10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended July 31, 2017
or
o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ___________ to  ___________

Commission File Number 333-161157   

PIVOT PHARMACEUTICALS INC.

(Exact name of registrant as specified in its charter)

British Columbia	N/A
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
1275 West 6th Avenue, Vancouver, British Columbia, Canada	V6H 1A6
(Address of principal executive offices)	(Zip Code)

(604) 805-7783

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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 of 1934 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. x YES    ¨ 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x YES    ¨ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨		Accelerated filer	¨
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ¨ YES    x NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. x YES    ¨ NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

75,847,114 common shares issued and outstanding as of September 15, 2017.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	24
Item 4.	Controls and Procedures	24
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26
SIGNATURES		28

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited interim condensed consolidated financial statements for the period ended July 31, 2017 form part of this quarterly report. All currency references in this report are to U.S. dollars unless otherwise noted. This financial information, in the opinion of management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data. The results of operations for the three and six month periods ended July 31, 2017 are not necessarily indicative of results to be expected for any subsequent period.

3

PIVOT PHARMACEUTICALS INC.

Condensed Consolidated Financial Statements

(Expressed in U.S. dollars)

Period ended July 31, 2017 (unaudited) and January 31, 2017

4

PIVOT PHARMACEUTICALS INC.

Condensed Consolidated Balance Sheets

(Expressed in U.S. dollars)

	July 31, 2017 $			January 31, 2017 $
	(unaudited)
Assets
Current assets
Cash		9,943			112,421
Prepaid and other current assets		23,195			17,337
Total current assets		33,138			129,758
Security deposit		2,900			2,900
Total assets		36,038			132,658
Liabilities and Stockholders’ Deficit
Current liabilities
Accounts payable and accrued liabilities		736,565			996,853
Due to related parties (Note 7)		47,000			22,574
Convertible debenture, net of discount (Note 3)		394,042			275,011
Derivative liability (Note 4)		142,905			312,541
Total liabilities		1,320,512			1,606,979
Stockholders’ Deficit
Common stock: Unlimited shares authorized, without par value, 75,847,114 and 75,647,114 shares issued and outstanding, respectively		7,351,568			7,327,588
Additional paid-in capital		11,764,740			11,211,031
Accumulated other comprehensive income		522,339			584,813
Accumulated deficit		(20,923,121	)		(20,597,753	)
Total stockholders’ deficit		(1,284,474	)		(1,474,321	)
Total liabilities and stockholders’ deficit		36,038			132,658

(The accompanying notes are an integral part of these condensed consolidated financial statements)

5

PIVOT PHARMACEUTICALS INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Expressed in U.S. dollars)

	Three Months Ended July 31, 2017 $			Three Months Ended July 31, 2016 $			Six Months Ended July 31, 2017 $			Six Months Ended July 31, 2016 $
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue		-			-			-			-
Expenses
Foreign exchange (gain) loss		(7,575	)		63,129			62,562			77,359
General and administrative		75,641			72			128,930			974,421
Management fees		132,478			1,122,368			269,773			3,368,947
Professional fees		48,211			(6,171	)		73,008			90,483
Total expenses		248,755			1,179,398			534,273			4,511,210
Loss from operations		(248,755	)		(1,179,398	)		(534,273	)		(4,511,210	)
Other income (expense)
Amortization of discount on convertible debenture		–			–			(105,392	)		–
Gain on change in fair value of derivative liabilities		91,564			–			171,451			–
Gain on settlement of debts		160,000			–			160,000			–
Interest expense		(8,365	)		–			(17,154	)		–
Total other income (expense)		243,199			–			208,905			–
Net loss		(5,556	)		(1,179,398	)		(325,368	)		(4,511,210	)
Other comprehensive income (loss)
Foreign currency translation adjustment		2,081			(36,363	)		62,473			150,166
Net comprehensive loss		(3,475	)		(1,215,761	)		(262,895	)		(4,361,044	)
Net income (loss) per share, basic and diluted		(0.00	)		(0.02	)		(0.00	)		(0.06	)
Weighted average shares outstanding – basic and diluted		75,737,423			75,179,627			75,693,254			75,010,761

(The accompanying notes are an integral part of these condensed consolidated financial statements)

6

PIVOT PHARMACEUTICALS INC.

Condensed Consolidated Statements of Cash Flows

(Expressed in U.S. dollars)

	Six Months Ended July 31, 2017 $			Six Months Ended July 31, 2016 $
	(unaudited)			(unaudited)
Operating activities
Net loss		(325,368	)		(4,511,210	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of discount on convertible debenture		105,392			–
Fair value of stock options vested		773			3,858,395
Gain on change in fair value of derivative liabilities		(171,451	)		–
Gain on settlement of debts		(160,000	)		–
Stock issued for services		23,986			252,598
Changes in operating assets and liabilities:
Prepaids and other current assets		(5,376	)		13,686
Accounts payable and accrued liabilities		403,022			271,953
Net cash used in operating activities		(129,022	)		(114,578	)
Financing activities
Proceeds from related party advances		25,500			33,000
Net cash provided by financing activities		25,500			33,000
Effects of exchange rate changes on cash		1,044			12,989
Decrease in cash		(102,478	)		(68,589	)
Cash – beginning of period		112,421			71,639
Cash – end of period		9,943			3,050
Supplemental disclosures:
Interest paid		–			–
Income tax paid		–			–
Non-cash investing and financing activities
Capital contribution through forgiveness of debt		520,425			-

(The accompanying notes are an integral part of these condensed consolidated financial statements)

7

PIVOT PHARMACEUTICALS INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Period ended July 31, 2017

(Expressed in U.S. dollars)

1.

Nature of Operations and Continuance of Business

Pivot Pharmaceuticals Inc. (the “Company”) was incorporated in British Columbia under the Business Corporations Act on June 10, 2002. On April 7, 2015, the Company changed its name from Neurokine Pharmaceuticals Inc. to Pivot Pharmaceuticals Inc. The Company is in the business of developing and commercializing therapeutic pharmaceutical products, focused on the strategy of identifying new therapeutic treatments to address unmet medical needs in women’s health. These consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As of July 31, 2017, the Company has not earned any revenue, has a working capital deficit of $1,287,374 and an accumulated deficit of $20,923,121. The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional financing. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company be unable to continue as a going concern.

2. Significant Accounting Policies

(a)	Basis of Presentation
	The consolidated financial statements and the related notes of the Company are prepared in accordance with generally accepted accounting principles in the United States and are expressed in U.S. dollars. The Company’s fiscal year-end is January 31.

(b)

Use of Estimates

The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, assumptions used to determine the fair values of stock-based compensation and derivative liabilities and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

(c)

Interim Financial Statements

These interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s condensed consolidated financial position, results of operations and cash flows for the periods shown. The condensed consolidated results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. Certain disclosures and financial information have been condensed in accordance with generally accepted accounting principles in the United States.

8

PIVOT PHARMACEUTICALS INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Period ended July 31, 2017

(Expressed in U.S. dollars)

2. Significant Accounting Policies (continued)

(d)	Basis of Consolidation
	The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The consolidating entities include:

	% of ownership	Jurisdiction
Pivot Pharmaceuticals Inc.	Parent	Canada
IndUS Pharmaceuticals, Inc. (“IndUS”)	100%	USA

(e)

Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings Per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method for all exercisable options and warrants and the if-converted method for all outstanding convertible debentures. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As at July 31, 2017, the Company had 5,908,347 (January 31, 2017 – 9,692,748) potentially dilutive shares.

(f)

Financial Instruments and Fair Value Measures

ASC 820, Fair Value Measurements, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2: Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3: Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist principally of cash, amounts receivable, accounts payable and accrued liabilities, due to related parties and convertible debenture. Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

9

PIVOT PHARMACEUTICALS INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Period ended July 31, 2017

(Expressed in U.S. dollars)

2. Significant Accounting Policies (continued)

(g)	Recent Accounting Pronouncements
	The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial position or results of operations.

3.	Convertible Debenture
	On September 30, 2016, the Company issued a convertible debenture with a non-related party for $500,000 Canadian Dollars ($380,411 US Dollars at September 30, 2016) (“Initial Advance”). The debenture is secured under a General Security Agreement, bears interest at 8% per annum and matures on the earlier of:

·	The date the lender demands repayment of principal and interest following an event of default,
·	The date of a dissolution event,
·	The date of a liquidity event, and
·	March 30, 2017.
The Company may request one or more additional advances of up to an aggregate amount of $1,000,000 Canadian Dollars (“Additional Advances”) provided that the aggregate amount under the convertible debenture does not exceed $1,500,000 Canadian Dollars. The note, including the Initial Advance and any Additional Advances, is convertible into common shares at a conversion price equal to the average closing market price of the Company’s common stock during the five day period leading up to the conversion date. The Company recorded the conversion feature of the convertible debenture as a derivative liability at an estimated fair value of $134,892 with a corresponding discount to the convertible debenture (Note 4). Pursuant to the convertible loan agreement, the Company issued 434,622 share purchase warrants to which the lender may acquire an interest in the Company equal to 12% of the maximum principal amount outstanding at any time at a price of $0.10 per share, which equates to the ten day average trading price of the Company’s common stock determined as at September 30, 2016. The Company calculated the 434,622 share purchase warrants based on the maximum outstanding principal balance on the convertible loan as of September 30, 2016. The Company recorded the share purchase warrant at an estimated fair value of $20,154 with a corresponding discount to the convertible debenture (Note 6). As of July 31, 2017, the carrying value of the convertible debenture is $394,042 (January 31, 2017 - $275,011) which is net of debt discounts related to conversion feature, financing costs and warrants of $nil, $nil and $nil, respectively (January 31, 2017 - $94,709, $6,126 and $6,477, respectively). As of July 31, 2017, interest accrued on the convertible debenture is $27,748 (January 31, 2017 - $10,307) and the fair value of the conversion option derivative liability is $142,905 (January 31, 2017 - $312,541). As of July 31, 2017, the Company has not repaid the convertible debenture, which is in default.

10

PIVOT PHARMACEUTICALS INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Period ended July 31, 2017

(Expressed in U.S. dollars)

4.	Derivative Liability
	Derivative liability consists of convertible debenture with variable conversion price (Note 3). The fair value of derivative liability as at July 31, 2017 and January 31, 2017 is as follows:

	July 31, 2017 $		January 31, 2017 $
September 2016 convertible debenture		142,905		312,541
		142,905		312,541

The fair value of derivative financial liability was determined using the binomial option pricing model, using the following assumptions:

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)
As at issuance date:
September 2016 convertible debenture		296	%		0.45	%		0	%		0.50
As at July 31, 2017:
September 2016 convertible debenture		162	%		1.13	%		0	%		0.25

5.

Stock Options

Effective December 30, 2015, the Company adopted a stock option plan. Under this plan, the Company may grant options to its directors, officers, employees and consultants up to an amount as determined by the Company and will be no more than a percentage of its outstanding common stock as may be required by the stock exchange the Company is listed with. The exercise price of the stock options will be determined by the Company and will be no less than any minimum exercise price as may be required by the stock exchange the Company is listed with. The following table summarizes the continuity of the Company’s stock options:

	Number of Options		Weighted Average Exercise Price (US$)		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (US$)
Outstanding, January 31, 2017		15,520,833		0.38		4.2		68,599
Granted		–		–		–		–
Forfeited		–		–		–		–
Outstanding, July 31, 2017		15,520,833		0.38		3.73		1,590

11

PIVOT PHARMACEUTICALS INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Period ended July 31, 2017

(Expressed in U.S. dollars)

5.	Stock Options (continued)
	The fair value of stock-based compensation expense was estimated using the Black-Scholes option pricing model and the following assumptions:

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)
29,000 options expiring on May 2, 2021		394	%		1.68	%		0	%		3.7

Additional information regarding stock options as of July 31, 2017, is as follows:

Options Outstanding	Options Exercisable		Exercise Price $		Expiry Date
200,000		200,000		0.25	November 30, 2020
4,000,000		4,000,000		0.10	December 14, 2020
7,250,000		7,250,000		0.70	February 22, 2021
29,000		28,000		0.34	May 2, 2021
4,000,000		4,000,000		0.10	December 14, 2021
41,833		41,833		0.05	January 23, 2022
15,520,833		15,519,833

$37 of stock-based compensation have yet to be recognized and will be recognized in future periods.

6.	Share Purchase Warrant
	The following table summarizes the continuity of share purchase warrant:

	Number of Warrants		Weighted Average Exercise Price $
Balance, January 31, 2017		434,622		0.10
Granted		–		–
Balance, July 31, 2017		434,622		0.10

As at July 31, 2017, the following share purchase warrant was outstanding:

Number of Warrants	Exercise Price $		Expiry Date
434,622		0.10	Upon repayment of convertible debenture (Note 3)

Pursuant to the convertible debenture (Note 3), the Company will be required to issue additional share purchase warrants on any Additional Advances to which the lender may acquire an interest in the Company equal to 12% of the maximum principal amount outstanding.

12

PIVOT PHARMACEUTICALS INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Period ended July 31, 2017

(Expressed in U.S. dollars)

7.

Related Party Transactions

As at July 31, 2017, the Company owed $3,737 (January 31, 2017 - $4,154) to a director of the Company, which is unsecured, non-interest bearing, and due on demand. As at July 31, 2017, the Company owed $43,264 (January 31, 2017 – $18,420) to the Company’s past Chief Executive Officer (Note 10). At July 31, 2017, $552,889 of accrued management fees to the Company’s Chief Financial Officer and Chief Business Officer were forgiven.

8.	Fair Value Measurements
	The Company’s financial liabilities carried at fair value measured on a recurring basis as of July 31, 2017 and January 31, 2017, consisted of the following:

	Total fair value at July 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative liability (1)	$	142,905	$	-	$	142,905	$	-

	Total fair value at January 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative liability (1)	$	312,541	$	-	$	312,541	$	-

_______________
(1)	Derivative liability amounts are due to the embedded derivatives of convertible debenture issued by the Company and are calculated using the binomial option pricing model (Note 4).
The Company has no financial assets carried at fair value.

9.	Commitments
	The Company’s minimum future lease commitments are:

	$
2018		12,000
2019		23,900
2020		12,000

10.

Subsequent Events

On September 11, 2017, the Company entered into an exchange agreement with its subsidiary, IndUS, and its Chief Executive Officer whereby the Company exchanged all of its outstanding common stock of IndUS for 3,800,000 common stock of the Company, upon with its Chief Executive Officer resigned. As part of this exchange agreement, the Company provided its past Chief Executive Officer with a non-interest bearing promissory note of $200,000 payable at the earlier of 45 days after the completion of a financing of at least $2,000,000 and September 10, 2027, and in discharge of all obligations with respect to all accrued and unpaid salary through September 11, 2017. Approximately $350,000 of liabilities belonging to IndUS will be assumed by the Company’s past Chief Executive Officer.

13

PIVOT PHARMACEUTICALS INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Period ended July 31, 2017

(Expressed in U.S. dollars)

10.

Subsequent Events (continued)

Concurrently, on September 11, 2017, the Company appointed Dr. Patrick Frankham as its interim Chief Executive Officer. On September 12, 2017, the Company entered into a licensing agreement with Altum Pharmaceuticals Inc. (“Altum”) whereby the Company was granted worldwide rights to BiPhasix Transdermal Drug Delivery Technology (“BiPhasix Technology”) for the delivery and commercialization of cannabinoids, cannabidiol (“CBD”), and tetrahydrocannabinol-based products. Financial consideration includes:

· Issuance of 2,500,000 shares of common stock on closing of the licensing agreement (issuable as at September 15, 2017);

· Issuance of 2,500,000 shares of common stock of the Company upon Health Canada Natural Product Number (“NPN”) approval for a CBD product developed using the BiPhasix Technology;

· Five percent (5%) royalties on annual net sales; and

· For pharmaceutical products:

o $1,000,000 payable upon first Investigative New Drug Application approval;

o $1,000,000 payable upon positive outcome of Phase II trial in first indication; and

o $2,000,000 payable upon New Drug Application approval.

14

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report on Form 10-Q contains certain forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition, promotional costs and the risk of declining revenues. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors. These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements. The following discusses our financial condition and results of operations based upon our unaudited financial statements which have been prepared in conformity with accounting principles generally accepted in the United States. It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

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

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in U.S. Dollars (US$) and all references to “common shares” refer to the common shares in our capital stock.

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

General Overview

We are a development stage pharmaceutical company. We were incorporated in the Province of British Columbia, Canada under the name “649186 B.C. Ltd.”, on June 10, 2002. On September 9, 2003, we changed our name to “Xerxes Health Corp.” and on June 26, 2007, we changed our name to “Neurokine Pharmaceuticals Inc.”.

Effective June 4, 2014, we filed with the British Columbia Registrar of Companies a Form 11, Notice of Alteration, wherein we increased our authorized share capital from 500,000,000 common shares without par value to an unlimited number of common shares without par value. The increase of authorized capital was approved by our stockholders at the annual and special meeting held on June 3, 2014.

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

 

15

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

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

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

On November 20, 2015, we completed the acquisition of IndUS Pharmaceuticals, Inc. (“IndUS”), a Delaware corporation, pursuant to an Agreement and Plan of Merger and Acquisition Agreement dated as of November 4, 2015 among our company, Pivot Pharma U.S. Inc., our wholly owned subsidiary, IndUS and Sindu Research Laboratories Pvt Ltd. As consideration for the purchase, we issued 4,512,500 shares of common stock on November 23, 2015 and 237,500 shares of common stock on December 4, 2015 and granted 41,833 stock options pursuant to the Agreement and Plan of Merger. As part of the acquisition, we appointed Dr. Pravin Chaturvedi as our new Chief Executive Officer and Director. On September 11, 2017, we completed an exchange agreement whereby the Company exchanged with Dr. Chaturvedi 100% of its shares of common stock of IndUS for 3,800,000 shares of common stock of Pivot, upon which Dr. Chaturvedi resigned as Chief Executive Officer and Director.

On September 12, 2017, we entered into a licensing agreement with Altum Pharmaceuticals Inc. (“Altum”) whereby we were granted worldwide rights to BiPhasix Transdermal Drug Delivery Technology (“BiPhasix Technology”) for the delivery and commercialization of cannabinoids, cannabidiol (“CBD”), and tetrahydrocannabinol (“THC”) based products. Financial consideration included:

· Issuance of 2,500,000 shares of common stock on closing of the licensing agreement (issuable as at September 15, 2017);

· Issuance of 2,500,000 shares of common stock of the Company upon Health Canada Natural Product Number (“NPN”) approval for a CBD product developed using the BiPhasix Technology;

· Five percent (5%) royalties on annual net sales; and

· For pharmaceutical products:

o $1,000,000 payable upon first Investigative New Drug Application approval;

o $1,000,000 payable upon positive outcome of Phase II trial in first indication; and

o $2,000,000 payable upon New Drug Application approval..

Our principal executive office is located at 1275 West 6th Avenue, Vancouver, B.C. Canada V6H 1A6. Our telephone number is (604) 805-7783.

Our Current Business

We are an emerging biopharmaceutical company engaged in the development and commercialization of therapeutic pharmaceuticals and nutraceuticals, as well as drug delivery platform technologies.

On the pharmaceutical side, Pivot focuses on development of proprietary drug delivery technologies for multiple indications using small molecules, biological and botanical (e.g. cannabinoids) products to treat unmet medical needs. Pivot has in-licensed a patented topical transdermal drug delivery technology platform, BiPhasix, for delivery of cannabinoids.

On the nutraceutical side, Pivot focuses on the research, development, and commercialization of cannabinoid based nutraceuticals. We will generate data to support the safety and efficacy of cannabinoids as Natural Health Product (“NHPs”) as outlined in Health Canada Regulations in order to make particular health claims. Health Canada publishes the Natural Health Products Regulations (“NHPR”) which set out the requirements governing the sale, manufacture, packaging, labelling, importation, distribution and storage of NHPs.

According to Health Canada, the objective of the NHPR is to provide reasonable assurance that products offered for sale in Canada are safe, efficacious and of high quality. Pivot may also follow applicable and harmonized regulations for product development and commercialization in the US, European Union and Asia Pacific regions. Alternatively, we will commercialize certain cannabinoid products with a Licensed Producer and/or Licensed Distributor as per the regulations concerning Access to Cannabis for Medical Purposes Regulations (“ACMPR”) since certain active ingredients in cannabinoids remain restricted until new legislation permits ease of development and distribution in 2018.

 

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Lastly, Pivot may also develop products containing cannabinoid active ingredients obtained from industrial hemp according to the Industrial Hemp Regulations (“IHR”) permitting such products provided they are sourced from industrial hemp. Otherwise stated, this means that the plants and plant parts of the genera Cannabis, the leaves and flowering heads of which do not contain more than 0.3% THC w/w, and includes the derivatives of such plants and plant parts.

Our pipeline targets indications such as cancer supportive care, pain and inflammation, women’s sexual dysfunction, dermatology and eye disease.

Our overall strategy includes the following:

1.	Acquire market-ready natural health products from third-parties for rebranding and re-sale;
2.	Acquire cannabinoid-based food additives for consumer sales;
3.	Develop cannabinoid-based natural health products using our BiPhasix topical platform technology;
4.	Develop pharmaceutical products delivered using our BiPhasix topical platform technology;
5.	Obtain partnerships with Health Canada approved Authorized Licensed Producers and/or Licensed Distributors, which can provide restricted and non-restricted cannabinoids as per the ACMPR or the IHR;
6.	Acquire novel proprietary drug delivery technologies, for example, metered dose, intra-nasal, suppositories;
7.	Make an application at the appropriate time to acquire Health Canada’s Authorized Licensed Producers and Licensed Dealers licenses as per the ACMPR;
8.	Out-license our platform technologies to Licensed Producers or Licensed Distributors and other drug developers;
9.	Secure and develop further intellectual property;
10.	Opportunistically acquire later‑stage drug candidates that provide new treatment options to address unmet medical needs in health care; and
11.	Establish partnerships with large and specialty pharmaceutical companies and/or biotechnology companies to collaboratively develop and/or commercialize our products.

Our Research and Development Strategy

Our management team has implemented a business minded and cost conscious approach to product research and development by focusing on development of novel therapies to address unmet needs in health care. Our research and development strategy will apply novel drug delivery options for new and/or existing drugs or NHPs.

For a drug to be successful it must be both efficacious and acceptably safe. Before a drug may be commercially marketed, it must be scrutinized and approved by applicable health authorities (such as Health Canada and the FDA in the United States) in each country or jurisdiction where it is sought to be sold. In pharmaceutical research and development, clinical trials are conducted to assess the safety and efficacy of the drug and the data to be collected for such new drugs. Health authorities then scrutinize the preclinical and clinical data and determine, based on the results, whether a drug may be sold to the public. Similarly, clinical trials can only take place once satisfactory information has been gathered on the quality of the product and its non-clinical safety, and approval to conduct clinical trials has been granted by the appropriate health authority in the country where the trial is scheduled to take place.

 

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Clinical trials involving new drugs are commonly classified into four phases. Each phase of the drug approval process is treated as a separate clinical trial. The drug development process will normally proceed through all four phases over many years. If the drug successfully passes through Phases I, II and III, it will usually be approved by the national regulatory authority for use in the general population. Phase IV trials are ‘post approval’ studies. Due to the considerable cost that may be required to complete a full series of clinical trials, the burden of paying for all the necessary people and services is usually borne by the sponsor, who may be the pharmaceutical or biotechnology company that developed the drug that is the subject of the study. Since the diversity of roles may exceed the resources of the sponsor, clinical trials are often managed by outsourced partners such as contract research organizations. Furthermore, approval rates for new drugs at each clinical trial stage are prohibitively low, which may require the sponsor to finance additional trials or abandon the drug under development altogether.

We will also develop products regulated under Canada’s Natural Health Products Guidance and support claims with clinical based data as per current regulations.

Preclinical safety studies for pharmaceutical or NHP product development will be conducted over the next 12 months to advance at least one of our product candidates.

Our Product Candidates

PGS-N005 (Female Sexual Dysfunction CBD Topical Cream)

Using our BiPhasix platform technology, we will develop and commercialize a topical cream containing CBDs (“PGS-N005”) for perimenopausal, menopausal and post-menopausal women who have noticed a decline in sexual desire and response, known as hypoactive sexual desire disorder. Up to 63% of sexually active women in the U.S. might be affected by female sexual dysfunction (“FSD”). While erectile dysfunction in men has been extensively researched, very little has been completed on FSD which can involve reduced sex drive, difficulty becoming aroused, vaginal dryness, lack of orgasm and decreased sexual satisfaction. The FSD market in the U.S. is estimated to exceed $4 billion with over 50 million potential sufferers.¹

PGS-N007 (Psoriasis BiPhasix CBD Topical Cream)

Using our BiPhasix platform technology, we will develop and commercialize a topical cream containing CBDs (“PGS-N007”) for psoriasis. Preclinical research has shown that CBD has potent anti-inflammatory properties suggesting that cannabinoids may be helpful for inflammation-related skin conditions like psoriasis and eczema. CBD, THC and other cannabinoids are anti-psoriasis agents. Under a psoriasis condition, skin cells are replaced every three to five days rather than the normal 30 days. This excessive and rapid growth of the epidermal layer of the skin generates red, itchy and scaly patches, which may be localized or completely cover the body.²

Psoriasis is generally considered an autoimmune and genetic disease triggered by environmental factors. Cold, medications, infections, traumas, body and psychological stress may play a role in starting the disease. Psoriasis is not contagious and there is no current cure for it. However, various treatments can control the symptoms. Psoriasis is associated with an increased risk of psoriatic arthritis, lymphomas, cardiovascular disease, Crohn's disease and depression. Psoriatic arthritis affects up to 30% of individuals with psoriasis.

__________

¹ https://www.researchgate.net/publication/7977139_Female_sexual_dysfunction

² https://www.royalqueenseeds.com/blog-cbd-can-relieve-psoriasis-by-balancing-immune-systems-response-n423 

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Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the period ended July 31, 2017, which are included herein.

Our operating results for the three and six months ended July 31, 2017 and 2016 are summarized as follows:

	Three Months Ended						Six Months Ended
	July 31,						July 31,
	2017			2016			2017			2016
Revenue	$	Nil			Nil		$	Nil		$	Nil
Depreciation	$	Nil			Nil		$	Nil		$	Nil
Foreign exchange (gain) loss	$	(7,575	)	$	63,129		$	62,562		$	77,359
General and administrative	$	75,641		$	72		$	128,930		$	974,421
Management fees	$	132,478		$	1,122,368		$	269,773		$	3,368,947
Professional fees	$	48,211		$	(6,171	)	$	73,008		$	90,483
Total Other (Income) Expenses	$	(243,199	)	$	Nil		$	(208,905	)	$	Nil
Net Income (Loss)	$	(5,556	)	$	(1,179,398	)	$	(325,368	)	$	(4,511,210	)

For the three months ended July 31, 2017, our net loss decreased by $1,173,842 as compared to the three months ended July 31, 2016. During the three months ended July 31, 2016, $795,248 of share-based compensation was recognized related to vesting of stock options granted to management, directors, consultants and advisors compared to $4 for the three months ended July 31, 2017. In addition, during the three months ended July 31, 2017, we recognized $160,000 of gain on settlement of debts related to accrued consulting fees forgiven.

For the six months ended July 31, 2017, our net loss decreased by $4,185,842 as compared to the six months ended July 31, 2016 due to $3,858,395 of share-based compensation recognized during the six months ended July 31, 2016 related to vesting of stock options as compared to $773 recognized during the six months ended July 31, 2017. In addition, during the six months ended July 31, 2017, we recognized $160,000 of gain on settlement of debts related to accrued consulting fees forgiven.

Revenue

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

Liquidity and Financial Condition

Working Capital

	At			At
	July 31,			January 31,
	2017			2017
Current Assets	$	33,138		$	129,758
Current Liabilities	$	1,320,512		$	1,606,979
Working Capital (Deficit)	$	(1,287,374	)	$	(1,477,221	)

Our total current assets as of July 31, 2017 were $33,138 as compared to total current assets of $129,758 as of January 31, 2017. The decrease was primarily due to operating expenditures paid during the period. Our total current liabilities as of July 31, 2017 were $1,320,512 as compared to total current liabilities of $1,606,979 as of January 31, 2017. The decrease in current liabilities was primarily attributed to forgiveness of accrued management and consulting fees during the three months ended July 31, 2017.

 

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Cash Flows

	Six Months Ended
	July 31,
	2017			2016
Net Cash Used In Operating Activities	$	(129,022	)	$	(114,578	)
Net Cash Provided By Financing Activities	$	25,500		$	33,000
Effects of Exchange Rate Changes on Cash	$	1,044		$	12,989
Increase (Decrease) in Cash During the Period	$	(102,478	)	$	(68,589	)

Operating Activities

During the six months ended July 31, 2017, our cash used by operating activities increased by $14,444 when compared to cash used in operating activities during the six months ended July 31, 2016. The increase in cash used for operating activities was a result of payments made related to professional fees.

Investing Activities

We did not have any investing activities during the six months ended July 31, 2017 and 2016.

Financing Activities

During the six months ended July 31, 2017, we received $25,500 (2016 - $33,000) in cash from financing activities.

In order for our company to expand its operations, we will require additional funds. The required additional funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we have negative cash flows from operating activities and may continue to be unprofitable. We will need to raise additional funds in the immediate future in order to proceed with our expanded operations. We have negative cash flows from operating activities. If we cannot generate sufficient revenues to operate with positive cash flows from operating activities or are unable to raise additional funds, we may suspend or cease our operations.

 

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In order for the Company to expand its operations and pursue its business plans related to development of its product candidates, we will require additional funds. Specifically, we estimate our operating expenses and working capital requirements for the next 12 months for our expanded operations to be as follows:

	Estimated Expenses (C$)
Research and Development Costs:
Studies of active pharmaceutical ingredient		17,500
Stage 1 – BiPhasix cream development without active pharmaceutical ingredient		35,750
Stage 2 – BiPhasix creadm development with active pharmaceutical ingredient		145,000
Scientific data		66,500
Supply of active pharmaceutical ingredient		80,000
Regulatory		115,000
Sales and Marketing Costs:
Market commercialization		215,000
Entertainment and promotion		20,000
Investor relations		60,000
Travel		60,000
Operating Expenses:
Insurance		40,000
Professional fees		120,000
Public company expenses		65,000
Salaries and benefits		800,000
Telephone and internet		6,000
Vehicles and transportation		6,000
Total:		1,851,750

Based on our expanded planned expenditures, we will require additional funds of approximately C$1.9 million to proceed with our expanded business plan over the next 12 months. If we secure less than the full amount of financing that we require, we will not be able to carry out our complete business plan and we will be forced to proceed with a scaled back business plan based on our available financial resources.

Funds raised will be used towards the recruitment of appropriate management and research and development personnel, as well as towards product development expenditures. Specifically, the funds will be used to cover research and development expenses associated with 1) manufacturing scale-up of both PGS-N005 and PGS-N007 at a Good Manufacturing Practices (“GMP”) certified, high potency drug manufacturing facility; 2) development and manufacture of formulation of PGS-N005 and PGS-N007 at a GMP-certified product manufacturing facility for administration of the drug candidates in animals (for safety evaluation) and subsequently to humans; and 3) submission to appropriate regulatory authorities for NHP registration.

 

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Inflation

The amounts presented in the consolidated financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

The discussion and analysis of our consolidated financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our consolidated financial statements.

Use of Estimates

The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Our company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, assumptions used to determine the fair values of stock-based compensation and derivative liabilities, and deferred income tax asset valuation allowances. Our company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by our company may differ materially and adversely from our company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Long-lived Assets

In accordance with ASC 360, “Property, Plant and Equipment”, our company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

 

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Stock-Based Compensation

Our company records stock-based compensation in accordance with ASC 718, Compensation – Stock-Based Compensation, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

Financial Instruments and Fair Value Measures

ASC 820, Fair Value Measurements, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Our company’s financial instruments consist principally of cash, accounts payable and accrued liabilities and amounts due to related parties. Pursuant to ASC 820, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets and derivative liabilities is determined based on “Level 2” inputs, as determined by observable market data. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations

Foreign Currency Translation

The functional currency of our parent entity, Pivot Pharmaceuticals Inc., is the Canadian dollar and the functional currency of our subsidiary is the US dollar. Our company’s presentation currency is the US dollar.

Monetary assets and liabilities are translated using the exchange rate prevailing at the consolidated balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Expenses are translated at average rates for the period. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

Results of operations are translated into our company’s presentation currency, US dollars, at an appropriate average rate of exchange during the year. Net assets and liabilities are translated to US dollars for presentation purposes at rates of exchange in effect at the end of the period. Gains or losses arising on translation are recognized in other comprehensive income (loss) as foreign currency translation adjustments.

Recent Accounting Pronouncements

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

 

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Item 3. Quantitative and Qualitative Disclosure About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our chief executive officer (our principal executive officer) and our chief financial officer (principal financial officer and principal accounting officer), as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer (our principal executive officer) and our chief financial officer (principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures as of quarter covered by this report. Based on the evaluation of these disclosure controls and procedures our chief executive officer (our principal executive officer) and our chief financial officer (principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective.

Changes in Internal Controls

During the quarter covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

Item 1A. Risk Factors

As a “small reporting company”, we are not required to provide the information required by this Item.

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.

 

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Item 6. Exhibits

Exhibit Number	Description
(3)	Articles of Incorporation and Bylaws
3.1	Articles of Incorporation 649186 B.C. Ltd. (incorporated by reference from our Registration Statement on Form S-1 filed on August 7, 2009)
3.2	“Company Act” Memorandum of 649186 B.C. Ltd. Certificate of Amendment (incorporated by reference from our Registration Statement on Form S-1 filed on August 7, 2009)
3.3	Certificate of Filing of 649186 B.C. Ltd. (incorporated by reference from our Registration Statement on Form S-1 filed on August 7, 2009)
3.4	Certificate of Incorporation of 649186 B.C. Ltd. (incorporated by reference from our Registration Statement on Form S-1 filed on August 7, 2009)
3.5	Certificate of Name Change of 649186 B.C. Ltd. to Xerxes Health Corp. (incorporated by reference from our Registration Statement on Form S-1 filed on August 7, 2009)
3.6	Transition Application of Xerxes Health Corp. (incorporated by reference from our Registration Statement on Form S-1 filed on August 7, 2009)
3.7	Certificate of Name Change of Xerxes Health Corp. to Neurokine Pharmaceuticals Inc. (incorporated by reference from our Registration Statement on Form S-1 filed on August 7, 2009)
3.8	Notice of Alteration to Authorized Share Structure (incorporated by reference from our Registration Statement on Form S-1 filed on August 7, 2009)
3.9	Notice of Alteration to Authorized Share Structure (incorporated by reference from our Current Report on Form 8-K filed on June 4, 2014)
3.10	Form 11 Notice of Alteration (incorporated by reference from our Current Report on Form 8-K filed on October 9, 2014)
3.11	Articles (incorporated by reference from our Current Report on Form 8-K filed on October 9, 2014)
3.12	Notice of Alteration changing name to Pivot Pharmaceuticals Inc. (incorporated by reference to our Current Report on Form 8-K filed on April 17, 2015)
3.13	Certificate of Name Change of Neurokine Pharmaceuticals Inc. to Pivot Pharmaceuticals Inc. (filed on June 17, 2015 with our Annual Report on Form 10K/A)
(10)	Material Contracts
10.1	Non-Exclusive License Agreement with Globe Laboratories Inc. dated June 17, 2008 (incorporated by reference to our Registration Statement on Form S-1/A filed on December 3, 2009)
10.2	Clinical Trial Services Agreement with Virtus Clinical Development (Pty) Limited dated March 1, 2009 (incorporated by reference to our Registration Statement on Form S-1/A filed on March 4, 2010)
10.3	Master Service Agreement with Northern Lipids Inc. dated October 2, 2007 (incorporated by reference to our Registration Statement on Form S-1/A filed on December 3, 2009)
10.4	Assignment of Invention (NK-001) dated January 30, 2008 (incorporated by reference to our Registration Statement on Form S-1/A filed on December 3, 2009)
10.5	Assignment of Invention (NK-002) dated April 18, 2008 (incorporated by reference to our Registration Statement on Form S-1/A filed on December 3, 2009)
10.6	Subscription Agreement with Ahmad Doroudian (incorporated by reference to our Form 8-K filed on August 12, 2010)
10.7	Debt Settlement Subscription Agreement dated September 26, 2013 with Ahmad Doroudian (incorporated by reference to our Quarterly Report on Form 10-Q filed on December 16, 2013)
10.8	Director Services Agreement dated February 25, 2015 with Barbara-Jean Bormann-Kennedy (incorporated by reference to our Current Report on Form 8-K filed on March 26, 2015)
10.9	Director Services Agreement dated February 25, 2015 with Dr. Patrick Frankham (incorporated by reference to our Current Report on Form 8-K filed on March 26, 2015)

 

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Exhibit Number	Description
10.10	Director Services Agreement dated February 26, 2015 with Dr. Wolfgang Renz (incorporated by reference to our Current Report on Form 8-K filed on March 26, 2015)
10.11	Consulting Services Agreement dated February 25, 2015 with Dr. Giora Davidai (incorporated by reference to our Current Report on Form 8-K filed on March 26, 2015)
10.12	Director Services Agreement dated November 19, 2015 with Dr. Patrick Frankham (incorporated by reference to our Quarterly Report on Form 10 Q filed on December 15, 2015)
10.13	Director Services Agreement dated November 19, 2015 with Dr. Wolfgang Renz (incorporated by reference to our Quarterly Report on Form 10 Q filed on December 15, 2015)
10.14	Consulting Services Agreement dated November 19, 2015 with Dr. Giora Davidai (incorporated by reference to our Quarterly Report on Form 10-Q filed on December 15, 2015)
10.15	Plan of Merger and Acquisition Agreement between our company and IndUS Pharmaceuticals, Inc., dated November 4, 2015 (incorporated by reference to our Current Report on Form 8-K filed on November 23, 2015 and our Current Report on Form 8-K/A filed on February 3, 2016)
10.16	Employment Agreement dated November 20, 2015 with Dr. Pravin Chaturvedi (incorporated by reference to our Quarterly Report on Form 10-Q filed on December 15, 2015)
10.17	Employment Agreement dated February 1, 2016 with Dr. Ahmad Doroudian (filed on April 29, 2016 with our Annual Report on Form 10-K)
10.18	Employment Agreement dated February 1, 2016 with Moira Ong (filed on April 29, 2016 with our Annual Report on Form 10-K)
10.19	Consulting Services Agreement dated February 1, 2016 with Soho Capital Inc. (filed on April 29, 2016 with our Annual Report on Form 10-K)
10.20*	Convertible debenture agreement dated September 29, 2016 with Avro Capital Partners Inc.
10.21	Exchange Agreement between our company, IndUS Pharmaceuticals, Inc. and Pravin Chaturvedi, dated September 11, 2017 (incorporated by reference to our Current Report on Form 8-K filed on September 12, 2017)
10.22	Licensing Agreement between our company and Altum Pharmaceuticals Inc. dated September 12, 2017 (incorporated by reference to our Current Report on Form 8-K filed on September 12, 2017)
10.23*	Debt Forgiveness Agreement dated July 31, 2017 between our company and Dr. Ahmad Doroudian
10.24*	Debt Forgiveness Agreement dated July 31, 2017 between our company and Moira Ong
10.25*	Debt Forgiveness Agreement dated July 31, 2017 between our company and Soho Capital Inc.
(31)	Rule 13a-14(d)/15d-14(d) Certifications
31.1*	Section 302 Certification under the Sarbanes-Oxley Act of 2002 of Principal Executive Officer
31.2*	Section 302 Certification under the Sarbanes-Oxley Act of 2002 of Principal Financial Officer
(32)	Section 1350 Certifications
32.1*	Section 906 Certification under the Sarbanes-Oxley Act of 2002 of Principal Executive Officer
32.2*	Section 906 Certification under the Sarbanes-Oxley Act of 2002 of Principal Financial Officer
99	Additional Exhibits
99.1	Audit Committee Charter (filed on June 17, 2015 with our Annual Report on Form 10K/A)
99.2	Stock Option Plan (filed on November 25, 2015 with our Definitive Proxy Statement on Schedule 14A)
101*	Interactive Data Files
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

__________

* Filed herewith

 

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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.

	PIVOT PHARMACEUTICALS INC.
	(Registrant)
Dated: September 15, 2017	/s/ Patrick Frankham
	Dr. Patrick Frankham
	Chief Executive Officer and Director
	(Principal Executive Officer)
Dated: September 15, 2017	/s/ Moira Ong
	Moira Ong
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

28

EX-10.20

EXHIBIT 10.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EX-10.23

EXHIBIT 10.23

DEBT FORGIVENESS AGREEMENT

This Debt Forgiveness Agreement (“Agreement”), entered into effective July 31, 2017, by and between Pivot Pharmaceuticals Inc. (the “Company”) and Ahmad Doroudian (“Lender”), in reference to the following:

WHEREAS, the Company is indebted to Lender for an amount equal to US$272,000 for accrued and unpaid salary (the “Debt”);

WHEREAS, subject to certain conditions contained herein, Lender has determined to forgive the Debt in its entirety; and

WHEREAS, the Company has determined that the forgiveness of the Debt is in the best interest of the Company.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency are hereby acknowledged, the parties agree as follows:

1. Debt Forgiveness. Lender hereby forgives the Debt in its entirety.

2. Representations and Warranties of Lender. Lender hereby represents and warrants to the Company that there are no legal actions, suits, arbitration or other legal or administrative proceedings or governmental investigations pending or contemplated which would prevent the enforcement of this Agreement.

3. Representations and Warranties of the Company. The Company hereby represents and warrants to Lender as follows:

a.

Organization and Standing. The Company is a corporation duly organized, validly existing and in good standing under the laws of British Columbia, Canada.

b.

Corporate Authority. The Company has all the required corporate power and authority to enter into this Agreement and to perform the transactions contemplated herein. The execution and delivery by Company of this Agreement and the consummation of all transactions contemplated herein have been duly and validly authorized. This Agreement is the legal, valid and binding obligation of Company enforceable in accordance with its terms.

3. Survival of Representations and Warranties. All representations and warranties of each party shall survive after the conclusion of this Agreement.

5. Indemnification. The Company hereby agrees to indemnify and hold Lender harmless against, in respect of, and shall on demand, reimburse it for:

a.	any and all loss, liability or damage suffered or incurred by Lender by reason of any untrue representation, breach of warranty or nonfulfillment of any covenant or agreement by the Company contained herein or in any certificate, document or instrument delivered by Lender hereunder; and
b.	any and all actions, suites, proceedings, claims, demand, assessments, judgments, costs and expenses, including, without limitation, reasonable legal fees and expenses, incident to any of the foregoing or incurred in investigation or attempting to avoid the same or to oppose the imposition thereto, or in enforcing this indemnity.

1

c. any and all liabilities, costs, damages, penalties, assessments, remedies, claims, orders, judgments, and expenses of any kind or nature (“Claims”) sustained, asserted or claimed by the Lender, any third party, or the Company, as a result of, arising directly or indirectly from, or related in any manner to, the Company or its affiliates, subsidiaries, officers, directors, employees, agents, successors and assigns.

6. General Release. The Company and its affiliates, subsidiaries, officers, directors, employees, agents, successors and assigns also release, discharge and forever acquit the Lender from any and all Claims.

7. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the Province of British Columbia, Canada.

8. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the transactions contemplated herein, and may be amended or modified only by an instrument in writing signed by the parties hereto.

9. Notices. All notices and other communication to be given under or by reason of this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person or by internationally recognized courier service, addressed as follows:

if to Lender:	Ahmad Doroudian 4172 Doncaster Way Vancouver, BC Canada V6S 1V9
if to the Company:	Pivot Pharmaceuticals Inc. 1275 West 6th Avenue, Suite 300 Vancouver, BC Canada V6H 1A6

IN WITNESS HEREOF, the parties hereto have executed this Agreement on the day and year first written above.

LENDER: AHMAD DOROUDIAN
By:	/s/ Ahmad Doroudian
Name:	Ahmad Doroudian
THE COMPANY: PIVOT PHARMACEUTICALS INC.
By:	/s/ Moira Ong
Name:	Moira Ong
Title:	CFO

2

EX-10.24

EXHIBIT 10.24

DEBT FORGIVENESS AGREEMENT

This Debt Forgiveness Agreement (“Agreement”), entered into effective July 31, 2017, by and between Pivot Pharmaceuticals Inc. (the “Company”) and Moira Ong (“Lender”), in reference to the following:

WHEREAS, the Company is indebted to Lender for an amount equal to US$272,000 for accrued and unpaid salary (the “Debt”);

WHEREAS, subject to certain conditions contained herein, Lender has determined to forgive the Debt in its entirety; and

WHEREAS, the Company has determined that the forgiveness of the Debt is in the best interest of the Company.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency are hereby acknowledged, the parties agree as follows:

1. Debt Forgiveness. Lender hereby forgives the Debt in its entirety.

2. Representations and Warranties of Lender. Lender hereby represents and warrants to the Company that there are no legal actions, suits, arbitration or other legal or administrative proceedings or governmental investigations pending or contemplated which would prevent the enforcement of this Agreement.

3. Representations and Warranties of the Company. The Company hereby represents and warrants to Lender as follows:

a.

Organization and Standing. The Company is a corporation duly organized, validly existing and in good standing under the laws of British Columbia, Canada.

b.

Corporate Authority. The Company has all the required corporate power and authority to enter into this Agreement and to perform the transactions contemplated herein. The execution and delivery by Company of this Agreement and the consummation of all transactions contemplated herein have been duly and validly authorized. This Agreement is the legal, valid and binding obligation of Company enforceable in accordance with its terms.

3. Survival of Representations and Warranties. All representations and warranties of each party shall survive after the conclusion of this Agreement.

5. Indemnification. The Company hereby agrees to indemnify and hold Lender harmless against, in respect of, and shall on demand, reimburse it for:

a.	any and all loss, liability or damage suffered or incurred by Lender by reason of any untrue representation, breach of warranty or nonfulfillment of any covenant or agreement by the Company contained herein or in any certificate, document or instrument delivered by Lender hereunder; and
b.	any and all actions, suites, proceedings, claims, demand, assessments, judgments, costs and expenses, including, without limitation, reasonable legal fees and expenses, incident to any of the foregoing or incurred in investigation or attempting to avoid the same or to oppose the imposition thereto, or in enforcing this indemnity.

 

1

c. any and all liabilities, costs, damages, penalties, assessments, remedies, claims, orders, judgments, and expenses of any kind or nature (“Claims”) sustained, asserted or claimed by the Lender, any third party, or the Company, as a result of, arising directly or indirectly from, or related in any manner to, the Company or its affiliates, subsidiaries, officers, directors, employees, agents, successors and assigns.

6. General Release. The Company and its affiliates, subsidiaries, officers, directors, employees, agents, successors and assigns also release, discharge and forever acquit the Lender from any and all Claims.

7. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the Province of British Columbia, Canada.

8. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the transactions contemplated herein, and may be amended or modified only by an instrument in writing signed by the parties hereto.

9. Notices. All notices and other communication to be given under or by reason of this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person or by internationally recognized courier service, addressed as follows:

if to Lender:	Moira Ong 2392 Lawson Avenue West Vancouver, BC Canada V7V 2E6
if to the Company:	Pivot Pharmaceuticals Inc. 1275 West 6th Avenue, Suite 300 Vancouver, BC Canada V6H 1A6

IN WITNESS HEREOF, the parties hereto have executed this Agreement on the day and year first written above.

LENDER: MOIRA ONG
By:	/s/ Moira Ong
Name:	Moira Ong
THE COMPANY: PIVOT PHARMACEUTICALS INC.
By:	/s/ Ahmad Doroudian
Name:	Ahmad Doroudian
Title:	Chairman

2

EX-10.25

EXHIBIT 10.25

DEBT FORGIVENESS AGREEMENT

This Debt Forgiveness Agreement (“Agreement”), entered into effective July 31, 2017, by and between Pivot Pharmaceuticals Inc. (the “Company”) and Soho Capital Inc. (“Lender”), in reference to the following:

WHEREAS, the Company is indebted to Lender for an amount equal to US$160,000 for accrued and unpaid salary (the “Debt”);

WHEREAS, subject to certain conditions contained herein, Lender has determined to forgive the Debt in its entirety; and

WHEREAS, the Company has determined that the forgiveness of the Debt is in the best interest of the Company.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency are hereby acknowledged, the parties agree as follows:

1. Debt Forgiveness. Lender hereby forgives the Debt in its entirety.

2. Representations and Warranties of Lender. Lender hereby represents and warrants to the Company that there are no legal actions, suits, arbitration or other legal or administrative proceedings or governmental investigations pending or contemplated which would prevent the enforcement of this Agreement.

3. Representations and Warranties of the Company. The Company hereby represents and warrants to Lender as follows:

a.

Organization and Standing. The Company is a corporation duly organized, validly existing and in good standing under the laws of British Columbia, Canada.

b.

Corporate Authority. The Company has all the required corporate power and authority to enter into this Agreement and to perform the transactions contemplated herein. The execution and delivery by Company of this Agreement and the consummation of all transactions contemplated herein have been duly and validly authorized. This Agreement is the legal, valid and binding obligation of Company enforceable in accordance with its terms.

3. Survival of Representations and Warranties. All representations and warranties of each party shall survive after the conclusion of this Agreement.

5. Indemnification. The Company hereby agrees to indemnify and hold Lender harmless against, in respect of, and shall on demand, reimburse it for:

a.	any and all loss, liability or damage suffered or incurred by Lender by reason of any untrue representation, breach of warranty or nonfulfillment of any covenant or agreement by the Company contained herein or in any certificate, document or instrument delivered by Lender hereunder; and
b.	any and all actions, suites, proceedings, claims, demand, assessments, judgments, costs and expenses, including, without limitation, reasonable legal fees and expenses, incident to any of the foregoing or incurred in investigation or attempting to avoid the same or to oppose the imposition thereto, or in enforcing this indemnity.

1

c. any and all liabilities, costs, damages, penalties, assessments, remedies, claims, orders, judgments, and expenses of any kind or nature (“Claims”) sustained, asserted or claimed by the Lender, any third party, or the Company, as a result of, arising directly or indirectly from, or related in any manner to, the Company or its affiliates, subsidiaries, officers, directors, employees, agents, successors and assigns.

6. General Release. The Company and its affiliates, subsidiaries, officers, directors, employees, agents, successors and assigns also release, discharge and forever acquit the Lender from any and all Claims.

7. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the Province of British Columbia, Canada.

8. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the transactions contemplated herein, and may be amended or modified only by an instrument in writing signed by the parties hereto.

9. Notices. All notices and other communication to be given under or by reason of this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person or by internationally recognized courier service, addressed as follows:

if to Lender:	Soho Capital Inc. 3456 Dunbar Street V6S 2C2 Vancouver, BC Canada V6S 2C2
if to the Company:	Pivot Pharmaceuticals Inc. 1275 West 6th Avenue, Suite 300 Vancouver, BC Canada V6H 1A6

IN WITNESS HEREOF, the parties hereto have executed this Agreement on the day and year first written above.

LENDER: SOHO CAPITAL INC.
By:	/s/ Kam Dass
Name:	Kam Dass
Title:	Secretary/Treasurer
THE COMPANY: PIVOT PHARMACEUTICALS INC.
By:	/s/ Ahmad Doroudian
Name:	Ahmad Doroudian
Title:	Chairman

2

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Patrick Frankham, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Pivot Pharmaceuticals Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 15, 2017

By:	/s/ Patrick Frankham
	Patrick Frankham
	Chief Executive Officer and Director (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Moira Ong, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Pivot Pharmaceuticals Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 15, 2017

By:	/s/ Moira Ong
	Moira Ong
	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Patrick Frankham, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	the Quarterly Report on Form 10-Q of Pivot Pharmaceuticals Inc. for the period ended July 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Pivot Pharmaceuticals Inc.

Dated: September 15, 2017	By:	/s/ Patrick Frankham
		Patrick Frankham
		Chief Executive Officer and Director (Principal Executive Officer)
		Pivot Pharmaceuticals Inc.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Pivot Pharmaceuticals Inc. and will be retained by Pivot Pharmaceuticals Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Moira Ong, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	the Quarterly Report on Form 10-Q of Pivot Pharmaceuticals Inc. for the period ended July 31, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Pivot Pharmaceuticals Inc.

Dated: September 15, 2017	By:	/s/ Moira Ong
		Moira Ong
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
		Pivot Pharmaceuticals Inc.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Pivot Pharmaceuticals Inc. and will be retained by Pivot Pharmaceuticals Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Jul. 31, 2017	Sep. 15, 2017
Document And Entity Information
Entity Registrant Name	Pivot Pharmaceuticals Inc.
Entity Central Index Key	0001464165
Document Type	10-Q
Document Period End Date	Jul. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--01-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		75,847,114
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2018

XML

Condensed Consolidated Balance Sheets - USD ($)	Jul. 31, 2017	Jan. 31, 2017
Current assets
Cash	$ 9,943	$ 112,421
Prepaid and other current assets	23,195	17,337
Total current assets	33,138	129,758
Security deposit	2,900	2,900
Total assets	36,038	132,658
Current liabilities
Accounts payable and accrued liabilities	736,565	996,853
Due to related parties (Note 7)	47,000	22,574
Convertible debenture, net of discount (Note 3)	394,042	275,011
Derivative liability (Note 4)	142,905	312,541
Total liabilities	1,320,512	1,606,979
Stockholders' Deficit
Common stock: Unlimited shares authorized, without par value, 75,847,114 and 75,647,114 shares issued and outstanding, respectively	7,351,568	7,327,588
Additional paid-in capital	11,764,740	11,211,031
Accumulated other comprehensive income	522,339	584,813
Accumulated deficit	(20,923,121)	(20,597,753)
Total stockholders' deficit	(1,284,474)	(1,474,321)
Total liabilities and stockholders' deficit	$ 36,038	$ 132,658

XML

Condensed Consolidated Balance Sheets (Parenthetical) - shares	Jul. 31, 2017	Jan. 31, 2017
Condensed Consolidated Balance Sheets Parenthetical
Common stock, Shares issued	75,847,114	75,647,114
Common stock, Shares outstanding	75,847,114	75,647,114

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 31, 2017	Jul. 31, 2016	Jul. 31, 2017	Jul. 31, 2016
Condensed Consolidated Statements Of Operations And Comprehensive Income
Revenue
Expenses
Foreign exchange (gain) loss	(7,575)	63,129	62,562	77,359
General and administrative	75,641	72	128,930	974,421
Management fees	132,478	1,122,368	269,773	3,368,947
Professional fees	48,211	(6,171)	73,008	90,483
Total expenses	248,755	1,179,398	534,273	4,511,210
Loss from operations	(248,755)	(1,179,398)	(534,273)	(4,511,210)
Other income (expense)
Amortization of discount on convertible debenture			(105,392)
Gain on change in fair value of derivative liabilities	91,564		171,451
Gain on settlement of debts	160,000		160,000
Interest expense	(8,365)		(17,154)
Total other income (expense)	243,199		208,905
Net loss	(5,556)	(1,179,398)	(325,368)	(4,511,210)
Other comprehensive income (loss)
Foreign currency translation adjustment	2,081	(36,363)	62,473	150,166
Net comprehensive loss	$ (3,475)	$ (1,215,761)	$ (262,895)	$ (4,361,044)
Net income (loss) per share, basic and diluted	$ 0.00	$ (0.02)	$ 0.00	$ (0.06)
Weighted average shares outstanding – basic and diluted	75,737,423	75,179,627	75,693,254	75,010,761

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 31, 2017	Jul. 31, 2016	Jul. 31, 2017	Jul. 31, 2016
Operating activities
Net loss	$ (5,556)	$ (1,179,398)	$ (325,368)	$ (4,511,210)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of discount on convertible debenture			105,392
Fair value of stock options vested			773	3,858,395
Gain on change in fair value of derivative liabilities	(91,564)		(171,451)
Gain on settlement of debts	(160,000)		(160,000)
Stock issued for services			23,986	252,598
Changes in operating assets and liabilities:
Prepaids and other current assets			(5,376)	13,686
Accounts payable and accrued liabilities			403,022	271,953
Net cash used in operating activities			(129,022)	(114,578)
Financing activities
Proceeds from related party advances			25,500	33,000
Net cash provided by financing activities			25,500	33,000
Effects of exchange rate changes on cash			1,044	12,989
Decrease in cash			(102,478)	(68,589)
Cash - beginning of period			112,421	71,639
Cash - end of period	$ 9,943	$ 3,050	9,943	3,050
Supplemental disclosures:
Interest paid
Income tax paid
Non-cash investing and financing activities
Capital contribution through forgiveness of debt			$ 520,425

XML

Nature of Operations and Continuance of Business

6 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Note 1. Nature of Operations and Continuance of Business

Pivot Pharmaceuticals Inc. (the “Company”) was incorporated in British Columbia under the Business Corporations Act on June 10, 2002. On April 7, 2015, the Company changed its name from Neurokine Pharmaceuticals Inc. to Pivot Pharmaceuticals Inc. The Company is in the business of developing and commercializing therapeutic pharmaceutical products, focused on the strategy of identifying new therapeutic treatments to address unmet medical needs in women’s health.

These consolidated financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As of July 31, 2017, the Company has not earned any revenue, has a working capital deficit of $1,287,374 and an accumulated deficit of $20,923,121. The continued operations of the Company are dependent on its ability to generate future cash flows or obtain additional financing. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company be unable to continue as a going concern.

XML

Significant Accounting Policies

6 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Note 2. Significant Accounting Policies

(a)	Basis of Presentation
	The consolidated financial statements and the related notes of the Company are prepared in accordance with generally accepted accounting principles in the United States and are expressed in U.S. dollars. The Company’s fiscal year-end is January 31.

(b)

Use of Estimates

The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, assumptions used to determine the fair values of stock-based compensation and derivative liabilities and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

(c)

Interim Financial Statements

These interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s condensed consolidated financial position, results of operations and cash flows for the periods shown. The condensed consolidated results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. Certain disclosures and financial information have been condensed in accordance with generally accepted accounting principles in the United States.

(d)	Basis of Consolidation
	The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The consolidating entities include:

	% of ownership	Jurisdiction
Pivot Pharmaceuticals Inc.	Parent	Canada
IndUS Pharmaceuticals, Inc. (“IndUS”)	100%	USA

(e)

Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings Per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method for all exercisable options and warrants and the if-converted method for all outstanding convertible debentures. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As at July 31, 2017, the Company had 5,908,347 (January 31, 2017 – 9,692,748) potentially dilutive shares.

(f)

Financial Instruments and Fair Value Measures

ASC 820, Fair Value Measurements, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2: Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3: Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist principally of cash, amounts receivable, accounts payable and accrued liabilities, due to related parties and convertible debenture. Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

(g)	Recent Accounting Pronouncements
	The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial position or results of operations.

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Convertible Debenture

6 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Note 3. Convertible Debenture

On September 30, 2016, the Company issued a convertible debenture with a non-related party for $500,000 Canadian Dollars ($380,411 US Dollars at September 30, 2016) (“Initial Advance”). The debenture is secured under a General Security Agreement, bears interest at 8% per annum and matures on the earlier of:

·	The date the lender demands repayment of principal and interest following an event of default,
·	The date of a dissolution event,
·	The date of a liquidity event, and
·	March 30, 2017.
The Company may request one or more additional advances of up to an aggregate amount of $1,000,000 Canadian Dollars (“Additional Advances”) provided that the aggregate amount under the convertible debenture does not exceed $1,500,000 Canadian Dollars. The note, including the Initial Advance and any Additional Advances, is convertible into common shares at a conversion price equal to the average closing market price of the Company’s common stock during the five day period leading up to the conversion date. The Company recorded the conversion feature of the convertible debenture as a derivative liability at an estimated fair value of $134,892 with a corresponding discount to the convertible debenture (Note 4). Pursuant to the convertible loan agreement, the Company issued 434,622 share purchase warrants to which the lender may acquire an interest in the Company equal to 12% of the maximum principal amount outstanding at any time at a price of $0.10 per share, which equates to the ten day average trading price of the Company’s common stock determined as at September 30, 2016. The Company calculated the 434,622 share purchase warrants based on the maximum outstanding principal balance on the convertible loan as of September 30, 2016. The Company recorded the share purchase warrant at an estimated fair value of $20,154 with a corresponding discount to the convertible debenture (Note 6). As of July 31, 2017, the carrying value of the convertible debenture is $394,042 (January 31, 2017 - $275,011) which is net of debt discounts related to conversion feature, financing costs and warrants of $nil, $nil and $nil, respectively (January 31, 2017 - $94,709, $6,126 and $6,477, respectively). As of July 31, 2017, interest accrued on the convertible debenture is $27,748 (January 31, 2017 - $10,307) and the fair value of the conversion option derivative liability is $142,905 (January 31, 2017 - $312,541). As of July 31, 2017, the Company has not repaid the convertible debenture, which is in default.

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Derivative Liability

6 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Note 4. Derivative Liability

Derivative liability consists of convertible debenture with variable conversion price (Note 3). The fair value of derivative liability as at July 31, 2017 and January 31, 2017 is as follows:

	July 31, 2017 $		January 31, 2017 $
September 2016 convertible debenture		142,905		312,541
		142,905		312,541

The fair value of derivative financial liability was determined using the binomial option pricing model, using the following assumptions:

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)
As at issuance date:
September 2016 convertible debenture		296	%		0.45	%		0	%		0.50
As at July 31, 2017:
September 2016 convertible debenture		162	%		1.13	%		0	%		0.25

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Stock Options

6 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Note 5. Stock Options

Effective December 30, 2015, the Company adopted a stock option plan. Under this plan, the Company may grant options to its directors, officers, employees and consultants up to an amount as determined by the Company and will be no more than a percentage of its outstanding common stock as may be required by the stock exchange the Company is listed with. The exercise price of the stock options will be determined by the Company and will be no less than any minimum exercise price as may be required by the stock exchange the Company is listed with.

The following table summarizes the continuity of the Company’s stock options:

	Number of Options		Weighted Average Exercise Price (US$)		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (US$)
Outstanding, January 31, 2017		15,520,833		0.38		4.2		68,599
Granted		–		–		–		–
Forfeited		–		–		–		–
Outstanding, July 31, 2017		15,520,833		0.38		3.73		1,590

The fair value of stock-based compensation expense was estimated using the Black-Scholes option pricing model and the following assumptions:

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)
29,000 options expiring on May 2, 2021		394	%		1.68	%		0	%		3.7

Additional information regarding stock options as of July 31, 2017, is as follows:

Options Outstanding	Options Exercisable		Exercise Price $		Expiry Date
200,000		200,000		0.25	November 30, 2020
4,000,000		4,000,000		0.10	December 14, 2020
7,250,000		7,250,000		0.70	February 22, 2021
29,000		28,000		0.34	May 2, 2021
4,000,000		4,000,000		0.10	December 14, 2021
41,833		41,833		0.05	January 23, 2022
15,520,833		15,519,833

$37 of stock-based compensation have yet to be recognized and will be recognized in future periods.

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Share Purchase Warrant

6 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Note 6. Share Purchase Warrant

The following table summarizes the continuity of share purchase warrant:

	Number of Warrants		Weighted Average Exercise Price $
Balance, January 31, 2017		434,622		0.10
Granted		–		–
Balance, July 31, 2017		434,622		0.10

As at July 31, 2017, the following share purchase warrant was outstanding:

Number of Warrants	Exercise Price $		Expiry Date
434,622		0.10	Upon repayment of convertible debenture (Note 3)

Pursuant to the convertible debenture (Note 3), the Company will be required to issue additional share purchase warrants on any Additional Advances to which the lender may acquire an interest in the Company equal to 12% of the maximum principal amount outstanding.

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Related Party Transactions

6 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Note 7. Related Party Transactions

As at July 31, 2017, the Company owed $3,737 (January 31, 2017 - $4,154) to a director of the Company, which is unsecured, non-interest bearing, and due on demand.

As at July 31, 2017, the Company owed $43,264 (January 31, 2017 – $18,420) to the Company’s past Chief Executive Officer (Note 10).

At July 31, 2017, $552,889 of accrued management fees to the Company’s Chief Financial Officer and Chief Business Officer were forgiven.

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Fair Value Measurements

6 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Note 8. Fair Value Measurements

The Company’s financial liabilities carried at fair value measured on a recurring basis as of July 31, 2017 and January 31, 2017, consisted of the following:

	Total fair value at July 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative liability (1)	$	142,905	$	-	$	142,905	$	-

	Total fair value at January 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative liability (1)	$	312,541	$	-	$	312,541	$	-

_______________
(1)	Derivative liability amounts are due to the embedded derivatives of convertible debenture issued by the Company and are calculated using the binomial option pricing model (Note 4).
The Company has no financial assets carried at fair value.

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Commitments

6 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Note 9. Commitments

The Company’s minimum future lease commitments are:

	$
2018		12,000
2019		23,900
2020		12,000

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Subsequent Events

6 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Note 10. Subsequent Events

Concurrently, on September 11, 2017, the Company appointed Dr. Patrick Frankham as its interim Chief Executive Officer.

On September 12, 2017, the Company entered into a licensing agreement with Altum Pharmaceuticals Inc. (“Altum”) whereby the Company was granted worldwide rights to BiPhasix Transdermal Drug Delivery Technology (“BiPhasix Technology”) for the delivery and commercialization of cannabinoids, cannabidiol (“CBD”), and tetrahydrocannabinol-based products. Financial consideration includes:

· Issuance of 2,500,000 shares of common stock on closing of the licensing agreement (issuable as at September 15, 2017);

· Issuance of 2,500,000 shares of common stock of the Company upon Health Canada Natural Product Number (“NPN”) approval for a CBD product developed using the BiPhasix Technology;

· Five percent (5%) royalties on annual net sales; and

· For pharmaceutical products:

o $1,000,000 payable upon first Investigative New Drug Application approval;

o $1,000,000 payable upon positive outcome of Phase II trial in first indication; and

o $2,000,000 payable upon New Drug Application approval.

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Significant Accounting Policies (Policies)

6 Months Ended

Jul. 31, 2017

Significant Accounting Policies Policies

Basis of Presentation

The consolidated financial statements and the related notes of the Company are prepared in accordance with generally accepted accounting principles in the United States and are expressed in U.S. dollars. The Company’s fiscal year-end is January 31.

Use of Estimates

The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, assumptions used to determine the fair values of stock-based compensation and derivative liabilities and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Interim Financial Statements

These interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s condensed consolidated financial position, results of operations and cash flows for the periods shown. The condensed consolidated results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. Certain disclosures and financial information have been condensed in accordance with generally accepted accounting principles in the United States.

Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The consolidating entities include:

	% of ownership	Jurisdiction
Pivot Pharmaceuticals Inc.	Parent	Canada
IndUS Pharmaceuticals, Inc. (“IndUS”)	100%	USA

Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings Per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method for all exercisable options and warrants and the if-converted method for all outstanding convertible debentures. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As at July 31, 2017, the Company had 5,908,347 (January 31, 2017 – 9,692,748) potentially dilutive shares.

Financial Instruments and Fair Value Measures

ASC 820, Fair Value Measurements, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2: Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3: Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, amounts receivable, accounts payable and accrued liabilities, due to related parties and convertible debenture. Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial position or results of operations.

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Significant Accounting Policies (Tables)

6 Months Ended

Jul. 31, 2017

Significant Accounting Policies Tables

Basis of Consolidation

	% of ownership	Jurisdiction
Pivot Pharmaceuticals Inc.	Parent	Canada
IndUS Pharmaceuticals, Inc. (“IndUS”)	100%	USA

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Derivative Liability (Tables)

6 Months Ended

Jul. 31, 2017

Derivative Liability Tables

Schedule of Fair value of derivative liability

	July 31, 2017 $		January 31, 2017 $
September 2016 convertible debenture		142,905		312,541
		142,905		312,541

Schedule of Interest Rate Derivatives

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)
As at issuance date:
September 2016 convertible debenture		296	%		0.45	%		0	%		0.50
As at July 31, 2017:
September 2016 convertible debenture		162	%		1.13	%		0	%		0.25

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Stock Options (Tables)

6 Months Ended

Jul. 31, 2017

Stock Options Tables

Schedule of Stock Options

	Number of Options		Weighted Average Exercise Price (US$)		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (US$)
Outstanding, January 31, 2017		15,520,833		0.38		4.2		68,599
Granted		–		–		–		–
Forfeited		–		–		–		–
Outstanding, July 31, 2017		15,520,833		0.38		3.73		1,590

Fair value of stock-based compensation expense

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)
29,000 options expiring on May 2, 2021		394	%		1.68	%		0	%		3.7

Additional information of stock options

Options Outstanding	Options Exercisable		Exercise Price $		Expiry Date
200,000		200,000		0.25	November 30, 2020
4,000,000		4,000,000		0.10	December 14, 2020
7,250,000		7,250,000		0.70	February 22, 2021
29,000		28,000		0.34	May 2, 2021
4,000,000		4,000,000		0.10	December 14, 2021
41,833		41,833		0.05	January 23, 2022
15,520,833		15,519,833

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Share Purchase Warrants (Tables)

6 Months Ended

Jul. 31, 2017

Share Purchase Warrants Tables

Schedule of continuity of share purchase warrants

	Number of Warrants		Weighted Average Exercise Price $
Balance, January 31, 2017		434,622		0.10
Granted		–		–
Balance, July 31, 2017		434,622		0.10

Schedule of share purchase warrant was outstanding

Number of Warrants	Exercise Price $		Expiry Date
434,622		0.10	Upon repayment of convertible debenture (Note 3)

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Fair Value Measurements (Tables)

6 Months Ended

Jul. 31, 2017

Fair Value Measurements Tables

Fair Value Measurement

	Total fair value at July 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative liability (1)	$	142,905	$	-	$	142,905	$	-

	Total fair value at January 31, 2017		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative liability (1)	$	312,541	$	-	$	312,541	$	-

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Commitments (Tables)

6 Months Ended

Jul. 31, 2017

Commitments Tables

Future lease commitments

	$
2018		12,000
2019		23,900
2020		12,000

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Nature of Operations and Continuance of Business (Details Narrative) - USD ($)	6 Months Ended
	Jul. 31, 2017	Jan. 31, 2017
Nature Of Operations And Continuance Of Business Details Narrative
Working capital deficit	$ 1,287,374
Accumulated deficit	$ (20,923,121)	$ (20,597,753)
State or Country of incorporation	British Columbia
Date of incorporation	Jun. 10, 2002

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Significant Accounting Policies (Details)	6 Months Ended
	Jul. 31, 2017
Pivot Pharmaceuticals Inc. [Member]
Percentege of ownership	Parent
Jurisdiction	Canada
IndUS Pharmaceuticals,Inc (“IndUS”) [Member]
% of ownership	100.00%
Jurisdiction	USA

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Significant Accounting Policies (Details Narrative) - shares	6 Months Ended	12 Months Ended
	Jul. 31, 2017	Jan. 31, 2017
Significant Accounting Policies Details Narrative
Potentially dilutive shares	5,908,347	9,692,748

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Convertible Debenture (Details Narrative)

1 Months Ended

6 Months Ended

Sep. 30, 2016

USD ($)

$ / shares

shares

Jul. 31, 2017

USD ($)

Jan. 31, 2017

USD ($)

Sep. 30, 2016

CAD

shares

Convertible debenture | CAD

CAD 500,000

Interest rate

8.00%

8.00%

Additional advances description

Provided that the aggregate amount under the convertible debenture does not exceed $1,500,000 Canadian Dollars.

Fair value of derivative liability

$ 134,892

Debt discount, conversion

$ 94,709

Debt discount, financing costs

6,126

Debt discount, warrants

6,477

Accrued interest

27,748

10,307

Derivative liabilities

142,905

312,541

Convertible debenture, net of discount

394,042

$ 275,011

Convertible Loan Agreement [Member]

Shares issued to purchase warrants | shares

434,622

434,622

Acquired an interest on principal amount

12.00%

12.00%

Price per share | $ / shares

$ 0.10

Fair Value of warrant

$ 20,154

Maximum [Member]

Additional advances receivable | CAD

CAD 1,000,000

Convertible debenture issued or issuable, Maximum | CAD

CAD 1,500,000

Non-related party [Member]

Convertible debenture

$ 380,411

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Derivative Liability (Details) - USD ($)	Jul. 31, 2017	Jan. 31, 2017
Derivative liabilities	$ 142,905	$ 312,541
September 2016 Convertible Debenture [Member]
Derivative liabilities	$ 142,905	$ 312,541

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Derivative Liability (Details 1)	6 Months Ended	12 Months Ended
	Jul. 31, 2017	Jan. 31, 2017
Expected volatility	162.00%
Risk-free interest rate	1.13%
Expected dividend yield	0.00%
Expected life (in years)	2 months 30 days
September 2016 Convertible Debenture [Member]
Expected volatility		296.00%
Risk-free interest rate		0.45%
Expected dividend yield		0.00%
Expected life (in years)		6 months

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Stock Options (Details)	6 Months Ended
	Jul. 31, 2017 USD ($) $ / shares shares
Number of Options
Balance, beginning | shares	15,520,833
Granted | shares
Forfeited | shares
Balance, ending | shares	15,520,833
Weighted Average Exercise Price
Balance, beginning | $ / shares	$ 0.38
Granted | $ / shares
Forfeited | $ / shares
Balance, ending | $ / shares	$ 0.38
Weighted Average Remaining Contractual Life (years)
Balance, beginning	4 years 2 months 12 days
Balance, ending	3 years 8 months 23 days
Aggregate Intrinsic Value
Balance, beginning | $	$ 68,599
Granted | $
Forfeited | $
Balance, ending | $	$ 1,590

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Stock Options (Details 1)	6 Months Ended
	Jul. 31, 2017
Expected Volatility	162.00%
Risk-free Interest Rate	1.13%
Expected Dividend Yield	0.00%
Expected Life (in years)	2 months 30 days
29,000 options expiring on May 2, 2021 [Member]
Expected Volatility	394.00%
Risk-free Interest Rate	1.68%
Expected Dividend Yield	0.00%
Expected Life (in years)	3 years 8 months 12 days

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Stock Options (Details 2) - $ / shares	6 Months Ended
	Jul. 31, 2017	Jan. 31, 2017
Options Outstanding	15,520,833	15,520,833
Options Exercisable	15,519,833
Exercise Price 0.25 [Member]
Options Outstanding	200,000
Options Exercisable	200,000
Exercise Price	$ 0.25
Expiry Date	Nov. 30, 2020
Exercise Price 0.10 [Member]
Options Outstanding	4,000,000
Options Exercisable	4,000,000
Exercise Price	$ 0.10
Expiry Date	Dec. 14, 2020
Exercise Price 0.70 [Member]
Options Outstanding	7,250,000
Options Exercisable	7,250,000
Exercise Price	$ 0.70
Expiry Date	Feb. 22, 2021
Exercise Price 0.34 [Member]
Options Outstanding	29,000
Options Exercisable	28,000
Exercise Price	$ 0.34
Expiry Date	May 02, 2021
Exercise Price 0.10 [Member]
Options Outstanding	4,000,000
Options Exercisable	4,000,000
Exercise Price	$ 0.10
Expiry Date	Dec. 14, 2021
Exercise Price 0.05 [Member]
Options Outstanding	41,833
Options Exercisable	41,833
Exercise Price	$ 0.05
Expiry Date	Jan. 23, 2022

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Stock Options (Details Narrative)	6 Months Ended
	Jul. 31, 2017 USD ($)
Stock Options Details Narrative
Unrecognized stock-based compensation	$ 37

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Share Purchase Warrant (Details)	6 Months Ended
	Jul. 31, 2017 $ / shares shares
Number of Warrants
Balance, beginning | shares	15,520,833
Balance, ending | shares	15,520,833
Weighted Average Exercise Price
Balance, beginning	$ 0.38
Granted
Balance, ending	$ 0.38
Warrant [Member]
Number of Warrants
Balance, beginning | shares	434,622
Granted | shares
Balance, ending | shares	434,622
Weighted Average Exercise Price
Balance, beginning	$ 0.10
Granted
Balance, ending	$ 0.10

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Share Purchase Warrant (Details 1) - $ / shares	6 Months Ended
	Jul. 31, 2017	Jan. 31, 2017
Number of Warrants	15,520,833	15,520,833
Warrant [Member]
Number of Warrants	434,622	434,622
Exercise Price	$ 0.10
Expiry Date Description	Upon repayment of convertible debenture (Note 3)

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Related Party Transactions (Details Narrative) - USD ($)	Jul. 31, 2017	Jan. 31, 2017
Due to related parties	$ 47,000	$ 22,574
Director [Member]
Due to related parties	3,737	4,154
CEO [Member]
Due to related parties	43,264	$ 18,420
Chief Financial Officer And Chief Business Officer [Member]
Accrued management fee forgiven	$ 552,889

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Fair Value Measurements (Details) - USD ($)	Jul. 31, 2017	Jan. 31, 2017
Derivative liability	$ 142,905	$ 312,541
Quoted prices in active markets (Level 1) [Member]
Derivative liability
Significant other observable inputs (Level 2) [Member]
Derivative liability	142,905	312,541
Significant unobservable inputs (Level 3) [Member]
Derivative liability

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Commitments (Details)	Jul. 31, 2017 USD ($)
Commitments Details
2018	$ 12,000
2019	23,900
2020	$ 12,000

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Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($)			1 Months Ended
	Sep. 12, 2017	Sep. 11, 2017	Sep. 15, 2017
Share exchange agreement [Member] | IndUS and CEO [Member]
Common stock shares issuable upon resignation of CEO		3,800,000
Share exchange agreement [Member] | Past CEO [Member]
Promissory note		$ 200,000
Maturity date description		At the earlier of 45 days after the completion of a financing of at least $2,000,000 and September 10, 2027, and in discharge of all obligations with respect to all accrued and unpaid salary through September 11, 2017
Share exchange agreement [Member] | IndUS Pharmaceuticals,Inc (“IndUS”) [Member]
Liabilities assumed by past CEO		$ 350,000
Licensing agreement [Member] | Altum Pharmaceuticals Inc. [Member]
Common stock, share issuable			2,500,000
Common stock shares issuable upon NPN approval	2,500,000
Percentage of royalties	5.00%
Amount payable upon first investigative drug application approval	$ 1,000,000
Amount payable upon positive outcome of Phase II trial	1,000,000
Amount payable upon New Drug Application approval	$ 2,000,000