Exhibit 99.1


Unaudited Interim Condensed Consolidated
Financial Statements
June 30, 2020





August 11, 2020

Management’s Responsibility for Financial Reporting

The accompanying unaudited interim condensed consolidated financial statements of IMV Inc. (the “Corporation”) are the responsibility of management and have been approved by the Board of Directors. The consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The unaudited interim condensed consolidated financial statements include some amounts and assumptions based on management’s best estimates which have been derived with careful judgment.

In fulfilling its responsibilities, management has developed and maintains a system of internal accounting controls. These controls are designed to ensure that the financial records are reliable for preparation of the unaudited interim condensed consolidated financial statements. The Audit Committee of the Board of Directors reviewed and approved the Corporation’s unaudited interim condensed consolidated financial statements, and recommended their approval by the Board of Directors.

(signed) Frederic Ors (signed) “Pierre Labbé”
Chief Executive Officer Chief Financial Officer

Approved on behalf of the Board of Directors

(signed) “James W. Hall”, Director (signed) “Wayne Pisano”, Director

 





IMV Inc.
Unaudited Interim Condensed Consolidated Statements of Financial Position
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

  June 30, December 31,
  2020 2019
  $ $
Assets    
 
Current assets    
Cash and cash equivalents 28,251 14,066
Amounts receivable 911 845
Prepaid expenses 7,973 3,032
Investment tax credits receivable 1,442      1,661  
 
  38,577 19,604
 
Property and equipment 2,825     2,830  
 
  41,402      22,434  
Liabilities    
 
Current liabilities    
Accounts payable, accrued and other liabilities 8,286 6,157
Amounts due to directors 75 60
Current portion of long-term debt (note 5) 592 88
Current portion of lease obligation 123     100  
 
  9,076 6,405
 
Lease obligation 1,295 1,208
 
Long-term debt (note 5) 8,696     8,373  
 
  19,067     15,986  
 
Equity 22,335     6,448  
 
  41,402     22,434  
Subsequent event (note 10)    

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





IMV Inc.
Unaudited Interim Condensed Consolidated Statements of Changes in Equity
For the period ended June 30, 2020 and 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

  Share   Contributed              
  Capital   Surplus   Warrants   Deficit   Total  
  $   $   $   $   $  
  (note 6)   (note 7)   (note 8)          
 
Balance, December 31, 2018 90,152   6,504   415   (92,754 ) 4,317  
 

Net loss and comprehensive loss for the period

      (10,994 ) (10,994 )

Issuance of shares in public offering

29,456         29,456  

Share issuance costs

(2,499 )       (2,499 )

Exercise of warrants

82     (21 )   61  

Warrants expired

  62   (62 )    

Employee share options:

                   

Value of services recognized

  694       694  

Exercise of options

281   (225 )     56  
 
Balance, June 30, 2019 117,472   7,035   332   (103,748 ) 21,091  
 
Balance, December 31, 2019 117,544   8,691   332   (120,119 ) 6,448  
 

Net loss and comprehensive loss for the period

      (16,936 ) (16,936 )

Issuance of shares in public equity offering

7,639         7,639  

Share issuance costs in a public equity offering

(716 )       (716 )

Issuance of shares in private placement

21,307         21,307  

Share and warrant issuance costs in private placement

(139 )       (139 )

Issuance of warrants in a private placement

    3,775     3,775  

Redemption of deferred share units, net of applicable taxes

184   (189 )     (5 )

Warrants expired

  332   (332 )    
Deferred share units (“DSU”s):                    

Value of services recognized

  239       239  
Employee share options:                    

Value of services recognized

  469       469  

Exercise of options

644   (390 )     254  
 
Balance, June 30, 2020 146,463   9,152   3,775   (137,055 ) 22,335  

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





IMV Inc.
Unaudited Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
For the three and six months ended June 30, 2020 and 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

  Three months ended June 30,   Six months ended June 30,  
  2020   2019   2020   2019  
  $   $   $   $  
Income                
Subcontract revenue   6     14  
Interest income 55   180   123   254  
 
  55   186   123   268  
 
Expenses                
Research and development 5,260   3,803   12,085   7,816  
General and administrative 3,047   2,184   6,082   4,144  
Government assistance (note 4) (1,406 ) (1,142 ) (1,964 ) (1,488 )
Accreted interest (note 5) 422   392   856   790  
 
