What changed in this filing

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Item 9A. Controls and Procedures

2019-05-03 compared with 2018-05-01 · 127 added, 104 removed, 385 unchanged (38% of the section changed)

10 unchanged sentences

We did not maintain appropriate financial reporting controls – As of January 31, 2019, our company has not maintained sufficient internal controls over financial reporting for the financial reporting process.

As at January 31, 2018, our company did not have sufficient financial reporting controls with respect to the segregation of incompatible duties related to the ability to post adjusting journal entries and access to our company’s assets.

As at January 31, 2019, our company did not have sufficient financial reporting controls with respect to the segregation of incompatible duties related to the ability to post journal entries and access to our company’s assets.

Accordingly, our company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

As a result of the material weaknesses described above, management has concluded that our company’s internal control over financial reporting was not effective as of January 31, 2019 based on criteria established in Internal Control—Integrated Framework issued by COSO.

Sadler, Gibb & Associates, LLC, our independent registered public auditors, was not required to and has not issued an attestation report concerning the effectiveness of our internal control over financial reporting as of January 31, 2018 pursuant to temporary rules of the Securities and Exchange Commission that permit our company to provide only management’s report in this annual report.

MNP, LLP, our independent registered public auditors, was not required to and has not issued an attestation report concerning the effectiveness of our internal control over financial reporting as of January 31, 2019 pursuant to temporary rules of the Securities and Exchange Commission that permit our company to provide only management’s report in this annual report.

Changes in Internal Controls

38 unchanged sentences

Patrick Frankham as our new Chief Executive Officer.

On August 27, 2018, we accepted the resignation of Dr.

Ahmad Doroudian as Director, Chairman and Secretary.

Concurrently, we appointed Dr.

Joseph Borovsky as Chairman and Director.

Directors, Executive Officers and Corporate Governance

3 unchanged sentences

Position Held with the Company

Date First Elected

Ahmad Doroudian

Chairman, Secretary, Chief Business Officer and Director

September 17, 2007

Date First Elected or Appointed

Joseph Borovsky

Chairman, Director and Executive Vice-President of Technology

August 27, 2018

Patrick Frankham

Chief Executive Officer and Director

November 20, 2015

July 24, 2014

Chief Financial Officer

4 unchanged sentences

The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

Ahmad Doroudian – Chairman, Secretary, Chief Business Officer and Director

Ahmad Doroudian was as our appointed president, Chief Executive Officer and Director on September 17, 2007 and as Chief Executive Officer and secretary on March 30, 2011.

He resigned as President, Chief Executive Officer and Secretary on August 30, 2011 and was re-appointed as President, Chief Executive Officer and Secretary on July 24, 2014.

Doroudian subsequently resigned as President and Chief Executive Officer on February 5, 2015 and was appointed as Chairman on that date.

Currently, Dr.

Ahmad Doroudian acts as our company’s Chairman, Secretary, Chief Business Officer and Director.

Prior to joining us, Dr.

Doroudian was involved in early stage financing and management of private and publicly listed companies.

From 1997 to 2004, he acted as the chief executive officer, chairman, vice chairman and director of PanGeo Pharma, Inc.

(now PendoPharm, a division of Pharmascience Inc.), a TSX-listed company founded by Dr.

Doroudian which received over $100 million dollars in financing.

From 2004 through 2007, Dr.

Doroudian also served as the president of, Rayan Pharma Inc., an exporter of pharmaceuticals to Eastern Europe.

From 2006 to 2008, Dr.

Doroudian was owner and chief executive officer of ABF Pharmacy, a group of successful retail pharmacies.

Doroudian was also the chief executive officer of Merus Labs International Inc., a specialty pharmaceutical company engaged in the acquisition and licensing of pharmaceutical products.

Joseph Borovsky – Chairman, Director and Executive Vice-President of Technology

Joseph Borovsky was appointed chairman and director on August 27, 2018.

Borovsky is an experienced executive and entrepreneur with broad-based success in leading major corporate research and development as well as innovative technology startups, P&L operations, sales, and marketing.

Formerly the director of research and development for Mead Corporation, Dr.

Borovsky received his Bachelor of Science degree in Chemistry from the University of California at Los Angeles, and his Ph.D.

in Physical Organic Chemistry from the University of Massachusetts at Amherst.

