What changed in this filing

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Item 2. Management’s Discussion and Analysis

2016-06-14 compared with 2015-12-15 · 99 added, 133 removed, 119 unchanged (66% of the section changed)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report on Form 10-Q contains certain forward-looking statements.

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Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$) and all references to "common shares" refer to the common shares in our capital stock.

Our financial statements are stated in U.S.

Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in U.S.

Dollars (US$) and all references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Pivot Pharmaceuticals Inc., unless otherwise indicated.

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On September 9, 2003, we changed our name to "Xerxes Health Corp." and on June 26, 2007, we changed our name to "Neurokine Pharmaceuticals Inc.".

Effective June 4, 2014, we filed with the British Columbia Registrar of Companies a Form 11, Notice of Alteration, wherein we have increased our authorized share capital from 500,000,000 common shares without par value to an unlimited number of common shares without par value.

Effective June 4, 2014, we filed with the British Columbia Registrar of Companies a Form 11, Notice of Alteration, wherein we increased our authorized share capital from 500,000,000 common shares without par value to an unlimited number of common shares without par value.

The increase of authorized capital was approved by our stockholders at the annual and special meeting held on June 3, 2014.

On September 26, 2014, our company held a special meeting of stockholders to approve the removal of our company's Pre-Existing Company Provisions, the cancellation of our current Articles and the adoption of new Articles and to approve a reverse stock split on the basis of up to 1:100.

Effective October 8, 2014, we filed with the British Columbia Registrar of Companies a Form 11, Notice of Alteration, wherein we have removed our Pre-Existing Company Provisions.

Effective October 8, 2014, we filed with the British Columbia Registrar of Companies a Form 11, Notice of Alteration, wherein we removed our Pre-Existing Company Provisions.

Effective April 7, 2015, we filed with the British Columbia Registrar of Companies a Form 11, Notice of Alteration, wherein we changed our name to "Pivot Pharmaceuticals Inc.".

Effective at the opening of trading on April 20, 2015, as approved by FINRA, our company effected a reverse stock split of our issued and outstanding common shares on a 10 old for 1 new share basis.

Effective at the opening of trading on April 20, 2015, as approved by FINRA, our company effected a reverse stock split of our issued and outstanding common shares on the basis of 10 old common stock for 1 new common stock.

On November 20, 2015, we completed the acquisition of IndUS Pharmaceuticals, Inc.

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As consideration for the purchase, we issued 4,512,500 shares of common stock on November 23, 2015 and 237,500 shares of common stock on December 4, 2015.

We will also be granting 41,833 stock options pursuant to the Agreement and Plan of Merger.

As part of the acquisition, we appointed Dr.

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Our principal executive office is located at 1275 West 6th Avenue, Vancouver, B.C.

Canada V6H 1A6.

Canada V6H 1A6, with another office at 25 Olympia Avenue, Suite K-300, Woburn, MA 01801, USA.

Our telephone number is (978) 973-5271.

We are engaged in the development and commercialization of therapeutic pharmaceutical products to address unmet medical needs in women's health including cancers affecting women.

We have a two-pronged strategy that includes:

emphasis on research and development to towards identifying new applications for existing drugs;

and developing novel therapies for women's cancers that are resistant to existing treatments due to inherent or acquired mutations..

Thus, our research and development activities are i) focused on developing hypotheses concerning new therapeutic uses for approved drugs, and conducting experimentation and clinical research to test those hypotheses;

and ii) advancing novel drug candidates for the treatment of women's cancers including, but not limited to metastatic endometrial cancer and triple-negative breast cancer, which have limited treatment options.

Where appropriate, we intend to depart from these two strategies to develop new variants of, or delivery methods for, or new dosage regimens for existing drugs or compounds as well as opportunistically acquire novel treatment options to address unmet or under-served medical needs in women's health.