  7,323   5,237   17,059   11,262  
 

Net loss and comprehensive loss for the year

(7,268 ) (5,051 ) (16,936 ) (10,994 )

 

Basic and diluted loss per share

(0.13 ) (0.10 ) (0.31 ) (0.23 )

 

Weighted-average shares outstanding

57,300,903   50,601,866   54,010,195   48,667,904  

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





IMV Inc.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2019 and 2020
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

  Six months ended June 30,  
  2020   2019  
  $   $  
Cash provided by (used in)        
Operating activities        
Net loss and comprehensive loss for the year (16,936 ) (10,994 )
Charges to operations not involving cash        

Interest on lease obligation

80   76  

Depreciation of property and equipment

245   225  

Accretion of long-term debt

856   790  

Deferred share unit compensation

239   (390 )

Stock-based compensation

469   694  

Loss on disposal of assets

  1  

Revaluation of long-term debt

  (840 )

Net cash flows used by operating activities before changes in non-cash working capital items

(15,047 ) (10,438 )
 

Net change in non-cash working capital balances related to operations

       

(Increase) decrease in amounts receivable

(66 ) 52  

Increase in prepaid expenses

(4,941 ) (338 )

Decrease (increase) in investment tax credits receivable

219   (639 )

Decrease in accounts payable, accrued and other liabilities

(1,001 ) (3,148 )

Increase in amounts due to directors

15   14  
 
  (20,821 ) (14,497 )
Financing activities        

Proceeds from issuance of share capital and warrants in private placement

25,082    

Share and warrant issuance costs in private placement

(139 )  

Proceeds from public equity offering

7,639   29,456  

Share issuance costs in public equity offering

(716 ) (2,499 )

Proceeds from short-term borrowing

3,130    

Proceeds from the exercise of stock options

254   56  

Proceeds from the exercise of warrants

  61  

Withholdings on redemption of DSUs

(5 )  

Repayment of long-term debt

(29 ) (42 )

Repayment of lease obligation

(120 ) (120 )
  35,096   26,912  
 
Investing activities        
Acquisition of property and equipment (90 ) (406 )
  (90 ) (406 )
 
Net change in cash and cash equivalents during the period 14,185   12,009  
 
Cash and cash equivalents – Beginning of period 14,066   14,895  
 
Cash and cash equivalents – End of period 28,251   26,904  
 
Supplementary cash flow        
 
Interest received 123   254  

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





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

1 Nature of operations

IMV Inc. (the “Corporation” or “IMV”) is, through its 100% owned subsidiary, a clinical stage biopharmaceutical company dedicated to making immunotherapy more effective, more broadly applicable and more widely available to people facing cancer, infectious and other serious diseases. IMV is pioneering a new class of targeted immunotherapies and vaccines based on the Corporation’s proprietary drug delivery platform (“DPX”). This patented technology leverages a novel mechanism of action that does not release the active ingredients at the site of injection but forces an active uptake by immune cells (antigen-presenting cells) and delivery of active ingredients into lymph nodes. This unique MOA enables the programming of immune cells in vivo, which are aimed at generating powerful target-specific therapeutic capabilities. IMV’s lead candidate, DPX-Survivac, is a T cell-activating immunotherapy that combines the utility of the platform with a target: survivin. IMV is currently assessing DPX-Survivac as a monotheraphy in advanced ovarian cancer, as well as a combination therapy in recurrent/refractory disffuse large B cell lymphoma and other indications across multiple clinical studies with Merck. IMV is also developing a DPX-based vaccine to fight against COVID-19. The Corporation has one reportable and geographic segment. Incorporated under the Canada Business Corporations Act and domiciled in Dartmouth, Nova Scotia, the shares of the Corporation are listed on the Nasdaq Stock Market and the Toronto Stock Exchange under the symbol “IMV”. The address of its principal place of business is 130 Eileen Stubbs Avenue, Suite 19, Dartmouth, Nova Scotia, Canada.

An outbreak of a novel strain of coronavirus, identified as “COVID-19”, was declared a global pandemic by the World Health Organization on March 11, 2020. In response, many countries have required entities to limit or suspend business operations and implemented travel restrictions and quarantine measures. These measures have disrupted the activities of many entities and have led to significant volatility in the global markets. The Corporation continues to monitor and actively manage the developing impacts from COVID-19, including but not limited to, the potential future effects on its assets, cash flow and liquidity, and will continue to assess impacts to the Corporation’s operations, going concern assumption, and the value of assets and liabilities reported in these statements. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Corporation’s operations and ability to finance its operations.

