Sirona Biochem : MD&A Q2 30 Apr 2023

SIRONA BIOCHEM CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED APRIL 30, 2023

SIRONA BIOCHEM CORP.

(A Development Stage Company)

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED APRIL 30, 2023

ITEM 1.1 INTRODUCTION

The following Management Discussion and Analysis ("MD&A") was prepared as of June 29, 2023 and should be read in conjunction with the consolidated financial statements and related notes for the period ended April 30, 2023 which have been prepared in accordance with International Financial Reporting Standards.

The Company was incorporated on October 19, 2006 under the Business Corporations Act of British Columbia. The Company is a development stage public company listed for trading on the TSX Venture Exchange (the "Exchange") under the symbol SBM. On May 1, 2009 the Company completed its qualifying transaction by entering into a Licensing Agreement with TFChem S.A.R.L. ("TFC"), a biopharmaceutical company based in Rouen, France, and changed its name from High Rider Capital Inc. to Sirona Biochem Corp. The principal activities of the Company are dedicated to the development of safer, more effective cosmetic and pharmaceutical active ingredients which are licensed to partners in exchange for upfront, milestone and royalty payments.

This Management's Discussion and Analysis contains forward-looking statements which may not be based on historical fact, including without limitation statements containing the words "believes," "may," "plan," "will," "estimate," "continue," "anticipates," "intends," "expects," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the Company's stage of development, lack of product revenues, additional capital requirements, risks associated with the completion of clinical trials and obtaining regulatory approval to market the Company's products, the ability to protect its intellectual property and dependence upon collaborative partners. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements are made as of the date hereof, and the Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.

Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about:

• general business and economic conditions;
• interest rates and foreign exchange rates;
• the timing of the receipt of regulatory and governmental approvals for the Company's research and development projects;
• the availability of financing for the Company's research and development projects, or the availability of financing on reasonable terms;
• the Company's ability to attract and retain skilled staff;
• market competition;
• tax benefits and tax rates;
• the Company's ongoing relations with its employees and with its business partners.

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Management cautions you that the foregoing list of important factors and assumptions is not exhaustive. Events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, these forward-looking statements. You should also carefully consider the matters discussed under "Risk Factors" in this MD&A. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, whether as a result of new information or future events or otherwise.

Further information is available on the SEDAR website, www.sedar.com.

ITEM 1.2 DESCRIPTION OF BUSINESS

• BUSINESS OVERVIEW
  Sirona Biochem was founded in 2009 by its current Chairman and CEO, Dr. Howard Verrico. The
  Company's first transaction was to acquire an exclusive global license to TFChem's proprietary diabetes drug, the SGLT2 Inhibitor. In 2011, Sirona Biochem went on to acquire TFChem's entire platform and development laboratory in Rouen, France.
  The value of Sirona and TFChem lies within the proprietary chemistry technology, its existing patents, existing licensing and partnering agreements and the team's expertise. TFChem has developed a fluorination chemistry that can improve the pharmaceutical qualities of carbohydrate- based molecules by stabilizing them. Carbohydrate molecules perform a variety of roles in living organisms and are essential to life. Their importance to life makes them valuable for the development of therapeutics and cosmeceuticals, but while they have broad application potential, they are extremely challenging to develop. Sirona has overcome the challenge of working with carbohydrates to develop safer, more effective cosmetic and pharmaceutical active ingredients.
  Sirona Biochem's development focus is centered around high-value programs. Each program is selected based on core expertise in the area, market potential, development timeline and return on investment. The Company is currently exploring the areas of diabetes, dyschromia, anti-aging, anti- cellulite and antiviral therapies and relies on a business model of licensing patents to large organizations in return for up-front and milestone payments as well as royalties.
• SIGNIFICANT EVENTS
  On June 7, 2022, the Company entered into a global exclusive licensing agreement with Allergan Aesthetics, an AbbVie company (NYSE: ABBV), pursuant to which Allergan Aesthetics will

develop and commercialize topical skin care treatments based on active ingredients derived from certain of Sirona's patents for TFC-1067 and related family of compounds.

Under the license agreement, the Company will a receive an upfront payment and further payments on achievement of milestones and royalties on product sales and has also agreed to financial terms as a supplier of its compounds.

ITEM 1.3 SELECTED ANNUAL INFORMATION

The following table sets forth selected financial information for the Company for the last three completed financial years ended October 31. This information has been derived from the Company's audited consolidated financial statements for each of those years and should be read in conjunction with those financial statements and the notes thereto.

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	2022	2021	2020
Total revenue	671,923	268,022	105,711
Loss:
In total	3,557,804	2,306,335	4,133,724
On a per share basis	0.01	0.02	0.02
Total assets	1,290,709	1,287,464	2,137,239
Total liabilities	1,076,194	1,384,479	2,089,844
Total shareholders' equity	(214,515)	97,015	(47,395)

*basic and fully diluted

ITEM 1.4 RESULTS OF ANNUAL OPERATIONS

Financial Analysis

Year 2022 compared to 2021

The loss in fiscal 2022 was $3,557,804 compared to $2,306,335 in fiscal 2021. The increase in loss was driven primarily by increased operation expenses. Revenue increased by $403,901 in fiscal 2022 to $671,923 compared to $268,022 in fiscal 2021. Research expenses decreased by $74,227 due to the decrease in general research costs in TFC. Consulting fees increased by $258,339 due to more operation activities in relation to business development in fiscal 2022. Office and administration expenses is consistent with fiscal 2021. Accounting and audit fees increased by $71,641 in fiscal 2022 to $292,766 compared to $221,125 in fiscal 2021. Legal fees increased by $122,208 in fiscal 2022 to $133,564 compared to $11,356 in fiscal 2021. Management fees and bonus increased by $124,452 in fiscal 2022 to $285,732 compared to $161,280 in fiscal 2021. Share-based payments increased by $1,133,564 due to the Company granting more stock options in fiscal 2022. Finance expenses increased by $23,666 due to the Company incurred more interest expenses in fiscal 2022.

Year 2021 compared to 2020

The loss in fiscal 2021 was $2,306,335 compared to $4,133,724 in fiscal 2020. The decrease in loss was driven primarily by increased revenue and decreased operation expenses. Revenue increased by $162,311 in fiscal 2021 to $268,022 compared to $105,711 in fiscal 2020. Research expenses decreased by $154,961 due to the decrease in general research costs in TFC. Consulting fees decreased by $125,913 due to less operation activities in relation to business development in fiscal 2021. Office and administration expenses decreased by $29,643 due to less operation activities in fiscal 2021. Accounting and audit fees decreased by $36,307 in fiscal 2021 to $221,125 compared to $257,432 in fiscal 2020. Legal fees decreased by $49,830 in fiscal 2021 to $11,356 compared to $61,186 in fiscal 2020. Share- based payments decreased by $1,291,740 due to the Company granting less stock options in fiscal 2021. Finance expenses decreased by $9,797 due to the Company fully paid convertible notes in year 2020, as result, less interest expenses incurred in fiscal 2021. Other income decreased by $32,442 in fiscal 2021 to $8,225 compared to $40,667 in fiscal 2020.

ITEM 1.5 SUMMARY OF CONSOLIDATED QUARTERLY RESULTS

The following table shows selected financial information for the eight most recently completed quarters:

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	30-Apr	January 31	October 31	July 31	April 30	January 31	October 31	July 31
	2023	2023	2022	2022	2022	2022	2021	2021
	$	$	$	$	$	$	$	$
Total Revenues	59,514	-	18,055	653,868	-	-	29,900	29,040
Net Loss	(763,911)	(622,326)	(363,889)	(381,101)	(761,448)	(2,051,366)	(300,347)	(493,792)
Loss per Share	(0.00)	(0.00)	0.00	0.00	0.00	0.01	0.00	0.00
Cash	907,859	144,117	421,519	1,126,071	1,342,522	144,625	778,006	189,886
Total Assets	1,395,354	778,005	1,290,709	1,957,324	2,026,285	674,853	1,287,464	1,126,750
Long Term Debt	200,894	112,352	91,139	176,972	274,509	385,020	468,770	654,369

All the financial data in the above table was prepared under IFRS.

ITEM 1.6

LIQUIDITY

During the period ended April 30, 2023, the Company incurred a net loss after taxes of $1,386,237 (2022: $2,812,814) and at April 30, 2023, had an accumulated deficit of $42,743,805 (2022: $41,357,568) and working capital of $706,405 (2022: $407,448).

Management believes that its existing cash resources, together with funds that will be obtained from future share issuances, are adequate for the total amount of planned research program. The Company's ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations.

Operating Activities

Cash flow used in operating activities was $976,143 for the year ended April 30, 2023 compared to $1,539,426 in the period ended April 30, 2022, mainly due to more operating expenses incurred during the year 2022.

Financing Activities

Cash flow used for financing activities during the year ended April 30, 2023 was $1,453,071 (2022: $2,111,859), representing net borrowings of $1,400,571 (2022: net payment of $164,925) and cash proceeds from options and warrants exercise of $52,500 (2022: $2,276,784).

Investing Activities

During the year ended April 30, 2023 and 2022, there is no investing activities for the purchase of equipment.

ITEM 1.7	CAPITAL RESOURCES
Working Capital
			As At		As At
			April 30, 2023		October 31, 2022
Current assets		$	1,381,419	$	1,271,984
Current liabilities		675,014		741,152
Working capital (deficiency)	$	706,405	$	407,446

During the period ended April 30, 2023, working capital increased by $298,959 mainly due to cash provided in financing activities in 2023.

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