Our business model currently includes the following activities:

identifying potential new indications for approved and marketed drug products;

securing or developing intellectual property rights to those products;

conducting appropriate laboratory tests and clinical trials;

advancing novel drug candidates acquired from our acquisition of IndUS through preclinical studies to support Investigational New Drug (IND) application to support first-in-human (FIH) trials;

seeking and establishing partnerships with large pharmaceutical, specialty pharmaceutical and biotechnology companies to develop and commercialize products outside of the initial market focus.

Our Current Business

We are a development stage biopharmaceutical company engaged in the development and commercialization of therapeutic pharmaceutical products, with a two-pronged strategy of identifying new therapeutic uses for existing drugs to address unmet medical needs in women's health including but not limited to urological and/or gynecological disturbances;

We are a development stage biopharmaceutical company engaged in the development and commercialization of therapeutic pharmaceutical products, focused on the strategy of identifying new therapeutic treatments to address unmet medical needs in women's health including but not limited to urological and/or gynecological disturbances;

and advancing novel anticancer drug candidates to provide new treatment options for metastatic cancers in women that do not have adequate treatment options or have poor response to existing treatment options due to inherent or acquired mutations.

Thus our research and development activities are focused on i) developing hypotheses concerning new therapeutic uses for approved drugs, and conducting experimentation and clinical research to test those hypotheses;

Where appropriate, we intend to depart from these two strategies to develop new variants of, or delivery methods for, existing drugs or compounds as well as opportunistically acquire novel treatment options to address unmet or under-served medical needs in women's health.

Our two-pronged R&D strategy of repurposing approved drugs and developing novel treatment options to address unmet medical needs, although not uncommon amongst pharmaceutical companies, differs from traditional drug development practices in two ways:

1) focusing on unmet medical needs in women's health including but not limited to urological and gynecological disturbances;

and 2) addressing unmet or under-served medical needs in women's cancers such as metastatic endometrial or triple-negative breast cancer that have inherent or acquired mutations rendering them resistant to existing treatment options.

Our initial focus is on developing therapeutic applications for existing drugs for the treatment of diseases and conditions specific to urological and/or gynecological disturbances in women.

The diseases and conditions that are the subject of our R&D program focused on re-purposing approved drugs and addressing resistant women's cancers include:

Dysmenorrhea in women aged 15-25 years old (PVT-001)

Lower urinary tract symptoms (LUTS) including filling and voiding issues (PVT-002)

Kidney stones (PVT-003)

Menopausal symptoms including hot flashes (PVT-004)

Our research and development activities are focused on i) advancing novel drug candidates for the treatment of women's cancers including, but not limited to metastatic endometrial cancer and triple-negative breast cancer, which have limited treatment options;

and ii) leveraging novel drug delivery treatment options to allow 'targeted' delivery of drugs to address women's health needs in urological and/or gynecological indications, and iii) opportunistically in-licensing later-stage drug candidates to augment our drug pipeline .

Where appropriate, we intend to depart from these strategies to opportunistically acquire additional novel treatment options to address unmet or under-served medical needs in women's health.

Our business model currently includes the following activities:

identifying novel drug delivery technologies that will allow targeted drug delivery for drugs;

securing and developing intellectual property rights to such products;

conducting appropriate laboratory tests and clinical trials;

advancing novel drug candidates to treat women's cancers from our acquisition of IndUS to support Investigational New Drug application to allow first-in-human trials;

opportunistically acquiring later-stage drug candidates that provide new treatment options to address unmet medical needs in women's health in cancer and lower urinary tract symptoms;

establishing partnerships with large and specialty pharmaceutical companies and/or biotechnology companies to collaboratively develop and/or commercialize our products.

One of our areas of focus includes developing therapeutic applications for existing drugs using novel delivery technologies for the treatment of diseases and conditions specific to cancer and/or urological disturbances in women.

The diseases and conditions that are the subject of our research and development program include addressing resistant cancers affecting women's health and developing new treatment options using novel drugs and/or novel delivery approaches to address oncological and urological conditions such as various gynecological and breast cancers as well as lower urinary tract symptoms such as overactive bladder.

Our current pipeline addresses the therapeutic areas of cancer and lower urinary tract symptoms (LUTS):

Metastatic endometrial cancer (PVT-005)

Triple-negative breast cancer (PVT-006)

Our planned research and development for the next 12 months will focus on development activities for PVT-005 and PVT-006 to support the filing of an Investigational New Drug (IND) application to support in first-in-human (FIH) clinical trials as well as develop new therapeutic uses for approved drugs through the use of novel delivery options to address unmet medical needs in urological and/or gynecological disturbances in women.

Our Research and Development ("R&D") Strategy:

A Focus on Addressing Unmet Medical Needs in Urological and Gynecological Disturbances and Resistant Cancers in Women

Our highly experienced management team has implemented a business-minded and cost-conscious approach to product research and development by focusing on development of novel therapies to address unmet needs in women's health.

Our R&D strategy will develop new therapeutic uses for existing drugs to address needs in women's health as well as advance some of its patented and proprietary novel anticancer drugs through its recent acquisition of IndUS.

Lower urinary tract symptoms including filling and voiding issues (PVT-002)

PVT-005 and PVT-006 are novel and patented anticancer small molecule drug candidates acquired through the acquisition of IndUS.

These molecules are novel DNA damage response inhibitors and belong to the chemical class of pyrrolobenzodiazepine dimers (PBDs).

These molecules have shown preclinical activity in cancers that have mutations in their tumor suppression and/or DNA repair abilities and have shown 'synthetic lethality' when dosed as monotherapy in such resistant cancers and/or in combination with standard-of-care drugs that are used in chemotherapeutic regimens for such patients.

PVT-005 and PVT-006 have shown excellent activity in tumor cells that have genetic or epigenetic mutations in DNA mismatch repair (mlh1, MSH2), tumor suppression functions (p53, PTEN) and/or homologous recombination (HR) functions.

They have shown significant synergies with platinum-based drugs such as cisplatin, and other drugs like topoisomerase II and I inhibitors (doxorubicin and camptothecin, respectively) and receptor tyrosine kinase (RTK) inhibitors – all or some of which are part of standard-of-care chemotherapeutic regimens to treat ovarian, breast, colorectal, non-small cell lung and other cancers that affect women's health.

Our research and development strategy is focused on developing novel treatment options to address various unmet medical needs in women's health, including but not limited to 1) urological and gynecological disturbances such as lower urinary tract symptoms;

Our Research and Development Strategy

Our management team has implemented a business-minded and cost-conscious approach to product research and development by focusing on development of novel therapies to address unmet needs in women's health.

Our research and development strategy will develop novel delivery options for new and/or existing drugs to address needs in women's health as well as advance some of its patented and proprietary novel anticancer drugs in gynecological and/or breast cancers through its recent acquisition of IndUS.

In order for a drug to be successful, it must be both efficacious and acceptably safe.

Therefore, before a drug may be commercially marketed, it must be scrutinized and approved by applicable health authorities (such as the FDA in the United States) in each country or jurisdiction where it is sought to be sold.

Before a drug may be commercially marketed, it must be scrutinized and approved by applicable health authorities (such as the Food and Drug Administration ("FDA") in the United States) in each country or jurisdiction where it is sought to be sold.

In pharmaceutical research and development, clinical trials are conducted to allow safety and efficacy data to be collected for new drugs or devices.

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Furthermore, approval rates for new drugs at each clinical trial stage are prohibitively low, which may require the sponsor to finance additional trials or abandon the drug under development altogether.

Our initial R&D strategy of finding new therapeutic uses for approved drugs seeks to avoid the cost of repeating one or more pre-clinical or clinical, safety, pharmacokinetic or or other tests by applying existing drug research to new indications.

In doing so, a company may reduce the time required to complete the necessary research and development activities, which can typically take in excess of 10 years, by more than half, as well as reduce the corresponding development costs.

Significantly, an existing drug, if efficacious for its new indication, is also more likely to be approved by an applicable health authority because it has already been shown to meet regulated safety standards that the vast majority of developmental drugs fail to achieve.

If a re-positioned drug is no longer protected by patent, no relationship between the original owner or developer of the drug and the new therapeutic use of the drug need exist.

However, it may in some circumstances be beneficial for the us to obtain a license from the original owner of the drug where there exists an opportunity to receive development, manufacturing, marketing or financing assistance from such owner.

We anticipate that our re-profiling approach will result in faster, more efficient clinical trials and dramatically increase the chance of obtaining regulatory approval at each clinical trial stage.

In some cases, we anticipate that we may be able to obtain a regulatory waiver and bypass certain clinical trial stages as a result of basing our products on re-profiled drugs.

Our recent acquisition of Greater Boston-based IndUS has provided us with a portfolio of patented and proprietary, novel anticancer drug candidates from multiple chemical classes of molecules referred to as pyrrolobenzodiazepine dimers ("PBD").

These molecules have shown excellent anticancer potential through their initial testing conducted at the National Cancer Institute (NCI) in Bethesda, MD.

Subsequent to their initial biological evaluation, chemical scale-up and formulation studies were conducted to evaluate their pharmacokinetics in rats and two novel and patented PBDs were prioritized for advancement through preclinical studies to support first-in-human (FIH) studies.

Our research and development strategy includes the development of novel anticancer drugs targeting subsets of women's cancer patients that have endometrial, triple-negative breast and/or ovarian cancer, to explore the opportunity of securing an orphan drug designation (intended for patient populations <200,000 in the US).

Since our anticancer portfolio has novel drugs that will require the conduct of nonclinical and clinical studies for new molecular entities (NMEs);

we will also use targeted delivery options for approved (generic) drugs to avoid the higher cost of repeating one or more pre-clinical or clinical, safety, pharmacokinetic or other tests by applying novel drug delivery approaches to get targeted delivery of drugs and get a quicker time to market by leveraging a US regulatory pathway termed 505b2 applications.

In doing so, a company may reduce the time required to complete the necessary research and development activities, which can typically take in excess of ten years, by more than half, as well as reduce the corresponding development costs.

Our recent acquisition of Greater Boston-based IndUS has provided us with a portfolio of novel, patented and proprietary, novel anticancer drug candidates from multiple chemical classes of molecules referred to as pyrrolobenzodiazepine dimers (PBDs).

These molecules have shown excellent anticancer potential during their initial biological testing conducted at the National Cancer Institute in Bethesda, MD.

Subsequent to their initial biological evaluation, chemical scale-up and formulation studies were conducted to evaluate their pharmacokinetics in rats and two novel and patented pyrrolobenzodiazepine dimers were prioritized for advancement through preclinical studies to support first-in-human studies.

PVT-005 and PVT-006 provide novel treatment options in combination with existing chemotherapeutic regimens to address unmet medical needs in women's cancers.

Our initial focus for PVT-005 is in metastatic endometrial cancer which harbors genomic mutations in DNA replication and repair pathways that render them resistant to existing chemotherapy options.

It is estimated that approximately 50,000 women in the United States have metastatic endometrial cancer that would become eligible for new therapy options following their initial treatments.

Similarly, PVT-006, a novel and patented PBD, distinct from PVT-005, has been identified as a lead candidate to address unmet medical needs of women with triple-negative breast cancer ("TNBC").

Triple-negative breast cancer is a very aggressive form of breast cancer that affects younger women, predominantly of African-American descent and it is estimated that approximately 170,000 women in the United States have TNBC.

Five different molecular subtypes of TNBC have been identified and basal-like (BL) subtype of TNBC affects up to 40,000 women in the United States.

PVT-006 is more likely to be effective, in combination with existing anticancer agents, in BL-TNBC subtype due to their mutations in DNA repair and replication pathways.

Our initial focus for PVT-005 is in patients with metastatic endometrial cancer, which harbors genomic mutations in DNA replication and repair pathways that render the cancer resistant to many existing chemotherapy options.

It is estimated that approximately 50,000 women in the United States have metastatic endometrial cancer that would become eligible for new therapy options following their initial treatments and PVT-005 will be added to the standard chemotherapeutic regimen(s) that will be used to treat metastatic endometrial cancer.

Similarly, PVT-006, a novel and patented pyrrolobenzodiazepine dimer, distinct from PVT-005, has been identified as a lead candidate to address unmet medical needs of women with triple-negative breast cancer.

Triple-negative breast cancer is a very aggressive form of breast cancer that affects younger women, predominantly of African-American descent.

It is estimated that approximately 170,000 women in the United States have triple-negative breast cancer.

Five different molecular subtypes of triple-negative breast cancer have been identified and the basal-like subtype of triple-negative breast cancer (BL-TNBC) affects up to 40,000 women in the United States.

PVT-006 is more likely to be effective in combination with existing anticancer agents, in basal-like triple-negative breast cancer subtype due to their mutations in DNA repair and replication pathways, which PVT-006 targets as its mechanism of action.

Preclinical safety studies will be conducted over the next 12 months to advance at least one of these candidates to an IND-stage to allow initiation of clinical studies in these highly unmet medical needs in women's cancer.

Issuances of Securities

On January 31, 2015, we issued 299,202,532 pre-split (29,920,253 post-split) shares of our common stock to six subscribers at the price of US$0.001 per share in full conversion of six outstanding convertible promissory notes held by the subscribers with an aggregate value US$299,203.53 including principal and accrued interest.

We originally issued the convertible promissory notes for cash consideration on December 11, 2014, June 27, 2014, April 26, 2013, December 4, 2011, February 23, 2011, and December 16, 2010, respectively.

47,649,500 pre-split (4,764,950 post-split) of the common shares were issued to Sassel Investments Inc., a corporation beneficially owned and controlled by Hamid Doroudian, a former officer and director of our company.

On March 6, 2015, 100,000,000 pre-split (10,000,000 post-split) shares of common stock were issued to directors, officers and a consultant for services.

An additional 300,000,000 pre-split (30,000,000 post-split) shares of common stock were held in escrow to be released as follows:

100,000,000 pre-split (10,000,000 post-split) shares of common stock on each of August 25, 2015, February 25, 2016 and February 25, 2017.

On August 25, 2015, 100,000,000 pre-split (10,000,000 post-split) shares of common stock were released.

In October 2015, these individuals returned 200,000,000 pre-split (20,000,000 post-split) shares of common stock that were received which, together with the 200,000,000 pre-split (20,000,000 post-split) shares of common stock held in escrow, have been cancelled by our company.

On April 15, 2015, the Company issued 2,500,000 shares of common stock to a service provider and an officer for services.

In April 2015, 400,000 shares of common stock were issued for cash proceeds of $48,844.

In July 2015, 1,000,000 shares of common stock were issued for cash proceeds of $261,036.

On August 1, 2015, 25,000 shares of common stock were issued pursuant to an advisory board agreement for our advisory board member.

An additional 75,000 shares of common stock were held in escrow to be released as follows:

25,000 shares of common stock on each of January 31, 2016, July 31, 2016 and January 31, 2017.

On August 24, 2015, 100,000 shares of common stock were issued pursuant to an investor relations agreement for services.

On November 23, 2015 and December 4, 2015, 4,512,500 and 237,500 shares of common stock, respectively, were issued pursuant to the acquisition of IndUS under the Agreement and Plan of Merger and Acquisition Agreement dated as of November 4, 2015 among our company, Pivot Pharma U.S.

Inc., our wholly owned subsidiary, IndUS and Sindu Research Laboratories Pvt Ltd.

250,000 shares of common stock of our company will be issued upon closing of the acquisition of Sindu Research Laboratories Pvt Ltd.

Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended October 31, 2015, which are included in this quarterly report on Form 10-Q.

Our operating results for the three and nine months ended October 31, 2015 and 2014 are summarized as follows:

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended April 30, 2016, which are included herein.

Our operating results for the three months ended April 30, 2016 and 2015 are summarized as follows:

Three Months Ended

Nine Months Ended

Foreign exchange (gain) loss

Foreign exchange loss

General and administrative

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Professional fees

Total Other (Income) Expenses

Stock-based compensation

Total Other Expenses

Net Income (Loss)

$ (3,331,812 )

For the three months ended October 31, 2015, our net loss decreased by $157,401 as compared to the three months ended October 31, 2014.

This decrease was due primarily to the reversal of management and consulting fees previously recognized on common stock issued for services upon cancellation of such common stock during the period.

For the nine months ended October 31, 2015, our net loss increased by $4,269,094 as compared to the nine months ended October 31, 2014.

Our loss increased primarily due to shares of common stock issued and issuable for services, which increased consulting expense and increase in professional fees due to our pursuit of the acquisition of IndUS.

$ (1,166,285 )

For the three months ended April 30, 2016, our net loss increased by $2,165,527 as compared to the three months ended April 30, 2015.

Our net loss increased primarily due to the vesting of stock options granted offset by a reduction in general and administrative expense, management fees and professional fees.

We have not earned any revenues since our inception and we do not anticipate earning revenues in the upcoming quarter.

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Working Capital (Deficit)

Our total current assets as of October 31, 2015 were $208,101 as compared to total current assets of $1,193 as of January 31, 2015.

The increase was primarily due to an increase in cash from shares subscribed and issued during the period.

Our total current liabilities as of October 31, 2015 were $143,959 as compared to total current liabilities of $71,053 as of January 31, 2015.

The increase in current liabilities was attributed to professional fees incurred during the period due to increased business activities, including preparation for the acquisition of IndUS, appointment of a member to our Scientific Advisory Board and cancellation of shares of common stock.

Nine Months Ended

Our total current assets as of April 30, 2016 were $ 52,013 as compared to total current assets of $103,215 as of January 31, 2016.

The decrease was primarily due to decrease in cash from working capital.

Our total current liabilities as of April 30, 2016 were $ 563,794 as compared to total current liabilities of $435,104 as of January 31, 2016.

The increase in current liabilities was attributed to the accrual of management fees during the three months ended April 30, 2016 pursuant to management agreements.

Three Months Ended

Net Cash Provided By (Used In) Operating Activities

Net Cash Provided By Financing Activities

Increase in Cash During the Period

Effects of Exchange Rate Changes on Cash

Increase (Decrease) in Cash During the Period

Operating Activities

During the nine months ended October 31, 2015, our cash used in operating activities increased by $115,887.

This increase was a result of payments made for professional fees related to activities that occurred during the period, including conversions and settlement of debentures, issuances of common stock, appointment of certain directors and officers and effecting our name change.

During the three months ended April 30, 2016, our cash used by operating activities increased by $66,421 when compared to cash used in operating activities during the three months ended April 30, 2015.

The increase in cash used for operating activities was as a result of payments made for past services provided, including audit and legal fees and transfer agent costs.

Investing Activities

We did not have any investing activities during the nine months ended October 31, 2015 and 2014.

We did not have any investing activities during the three months ended April 30, 2016 and 2015.

Financing Activities

During the nine months ended October 31, 2015, we received $309,880 (US$240,000) in cash from financing activities compared with proceeds of $7,500 during the nine months ended October 31, 2014.

During the three months ended April 30, 2016, we received $nil (2015 - $40,000) in cash from financing activities.

We will require additional funds to fund our budgeted expenses over the next 12 months.

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Estimated Expenses

Business development

General and administrative

Listing expenses

Research and development

Based on our planned expenditures, we will require additional funds of approximately $6,081,480 to proceed with our business plan over the next 12 months.

Research and Development Costs:

Studies and manufacture of active product ingredient

R&D headcount

Sales and Marketing Costs:

Entertainment and promotion

Investor relations

Operating Expenses:

Director fees

Office and laboratory lease

Professional fees

Public company expenses

Salaries and benefits

Telephone and internet

Vehicles and transportation

Based on our planned expenditures, we will require additional funds of approximately $8.9 million to proceed with our business plan over the next 12 months.

If we secure less than the full amount of financing that we require, we will not be able to carry out our complete business plan and we will be forced to proceed with a scaled back business plan based on our available financial resources.

There can be no assurance that our business plans will be successful whether scaled back or not.

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position.

The amounts presented in the consolidated financial statements do not provide for the effect of inflation on our operations or financial position.

The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America.

Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses.

The discussion and analysis of our consolidated financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America.

Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses.

These estimates and assumptions are affected by management's application of accounting policies.

We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

Basis of Presentation

The financial statements and the related notes of our company are prepared in accordance with generally accepted accounting principles in the United States and are expressed in Canadian dollars.

Our company's fiscal year-end is January 31.

We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our consolidated financial statements.

Use of Estimates

The preparation of these financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Our company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, assumptions used to determine the fair values of stock-based compensation and derivative liabilities, and deferred income tax asset valuation allowances.

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To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and Cash Equivalents

Our company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

As at October 31, 2015, and January 31, 2015, our company had no cash equivalents.

Property and Equipment

Property and equipment is comprised of office equipment and is recorded at cost.

Our company amortizes the cost of equipment on a straight-line basis over their estimated useful life of five years.

Long-lived Assets

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All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

Derivative Financial Instruments

Derivative financial instruments that are not classified as equity and are not used in hedging relationships are measured at fair value.

Subsequent changes to fair value are recorded in the statement of operations.

Earnings (Loss) Per Share

Our company computes net earnings (loss) per share in accordance with ASC 260, Earnings Per Share.

ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the income statement.

Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.

Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.

In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.

Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

At October 31, 2015, our company has no (January 31, 2015 – 460,000) potentially dilutive shares.

Comprehensive Loss

ASC 220, Comprehensive Income , establishes standards for the reporting and display of comprehensive loss and its components in the financial statements.

As at October 31, 2015, and January 31, 2015, our company had no items representing comprehensive income or loss.

Research and Development Costs

Research costs are expensed in the period that they are incurred.

Financial Instruments and Fair Value Measures

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Foreign Currency Translation

Our company's functional currency and its reporting currency is the Canadian dollar and foreign currency transactions are primarily undertaken in United States dollars.

Monetary assets and liabilities are translated using the exchange rate prevailing at the balance sheet date.

The functional currency of our parent entity, Pivot Pharmaceuticals Inc., is the Canadian dollar and the functional currency of our subsidiary is the US dollar.

Our company's presentation currency is the US dollar.

Monetary assets and liabilities are translated using the exchange rate prevailing at the consolidated balance sheet date.

Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction.

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Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

Results of operations are translated into our company's presentation currency, US dollars, at an appropriate average rate of exchange during the year.

Net assets and liabilities are translated to US dollars for presentation purposes at rates of exchange in effect at the end of the period.

Gains or losses arising on translation are recognized in other comprehensive income (loss) as foreign currency translation adjustments.

Recent Accounting Pronouncements

Our company has implemented all new accounting pronouncements that are in effect and that may impact our financial statements and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

Our company has implemented all new accounting pronouncements that are in effect and that may impact our consolidated financial statements and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations.

Quantitative and Qualitative Disclosure About Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis