QUANTRX BIOMEDICAL CORP - Quarter Report: 2018 June (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2018
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________
to __________
Commission File No. 000-17119
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QUANTRX BIOMEDICAL CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
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Nevada
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33-0202574
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(State or Other Jurisdiction of Incorporation or
Organization)
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(I.R.S. Employer Identification Number)
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10190
SW 90th Avenue, Tualatin, Oregon 97123
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(Address of Principal Executive Offices) (Zip Code)
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(212) 980-2235
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(Registrant's Telephone Number, Including Area Code)
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Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No
[ ]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or
for such shorter period that the registrant was required to submit
and post such files). Yes [ ] No
[X]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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[ ]
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Accelerated filer
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[ ]
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Non-Accelerated filer
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[ ]
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Smaller reporting company
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[X]
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(do not check if a smaller reporting company)
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[ ]
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Emerging growth company
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[ ]
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
[ ]
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes
[ ] No [X]
The number of shares outstanding of the issuer’s common stock
as of August 17, 2018 was 78,696,461.
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PART I – FINANCIAL
INFORMATION
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION
THIS QUARTERLY REPORT ON FORM 10-Q, INCLUDING EXHIBITS HERETO,
CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE
FORWARD-LOOKING STATEMENTS ARE TYPICALLY IDENTIFIED BY THE WORDS
“ANTICIPATES,” “BELIEVES,”
“EXPECTS,” “INTENDS,”
“FORECASTS,” “PLANS,”
“ESTIMATES,” “MAY,” “FUTURE,”
“STRATEGY,” OR WORDS OF SIMILAR MEANING. VARIOUS
FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED IN THE FORWARD-LOOKING STATEMENTS, INCLUDING THOSE
DESCRIBED IN “RISK FACTORS” IN OUR ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2017. WE ASSUME NO
OBLIGATIONS TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT
NEW INFORMATION, ACTUAL RESULTS, CHANGES IN ASSUMPTIONS, OR CHANGES
IN OTHER FACTORS, EXCEPT AS REQUIRED BY LAW.
QUANTRX BIOMEDICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
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June 30,
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December 31,
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2018
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2017
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ASSETS
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(unaudited)
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Current
Assets:
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Cash
and cash equivalents
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$290,544
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$460,111
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Cash
in escrow
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400,597
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402,532
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Prepaid
expenses
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9,387
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28,160
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Total
Current Assets
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700,528
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890,803
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Investments
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500,000
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500,000
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Total
Assets
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$1,200,528
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$1,390,803
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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Current
Liabilities:
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Accounts
payable
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$149,084
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$167,900
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Accrued
expenses
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5,154
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26,708
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Notes
payable and accrued interest
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1,935,364
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1,825,135
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Notes
payable, related party and accrued interest
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128,144
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120,611
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Total
Liabilities
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2,217,746
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2,140,354
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Commitments
and Contingencies (See Note 9)
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-
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-
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Stockholders’
Equity (Deficit):
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Preferred
stock; $0.01 par value, 25,000,000 authorized shares;
20,500,000 shares designated as Series B Convertible Preferred
Stock; Series B Convertible Preferred shares 6,196,858 and
16,676,942, issued and outstanding, respectively
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61,969
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166,769
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Common
Stock; $0.01 par value; 150,000,000 authorized; 78,696,461
shares issued and outstanding
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786,964
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786,964
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Additional
paid-in capital
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48,876,398
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48,791,598
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Stock
to be issued
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8,600
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8,600
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Accumulated
deficit
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(50,751,149)
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(50,503,482)
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Total
Stockholders’ Equity (Deficit)
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(1,017,218)
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(749,551)
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Total
Liabilities and Stockholders’ Equity (Deficit)
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$1,200,528
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$1,390,803
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The accompanying condensed notes are an integral part of these
consolidated financial statements.
QUANTRX BIOMEDICAL
CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
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Three Months Ended
June 30,
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Six Months Ended
June 30,
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2018
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2017
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2018
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2017
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Operating
Expenses:
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Sales,
general and administrative
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$47,517
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$17,936
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$75,497
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$40,308
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Professional
fees
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36,126
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16,195
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54,449
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29,437
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Amortization
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-
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893
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-
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1,788
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Total
Costs and Operating Expenses
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83,643
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35,024
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129,946
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71,533
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Loss
from Operations
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(83,643)
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(35,024)
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(129,946)
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(71,533)
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Other
Income (Expense):
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Interest
expense
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(59,371)
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(56,537)
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(118,286)
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(112,699)
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Interest
Income
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346
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-
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565
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-
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Total
Other Income (Expense), net
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(59,025)
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(56,537)
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(117,721)
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(112,699)
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Loss
Before Taxes
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(142,668)
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(91,561)
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(247,667)
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(184,232)
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Provision
for Income Taxes
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-
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-
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-
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-
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Net
Loss
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$(142,668)
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$(91,561)
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$(247,667)
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$(184,232)
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Basic
and Diluted Net Loss per Common Share
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$(0.00)
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$(0.00)
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$(0.00)
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$(0.00)
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Basic
and Diluted Weighted Average Shares Used in per Share
Calculation
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78,696,461
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78,696,461
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78,696,461
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78,696,461
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The accompanying condensed notes are an integral part of these
interim consolidated financial statements.
QUANTRX BIOMEDICAL
CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
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Six
Months Ended
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June
30,
2018
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June
30,
2017
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CASH
FLOWS FROM OPERATING ACTIVITIES:
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Net
loss
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$(247,667)
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$(184,232)
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Adjustments
to reconcile net loss to net cash used by operating
activities:
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Depreciation
and amortization
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-
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1,788
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Interest
earned on escrow account
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(565)
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-
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(Increase)
Decrease in:
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Prepaid
expenses
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18,773
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18,729
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Increase
(decrease) in:
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Accounts
payable
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(18,816)
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6,605
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Accrued
interest and expenses
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98,708
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91,603
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|
|
|
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Net
Cash Used by Operating Activities
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(149,567)
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(65,507)
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CASH
FLOWS FROM INVESTING ACTIVITIES:
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-
|
-
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Net Cash Provided
by (Used in) Investing Activities
|
-
|
-
|
|
|
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CASH
FLOWS FROM FINANCING ACTIVITIES
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Repurchase
of preferred stock with cash
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(20,000)
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-
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Principal
payments on long-term debt
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-
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(1,816)
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Proceeds
from the issuance of shareholder loans
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-
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50,000
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Proceeds
from the issuance of notes payable
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-
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50,000
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Net Cash Provided
by (Used in) Financing Activities
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(20,000)
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98,184
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|
|
|
|
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Net
Increase (Decrease) in Cash and Cash Equivalents
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(169,567)
|
32,677
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|
|
|
|
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Cash
and Cash Equivalents, Beginning of Period
|
460,111
|
691
|
|
|
|
|
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Cash
and Cash Equivalents, End of Period
|
$290,544
|
$33,368
|
|
|
|
|
|
Supplemental
Cash Flow Disclosures:
|
|
|
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Interest
expense paid in cash
|
$524
|
$964
|
|
Income
tax paid
|
$-
|
$-
|
The accompanying condensed notes are an integral part of these
interim consolidated financial statements.
QUANTRX
BIOMEDICAL
CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1.
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Overview
QuantRx Biomedical Corporation was incorporated on December 5,
1986, in the State of Nevada. Our principal business office is
located at 10190 SW 90th Avenue, Tualatin, Oregon 97123. When used
in this Quarterly Report on Form 10-Q, the terms
“Company,”
“we,”
“our,”
“ours,”
or “us”
mean QuantRx Biomedical Corporation, unless context otherwise
requires.
We have developed and intend to commercialize our patented miniform
pads (“PADs”)
and PAD based over-the-counter products for the treatment of
hemorrhoids, minor vaginal infection, urinary incontinence, general
catamenial uses and other medical needs. We are also developing and
intend to commercialize genomic diagnostics for the laboratory
market, based on our lateral flow patents. Our platforms include:
inSync®, UniqueTM,
and OEM branded over-the-counter and laboratory testing products
based on our core intellectual property related to our PAD
technology.
The continuation of our operations remains contingent upon the
receipt of additional financing required to execute our business
and operating plan, which is currently focused on the
commercialization of our PAD technology, either directly or through
a joint venture or other relationship intended to increase
shareholder value. In the interim, we have nominal operations,
focused principally on maintaining our intellectual property
portfolio and maintaining compliance with the public company
reporting requirements. In order to continue as a going concern, we
will need to raise capital, which may include the issuance of debt
and/or equity securities. No assurances can be given that the we
will obtain financing, or otherwise successfully develop a business
and operating plan or enter into an alternative relationship to
commercialize our PAD technology.
Our principal business line consists of over-the-counter
commercialization of our InSync feminine hygienic interlabial pad,
the Unique® Miniform for hemorrhoid application, and other
treated miniforms (the “OTC
Business”), as well as
maintaining established and continuing licensing relationships
related to these products. We also own certain diagnostic testing
technology (the “Diagnostic
Business”) that is based
on our lateral flow patents. Management believes this corporate
structure permits us to more efficiently explore options to
maximize the value of our products and intellectual property
portfolio, with the objective of maximizing the value of the
Businesses for the benefit of the Company and our
shareholders.
Our current focus is to obtain additional working capital necessary
to continue as a going concern, and to develop a longer term
financing and operating plan to: (i) commercialize our over
the-counter products either directly or through joint ventures,
mergers or similar transactions intended to capitalize on potential
commercial opportunities; (ii) contract manufacturing of our
over-the counter products to third parties while maintaining
control over the manufacturing process; (iii) maintain our
intellectual property portfolio with respect to patents and
licenses pertaining to both the OTC Business and the Diagnostics
Business; and (iv) maximize the value of our investments in
non-core assets. As a result of our current financial
condition, however, our efforts in the short-term will be focused
on obtaining financing necessary to maintain the Company as a going
concern.
We follow the accounting guidance outlined in the Financial
Accounting Standards Board Codification guidelines. The
accompanying unaudited interim consolidated financial statements
have been prepared in accordance with generally accepted principles
for interim financial information and with the items under
Regulation S-X required by the instructions to Form 10-Q. They may
not include all information and footnotes required by United States
Generally Accepted Accounting Principles
(“GAAP”)
for complete financial statements. However, except as disclosed
herein, there have been no material changes in the information
disclosed in the notes to the financial statements for the year
ended December 31, 2017 included in the Company’s Annual
Report on Form 10-K, filed with the Securities and Exchange
Commission on April 17, 2018. The interim unaudited financial
statements presented herein should be read in conjunction with
those financial statements included in the Form 10-K. In the
opinion of Management, all adjustments considered necessary for a
fair presentation, which unless otherwise disclosed herein,
consisting primarily of normal recurring adjustments, have been
made. Operating results for the six months ended June 30, 2018 are
not necessarily indicative of the results that may be expected for
the year ending December 31, 2018.
Certain amounts in the prior period financial statements have been
reclassified to conform to the current period presentation. These
reclassifications had no effect on previously reported losses,
total assets or stockholders’ equity.
2.
MANAGEMENT STATEMENT REGARDING GOING CONCERN
Currently, we are not generating revenue from operations, and do
not anticipate generating meaningful revenue from operations or
otherwise in the short-term. We have historically financed our
operations primarily through issuances of equity and the proceeds
from the issuance of promissory notes. In the past, we also
provided for our cash needs by issuing common stock, options and
warrants for certain operating costs, including consulting and
professional fees, as well as divesting our minority equity
interests and equity-linked investments. In addition, in the fiscal
year ended December 31, 2017, we received a cash payment as
consideration for the sale and transfer of the certain assets to
Preprogen LLC (“Preprogen”).
Our history of operating losses, limited cash resources and
the absence of an operating plan necessary to capitalize on our
assets raise substantial doubt about our ability to continue
as a going concern absent a strengthening of our cash
position. Management is currently pursuing various funding
options, including seeking debt or equity financing, licensing
opportunities and the sale of certain investment holdings, as well
as a strategic, merger or other transaction to obtain additional
funding to continue the development of, and to successfully
commercialize, our products. There can be no assurance that we
will be successful in our efforts. Should we be unable to
obtain adequate financing or generate sufficient revenue in the
future, our business, result of operations, liquidity and financial
condition would be materially and adversely harmed, and we will be
unable to continue as a going concern.
There can be no assurance that, assuming we are able to
strengthen our cash position, we will achieve sufficient revenue or
profitable operations to continue as a going concern.
3. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of the Company is
presented to assist in understanding the Company’s financial
statements. The financial statements and notes are representations
of the Company’s management, which is responsible for their
integrity and objectivity. These accounting policies conform to
GAAP and have been consistently applied in the preparation of the
financial statements.
Accounting for Share-Based Payments. The Company follows the provisions of ASC Topic
718, which establishes the accounting for transactions in which an
entity exchanges equity securities for services and requires
companies to expense the estimated fair value of these awards over
the requisite service period. The Company uses the Black-Scholes
option pricing model in determining fair value. Accordingly,
compensation cost has been recognized using the fair value method
and expected term accrual requirements as prescribed. During
the six months ended June 30, 2018 and 2017, the Company had no
stock compensation expense.
The Company accounts for share-based payments granted to
non-employees in accordance with ASC Topic 505,
“Equity Based Payments to
Non-Employees.” The
Company determines the fair value of the stock-based payment as
either the fair value of the consideration received or the fair
value of the equity instruments issued, whichever is more reliably
measurable. If the fair value of the equity instruments issued
is used, it is measured using the stock price and other measurement
assumptions as of the earlier of either (i) the date at which a
commitment for performance by the counterparty to earn the equity
instruments is reached, or (ii) the date at which the
counterparty’s performance is
complete.
In the case of modifications, the Black-Scholes model is used to
value modified warrants on the modification date by applying the
revised assumptions. The difference between the fair value of the
warrants prior to the modification and after the modification
determines the incremental value. In the past, the Company has
modified warrants in connection with the issuance of certain notes
and note extensions. These modified warrants were originally issued
in connection with previous private placement investments. In the
case of debt issuances, the warrants were accounted for as original
issuance discount based on their relative fair values. When
modified in connection with a note issuance, the Company recognizes
the incremental value as a part of the debt discount calculation,
using its relative fair value in accordance with ASC Topic 470-20,
“Debt
with Conversion and Other Options.” When modified in connection with note
extensions, the Company recognized the incremental value as prepaid
interest, which is expensed over the term of the
extension.
The fair value of each share based payment is estimated on the
measurement date using the Black-Scholes model with the following
assumptions, which are determined at the beginning of each year and
utilized in all calculations for that year. During the six months
ended June 30, 2018 and 2017, the Company did not make any
Black-Scholes model assumptions, as no share-based payments were
made during those periods.
Risk-Free Interest Rate. The interest rate used is based on the yield
of a U.S. Treasury security as of the beginning of the
year.
Expected Volatility. The
Company calculates the expected volatility based on historical
volatility of monthly stock prices over a three-year
period.
Dividend Yield. The
Company has never paid cash dividends, and does not currently
intend to pay cash dividends, and thus has assumed a 0% dividend
yield.
Expected Term. For
options, the Company has no history of employee exercise patterns.
Therefore, the Company uses the option term as the expected term.
For warrants, the Company uses the actual term of the
warrant.
Pre-Vesting Forfeitures. Estimates of pre-vesting option forfeitures
are based on Company experience. The Company will adjust its
estimate of forfeitures over the requisite service period based on
the extent to which actual forfeitures differ, or are expected to
differ, from such estimates. Changes in estimated forfeitures will
be recognized through a cumulative catch-up adjustment in the
period of change and will also impact the amount of compensation
expense to be recognized in future periods.
Earnings per Share. The Company computes net income (loss) per common
share in accordance with ASC Topic 260. Net income (loss) per share
is based upon the weighted average number of outstanding common
shares and the dilutive effect of common share equivalents, such as
options and warrants to purchase Common Stock, convertible
preferred stock and convertible notes, if applicable, that are
outstanding each year. Basic and diluted earnings per share were
the same at the reporting dates of the accompanying financial
statements, as including Common Stock equivalents in the
calculation of diluted earnings per share would have been
antidilutive.
As of June 30, 2018, the Company had outstanding options
exercisable for 2,300,000 shares of its Common Stock, outstanding
warrants exercisable for 15,000,000 shares of its Common Stock, and
preferred shares convertible into 6,196,858 shares of its Common
Stock, which options, warrants and preferred shares were deemed to
be antidilutive for the six months ended June 30, 2018. The Company
has reserved for issuance 860,000 shares of its Series B Preferred
Stock to certain investors in connection with the 2017 Notes. As of
June 30, 2018, the Company has estimated and reserved for issuance
approximately 20.0 million shares of Common Stock for a future
conversion of its issued and outstanding Convertible Notes
Payable.
As of June 30, 2017, the Company had outstanding options
exercisable for 2,352,000 shares of its Common Stock, and preferred
shares convertible into 16,676,972 shares of its Common Stock,
which options and preferred shares were deemed to be antidilutive
for the six months ended June 30, 2017.
Fair Value. The
Company has adopted ASC Topic 820, “Fair Value Measurements
and Disclosures” for
both financial and nonfinancial assets and liabilities. The
Company has not elected the fair value option for any of its assets
or liabilities.
Use of Estimates. The accompanying financial statements are prepared
in conformity with accounting principles generally accepted in the
United States of America, and include certain estimates and
assumptions, which affect the reported amounts of assets and
liabilities at the date of the financial statements, and the
reported amounts of revenue and expense during the reporting
period. Accordingly, actual results may differ from those
estimates.
Recent Accounting Pronouncements.
Management has considered all recent accounting pronouncements in
the current period and identified no pronouncements that would have
an impact on our financial statements.
4.
INVESTMENTS
In May 2006, the Company purchased 144,024 shares of common stock
of GMS Biotech, formerly Genomics USA, Inc.
(“GUSA”) for $200,000. After the investment, the
Company owned approximately 5% of the total issued and outstanding
common stock of GUSA. As of December 31, 2017, the Company’s
position had been diluted to approximately 2% of the issued and
outstanding common stock of GUSA. The investment is recorded
at historical cost and is assessed at least annually for
impairment. During the year ended December 31, 2017, the Company
recorded a loss of $169,948 to fully impair the value of its common
stock investment in GUSA. The Company has valued the impairment
based on the dilution of the Company’s investment and certain
other factors.
On December 15, 2017, we executed an agreement with Preprogen,
pursuant to which we sold, assigned and licensed-back certain
assets pertaining to our Diagnostic Business (the
“Preprogen
Transaction”).
As a part of the Preprogen
Transaction, we acquired a 15% interest Preprogen
LLC.
5.
INTANGIBLE
ASSETS
On December 15, 2017, the Company entered into an agreement with
Preprogen, pursuant to which the parties agreed to the sale,
assignment, and license-back of certain assets, including
intellectual property transferred to Preprogen necessary to the
development, manufacture, marketing and sale of the Company’s
OTC miniform products for the feminine hygiene and hemorrhoid
treatment markets. At June 30, 2018 and December 31, 2017, the
Company has reduced its capitalized intangible assets to
zero.
Amortization expense for the six months ended June 30, 2018 and
2017 totaled $0 and $1,788, respectively.
6.
CONVERTIBLE NOTES PAYABLE
On January 2, 2015, the Company issued an additional Bridge Note in
the principal amount of $36,500 and issued 73,000 shares of Common
Stock to the purchaser of the additional Bridge Note. Additionally,
we issued 500,000 shares of Common Stock in January 2015 to certain
investors who purchased Bridge Notes during the year ended December
31, 2014.
On June 30, 2015, the Company issued two additional Bridge Notes in
the aggregate principal amount of $50,000 and issued an aggregate
total of 100,000 shares of Common Stock to the purchasers of these
Bridge Notes. In connection with the issuance of these notes, the
Company recorded debt discount expenses totaling $2,830 and has
amortized these costs over the life of the notes.
In June 2015, the Company authorized the issuance of an aggregate
total of 1,875,691 shares of Common Stock as payment for accrued
interest for the period from January 1, 2015 through June 30, 2015
under certain convertible notes payable. The Company settled a
total of $70,256 in accrued interest, recognizing a gain on
settlement in the amount of $23,364. The Company and the
holders of the Bridge Notes also agreed to extend the maturity date
of the Bridge Notes from June 30, 2015 to December 31, 2015. As
consideration for the extension of the maturity date of the Bridge
Notes, the Company issued an aggregate total of 286,500 shares of
Common Stock to the Bridge Note holders. These Bridge Notes are now payable on
demand.
In July 2015, the Company issued a Bridge Note in the principal
amount of $35,000 and issued an aggregate total of 70,000 shares of
Common Stock to the purchaser of the Bridge Note.
On March 31, 2016, Burnham Hill Advisors, LLC
(“BHA”) agreed to exchange the amounts owed to
BHA under the October 29, 2013 agreement for a promissory note, on
terms substantially similar to the Bridge Notes (the
“BHA
Note”), in the principal
amount of $283,000 with issuance date of March 31, 2016.
The BHA Note is payable on demand as
of December 31, 2016, and was past due as of September 30, 2017. On
April 1, 2017, BHA assigned the BHA Note to certain of its then
employees, including Michael Abrams, who serves as a director of
the Company, under the same terms.
During each of the quarters ended March 31, 2017 and June 30, 2017,
the Company issued an MOU Note in the principal amount of
$25,000.
In July and August 2017, the Company issued 2017 Bridge Notes in
the aggregate principal amount of $86,000. Each 2017 Bridge Note
accrues interest at a rate of 10% per annum, and matured on
September 30, 2017. The 2017 Bridge Notes are now payable on
demand.
In October 2017, the Company issued an additional MOU Note in the
principal amount of $15,000.
The three MOU Notes, with an aggregate principal amount of $65,000,
were all cancelled and applied as part of the purchase price in the
Preprogen Transaction.
At June 30, 2018 and December 31, 2017, the Company’s
Convertible Notes Payable and Accrued Interest were as
follows:
|
|
June 30,
2018
|
December 31,
2017
|
|
Notes
Payable and accrued interest payable
|
$1,935,364
|
$1,825,135
|
|
Notes
Payable and accrued interest payable, related party
|
128,144
|
120,611
|
|
Total
notes payable
|
$2,063,508
|
$1,945,746
|
Notes Payable, Related Party
As of June 30, 2018, the Company owed Michael Abrams, a director of
the Company, an aggregate total of $128,144 for outstanding
principal and accrued and unpaid interest the BHA Notes.
As of December 31, 2017, the Company
owed Mr. Abrams an aggregate total of $120,611 for outstanding
principal and accrued and unpaid interest on the BHA Notes. Mr.
Abrams was formerly affiliated with BHA.
On April 1, 2017, BHA assigned the BHA Notes, including all accrued
but unpaid interest to its employees, and is no longer a related
party note payable. As noted
above, Michael Abrams, one of the Company’s directors and
previously an affiliate of BHA, was assigned $50,000 of the
outstanding principal amount of the BHA Note, plus all accrued and
unpaid interest on such amount.
7. RELATED
PARTY TRANSACTIONS
During the six months ended June 30, 2018, the Company paid its
CEO, Shalom Hirschman, a bonus of $15,000 for his significant
contributions to the Company.
In April 2018, the Company paid BHA $30,000 as consideration for
certain advisory services, which included the oversight and
management of the relocation of the Company’s assets held in
Oregon to New Jersey as well as the structuring, negotiation
and execution of the Purchased Shares transaction referenced above.
Michael Abrams, a director of the Company, is formerly an affiliate
of BHA.
8. OTHER
BALANCE SHEET INFORMATION
Components of selected captions in the accompanying balance sheets
consist of:
|
Prepaid expense:
|
June 30,
2018
|
December 31,
2017
|
|
Prepaid
insurance
|
$9,387
|
$28,160
|
|
Total prepaid expense
|
$9,387
|
$28,160
|
|
|
|
|
|
Property and equipment:
|
|
|
|
Computers
and office furniture, fixtures and equipment
|
$28,031
|
$28,031
|
|
Machinery
and equipment
|
5,475
|
5,475
|
|
Less:
accumulated depreciation
|
(33,506)
|
(33,506)
|
|
Property and equipment, net
|
$-
|
$-
|
|
|
|
|
|
Accrued expense:
|
|
|
|
Other
Accrued expense
|
$5,154
|
$26,708
|
|
Total accrued expense
|
$5,154
|
$26,708
|
Property and equipment are stated at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of
the assets. The Company’s property and equipment at June 30,
2018 consisted of computer and office equipment, machinery and
equipment with estimated useful lives of three to seven years. As
of December 31, 2017 and June 30, 2018, the Company’s
property and equipment was fully depreciated.
Expenditures for repairs and maintenance are expensed as
incurred.
9.
COMMITMENTS AND CONTINGENCIES
In December 2017, in connection with the Preprogen Transaction, the
Company committed to share in 50% of certain fees and costs
incurred in connection with the future manufacturing costs for the
miniform pads; provided, however,
that the Company’s expenses
shall not exceed $400,000. The Company has reserved that same
amount in an escrow account until an acceptable manufacturer is
identified by Preprogen and the Company.
10.
PREFERRED STOCK
The Company has authorized 25,000,000 shares of preferred stock, of
which 20,500,000 are designated as Series B Convertible Preferred
Stock, $0.01 par value, with a stated value of approximately
$204,000 (“Series B
Preferred”). The
remaining authorized preferred shares have not been designated by
the Company as of June 30, 2018.
On November 19, 2010, the Company filed a Certificate of Withdrawal
of the Certificate of Designations of the Series A Preferred Stock
(“Series A
Preferred”) with the
Nevada Secretary of State, as there were no shares of Series A
Preferred issued and outstanding after the exchange transaction
discussed below.
Series B Convertible Preferred Stock
The Series B Preferred ranks senior to the Common Stock for
purposes of liquidation preference, and to all other classes and
series of equity securities of the Company that by their terms did
not rank senior to the Series B Preferred
(“Junior
Stock”). Holders of
the Series B Preferred are entitled to receive cash dividends,
when, as and if declared by the Board of Directors, and they shall
be entitled to receive an amount equal to the cash dividend
declared on one share of Common Stock multiplied by the number of
shares of Common Stock equal to the outstanding shares of Series B
Preferred, on an as converted basis. The holders of Series B
Preferred have voting rights to vote as a class on matters a)
amending, altering or repealing the provisions of the Series B
Preferred so as to adversely affect any right, preference,
privilege or voting power of the Series B Preferred; or b) to
affect any distribution with respect to Junior Stock. At any
time, the holders of Series B Preferred may, subject to
limitations, elect to convert all or any portion of their Series B
Preferred into fully paid non-assessable shares of Common Stock at
a 1:1 conversion rate.
As disclosed under Note 6 above, in July and August, 2017, the
Company entered into Note Purchase Agreements with two existing
stockholders, pursuant to which the Company issued 2017 Bridge
Notes in the aggregate principal amount of $86,000. As additional
consideration for the purchase of the 2017 Bridge Notes, the
Company has reserved for issuance an aggregate of 860,000 shares of
Series B Preferred to be issued to the purchasers of the 2017
Bridge Notes. The Company has valued the Series B Preferred and has
recorded a discount on the 2017 Bridge Notes of $7,818, which was
amortized in full during the year ended December 31,
2017.
In April 2018, the Company completed the purchase of 10,480,084
shares of Series B Convertible Preferred Stock (the
“Purchased
Shares”) from an
institutional shareholder for an aggregate purchase price of
$20,000. Following this transaction, the shareholder no longer
holds shares in the Company.
As of June 30, 2018, the Company had 6,196,858 and shares of Series
B Preferred issued and outstanding, with a liquidation preference
of $61,969 and convertible into 6,196,858 shares of Common
Stock. As of December 31,
2017, the Company had 16,676,942 shares of Series B Preferred
issued and outstanding with a liquidation preference of $166,769
and convertible into 16,676,942 shares of Common
Stock.
11. COMMON
STOCK, OPTIONS AND WARRANTS
The Company has authorized 150,000,000 shares of its Common Stock,
of which 78,696,461 were issued and outstanding at each of June 30,
2018 and December 31, 2017.
During the six months ended June 30, 2018 and 2017, there were no
warrants issued by the Company. As of June 30, 2018, the
Company has one warrant issued and outstanding, which warrant was
issued in December 2017 to Preprogen’s designee to purchase
up to 15.0 million shares of the Company’s Common Stock, at
an exercise price of $0.05 per share. The warrant was immediately
exercisable upon issuance, and expires on December 14,
2022.
2007 Incentive and Non-Qualified Stock Option Plan.
The fair value of options
granted under the Company’s 2007 Incentive and Non-Qualified
Stock Option Plan is recorded as compensation expense over the
vesting period, or, for performance based awards, the expected
service term. The Company did not
issue any options during the six months ended June 30, 2018 or
2017.
12.
SUBSEQUENT EVENTS
In
accordance with the Subsequent Events Topic of the FASB ASC 855, we
have evaluated subsequent events through the date of this filing,
and have determined that no subsequent events are reasonably likely
to impact the financial statements.
ITEM
2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
The following discussion of our financial condition should be read
in conjunction with the financial statements and notes to financial
statements included elsewhere in this filing. The following
discussion (as well as statements in Item 1 above and elsewhere)
contains forward-looking statements within the meaning of the
Private Securities Litigation Act of 1995 that involve risks and
uncertainties. Some or all of the results anticipated by these
forward-looking statements may not occur. Forward-looking
statements involve known and unknown risks and uncertainties
including, but not limited to, trends in the biotechnology,
healthcare, and pharmaceutical sectors of the economy; competitive
pressures and technological developments from domestic and foreign
genetic research and development organizations which may affect the
nature and potential viability of our business strategy; and
private or public sector demand for products and services similar
to what we plan to commercialize. We disclaim any intention or
obligation to publicly announce the results of any revisions to any
of the forward-looking statements contained herein to reflect
future events or developments.
Unless otherwise indicated or the context otherwise requires, all
references in this report to “we,” “our,”
“ours,” “us,” the “Company” or
similar terms refer to QuantRx Biomedical Corporation, a Nevada
corporation.
Overview
We have developed and intend to commercialize our patented miniform
pads (“PADs”)
and PAD based over-the-counter products for the treatment of
hemorrhoids, minor vaginal infection, urinary incontinence, general
catamenial uses and other medical needs. We are also developing and
intend to commercialize genomic diagnostics for the laboratory
market, based on our lateral flow patents. Our platforms include:
inSync®, UniqueTM,
and OEM branded over-the-counter and laboratory testing products
based on our core intellectual property related to our PAD
technology.
The continuation of our operations remains contingent upon the
receipt of additional financing required to execute our business
and operating plan, which is currently focused on the
commercialization of our PAD technology either directly or through
a joint venture or other relationship intended to increase
shareholder value. In the interim, we have nominal operations,
focused principally on maintaining our intellectual property
portfolio and maintaining compliance with the public company
reporting requirements. In order to continue as a going concern, we
will need to raise capital, which may include the issuance of debt
and/or equity securities. No assurances can be given that the we
will obtain financing, or otherwise successfully develop a business
and operating plan or enter into an alternative relationship to
commercialize our PAD technology.
Our principal business line consists of over-the-counter
commercialization of our InSync feminine hygienic interlabial pad,
the Unique® Miniform for hemorrhoid application, and other
treated miniforms (the “OTC
Business”), as well as
maintaining established and continuing licensing relationships
related to these products. We also own certain diagnostic testing
technology (the “Diagnostic
Business”) that is based
on our lateral flow patents. Management believes this corporate
structure permits us to more efficiently explore options to
maximize the value of our products and intellectual property
portfolio, with the objective of maximizing the value of the
Businesses for the benefit of the Company and our
shareholders.
Our current focus is to obtain additional working capital necessary
to continue as a going concern, and to develop a longer term
financing and operating plan to: (i) commercialize our over
the-counter products either directly or through joint ventures,
mergers or similar transactions intended to capitalize on potential
commercial opportunities; (ii) contract manufacturing of our
over-the counter products to third parties while maintaining
control over the manufacturing process; (iii) maintain our
intellectual property portfolio with respect to patents and
licenses pertaining to both the OTC Business and the Diagnostics
Business; and (iv) maximize the value of our investments in
non-core assets. As a result of our current financial
condition, however, our efforts in the short-term will be focused
on obtaining financing necessary to maintain the Company as a going
concern.
The following discussion of our financial condition should be read
together with our financial statements and related notes included
in the Annual Report on Form 10-K, filed on April 17,
2018.
Consolidated Results of Operations
Comparison of the Three and Six Months Ended June 30, 2018 to the
Three and Six Months Ended June 30, 2017.
The Company did not generate any revenue during the three
and six months ended June 30, 2018 or the three and six months
ended June 30, 2017. The absence of revenue
is due to no royalty revenue attributable to the Company’s
PAD technology received during the periods. Management does not
anticipate that the Company will generate any
revenue until such time as the Company develops a plan to
commercialize its over-the-counter products, which is contingent on
the receipt of financing.
Sales, general and administrative expense for the three months
ended June 30, 2018 and 2017 was $47,517 and $17,936, respectively.
Sales, general and administrative expense for the six months ended
June 30, 2018 and 2017 was $75,497 and $40,308, respectively.
Sales, general and administrative expense includes, but is not
limited to, consulting expense, office and insurance expense,
accounting and other costs to maintain compliance with the
Company’s reporting requirements to the Securities and
Exchange Commission (the “SEC”). The increase in sales,
general and administrative expense for
the three and six
months ended June 30, 2018 is
principally attributable to higher administrative costs related to
moving the Company’s assets, and higher transfer agent costs
in the 2018 period. Partially offsetting the overall increase in
the 2018 periods are lower costs for maintenance of intellectual
property in the 2018 periods compared to the 2017 periods.
Professional fees for the three months ended June 30, 2018 and 2017
were $36,126 and $16,195, respectively. Professional fees for the
six months ended June 30, 2018 and 2017 were $54,449 and $29,437,
respectively. Professional fees include the costs of legal,
consulting and auditing services provided to us.
The
increase in professional fees for the 2018 periods
compared to the 2017 periods is related to higher overall costs for
professional services during the 2018 period including higher legal
fees and consulting fees of $15,000 paid to the
Company’s CEO, in the six
months ended June 30, 2018 as a bonus for his significant
contributions to the Company.
The Company did not incur any research and development costs
during the three and six months
ended June 30, 2018 or
2017. The Company did not
engage in any research and development efforts in the 2018 period,
nor does the Company expect to engage in any research and
development activity and until funding is secured and we develop a
plan to commercialize its products.
Interest expense for the three months ended June 30, 2018 and 2017
was $59,371 and $56,537, respectively. Interest expense for the six months ended June 30,
2018 and 2017 was $118,286 and $112,699, respectively.
The
increase in interest expense in the 2018 periods compared to the
2017 periods is related to a higher balance of outstanding notes
payable during the 2018 periods.
The Company’s net loss for the three months ended June 30,
2018 was $142,668 compared to net loss for the three months ended
June 30, 2017 of $91,561. The Company’s net loss for the six months
ended June 30, 2018 was $247,667 compared to net loss for the six
months ended June 30, 2017 of $184,232. The increase in net
loss in the three and six months periods ending June 30, 2018
compared to the comparable periods in 2017 is due to higher
expenses, sales, general and administrative expense and interest
expense, as discussed above.
The Company expects net loss to decrease in future periods due to
the current suspension of our active operations and our lack of
revenue. We do not expect to re-commence active operations until we
are able to secure financing necessary to execute our business
and operating plan, including the development and launch of our
over-the-counter products, or to otherwise capitalize on our PAD
technology.
Liquidity and Capital Resources
At June 30, 2018, the Company had cash and cash equivalents of
$290,544, as compared to $460,111 at December 31,
2017.
The Company had cash and cash equivalents of $33,368 at June 30,
2017. The significant increase in cash and cash equivalents between
the 2018 and 2017 periods, is primarily attributable to the
payments received by the Company in December 2017 in connection
with the sale of certain assets pertaining to our Diagnostic
Business to Preprogen LLC
(“Preprogen”),
offset by $15,000 paid to Dr. Shalom Hirschman, the Company’s
CEO, in the six months ended June 30, 2018 as a bonus for his
significant contributions to the Company.
During the six months ended June 30, 2018, the Company used
$149,567 for operating activities, compared to $65,507 used during
the six months ended June 30, 2017. The net overall increase in
cash used for operating activities during the six months ended June
30, 2018, is attributable to higher operating expenses in the 2018
period partially offset by a higher balance of unpaid interest
expense on convertible notes payable.
During the six months ended June 30, 2018, the Company used $20,000
for financing activities, as compared to $98,184 provided by
financing activities during the six months ended June 30, 2017. The
decrease in cash provided by financing activities for the six
months ended June 30, 2018 is attributable to a repurchase of
preferred shares and the fact that the Company did not participate
in any financing activities during the six months ended June 30,
2018.
The Company has not generated sufficient revenues from operations
to meet its operating expenses. The Company requires additional
funding to complete the development and launch of its
over-the-counter products, or to otherwise capitalize on its PAD
technology. The Company has historically financed its operations
primarily through issuances of equity and the proceeds of debt
instruments. In the past, the Company has also provided for its
cash needs by issuing Common Stock, options and warrants for
certain operating costs, including consulting and professional
fees. In addition, in the fiscal year ended December 31, 2017,
the Company received a large cash payment from Preprogen as
consideration for the sale and transfer of the certain
assets.
Management believes that given the current economic environment and
the continuing need to strengthen our cash position, there is
substantial doubt about our ability to continue as a going concern.
We are pursuing various funding options, including licensing
opportunities and the sale of investment holdings, as well other
financing transactions, to obtain additional funding to continue
the development of our products and bring them to commercial
markets. There can be no assurance that we will be successful in
our efforts. Should we be unable to raise adequate financing or
generate sufficient revenue in the future, the Company’s
business, results of operations, liquidity and financial condition
would be materially and adversely harmed.
The Company believes that the ability of the Company to re-commence
operations, and therefore continue as a going concern is dependent
upon its ability to do any or all of the
following:
●
obtain
adequate sources of funding to pay operating expenses and fund
long-term business operations;
●
enter
into a licensing or other relationship that allows the Company to
commercialize its products;
●
manage
or control working capital requirements by reducing operating
expenses; and
●
develop
new and enhance existing relationships with product distributors
and other points of distribution for the Company’s
products.
There can be no assurance that the Company will be successful in
achieving its short- or long-term plans as set forth above, or that
such plans, if consummated, will enable the Company to obtain
profitable operations or continue in the long-term as a going
concern.
Off-Balance Sheet Arrangements
We have not entered into any transactions with unconsolidated
entities in which we have financial guarantees, subordinated
retained interests, derivative instruments or other contingent
arrangements that expose us to material continuing risks,
contingent liabilities or any other obligations under a variable
interest in an unconsolidated entity that provides us with
financing, liquidity, market risk or credit risk
support.
Critical Accounting Policies
Revenue Recognition
The Company recognizes revenue in accordance with SEC Staff
Accounting Bulletin Topic 13 when persuasive evidence of an
arrangement exists and delivery has occurred, provided the fee is
fixed or determinable and collection is probable. The Company
assesses whether the fee is fixed and determinable based on the
payment terms associated with the transaction. If a fee is based
upon a variable such as acceptance by the customer, the Company
accounts for the fee as not being fixed and determinable. In these
cases, the Company defers revenue and recognizes it when it becomes
due and payable. Up-front engagement fees are recorded as deferred
revenue and amortized to income on a straight-line basis over the
term of the agreement, although the fee is due and payable at the
time the agreement is signed or upon annual renewal. Payments
related to substantive, performance-based milestones in an
agreement are recognized as revenue upon the achievement of the
milestones as specified in the underlying agreement when they
represent the culmination of the earnings process.
The Company assesses the probability of collection based on a
number of factors, including past transaction history with the
customer and the current financial condition of the customer. If
the Company determines that collection of a fee is not reasonably
assured, revenue is deferred until the time collection becomes
reasonably assured. Significant management judgment and estimates
must be made and used in connection with the revenue recognized in
any accounting period. Material differences may result in the
amount and timing of our revenue for any period if our management
made different judgments or utilized different
estimates.
The Company recognizes revenue from nonrefundable minimum royalty
agreements from distributors or resellers upon delivery of product
to the distributor or reseller, provided no significant obligations
remain outstanding, the fee is fixed and determinable, and
collection is probable. Once minimum royalties have been received,
additional royalties are recognized as revenue when earned based on
the distributor’s contractual reporting obligations. The
Company is able to recognize minimum royalty payments on an accrual
basis, as they are specified in the contract. However, since the
Company cannot forecast product sales by licensees, royalty
payments that are based on product sales by the licensees are not
determinable until the licensee has completed their computation of
the royalties due and/or remitted their cash payment to us. Should
information on licensee product sales become available so as to
enable the Company to recognize royalty revenue on an accrual
basis, materially different revenues and results of operations
could occur.
Reclassifications
Prior period financial statement amounts have been reclassified to
conform to current period presentation. The reclassifications have
no effect on net loss or earnings per share.
Use of Estimates
The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities,
revenues and expenses and related disclosures of contingent assets
and liabilities in the financial statements and accompanying notes.
The accounting policies discussed below are considered by
management to be the most important to the Company’s
financial condition and results of operations, and require
management to make its most difficult and subjective judgments due
to the inherent uncertainty associated with these matters. All
significant estimates and assumptions are developed based on the
best information available to us at the time made and are regularly
reviewed and adjusted when necessary. We believe that our estimates
and assumptions are reasonable under the circumstances. However,
actual results may vary from these estimates and assumptions.
Additional information on significant accounting principles is
provided in Note 3 of the attached financial
statements.
Impairment of Assets
We assess the impairment of long-lived assets, including our other
intangible assets, at least annually or whenever events or changes
in circumstances indicate that their carrying value may not be
recoverable. The determination of related estimated useful lives
and whether or not these assets are impaired involves significant
judgments, related primarily to the future profitability and/or
future value of the assets. Changes in our strategic plan and/or
market conditions could significantly impact these judgments and
could require adjustments to recorded asset balances. We hold
investments in companies having operations or technologies in areas
which are within or adjacent to our strategic focus when acquired,
all of which are privately held and whose values are difficult to
determine. We record an investment impairment charge if we believe
an investment has experienced a decline in value that is other than
temporary. Future changes in our strategic direction, adverse
changes in market conditions or poor operating results of
underlying investments could result in losses or an inability to
recover the carrying value of the investments that may not be
reflected in an investment’s current carrying value, thereby
possibly requiring an impairment charge in the future.
In determining fair value of assets, the Company bases estimates on
historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of
which form the basis for making judgments about carrying values of
assets that are not readily apparent from other sources. Actual
fair value may differ from management estimates resulting in
potential impairments causing material changes to certain assets
and results of operations.
Share-Based Payments
We grant options to purchase our Common Stock to our employees and
directors under our stock option plan. We estimate the value of
stock option awards on the date of grant using a Black-Scholes
pricing model (Black-Scholes model). The determination of the fair
value of share-based payment awards on the date of grant using the
Black-Scholes model is affected by our stock price as well as
assumptions regarding a number of complex and subjective variables.
These variables include, but are not limited to, our expected stock
price volatility over the term of the awards, actual and projected
employee stock option exercise behaviors, and risk-free interest
rate. If factors change and we employ different assumptions in
future periods, the compensation expense that we record may differ
significantly from what we have recorded in the current
period.
We determine the fair value of the share-based compensation awards
granted to non-employees as either the fair value of the
consideration received or the fair value of the equity instruments
issued, whichever is more reliably measurable. If the fair value of
the equity instruments issued is used, it is measured using the
stock price and other measurement assumptions as of the earlier of
either of (i) the date at which a commitment for performance by the
counterparty to earn the equity instruments is reached, or (ii) the
date at which the counterparty’s performance is
complete.
Estimates of share-based compensation expenses are significant to
our financial statements, but these expenses are based on option
valuation models and will never result in the payment of cash by
us.
The above listing is not intended to be a comprehensive list of all
of our accounting policies. In most cases, the accounting treatment
of a particular transaction is specifically dictated by accounting
principles generally accepted in the United States.
Deferred Taxes
We recognize deferred tax assets and liabilities based on
differences between the financial statement carrying amounts and
tax bases of assets and liabilities, which requires management to
perform estimates of future transactions and their respective
valuations. We review our deferred tax assets for recoverability
and establish a valuation allowance if it is more likely than not
that the Company will not realize the benefit of the net deferred
tax asset. At June 30, 2018 and December 31, 2017, a valuation
allowance has been established. The likelihood of a material change
in the valuation allowance depends on our ability to generate
sufficient future taxable income. In the future, if management
determines that the likelihood exists to utilize the
Company’s deferred tax assets, a reduction of the valuation
allowance could materially increase the Company’s net
deferred tax asset.
ITEM 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of our management,
including our principal executive officer and principal financial
officer, we conducted an evaluation of the effectiveness of the
design and operations of our disclosure controls and procedures, as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”), as of June 30,
2018. Based on this evaluation, and in light of the previously
disclosed material weaknesses in internal controls over financial
reporting, the Company’s Chief Executive Officer, who also
serves as its Principal Financial Officer, concluded that our
disclosure controls and procedures were not
effective.
(b) Changes in internal controls over financial reporting.
There has been no change in our internal control over financial
reporting that occurred during our most recent fiscal year that has
materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting. There has been no
progress towards remediating our previously disclosed material
weakness due to the lack of funding.
PART II - OTHER
INFORMATION
ITEM 1. Legal
Proceedings
As of the date hereof, there are no material pending legal
proceedings to which we are a party to or of which any of our
property is the subject.
ITEM 1A. Risk Factors
Our results of operations and financial condition are subject to
numerous risks and uncertainties described in our Annual Report on
Form 10-K for our fiscal year ended December 31, 2017, filed on
April 17, 2018. You should carefully consider these risk factors in
conjunction with the other information contained in this Quarterly
Report. Should any of these risks materialize, our business,
financial condition and future prospects could be negatively
impacted. As of June 30, 2018, there have been no material changes
to the disclosures made in the above-referenced Form
10-K.
ITEM 2. Unregistered Sales of Equity Securities, and Use of
Proceeds
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
Not Applicable.
ITEM 5. Other Information
None.
ITEM 6. Exhibits
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Exhibit
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Description
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Certification of Chief Executive Officer and Principal Financial
and Accounting Officer required under Rule 13a-14(a) or Rule
15d-14(a) of the Securities and Exchange Act of 1934, as
amended.
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Certification of Chief Executive Officer and Principal Financial
and Accounting Officer required under Rule 13a-14(a) or Rule
15d-14(a) of the Securities and Exchange Act of 1934, as amended,
and 18 U.S.C. Section 1350.
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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101.LAB
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XBRL Taxonomy Extension Label Linkbase
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly
authorized.
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Date: August 20, 2018
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/s/ Shalom Hirschman
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Shalom Hirschman
Principal Executive, Financial and Accounting Officer
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-19-