He also completed a year of post-doctoral research in Medicinal Chemistry at Washington State University College of Pharmacy, Pullman, WA, and was a Research Fellow in Synthetic Organic Chemistry at Harvard University in Cambridge, Massachusetts.

Borovsky is also our Executive Vice-President of Technology.

Patrick Frankham – Director

10 unchanged sentences

Moira Ong – Chief Financial Officer

Moira Ong was appointed as our Chief Financial Officer on December 26, 2010.

Ong has more than 20 years of experience in public company accounting and audit reporting.

Moira Ong was appointed as our Chief Financial Officer on December 26, 2010 and is experienced in public company audit, accounting and reporting.

From 2010 through 2012, Ms.

Ong was also the vice president of finance of Merus Labs International Inc., a specialty pharmaceutical company engaged in the acquisition and licensing of pharmaceutical products.

Ong was the vice president of finance of Merus Labs International Inc., a specialty pharmaceutical company engaged in the acquisition and licensing of pharmaceutical products.

From 2005 until 2010, Ms.

15 unchanged sentences

Conflicts of Interest

Doroudian is a co-founder and chief executive officer of Altum Pharmaceuticals Inc., a company engaged in the research, development and commercialization of novel pharmaceutical products.

Renz is president of international business at Physicians Interactive and also serves as adjunct professor of surgery at McGill University’s Faculty of Medicine in Montreal, Canada.

While we do not anticipate that these activities will compete with our business, Dr.

Doroudian and Dr.

Renz may have pre-existing fiduciary duties with one or more organizations and may not agree to present business opportunities or research data to us unless other entities have first declined to accept them or consented to their release.

Accordingly, they may have a conflict of interest in determining to which entity a particular business opportunity should be presented.

Accordingly, he may have a conflict of interest in determining to which entity a particular business opportunity should be presented.

Our directors are not obligated to commit their time and attention exclusively to our business and, accordingly, they may encounter a conflict of interest in allocating their time between our operations and those of other businesses.

41 unchanged sentences

All proceedings of our board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors.

Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the corporate laws of the state of Nevada and the bylaws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.

Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the corporate laws of the province of British Columbia and the bylaws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.

Our company currently does not have nominating, compensation committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter.

12 unchanged sentences

Wolfgang Renz and Dr.

Ahmad Doroudian.

Joseph Borovsky.

Financial information relating to quarterly reports was disseminated to all board members for review.

7 unchanged sentences

The particulars of the compensation paid to the following persons:

our principal executive officer;

each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended January 31, 2018 and 2017;

up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended January 31, 2018 and 2017,

(a) our principal executive officer;

(b) each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended January 31, 2019 and 2018;

(c) up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended January 31, 2019 and 2018,

who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:

SUMMARY COMPENSATION TABLE

and Principal

Name and Principal Position

Option Awards

Non-Equity Incentive

Compensa-tion

Nonqualified Deferred

Compensa-tion

Compens-ation ($)

Joseph Borovsky (1) Chairman,

Director and Executive Vice-President of Technology

Patrick Frankham (2)

President, Chief Executive Officer and Director

Pravin Chaturvedi (2)

Past President, Chief Executive Officer and Director

Moira Ong (3)

Chief Financial Officer

Ahmad Doroudian (4)

Chairman, Secretary, Chief Business Officer and Director

Frankham was appointed as our president, Chief Executive Officer and Director on September 11, 2017.

Chaturvedi was appointed as our president, Chief Executive Officer and Director on November 20, 2015 and resigned as Chief Executive Officer and Director on September 11, 2017.

Ong was appointed as our Chief Financial Officer on December 26, 2010.

Doroudian was appointed as our President, Chief Executive Officer and Director on September 17, 2007 and as Chief Executive Officer and Secretary on March 30, 2011.

Patrick Rolfes (4)

Former President of Pivot Naturals, LLC

Ahmad Doroudian (5) Former Chairman, Secretary,

Chief Business Officer and Director

Pravin Chaturvedi (6)

Former President, Chief Executive Officer and Director

(1) Joseph Borovsky was appointed director and chairman on August 27, 2018

(2) Patrick Frankham was appointed as our president, Chief Executive Officer and Director on September 11, 2017.

