0001594062-18-000183.txt : 20181106 0001594062-18-000183.hdr.sgml : 20181106 20181106101113 ACCESSION NUMBER: 0001594062-18-000183 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 50 CONFORMED PERIOD OF REPORT: 20180930 FILED AS OF DATE: 20181106 DATE AS OF CHANGE: 20181106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Qrons Inc. CENTRAL INDEX KEY: 0001689084 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 813623646 STATE OF INCORPORATION: WY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55800 FILM NUMBER: 181161830 BUSINESS ADDRESS: STREET 1: 777 BRICKELL AVENUE STREET 2: SUITE 500 CITY: MIAMI STATE: FL ZIP: 33131 BUSINESS PHONE: 7866202140 MAIL ADDRESS: STREET 1: 777 BRICKELL AVENUE STREET 2: SUITE 500 CITY: MIAMI STATE: FL ZIP: 33131 FORMER COMPANY: FORMER CONFORMED NAME: BIOLABMART INC. DATE OF NAME CHANGE: 20161102 10-Q 1 form10q.htm 10-Q

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q
 
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
For the quarterly period ended: September 30, 2018
 
 
[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from __________ to __________

000-55800
(Commission File Number)
 
QRONS INC.
(Exact name of registrant as specified in its charter)
 
 
Wyoming
81-3623646
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
 
777 Brickell Avenue, Suite 500, Miami, Florida
33131
(Address of principal executive offices)
(Zip Code)
 
(786)-620-2140
(Registrant's telephone number, including area code)
 
 
(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.

Yes [X]  No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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).
 
Yes [X] No [  ]

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

 
 
Large accelerated filer[  ]
Accelerated filer [  ]
Non-accelerated filer[  ] (Do not check if a smaller reporting company)
Smaller reporting company [X]
 
Emerging growth company [X]

      If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [  ]
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
Yes [  ]  No [X ]
 
As of November 5, 2018, there were 12,849,581 shares of the registrant's common stock outstanding.



QRONS INC.
TABLE OF CONTENTS

 
 
 
Page
 
PART I – FINANCIAL INFORMATION
 
 
 
 
 3
 
 
 
 21
 
 
 
 27
 
 
 
 28
 
 
 
 
PART II – OTHER INFORMATION
 
 
 
 
 29
 
 
 
 29
 
 
 
 29
 
 
 
 29
 
 
 
 29
 
 
 
 29
 
 
 
 30
 
 
 
 
 30


2


 
PART I -- FINANCIAL INFORMATION


 
ITEM 1.  FINANCIAL STATEMENTS


QRONS INC.
CONDENSED BALANCE SHEETS
(Unaudited)

 
 
September 30,
2018
   
December 31,
2017
 
 
           
 
           
ASSETS
           
Current assets
           
Cash and cash equivalents
 
$
198,622
   
$
57,767
 
Prepaid expenses
   
54,991
     
15,812
 
Total current assets
   
253,613
     
73,579
 
 
               
TOTAL ASSETS
 
$
253,613
   
$
73,579
 
 
               
LIABILITIES AND STOCKHOLDERS' EQUITY
               
 
               
Current liabilities
               
Accounts payable and accrued liabilities
 
$
14,267
   
$
14,141
 
Accounts payable and accrued liabilities – related party
   
2,915
     
1,410
 
Convertible note – related party, net of debt discount
   
25,000
     
6,665
 
Derivative liabilities
   
30,506
     
31,090
 
Total current liabilities
   
72,688
     
53,306
 
 
               
Total liabilities
   
72,688
     
53,306
 
 
               
Stockholders' equity
               
Series A Preferred Shares: $0.001 par value, authorized 10,000; 2,000 shares issued and outstanding
   
2
     
2
 
Common stock, $0.0001 par value: shares authorized 100,000,000; 12,826,853 and 12,404,910 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively
   
1,283
     
1,240
 
Additional Paid-in Capital
   
3,497,774
     
1,611,711
 
Accumulated deficit
   
(3,318,134
)
   
(1,592,680
)
Total stockholder's equity
   
180,925
     
20,273
 
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
 
$
253,613
   
$
73,579
 

 
The accompanying notes are an integral part of these unaudited condensed financial statements.

 
3

 
QRONS INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

 
 
 
Three Months ended
   
Nine Months ended
 
 
 
September 30,
   
September 30,
 
 
 
2018
   
2017
   
2018
   
2017
 
 
                       
Net sales
 
$
-
   
$
-
   
$
-
   
$
-
 
 
                               
Operating expenses:
                               
Research and development expenses
   
104,798
     
8,406
     
237,770
     
10,120
 
Professional fees
   
6,300
     
8,170
     
35,449
     
11,297
 
General and administrative expenses
   
423,216
     
31,643
     
1,432,980
     
47,252
 
Total operating expenses
   
534,314
     
48,219
     
1,706,199
     
68,669
 
 
                               
Income (loss) from operations
   
(534,314
)
   
(48,219
)
   
(1,706,199
)
   
(68,669
)
 
                               
Other income (expense)
                               
Interest expense
   
(6,048
)
   
(1,785
)
   
(19,839
)
   
(7,215
)
Change in derivative liabilities
   
(2,979
)
   
(47,954
)
   
584
     
(47,954
)
Total Other income (expense)
   
(9,027
)
   
(49,739
)
   
(19,255
)
   
(55,169
)
 
                               
Net (loss)
 
$
(543,341
)
 
$
(97,958
)
 
$
(1,725,454
)
 
$
(123,838
)
 
                               
Net (loss) per common shares (basic and diluted)
 
$
(0.04
)
 
$
(0.00
)
 
$
(0.14
)
 
$
(0.00
)
 
                               
Weighted average shares outstanding
                               
Basic and diluted
   
12,807,584
     
11,552,000
     
12,744,561
     
11,544,293
 


The accompanying notes are an integral part of these unaudited condensed financial statements.

 
4

 
QRONS INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

 

 
 
For the Nine Months ended September 30,
 
 
 
2018
   
2017
 
Cash Flows From Operating Activities
           
Net loss
 
$
(1,725,454
)
 
$
(123,838
)
Adjustments to reconcile net loss to net cash provided from (used by) operating activities:
               
Stock awards recorded as advisory services
   
178,000
     
-
 
Stock options granted and recorded as administrative expenses and advisory services
   
1,183,106
     
-
 
Accretion of debt discount
   
18,335
     
6,599
 
Change in derivative liabilities
   
(584
)
   
47,954
 
Changes in operating assets and liabilities:
               
Prepaid expenses
   
(39,179
)
   
-
 
Accounts payable and accrued liabilities
   
126
     
6,059
 
Accounts payable and accrued liabilities, related party
   
1,505
     
-
 
Net cash provided (used by) operating activities
   
(384,145
)
   
(63,226
)
 
               
Cash Flows From Investing Activities
               
Net cash provided from (used by) investing activities
   
-
     
-
 
 
               
Cash Flows From Financing Activities
               
Proceeds from convertible note
   
-
     
15,000
 
Proceeds from private placement
   
525,000
     
32,000
 
Financing costs
   
-
     
(22,548
)
Net cash provided from financing activities
   
525,000
     
24,452
 
 
               
Increase (decrease) in cash and cash equivalents
   
140,855
     
(38,774
)
 
               
Cash at beginning of period
   
57,767
     
155,242
 
Cash at end of period
   
198,622
     
116,468
 
 
               
SUPPLEMENTAL DISCLOSURES
               
Interest paid
 
$
-
   
$
-
 
Income taxes paid
 
$
-
   
$
-
 
 
               

 
The accompanying notes are an integral part of these unaudited condensed financial statements.

 
5

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018
 
Note 1 – Description of Business and Basis of Presentation

Organization and nature of business:

Qrons Inc.  ("Qrons" or the "Company") was incorporated under the laws of the State of Wyoming on August 22, 2016 under the name BioLabMart Inc.

On July 6, 2017, the board of directors and a majority of the Company's shareholders approved an amendment to the Company's Articles of Incorporation to change the name of the Company from "BioLabMart Inc." to "Qrons Inc.". On August 8, 2017, the Company filed Amended Articles of Incorporation with the State of Wyoming to effectuate such name change. The Company's common stock was approved by the Financial Industry Regulatory Authority ("FINRA") for quotation on the OTC pink sheets under the symbol "BLMB" as of July 3, 2017. FINRA announced the Company's name change to Qrons Inc. on its Daily List on August 9, 2017. The new name and symbol change to "QRON" for the OTC Market was effective August 10, 2017.

The Company is a preclinical stage biotechnology company developing advanced cell-based solutions to combat neuronal injuries and achieve a breakthrough in the treatment of traumatic brain injuries ("TBIs"), an unmet medical need.  We believe that our approach is pushing the boundaries of science by using the latest advances in molecular biology and chemistry. The Company collaborates with universities and scientists in the fields of regenerative medicine, tissue engineering and 3D printable hydrogels to develop a treatment that integrates proprietary, engineered mesenchymal stem cells, 3D printable implant, smart materials and a novel delivery system.  

Our headquarters are located at 777 Brickell Avenue, Suite 500, Miami, Florida 33131.

Ariel Agreements

On December 14, 2016, the Company entered into a license and research funding agreement ("License Agreement") with Ariel Scientific Innovations Ltd., formerly known as Ariel University R&D Co., Ltd., ("Ariel"), a wholly owned subsidiary of Ariel University, based in Ariel, Israel. Under the terms of the License Agreement, Professor Danny Baranes, the principal investigator and his research team will carry out further research relating to cell treatment with conditioned medium for neuronal tissue regeneration and repair. In consideration for payments under the License Agreement, the Company received an exclusive worldwide royalty- bearing license in Ariel patents and know-how to develop and commercialize products based on or incorporating conditioned medium for neuronal tissue regeneration and/or repair, resulting from Ariel's research or technology or the Company's research funding (the "Products). Under the License Agreement, the Company is required to use its best efforts to develop and commercialize the Products in accordance with development milestones set forth in the Agreement.

In lieu of extending the research financing and research period under the License Agreement beyond the initial 12 months, on December 14, 2017, the Company entered into a 12-month services agreement with Ariel (the "Services Agreement") pursuant to which a team at Ariel under the direction of Prof. Danny Baranes will conduct molecular biology research activities involving the testing of implant materials for the Company. On April 12, 2018, the Services Agreement was amended to provide for additional services as the Company may request.

On March 6, 2018, the Company entered into an additional services agreement with Ariel for the services of Professor Gadi Turgeman and his neurobiology research team in their lab.

6

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018
 
Note 1 – Description of Business and Basis of Presentation (continued)

Dartmouth Agreements

On October 17, 2017, the Company entered into an Option Agreement (the "Agreement") with the Trustees of Dartmouth College which provides for, among other things, the grant to the Company of a one-year exclusive option to negotiate a worldwide, royalty bearing, exclusive license with Dartmouth for 3D printable materials in the field of human and animal health. During the option period, the Company agreed to use all commercially reasonable resources to evaluate the intellectual property and provide quarterly milestone reports and a commercialization plan upon exercise of the option. Pursuant to the Agreement, the Company agreed to finance the prosecution of patents by Dartmouth to protect its intellectual property.  Further, the Agreement provides for the payment by the Company of an option fee and certain license fees and royalty payments based upon the Company's product sales, as part of a final negotiated license agreement. The Company exercised its option on March 26, 2018 to negotiate definitive license terms, as it continues further evaluation and research.

On July 12, 2018, the Company entered into a one-year sponsored research agreement (the "Sponsored Research Agreement"), with the Trustees of Dartmouth College ("Dartmouth") pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement.  Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned.  Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes.

The Agreement may be terminated earlier than one year upon written agreement of the parties, a material breach which is not cured within 30 days of notice thereof, if Professor Ke no longer conducts the research under the Agreement and a successor acceptable to both parties is not available, or in the event of an unauthorized assignment of the Company's rights and obligations under the Agreement.


Note 2 – Summary of Significant Accounting Policies

Financial Statement Presentation:  The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC"), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements  included in our Annual Report on Form 10-K for the year ended December 31, 2017.
In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine-month periods have been made. Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year. 

Fiscal year end: The Company has selected December 31 as its fiscal year end.

Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.

Cash Equivalents: The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.

Research and Development Costs: The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, "Research and Development". Research and development costs were $237,770 and $10,120 for the nine-month periods ended September 30, 2018 and September 30, 2017, respectively.

Advertising and Marketing Costs: Advertising and marketing costs are expensed as incurred. The Company incurred $48,832 and $15,657 in advertising or marketing costs during the nine months ended September 30, 2018 and 2017, respectively.
7

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 2 – Summary of Significant Accounting Policies (continued)

Related parties: For the purposes of these financial statements, parties are considered to be related if one party has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Stock-Based Compensation and Other Share-Based Payments: The expense attributable to the Company's Directors is recognized over the period the amounts are earned and vested, and the expense attributable to the Company's non-employees is recognized when vested, as described in Note 7, Stock Plan.

Fair Value of Financial Instruments

FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument.

The following table provides a summary of the fair value of our derivative liabilities as of September 30, 2018 and December 31, 2017:

 
Fair value measurements on a recurring basis
 
 
Level 1
 
Level 2
 
Level 3
 
As of September 30, 2018:
           
Liabilities
           
Derivative liabilities
 
$
-
   
$
-
   
$
30,506
 
 
                       
As of December 31, 2017:
                       
Liabilities
                       
Derivative liabilities
 
$
-
   
$
-
   
$
31,090
 


 
8

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 2 – Summary of Significant Accounting Policies (continued)

Warrants: The Company accounts for common stock warrants in accordance with applicable accounting guidance provided in ASC Topic 815 "Derivatives and Hedging – Contracts in Entity's Own Equity" (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement.  For warrants classified as equity instruments we apply the Black Scholes model.   Presently all warrants issued and outstanding are accounted for using the equity method.

Income taxes: The Company has adopted ASC Topic 740 – "Income Taxes" ASC Topic 740 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Basic and Diluted Loss Per Share: In accordance with ASC Topic 260 – "Earnings Per Share", the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential common stock had been issued and if the additional shares of common stock were dilutive.

Potential common stock consists of the incremental common stock issuable upon the exercise of common stock warrants (using the if-converted method), convertible notes, classes of shares with conversion features, and stock awards and stock options. The computation of basic loss per share for the nine-month period ended September 30, 2018 and 2017 excludes potentially dilutive securities of underlying share purchase warrants, convertible notes, stock options and preferred shares, because their inclusion would be antidilutive. As a result, the computations of net loss per share for each period presented is the same for both basic and fully diluted.

The table below reflects the potentially dilutive securities at each reporting period which have been excluded from the computation of diluted net loss per share:

 
 
September 30, 2018
   
September 30, 2017
 
Stock purchase warrants
   
52,000
     
566,000
 
Research Warrants at 3% of issued and outstanding shares
   
384,806
     
-
 
Convertible Notes
   
28,778
     
32,178
 
Series A Preferred shares
   
700
     
700
 
Stock options vested
   
30,000
     
-
 
Stock options not yet vested
   
690,000
     
-
 
Stock awards not yet vested
   
290,000
     
-
 
 
   
1,476,284
     
598,878
 
 
New Accounting Pronouncements: There were various accounting standards and interpretations issued recently, none of which are expected to have a material effect on the Company's operations, financial position or cash flows.
9

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 3 – Going Concern

The Company has experienced net losses to date, and it has not generated revenue from operations.  While the Company has recently raised proceeds, it does not believe its resources will be sufficient to meet its operating and capital needs beyond the fourth quarter of 2018. The Company expects it will require additional capital to fully implement the scope of its proposed business operations, which raises substantial doubt about its ability to continue as a going concern.  The Company will have to continue to rely on equity and debt financing. There can be no assurance that financing, whether debt or equity, will always be available to the Company in the amount required at any particular time or for any particular period or, if available, that it can be obtained on favorable terms.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amount and classification of liabilities that might cause results from this uncertainty.

Note 4 – Convertible Note – Related Party and Derivative Liabilities

On September 1, 2016, the Company entered into a convertible debenture agreement with CubeSquare, LLC ("CubeSquare"), of which our Chief Executive Officer is the managing partner and our President is a 25% owner. The Company received proceeds of $10,000 during fiscal 2016 ("Note 1"). The note bears interest at 8% per annum and was due on September 1, 2017. Interest accrues from September 1, 2016 and is payable on maturity. Interest is payable, at the lender's option, in cash or common stock. Any portion of the loan and unpaid interest are convertible at any time at the option of the lender into shares of common stock of the Company at a conversion price of the greater of (i) $0.0625 per share if the Company's shares are not trading on a public market and; (ii) in the event the Company's shares are listed for trading on a public market, the conversion price shall be equal to a 50% discount to  the average of the five  lowest trading prices during the previous twenty  trading days prior to the date of the notice of conversion from the lender.

On September 28, 2017 the Company and CubeSquare amended Note 1 to extend the maturity date  from September 1, 2017 to September 1, 2018 and on September 9, 2018, the Company further amended Note 1 to extend the maturity date to September 1, 2019, under the same terms and conditions.

On September 27, 2017, the Company entered into a second convertible debenture agreement with CubeSquare under which the Company received proceeds of $15,000 (Note 2). Note 2 bears interest at 8% per annum and is due on September 27, 2018. Interest shall accrue from September 27, 2017 and shall be payable on maturity.   Any portion of the principal and unpaid interest under the note is convertible at any time at the option of CubeSquare into shares of common stock of the Company at a conversion price equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days prior to the date of the notice of conversion from CubeSquare. On September 9, 2018, Note 2 was amended to extend the maturity date until September 27, 2019.

The Company analyzed the amendment to Note 1 and Note 2 under ASC 815-10-15-83 and concluded that these two convertible debentures meet the definition of a derivative. We estimated the fair value of the derivative on the inception dates, and subsequently, using the Black-Scholes valuation technique, adjusted for the effect of dilution, because that technique embodies all of the assumptions (including, volatility, expected terms, and risk-free rates) that are necessary to fair value complex derivate instruments.

10

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 4 – Convertible Note – Related Party and Derivative Liabilities (continued)

The carrying value of these convertible notes is as follows:

 
 
September 30, 2018
   
December 31, 2017
 
Face value of certain convertible notes
 
$
25,000
   
$
25,000
 
Less: unamortized discount
   
-
     
(18,335
)
Carrying value
 
$
25,000
   
$
6,665
 

Amortization of the discount over the three months ended September 30, 2018 and 2017 totaled $5,541 and $1,571, respectively, which amounts have been recorded as interest expense. Amortization of the discount over the nine months ended September 30, 2018 and 2017 totaled $18,335 and $6,599, respectively, which amounts have been recorded as interest expense.  

As a result of the application of ASC No. 815 in the periods ended September 30, 2018 and December 31, 2017 the fair value of the conversion feature is summarized as follows:

Balance at December 31, 2017
 
$
31,090
 
Derivative addition associated with convertible notes
   
-
 
Change in fair value
   
(584
)
Balance at September 30, 2018
 
$
30,506
 

The fair value at the commitment and re-measurement dates for the Company's derivative liabilities were based upon the following management assumptions as of September 30, 2018 and commitment date:

 
Commitment Date
 
September 30,
2018
 
December 31,
2017
 
Expected dividends
 
0
 
 
0
 
 
0
 
Expected volatility
101% ~103%
 
77% ~ 83%
 
110% ~ 115%
 
Expected term
0.92 ~ 1 year
 
0.92 ~0.99 year
 
0.67 ~0.74 year
 
Risk free interest rate
 
1.33%
 
 
2.59%
 
1.53% ~ 1.65%
 

Note 5 – License and Research Funding Agreements

On December 14, 2016, the Company entered into the License Agreement with Ariel. Under the terms of the License Agreement, Professor Danny Baranes, the principal investigator and his research team will carry out further research relating to cell treatment with conditioned medium for neuronal tissue regeneration and repair. The Company shall fund the research completed during the research period in the total amount of $100,000. In consideration for payments under the License Agreement, the Company received an exclusive worldwide royalty- bearing license in Ariel patents and know-how to develop and commercialize products based on or incorporating conditioned medium for neuronal tissue regeneration and/or repair, resulting from Ariel's research or technology or the Company's research funding (the "Products). Under the License Agreement, the Company is required to use its best efforts to develop and commercialize the Products in accordance with development milestones set forth in the Agreement.
11

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 5 – License and Research Funding Agreements (continued)

In addition, upon the occurrence of an Exit Event (as defined in the License Agreement) of the Company or of any affiliate commercializing the products, the Company is obligated to issue to Ariel an immediately exercisable warrant for that number of shares equal to 4% of the issued and outstanding shares of the Company at the time of issuance.

The Company and Ariel entered into Addendum #1, effective December 13, 2017 (the "Addendum") to the License Agreement pursuant to which Ariel was permitted to exercise a portion of the warrant granted pursuant to the License Agreement. On December 13, 2017, the Company issued 119,950 shares of common stock to Ariel, representing 1% of the issued and outstanding shares of the Company on such date, and valued at $335,860. The right to the balance of the shares subject to the warrant remains subject to the terms of the License Agreement and the occurrence of an Exit Event (as described in the License Agreement). In addition, the Addendum provides that Ariel may not request a demand registration until the balance of the shares subject to the warrant is exercised.

In addition to the other payments, the Company will pay Ariel upon the occurrence of the following milestone events, additional payments which shall be due within 6 months of completion of the milestone:

-
 Upon successful clinical FDA Phase II completion - $130,000; and
 
-
 Upon successful clinical FDA Phase III completion - $390,000

Upon successful development and commercialization and in recognition of the rights and licenses granted to the Company pursuant to the License Agreement, the Company will be subject to certain royalty payments as specified in the License Agreement.

During the year ended December 31, 2017, the Company incurred total research and development costs of $1,179,777, which amount includes the aforementioned value of 119,950 shares of common stock at $335,860 pursuant to the License Agreement, as well as $812,000 recorded as stock-based compensation related to certain stock awards discussed in Note 6 – Commitments below, granted to various members of the Company's scientific advisory board.

In lieu of extending the research financing and research period under the License Agreement with Ariel beyond the initial 12 months, on December 14, 2017, the Company entered into a 12-month services agreement with Ariel (the "Services Agreement") pursuant to which a team at Ariel University under the direction of Professor Danny Baranes will conduct molecular biology research activities involving the testing of scaffold materials for the Company. As compensation for such services, the Company paid Ariel (i) $17,250 on December 19, 2017 and an additional $17,250 on April 26, 2018.  On April 12, 2018, the Services Agreement was amended to provide for the payment by the Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request.

On March 6, 2018, the Company entered into an additional service agreement with Ariel for the services of Professor Gadi Turgeman and his stem cells research team in their lab pursuant to which the Company paid Ariel $20,580 on each of March 19, 2018 and August 22, 2018.

On July 12, 2018, the Company entered into the Sponsored Research Agreement with Dartmouth pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement.  Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned.  Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes. The Agreement may be terminated earlier than one year upon written agreement of the parties, a material breach which is not cured within 30 days of notice thereof, if Professor Ke no longer conducts the research under the Agreement and a successor acceptable to both parties is not available, or in the event of an unauthorized assignment of the Company's rights and obligations under the Agreement.
12

 
QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 6 – Commitments

(1)  
Service Agreement with Ariel - Prof. Danny Baranes

On December 14, 2017, the Company entered into a 12-month services agreement pursuant to which a team at Ariel under the direction of Prof. Danny Baranes will conduct molecular biology research activities involving the testing of implant materials for the Company. As compensation for the services provided, the Company will pay Ariel (i) $17,250 within five business days of the execution of the Services Agreement, and (ii) $17,250 by May 1, 2018.

The Services Agreement may be terminated by the non-breaching party upon a material breach that is not cured within 30 days or by the Company upon thirty days' prior written notice to Ariel. Ariel must keep confidential information of the Company confidential for five years after the term of the Services Agreement.

During the year ended December 31, 2017, $17,250 was paid and on April 26, 2018, the remaining installment of $17,250 was paid. During the year ended December 31, 2017, $1,438 was expensed, and during the nine months ended September 30, 2018 $25,875 was expensed, and the remaining $7,187, which amount is reflected on the Company's balance sheets as prepaid expenses, will be expensed in a subsequent period.

On April 12, 2018, the Services Agreement was amended to provide for the payment by the Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request. During the nine-month period ended September 30, 2018, the Company paid $14,082 for these additional fees.

(2)  
Service Agreement with Ariel - Dr. Gadi Turgeman

On March 6, 2018, the Company entered into a service agreement for the services of Professor Gadi Turgeman and his stem cells research team in their lab. As compensation for the services provided, the Company paid Ariel $20,580 on each of March 19, 2018 and August 22, 2018.

The Services Agreement may be terminated by the non-breaching party upon a material breach that is not cured within 30 days or by the Company upon thirty days' prior written notice to Ariel. Ariel must keep confidential information of the Company confidential for six years after the term of the Services Agreement.

During the nine months ended September 30, 2018, $41,160 was paid and recorded as prepaid expenses, of which $24,010 was expensed in the nine-month period ended September 30, 2018, and the remaining $17,150 will be expensed in a subsequent period.

(3)  
Science Advisory Board Member Consulting Agreements (the "Agreements")

As part of its ongoing program of research and development, the Company has retained distinguished scientists and other qualified individuals to advise the Company with respect to its technology and business strategy and to assist it in the research, development and analysis of the Company's technology and products. In furtherance thereof, the Company has retained certain Advisors as members of its Scientific Advisory Board as described below, and the Company and Advisors have entered into agreements with the following terms and conditions:
13

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 6 – Commitments (continued)

(3)  
Science Advisory Board Member Consulting Agreements (the "Agreements") (continued)

-
Scientific Advisory Board and Consulting Services - Advisor shall provide general consulting services to Company (the "Services") as a member of its Scientific Advisory Board ("SAB"). As a member of the SAB, Advisor agrees to provide the Services as follows: (a) attending meetings of the Company's SAB; (b) performing the duties of a SAB member at such meetings, as established from time to time by the mutual agreement of the Company and the SAB members, including without limitation meeting with Company employees, consultants and other SAB members, reviewing goals of the Company and assisting in developing strategies for achieving such goals, and providing advice, support, theories, techniques and improvements in the Company's scientific research and product development activities; and (c) providing consulting services to Company at its request, including a reasonable amount of informal consultation over the telephone or otherwise as requested by Company. Advisor's consultation with Company will involve services as scientific, technical and business advisor to the Company and its senior team as needed with respect to the field of neuronal injuries and neuro degenerative diseases ("the "Field") and requires the application of unique, special and extraordinary skills and knowledge that Advisor possesses in the Field.
 
-
SAB Consulting Compensation - the Company shall grant to Advisor the option to purchase certain number of shares of the common stock of the Company as per the stock option award grant. The options are subject to terms and provisions of the Company's 2016 Stock Option and Stock Award Plan.

On November 15, 2017, the Company entered into Agreements with three Advisors under the terms of which two Advisors are granted an option to purchase 20,000 shares of common stock and one Advisor was granted an option to purchase 30,000 shares of common stock under the 2016 Stock Option and Award Plan subject to certain vesting terms.

On April 16, 2018, the Company entered into a one-year advisory board member consulting agreement with an assistant Professor of Chemistry at Dartmouth College to serve on the Company's Scientific Advisory Board. In consideration for serving on the Scientific Advisory Board, the Company granted an option to purchase 30,000 shares of its common stock under certain vesting terms to the assistant Professor.

On August 15, 2018, the Company entered into an Agreement with an Advisor under the terms of which the Company granted an option to purchase 20,000 shares of common stock under the 2016 Stock Option and Award Plan subject to certain vesting terms.

(4)  
Business Advisory Board Agreement

On January 23, 2018, the Company entered into a one-year advisory board member consulting agreement with Pavel Hilman, the controlling shareholder of Conventus Holdings SA, a BVI corporation ("Conventus"), under which Mr. Hilman will serve on the Company's Advisory Board as a business advisor. The Advisory Board Agreement will automatically renew for up to two additional one-year periods, unless earlier terminated by either party upon 30 days' prior written notice to the other party. In consideration for serving on the Advisory Board, the Company awarded 10,000 shares of its common stock to Mr. Hilman under its 2016 Stock Option and Stock Award Plan.
14

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 6 – Commitments (continued)

 (5)  
 Investor Relations Agreement

On April 23, 2018, the Company entered into a six-month investor relations agreement with an investor relations firm for a monthly consulting fee of $5,000 and the issuance of 75,000 shares of common stock payable on signing the agreement.

On June 23, 2018, the Company gave notice of rescission of the agreement to such firm and requested the return of the consulting fee paid and the 75,000 shares of common stock. As a result, the Company has not recorded any fees for services rendered past June 23, 2018.  A total of $10,000 representing April 2018 and May 2018 monthly consulting fees is reflected in the statement of operations and a total of $150,000, the fair market value of the issued shares, was expensed on issue.

 (6)  
 Sponsored Research Agreement

On July 12, 2018, the Company entered into a one-year sponsored research agreement (the "Sponsored Research Agreement"), with the Trustees of Dartmouth College ("Dartmouth") pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement.  Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned.  Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes. The Company funded $36,293 on August 20, 2018 and will fund additional $18,147 by December 1, 2018 and $18,146 by June 1, 2019, respectively.

The Agreement may be terminated earlier than one year upon written agreement of the parties, a material breach which is not cured within 30 days of notice thereof, if Professor Ke no longer conducts the research under the Agreement and a successor acceptable to both parties is not available, or in the event of an unauthorized assignment of the Company's rights and obligations under the Agreement.

During the nine months ended September 30, 2018, $36,293 was paid and recorded as prepaid expenses, of which $9,073 was expensed in the nine-month period ended September 30, 2018, and the remaining $27,220 will be expensed in a subsequent period.

Note 7 – Stock Plan

2016 Stock Option and Stock Award 

On December 14, 2016, the Board adopted the Company's 2016 Stock Option and Stock Award Plan (the "Plan"). The Plan provides for the award of stock options (incentive and non-qualified), stock awards and stock appreciation rights to officers, directors, employees and consultants who provide services to the Company. The terms of awards under the Plan are made by the Administrator of the Plan appointed by the Company's Board of Directors (the "Board"), or in the absence of an Administrator, by the Board. The Company has reserved 10 million shares for issuance under the Plan.
15

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 7 – Stock Plan (continued)

Stock Awards:

On December 14, 2016, the Board awarded to each of its Science Advisors, Prof. Danny Baranes and Dr. Liat Hammer, a total of 440,000 shares of common stock of which 150,000 shares vested on December 14, 2016, 145,000 shares vested on December 14, 2017, and 145,000 shares will vest on December 14, 2018, provided such advisors are still providing services to the Company.

The value of the vested awards had been recorded as research and development expenses in the respective periods.  A total of 290,000 stock awards are expected to vest during the fourth quarter of fiscal 2018.

On January 23, 2018, the Company awarded 10,000 shares of its common stock to Mr. Hilman under its 2016 Stock Option and Stock Award Plan, which shares were fully vested and recorded as advisory services on issuance.  

   
For the nine months ended
September 30, 2018
   
For the year ended December 31, 2017
 
Number of shares vested in period
   
10,000
     
290,000
 
Fair market value per share
 
$
2.80
   
$
2.80
 
Stock based compensation recognized
 
$
28,000
   
$
812,000
 

Stock Options:

(a)  
Stock Options granted to Science Advisors:

On November 15, 2017, under the 2016 Stock Option and Award Plan, the Board awarded two of its Science Advisors the following three-year stock options: (i) an immediately exercisable option to purchase 6,667 shares of common stock at an exercise price of $2.00 per share, (ii) an option to purchase 6,667 shares of common stock exercisable on November 15, 2018 at an exercise price of $2.00 per share and (iii) an option to purchase 6,666 shares of common stock exercisable on November 15, 2019 at an exercise price of $2.00 per share, provided the advisors are still providing services to the Company.

On November 15, 2017, under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 15,000 shares of common stock, exercisable on November 15, 2018 at an exercise price of $0.40 per share and (ii) an option to purchase 15,000 shares of common stock exercisable on November 15, 2019 at an exercise price of $0.40 per share, provided the advisor is still providing services to the Company.

On April 16, 2018, under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 10,000 shares of common stock, exercisable on April 16, 2018 at an exercise price of $2.00 per share (ii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2019 at an exercise price of $2.00 per share, and (iii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2020 at an exercise price of $2.00 per share, provided the advisor is still providing services to the Company.
On August 15, 2018, under the 2016 Stock Option and Award Plan, the Board granted a Science Advisor an option to purchase an aggregate of 20,000 shares of  common stock at an exercise price of $2.00 per share. The option vests as to 6,667 shares on each of August 15, 2018 and August 15, 2019 and as to 6,666 shares on August 15, 2020 and remains exercisable as to each such installment for three years from the date of vesting.
16

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 7 – Stock Plan (continued)

Stock Options: (continued)

(a)  
Stock Options granted to Science Advisors: (continued)

During the year ended December 31, 2017, total recognized compensation in respect of the above stock option compensation was $29,000, which amount has been allocated as advisory services as part of general and administrative expenses.

The Company recorded stock-based compensation in the amount of $48,078 and $122,816 in respect to these options grants during the three and nine months ended September 30, 2018, respectively, which amounts have been allocated as advisory services as part of general and administrative expenses.

As of September 30, 2018, total unrecognized compensation remaining to be recognized in future periods totaled $92,671.

(b)  
Stock Options granted to Officers:

On December 4, 2017, the Board granted five-year options to each of its two officers for the purchase of 300,000 shares of the common stock of the Company. The options have an exercise price of $2.00 and vest and become exercisable on December 4, 2018.
 
During the year ended December 31, 2017, total recognized compensation of $106,029 was recorded as general and administrative expenses.

During the three and nine months ended September 30, 2018, total recognized compensation of $353,430 and $1,060,290, respectively, was recorded as general and administrative expenses.

As of September 30, 2018, total unrecognized compensation remaining to be recognized in future periods totaled $246,755.


The fair value of each option award above is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions at the measurement date(s):
 
 
 
Measurement date
 
Dividend yield
 
 
0%
 
Expected volatility
 
114.69 ~ 126.34%
 
Risk-free interest rate
 
1.79% ~ 2.68%
 
Expected life (years)
 
3 ~ 5
 
Stock Price
 
$
2.00 ~ 2.80
 
Exercise Price
 
$
0.40 ~ 2.00
 

17

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 7 – Stock Plan (continued)

Stock Options: (continued)

A summary of the activity for the Company's stock options for the nine-month period ended September 30, 2018 and for the year ended December 31, 2017, is as follows:

 
 
September 30, 2018
   
December 31, 2017
 
 
       
Weighted Average
         
Weighted Average
 
 
 
Shares
   
Exercise Price
   
Shares
   
Exercise Price
 
Outstanding, beginning of period
   
670,000
   
$
1.93
     
-
   
$
-
 
Granted
   
50,000
   
$
2.00
     
670,000
   
$
1.93
 
Exercised
   
-
   
$
-
     
-
   
$
-
 
Canceled
   
-
   
$
-
     
-
   
$
-
 
Outstanding, end of period
   
720,000
   
$
1.93
     
670,000
   
$
1.93
 
Options exercisable, end of period
   
30,000
   
$
2.00
     
13,334
   
$
2.00
 
Options expected to vest, end of period
   
690,000
   
$
1.93
     
656,666
   
$
1.89
 
Weighted average fair value of options granted
         
$
2.30
           
$
2.36
 

Note 8 – Capital Stock

Authorized:

The Company has authorized 100,000,000 shares of common stock, par value $0.0001 and 10,000 shares of preferred stock which is designated as Series A Preferred Stock, par value $0.001.

Series A Preferred Stock:

The Series A Preferred Stock is redeemable at the option of the Company at any time, in whole or in part, upon 10 trading days prior notice, at a price of $1.00 per share plus 4% per annum from the date of issuance (the "Stated Value"). The holders of the Series A Preferred Stock are entitled to a liquidation preference equal to the Stated Value, prior to the holders of other preferred stock or common stock. The holders of the Series A Preferred Stock have the right to convert such stock into common stock at a conversion rate equal to the Stated Value as of the conversion date divided by the average closing price of the common stock for the five previous trading days. The Company is required to reserve sufficient number of shares for the conversion of the Series A Preferred Stock. The holders of Class A Preferred Stock shall vote together as a single class with the holders of the Company's common stock and the holders of any other class or series of shares entitled to vote with the common stock, with the holders of Class A Preferred Stock being entitled to 66 2/3% of the total votes on all such matters, regardless of the actual number of shares of Class A Preferred Stock then outstanding.

There was a total of 2,000 shares of Series A Preferred Stock issued and outstanding as at September 30, 2018 and December 31, 2017.
18

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 8 – Capital Stock (continued)

Common Stock issuances during the nine months ended September 30, 2018:

On January 23, 2018 the Company sold 312,500 shares of its common stock to Conventus and raised $500,000 pursuant to a subscription agreement in a private placement offering. The proceeds of the offering will be used for research and general corporate purposes.

On January 23, 2018, the Company issued 10,000 shares for advisory services (Note 6(4)). The shares were valued at fair market value on the date of issuance for a total of $28,000 or $2.80 per share.

On February 6, 2018, the Company received a warrant exercise notice in respect of 2,000 warrants from a subscriber and issued 1,715 shares of common stock on a cashless exercise basis as per the cashless exercise formula contained in the warrant.

On April 23, 2018, the Company issued 75,000 shares of its common stock in respect of an investor relations services agreement which was rescinded on June 23, 2018 (Note 6(5)). The shares were valued at the fair market value on the date of issuance for a total of $150,000, or $2.00 per share.

On September 16, 2018 the Company sold 22,728 shares of its common stock to an investor and raised $25,000 pursuant to a subscription agreement in a private placement offering. The proceeds of the offering will be used for research and general corporate purposes.
 
Common Stock issuances as of December 31, 2017:

On December 13, 2017, 119,950 shares were issued to Ariel as an exercise of warrants pursuant to a License Agreement (Note 5 – License and Research Funding Agreement). These shares were valued at $335,860 or $2.80 per share, based on fair market value, and the associated cost was recorded as research and development expenses.
 
On December 14, 2017, the Company issued 290,000 shares to two Scientific Advisors as a stock award, valued at $812,000, or $2.80 per share, based on fair market value, and recorded the associated cost as research and development expenses. (Note 7 – Stock Plan).

During the year ended December 31, 2017, the Company received aggregate proceeds of $32,000 in private placement subscriptions for a total of 128,000 shares.

During the year ended December 31, 2017 the Company received warrant exercise notices in respect of 512,000 warrants from various subscribers and issued a total of 442,960 shares of common stock on a cashless exercise basis as per the cashless exercise formula in the warrant.

19

QRONS INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
September 30, 2018

Note 8 – Capital Stock (continued)

Share Purchase Warrants

In accordance with authoritative accounting guidance, the fair value of the aforementioned warrants was calculated using the Black-Scholes option-pricing model with the following assumptions at the measurement date(s):

 
 
Measurement date
 
Dividend yield
 
 
0%
 
Expected volatility
 
97.90~119.33%
 
Risk-free interest rate
 
1.47~1.60%
 
Expected life (years)
 
2.71~2.92
 
Stock Price
 
$
0.25
 
Exercise Price
 
$
0.40
 

As of September 30, 2018, and December 31, 2017, the following common stock purchase warrants were outstanding:

 
 
Warrants (1)
   
Weighted Average Exercise Price
 
Outstanding – December 31, 2016
   
502,000
   
$
0.40
 
Granted
   
64,000
     
0.40
 
Forfeited/Canceled
   
-
     
-
 
Exercised
   
512,000
 
(2)
 
0.40
 
Outstanding – December 31, 2017
   
54,000
     
0.40
 
Granted
   
-
     
-
 
Forfeited/Canceled
   
-
     
-
 
Exercised
   
2,000
 
(3)
 
0.40
 
Outstanding – September 30, 2018
   
52,000
   
$
0.40
 

(1) Each two shares of common stock purchased under the private placement provides for one warrant to acquire an additional share of common stock together with the payment of $0.40.

(2) During the year ended December 31, 2017, investors exercised 512,000 share purchase warrants and received 442,960 underlying shares for exercise on a cashless basis.

(3) During the nine-month period ended September 30, 2018, investors exercised 2,000 share purchase warrants and received 1,715 underlying shares for exercise on a cashless basis.

Note 9 – Subsequent Events

On October 8, 2018 the Company sold 22,728 shares of its common stock to an investor and raised $25,000 pursuant to a subscription agreement in a private placement offering. The proceeds of the offering will be used for research and general corporate purposes.

The Company has evaluated subsequent events from the balance sheet date through the date that the financial statements were issued and determined that there are no additional subsequent events to disclose.
20

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 
This Quarterly Report on Report contains predictions, estimates and other forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors including the risks set forth in the section entitled "Risk Factors" in our Post-Effective Amendment No. 1 to our Registration Statement on Form S-1, as filed with the Securities and Exchange Commission (the "SEC") on March 15, 2018, that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements.

Forward-looking statements represent our management's beliefs and assumptions only as of the date of this Report. You should read this Report with the understanding that our actual future results may be materially different from what we expect.

All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.

The management's discussion and analysis of our financial condition and results of operations are based upon our condensed financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements for the three and nine months ended September 30, 2018 and the notes thereto appearing elsewhere in this Report and the Company's audited financial statements for the fiscal year ended December 31, 2017, as filed with the SEC in its Annual Report on Form 10-K on March 2, 2018, along with the accompanying notes.  As used in this Quarterly Report, the terms "we", "us", "our", and the "Company" means BioLabMart Inc. prior to August 8, 2017 and Qrons Inc. since August 8, 2017.

Overview

The Company was incorporated under the laws of the State of Wyoming on August 22, 2016 as BioLabMart Inc. and changed its name to Qrons Inc. on August 8, 2017.
 
The Company is a preclinical stage biotechnology company developing advanced cell-based solutions to combat neuronal injuries and achieve a breakthrough in the treatment of traumatic brain injuries ("TBIs"), an unmet medical need.  We believe that our approach is pushing the boundaries of science by using the latest advances in molecular biology and chemistry. The Company collaborates with universities and scientists in the fields of regenerative medicine, tissue engineering and 3D printable hydrogels to develop a treatment that integrates proprietary, engineered mesenchymal stem cells, 3D printable implant, smart materials and a novel delivery system.  

The Company raised an aggregate of $281,000 between November 2, 2016 and January 27, 2017 from 37 accredited investors, $500,000 in January 2018 from an accredited investor, and an aggregate of $50,000 from two accredited investors in September and October 2018, in private placement offerings under Regulation D and Regulation S under the Securities Act of 1933., 

The Company relies primarily on its two co-founders, Jonah Meer and Ido Merfeld, who are its sole officers and directors to manage its day- to-day business.  We currently outsource all professional services to third parties in an effort to maintain lower operational costs.
21

Messrs. Meer and Merfeld, as the holders of the Company's issued and outstanding shares of the Company's Class A Preferred Stock, collectively have 66 2/3% of the voting rights of the Company. Acting together, they will be able to influence the outcome of all corporate actions requiring approval of our stockholders.

The Company's common stock was approved by the Financial Industry Regulatory Authority ("FINRA") for quotation on the OTC pink sheets under the symbol "BLMB" as of July 3, 2017. On July 6, 2017, the Company's board of directors and shareholders approved an amendment to its Articles of Incorporation changing the name of the Company from "BioLabMart Inc." to "Qrons Inc. The Secretary of State of the State of Wyoming approved such name change, effective August 8, 2017.  FINRA announced the Company's name change to Qrons Inc. on its Daily List on August 9, 2017. The new name and symbol, "QRON", became effective on August 10, 2017.

License Agreement with Ariel

On December 14, 2016, the Company entered into a license and research funding agreement ("License Agreement") with Ariel University R&D Co., Ltd., ("Ariel"), a wholly owned subsidiary of Ariel University, based in Ariel, Israel. In consideration for payments under the License Agreement, the Company received an exclusive worldwide royalty-bearing license in Ariel patents and know-how to develop and commercialize products for neuronal tissue regeneration and/or repair, resulting from Ariel's research or technology or the Company's research funding.
Services Agreements with Ariel

In lieu of extending the research financing and research period under the License Agreement beyond the initial 12 months, on December 14, 2017, the Company entered into a 12-month services agreement with Ariel (the "Services Agreement") pursuant to which a team at Ariel University under the direction of Prof. Danny Baranes will conduct molecular biology research activities involving the testing of implant materials for the Company. As compensation for such services, the Company paid Ariel (i) $17,250 on December 19, 2017 and (ii) $17,250 on April 26, 2018. On April 12, 2018, the Services Agreement was amended to provide for the payment by the Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request.

On March 6, 2018, the Company entered into an additional service agreement with Ariel for the services of Professor Gadi Turgeman and his stem cells research team in their lab pursuant to which the Company paid Ariel $20,580 on each of March 19, 2018 and August 22, 2018.

Option Agreement with Dartmouth

On October 17, 2017, the Company entered into an option agreement (the " Option Agreement") with the Trustees of Dartmouth College ("Dartmouth") which provides for, among other things, the grant to the Company of a one-year exclusive option to negotiate a worldwide, royalty bearing, exclusive license with Dartmouth for 3D printable materials in the field of human and animal health. The Option Agreement provided the opportunity to evaluate the intellectual property, potential products and markets and for further research to develop the intellectual property. The Company exercised its option on March 26, 2018 to negotiate definitive license terms, as it continues further evaluation and research.

Sponsored Research Agreement with Dartmouth

On July 12, 2018, the Company entered into a one-year sponsored research agreement (the "Sponsored Research Agreement"), with Dartmouth pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement.

Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned.

Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes.
22


If either party desires to obtain patent and copyright protection for intellectual property created under the Agreement, such party shall notify the other party and the parties shall agree upon intellectual property protection strategy and cost allocation. Each party shall have the right to grant licenses under jointly-owned patents to third parties, subject to the Company's option to the exclusive right to license Dartmouth intellectual property and/or Dartmouth's ownership in jointly-owned intellectual property upon notification to Dartmouth in accordance with the terms of the Agreement and at the Company's cost.  If the Company exercises its option to license intellectual property, Dartmouth shall negotiate exclusively with the Company for 180 days (or such additional period as agreed upon by the parties) for such licenses.  The Company will be required to reimburse Dartmouth for the costs of patent prosecution and maintenance in the United States and any foreign country and demonstrate reasonable efforts to commercialize the technology.

The Agreement may be terminated earlier than one year upon written agreement of the parties, a material breach which is not cured within 30 days of notice thereof, if Professor Ke no longer conducts the research under the Agreement and a successor acceptable to both parties is not available, or in the event of an unauthorized assignment of the Company's rights and obligations under the Agreement.

Plan of Operations

We have not completed development of our product candidate nor generated any revenue from the sales of products or services.

In the next 12 months, we currently plan on completing development of our product candidate. This will require us to continue working with Dartmouth under the Sponsored Research Agreement in our development of innovative 3D printable biocompatible advanced materials and stem cell delivery techniques. At our Ariel labs our Stem Cells Team will continue development of our proprietary, neuro-regenerative mesenchymal stem cell lines.

Upon completion of the development of our product candidate we will begin testing for efficacy. This will require us to establish an Efficacy Team, in preparation to reach clinical trials.

On January 15, 2018, Ariel filed a  provisional patent application related to our neural cell development research. Subject to positive efficacy findings, we currently intend to file for a non-provisional application. On April 9, 2018, we filed a provisional patent application  with the U.S. Patent and Trademark Office  entitled 'Techniques for Promoting Neuronal Recovery'.

As our research progresses, if and when we achieve functional supporting results, we or Ariel intend to file for additional patents. Under the License Agreement Ariel shall be responsible for the preparation, filing, prosecution and protection of its patents. Such preparation shall be done in consultation with the Company, provided expenses in excess of $1,000 will require Company pre-approval. The Company shall reimburse Ariel for all documented patent-related expenses. We currently estimate the cost of such patent preparation and filing to be approximately $7,000 which we intend to fund with the Company's operating capital.

We will continue exploring sources of additional debt and equity financings as well as available grants.

There is substantial doubt that we can continue as an on-going business after the next twelve months unless we obtain additional capital to pay our expenditures. We do not currently have sufficient resources to accomplish all of the conditions necessary for us to generate revenue.
23


RESULTS OF OPERATIONS

Three Months Ended September 30, 2018 and September 30, 2017

Revenue

We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future.
 
Net Loss

Our net loss for the three months ended September 30, 2018 and 2017 is as follows:


 
 
For the three months ended September 30,
 
 
 
2018
   
2017
 
 
           
Net sales
 
$
-
   
$
-
 
 
               
Operating expenses:
               
Research and development expenses
   
104,798
     
8,406
 
Professional fees
   
6,300
     
8,170
 
General and administrative expenses
   
423,216
     
31,643
 
Total operating expenses
   
534,314
     
48,219
 
 
               
Income (loss) from operations
   
(534,314
)
   
(48,219
)
 
               
Other income (expense)
               
Interest expense
   
(6,048
)
   
(1,785
)
Change in derivative liabilities
   
(2,979
)
   
(47,954
)
 
               
Net (loss)
 
$
(543,341
)
 
$
(97,958
)

Operating Expenses

Total operating expenses for the three months ended September 30, 2018 were $534,314 compared to total operating expenses of $48,219 for the three months ended September 30, 2017. During the three months ended September 30, 2018, the Company incurred $104,798 of research and development expenses which included payroll of $34,563, service fees related to certain research and development agreements of $26,087, fees associated with a sponsored research agreement of $9,073, legal and filing fees related to patents of $710, publication and software fees of $2,163 and purchases of expendable lab supplies and equipment of $32,203, compared to $8,406 of research and development expenses for the three months ended September 30, 2017, which consisted of patent fees of $5,018, and purchases of expendable lab supplies. The Company incurred general and administrative expenses of $423,216 for the three months ended September 30, 2018 compared to general and administrative expenses of $31,643 for the three months ended September 30, 2017. The increase in general and administrative expense during the three months ended September 30, 2018 was primarily due to stock-based compensation costs of $401,208 related to the issuance of stock options to our officers, and members of our advisory board. Professional fees totaled $6,300 for the three months ended September 30, 2018 compared to professional fees of $8,170 during the three months September 30, 2017.   Other expense in the three months ended September 30, 2018 included a loss of $2,979 as a result of the change in value of our derivative liabilities and interest expense of $6,048, including accretion of our convertible notes of $5,541. Other expense was $49,739 in the three months ended September 30, 2017, which represents interest expense related to the accretion of our convertible notes, as well as accrued interest, and a loss from the change in the value of our derivative liabilities of $47,954. We had a net loss of $543,341 in the three months ended September 30, 2018 compared to a net loss of $97,958 in the three months ended September 30, 2017.
24


Nine Months Ended September 30, 2018 and September 30, 2017

Revenue

We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future.
 
Net Loss

Our net loss for the nine months ended September 30, 2018 and 2017 is as follows:


 
 
For the nine months ended September 30,
 
 
 
2018
   
2017
 
 
           
Net sales
 
$
-
   
$
-
 
 
               
Operating expenses:
               
Research and development expenses
   
237,770
     
10,120
 
Professional fees
   
35,449
     
11,297
 
General and administrative expenses
   
1,432,980
     
47,252
 
Total operating expenses
   
1,706,199
     
68,669
 
 
               
Income (loss) from operations
   
(1,706,199
)
   
(68,669
)
 
               
Other income (expense)
               
Interest expense
   
(19,839
)
   
(7,215
)
Change in derivative liabilities
   
584
     
(47,954
)
 
               
Net (loss)
 
$
(1,725,454
)
 
$
(123,838
)

Operating Expenses

Total operating expenses for the nine months ended September 30, 2018 were $1,706,199 compared to total operating expenses of $68,669 for the nine months ended September 30, 2017. During the nine months ended September 30, 2018, the Company incurred $237,770 of research and development expenses which included payroll of $88,856, service fees related to certain research and development agreements of $64,167, fees associated with a sponsored research agreement of $9,073, legal and filing fees related to patents of $21,566, publication and software fees of $4,910 and purchases of expendable lab supplies and equipment of $49,199, compared to $10,120 of research and development expenses for the nine months ended September 30, 2017 which consisted of patent fees of $5,018 and purchases of expendable lab supplies. The Company incurred general and administrative expenses of $1,432,980 for the nine months ended September 30, 2018 compared to general and administrative expenses of $47,252 for the nine months ended September 30, 2017. The increase in general and administrative expense during the nine months ended September 30, 2018 was primarily due to stock-based compensation costs of $1,183,106 related to the issuance of stock options to our officers, and $178,000 for stock awards and shares for services to members of our advisory board and investor relations consultants. Professional fees totaled $35,449 for the nine months ended September 30, 2018 compared to professional fees of $11,297 during the nine months September 30, 2017.    Other expense in the nine months ended September 30, 2018 included a gain of $584 as a result of the change in value of our derivative liabilities and interest expense of $19,839, including accretion of our convertible notes of $18,335. Other expense was $55,169 in the nine months ended September 30, 2017, which represents interest expense related to the accretion of our convertible notes of $6,599, as well as accrued interest, and a loss from the change in the value of our derivative liabilities of $47,954 We had a net loss of $1,725,454 in the nine months ended September 30, 2018 compared to a net loss of $123,838 in the nine months ended September 30, 2017.
25


Liquidity and Financial Condition

Our current assets as of September 30, 2018 were $253,613 which consisted of $198,622 in cash and cash equivalents and $54,991 of prepaid expenses.  We are in the early stage of development, have experienced net losses to date and have not generated revenue from operations which raises substantial doubt about our ability to continue as a going concern. There are a number of conditions that we must satisfy before we will be able to commercialize our potential product and generate revenue, including successful development of a product candidate, which includes clinical trials, FDA approval, demonstration of effectiveness sufficient to generate commercial orders by customers, establishing production capabilities as well as effective marketing and sales capabilities for our product. We do not currently have sufficient resources to accomplish any of these conditions necessary for us to generate revenue and currently expect to incur increasing operating expenses.  We will require substantial additional funds for operations, the service of debt and to fund our business objectives. We will have to continue to rely on equity and debt financing. There can be no assurance that financing, whether debt or equity, will always be available to us in the amount required at any particular time or for any particular period or, if available, that it can be obtained on terms favorable to us. While we secured financing in the amount of $500,000 in January 2018, and additional financing of $50,000 in September and October 2018, without additional financing, we do not believe our resources will be sufficient to meet our operating and capital needs beyond the fourth quarter of 2018.

Working Capital

 
 
At September 30, 2018
 
At December 31, 2017
 
 
       
Current Assets
$
253,613
 
$
73,579
 
Current Liabilities
 
72,688
   
53,306
 
Working Capital
$
180,925
 
$
20,273
 

 
Cash Flows

 
 
 
At September 30, 2018
   
At September 30, 2017
 
Net cash (used in) operating activities
 
$
(384,145
)
 
$
(63,226
)
Net cash provided by investing activities
   
-
     
-
 
Net cash provided by financing activities
 
$
525,000
   
$
24,452
 
Net increase (decrease) in cash during period
 
$
140,855
   
$
(38,774
)

Operating Activities
 
Net cash used in operating activities was $384,145 for the nine-month period ended September 30, 2018 compared to $63,226 for the nine-month period ended September 30, 2017.  Cash used in operating activities was predominantly the result of our net loss, offset by non-cash items including compensation in the form of stock options totaling $1,183,106, stock awards and stock based compensation totaling $178,000 related to an investor relations agreement and service provided on the Company's advisory board, accretion expense of $18,335, and a gain from the change in the value of derivative liabilities of $584.  Changes in operating assets and liabilities includes an increase to accounts payable of $126, an increase to prepaid expenses of $39,179 and an increase to accounts payable related party of $1,505 during the nine months ended September 30, 2018.  During the nine months ended September 30, 2017 cash used in operating activities was also a result of our net loss of $123,838, offset by an increase to accounts payable of $6,059, accretion of debt discount totaling $6,599 and a change in our derivative liabilities of $47,954.

Investing Activities
 
There were no investing activities during the nine-month periods ended September 30, 2018 and 2017.
26

 
Financing Activities
 
Net cash provided by financing activities was $525,000 for the nine-month period ended September 30, 2018 compared to $24,452 for the nine-month period ended September 30, 2017. The Company received proceeds from private placement offerings totaling $525,000 in the nine-month period ended September 30, 2018 as compared to $32,000 in the nine months ended September 30, 2017, which included financing costs of $22,548, with no similar expense in the nine-month period ended September 30, 2018. Further during the nine months ended September 30, 2017, the Company received proceeds of $15,000 from a convertible note, with no similar financing in the nine months ended September 30, 2018.

Going Concern
 
Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that may be necessary should we be unable to continue in operation. Our report from our independent registered public accounting firm for the fiscal year ended December 31, 2017 includes an explanatory paragraph stating the Company has experienced net losses to date, and it has not generated revenue from operations, and will need additional working capital to service debt and for ongoing operations.  These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially and adversely effected and we may be unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in note 2 to our financial statements contained herein.  

Recent Accounting Pronouncements
 
There were various accounting standards and interpretations issued recently, none of which are expected to have a material effect on the Company's operations, financial position or cash flows. 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company and are not required to provide this information.
27

  
ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
 
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of September 30, 2018, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, based on the material weaknesses discussed below, our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Act Commission's rules and forms and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our internal controls are not effective for the following reasons: (i) there is an inadequate segregation of duties consistent with control objectives as management is comprised of only two persons, one of which is the Company's principal executive officer and principal financial officer and, (ii) the Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.
 
In order to mitigate the foregoing material weakness, we have engaged an outside accounting consultant with significant experience in the preparation of financial statements in conformity with U.S. GAAP to assist us in the preparation of our financial statements to ensure that these financial statements are prepared in conformity to U.S. GAAP. We will continue to monitor the effectiveness of this action and make any changes that our management deems appropriate.

We would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will reassess this matter in the following year to determine whether improvement in segregation of duty is feasible. In addition, we would need to expand our board to include independent members.
 
Going forward, we intend to evaluate our processes and procedures and, where practicable and resources permit, implement changes in order to have more effective controls over financial reporting. 
 
Changes in Internal Control over Financial Reporting
 
During the period covered by this report, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

28


PART II – OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company's property is not the subject of any pending legal proceedings.

ITEM 1A. RISK FACTORS

The Company is a smaller reporting company and is not required to provide this information.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
Except as set forth below, there were no sales of equity securities sold during the period covered by this Report:

On August 15, 2018, we granted an option to purchase an aggregate of 20,000 shares of our common stock at an exercise price of $2.00 per share to Igor Korman. The option vests as to 6,667 shares on each of August 15, 2018 and August 15, 2019 and as to 6,666 shares on August 15, 2020 and remains exercisable as to each such installment for three years from the date of vesting.

On September 16, 2018, we sold 22,728 shares of our common stock to an accredited investor for $25,000 pursuant to a subscription agreement.

On October 8, 2018 we sold 22,728 shares our common stock to an accredited investor for $25,000 pursuant to a subscription agreement.

The above issuance did not involve any underwriters, underwriting discounts or commissions, or any public offering and we believe is exempt from the registration requirements of the Securities Act of 1933 by virtue of Section 4(2) thereof and/or Regulation D promulgated thereunder. The purchaser represented to us that he was an accredited investor and was acquiring the shares for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof and that he could bear the risks of the investment.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES
 
Not Applicable
 
ITEM 5. OTHER INFORMATION

None.
29


ITEM 6. EXHIBITS

Exhibit Number
Exhibit
 
 


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.


 
QRONS INC.
 
 
 
 
 
Date: November 6, 2018
By:
/s/ Jonah Meer
 
 
Name:
Jonah Meer 
 
 
Title:
Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer)
 


 
30
EX-31.1 2 ex311.htm CERTIFICATION

Exhibit 31.1


Certification Pursuant to pursuant to Rule 13a-14(a) or Rule 15d-14(a)
of the Securities Exchange Act of 1934, as amended

I, Jonah Meer, (Principal Executive Officer and Principal Financial and Accounting Officer), certify that:
 
1. I have reviewed this quarterly report on Form 10-Q of Qrons Inc. (the "Company);
 
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. As the registrant's certifying officer, I am 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 15-d-15 (f) for the registrant and I 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 my 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 period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
 
5.  As the registrant's certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
 
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.

Dated: November 6, 2018
By:
/s/Jonah Meer
 
 
 
Name: Jonah Meer
 
 
 
Chief Executive Officer and Chief Financial Officer
(Principal Executive Officer and Principal Financial and Accounting Officer)
 
 
 
      
 



EX-32.1 3 ex321.htm CERTIFICATION

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
 
 
The undersigned, Jonah Meer, Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) of Qrons Inc. (the "Company"), certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350) that, to his knowledge, the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (the "Report"):
 
          (1)  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 result of operations of the Company.
 
 
 
 
 
/s/Jonah Meer
 
Jonah Meer
 
Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer)
 
 
Date: November 6, 2018
 


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vertical-align: bottom; background-color: #cceeff;"> <div style="text-align: right; font-family: 'times new roman', times, serif; font-size: 10pt;">&#160;</div> </td> <td style="width: 306px; vertical-align: bottom; background-color: #cceeff;"> <div style="text-align: right; font-family: 'times new roman', times, serif; font-size: 10pt;">0</div> </td> <td style="width: 13px; vertical-align: bottom; background-color: #cceeff;"> <div style="text-align: right; font-family: 'times new roman', times, serif; font-size: 10pt;">&#160;</div> </td> <td style="width: 111px; vertical-align: bottom; background-color: #cceeff;"> <div style="text-align: right; font-family: 'times new roman', times, serif; font-size: 10pt;">&#160;</div> </td> <td style="width: 224px; vertical-align: bottom; background-color: #cceeff;"> <div style="text-align: right; font-family: 'times new roman', times, serif; font-size: 10pt;">0</div> </td> <td style="width: 13px; vertical-align: bottom; background-color: #cceeff;"> <div style="text-align: justify; 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Any portion of the principal and unpaid interest under the note is convertible at any time at the option of CubeSquare into shares of common stock of the Company at a conversion price equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days prior to the date of the notice of conversion from CubeSquare. 2017-09-01 Note 1 to extend the maturity date from September 1, 2017 to September 1, 2018 and on September 9, 2018, the Company further amended Note 1 to extend the maturity date to September 1, 2019, under the same terms and conditions. Note 2 was amended to extend the maturity date until September 27, 2019. 1571 6599 5541 18335 100000 0.04 Upon successful clinical FDA Phase II completion - $130,000; and Upon successful clinical FDA Phase III completion - $390,000 119950 812000 29000 106029 48078 353430 122816 1060290 P6M 119950 75000 335860 335860 0.01 The Company entered into an additional service agreement with Ariel for the services of Professor Gadi Turgeman and his stem cells research team in their lab pursuant to which the Company paid Ariel $20,580 on each of March 19, 2018 and August 22, 2018. The Company paid Ariel (i) $17,250 on December 19, 2017 and an additional $17,250 on April 26, 2018. On April 12, 2018, the Services Agreement was amended to provide for the payment by the Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request. 17250 17250 20580 17250 17250 20580 1438 25875 7187 20000 64000 10000 30000 30000 20000 The Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request. 41160 36293 24010 9073 17150 27220 5000 The Company issued 10,000 shares for advisory services (Note 6(4)). The shares were valued at fair market value on the date of issuance for a total of $28,000 or $2.80 per share. The Company issued 75,000 shares of its common stock in respect of an investor relations services agreement which was rescinded on June 23, 2018 (Note 6(5)). The shares were valued at the fair market value on the date of issuance for a total of $150,000, or $2.00 per share. The Company gave notice of rescission of the agreement to such firm and requested the return of the consulting fee paid and the 75,000 shares of common stock. As a result, the Company has not recorded any fees for services rendered past June 23, 2018. A total of $10,000 representing April 2018 and May 2018 monthly consulting fees is reflected in the statement of operations and a total of $150,000, the fair market value of the issued shares, was expensed on issue. 290000 10000 2.80 2.80 812000 28000 0.00 0.00 1.2634 1.1469 1.1933 0.9790 0.0268 0.0179 0.0160 0.0147 P5Y P3Y P2Y11M1D P2Y8M16D 2.80 2.00 0.40 2.00 670000 720000 670000 50000 13334 30000 656666 690000 1.93 1.93 1.93 2.00 2.00 2.00 1.89 1.93 2.36 2.30 10000000 440000 10000 150000 145000 145000 145000 290000 Under the 2016 Stock Option and Award Plan, the Board awarded two of its Science Advisors the following three-year stock options: (i) an immediately exercisable option to purchase 6,667 shares of common stock at an exercise price of $2.00 per share, (ii) an option to purchase 6,667 shares of common stock exercisable on November 15, 2018 at an exercise price of $2.00 per share and (iii) an option to purchase 6,666 shares of common stock exercisable on November 15, 2019 at an exercise price of $2.00 per share, provided the advisors are still providing services to the Company. Under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 15,000 shares of common stock, exercisable on November 15, 2018 at an exercise price of $0.40 per share and (ii) an option to purchase 15,000 shares of common stock exercisable on November 15, 2019 at an exercise price of $0.40 per share, provided the advisor is still providing services to the Company. Under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 10,000 shares of common stock, exercisable on April 16, 2018 at an exercise price of $2.00 per share and (ii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2019 at an exercise price of $2.00 per share, and (iii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2020 at an exercise price of $2.00 per share, provided the advisor is still providing services to the Company. provided the advisor is still providing services to the Company. Under the 2016 Stock Option and Award Plan, the Board granted a Science Advisor an option to purchase an aggregate of 20,000 shares of common stock at an exercise price of $2.00 per share. The option vests as to 6,667 shares on each of August 15, 2018 and August 15, 2019 and as to 6,666 shares on August 15, 2020 and remains exercisable as to each such installment for three years from the date of vesting. 92671 246755 2 P5Y 2018-12-04 300000 0.25 0.40 502000 54000 52000 512000 2000 2000 0.40 0.40 0.40 0.40 0.40 0.40 119950 290000 335860 812000 2.80 2.80 The Series A Preferred Stock is redeemable at the option of the Company at any time, in whole or in part, upon 10 trading days prior notice, at a price of $1.00 per share plus 4% per annum from the date of issuance (the "Stated Value"). The holders of the Series A Preferred Stock are entitled to a liquidation preference equal to the Stated Value, prior to the holders of other preferred stock or common stock. The holders of the Series A Preferred Stock have the right to convert such stock into common stock at a conversion rate equal to the Stated Value as of the conversion date divided by the average closing price of the common stock for the five previous trading days. The Company is required to reserve sufficient number of shares for the conversion of the Series A Preferred Stock. The holders of Class A Preferred Stock shall vote together as a single class with the holders of the Company's common stock and the holders of any other class or series of shares entitled to vote with the common stock, with the holders of Class A Preferred Stock being entitled to 66 2/3% of the total votes on all such matters, regardless of the actual number of shares of Class A Preferred Stock then outstanding. 312500 22728 22728 32000 500000 25000 25000 128000 The Company received a warrant exercise notice in respect of 2,000 warrants from a subscriber and issued 1,715 shares of common stock on a cashless exercise basis as per the cashless exercise formula contained in the warrant. 442960 1715 true true false 14082 The Company entered into a one-year sponsored research agreement (the "Sponsored Research Agreement"), with the Trustees of Dartmouth College ("Dartmouth") pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement. Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned. Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes. The Company funded $36,293 on August 20, 2018 and will fund additional $18,147 by December 1, 2018 and $18,146 by June 1, 2019, respectively. 2018-09-27 0.40 Each two shares of common stock purchased under the private placement provides for one warrant to acquire an additional share of common stock together with the payment of $0.40. During the year ended December 31, 2017, investors exercised 512,000 share purchase warrants and received 442,960 underlying shares for exercise on a cashless basis. During the nine-month period ended September 30, 2018, investors exercised 2,000 share purchase warrants and received 1,715 underlying shares for exercise on a cashless basis. 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Document and Entity Information - shares
9 Months Ended
Sep. 30, 2018
Nov. 14, 2018
Document and Entity Information [Abstract]    
Entity Registrant Name Qrons Inc.  
Entity Central Index Key 0001689084  
Trading Symbol QRON  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Type 10-Q  
Document Period End Date Sep. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q3  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Common Stock, Shares Outstanding   12,849,581
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Condensed Balance Sheets (Unaudited) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Current assets    
Cash and cash equivalents $ 198,622 $ 57,767
Prepaid expenses 54,991 15,812
Total current assets 253,613 73,579
TOTAL ASSETS 253,613 73,579
Current liabilities    
Accounts payable and accrued liabilities 14,267 14,141
Accounts payable and accrued liabilities - related party 2,915 1,410
Convertible note - related party, net of debt discount 25,000 6,665
Derivative liabilities 30,506 31,090
Total current liabilities 72,688 53,306
Total liabilities 72,688 53,306
Stockholders' equity    
Series A Preferred Shares: $0.001 par value, authorized 10,000; 2,000 shares issued and outstanding 2 2
Common stock, $0.0001 par value: shares authorized 100,000,000; 12,826,853 and 12,404,910 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively 1,283 1,240
Additional Paid-in Capital 3,497,774 1,611,711
Accumulated deficit (3,318,134) (1,592,680)
Total stockholder's equity 180,925 20,273
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 253,613 $ 73,579
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Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Sep. 30, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Series A Preferred Shares, par value $ 0.001 $ 0.001
Series A Preferred Shares, authorized 10,000 10,000
Series A Preferred Shares, shares issued 2,000 2,000
Series A Preferred Shares, shares outstanding 2,000 2,000
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 12,826,853 12,404,910
Common stock, shares outstanding 12,826,853 12,404,910
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Condensed Statements of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Income Statement [Abstract]        
Net sales
Operating expenses:        
Research and development expenses 104,798 8,406 237,770 10,120
Professional fees 6,300 8,170 35,449 11,297
General and administrative expenses 423,216 31,643 1,432,980 47,252
Total operating expenses 534,314 48,219 1,706,199 68,669
Income (loss) from operations (534,314) (48,219) (1,706,199) (68,669)
Other income (expense)        
Interest expense (6,048) (1,785) (19,839) (7,215)
Change in derivative liabilities (2,979) (47,954) 584 (47,954)
Total Other income (expense) (9,027) (49,739) (19,255) (55,169)
Net (loss) $ (543,341) $ (97,958) $ (1,725,454) $ (123,838)
Net (loss) per common shares (basic and diluted) $ (0.04) $ 0.00 $ (0.14) $ 0.00
Weighted average shares outstanding Basic and diluted 12,807,584 11,552,000 12,744,561 11,544,293
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Condensed Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Cash Flows From Operating Activities    
Net loss $ (1,725,454) $ (123,838)
Adjustments to reconcile net loss to net cash provided from (used by) operating activities:    
Stock awards recorded as advisory services 178,000
Stock options granted and recorded as administrative expenses and advisory services 1,183,106
Accretion of debt discount 18,335 6,599
Change in derivative liabilities (584) 47,954
Changes in operating assets and liabilities:    
Prepaid expenses (39,179)
Accounts payable and accrued liabilities 126 6,059
Accounts payable and accrued liabilities, related party 1,505
Net cash provided (used by) operating activities (384,145) (63,226)
Cash Flows From Investing Activities    
Net cash provided from (used by) investing activities
Cash Flows From Financing Activities    
Proceeds from convertible note 15,000
Proceeds from private placement 525,000 32,000
Financing costs (22,548)
Net cash provided from financing activities 525,000 24,452
Increase (decrease) in cash and cash equivalents 140,855 (38,774)
Cash at beginning of period 57,767 155,242
Cash at end of period 198,622 116,468
SUPPLEMENTAL DISCLOSURES    
Interest paid
Income taxes paid
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Description of Business and Basis of Presentation
9 Months Ended
Sep. 30, 2018
Description of Business and Basis of Presentation [Abstract]  
Description of Business and Basis of Presentation
Note 1 – Description of Business and Basis of Presentation
 
Organization and nature of business:
 
Qrons Inc.  ("Qrons" or the "Company") was incorporated under the laws of the State of Wyoming on August 22, 2016 under the name BioLabMart Inc.
 
On July 6, 2017, the board of directors and a majority of the Company's shareholders approved an amendment to the Company's Articles of Incorporation to change the name of the Company from "BioLabMart Inc." to "Qrons Inc.". On August 8, 2017, the Company filed Amended Articles of Incorporation with the State of Wyoming to effectuate such name change. The Company's common stock was approved by the Financial Industry Regulatory Authority ("FINRA") for quotation on the OTC pink sheets under the symbol "BLMB" as of July 3, 2017. FINRA announced the Company's name change to Qrons Inc. on its Daily List on August 9, 2017. The new name and symbol change to "QRON" for the OTC Market was effective August 10, 2017.
 
The Company is a preclinical stage biotechnology company developing advanced cell-based solutions to combat neuronal injuries and achieve a breakthrough in the treatment of traumatic brain injuries ("TBIs"), an unmet medical need.  We believe that our approach is pushing the boundaries of science by using the latest advances in molecular biology and chemistry. The Company collaborates with universities and scientists in the fields of regenerative medicine, tissue engineering and 3D printable hydrogels to develop a treatment that integrates proprietary, engineered mesenchymal stem cells, 3D printable implant, smart materials and a novel delivery system.  
 
Our headquarters are located at 777 Brickell Avenue, Suite 500, Miami, Florida 33131.
 
Ariel Agreements
 
On December 14, 2016, the Company entered into a license and research funding agreement ("License Agreement") with Ariel Scientific Innovations Ltd., formerly known as Ariel University R&D Co., Ltd., ("Ariel"), a wholly owned subsidiary of Ariel University, based in Ariel, Israel. Under the terms of the License Agreement, Professor Danny Baranes, the principal investigator and his research team will carry out further research relating to cell treatment with conditioned medium for neuronal tissue regeneration and repair. In consideration for payments under the License Agreement, the Company received an exclusive worldwide royalty- bearing license in Ariel patents and know-how to develop and commercialize products based on or incorporating conditioned medium for neuronal tissue regeneration and/or repair, resulting from Ariel's research or technology or the Company's research funding (the "Products). Under the License Agreement, the Company is required to use its best efforts to develop and commercialize the Products in accordance with development milestones set forth in the Agreement.
 
In lieu of extending the research financing and research period under the License Agreement beyond the initial 12 months, on December 14, 2017, the Company entered into a 12-month services agreement with Ariel (the "Services Agreement") pursuant to which a team at Ariel under the direction of Prof. Danny Baranes will conduct molecular biology research activities involving the testing of implant materials for the Company. On April 12, 2018, the Services Agreement was amended to provide for additional services as the Company may request.
 
On March 6, 2018, the Company entered into an additional services agreement with Ariel for the services of Professor Gadi Turgeman and his neurobiology research team in their lab.
 
Dartmouth Agreements
 
On October 17, 2017, the Company entered into an Option Agreement (the "Agreement") with the Trustees of Dartmouth College which provides for, among other things, the grant to the Company of a one-year exclusive option to negotiate a worldwide, royalty bearing, exclusive license with Dartmouth for 3D printable materials in the field of human and animal health. During the option period, the Company agreed to use all commercially reasonable resources to evaluate the intellectual property and provide quarterly milestone reports and a commercialization plan upon exercise of the option. Pursuant to the Agreement, the Company agreed to finance the prosecution of patents by Dartmouth to protect its intellectual property.  Further, the Agreement provides for the payment by the Company of an option fee and certain license fees and royalty payments based upon the Company's product sales, as part of a final negotiated license agreement. The Company exercised its option on March 26, 2018 to negotiate definitive license terms, as it continues further evaluation and research.
 
On July 12, 2018, the Company entered into a one-year sponsored research agreement (the "Sponsored Research Agreement"), with the Trustees of Dartmouth College ("Dartmouth") pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement.  Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned.  Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes.
 
The Agreement may be terminated earlier than one year upon written agreement of the parties, a material breach which is not cured within 30 days of notice thereof, if Professor Ke no longer conducts the research under the Agreement and a successor acceptable to both parties is not available, or in the event of an unauthorized assignment of the Company's rights and obligations under the Agreement.
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Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2018
Summary of Significant Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Note 2 – Summary of Significant Accounting Policies
 
Financial Statement Presentation:  The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission(the "SEC"), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements  included in our Annual Report on Form 10-K for the year ended December 31, 2017.
In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine-month periods have been made. Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year. 
 
Fiscal year end: The Company has selected December 31 as its fiscal year end.
 
Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.
 
Cash Equivalents: The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.
 
Research and Development Costs: The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, "Research and Development". Research and development costs were $237,770 and $10,120 for the nine-month periods ended September 30, 2018 and September 30, 2017, respectively.
 
Advertising and Marketing Costs: Advertising and marketing costs are expensed as incurred. The Company incurred $48,832 and $15,657 in advertising or marketing costs during the nine months ended September 30, 2018 and 2017, respectively.
Related parties: For the purposes of these financial statements, parties are considered to be related if one party has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.
 
Stock-Based Compensation and Other Share-Based Payments: The expense attributable to the Company's Directors is recognized over the period the amounts are earned and vested, and the expense attributable to the Company's non-employees is recognized when vested, as described in Note 7, Stock Plan.
 
Fair Value of Financial Instruments
 
FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC 820 describes three levels of inputs that may be used to measure fair value:
 
Level 1 – Quoted prices in active markets for identical assets or liabilities.
 
Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
 
Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
 
If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument.
 
The following table provides a summary of the fair value of our derivative liabilities as of September 30, 2018 and December 31, 2017:
 
 
Fair value measurements on a recurring basis
 
 
Level 1
 
Level 2
 
Level 3
 
As of September 30, 2018:
           
Liabilities
           
Derivative liabilities
 
$
-
   
$
-
   
$
30,506
 
 
                       
As of December 31, 2017:
                       
Liabilities
                       
Derivative liabilities
 
$
-
   
$
-
   
$
31,090
 
 
Warrants: The Company accounts for common stock warrants in accordance with applicable accounting guidance provided in ASC Topic 815 "Derivatives and Hedging – Contracts in Entity's Own Equity" (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement.  For warrants classified as equity instruments we apply the Black Scholes model.   Presently all warrants issued and outstanding are accounted for using the equity method.
 
Income taxes: The Company has adopted ASC Topic 740 – "Income Taxes" ASC Topic 740 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
 
Basic and Diluted Loss Per Share: In accordance with ASC Topic 260 – "Earnings Per Share", the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential common stock had been issued and if the additional shares of common stock were dilutive.
 
Potential common stock consists of the incremental common stock issuable upon the exercise of common stock warrants (using the if-converted method), convertible notes, classes of shares with conversion features, and stock awards and stock options. The computation of basic loss per share for the nine-month period ended September 30, 2018 and 2017 excludes potentially dilutive securities of underlying share purchase warrants, convertible notes, stock options and preferred shares, because their inclusion would be antidilutive. As a result, the computations of net loss per share for each period presented is the same for both basic and fully diluted.
 
The table below reflects the potentially dilutive securities at each reporting period which have been excluded from the computation of diluted net loss per share:
 
 
 
September 30, 2018
   
September 30, 2017
 
Stock purchase warrants
   
52,000
     
566,000
 
Research Warrants at 3% of issued and outstanding shares
   
384,806
     
-
 
Convertible Notes
   
28,778
     
32,178
 
Series A Preferred shares
   
700
     
700
 
Stock options vested
   
30,000
     
-
 
Stock options not yet vested
   
690,000
     
-
 
Stock awards not yet vested
   
290,000
     
-
 
 
   
1,476,284
     
598,878
 
 
New Accounting Pronouncements: There were various accounting standards and interpretations issued recently, none of which are expected to have a material effect on the Company's operations, financial position or cash flows.
XML 17 R8.htm IDEA: XBRL DOCUMENT v3.10.0.1
Going Concern
9 Months Ended
Sep. 30, 2018
Going Concern [Abstract]  
Going Concern
Note 3 – Going Concern
 
The Company has experienced net losses to date, and it has not generated revenue from operations.  While the Company has recently raised proceeds, it does not believe its resources will be sufficient to meet its operating and capital needs beyond the fourth quarter of 2018. The Company expects it will require additional capital to fully implement the scope of its proposed business operations, which raises substantial doubt about its ability to continue as a going concern.  The Company will have to continue to rely on equity and debt financing. There can be no assurance that financing, whether debt or equity, will always be available to the Company in the amount required at any particular time or for any particular period or, if available, that it can be obtained on favorable terms.
 
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amount and classification of liabilities that might cause results from this uncertainty.
XML 18 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Note - Related Party and Derivative Liabilities
9 Months Ended
Sep. 30, 2018
Convertible Note - Related Party and Derivative Liabilities [Abstract]  
Convertible Note - Related Party and Derivative Liabilities
Note 4 – Convertible Note – Related Party and Derivative Liabilities
 
On September 1, 2016, the Company entered into a convertible debenture agreement with CubeSquare, LLC ("CubeSquare"), of which our Chief Executive Officer is the managing partner and our President is a 25% owner. The Company received proceeds of $10,000 during fiscal 2016 ("Note 1"). The note bears interest at 8% per annum and was due on September 1, 2017. Interest accrues from September 1, 2016 and is payable on maturity. Interest is payable, at the lender's option, in cash or common stock. Any portion of the loan and unpaid interest are convertible at any time at the option of the lender into shares of common stock of the Company at a conversion price of the greater of (i) $0.0625 per share if the Company's shares are not trading on a public market and; (ii) in the event the Company's shares are listed for trading on a public market, the conversion price shall be equal to a 50% discount to  the average of the five  lowest trading prices during the previous twenty  trading days prior to the date of the notice of conversion from the lender.
 
On September 28, 2017 the Company and CubeSquare amended Note 1 to extend the maturity date  from September 1, 2017 to September 1, 2018 and on September 9, 2018, the Company further amended Note 1 to extend the maturity date to September 1, 2019, under the same terms and conditions.
 
On September 27, 2017, the Company entered into a second convertible debenture agreement with CubeSquare under which the Company received proceeds of $15,000 (Note 2). Note 2 bears interest at 8% per annum and is due on September 27, 2018. Interest shall accrue from September 27, 2017 and shall be payable on maturity.   Any portion of the principal and unpaid interest under the note is convertible at any time at the option of CubeSquare into shares of common stock of the Company at a conversion price equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days prior to the date of the notice of conversion from CubeSquare. On September 9, 2018, Note 2 was amended to extend the maturity date until September 27, 2019.
 
The Company analyzed the amendment to Note 1 and Note 2 under ASC 815-10-15-83 and concluded that these two convertible debentures meet the definition of a derivative. We estimated the fair value of the derivative on the inception dates, and subsequently, using the Black-Scholes valuation technique, adjusted for the effect of dilution, because that technique embodies all of the assumptions (including, volatility, expected terms, and risk-free rates) that are necessary to fair value complex derivate instruments.
 
The carrying value of these convertible notes is as follows:
 
 
 
September 30, 2018
   
December 31, 2017
 
Face value of certain convertible notes
 
$
25,000
   
$
25,000
 
Less: unamortized discount
   
-
     
(18,335
)
Carrying value
 
$
25,000
   
$
6,665
 
 
Amortization of the discount over the three months ended September 30, 2018 and 2017 totaled $5,541 and $1,571, respectively, which amounts have been recorded as interest expense. Amortization of the discount over the nine months ended September 30, 2018 and 2017 totaled $18,335 and $6,599, respectively, which amounts have been recorded as interest expense.  
 
As a result of the application of ASC No. 815 in the periods ended September 30, 2018 and December 31, 2017 the fair value of the conversion feature is summarized as follows:
 
Balance at December 31, 2017
 
$
31,090
 
Derivative addition associated with convertible notes
   
-
 
Change in fair value
   
(584
)
Balance at September 30, 2018
 
$
30,506
 
 
The fair value at the commitment and re-measurement dates for the Company's derivative liabilities were based upon the following management assumptions as of September 30, 2018 and commitment date:
 
 
Commitment Date
 
September 30,
2018
 
December 31,
2017
 
Expected dividends
 
0
 
 
0
 
 
0
 
Expected volatility
101% ~103%
 
77% ~ 83%
 
110% ~ 115%
 
Expected term
0.92 ~ 1 year
 
0.92 ~0.99 year
 
0.67 ~0.74 year
 
Risk free interest rate
 
1.33%
 
 
2.59%
 
1.53% ~ 1.65%
XML 19 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
License and Research Funding Agreements
9 Months Ended
Sep. 30, 2018
License And Research Funding Agreements [Abstract]  
License and Research Funding Agreements
Note 5 – License and Research Funding Agreements
 
On December 14, 2016, the Company entered into the License Agreement with Ariel. Under the terms of the License Agreement, Professor Danny Baranes, the principal investigator and his research team will carry out further research relating to cell treatment with conditioned medium for neuronal tissue regeneration and repair. The Company shall fund the research completed during the research period in the total amount of $100,000. In consideration for payments under the License Agreement, the Company received an exclusive worldwide royalty- bearing license in Ariel patents and know-how to develop and commercialize products based on or incorporating conditioned medium for neuronal tissue regeneration and/or repair, resulting from Ariel's research or technology or the Company's research funding (the "Products). Under the License Agreement, the Company is required to use its best efforts to develop and commercialize the Products in accordance with development milestones set forth in the Agreement.
 
In addition, upon the occurrence of an Exit Event (as defined in the License Agreement) of the Company or of any affiliate commercializing the products, the Company is obligated to issue to Ariel an immediately exercisable warrant for that number of shares equal to 4% of the issued and outstanding shares of the Company at the time of issuance.
 
The Company and Ariel entered into Addendum #1, effective December 13, 2017 (the "Addendum") to the License Agreement pursuant to which Ariel was permitted to exercise a portion of the warrant granted pursuant to the License Agreement. On December 13, 2017, the Company issued 119,950 shares of common stock to Ariel, representing 1% of the issued and outstanding shares of the Company on such date, and valued at $335,860. The right to the balance of the shares subject to the warrant remains subject to the terms of the License Agreement and the occurrence of an Exit Event (as described in the License Agreement). In addition, the Addendum provides that Ariel may not request a demand registration until the balance of the shares subject to the warrant is exercised.
 
In addition to the other payments, the Company will pay Ariel upon the occurrence of the following milestone events, additional payments which shall be due within 6 months of completion of the milestone:
 
-
 Upon successful clinical FDA Phase II completion - $130,000; and
 
-
 Upon successful clinical FDA Phase III completion - $390,000
 
Upon successful development and commercialization and in recognition of the rights and licenses granted to the Company pursuant to the License Agreement, the Company will be subject to certain royalty payments as specified in the License Agreement.
 
During the year ended December 31, 2017, the Company incurred total research and development costs of $1,179,777, which amount includes the aforementioned value of 119,950 shares of common stock at $335,860 pursuant to the License Agreement, as well as $812,000 recorded as stock-based compensation related to certain stock awards discussed in Note 6 – Commitments below, granted to various members of the Company's scientific advisory board.
 
In lieu of extending the research financing and research period under the License Agreement with Ariel beyond the initial 12 months, on December 14, 2017, the Company entered into a 12-month services agreement with Ariel (the "Services Agreement") pursuant to which a team at Ariel University under the direction of Professor Danny Baranes will conduct molecular biology research activities involving the testing of scaffold materials for the Company. As compensation for such services, the Company paid Ariel (i) $17,250 on December 19, 2017 and an additional $17,250 on April 26, 2018.  On April 12, 2018, the Services Agreement was amended to provide for the payment by the Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request.
 
On March 6, 2018, the Company entered into an additional service agreement with Ariel for the services of Professor Gadi Turgeman and his stem cells research team in their lab pursuant to which the Company paid Ariel $20,580 on each of March 19, 2018 and August 22, 2018.
 
On July 12, 2018, the Company entered into the Sponsored Research Agreement with Dartmouth pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement.  Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned.  Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes. The Agreement may be terminated earlier than one year upon written agreement of the parties, a material breach which is not cured within 30 days of notice thereof, if Professor Ke no longer conducts the research under the Agreement and a successor acceptable to both parties is not available, or in the event of an unauthorized assignment of the Company's rights and obligations under the Agreement.
XML 20 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments
9 Months Ended
Sep. 30, 2018
Commitments [Abstract]  
Commitments
Note 6 – Commitments
 
(1)  
Service Agreement with Ariel - Prof. Danny Baranes
 
On December 14, 2017, the Company entered into a 12-month services agreement pursuant to which a team at Ariel under the direction of Prof. Danny Baranes will conduct molecular biology research activities involving the testing of implant materials for the Company. As compensation for the services provided, the Company will pay Ariel (i) $17,250 within five business days of the execution of the Services Agreement, and (ii) $17,250 by May 1, 2018.
 
The Services Agreement may be terminated by the non-breaching party upon a material breach that is not cured within 30 days or by the Company upon thirty days' prior written notice to Ariel. Ariel must keep confidential information of the Company confidential for five years after the term of the Services Agreement.
 
During the year ended December 31, 2017, $17,250 was paid and on April 26, 2018, the remaining installment of $17,250 was paid. During the year ended December 31, 2017, $1,438 was expensed, and during the nine months ended September 30, 2018 $25,875 was expensed, and the remaining $7,187, which amount is reflected on the Company's balance sheets as prepaid expenses, will be expensed in a subsequent period.
 
On April 12, 2018, the Services Agreement was amended to provide for the payment by the Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request. During the nine-month period ended September 30, 2018, the Company paid $14,082 for these additional fees.
 
(2)  
Service Agreement with Ariel - Dr. Gadi Turgeman
 
On March 6, 2018, the Company entered into a service agreement for the services of Professor Gadi Turgeman and his stem cells research team in their lab. As compensation for the services provided, the Company paid Ariel $20,580 on each of March 19, 2018 and August 22, 2018.
 
The Services Agreement may be terminated by the non-breaching party upon a material breach that is not cured within 30 days or by the Company upon thirty days' prior written notice to Ariel. Ariel must keep confidential information of the Company confidential for six years after the term of the Services Agreement.
 
During the nine months ended September 30, 2018, $41,160 was paid and recorded as prepaid expenses, of which $24,010 was expensed in the nine-month period ended September 30, 2018, and the remaining $17,150 will be expensed in a subsequent period.
 
(3)  
Science Advisory Board Member Consulting Agreements (the "Agreements")
 
As part of its ongoing program of research and development, the Company has retained distinguished scientists and other qualified individuals to advise the Company with respect to its technology and business strategy and to assist it in the research, development and analysis of the Company's technology and products. In furtherance thereof, the Company has retained certain Advisors as members of its Scientific Advisory Board as described below, and the Company and Advisors have entered into agreements with the following terms and conditions:
 
-
Scientific Advisory Board and Consulting Services - Advisor shall provide general consulting services to Company (the "Services") as a member of its Scientific Advisory Board ("SAB"). As a member of the SAB, Advisor agrees to provide the Services as follows: (a) attending meetings of the Company's SAB; (b) performing the duties of a SAB member at such meetings, as established from time to time by the mutual agreement of the Company and the SAB members, including without limitation meeting with Company employees, consultants and other SAB members, reviewing goals of the Company and assisting in developing strategies for achieving such goals, and providing advice, support, theories, techniques and improvements in the Company's scientific research and product development activities; and (c) providing consulting services to Company at its request, including a reasonable amount of informal consultation over the telephone or otherwise as requested by Company. Advisor's consultation with Company will involve services as scientific, technical and business advisor to the Company and its senior team as needed with respect to the field of neuronal injuries and neuro degenerative diseases ("the "Field") and requires the application of unique, special and extraordinary skills and knowledge that Advisor possesses in the Field.
 
-
SAB Consulting Compensation - the Company shall grant to Advisor the option to purchase certain number of shares of the common stock of the Company as per the stock option award grant. The options are subject to terms and provisions of the Company's 2016 Stock Option and Stock Award Plan.
 
On November 15, 2017, the Company entered into Agreements with three Advisors under the terms of which two Advisors are granted an option to purchase 20,000 shares of common stock and one Advisor was granted an option to purchase 30,000 shares of common stock under the 2016 Stock Option and Award Plan subject to certain vesting terms.
 
On April 16, 2018, the Company entered into a one-year advisory board member consulting agreement with an assistant Professor of Chemistry at Dartmouth College to serve on the Company's Scientific Advisory Board. In consideration for serving on the Scientific Advisory Board, the Company granted an option to purchase 30,000 shares of its common stock under certain vesting terms to the assistant Professor.
 
On August 15, 2018, the Company entered into an Agreement with an Advisor under the terms of which the Company granted an option to purchase 20,000 shares of common stock under the 2016 Stock Option and Award Plan subject to certain vesting terms.
 
(4)  
Business Advisory Board Agreement
 
On January 23, 2018, the Company entered into a one-year advisory board member consulting agreement with Pavel Hilman, the controlling shareholder of Conventus Holdings SA, a BVI corporation ("Conventus"), under which Mr. Hilman will serve on the Company's Advisory Board as a business advisor. The Advisory Board Agreement will automatically renew for up to two additional one-year periods, unless earlier terminated by either party upon 30 days' prior written notice to the other party. In consideration for serving on the Advisory Board, the Company awarded 10,000 shares of its common stock to Mr. Hilman under its 2016 Stock Option and Stock Award Plan.
 
 (5)  
 Investor Relations Agreement
 
On April 23, 2018, the Company entered into a six-month investor relations agreement with an investor relations firm for a monthly consulting fee of $5,000 and the issuance of 75,000 shares of common stock payable on signing the agreement.
 
On June 23, 2018, the Company gave notice of rescission of the agreement to such firm and requested the return of the consulting fee paid and the 75,000 shares of common stock. As a result, the Company has not recorded any fees for services rendered past June 23, 2018.  A total of $10,000 representing April 2018 and May 2018 monthly consulting fees is reflected in the statement of operations and a total of $150,000, the fair market value of the issued shares, was expensed on issue.
 
 (6)  
 Sponsored Research Agreement
 
On July 12, 2018, the Company entered into a one-year sponsored research agreement (the "Sponsored Research Agreement"), with the Trustees of Dartmouth College ("Dartmouth") pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement.  Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned.  Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes. The Company funded $36,293 on August 20, 2018 and will fund additional $18,147 by December 1, 2018 and $18,146 by June 1, 2019, respectively.
 
The Agreement may be terminated earlier than one year upon written agreement of the parties, a material breach which is not cured within 30 days of notice thereof, if Professor Ke no longer conducts the research under the Agreement and a successor acceptable to both parties is not available, or in the event of an unauthorized assignment of the Company's rights and obligations under the Agreement.
 
During the nine months ended September 30, 2018, $36,293 was paid and recorded as prepaid expenses, of which $9,073 was expensed in the nine-month period ended September 30, 2018, and the remaining $27,220 will be expensed in a subsequent period.
XML 21 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stock Plan
9 Months Ended
Sep. 30, 2018
Stock Plan [Abstract]  
Stock Plan
Note 7 – Stock Plan
 
2016 Stock Option and Stock Award 
 
On December 14, 2016, the Board adopted the Company's 2016 Stock Option and Stock Award Plan (the "Plan"). The Plan provides for the award of stock options (incentive and non-qualified), stock awards and stock appreciation rights to officers, directors, employees and consultants who provide services to the Company. The terms of awards under the Plan are made by the Administrator of the Plan appointed by the Company's Board of Directors (the "Board"), or in the absence of an Administrator, by the Board. The Company has reserved 10 million shares for issuance under the Plan.
 
Stock Awards:
 
On December 14, 2016, the Board awarded to each of its Science Advisors, Prof. Danny Baranes and Dr. Liat Hammer, a total of 440,000 shares of common stock of which 150,000 shares vested on December 14, 2016, 145,000 shares vested on December 14, 2017, and 145,000 shares will vest on December 14, 2018, provided such advisors are still providing services to the Company.
 
The value of the vested awards had been recorded as research and development expenses in the respective periods.  A total of 290,000 stock awards are expected to vest during the fourth quarter of fiscal 2018.
 
On January 23, 2018, the Company awarded 10,000 shares of its common stock to Mr. Hilman under its 2016 Stock Option and Stock Award Plan, which shares were fully vested and recorded as advisory services on issuance.  
 
   
For the nine months ended
September 30, 2018
   
For the year ended December 31, 2017
 
Number of shares vested in period
   
10,000
     
290,000
 
Fair market value per share
 
$
2.80
   
$
2.80
 
Stock based compensation recognized
 
$
28,000
   
$
812,000
 
 
Stock Options:
 
(a)  
Stock Options granted to Science Advisors:
 
On November 15, 2017, under the 2016 Stock Option and Award Plan, the Board awarded two of its Science Advisors the following three-year stock options: (i) an immediately exercisable option to purchase 6,667 shares of common stock at an exercise price of $2.00 per share, (ii) an option to purchase 6,667 shares of common stock exercisable on November 15, 2018 at an exercise price of $2.00 per share and (iii) an option to purchase 6,666 shares of common stock exercisable on November 15, 2019 at an exercise price of $2.00 per share, provided the advisors are still providing services to the Company.
 
On November 15, 2017, under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 15,000 shares of common stock, exercisable on November 15, 2018 at an exercise price of $0.40 per share and (ii) an option to purchase 15,000 shares of common stock exercisable on November 15, 2019 at an exercise price of $0.40 per share, provided the advisor is still providing services to the Company.
 
On April 16, 2018, under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 10,000 shares of common stock, exercisable on April 16, 2018 at an exercise price of $2.00 per share and (ii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2019 at an exercise price of $2.00 per share, and (iii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2020 at an exercise price of $2.00 per share, provided the advisor is still providing services to the Company. provided the advisor is still providing services to the Company.
On August 15, 2018, under the 2016 Stock Option and Award Plan, the Board granted a Science Advisor an option to purchase an aggregate of 20,000 shares of  common stock at an exercise price of $2.00 per share. The option vests as to 6,667 shares on each of August 15, 2018 and August 15, 2019 and as to 6,666 shares on August 15, 2020 and remains exercisable as to each such installment for three years from the date of vesting.
During the year ended December 31, 2017, total recognized compensation in respect of the above stock option compensation was $29,000, which amount has been allocated as advisory services as part of general and administrative expenses.
The Company recorded stock-based compensation in the amount of $48,078 and $122,816 in respect to these options grants during the three and nine months ended September 30, 2018, respectively, which amounts have been allocated as advisory services as part of general and administrative expenses.
 
As of September 30, 2018, total unrecognized compensation remaining to be recognized in future periods totaled $92,671.
 
(b)  
Stock Options granted to Officers:
 
On December 4, 2017, the Board granted five-year options to each of its two officers for the purchase of 300,000 shares of the common stock of the Company. The options have an exercise price of $2.00 and vest and become exercisable on December 4, 2018.
 
During the year ended December 31, 2017, total recognized compensation of $106,029 was recorded as general and administrative expenses.
 
During the three and nine months ended September 30, 2018, total recognized compensation of $353,430 and $1,060,290, respectively, was recorded as general and administrative expenses.
 
As of September 30, 2018, total unrecognized compensation remaining to be recognized in future periods totaled $246,755.

The fair value of each option award above is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions at the measurement date(s):
 
 
 
Measurement date
 
Dividend yield
 
 
0%
 
Expected volatility
 
114.69 ~ 126.34%
 
Risk-free interest rate
 
1.79% ~ 2.68%
 
Expected life (years)
 
3 ~ 5
 
Stock Price
 
$
2.00 ~ 2.80
 
Exercise Price
 
$
0.40 ~ 2.00
 
 
A summary of the activity for the Company's stock options for the nine-month period ended September 30, 2018 and for the year ended December 31, 2017, is as follows:
 
 
 
September 30, 2018
   
December 31, 2017
 
 
       
Weighted Average
         
Weighted Average
 
 
 
Shares
   
Exercise Price
   
Shares
   
Exercise Price
 
Outstanding, beginning of period
   
670,000
   
$
1.93
     
-
   
$
-
 
Granted
   
50,000
   
$
2.00
     
670,000
   
$
1.93
 
Exercised
   
-
   
$
-
     
-
   
$
-
 
Canceled
   
-
   
$
-
     
-
   
$
-
 
Outstanding, end of period
   
720,000
   
$
1.93
     
670,000
   
$
1.93
 
Options exercisable, end of period
   
30,000
   
$
2.00
     
13,334
   
$
2.00
 
Options expected to vest, end of period
   
690,000
   
$
1.93
     
656,666
   
$
1.89
 
Weighted average fair value of options granted
         
$
2.30
           
$
2.36
 
XML 22 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Capital Stock
9 Months Ended
Sep. 30, 2018
Capital Stock [Abstract]  
Capital Stock
Note 8 – Capital Stock
 
Authorized:
 
The Company has authorized 100,000,000 shares of common stock, par value $0.0001 and 10,000 shares of preferred stock which is designated as Series A Preferred Stock, par value $0.001.
 
Series A Preferred Stock:
 
The Series A Preferred Stock is redeemable at the option of the Company at any time, in whole or in part, upon 10 trading days prior notice, at a price of $1.00 per share plus 4% per annum from the date of issuance (the "Stated Value"). The holders of the Series A Preferred Stock are entitled to a liquidation preference equal to the Stated Value, prior to the holders of other preferred stock or common stock. The holders of the Series A Preferred Stock have the right to convert such stock into common stock at a conversion rate equal to the Stated Value as of the conversion date divided by the average closing price of the common stock for the five previous trading days. The Company is required to reserve sufficient number of shares for the conversion of the Series A Preferred Stock. The holders of Class A Preferred Stock shall vote together as a single class with the holders of the Company's common stock and the holders of any other class or series of shares entitled to vote with the common stock, with the holders of Class A Preferred Stock being entitled to 66 2/3% of the total votes on all such matters, regardless of the actual number of shares of Class A Preferred Stock then outstanding.
 
There was a total of 2,000 shares of Series A Preferred Stock issued and outstanding as at September 30, 2018 and December 31, 2017.
 
Common Stock issuances during the nine months ended September 30, 2018:
 
On January 23, 2018 the Company sold 312,500 shares of its common stock to Conventus and raised $500,000 pursuant to a subscription agreement in a private placement offering. The proceeds of the offering will be used for research and general corporate purposes.
 
On January 23, 2018, the Company issued 10,000 shares for advisory services (Note 6(4)). The shares were valued at fair market value on the date of issuance for a total of $28,000 or $2.80 per share.
 
On February 6, 2018, the Company received a warrant exercise notice in respect of 2,000 warrants from a subscriber and issued 1,715 shares of common stock on a cashless exercise basis as per the cashless exercise formula contained in the warrant.
 
On April 23, 2018, the Company issued 75,000 shares of its common stock in respect of an investor relations services agreement which was rescinded on June 23, 2018 (Note 6(5)). The shares were valued at the fair market value on the date of issuance for a total of $150,000, or $2.00 per share.
 
On September 16, 2018 the Company sold 22,728 shares of its common stock to an investor and raised $25,000 pursuant to a subscription agreement in a private placement offering. The proceeds of the offering will be used for research and general corporate purposes.
 
Common Stock issuances as of December 31, 2017:
 
On December 13, 2017, 119,950 shares were issued to Ariel as an exercise of warrants pursuant to a License Agreement (Note 5 – License and Research Funding Agreement). These shares were valued at $335,860 or $2.80 per share, based on fair market value, and the associated cost was recorded as research and development expenses.
 
On December 14, 2017, the Company issued 290,000 shares to two Scientific Advisors as a stock award, valued at $812,000, or $2.80 per share, based on fair market value, and recorded the associated cost as research and development expenses. (Note 7 – Stock Plan).
 
During the year ended December 31, 2017, the Company received aggregate proceeds of $32,000 in private placement subscriptions for a total of 128,000 shares.
 
During the year ended December 31, 2017 the Company received warrant exercise notices in respect of 512,000 warrants from various subscribers and issued a total of 442,960 shares of common stock on a cashless exercise basis as per the cashless exercise formula in the warrant.
 
Share Purchase Warrants
 
In accordance with authoritative accounting guidance, the fair value of the aforementioned warrants was calculated using the Black-Scholes option-pricing model with the following assumptions at the measurement date(s):
 
 
 
Measurement date
 
Dividend yield
 
 
0%
 
Expected volatility
 
97.90~119.33%
 
Risk-free interest rate
 
1.47~1.60%
 
Expected life (years)
 
2.71~2.92
 
Stock Price
 
$
0.25
 
Exercise Price
 
$
0.40
 
 
As of September 30, 2018, and December 31, 2017, the following common stock purchase warrants were outstanding:
 
 
 
Warrants (1)
   
Weighted Average Exercise Price
 
Outstanding – December 31, 2016
   
502,000
   
$
0.40
 
Granted
   
64,000
     
0.40
 
Forfeited/Canceled
   
-
     
-
 
Exercised
   
512,000
 
(2)
 
0.40
 
Outstanding – December 31, 2017
   
54,000
     
0.40
 
Granted
   
-
     
-
 
Forfeited/Canceled
   
-
     
-
 
Exercised
   
2,000
 
(3)
 
0.40
 
Outstanding – September 30, 2018
   
52,000
   
$
0.40
 
 
(1) Each two shares of common stock purchased under the private placement provides for one warrant to acquire an additional share of common stock together with the payment of $0.40.
 
(2) During the year ended December 31, 2017, investors exercised 512,000 share purchase warrants and received 442,960 underlying shares for exercise on a cashless basis.
 
(3) During the nine-month period ended September 30, 2018, investors exercised 2,000 share purchase warrants and received 1,715 underlying shares for exercise on a cashless basis.
XML 23 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Events
9 Months Ended
Sep. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events
Note 9 – Subsequent Events
 
On October 8, 2018 the Company sold 22,728 shares of its common stock to an investor and raised $25,000 pursuant to a subscription agreement in a private placement offering. The proceeds of the offering will be used for research and general corporate purposes.
 
The Company has evaluated subsequent events from the balance sheet date through the date that the financial statements were issued and determined that there are no additional subsequent events to disclose.
XML 24 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2018
Summary of Significant Accounting Policies [Abstract]  
Financial Statement Presentation
Financial Statement Presentation:  The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission(the "SEC"), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements  included in our Annual Report on Form 10-K for the year ended December 31, 2017.
In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine-month periods have been made. Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year.
Fiscal year end
Fiscal year end: The Company has selected December 31 as its fiscal year end.
Use of Estimates
Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.
Cash Equivalents
Cash Equivalents: The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.
Research and Development Costs
Research and Development Costs: The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, "Research and Development". Research and development costs were $237,770 and $10,120 for the nine-month periods ended September 30, 2018 and September 30, 2017, respectively.
Advertising and Marketing Costs
Advertising and Marketing Costs: Advertising and marketing costs are expensed as incurred. The Company incurred $48,832 and $15,657 in advertising or marketing costs during the nine months ended September 30, 2018 and 2017, respectively.
Related parties
Related parties: For the purposes of these financial statements, parties are considered to be related if one party has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.
Stock-Based Compensation and Other Share-Based Payments
Stock-Based Compensation and Other Share-Based Payments: The expense attributable to the Company's Directors is recognized over the period the amounts are earned and vested, and the expense attributable to the Company's non-employees is recognized when vested, as described in Note 7, Stock Plan.
Fair Value of Financial Instruments
Fair Value of Financial Instruments
 
FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC 820 describes three levels of inputs that may be used to measure fair value:
 
Level 1 – Quoted prices in active markets for identical assets or liabilities.
 
Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
 
Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
 
If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument.
 
The following table provides a summary of the fair value of our derivative liabilities as of September 30, 2018 and December 31, 2017:
 
 
Fair value measurements on a recurring basis
 
 
Level 1
 
Level 2
 
Level 3
 
As of September 30, 2018:
           
Liabilities
           
Derivative liabilities
 
$
-
   
$
-
   
$
30,506
 
 
                       
As of December 31, 2017:
                       
Liabilities
                       
Derivative liabilities
 
$
-
   
$
-
   
$
31,090
 
Warrants
Warrants: The Company accounts for common stock warrants in accordance with applicable accounting guidance provided in ASC Topic 815 "Derivatives and Hedging – Contracts in Entity's Own Equity" (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement.  For warrants classified as equity instruments we apply the Black Scholes model.   Presently all warrants issued and outstanding are accounted for using the equity method.
Income taxes
Income taxes: The Company has adopted ASC Topic 740 – "Income Taxes" ASC Topic 740 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Basic and Diluted Loss Per Share
Basic and Diluted Loss Per Share: In accordance with ASC Topic 260 – "Earnings Per Share", the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential common stock had been issued and if the additional shares of common stock were dilutive.
 
Potential common stock consists of the incremental common stock issuable upon the exercise of common stock warrants (using the if-converted method), convertible notes, classes of shares with conversion features, and stock awards and stock options. The computation of basic loss per share for the nine-month period ended September 30, 2018 and 2017 excludes potentially dilutive securities of underlying share purchase warrants, convertible notes, stock options and preferred shares, because their inclusion would be antidilutive. As a result, the computations of net loss per share for each period presented is the same for both basic and fully diluted.
 
The table below reflects the potentially dilutive securities at each reporting period which have been excluded from the computation of diluted net loss per share:
 
 
 
September 30, 2018
   
September 30, 2017
 
Stock purchase warrants
   
52,000
     
566,000
 
Research Warrants at 3% of issued and outstanding shares
   
384,806
     
-
 
Convertible Notes
   
28,778
     
32,178
 
Series A Preferred shares
   
700
     
700
 
Stock options vested
   
30,000
     
-
 
Stock options not yet vested
   
690,000
     
-
 
Stock awards not yet vested
   
290,000
     
-
 
 
   
1,476,284
     
598,878
 
New Accounting Pronouncements
New Accounting Pronouncements: There were various accounting standards and interpretations issued recently, none of which are expected to have a material effect on the Company's operations, financial position or cash flows.
XML 25 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2018
Summary of Significant Accounting Policies [Abstract]  
Summary of the fair value of our derivative liabilities
 
Fair value measurements on a recurring basis
 
 
Level 1
 
Level 2
 
Level 3
 
As of September 30, 2018:
           
Liabilities
           
Derivative liabilities
 
$
-
   
$
-
   
$
30,506
 
 
                       
As of December 31, 2017:
                       
Liabilities
                       
Derivative liabilities
 
$
-
   
$
-
   
$
31,090
 
Schedule of potentially dilutive securities
 
 
September 30, 2018
   
September 30, 2017
 
Stock purchase warrants
   
52,000
     
566,000
 
Research Warrants at 3% of issued and outstanding shares
   
384,806
     
-
 
Convertible Notes
   
28,778
     
32,178
 
Series A Preferred shares
   
700
     
700
 
Stock options vested
   
30,000
     
-
 
Stock options not yet vested
   
690,000
     
-
 
Stock awards not yet vested
   
290,000
     
-
 
 
   
1,476,284
     
598,878
XML 26 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Note - Related Party and Derivative Liabilities (Tables)
9 Months Ended
Sep. 30, 2018
Convertible Note - Related Party and Derivative Liabilities [Abstract]  
Schedule of convertible notes
 
 
September 30, 2018
   
December 31, 2017
 
Face value of certain convertible notes
 
$
25,000
   
$
25,000
 
Less: unamortized discount
   
-
     
(18,335
)
Carrying value
 
$
25,000
   
$
6,665
Schedule of fair value of conversion feature
Balance at December 31, 2017
 
$
31,090
 
Derivative addition associated with convertible notes
   
-
 
Change in fair value
   
(584
)
Balance at September 30, 2018
 
$
30,506
Schedule of fair value at commitment and re-measurement dates derivative liabilities
 
Commitment Date
 
September 30,
2018
 
December 31,
2017
 
Expected dividends
 
0
 
 
0
 
 
0
 
Expected volatility
101% ~103%
 
77% ~ 83%
 
110% ~ 115%
 
Expected term
0.92 ~ 1 year
 
0.92 ~0.99 year
 
0.67 ~0.74 year
 
Risk free interest rate
 
1.33%
 
 
2.59%
 
1.53% ~ 1.65%
 
XML 27 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stock Plan (Tables)
9 Months Ended
Sep. 30, 2018
Stock Plan [Abstract]  
Schedule of stock award
   
For the nine months ended
September 30, 2018
   
For the year ended December 31, 2017
 
Number of shares vested in period
   
10,000
     
290,000
 
Fair market value per share
 
$
2.80
   
$
2.80
 
Stock based compensation recognized
 
$
28,000
   
$
812,000
 
Schedule of fair value options assumptions
 
 
Measurement date
 
Dividend yield
 
 
0%
 
Expected volatility
 
114.69 ~ 126.34%
 
Risk-free interest rate
 
1.79% ~ 2.68%
 
Expected life (years)
 
3 ~ 5
 
Stock Price
 
$
2.00 ~ 2.80
 
Exercise Price
 
$
0.40 ~ 2.00
 
Schedule of stock options
 
 
September 30, 2018
   
December 31, 2017
 
 
       
Weighted Average
         
Weighted Average
 
 
 
Shares
   
Exercise Price
   
Shares
   
Exercise Price
 
Outstanding, beginning of period
   
670,000
   
$
1.93
     
-
   
$
-
 
Granted
   
50,000
   
$
2.00
     
670,000
   
$
1.93
 
Exercised
   
-
   
$
-
     
-
   
$
-
 
Canceled
   
-
   
$
-
     
-
   
$
-
 
Outstanding, end of period
   
720,000
   
$
1.93
     
670,000
   
$
1.93
 
Options exercisable, end of period
   
30,000
   
$
2.00
     
13,334
   
$
2.00
 
Options expected to vest, end of period
   
690,000
   
$
1.93
     
656,666
   
$
1.89
 
Weighted average fair value of options granted
         
$
2.30
           
$
2.36
 
XML 28 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Capital Stock (Tables)
9 Months Ended
Sep. 30, 2018
Capital Stock [Abstract]  
Schedule of fair value warrants assumptions
 
 
Measurement date
 
Dividend yield
 
 
0%
 
Expected volatility
 
97.90~119.33%
 
Risk-free interest rate
 
1.47~1.60%
 
Expected life (years)
 
2.71~2.92
 
Stock Price
 
$
0.25
 
Exercise Price
 
$
0.40
 
Schedule of common stock purchase warrants were outstanding
 
 
 
Warrants (1)
   
Weighted Average Exercise Price
 
Outstanding – December 31, 2016
   
502,000
   
$
0.40
 
Granted
   
64,000
     
0.40
 
Forfeited/Canceled
   
-
     
-
 
Exercised
   
512,000
 
(2)
 
0.40
 
Outstanding – December 31, 2017
   
54,000
     
0.40
 
Granted
   
-
     
-
 
Forfeited/Canceled
   
-
     
-
 
Exercised
   
2,000
 
(3)
 
0.40
 
Outstanding – September 30, 2018
   
52,000
   
$
0.40
 
 
(1) Each two shares of common stock purchased under the private placement provides for one warrant to acquire an additional share of common stock together with the payment of $0.40.
 
