What changed in this filing

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Item 1. Financial Statements

2021-03-11 compared with 2020-12-11 · 384 added, 259 removed, 518 unchanged (55% of the section changed)

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Accrued interest

Notes payable, net of unamortized debt discount of $455,024 and $233,770

Notes payable, net of unamortized beneficial conversion feature, debt

discount and closing costs of $402,317 and $233,770

Total current liabilities

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Total liabilities

Shareholders' equity (deficit):

Shareholders' deficit:

Preferred stock, $0.001 par value, 100,000,000 shares authorized, no shares issued or

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Total liabilities and stockholders' deficit

The accompanying

notes are an integral part of these financial statements.

Odyssey Group

International, Inc.

Statements of

Operations and Comprehensive Loss

For the Three Months Ended October 31,

The accompanying notes are an integral

part of these financial statements.

Odyssey Group International, Inc.

Statements of Operations and Comprehensive

For the Three Months Ended

For the Six Months Ended

General and administrative expense

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$ (1,580,814 )

$ (2,017,557 )

Basic and diluted net loss per share

Shares used for basic and diluted net loss per share

The accompanying

notes are an integral part of these financial statements.

Odyssey Group

International, Inc.

Statements of

Stockholders' Equity (Deficit)

The accompanying notes are an integral

part of these financial statements.

Odyssey Group International, Inc.

Statements of Stockholders' Equity (Deficit)

Total Equity (Deficit)

Balances, July 31, 2020

$ (28,850,728 )

Note payable converted to common stock

Note payable converted to

Stock-based compensation

Common stock issued in debt financing

Common stock issued in equity financing

Common stock issued in debt

Common stock issued in equity

Stock forfeited

Warrants issued in connection with financings

Warrants issued in connection

with financings

Balances, October 31, 2020

(29,562,242 )

Common stock issued for services

Stock-based compensation

Common stock issued in debt

Common stock issued in equity

Beneficial conversion feature

of LGH financing

Warrants issued in connection

with financings

Balances, January 31, 2021

$ (30,431,542 )

$ (1,015,971 )

Total Equity (Deficit)

Balances, July 31, 2019

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Stock-based compensation

Warrants and beneficial conversion feature issued

with convertible notes

Warrants and beneficial conversion

feature issued with convertible notes

Balances, October 31, 2019

(25,918,484 )

The accompanying

notes are an integral part of these financial statements.

Odyssey Group

International, Inc.

Statements of

For the Three Months Ended October 31,

Stock-based compensation

Common stock issued for services

Balances, January 31, 2020

$ (26,519,429 )

$ (1,025,699 )

The accompanying notes are an integral

part of these financial statements.

Odyssey Group International, Inc.

Statements of Cash Flows

For the Six Months Ended January 31,

Cash flows from operating activities:

$ (1,580,814 )

Adjustments to reconcile net loss to net cash flows used in operating

$ (2,017,557 )

Adjustments to reconcile net loss to net cash flows used in operating activities:

Depreciation and amortization

Stock-based compensation

Amortization of beneficial conversion feature

Amortization of debt discount and closing costs

Other non-cash interest expense

Changes in operating assets and liabilities:

Increase in prepaid expenses

Increase in accounts payable

Increase (decrease) in accrued wages

Stock issued for services

Amortization of beneficial conversion feature, debt discount

and closing costs

Financing costs paid with stock

(Increase) decrease in prepaid expenses

Increase (decrease) in accounts payable

Increase in accrued wages

Increase in accrued interest

Net cash used in operating activities

Cash flows from investing activities:

Cash flows from financing activities:

Proceeds from notes payable

Financing closing costs paid

Principal payments made on notes payable

Financing closing costs paid with cash

Proceeds from equity financing

Net cash provided by financing activities

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents:

Increase (decrease) in cash

Beginning of period

End of period

Supplemental cash flow information

Cash paid for interest

Supplemental disclosure of non-cash information:

Beneficial conversion feature related to Note payable

Common stock issued for conversion of notes payable

Beneficial conversion feature related to Notes payable

Common stock issued for conversion of Notes payable and related accrued interest

Common stock issued for debt financing commitment shares

1 unchanged sentence

Original issue discount on debt

The accompanying

notes are an integral part of these financial statements.

Stock issued in exchange for closing costs

Beneficial conversion feature recognized

The accompanying notes are an integral

part of these financial statements.

Odyssey Group International, Inc.

to Financial Statements

Basis of Presentation and Nature of Operations

Notes to Financial Statements

Presentation and Nature of Operations

Basis of Presentation

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Our significant accounting policies have

not changed during the three months ended October 31, 2020 from those disclosed in our Annual Report on Form 10-K for the year

ended July 31, 2020.

not changed during the six months ended January 31, 2021 from those disclosed in our Annual Report on Form 10-K for the year ended

July 31, 2020.

Research and Development Expense

Research and development expense is expensed

as incurred as a component of General and administrative expense and totaled $42,619 for both the three and six months ended January

31, 2021 and $10,000 and $0 for the three and six months ended January 31, 2020, respectively.