(3) Moira Ong was appointed as our Chief Financial Officer on December 26, 2010.

(4) Patrick Rolfes was appointed president of Pivot Naturals, LLC, subsidiary of our company, on March 1, 2018.

The employment agreement was terminated on April 11, 2019.

(5) Ahmad Doroudian was appointed president, chief executive officer and director of our company on September 17, 2007 and as secretary on March 30, 2011.

He resigned as president, chief executive officer and secretary on August 30, 2011 and was re-appointed as president, chief executive officer and secretary on July 24, 2014.

Doroudian subsequently resigned as president and chief executive officer on February 5, 2015 and was appointed as chairman on that date.

Currently Dr.

Ahmad Doroudian acts as our company’s Chairman, Secretary, Chief Business Officer and Director.

Amounts incurred as salaries for the year ended January 31, 2017 of $200,000 for Ms.

Ong and $200,000 for Dr.

Doroudian were forgiven on July 31, 2017.

Upon the resignation of Dr.

BJ Bormann, Dr.

Doroudian was appointed interim chief executive officer until the appointment of Dr.

Chaturvedi on November 20, 2015.

On February 1, 2016, Dr.

Doroudian was appointed chief business officer.

Doroudian resigned as director, chairman and chief business officer on August 27, 2018.

Chaturvedi was appointed as our president, Chief Executive Officer and Director on November 20, 2015 and resigned as Chief Executive Officer and Director on September 11, 2017.

Other than as set out below, there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.

4 unchanged sentences

Stock Options/SAR Grants

During our fiscal year ended January 31, 2018, we did not grant any stock options to officers and directors.

During our fiscal year ended January 31, 2017:

5,000,000 stock options with exercise price of $0.70 and maturity on February 22, 2021 to officers and directors, including our past President, Dr.

4,000,000 stock options with exercise price of $0.10 and maturity on December 14, 2021 were granted to two of our directors.

During our fiscal years ended January 31, 2019 and 2018, we did not grant any stock options to officers and directors.

Outstanding Equity Awards at Fiscal Year End

1 unchanged sentence

Options Awards

Number of Securities

Unexercisable

Option Expiration Date

Shares or Units of

Equity Incentive

Option Exercise

Number of Shares or Units of

Stock That Have Not

Market Value of Shares or

Units of That Have

Incentive Plan Awards:

Market Value of Shares or Units of That Have

Equity Incentive Plan Awards:

Shares, Units or Other

Stock Rights That Have Not

Equity Incentive

Shares, Units or Other

Patrick Frankham

December 14, 2020

Chief Executive Officer

Moira Ong Chief Financial Officer

February 22, 2021

Ahmad Doroudian Chief Business Officer

December 14, 2021

Chief Financial Officer

February 22, 2021

Joseph Borovsky Chairman

and Executive Vice-President of Technology

November 14, 2022

Option Exercises

10 unchanged sentences

Each agreement may be terminated by our company without notice for cause, or by any party with 30 days prior notice.

No options were granted on December 15, 2017 as such grants would have exceeded the limitations set out in our Stock Option Plan.

No options were granted on December 15, 2017 and December 15, 2018 as such grants would have exceeded the limitations set out in our Stock Option Plan.

Pension, Retirement or Similar Benefit Plans

8 unchanged sentences

Name and Address of Beneficial Owner

Amount and Nature of

Beneficial Ownership

Percentage of

Ahmad Doroudian (2)

4172 Doncaster Way

Vancouver BC V6S 1V9

23,050,889 (3) CommonShares

Amount and Nature of Beneficial Ownership

Percentage of Class (1)

Patrick Frankham (4)

1 unchanged sentence

Rosemere, QC, J7A 4J7

4,000,000 (7) CommonShares

Moira Ong (4)

2392 Lawson Avenue

West Vancouver, BC V7V 2E6

3,092,384 (5) CommonShares

4,000,000 (5)

Common Shares

Wolfgang Renz (8)

Am Hochgericht 31 Rheinfelden, Germany 79618

4,000,000 (9) CommonShares

4,200,000 (9)

Common Shares

Moira Ong (6) 2392 Lawson Avenue

West Vancouver, BC V7V 2E6 3,292,384 (7)

Common Shares

Patrick Rolfes (10)

1 unchanged sentence

Anaheim, CA 92801

779,763 (11) CommonShares

Common Shares

Joseph Borovsky (12)

1 unchanged sentence

Wilmington, NC 28412

255,023 (13) CommonShares

Common Shares

Directors and Officers as a Group (1)

Common Shares

Ahmad Doroudian (2) 4172 Doncaster Way

Vancouver BC V6S 1V9 11,161,929 (3)

Common Shares

Over 5% Shareholders as a Group

Nil Common Shares

11,161,929 Common Shares

____________________

(1) Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:

4 unchanged sentences

In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on April 28, 2017.

