XORTX Therapeutics Inc. Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Financial instruments and risk management (Tables)

Financial instruments and risk management (Tables)

12 Months Ended

Dec. 31, 2021

The following table presents the Company’s financial instruments, measured at fair value on the consolidated statements of financial position as at December 31, 2021 and 2020 and categorized into levels of the fair value hierarchy:

Schedule of financial instruments

		December 31, 2021				December 31, 2020
	Level	Carrying Value		Estimated Fair Value ^*		Carrying Value		Estimated Fair Value ^*
			$		$		$		$
FVTPL
Cash	1		18,851,244		18,851,244		171,271		171,271
Other financial liabilities
Accounts payable and accrued liabilities	2		700,999		700,999		1,034,213		1,034,213
FVTPL
Derivative warrant liability	3		4,597,332		4,597,332		—		—

The Company has determined that the carrying values of its short-term financial assets and financial liabilities, including cash and accounts payable and accrued liabilities, approximate their fair value due to the short-term nature of the instruments. Information on the fair value of the derivative warrant liability is included in Note 9(g).

The Company’s maximum exposure to credit risk at the financial position date under its financial instruments is summarized as follows:

Credit risk is the risk of financial loss to the Company if a customer of counterparty to a financial instrument fails to meet its obligations. The Company’s maximum exposure to credit risk at the financial position date under its financial instruments is summarized as follows:

	December 31, 2021		December 31, 2020
	$		$

Cash		18,851,244		171,271

The contractual maturities of these financial liabilities as at December 31, 2021 and 2020 are summarized below:

	Payments due by period as of December 31, 2021
	Total		Less than 3 months		Between 3 months and 1 year		1-3 years
		$		$		$		$

Accounts payable and accrued liabilities		700,999		700,999		—		—

		700,999		700,999		—		—

	Payments due by period as of December 31, 2020
	Total		Less than 3 months		Between 3 months and 1 year		1-3 years
		$		$		$		$

Accounts payable and accrued liabilities		1,034,213		1,034,213		—		—

		1,034,213		1,034,213		—		—

As at December 31, 2021, the Company is exposed to currency risk on the following financial assets and liabilities denominated in US Dollars (“USD”) and British Pounds (“GBP”). The sensitivity of the Company’s net earnings due to changes in the exchange rate between the USD and GBP against the Canadian dollar is included in the table below in Canadian dollar equivalents:

	USD amount			GBP amount			Total
		$			$			$
Cash		13,813,058			—			13,813,058
Accounts payable and accrued liabilities		(76,178	)		(143,900	)		(220,078	)
Net exposure		13,736,880			(143,900	)		13,592,980

Effect of +/- 10% change in currency		1,373,688			(14,390	)