Reclassifications

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There was no effect on our Statements

of Operations and Comprehensive Loss and Statement of Cash Flows.

of Operations and Comprehensive Loss or Statements of Cash Flows.

Nature of Operations

Our business model is to develop or acquire

medical related products, engage third parties to manufacture such products and then distribute the products through various distribution

channels, including third parties.

We have product development projects in three different life-saving technologies;

the CardioMap®

heart monitoring and screening device, the Save a Life choking rescue device and a unique neurosteroid drug compound intended to

treat rare brain disorders.

We intend to acquire other technologies and assets and plan to be a trans-disciplinary product development

company involved in the discovery, development and commercialization of products and technologies that may be applied over various

medical markets.

medical related products, engage third parties to help develop and manufacture such products and then distribute the products through

various distribution channels, including third parties.

We have product development projects in four different technologies;

CardioMap®

heart monitoring and screening device, the Save a Life choking rescue device and two unique neurosteroid drug compounds

intended to treat rare brain disorders and mild brain trauma (concussions).

We intend to acquire other technologies and assets

and plan to be a trans-disciplinary product development company involved in the discovery, development and commercialization of

products and technologies that may be applied over various medical markets.

We plan to license, improve and develop

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We will engage third-party research and development

firms who specialize in the creation of our products to assist us in the development of our own products and we will apply for

trademarks and patents once we have developed proprietary products.

firms who specialize in the creation of our products and we will apply for trademarks and patents as we develop proprietary products.

We are not currently selling or marketing

any products, as our products are in late-stage development and Food and Drug Administration ("FDA") clearance or approval

to market our products will be required in order to sell in the United States.

New Accounting Pronouncements

any products, as our products are in various stages of development and Food and Drug Administration ("FDA") clearance

or approval to market our products will be required in order to sell in the United States.

New Accounting

Pronouncements

In December 2019, the Financial Accounting

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or cash flows.

Purchase Agreement

On January 7, 2021, we entered into an

Asset Purchase Agreement (the “APA”) with Prevacus, Inc.

(“Prevacus”), pursuant to which we will purchase

the assets and all of the rights, interests and intellectual property in a certain drug program (PRV-002) for treating mild brain

trauma (concussion) and delivery device (the “Asset”) in exchange for (i) 7,000,000 shares of our common stock plus

(ii) the Milestone Consideration, if any.

On March 1, 2021, our APA with Prevacus

closed and we issued 6,000,000 shares of our common stock with a value of $7,080,000.

We withheld 1,000,000 shares of our

common stock in exchange for our payment of certain liabilities of Prevacus.

See Note 11 of Notes to Financial Statements for additional

The fair value of financial assets and

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any transfers of assets or liabilities measured at fair value on a recurring basis to or from Level 1, Level 2 or Level 3 during

the three months ended October 31, 2020 or the year ended July 31, 2020.

the six months ended January 31, 2021 or the year ended July 31, 2020.

The carrying values

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No changes were

made to our valuation techniques during the quarter ended October 31, 2020.

made to our valuation techniques during the quarter ended January 31, 2021.

Contingent Liability

At October 31,

At January 31,

2021 and July 31, 2020, we had contingent consideration related to the acquisition of intellectual property, know-how and patents

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value of our fixed-rate long-term debt was as follows:

October 31, 2020

January 31, 2021

July 31, 2020

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during the period.

No non-financial assets were recorded at fair value during the three months ended October 31, 2020 or the fiscal

No non-financial assets were recorded at fair value during the six months ended January 31, 2021 or the fiscal

year ended July 31, 2020.

LGH Investments, LLC

On December 11, 2020, we entered into a

Securities Purchase Agreement (the “SPA”) with LGH Investments, LLC (“LGH”), pursuant to which we entered

into a $165,000 face value convertible promissory note which bears interest at a one-time rate of 8.0% applied to the face value

and is due September 11, 2021 (the “Note”).

We received $142,500 net cash from the issuance of the Note and incurred

a $15,000 original issue discount and $7,500 closing costs, which are being amortized over the life of the Note.

The Note is convertible at a price of $0.15

per share, subject to adjustment as provided in the Note.

If an Event of Default occurs as defined in the Note, the conversion

price will be the lesser of (i) $0.15 per share;

or (ii) 70% of the lowest traded price in the prior twenty trading days immediately

preceding the Notice of Conversion.

The SPA included the issuance of (i) a

five-year share purchase warrant exercisable for 470,000 shares of our common stock at a price of $0.35 per share (the “Warrant”);

and (ii) 200,000 shares of our common stock (the “Inducement Shares”).

The value of the 470,000 warrants was $82,720

and the value of the 200,000 shares of common stock was $40,000 for a total value of $112,720, which is being amortized over the

life of the Note as closing costs.

Additionally, 100,000 shares valued at $44,000 were expensed as financing costs when incurred.

The conversion feature met the criteria

for characterization as a beneficial conversion feature and, accordingly, we allocated $19,780 of the proceeds to the beneficial

conversion feature, which is also being amortized over the life of the Note.

Labrys Fund, LP

On August 14, 2020, we entered into a Securities

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(a) 1,140,000 shares or (b) the sum of (i)

the number of shares of common stock issuable upon conversion of or otherwise pursuant to the Note and such additional shares of

common stock, if any, as are issuable on account of interest on the Note pursuant to the Labrys SPA issuable upon the full conversion

of the Note (assuming no payment of the principal amount or interest) as of any issue date multiplied by (ii) one and a

the number of shares of common stock issuable upon conversion of or otherwise pursuant to the Note and such additional shares

of common stock, if any, as are issuable on account of interest on the Note pursuant to the Labrys SPA issuable upon the full

conversion of the Note (assuming no payment of the principal amount or interest) as of any issue date multiplied by (ii) one and

We are subject to penalties for failure to timely deliver shares to Labrys following a conversion request.

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Labrys SPA and the Note, which we believe are customary for transactions of this type.

At October 31, 2020, we were in compliance

At January 31, 2021, we were in compliance

with all covenants and restrictions.

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The following notes payable were outstanding:

October 31, 2020

January 31, 2021

July 31, 2020

1 unchanged sentence

Note issued to Labrys due August 14, 2021 with an interest rate of 12.0%

Convertible note issued to LGH due September 11, 2021 with an interest rate of 8.0% and convertible at $0.15 per share

Unamortized debt discount and closing costs

Stock Options

Stock option activity during the quarter ended October 31, 2020

Stock option activity during the six months ended January 31,

2021 was as follows:

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(15,000,000 )

Options outstanding at October 31, 2020

Options outstanding at January 31, 2021

Restricted Stock Units (“RSUs”)

There was no RSU activity during the quarter

ended October 31, 2020.

At October 31, 2020, there were unvested RSUs outstanding covering 400,000 shares of our common stock.

RSU activity during the six months ended

January 31, 2021 was as follows:

RSUs outstanding at July 31, 2020

RSUs outstanding at January 31, 2021

In January 2021, we issued RSUs covering

4,000,000 shares of our common stock to two officers which vest equally over 36 months.

In addition, we issued RSUs covering 50,000

shares of our common stock to a consultant which vest equally over 24 months.

Warrant activity during the six months

ended January 31, 2021 was as follows:

Number of Warrants

Weighted Average Exercise Price

Warrants outstanding at July 31, 2020

Warrants issued

Warrants exercised

Warrants canceled

Warrants outstanding at January 31, 2021

Unrecognized Compensation Costs

At October 31, 2020, we had unrecognized

At January 31, 2021, we had unrecognized

stock-based compensation of $982,335, which will be recognized over the weighted average remaining vesting period of 2.92 years.

Net Loss Per Share

Basic and diluted net loss per share is

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were excluded from the calculations of diluted net loss per share:

Three Months Ended October 31,

Six Months Ended January 31,

Options to purchase common stock

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Total potentially dilutive securities

Common Stock Issuances

Stock Issuances

Conversion of Convertible Note Payable

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by the conversion price of the Convertible Promissory Note of $0.50 per share.

Lincoln Park Capital Fund

On August 14, 2020, we entered into a Purchase

Agreement (the “LPC Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”).

Upon the satisfaction

of the conditions to our right to commence sales under the LPC Purchase Agreement, including the registration of shares of our

common stock issuable under the LPC Purchase Agreement in accordance with the RRA (the “Commencement”) and the date

of satisfaction of such conditions the “Commencement Date”), we have the right, in our sole discretion, to sell to

LPC up to $10,250,000 in shares of our common stock, from time to time over a 36-month period.

In consideration for entering into

the LPC Purchase Agreement, we issued 793,802 shares of our common stock to LPC.

Pursuant to the LPC

Purchase Agreement, we have the right, in our sole discretion, to sell to LPC up to $10,250,000 in shares of our common stock,

from time to time over a 36-month period.

In consideration for entering into the LPC Purchase Agreement, we issued 793,802 shares

of our common stock to LPC.

Upon entering into the LPC Purchase Agreement,

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also receive a fee totaling 8% of any additional funds raised pursuant to the LPC Purchase Agreement.

In addition, and in consideration for

the service provided in connection with Labrys and LPC, we granted warrants that were immediately exercisable for a total of 550,000

In addition, and in consideration for the

service provided in connection with Labrys and LPC, we granted warrants that were immediately exercisable for a total of 550,000

shares of our common stock at $0.50 per share to A.G.P.

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costs related to the Labrys transaction and is being amortized over the one-year life of the note.

The following table sets forth the amount

of gross proceeds we would receive from additional sales of our stock to LPC under the LPC Purchase Agreement at varying purchase

Shares purchased by LPC, including the

initial purchase, are summarized below:

Purchase Date

Number of Shares Purchased

Purchase Price per Share

Total Purchase Price

Remaining Purchase Availability

August 14, 2020

January 11, 2021

January 15, 2021

The following table sets forth the remaining

amount of gross proceeds we would receive from additional sales of our stock under the LPC Purchase Agreement at varying purchase

prices as of January 31, 2021:

Assumed Average

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the Sale of Shares

(1) Although the Purchase Agreement provides that we may sell up to an additional $10,000,000 of our

common stock to LPC, depending on the assumed average price per share, we may or may not be able to ultimately sell to Lincoln

Park a number of shares of our common stock with a total value of $10,000,000.

(2) The numerator is based on the maximum number of shares purchased at the corresponding assumed purchase

price plus the 1,396,224 shares already owned by LPC.

The denominator is based on 90,570,202 shares outstanding as of October 31,

2020 plus the number of shares assumed purchased.

The table does not give effect to the prohibition contained in the LPC Purchase

Agreement that prevents us from selling to LPC the number of shares such that, after giving effect to such sale, LPC and its affiliates

would beneficially own more than 4.99% of the then outstanding shares of our common stock.

Assuming the closing stock price of

$0.30 per share on October 31, 2020 and the 4.99% limitation mentioned above, the total number of additional shares we could sell

to LPC would be 1,891,039 for proceeds of $567,312.

(3) The closing price of our common stock on October 31, 2020.

Related Party Transactions

Although the Purchase Agreement provides that we may sell up to an additional $9,964,920 of our common stock to LPC, depending on the assumed average price per share, we may or may not be able to ultimately sell to Lincoln Park a number of shares of our common stock with a total value of $9,964,920 as the maximum number of shares to be sold totals 20,065,166.

Following purchases and issuances made to date, 18,468,942 shares remained as of January 31, 2021.

The numerator is based on the maximum number of shares purchased at the corresponding assumed purchase price plus the 1,596,224 shares owned by LPC at January 31, 2021.

The denominator is based on 91,610,202 shares outstanding as of January 31, 2021 plus the number of shares assumed purchased.

The table does not give effect to the prohibition contained in the LPC Purchase Agreement that prevents us from selling to LPC the number of shares such that, after giving effect to such sale, LPC and its affiliates would beneficially own more than 4.99% of the then outstanding shares of our common stock.

The closing price of our common stock on January 29, 2021.

Party Transactions

Due to Officers and Executives

The following amounts were due to an officer and an executive

and were included in Accounts payable on our Balance Sheets:

October 31, 2020

The following amounts were due to our officers and were included

in Accounts payable on our Balance Sheets:

January 31, 2021

July 31, 2020

Christine Farrell, Controller

Christine Farrell, CFO

The amount of salary due to Mr.

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Salary accrued

Balance at October 31, 2020

We did not recognize any revenues for

the year ended July 31, 2020 or the quarter ended October 31, 2020 and we had an accumulated deficit of $29,562,242 as of October

Balance at January 31, 2021

We did not recognize any revenues for the

year ended July 31, 2020 or the six months ended January 31, 2021 and we had an accumulated deficit of $30,431,542 as of January

For the foreseeable future, we expect to experience continuing operating losses and negative cash flows from operations.

Cash available at October 31, 2020 of $292,756 may not provide enough working capital to meet our current operating expenses through

December 10, 2021.

Cash available at January 31, 2021 of $63,072 may not provide enough working capital to meet our current operating expenses through

March 10, 2022.

The operating deficit indicates substantial

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volume of our common stock, is it is difficult to predict the timing and amount of availability pursuant to our equity line of

credit with LPC (see Note 7.

credit with LPC (see Note 8 above).

Given our recurring losses, negative cash flow, accumulated deficit, and the impact of COVID-19,

there is substantial doubt about our ability to continue as a going concern.

Subsequent Event

4, 2020, our registration statement on S-1 that was filed on November 23, 2020, was declared effective by the Securities and Exchange

The final prospectus was filed on December 8, 2020.

The registration statement contains one prospectus which is incorporated

by reference into this filing and is available in electronic form through the Securities and Exchange Commission EDGAR system.

We have not sold any shares under the prospectus.

Subsequent Events

Stock Subscriptions

In February 2021, we sold a total of 952,171 shares of our common

stock to 11 accredited investors for total proceeds of $689,500.

In March 2021, we sold 525,000 Units at $1.00 per unit.

Unit consisted of one share of our common stock and a right to purchase one share of our common stock $2.00.

This right expires

one year from the date of closing.

LPC Share Purchases

From February 1, 2021 through March 10,

2021, LPC purchased an additional 1,173,124 shares of our common stock for a total price of $1,018,448 and, as of March 10, 2021,

there was $8,946,472 remaining purchase availability.

On February 11, 2021, we received notice that the SBA Paycheck

Protection Program loan was forgiven.

On March 1, 2021, our APA with Prevacus

closed and we issued 6,000,000 shares of our common stock with a value of $7,080,000.

We withheld 1,000,000 shares of our common

stock in exchange for our payment of certain liabilities of Prevacus.

The Milestone Consideration may be earned

by Prevacus as follows:

(i) up to 2,000,000 shares of our Common Stock when the United States Patents are revived in our name by

Patent and Trademark Office and any international patents that have lapsed also revived in our name by the respective

country’s patent offices.

The value of shares issued shall not exceed $6,000,000 based on the price of our common stock on

the date the payment is due;

(ii) 1,000,000 shares of our common stock upon successful first dosing in a Phase I Clinical Trial

for the Asset;

(iii) up to 2,000,000 shares of our common stock upon the grant and issuance to us of a Patent for the drug-device

combination for the Asset and the Delivery Device from the U.S.

Patent and Trademark Office, the value of which shall not exceed

$10,000,000 based on the price of our common stock on the date the payment is due;

(iv) 1,000,000 shares of our common stock upon

our receipt of net proceeds of at least $1,000,000 in a Non-Dilutive Financing relating directly to the development of the Asset

and the Delivery Device.

This milestone will expire one year after the Closing Date or, for any Non-Dilutive Financing submitted

prior to the one year anniversary of the Closing Date, the milestone will stay effective until the second year anniversary of the

Closing Date;

(v) up to 2,000,000 shares of our common stock if we sell the Asset after a Phase Ib Clinical Trial for which we

are the sponsor is complete, but prior to completion of a Phase II Clinical Trial, to a Third Party resulting in net proceeds to

us of at least $50,000,000.

The value of the 2,000,000 shares related to this milestone shall not exceed $50,000,000 dollars, shall

not exceed $25,000,000 based on the price of our common stock on the date the payment is due;

(vi) 4,000,000 shares of our common

stock upon the successful completion of a Phase II Clinical Trial for the Asset that leads to (I) our sale of the Asset to a Third

Party resulting in net proceeds to us of at least $50,000,000;

or (II) the administration of the first dose to a human being in

a Phase III Clinical Trial for the Asset for which Company;

and (vii) 2,000,000 shares of our common stock after the first dosing

in a human as part of a Phase II Clinical Trial and the successful completion of a Phase 1B human clinical trial, as determined

by us in our sole discretion.

LGH Investments, LLC

On March 5, 2021, LGH notified us of their

intent to convert their $165,000 convertible promissory note plus $13,200 of interest.

We negotiated with them to convert $89,100

of the total into 594,000 shares of our common stock and paid the remaining $89,100 in cash.

Convertible Notes

In February and

March 2021, upon maturity, we converted Convertible Promissory Notes with a face value of $130,000 and accrued interest of $9,100

into 140,397 shares of our common stock as calculated by the conversion price of the Convertible Promissory Notes of $0.99 per

In February 2021, we settled a Convertible

Promissory Note with a face value of $20,000 and accrued interest of $1,400 with cash totaling $21,400.

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

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channels, including third parties.

We have made significant investments in three different life saving technologies:

We have made investments in three different life saving technologies:

the CardioMap®

heart monitoring and screening device;

monitoring and screening device;

the Save a Life choking rescue device;

and a unique neurosteroid drug compound intended

to treat rare brain disorders.

and a unique neurosteroid drug compound intended to treat

rare brain disorders.

We intend to acquire other technologies

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Recent Funding

Stock Subscriptions

In February 2021, we sold a total of 952,171 shares to 11 accredited

investors for total proceeds of $689,500.

In March 2021, we sold 525,000 Units at $1.00 per unit.

Unit consisted of one share of our common stock and a right to purchase one share of our common stock $2.00.

This right expires

one year from the date of closing.

On December 11, 2020, we entered into a

Securities Purchase Agreement with LGH Investments, LLC, pursuant to which we entered into a $165,000 face value convertible promissory

note which bears interest at a one-time rate of 8.0% applied to the face value and is due September 11, 2021.

We received $142,500

net cash from the issuance of the Note and incurred a $15,000 original issue discount and $7,500 of closing costs, which are being

amortized over the life of the note.

On March 5, 2021, LGH notified us of their

intent to convert their $165,000 convertible promissory note plus $13,200 of interest.

We negotiated with them to convert $89,100

of the total into 594,000 shares of our common stock and paid the remaining $89,100 in cash.

See Note 5 of Notes to Financial Statements

for additional information.

Labrys and Lincoln Park

In August 2020, we entered into two funding

arrangements.

arrangements as follows:

One with Labrys Fund, LP, which provided

us with $315,000 of cash in exchange for a $350,000 promissory note and 420,000 shares of our common stock.

See Note 5 of Notes

to Financial Statements for additional information.

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our common stock over a 36-month period in exchange for 793,802 shares of our common stock with a value of $369,118.

made an initial purchase of 602,422 shares of our common stock for $250,000.

of Notes to Financial Statements for additional

made an initial purchase of 602,422 shares of our common stock for $250,000, two additional purchases in January 2021 for a total

of 200,000 shares for $35,080 and additional purchases through March 10, 2021 totaling 1,173,124 shares for total proceeds of $1,018,448.

See Note 8 of Notes to Financial Statements for additional information.

On December 4, 2020, our registration statement

on Form S-1 that was filed on November 23, 2020, was declared effective by the Securities and Exchange Commission.

The final prospectus

was filed on December 8, 2020.

The registration statement contains one prospectus which is incorporated by reference into this

filing and is available in electronic form through the Securities and Exchange Commission EDGAR system.

We have not sold any shares

under the prospectus.

We intend to use the proceeds from both

the Labrys and Lincoln Park agreements for general corporate purposes, including for working capital, capital expenditures and

for funding additional preclinical development and potentially future clinical development of our pipeline candidates.

on Form S-1 for the registration of shares to be sold to Lincoln Park was declared effective by the Securities and Exchange Commission.

We intend to use the proceeds from all

of the agreements for general corporate purposes, including for working capital, capital expenditures and for funding additional

preclinical development and potentially future clinical development of our pipeline candidates.

Asset Purchase Agreement

On January 7, 2021, we entered into an

Asset Purchase Agreement (“APA”) with Prevacus, Inc.

(“Prevacus”) pursuant to which we will purchase the

assets and all of the rights, interests and intellectual property in a certain drug program (PRV-002) for treating mild brain trauma

(concussion) and delivery device (the “Asset”) in exchange for (i) 7,000,000 shares of our common stock plus (ii) the

Milestone Consideration, if any.

On March 1, 2021, our APA with Prevacus

closed and we issued 6,000,000 shares of our common stock with a value of $7,080,000.

We withheld 1,000,000 shares of our

common stock in exchange for our payment of certain liabilities of Prevacus.

See Note 3 of Notes to Financial Statements

for additional information

Going Concern

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and we do not have any sources of revenue.

We had an accumulated deficit of $29,562,242 as of October 31, 2020 and cash of $292,756.

We had an accumulated deficit of $30,431,542 as of January 31, 2021 and cash of $63,072.

Management’s plans include engaging in further research and development and raising additional capital in the short term

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experience continuing operating losses and negative cash flows from operations as our management executes our current business

The cash of $292,756 available at October 31, 2020, may not provide enough working capital to meet our current operating

expenses through December 10, 2021.

The cash of $63,072 available at January 31, 2021 may not provide enough working capital to meet our current operating expenses

through March 10, 2022.

If we are unable to raise additional capital

by December 10, 2021, we will adjust our current business plan.

Due to the unknown and volatile nature of the stock price and

trading volume of our common stock, is it is difficult to predict the timing and amount of availability pursuant to our equity

line of credit with LPC (see Note 7.

of Notes to Financial Statements).

Given our recurring losses, negative cash flow, accumulated

deficit, and the impact of COVID-19, there is substantial doubt about our ability to continue as a going concern.

by March 10, 2022, we will adjust our current business plan.

Due to the unknown and volatile nature of the stock price and trading

volume of our common stock, is it is difficult to predict the timing and amount of availability pursuant to our equity line of

credit with LPC (see Note 8 of Notes to Financial Statements).

Given our recurring losses, negative cash flow, accumulated deficit,

and the impact of COVID-19, there is substantial doubt about our ability to continue as a going concern.

Impact of COVID-19

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Use of Estimates

During the three months ended October 31,

During the six months ended January 31,

2021, there were no significant changes to our significant accounting policies and estimates are described in Note 2.

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We do not currently sell or market any

products and we did not have any revenue in the three-month periods ended October 31, 2020 or 2019.

We will commence actively marketing

products after the products and drugs in development have been FDA cleared or approved, but there can be no assurance, however,

that we will be successful in obtaining FDA clearance or approval for our products.

Three Months Ended October 31,

products and we did not have any revenue in the three or six month periods ended January 31, 2021 or 2020.

We will commence actively

marketing products after the products and drugs in development have been FDA cleared or approved, but there can be no assurance,

however, that we will be successful in obtaining FDA clearance or approval for our products.

Three Months Ended January 31,

General and administrative expense

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Interest expense

$ (1,416,612 )

Basic and diluted net loss per share

Six Months Ended January 31,

General and administrative expense

Loss from operations

Interest expense

Basic and diluted net loss per share

General and Administrative Expense

Our General and administrative expense

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activities, as well as stock-based compensation, costs related to maintaining compliance as a public company and legal and professional

The increase in General and administrative

expense in the three months ended January 31, 2021 as compared to the same period of 2020 was due to a $70,147 decrease in board

and stock expense due to the vesting of restricted stock units in the 2020 period and a $77,477 decrease in consulting fees, offset

by $42,619 increase research and development expense, a $115,297 increase in legal and professional fees, a $52,565 increase in

business development and investor relations, a $25,674 increase in insurance expense and a $46,806 increase in financing.

The decrease in General and administrative

expense was due to a $918,032 decrease in board and stock expense due to the vesting of restricted stock units in the 2019 period

and a $10,000 decrease research and development expense, offset by a $240,000 increase in financing expense and a $93,061 increase

in legal and professional fees related to our agreements with Labrys and Lincoln Park, and a $20,393 increase in payroll expense.

expense in the six months ended January 31, 2021 as compared to the same period of 2020 was due to a $988,178 decrease in board

and stock expense due to the vesting of restricted stock units in the 2020 period and a $158,192 decrease in consulting fees, offset

by a $275,504 increase in legal and professional fees, a $32,619 increase in research and development expense, a $58,950 increase

in business development and investor relations, $18,257 in payroll costs, a $29,841 increase in insurance expense and a $66,806

increase in financing costs.

Interest Expense

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debt outstanding was as follows:

Three Months Ended October 31,

Three Months Ended January 31,

Six Months Ended January 31,

Weighted average debt outstanding

Weighted average interest rate

The increase in interest expense for the

three-month period ended October 31, 2020 compared to the same period of 2019 was due to the increased average debt outstanding

and higher average interest rates due to the issuance of debt to Labrys in August 2020 as discussed above, as well as an $82,846

increase in amortization of debt discount and closing costs and an $18,204 increase in amortization of beneficial conversion feature,

offset in part by the conversion of a $100,000 note payable also in August 2020.

Net loss decreased in the three-month period

ended October 31, 2020 compared to the same period of 2019 due to the decrease in General and administrative expense, partially

offset by the increase in Interest expense as discussed above.

The increases in interest expense for the

three and six months ended January 31, 2021 compared to the same periods of 2020 were due to the increased average debt outstanding

and higher average interest rates due to the issuance of debt to Labrys in August 2020 and to LGH in December 2020 as discussed

above, as well as a $149,594 and a $250,464 increase, respectively, in amortization of debt discount, beneficial conversion feature

and closing costs, offset in part by the conversion of a $100,000 note payable in August 2020.

Net loss increased in the three months

ended January 31, 2021 compared to the same period of the prior year due to increased General and administrative expense and interest

expense as discussed above.

The decrease in the six months ended January 31, 2021 compared to the same period of 2020 was due to

the decrease in General and administrative expense, partially offset by the increase in Interest expense as discussed above.

Liquidity and Capital Resources

The following table sets forth the primary sources and uses

Three Months Ended October 31,

Six Months Ended January 31,

Net cash used in operating activities

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Convertible Notes

At October 31, 2020, we had 10 convertible

At January 31, 2021, we had 10 convertible

notes outstanding with a total principal balance of $345,000, unamortized debt discount of $58,546 and accrued interest of $20,056.

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the conversion price of $0.50 per share, resulting in the issuance of 214,000 shares of our common stock.

LGH Convertible Note Payable

On December 11, 2020, we entered into a

Securities Purchase Agreement (the “SPA”) with LGH Investments, LLC (“LGH”), pursuant to which we entered

into a $165,000 face value convertible promissory note which bears interest at a one-time rate of 8.0% applied to the face value

and is due September 11, 2021 (the “Note”).

We received $142,500 net cash from the issuance of the Note and incurred

a $15,000 original issue discount and $7,500 closing costs, which are being amortized over the life of the Note.

The Note is convertible at a price of $0.15

per share, subject to adjustment as provided in the Note.

If an Event of Default occurs as defined in the Note, the conversion

price will be the lesser of (i) $0.15 per share;

or (ii) 70% of the lowest traded price in the prior twenty trading days immediately

preceding the Notice of Conversion.

The SPA included the issuance of (i) a

five-year share purchase warrant exercisable for 470,000 shares of our common stock at a price of $0.35 per share (the “Warrant”);

and (ii) 200,000 shares of our common stock (the “Inducement Shares”).

The value of the 470,000 warrants was $82,720

and the value of the 200,000 shares of common stock was $40,000 for a total value of $112,720, which is being amortized over the

life of the Note as closing costs.

Additionally, 100,000 shares valued at $44,000 was expensed as financing costs when incurred.

Labrys Note Payable

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The Note bears interest at 12% per year.

Upon the occurrence of any “Event

of Default”

as defined in the Note, the Note is convertible into shares of our common stock at a price per share equal to

the closing bid price of the common stock on the trading day immediately preceding the date of conversion (the “Conversion

Price”);

provided, however , that Labrys may not convert any portion of the Note which would cause Labrys, collectively

with its affiliates, to hold more than 4.99% of our issued and outstanding common stock, unless such limit is waived.

not execute any short sales on any of our common stock at any time while the Note is outstanding.

The Note requires that we reserve from

our authorized and unissued common stock a number of shares equal to the greater of:

(a) 1,140,000 shares or (b) the sum of (i)

the number of shares of common stock issuable upon conversion of or otherwise pursuant to the Note and such additional shares of

common stock, if any, as are issuable on account of interest on the Note pursuant to the Labrys SPA issuable upon the full conversion

of the Note (assuming no payment of the principal amount or interest) as of any issue date multiplied by (ii) one and a

We are subject to penalties for failure to timely deliver shares to Labrys following a conversion request.

The Labrys SPA and the Note contain covenants

and restrictions common with this type of debt transaction.

Furthermore, we are subject to certain negative covenants under the

Labrys SPA and the Note, which we believe are customary for transactions of this type.

At October 31, 2020, we were in compliance

with all covenants and restrictions.

In connection with the Labrys transaction,

we engaged Alliance Group Partners, LLP (“A.G.P.”) as a placement agent.

In exchange for their services, we paid A.G.P.

$25,200 in cash and we also paid $6,500 in cash for Labrys’

legal fees in connection with the transaction.

of Notes to Financial Statements

for additional information.

On May 8, 2020, we received loan proceeds

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for the first six months.

We used the proceeds for purposes consistent with the PPP and anticipate that this PPP Note will

Stock Sale to Lincoln Park

We used the proceeds for purposes consistent with the PPP.

On February 11, 2021, we received notice

that the PPP Note was forgiven.

Stock Sales to Lincoln Park

On August 14, 2020, we entered into a Purchase

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Capital Fund, LLC (“LPC”).

Upon the satisfaction of the conditions to our right to commence sales under the LPC Purchase

Agreement, including the registration of shares of Common Stock issuable under the LPC Purchase Agreement in accordance with the

RRA (the “Commencement”) and the date of satisfaction of such conditions the “Commencement Date”), we have

the right, in our sole discretion, to sell to LPC up to $10,250,000 in shares of our common stock, from time to time over a 36-month

In consideration for entering into the LPC Purchase Agreement, we issued 793,802 shares to LPC.

On December 4, 2020, our registration statement

on Form S-1 that was filed on November 23, 2020, was declared effective by the Securities and Exchange Commission.

The final prospectus

was filed on December 8, 2020.

The registration statement contains one prospectus which is incorporated by reference into this

filing and is available in electronic form through the Securities and Exchange Commission EDGAR system.

We have not sold any shares

under the prospectus.

Pursuant to the LPC Purchase Agreement, we have the right, in our sole discretion, to sell

to LPC up to $10,250,000 in shares of our common stock, from time to time over a 36-month period.

In consideration for entering

into the LPC Purchase Agreement, we issued 793,802 shares to LPC.

Upon entering into the LPC Purchase Agreement,

and RRA, we sold 602,422 shares of our common stock to LPC in an initial purchase for a total purchase price of $250,000.

and subject to the conditions of the LPC Purchase Agreement and RRA, on any business day and subject to certain customary conditions,

we may direct LPC to purchase to up to 200,000 shares of our common stock (such purchases, “Regular Purchases”).

amount of a Regular Purchase may increase up to 100,000 shares of common stock under certain circumstances based on the market

price of the common stock.

There are no limits on the price per share that LPC may pay to purchase common stock under the LPC Purchase

Agreement, provided that LPC’s committed obligation under any Regular Purchase shall not exceed $50,000 unless the median

aggregate dollar value of the volume of shares of common stock during the 20 consecutive trading day period ending on the date

of the applicable Regular Purchase equals or exceeds $100,000, in which case LPC’s committed obligation under such single

Regular Purchase shall not exceed $500,000.

In addition, if we have directed LPC to

purchase the full amount of common stock available as a Regular Purchase on a given day, we may direct LPC to purchase additional

amounts as “accelerated purchases”

and “additional accelerated purchases”

as set forth in the LPC Purchase

The purchase price of shares of our common stock will be based on the then prevailing market prices of such shares at

the time of sale.

The LPC Purchase Agreement limits our sale of shares of our common stock to LPC, and LPC’s purchase or

acquisition of our common stock, to an amount of common stock that, when aggregated with all other shares of our common stock then

beneficially owned by LPC would result in LPC having beneficial ownership, at any single point in time, of more than 4.99% of the

then total outstanding shares of our common stock.

The LPC Purchase Agreement contains customary

representations, warranties, covenants, closing conditions and indemnification and termination provisions.

LPC has covenanted not

to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s common stock.

The LPC Purchase Agreement does not limit the Company’s ability to raise capital from other sources at its sole discretion;

provided, however, that we shall not enter into any “Variable Rate Transaction”

as defined in the LPC Purchase Agreement,

including the issuance of any floating conversion rate or variable priced equity-like securities, but excluding any “At-the-Market”

offering with a registered broker-dealer, until the later of (i) the 36-month anniversary of the date of the LPC Purchase Agreement,

and (ii) the 36-month anniversary of the Commencement Date (if the Commencement has occurred), in either case irrespective of any

earlier termination of the LPC Purchase Agreement.

The LPC Purchase Agreement may be terminated by us at any time at our discretion

without any cost to us.

In connection with the LPC transaction,

we engaged A.G.P.

as a placement agent to help raise capital.

introduced us to LPC, for which we agreed to pay A.G.P.

fee of 8% of the amount of the funds received from LPC, which totaled $20,000 in the quarter ended October 31, 2020.

also receive a fee totaling 8% of any additional funds raised pursuant to the LPC Purchase Agreement.

In addition, and in consideration for

the services provided related to both Labrys and LPC, we granted warrants that were immediately exercisable for a total of 550,000

shares of our common stock at $0.50 per share to A.G.P.

and two partners of A.G.P.

The warrants had a value of $220,000 and expire

August 6, 2024.

Of the $220,000, $91,667 was netted against the LPC equity transaction and $128,333 was recorded as debt closing

costs related to the Labrys transaction and is being amortized over the one-year life of the note.

we sold 602,422 shares of our common stock to LPC in an initial purchase for a total purchase price of $250,000.

In January 2021,

we sold an additional 200,000 shares of our common stock to LPC for total proceeds $35,080.

From February 1, 2021 through

March 10, 2021, LPC purchased an additional 1,173,124 shares of our common stock for a total price of $1,018,448 and, as of March

10, 2021, there was $8,946,472 remaining purchase availability.

See Note 8 and 11 of Notes to Financial

Statements for additional information.

Inflation did not have a material impact

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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-Q

Item 1. Financial Statements