As of April 28, 2017, there were 75,647,114 shares of our company’s common stock issued and outstanding.

Ahmad Doroudian was appointed as our President, Chief Executive Officer and Director on September 17, 2007 and as Chief Executive Officer and Secretary on March 30, 2011.

As of May 2, 2019, there were 106,244,230 shares options and warrants of our company’s common stock issued and outstanding.

Ahmad Doroudian was appointed president, chief executive officer and director of our company on September 17, 2007 and as secretary on March 30, 2011.

He resigned as president, chief executive officer and secretary on August 30, 2011 and was re-appointed as president, chief executive officer and secretary on July 24, 2014.

Doroudian subsequently resigned as president and chief executive officer on February 5, 2015 and was appointed as chairman on that date.

Currently Dr.

Ahmad Doroudian acts as our company’s Chairman, Secretary, Chief Business Officer and Director.

Upon the resignation of Dr.

BJ Bormann, Dr.

Doroudian was appointed interim chief executive officer until the appointment of Dr.

Chaturvedi on November 20, 2015.

On February 1, 2016, Dr.

Doroudian was appointed chief business officer.

Doroudian resigned as director, chairman and chief business officer on August 27, 2018.

(3) Includes 6,121,979 shares owned by Dr.

Doroudian, 200,000 shares owned by Khadija Zerouali, the spouse of Dr.

Ahmad Doroudian, 200,000 shares owned by Kinwa Pharma International Company Ltd., a company over which Dr.

Ahmad Doroudian and Ms.

Zerouali have shared voting and investment power, 3,264,950 shares owned by Sassel Investments Inc., a company over which Dr.

Ahmad Doroudian has voting and investment power and 2,000,000 options to purchase shares at $0.70 for a period of five years from February 23, 2016.

Doroudian, 3,039,950 shares owned by Sassel Investments Inc., a company over which Dr.

Ahmad Doroudian has voting and investment power and 2,000,000 options to purchase shares at US$0.70 for a period of five years from February 23, 2016.

Patrick Frankham was appointed as Director of our company on July 24, 2014 and as our Chief Executive Officer on September 11, 2017.

(5) Includes 2,000,000 options to purchase shares at US$0.10 for a period of five years from December 15, 2015 and 2,000,000 options to purchase shares at US$0.10 for a period of five years from December 15, 2016.

Ong was appointed as our Chief Financial Officer on December 26, 2010.

(7) Includes 2,292,384 shares owned by Ms.

Ong and 1,000,000 options to purchase shares at $0.70 for a period of five years from February 23, 2016.

Patrick Frankham was appointed as Director of our company on July 24, 2014 and as our Chief Executive Officer on September 11, 2017.

Includes 2,000,000 options to purchase shares at $0.10 for a period of five years from December 15, 2015 and 2,000,000 options to purchase shares at $0.10 for a period of five years from December 15, 2016.

Ong and 1,000,000 options to purchase shares at US$0.70 for a period of five years from February 23, 2016.

Renz was appointed as a Director of our company on February 5, 2015.

(9) Includes 200,000 shares owned by Dr.

Renz and 2,000,000 options to purchase shares at US$0.10 for a period of five years from December 15, 2015 and 2,000,000 options to purchase shares at US$0.10 for a period of five years from December 15, 2016.

(10) Patrick Rolfes was appointed as President of our fully owned subsidiary, Pivot Naturals, LLC (formerly ERS Holdings, LLC) on March 1, 2018.

Rolfes’ employment with Pivot Naturals, LLC was terminated on April 11, 2019.

(11) Includes 948,149 shares owned by Mr.

Joseph Borovsky was appointed as Vice President, Product Formulation on March 1, 2018.

(12) Joseph Borovsky was appointed as Executive Vice President, Technology on March 1, 2018 and as director and chairman on August 27, 2018.

(13) Includes 571,959 shares owned by Mr.

Borovsky and 50,000 options to purchase shares at US$0.39 for a period of five years from November 15, 2017.

Changes in Control

4 unchanged sentences

Plan Category

Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights

Weighted-average Exercise Price of Outstanding Options, Warrants and Rights

Number of Securities to be Issued Upon Exercise of Outstanding Options,

Warrants and Rights

Weighted-average Exercise

Price of Outstanding Options, Warrants and Rights

Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A) (Column C)

5 unchanged sentences

We currently act with three directors, consisting of Dr.

Ahmad Doroudian, Dr.

Joseph Borovsky, Dr.

Patrick Frankham and Dr.

2 unchanged sentences

Our audit committee consists of Dr.

Wolfgang Renz and Dr.

Ahmad Doroudian.

Joseph Borovsky, Dr.

Patrick Frankham and Dr.

Wolfgang Renz.

We do not have a standing compensation or nominating committee, but our entire board of directors acts in such capacities.

10 unchanged sentences

All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.

Exhibit Number

Articles of Incorporation and Bylaws

23 unchanged sentences

to Pivot Pharmaceuticals Inc.

(incorporated by reference to our Quarterly Report on Form 10-Q filed on June 17, 2015)

(incorporated by reference to our Annual Report on Form 10-K filed on May 15, 2015)

Material Contracts

7 unchanged sentences

Subscription Agreement with Ahmad Doroudian (incorporated by reference to our Form 8-K filed on August 12, 2010)

Exhibit Number

Debt Settlement Subscription Agreement dated September 26, 2013 with Ahmad Doroudian (incorporated by reference to our Quarterly Report on Form 10-Q filed on December 16, 2013)

20 unchanged sentences

(filed on April 29, 2016 with our Annual Report on Form 10-K)

Convertible debenture agreement dated September 29, 2016 with Avro Capital Partners Inc.

Convertible debentures agreement dated September 29, 2016 with Avro Capital Partners Inc.

(incorporated by reference to our Quarterly Report on Form 10-Q filed on September 14, 2017)

20 unchanged sentences

Employment Agreement between our company and Joseph Borovsky dated March 1, 2018 (incorporated by reference to our Current Report on Form 8-K filed on March 12, 2018)

10% Senior Secured Convertible Debenture (CDN$2,500,000) due March 2, 2019 (CD-1) (incorporated by reference to our Current Report on Form 8-K filed on March 12, 2018)

10% Senior Secured Convertible Debenture (CDN$2,500,000) due March 2, 2019 (CD-2) (incorporated by reference to our Current Report on Form 8-K filed on March 12, 2018)

10% Senior Secured Convertible Debentures (CDN$2,500,000) due March 2, 2019 (CD-1) (incorporated by reference to our Current Report on Form 8-K filed on March 12, 2018)

10% Senior Secured Convertible Debentures (CDN$2,500,000) due March 2, 2019 (CD-2) (incorporated by reference to our Current Report on Form 8-K filed on March 12, 2018)

10% Senior Secured Convertible Debentures (CDN$1,750,000) due March 2, 2019 (CD-3) (incorporated by reference to our Current report on Form 8-K filed on November 6, 2018)

10% Senior Secured Convertible Debentures (CDN$1,750,000) due March 2, 2019 (CD-4) (incorporated by reference to our Current report on Form 8-K filed on November 6, 2018)

10% Senior Secured Convertible Debentures (CDN$1,375,000) due June 1, 2019 (CD-3)

10% Senior Secured Convertible Debentures (CDN$1,375,000) due June 1, 2019 (CD-4)

Rule 13a-14(d)/15d-14(d) Certifications

14 unchanged sentences

XBRL Taxonomy Extension Presentation Linkbase Document

________________

* Filed herewith.

14 unchanged sentences

(Principal Executive Officer)

/s/ Ahmad Doroudian

Ahmad Doroudian

Chairman, Secretary and Director

/s/ Joseph Borovsky

Joseph Borovsky

Chairman and Director

/s/ Wolfgang Renz

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures