	(0.55	)	$	(1.78	)	$	(1.32	)	$	(3.01	)
Weighted average number of shares (*) for the purposes of basic and diluted loss per share		3,747,333			1,309,115			3,010,522			1,279,977

Three-month period ended April 30, 2023, compared to the three-month period ended April 30, 2022

Research Costs

Research costs are comprised primarily of (i) Salaries and wages to Company employees at and (ii) pre-clinical trials.

For the three-month period ended April 30, 2023, research costs amounted to $317,572 as compared to $1,160,758 for the three-month period ended April 30, 2022.

General and Administrative Expenses

For the three-month period ended April 30, 2023, general and administrative expenses amounted to $1,338,445 as compared to $1,059,881 for the three-month period ended April 30, 2022.

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

Finance expenses

For the three-month period ended April 30, 2023, financial expenses amounted to $411,098 as compared to $105,146 for the three-month period ended April 30, 2022. The financial expenses during the three-month period ended April 30, 2023 consist of change in warrant liability of $360,557, foreign exchange loss of $60,952 and finance income, net of $5,966.

Loss for the period

The Company reported a loss for the three-month period ended April 30, 2023 of $2,076,382 as compared to a loss of $2,325,785 for the three-month period ended April 30, 2022.

Six-month period ended April 30, 2023, compared to the six-month period ended April 30, 2022

Research Costs

Research costs are comprised primarily of (i) Salaries and wages to Company employees at and (ii) pre-clinical trials.

For the six-month period ended April 30, 2023, research costs amounted to $905,202 as compared to $1,471,595 for the six-month period ended April 30, 2022.

General and Administrative Expenses

For the six-month period ended April 30, 2023, general and administrative expenses amounted to $2,583,873 as compared to $2,276,202 for the six-month period ended April 30, 2022. The amount incurred in 2023 is consistent with the amount spent in 2022.

Finance expenses

For the six-month period ended April 30, 2023, financial expenses amounted to $490,681 as compared to an $109,882 for the three-month period ended April 30, 2022. The financial expenses during the six-month period ended April 30, 2023 consist of change in warrant liability of $360,557, foreign exchange loss of $95,356 and finance income, net of $23,981.

Loss for the period

The Company reported a loss for the six-month period ended April 30, 2023 of $3,975,851 as compared to a loss of $3,857,679 for the six-month period ended April 30, 2022.

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

Financial Summary of Quarterly Results

The following is a summary of the Company’s financial results for the eight most recently completed quarters.

	April 30, 2023			January 31, 2023			October 31, 2022			July 31, 2022

Total revenues	$	–		$	–		$	–		$	–
Net loss		(2,076,382	)		(1,899,469	)		(1,554,178	)		(1,483,011	)
Net loss per share, basic and diluted		(0.55	)		(0.83	)		(1.22	)		(1.10	)

	April 30, 2022			January 31, 2022			October 31, 2021			July 31, 2021

Total revenues	$	–		$	–		$	–		$	–
Net loss		(2,325,785	)		(1,531,895	)		(1,853,101	)		(793,248	)
Net loss per share, basic and diluted		(1.78	)		(1.22	)		(1.98	)		(0.66	)

Factors causing significant variations in quarterly results are as follows:

●

The increase in loss for the quarter ended July 31, 2021, was primarily due to an increase in professional, management and directors’ fees.

●

The increase in loss for the quarter ended October 31, 2021, was primarily due to an increase in share-based compensation that relates to the grant of 111,889 stock options and 6,667 restricted share units during the quarter, and an increase in research and development.

●

The decrease in loss for the quarter ended January 31, 2022, was primarily due to a decrease in share-based compensation.

●

The increase in loss for the quarter ended April 30, 2022, was primarily due to an increase in research and development.

●

The decrease in loss for the quarter ended July 31, 2022, was primarily due to a decrease in research and development.

●

The increase in loss for the quarter ended October 31, 2022, was primarily due to an increase in research and development.

●

The increase in loss for the quarter ended January 31, 2023, was primarily due to an increase in general and administrative.

●

The increase in loss for the quarter ended April 30, 2023, was primarily due to an increase in financial expenses relating to the change in fair value of the warrant liability of $360,557.

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

Liquidity and Capital Resources

As of April 30, 2023, the Company had cash on hand of $5,245,707 and positive working capital of $3,187,885, compared to $128,777 and negative working capital of $1,497,720 as of October 31, 2022, respectively. During the six-month period ended April 30, 2023, the Company’s overall position of cash increased by $5,116,930 from the year ended October 31, 2022. This increase in cash can be attributed to the following:

●

The Company’s net cash used in operating activities during the six-month period ended April 30, 2023, was $4,172,649 as compared to $3,256,077 for the six-month period ended April 30, 2022. This increase is mostly due to increase in prepaid expenses and decreases in accounts payable and accrued liabilities.

●

Net cash provided by financing activities for the six-month period ended April 30, 2023, was $9,290,812 as compared to $629,007 for the six-month period ended April 30, 2022. Cash provided in 2023 was from November 2022 financing on Nasdaq and April 2023 Public Offering.

The Company may have capital requirements in excess of its currently available resources. In the event the Company’s plans change, its assumptions change or prove inaccurate, or its capital resources in addition to projected cash flow, if any, prove to be insufficient to fund operations, the Company may be required to seek additional financing. There can be no assurance that the Company will have sufficient financing to meet its future capital requirements or that additional financing will be available on terms acceptable to the Company in the future.

Capital Management

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash and equity comprised of issued capital, shares issuable, warrants reserve and share-based payment reserve.

The Company is not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged from the year ended October 31, 2022.

Off Balance Sheet Arrangements

There are no off-balance sheet arrangements to which the Company is committed.

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

Transactions With Related Parties

Compensation to key management personnel

(i)

The compensation to key management personnel for employment services they provide to the Company is as follows:

	Three months ended		Three months ended		Six months ended		Six months ended
	April 30,		April 30,		April 30,		April 30,
	2023		2022		2023		2022

Officers:
Consulting fees	$	78,622	$	101,822	$	202,718	$	195,504
Share based compensation		34,279		122,184		78,721		230,201
	$	112,901	$	225,005	$	281,439	$	425,705
Directors:
Directors’ fees	$	41,834	$	17,775	$	80,976	$	35,360
Share based compensation		34,029		7,767		78,124		18,742
	$	75,863	$	25,542	$	159,100	$	54,102

(ii)

Balances with related parties

	April 30,		October 31,
	2023		2022
Amounts owed to officers	$	27,085	$	136,149
Amounts owed to directors		21,236		70,345
	$	48,321	$	206,494

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

Financial Instruments and Risk Management

(a)

Fair Values

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s statement of financial position as at April 30, 2023, as follows:

	Fair Value Measurements Using
	Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Balance April 30, 2023
Short-term investment	$	135,001	$	–	$	–	$	135,001
Derivative warrants liability		–		1,795,499		–		1,795,499

Assets and liabilities measured at fair value on a recurring basis were presented on the Company’s statement of financial position as of October 31, 2022, as follows:

	Fair Value Measurements Using
	Quoted prices in active markets for identical instruments (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Balance October 31, 2022
Short-term investment	$	193,750	$	–	$	–	$	193,750
Derivative liability		–		290,569		–		290,569

The fair values financial instruments, which include cash, amounts receivable, accounts payable and accrued liabilities, and amounts due to related parties, approximate their carrying values due to the relatively short-term maturity of these instruments.

(b)

Credit Risk

(c)

Foreign Exchange Rate Risk

Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent that monetary assets and liabilities are denominated in a foreign currency. The Company’s subsidiary operates in Israel and has certain monetary financial instruments denominated in New Israeli Shekel and U.S dollars. The Company has not entered into foreign exchange rate contracts to mitigate this risk.

The following table indicates the impact of foreign currency exchange risk on net working capital as at April 30, 2023. The table below also provides a sensitivity analysis of a 10% strengthening of the foreign currency against functional currencies identified which would have increased (decreased) the Company’s net loss by the amounts shown in the table below. A 10% weakening of the foreign currency against the functional currencies would have had the equal but opposite effect as of April 30, 2023.

Cash	$	250,024
Amounts receivable		49,235
Accounts payable and accrued liabilities		(676,001	)
Due to related parties		(18,764	)
Total foreign currency financial assets and liabilities	$	(395,506	)

Impact of a 10% strengthening or weakening of foreign exchange rate	$	39,551

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

(d)

Interest Rate Risk

(e)

Liquidity Risk

The following amounts are the contractual maturities of financial liabilities as of April 30, 2023, and October 31, 2022:

April 30, 2023	Total		Within 1 year		Within 2-5 years

Accounts payable and accrued liabilities	$	805,453	$	805,453	$	–
Due to related parties		48,321		48,321		–
Derivative warrants liability		1,795,499		1,795,499		–
Lease liability		4,941		4,941		–
	$	2,654,214	$	2,654,214	$	–

October 31, 2022	Total		Within 1 year		Within 2-5 years

Accounts payable and accrued liabilities	$	1,396,960	$	1,396,960	$	–
Due to related parties		206,494		206,494		–
Derivative liability		290,569		290,569
Lease liability		38,390		38,390
	$	1,932,413	$	1,932,413	$	–

Accounting Standards Issued But Not Yet Effective

A number of new standards, and amendments to standards and interpretations, are not yet effective for the six months ended April 30, 2023, and have not been early adopted in preparing these condensed interim consolidated financial statements. These new standards, and amendments to standards and interpretations are either not applicable or are not expected to have a significant impact on the Company’s condensed interim consolidated financial statements.

Significant Accounting Estimates and Judgments

The preparation of condensed interim consolidated financial statements in accordance with IFRS requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts of assets, liabilities, income, and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

Significant Estimates

Share-based Compensation

Warrant Liability

Significant Judgments

Going Concern

The application of the going concern assumption which requires management to take into account all available information about the future, which is at least but not limited to, 12 months from the year end of the reporting period. The Company is aware that material uncertainties related to events or conditions may cast significant doubt upon the Company’s ability to continue as a going concern.

Additional Disclosure for Companies Without Significant Revenue

An analysis of material components of the Company’s general and administrative expenses is disclosed in the condensed interim consolidated financial statements for the six and three-months ended April 30, 2023, to which this MD&A relates.

Disclosure of Outstanding Share Data

Authorized share capital consists of unlimited number of common shares without par value.

As of April 30, 2023, and June 14, 2023, the Company had 6,996,165 and 7,100,314 common shares issued and outstanding, respectively.

As of April 30, 2023, and June 14, 2023, the Company had 157,666 and 159,498 stock options outstanding.

As of April 30, 2023, and June 14, 2023, the Company had 373,936 share purchase warrants outstanding.

As of April 30, 2023, and June 14, 2023, the Company had 59,795 and 63,409 RSU’s outstanding.

CLEARMIND MEDICINE INC.

Management’s Discussion and Analysis

For the Three and Six Months Ended April 30, 2023

Risks and Uncertainties

The Company business, and investing in the Company’s securities, are subject to numerous risks, as more fully described in the section entitled “Risk Factors” beginning on page 9 and other risk factors contained in the Company’s Annual Information Form filed in SEDAR on December 1, 2022. If any of these risks actually occur, the Company’s business, financial condition or results of operations would likely be materially adversely affected. In each case, the trading price of the Company’s securities would likely decline, and investors may lose all or part of their investment. The following is a summary of some of the principal risks the Company faces:

●

The Company has incurred losses since its inception. The Company anticipated that it will incur significant losses for the foreseeable future, and the Company may never achieve or maintain profitability.

	●	The Company’s financial statements contain an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern.

	●	If the Company is unable to establish sales and marketing capabilities or enter into agreements to sell and market any product candidates, the Company may not be successful in commercializing those product candidates.

	●	If the Company is unable to maintain effective proprietary rights for the Company’s product candidates or any future product candidates, the Company may not be able to compete effectively in its markets.