BetterLife Pharma Inc. 10-Q

Item 1. Financial Statements Our unaudited interim condensed consolidated financial statements for the period ended October 31, 2017 form part of this quarterly report. All currency references in this report are to U.S. dollars unless otherwise noted. This financial information, in the opinion of management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data. The results of operations for the three and nine month periods ended October 31, 2017 are not necessarily indicative of results to be expected for any subsequent period. 3 Table of Contents PIVOT PHARMACEUTICALS INC. Condensed Consolidated Financial Statements (Expressed in U.S. dollars) Period ended October 31, 2017 (unaudited) and January 31, 2017 4 Table of Contents PIVOT PHARMACEUTICALS INC. Condensed Consolidated Balance Sheets (Expressed in U.S. dollars) October 31, 2017 $ January 31, 2017 $ (unaudited) Assets Current assets Cash 250,386 112,421 Prepaid and other current assets 45,526 17,337 Total current assets 295,912 129,758 Security deposit – 2,900 Intangible asset (Notes 4(a) and 5) 239,247 – Total assets 535,159 132,658 Liabilities and Stockholders’ Equity (Deficit) Current liabilities Accounts payable and accrued liabilities 145,481 996,853 Due to related parties (Note 13) 4,544 22,574 Convertible debenture, net of discount (Note 6) – 275,011 Derivative liability (Note 7) – 312,541 Total current liabilities 150,025 1,606,979 Promissory note (Note 8) 202,197 – Total liabilities 352,222 1,606,979 Stockholders’ Equity (Deficit) Common stock: Unlimited shares authorized, without par value, 79,600,925 and 75,647,114 shares issued and outstanding, respectively (Note 9) 7,896,165 7,327,588 Subscriptions payable (Note 9) 327,298 – Additional paid-in capital 11,766,274 11,211,031 Accumulated other comprehensive income 585,533 584,813 Accumulated deficit (20,392,333 ) (20,597,753 ) Total stockholders’ equity (deficit) 182,937 (1,474,321 ) Total liabilities and stockholders’ equity (deficit) 535,159 132,658 (The accompanying notes are an integral part of these condensed consolidated financial statements) 5 Table of Contents PIVOT PHARMACEUTICALS INC. Condensed Consolidated Statements of Operations and Comprehensive Income (Expressed in U.S. dollars) Three Months Ended October 31, 2017 $ Three Months Ended October 31, 2016 $ Nine Months Ended October 31, 2017 $ Nine Months Ended October 31, 2016 $ (unaudited) (unaudited) (unaudited) (unaudited) Revenue – – – – Expenses Amortization of intangible asset (Note 5) 8,309 – 8,309 – Foreign exchange (gain) loss 38,762 60,658 101,324 138,017 General and administrative 50,480 71,301 179,410 1,045,722 Management fees 31,941 548,407 301,714 3,917,354 Professional fees 55,166 9,938 128,174 100,421 Total expenses 184,658 690,304 718,931 5,201,514 Loss from operations (184,658 ) (690,304 ) (718,931 ) (5,201,514 ) Other income (expense) Amortization of discount on convertible debenture – (48,672 ) (105,392 ) (48,672 ) Loss (gain) on change in fair value of derivative liabilities 33,260 (212,354 ) 204,711 (212,354 ) Gain on disposal of asset (Note 3) 609,311 – 609,311 – Gain on settlement of debts 80,144 – 240,144 – Interest expense (7,331 ) (3,612 ) (24,481 ) (3,612 ) Total other income (expense) 715,384 (264,638 ) 924,293 (264,638 ) Net income (loss) 530,726 (954,942 ) 205,362 (5,466,152 ) Other comprehensive income (loss) Foreign currency translation adjustment (63,201 ) (40,569 ) (728 ) 109,597 Net comprehensive income (loss) 428,224 (995,511 ) 204,634 (5,356,555 ) Net income (loss) per share, basic 0.01 (0.01 ) 0.00 (0.07 ) Net income (loss) per share, diluted 0.01 (0.01 ) 0.00 (0.07 ) Weighted average shares outstanding – basic 76,761,576 75,613,498 76,055,298 75,212,555 Weighted average shares outstanding – diluted 81,596,692 75,613,498 78,877,344 75,212,555 (The accompanying notes are an integral part of these condensed consolidated financial statements) 6 Table of Contents PIVOT PHARMACEUTICALS INC. Condensed Consolidated Statements of Cash Flows (Expressed in U.S. dollars) Nine Months Ended October 31, 2017 $ Nine Months Ended October 31, 2016 $ (unaudited) (unaudited) Operating activities Net income (loss) 205,362 (5,466,152 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization 8,309 – Amortization of discount on convertible debenture 105,392 48,672 Fair value of stock options vested 1,057 4,300,354 (Gain) loss on change in fair value of derivative liabilities (204,711 ) 212,354 Gain on disposal of assets (609,311 ) – Gain on settlement of debts (240,144 ) – Stock issued for services 24,531 256,382 Changes in operating assets and liabilities: Prepaids and other current assets 35,589 5,938 Due to related parties 4,510 16,500 Accounts payable and accrued liabilities 457,439 366,124 Other liabilities 12,266 – Net cash used in operating activities (199,711 ) (259,828 ) Financing activities Proceeds from convertible debenture – 381,350 Proceeds from debenture 36,500 – Proceeds from issuance of common stock 31,799 – Proceeds from issuance of common stock subscriptions 264,326 – Net cash provided by financing activities 332,625 381,350 Effects of exchange rate changes on cash 5,051 13,414 Increase in cash 137,965 134,936 Cash – beginning of period 112,421 71,639 Cash – end of period 250,386 206,575 Supplemental cash flow disclosures (Note 12) (The accompanying notes are an integral part of these condensed consolidated financial statements) 7 Table of Contents PIVOT PHARMACEUTICALS INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) Period ended October 31, 2017 (Expressed in U.S. dollars) 1. Nature of Operations and Continuance of Business Pivot Pharmaceuticals Inc. (the “Company”) was incorporated in British Columbia under the Business Corporations Act on June 10, 2002. On April 7, 2015, the Company changed its name from Neurokine Pharmaceuticals Inc. to Pivot Pharmaceuticals Inc. The Company is in the business of developing and commercializing therapeutic pharmaceutical products, focused on the strategy of identifying new therapeutic treatments to address unmet medical needs in women’s health. These 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. As of October 31, 2017, the Company has not earned any revenue, has a working capital of $145,887 and an accumulated deficit of $20,392,333. The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional financing. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company be unable to continue as a going concern. 2. Significant Accounting Policies (a) Basis of Presentation The consolidated financial statements and the related notes of the Company are prepared in accordance with generally accepted accounting principles in the United States and are expressed in U.S. dollars. The Company’s fiscal year-end is January 31. (b) Use of Estimates 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. The 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. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. (c) Interim Financial Statements These interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s condensed consolidated financial position, results of operations and cash flows for the periods shown. The condensed consolidated results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. Certain disclosures and financial information have been condensed in accordance with generally accepted accounting principles in the United States. 8 Table of Contents PIVOT PHARMACEUTICALS INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) Period ended October 31, 2017 (Expressed in U.S. dollars) 2. Significant Accounting Policies (continued) (d) Basis of Consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The consolidating entities include: % of ownership Jurisdiction Pivot Pharmaceuticals Inc. Parent Canada Pivot Green Stream Health Solutions Inc. 100 % Canada (e) Loss Per Share The Company computes net 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 consolidated statement of operations. 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 for all exercisable options and warrants and the if-converted method for all outstanding convertible debentures. 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. As at October 31, 2017, the Company had 2,822,046 (January 31, 2017 – 9,692,748) potentially dilutive shares. (f) Financial Instruments and Fair Value Measures ASC 820, Fair Value Measurements, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2: Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3: Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist principally of cash, amounts receivable, accounts payable and accrued liabilities, due to related parties and promissory note. Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. 9 Table of Contents PIVOT PHARMACEUTICALS INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) Period ended October 31, 2017 (Expressed in U.S. dollars) 2. Significant Accounting Policies (continued) (g) Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial position or results of operations. 3. Disposal of Asset On September 11, 2017, the Company completed an exchange agreement whereby the Company exchanged with its past Chief Executive Officer 100% of its shares of common stock of its wholly-owned subsidiary, IndUS Pharmaceuticals, Inc. (“IndUS”), for 3,800,000 shares of common stock of the Company (Note 9(a)). Pursuant to the exchange agreement, the Company has provided its former Chief Executive Officer a promissory note (Note 8(a)) in the amount of $200,000 in discharge of all obligations with respect to Dr. Chaturvedi’s accrued salary totaling $267,267 through September 11, 2017. The disposal of IndUS resulted in a gain as follows: 3,800,000 shares of common stock acquired and cancelled 380,000 Net liabilities exchanged 229,311 Gain on disposal of asset 609,311 The disposal of IndUS did not meet the definition of discontinued operations as it did not represent a strategic shift that has a major effect on the Company’s operations and financial results. 4. Asset Acquisitions (a) BiPhasix License On September 12, 2017, the Company entered into a licensing agreement with Altum Pharmaceuticals Inc. (“Altum”) whereby the Company acquired worldwide rights to the BiPhasix™ transdermal drug delivery technology for the development and commercialization of Cannabinoids, Cannabidiol and Tetrahydrocannabinol products. Consideration included: 1) Issuance of 2,500,000 shares of common stock on September 12, 2017 (Notes 5 and 9(b)); 2) Issuance of 2,500,000 shares of common stock of Pivot upon Health Canada Natural Product Number approval; 3) Royalties on annual gross sales; and 4) For pharmaceutical products, milestone payments payable upon first Investigative New Drug Approval, upon positive outcome of Phase II trial in first indication, and upon New Drug Application approval. (b) Solmic Solubilization License On September 23, 2017, the Company entered into a collaboration and license agreement with SolMic GmbH (“Solmic”) whereby the Company will acquire worldwide rights to Solmic’s Solubilization Technology for the development and commercialization of cannabinoid-containing natural extracts. Milestones include payments upon the following developments: 1) Regulatory approval of a natural health product; 2) First approval of an investigative new drug application for a pharmaceutical product; 3) Positive outcome of a Phase II clinical trial of a pharmaceutical product in the first indication; and 4) Approval of a New Drug Application for a pharmaceutical product by the US Food and Drug Administration. Other consideration include a sales milestone upon aggregate net sales of $5,000,000 and royalties on aggregate net sales. 10 Table of Contents PIVOT PHARMACEUTICALS INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) Period ended October 31, 2017 (Expressed in U.S. dollars) 5. Intangible Asset Cost BiPhasix License $ Balance, January 31, 2017 – License agreement (Note 4(a)) 247,556 Balance, October 31, 2017 247,556 Accumulated Amortization Balance, January 31, 2017 – Amortization 8,309 Balance, October 31, 2017 8,309 Net book value, October 31, 2017 239,247 Net book value, January 31, 2017 – 6. Convertible Debenture On September 30, 2016, the Company issued a convertible debenture with a non-related party for $500,000 Canadian Dollars ($380,411 US Dollars at September 30, 2016) (“Initial Advance”). The debenture is secured under a General Security Agreement, bears interest at 8% per annum and matures on the earlier of: · The date the lender demands repayment of principal and interest following an event of default, · The date of a dissolution event, · The date of a liquidity event, and · March 30, 2017. The Company may request one or more additional advances of up to an aggregate amount of $1,000,000 Canadian Dollars (“Additional Advances”) provided that the aggregate amount under the convertible debenture does not exceed $1,500,000 Canadian Dollars. The note, including the Initial Advance and any Additional Advances, is convertible into common shares at a conversion price equal to the average closing market price of the Company’s common stock during the five day period leading up to the conversion date. The Company recorded the conversion feature of the convertible debenture as a derivative liability at an estimated fair value of $134,892 with a corresponding discount to the convertible debenture (Note 7). Pursuant to the convertible loan agreement, the Company issued 434,622 share purchase warrants to which the lender may acquire an interest in the Company equal to 12% of the maximum principal amount outstanding at any time at a price of $0.10 per share, which equates to the ten day average trading price of the Company’s common stock determined as at September 30, 2016. The Company calculated the 434,622 share purchase warrants based on the maximum outstanding principal balance on the convertible loan as of September 30, 2016. The Company recorded the share purchase warrant at an estimated fair value of $20,154 with a corresponding discount to the convertible debenture (Note 11). 11 Table of Contents PIVOT PHARMACEUTICALS INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) Period ended October 31, 2017 (Expressed in U.S. dollars) 6. Convertible Debenture (continued) On September 18, 2017, the lender converted the outstanding principal and accrued interest of the convertible debenture into 4,623,825 shares of common stock (Note 9(c)) of the Company at a conversion price of $0.10. A loss on conversion of debenture of $21,236 was recorded within gain on settlement of debts in the condensed consolidated statements of operations and comprehensive income. As of October 31, 2017, the carrying value of the convertible debenture is $nil (January 31, 2017 - $275,011) which is net of debt discounts related to conversion feature, financing costs and warrants of $nil, $nil and $nil, respectively (January 31, 2017 - $94,709, $6,126 and $6,477, respectively). As of October 31, 2017, interest accrued on the convertible debenture is $nil (January 31, 2017 - $10,307) and the fair value of the conversion option derivative liability is $nil (January 31, 2017 - $312,541). 7. Derivative Liability Derivative liability consists of convertible debenture with variable conversion price (Note 6). On September 18, 2017, the convertible debenture was converted into shares of common stock (Note 6). The fair value of derivative liability as at October 31, 2017 and January 31, 2017 is as follows: October 31, 2017 $ January 31, 2017 $ September 2016 convertible debenture – 312,541 – 312,541 The fair value of derivative financial liability was determined using the binomial option pricing model, using the following assumptions: Expected Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) As at issuance date: September 2016 convertible debenture 296 % 0.45 % 0 % 0.50 8. Promissory Note October 31, 2017 $ January 31, 2017 $ Principal (Note 8(a)) 200,000 – Accrued interest (Note 8(a)) 2,197 – 202,197 – (a) Promissory Note – Former Chief Executive Officer (Note 3) Promissory note bears interest at 8% per annum. Principal and accrued interest are due on the earlier of: 1) 30 days after the completion of a financing of at least $2,000,000 and (ii) September 10, 2027. 12 Table of Contents PIVOT PHARMACEUTICALS INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) Period ended October 31, 2017 (Expressed in U.S. dollars) 8. Promissory Note (continued) (b) Promissory Note – Third Party On September 27, 2017, the Company issued a promissory note in the amount of $400,000, bearing interest at 12% per annum and maturing on December 31, 2018, which no proceeds have been received by the Company as at October 31, 2017. As part of the promissory note, 100,000 shares of our common stock were issued (Note 9(d)). 9. Common Stock (a) On September 11, 2017, 3,800,000 shares of common stock were acquired and cancelled pursuant to the share exchange agreement (Note 3). (b) On September 12, 2017, 2,500,000 shares of common stock were issued pursuant to the Altum licensing agreement (Note 4(a)). (c) On September 18, 2017, 4,623,825 shares of common stock were issued upon conversion of convertible debenture (Note 6). (d) On October 26, 2017, 100,000 shares of common stock were issued pursuant to a promissory note issued (Note 8(b)). (e) In October 2017, the Company received proceeds totaling $223,000 pursuant to private placements for the issuance of 2,230,000 shares of common stock. 330,000 shares of common stock were issued on October 30 and 1,900,000 shares of common stock were issuable as of October 31, 2017. As of October 31, 2017 200,000 shares of common stock were issuable related to share issue costs on this private placement. The 1,900,000 shares of common stock related to the private placement and the 200,000 shares of common stock related to share issue costs were issued on November 2, 2017. (f) In October 2017, the Company received proceeds totaling $76,000 pursuant to private placements for the issuance of 380,000 units, consisting of one common stock and one half of one share purchase warrant. Each share purchase warrant entitles the holder to purchase a common share at $0.35 for 18 months. These units were issuable as of October 31, 2017. On November 30, 2017, 380,000 shares of common stock and 190,000 share purchase warrants were issued in full satisfaction of the stock subscription payable. (g) On October 31, 2017, the Company settled $35,152 of accounts payable through the issuance of 92,384 shares of common stock (Note 13), which were issued on November 2, 2017. 10. Stock Options Effective December 30, 2015, the Company adopted a stock option plan. Under this plan, the Company may grant options to its directors, officers, employees and consultants up to an amount as determined by the Company and will be no more than a percentage of its outstanding common stock as may be required by the stock exchange the Company is listed with. The exercise price of the stock options will be determined by the Company and will be no less than any minimum exercise price as may be required by the stock exchange the Company is listed with. The following table summarizes the continuity of the Company’s stock options: 13 Table of Contents PIVOT PHARMACEUTICALS INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) Period ended October 31, 2017 (Expressed in U.S. dollars) 10. Stock Options (continued) Number of Options Weighted Average Exercise Price (US$) Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value (US$) Outstanding, January 31, 2017 15,520,833 0.38 4.2 68,599 Granted – – – – Forfeited – – – – Outstanding, October 31, 2017 15,520,833 0.38 3.47 2,285,100 The fair value of stock-based compensation expense was estimated using the Black-Scholes option pricing model and the following assumptions: Expected Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) 29,000 options expiring on May 2, 2021 377 % 1.73 % 0 % 3.5 Additional information regarding stock options as of October 31, 2017, is as follows: Options Outstanding Options Exercisable Exercise Price $ Expiry Date 200,000 200,000 0.25 November 30, 2020 4,000,000 4,000,000 0.10 December 14, 2020 7,250,000 7,250,000 0.70 February 22, 2021 29,000 28,000 0.34 May 2, 2021 4,000,000 4,000,000 0.10 December 14, 2021 41,833 41,833 0.05 January 23, 2022 15,520,833 15,519,833 $60 of stock-based compensation have yet to be recognized and will be recognized in future periods. 14 Table of Contents PIVOT PHARMACEUTICALS INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) Period ended October 31, 2017 (Expressed in U.S. dollars) 11. Share Purchase Warrant The following table summarizes the continuity of share purchase warrant: Number of Warrants Weighted Average Exercise Price $ Balance, January 31, 2017 434,622 0.10 Expired (434,622 ) (0.10 ) Balance, October 31, 2017 – – As at October 31, 2017, there are no share purchase warrants outstanding. On November 30, 2017, 190,000 share purchase warrants, entitling the holder to purchase a common share at $0.35 for 18 months, were issued (Note 9(f)). 12. Supplemental Cash Flow Information Nine Months Ended October 31, 2017 Nine Months Ended October 31, 2016 Supplemental disclosures: Interest paid – – Income tax paid – – Non-cash investing and financing activities: Capital contribution through forgiveness of debt 531,310 – Common stock issued for settlement of accounts payable 35,152 – Common stock issued for settlement of convertible debenture 601,097 – Common stock issued for prepaid assets 72,924 – Common stock issued for intangible asset 262,500 – Common stock subscriptions issued for services 21,207 – Debt discounts on convertible debt – 284,184 Promissory note issued for settlement of accrued salaries 200,000 – Treasury stock returned and retired in disposition of assets 380,000 – 13. Related Party Transactions As at October 31, 2017, the Company owed $4,544 (January 31, 2017 - $4,154) to a director of the Company, which is unsecured, non-interest bearing, and due on demand. During the nine months ended October 31, 2017, $552,889 of accrued management fees to the Company’s Chief Financial Officer and Chief Business Officer were forgiven. In addition, $35,152 of accounts payable due to a company controlled by the Company’s Chief Financial Officer were settled for 92,384 shares of common stock. 15 Table of Contents PIVOT PHARMACEUTICALS INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) Period ended October 31, 2017 (Expressed in U.S. dollars) 14. Fair Value Measurements The Company’s financial liabilities carried at fair value measured on a recurring basis as of October 31, 2017 and January 31, 2017, consisted of the following: Total fair value at October 31, 2017 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Derivative liability (1) $ - $ - $ - $ - Total fair value at January 31, 2017 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Derivative liability (1) $ 312,541 $ - $ 312,541 $ - ____________ (1) Derivative liability amounts are due to the embedded derivatives of convertible debenture issued by the Company and are calculated using the binomial option pricing model (Note 6). The Company has no financial assets carried at fair value. 15. Subsequent Events (a) On November 7, 2017, 50,000 shares of common stock were issued to a service provider for services rendered. (b) On November 15, 2017, the Company entered into scientific advisory board agreements whereby 100,000 options to purchase shares of common stock with the following terms were granted: · Exercise price of $0.39; · 25% vesting on each of the following dates: November 15, 2017, May 15, 2018, November 15, 2018 and May 15, 2019; · Expiry on November 14, 2022. 16 Table of Contents