2 Basis of presentation

The Corporation prepares its unaudited interim condensed consolidated financial statements in accordance with Canadian generally accepted accounting principles as set out in the Chartered Professional Accountants of Canada Handbook – Accounting Part I, which incorporates International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

These unaudited interim condensed consolidated financial statements have been prepared in accordance with IFRS applicable to the preparation of interim financial statements, including IAS 34, International Accounting Standards 34 “Interim Financial Reporting”. Accordingly, certain information normally included in annual audited financial statements prepared in accordance with IFRS, as issued by the IASB, have been omitted or condensed. The unaudited interim condensed consolidated financial statements should be read in conjunction with the Corporation’s annual audited consolidated financial statements for the year ended December 31, 2019.

The policies applied in these unaudited interim condensed consolidated financial statements are based on IFRS issued and outstanding as of August 11, 2020, the date the Board of Directors approved the statements. Any subsequent changes to IFRS that are given effect in the Corporation’s annual audited consolidated financial statements for the year ending December 31, 2019 could result in restatement of these unaudited interim condensed consolidated financial statements.

(2)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

3 Significant accounting policies, judgements and estimation uncertainty

These unaudited interim condensed consolidated financial statements have been prepared using the same policies and methods as the annual audited consolidated financial statements of the Corporation for the period ended December 31, 2019. Refer to note 4 of the Corporation’s annual audited consolidated financial statements for the year ended December 31, 2019 for more information on accounting policies and methods applied.

4 Government grants

The Corporation is evaluating all applicable government relief programs. Notably, in response to the negative economic impact of COVID-19, the Government of Canada, in collaboration with the National Research Council of Canada Industrial Research Assistance Program (“NRC IRAP”), announced the Innovation Assistance Program (“IAP”) program in April 2020. IAP provides a wage subsidy on eligible remuneration, subject to limits per employee, to eligible employers pursuing technology driven innovation who are not eligible for funding under the Canada Emergency Wage Subsidy. The Corporation qualified for this subsidy from the April 1, 2020 effective date through to June 23, 2020, and has, accordingly, recognized $601 of IAP for the 12-week period ended June 23, 2020, and has recorded it in government assistance on the unaudited interim condensed consolidated statements of loss and comprehensive loss. As at June 30, 2020 there is $121 in receivables related to this IAP funding.

In May 2020, the Corporation obtained $378 in NRC IRAP funding toward the development of its COVID-19 vaccine candidate, DPX-COVID-19. Under this program, NRC-IRAP will reimburse up to 80% of eligible project salaries and 50% of eligible contractor costs. As at June 30, 2020, the Corporation has recognized $150 of this NRC-IRAP funding in government assistance on the unaudited interim condensed consolidated statements of loss and comprehensive loss.

Refer to Subsequent event (note 10) for detail on additional government assistance obtained for the Corporation’s COVID-19 vaccine project subsequent to the reporting period.

5 Long-term debt

 

 

June 30,

December 31,

 

2020

2019

 

$

$

Atlantic Canada Opportunities Agency (“ACOA”), Atlantic Innovation Fund interest-free loan with a maximum contribution of $3,786. Annual repayments, commencing December 1, 2008, are calculated as a percentage of gross revenue for the preceding fiscal year, at 2% when gross revenues are less than $5,000 and 5% when gross revenues are greater than $5,000. As at June 30, 2020, the amount drawn down on the loan, net of repayments, is $3,744 (2019 - $3,744).

1,650

1,404

 

ACOA Atlantic Innovation Fund, interest-free loan with a maximum contribution of $3,000. Annual repayments, commencing December 1, 2011, are calculated as a percentage of gross revenue for the preceding fiscal year, at 2% when gross revenues are less than $5,000 and 5% when gross revenues are greater than $5,000. As at June 30, 2020, the amount drawn down on the loan is $2,995 (2019 - $2,995).

1,454

1,237

 

ACOA Business Development Program, interest-free loan with a maximum contribution of $395, repayable in monthly payments beginning October 2015 of $3 until October 2017 and $6 until September 2022. As at June 30, 2020, the amount drawn down on the loan, net of repayments, is $167 (2019 - $184).

159

180

(3)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

5 Long-term debt (continued)

 

ACOA Atlantic Innovation Fund, interest-free loan with a maximum contribution of $2,944, annual repayments commencing September 1, 2014, are calculated as a percentage of gross revenue from specific product(s) for the preceding fiscal year, at 5% for the first 5 year period and 10%, thereafter. As at June 30, 2020, the amount drawn down on the loan is $2,944 (2019 - $2,944).

1,740

1,481

 

TNC 120-140 Eileen Stubbs Ltd. (the “Landlord”) loan, with a maximum contribution of $300,000, bearing interest at 8% per annum, is repayable in monthly payments beginning upon receipt of the final installment of the loan until May 31, 2028. The loan is made available in three equal installments based on the Corporation meeting certain milestones. As at June 30, 2020, the amount drawn down on the loan is $267 (2019 - $279).

267

279

 

Province of Nova Scotia (the “Province”) secured loan with a maximum contribution of $5,000, bearing interest at a rate equal to the Province’s cost of funds plus 1%, compounded semi-annually and payable monthly. The loan is repayable in monthly payments beginning January 1, 2021 of $83 plus interest until December 2025. The Corporation and its subsidiary have provided a general security agreement granting a first security interest in favour of the Province of Nova Scotia in and to all the assets of the Corporation and its subsidiary, including the intellectual property. As at June 30, 2020, the amount drawn down on the loan is $5,000 (2019 - $5,000).

4,018

3,880

 
 

9,288

8,461

 

Less: Current portion

592

88

 
 

8,696

8,373

Total contributions received, less amounts that have been repaid as at June 30, 2020, are $15,090 (2019 -$15,164).

Certain ACOA loans and the Province loan require approval by ACOA or the Minister for the Province before the Corporation can pay management fees, bonuses, dividends or other distributions, before there is any change of ownership of the Corporation. The Province loan requires the Corporation to obtain the written consent from the Province prior to the sale, disposal or abandonment of possession of the intellectual property of the Corporation or its subsidiary. If during the term of the Province loan, the head office, research and development facilities, or production facilities of the Corporation are moved from the Province, the Corporation is required to repay 40% of the outstanding principal of the loan.

In June 2019, the Corporation amended its loan agreement with the Province. Previously, the maturity date of the loan was August 9, 2020. The Corporation shall now start repaying the balance of the principal amount on the first day of January 2021, by making 60 monthly principal payments of $83 plus interest from January 2021 to December 2025. The annual interest rate remains at the Province’s cost of funds plus 1%.

The Province loan requires certain early repayments if the Corporation’s subsidiary, or the Corporation on a consolidated basis, has cash flow from operations in excess of $1,500. The Province loan also requires repayment of the loan under certain circumstances, such as changes of control, sale or liquidation of the Corporation or the sale of substantially all of the assets of the Corporation.

(4)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

5 Long-term debt (continued)

 

  June 30,   December 31,  
  2020   2019  
  $   $  
Balance – Beginning of year 8,461   8,150  
Accreted interest 856   1,239  
Revaluation of long-term debt   (840 )
Repayment of debt (29 ) (88 )
 
Balance – End of year 9,288   8,461  
Less: Current portion 592   88  
 
Non-current portion 8,696   8,373  

The Corporation is in compliance with its debt covenants as of June 30, 2020.

6 Share capital

 

Authorized

Unlimited number of common shares and preferred shares, issuable in series, all without par value.

  Number of  
  common shares Amount
  # $
Issued and outstanding    
Balance – December 31, 2018 45,106,401 90,152
Issued for cash consideration, net of issuance costs 5,404,855 26,957
Stock options exercised 105,196 353
Warrants exercised 14,423   82  
Balance – December 31, 2019 50,630,875 117,544
Issued for cash, net of issuance costs 10,840,888 28,091
Stock options exercised 155,389 644
DSUs redeemed 76,920   184  
Balance – June 30, 2020 61,704,072   146,463  

As at June 30, 2020, a total of 5,033,100 shares (2019 – 2,069,142) are reserved to meet outstanding stock options and deferred share units.

On May 7, 2020, the Corporation completed a private placement of 8,770,005 units at a price of $2.86 per unit, for aggregated proceeds of $25,082. Each unit consisted of one common share and 0.35 of one common share purchase warrant, with each whole warrant entitling the holder to acquire one common share of the Corporation at an exercise price of $3.72 for a period of 24 months expiring on May 7, 2022. The value allocated to the common shares issued was $21,307 and the value allocated to the warrants was $3,775. Total costs associated with the offering were $139, including cash costs for professional and regulatory fees.

On March 17, 2020, the Corporation entered into an Equity Distribution Agreement (“ATM Distribution”) with Piper Sandler & Co. (“Piper Sandler”) authorizing the Corporation to offer and sell common shares from time-

(5)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

6 Share capital (continued)

to-time up to an aggregate offering amount of US$30,000 through Piper Sandler, as agent. The total expenses associated with the ATM Distribution, excluding compensation and reimbursements payable to Piper Sandler under the terms of the Equity Distribution Agreement, were approximately $487. As of June 30, 2020, 2,070,883 common shares have been sold under the ATM Distribution for total gross proceeds of $7,639. In order to maintain the remainder of IMV's ATM Distribution facility under its new Canadian base shelf prospectus, IMV re-entered into an ATM Distribution dated June 30, 2020, with Piper Sandler, to offer and sell common shares from time-to-time up to an aggregate offering amount of US$24,500 through Piper Sandler, as agent. An additional 4,770,890 common shares were sold subsequent to June 30, 2020 for gross proceeds of US$24,500, concluding the proceeds raised under the ATM Distribution to the maximum offering amount of US$24,500 as of July 20, 2020.

On March 6, 2019, the Corporation completed a public offering, issuing an aggregate of 4,900,000 common shares at a price of $5.45 per common share, raising gross proceeds of $26,705. On March 11, 2019, the underwriters partially exercised their option to purchase common shares, resulting in the issuance of 504,855 common shares of the Corporation at a price of $5.45 per share for additional gross proceeds of approximately $2,751. As a result of the exercise of this option, the Corporation has raised total gross proceeds of approximately $29,456 before deducting the underwriting commissions and offering expenses of $2,499.

7 Contributed surplus

Deferred share units

The maximum number of common shares which the Corporation is entitled to issue from Treasury in connection with the redemption of DSUs granted under the DSU Plan is 968,750 common shares.

DSU activity for the three months ended June 30, 2020, and the year ended December 31, 2019, are as follows:

  June 30,   December 31,
  2020   2019
  #   #
 
Opening balance 360,965   223,604
Granted 78,047   137,361
Redeemed (79,106 )  
 
Closing balance 359,906   360,965  

At June 30, 2020, there were 359,906 (2019 – 360,965) DSUs outstanding related to this Plan.

Compensation expense for the three and six months ended June 30,2020 was $117 (2019 – ($186) recovery) and $239 (2019 – ($390) recovery), respectively, recognized over the vesting period. All services received in exchange for the grant of DSUs were measured at their fair values at the time of grant and vest immediately. Vested DSUs cannot be redeemed until the holder is no longer a member of the Board.

On August 8, 2019 (the “Reclassification Date”), the the Corporation resolved to settle all future DSU redemptions in shares instead of cash. All outstanding DSUs are accordingly now considered equity-settled instruments. As a result of this change, the fair value of the DSUs at the Reclassification Date were reclassified from liabilities to contributed surplus.

(6)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

7 Contributed surplus (continued)

Stock options

The fair values of stock options are estimated using the Black-Scholes option pricing model. As at June 30, 2020, 295,850 stock options (2019 – 343,100) with a weighted average exercise price of $5.66 (2019 - $6.39) and a term of five years (2019 - five years), were granted to employees and consultants. The expected volatility of these stock options was determined using historical volatility rates and the expected life was determined using the weighted average life of past options issued. The value of these stock options has been estimated at $873 (2019 - $1,112), which is a weighted average grant date value per option of $2.95 (2019 - $3.24), using the Black-Scholes valuation model and the following weighted average assumptions:

    2020     2019  
Risk-free interest rate   1.20 %   1.81 %
Market price $5.98   $7.20  
Expected volatility   68 %   64 %
Expected life (years)   4.2     4.2  
Forfeiture rate   4 %   5 %
Expected dividend yield   0 %   0 %

 

Option activity for the six months ended June 30, 2020 and the year ended December 31, 2019 was as follows:

        June 30, 2020     December 31, 2019  
      Weighted     Weighted
      average     average
  Number   exercise price Number   exercise price
  #   $ #   $
Outstanding - Beginning of year 1,573,411   4.63 1,474,477   4.12
Granted 295,850   5.66 343,100   6.39
Exercised (193,751 ) 1 2.43 (139,877 )1 2.32
Forfeited (45,775 ) 6.81 (90,570 ) 6.81
Cancelled (26,042 ) 6.40 (1,219 ) 7.04
Expired   (12,500 ) 2.37
Outstanding - End of year 1,603,693   4.98 1,573,411   4.63

1 Of the 193,751 (2019 – 139,877) options exercised, 100,001 (2019 - 98,408) elected the cashless exercise, under which 61,639 shares (2019 - 63,727) were issued. These options would have otherwise been exercisable for proceeds of $217 (2019 - $229) on the exercise date.

The weighted average exercise price of options exercisable at June 30, 2020 is $4.27 (2019 - $3.29).

The maximum number of common shares issuable under the Corporation’s stock option plan shall not exceed 4,600,000, inclusive of all shares presently reserved for issuance pursuant to previously granted stock options.

(7)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

8 Warrants

Warrant activity for the period ended June 30, 2020, and the year ended December 31, 2019, was as follows:

          June 30, 2020         December 31, 2019  
      Weighted         Weighted    
      average         average    
      exercise         exercise    
  Number   price Amount   Number   price Amount  
  #   $ $   #   $ $  
Opening balance 134,766   6.53 332   192,458   5.84 415  
Granted 3,069,501   3.72 3,775      
Exercised     (14,423 ) 4.22 (21 )
Expired (134,766 ) 6.53     (332 ) (43,269 ) 4.22 (62 )
 
Closing balance 3,069,501   3.72     3,775   134,766   6.53 332  

The fair values of warrants are estimated using the Black-Scholes option pricing model. The fair values of warrants are estimated using the Black-Scholes option pricing model. There were no warrants issued in 2019. The weighted average assumptions used in the Black-Scholes valuation model for 2020 were as follows:

  2020  
Risk-free interest rate 0.27 %
Market price $3.12  
Expected volatility 83 %
Expected dividend yield  
Expected life (years) 2  

 

9 Financial instruments

Fair value of financial instruments

Financial instruments are defined as a contractual right or obligation to receive or deliver cash on another financial asset.

The following table sets out the approximate fair values of financial instruments as at the unaudited interim condensed consolidated statements of financial position date with relevant comparatives:

  June 30, 2020   December 31, 2019
  Carrying   Carrying  
  value Fair value value Fair value
  $ $ $ $
Cash and cash equivalents 28,251 28,251 14,066 14,066
Amounts receivable 243 243 439 439
Accounts payable, accrued and other liabilities 8,261 8,261 6,142 6,142
Amounts due to directors 75 75 60 60
Long-term debt 9,288 9,288 8,461 8,461

(8)





IMV Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
As at June 30, 2020 and December 31, 2019
(Expressed in thousands of Canadian dollars except for share and per share amounts)

 

9 Financial instruments (continued)

Assets and liabilities, such as commodity taxes, that are not contractual and that arise as a result of statutory requirements imposed by governments, do not meet the definition of financial assets or financial liabilities and are, therefore, excluded from amounts receivable and accounts payable and accrued liabilities.

Fair value of items, which are short-term in nature, have been deemed to approximate their carrying value. The above noted fair values, presented for information only, reflect conditions that existed only at June 30, 2020 and December 31, 2019 and do not necessarily reflect future value or amounts which the Corporation might receive if it were to sell some or all of its assets to a willing buyer in a free and open market.

The fair value of long-term debt is estimated based on the expected interest rates for similar borrowings by the Corporation at the unaudited interim condensed consolidated statements of financial position dates. As at June 30, 2020, the fair value is estimated to be equal to the carrying amount.

10 Subsequent event

On August 5, 2020, the Corporation announced an additional $4 million in project funding from NRC-IRAP, ACOA and Next Generation Manufacturing Canada (“NGen”) to support the rapid development of DPX-COVID-19. NRC-IRAP and NGen’s contributions are government grants reimbursed based a percentage of eligible project expenditures. ACOA’s contribution is an interest free government loan with a maximum contribution of $1 million conditionally repayable based on a percentage of revenues only from resulting COVID-19 vaccine revenue.

(9)