(2) During the year ended December 31, 2017, investors exercised 512,000 share purchase warrants and received 442,960 underlying shares for exercise on a cashless basis.
 
(3) During the nine-month period ended September 30, 2018, investors exercised 2,000 share purchase warrants and received 1,715 underlying shares for exercise on a cashless basis.
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Details) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Level 1 [Member]    
Liabilities    
Derivative liabilities
Level 2 [Member]    
Liabilities    
Derivative liabilities
Level 3 [Member]    
Liabilities    
Derivative liabilities $ 30,506 $ 31,090
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Details 1) - shares
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities net loss per share 1,476,284 598,878
Stock options vested [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities net loss per share 30,000
Stock options not yet vested [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities net loss per share 690,000
Stock awards not yet vested [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities net loss per share 290,000
Series A Preferred shares [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities net loss per share 700 700
Stock purchase warrants [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities net loss per share 52,000 566,000
Research Warrants at 3% of issued and outstanding shares [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities net loss per share 384,806
Convertible Notes [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive securities net loss per share 28,778 32,178
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Summary of Significant Accounting Policies (Details Textual) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Summary of Significant Accounting Policies (Textual)        
Research and development costs $ 104,798 $ 8,406 $ 237,770 $ 10,120
Advertising or marketing costs     $ 48,832 $ 15,657
Research warrants issued and outstanding, percentage     3.00%  
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Note - Related Party and Derivative Liabilities (Details) - USD ($)
Sep. 30, 2018
Dec. 31, 2017
Convertible Note - Related Party and Derivative Liabilities [Abstract]    
Face value of certain convertible notes $ 25,000 $ 25,000
Less: unamortized discount (18,335)
Carrying value $ 25,000 $ 6,665
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Note - Related Party and Derivative Liabilities (Details 1)
9 Months Ended
Sep. 30, 2018
USD ($)
Convertible Note - Related Party and Derivative Liabilities [Abstract]  
Balance at December 31, 2017 $ 31,090
Derivative addition associated with convertible notes
Change in fair value (584)
Balance at September 30, 2018 $ 30,506
XML 34 R25.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Note - Related Party and Derivative Liabilities (Details 2)
9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Derivative [Line Items]    
Expected dividends 0.00% 0.00%
Risk free interest rate 2.59%  
Commitment Date [Member]    
Derivative [Line Items]    
Expected dividends 0.00%  
Risk free interest rate 1.33%  
Minimum [Member]    
Derivative [Line Items]    
Expected volatility 77.00% 110.00%
Expected term 11 months 1 day 8 months 2 days
Risk free interest rate   1.53%
Minimum [Member] | Commitment Date [Member]    
Derivative [Line Items]    
Expected volatility 101.00%  
Expected term 11 months 1 day  
Maximum [Member]    
Derivative [Line Items]    
Expected volatility 83.00% 115.00%
Expected term 11 months 26 days 8 months 26 days
Risk free interest rate   1.65%
Maximum [Member] | Commitment Date [Member]    
Derivative [Line Items]    
Expected volatility 103.00%  
Expected term 1 year  
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
Convertible Note - Related Party and Derivative Liabilities (Details Textual) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended
Sep. 09, 2018
Sep. 28, 2017
Sep. 27, 2017
Sep. 01, 2016
Jun. 30, 2018
Jun. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Convertible Note - Related Party and Derivative Liabilities (Textual)                
Received proceeds totaling             $ 15,000
Amortization of discount         $ 5,541 $ 1,571 $ 18,335 $ 6,599
CubeSquare, LLC [Member]                
Convertible Note - Related Party and Derivative Liabilities (Textual)                
Received proceeds totaling     $ 15,000 $ 10,000        
Interest rate per annum     8.00% 8.00%        
Conversion, description     Any portion of the principal and unpaid interest under the note is convertible at any time at the option of CubeSquare into shares of common stock of the Company at a conversion price equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days prior to the date of the notice of conversion from CubeSquare. (i) $0.0625 per share if the Company's shares are not trading on a public market and; (ii) in the event the Company's shares are listed for trading on a public market, the conversion price shall be equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days prior to the date of the notice of conversion from the lender.        
Maturity date       Sep. 01, 2017        
Maturity date, description Note 2 was amended to extend the maturity date until September 27, 2019. Note 1 to extend the maturity date from September 1, 2017 to September 1, 2018 and on September 9, 2018, the Company further amended Note 1 to extend the maturity date to September 1, 2019, under the same terms and conditions.            
Debt instument due date     Sep. 27, 2018          
CubeSquare, LLC [Member] | President [Member]                
Convertible Note - Related Party and Derivative Liabilities (Textual)                
Ownership percentage       25.00%        
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.10.0.1
License and Research Funding Agreements (Details) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Mar. 06, 2018
Dec. 13, 2017
Dec. 14, 2016
Apr. 23, 2018
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Dec. 31, 2017
License and Research Funding Agreements (Textual)                  
Research and development costs         $ 104,798 $ 8,406 $ 237,770 $ 10,120  
Shares issued for advisory services, value       75,000          
License and research funding agreement compensation paid, description The Company entered into an additional service agreement with Ariel for the services of Professor Gadi Turgeman and his stem cells research team in their lab pursuant to which the Company paid Ariel $20,580 on each of March 19, 2018 and August 22, 2018.           The Company paid Ariel (i) $17,250 on December 19, 2017 and an additional $17,250 on April 26, 2018. On April 12, 2018, the Services Agreement was amended to provide for the payment by the Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request.    
Ariel University [Member]                  
License and Research Funding Agreements (Textual)                  
Shares issued for advisory services, value   119,950              
Shares issued, value   $ 335,860              
Shares issued, percentage   1.00%              
License Agreement [Member]                  
License and Research Funding Agreements (Textual)                  
Total amount of fund for research during research period     $ 100,000            
Warrant exercisable percentage     4.00%            
Payments of completion of milestone events, description     Upon successful clinical FDA Phase II completion - $130,000; and Upon successful clinical FDA Phase III completion - $390,000            
Research and development costs                 $ 1,179,777
Aforementioned funding amount                 119,950
Stock based compensation                 812,000
Payments of completion of milestone events due     6 months            
Shares issued, value                 $ 335,860
XML 37 R28.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments (Details) - USD ($)
1 Months Ended 9 Months Ended 12 Months Ended
Oct. 08, 2018
Jul. 12, 2018
Jun. 23, 2018
Apr. 12, 2018
Apr. 23, 2018
Jan. 23, 2018
Nov. 15, 2017
Sep. 30, 2018
Dec. 31, 2017
Aug. 22, 2018
Aug. 15, 2018
May 01, 2018
Apr. 26, 2018
Apr. 16, 2018
Mar. 19, 2018
Dec. 14, 2017
Commitments (Textual)                                
Compensation for the services provided                 $ 17,250     $ 17,250 $ 17,250      
Compensation cost                 $ 1,438              
Service agreement payment, description       The Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request.                        
Consulting fee         $ 5,000                      
Investor relations agreement, description     The Company gave notice of rescission of the agreement to such firm and requested the return of the consulting fee paid and the 75,000 shares of common stock. As a result, the Company has not recorded any fees for services rendered past June 23, 2018. A total of $10,000 representing April 2018 and May 2018 monthly consulting fees is reflected in the statement of operations and a total of $150,000, the fair market value of the issued shares, was expensed on issue.   The Company issued 75,000 shares of its common stock in respect of an investor relations services agreement which was rescinded on June 23, 2018 (Note 6(5)). The shares were valued at the fair market value on the date of issuance for a total of $150,000, or $2.00 per share.                      
Paid for additional fees               $ 14,082                
Issuance of common stock payable         75,000                      
Service Agreement with Ariel [Member]                                
Commitments (Textual)                                
Compensation for the services provided                   $ 20,580         $ 20,580 $ 17,250
Compensation cost               25,875                
Prepaid expenses               41,160                
Prepaid expensed during period               24,010                
Outstanding expenses               17,150                
Sponsored Research Agreement [Member]                                
Commitments (Textual)                                
Prepaid expenses               36,293                
Prepaid expensed during period               9,073                
Outstanding expenses               $ 27,220                
Sponsored research agreement, description   The Company entered into a one-year sponsored research agreement (the "Sponsored Research Agreement"), with the Trustees of Dartmouth College ("Dartmouth") pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement. Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned. Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes. The Company funded $36,293 on August 20, 2018 and will fund additional $18,147 by December 1, 2018 and $18,146 by June 1, 2019, respectively.                            
2016 Stock Option and Award Plan [Member]                                
Commitments (Textual)                                
Advisors are granted the option           10,000 20,000                  
Stock option and advisor granted             30,000       20,000     30,000    
Subsequent Event [Member] | Service Agreement with Ariel [Member]                                
Commitments (Textual)                                
Compensation cost $ 7,187                              
XML 38 R29.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stock Plan (Details) - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Stock Plan [Abstract]    
Number of shares vested in period 10,000 290,000
Fair market value per share $ 2.80 $ 2.80
Stock based compensation recognized $ 28,000 $ 812,000
XML 39 R30.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stock Plan (Details 1) - Stock Options [Member] - Measurement Date [Member]
9 Months Ended
Sep. 30, 2018
$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Dividend yield 0.00%
Exercise Price, Minimum $ 0.40
Exercise Price, Maximum $ 2.00
Minimum [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Expected volatility 114.69%
Risk-free interest rate 1.79%
Expected life (years) 3 years
Stock Price $ 2.00
Maximum [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Expected volatility 126.34%
Risk-free interest rate 2.68%
Expected life (years) 5 years
Stock Price $ 2.80
XML 40 R31.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stock Plan (Details 2) - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Stock Plan [Abstract]    
Shares Outstanding, beginning of period 670,000
Shares, Granted 50,000 670,000
Shares, Exercised
Shares, Canceled
Shares Outstanding, end of period 720,000 670,000
Shares Options exercisable, end of period 30,000 13,334
Shares, Options expected to vest, end of period 690,000 656,666
Weighted Average Shares Exercise Price, Outstanding, beginning of period $ 1.93
Weighted Average Shares Exercise Price, Granted 2.00 1.93
Weighted Average Shares Exercise Price, Exercised
Weighted Average Exercise Price, Canceled
Weighted Average Shares Exercise Price, Outstanding, end of period 1.93 1.93
Weighted Average Exercise Price, Options exercisable, end of period 2.00 2.00
Weighted Average Exercise Price, Options expected to vest, end of period 1.93 1.89
Weighted Average Exercise Price, Weighted average fair value of options granted $ 2.30 $ 2.36
XML 41 R32.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stock Plan (Details Textual) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Aug. 15, 2018
Dec. 14, 2017
Dec. 04, 2017
Dec. 14, 2016
Apr. 16, 2018
Nov. 15, 2017
Sep. 30, 2018
Sep. 30, 2018
Dec. 31, 2017
Jan. 23, 2018
Stock Plan (Textual)                    
Total unrecognized compensation remaining to be recognized in future periods               $ 92,671    
General and administrative expenses [Member]                    
Stock Plan (Textual)                    
Stock-based compensation             $ 48,078 122,816 $ 29,000  
Stock Options granted to Officers [Member]                    
Stock Plan (Textual)                    
Total unrecognized compensation remaining to be recognized in future periods               246,755    
Weighted average exercise price     $ 2              
Shares of common stock under certain vesting terms     5 years              
Vest and exercisable date     Dec. 04, 2018              
Granted an option to purchase shares of common stock     300,000              
Stock Options granted to Officers [Member] | General and administrative expenses [Member]                    
Stock Plan (Textual)                    
Stock-based compensation             $ 353,430 $ 1,060,290 $ 106,029  
2016 Stock Option and Award Plan [Member]                    
Stock Plan (Textual)                    
Reserved shares for issuance       10,000,000            
Stock award                   10,000
Description of services agreement Under the 2016 Stock Option and Award Plan, the Board granted a Science Advisor an option to purchase an aggregate of 20,000 shares of common stock at an exercise price of $2.00 per share. The option vests as to 6,667 shares on each of August 15, 2018 and August 15, 2019 and as to 6,666 shares on August 15, 2020 and remains exercisable as to each such installment for three years from the date of vesting.       Under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 10,000 shares of common stock, exercisable on April 16, 2018 at an exercise price of $2.00 per share and (ii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2019 at an exercise price of $2.00 per share, and (iii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2020 at an exercise price of $2.00 per share, provided the advisor is still providing services to the Company. provided the advisor is still providing services to the Company. Under the 2016 Stock Option and Award Plan, the Board awarded two of its Science Advisors the following three-year stock options: (i) an immediately exercisable option to purchase 6,667 shares of common stock at an exercise price of $2.00 per share, (ii) an option to purchase 6,667 shares of common stock exercisable on November 15, 2018 at an exercise price of $2.00 per share and (iii) an option to purchase 6,666 shares of common stock exercisable on November 15, 2019 at an exercise price of $2.00 per share, provided the advisors are still providing services to the Company.        
2016 Stock Option and Award Plan one [Member]                    
Stock Plan (Textual)                    
Description of services agreement           Under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 15,000 shares of common stock, exercisable on November 15, 2018 at an exercise price of $0.40 per share and (ii) an option to purchase 15,000 shares of common stock exercisable on November 15, 2019 at an exercise price of $0.40 per share, provided the advisor is still providing services to the Company.        
Board of Directors Chairman [Member]                    
Stock Plan (Textual)                    
Stock award       440,000            
Receive common stock vest upon grant date       150,000            
Vested shares   145,000   145,000            
Board of Directors Chairman [Member] | December 14, 2018 [Member]                    
Stock Plan (Textual)                    
Vested shares               145,000    
Stock awards are expected to vest [Member] | Fourth Quarter [Member]                    
Stock Plan (Textual)                    
Vested shares               290,000    
XML 42 R33.htm IDEA: XBRL DOCUMENT v3.10.0.1
Capital Stock (Details) - Measurement Date [Member] - Stock Purchase Warrants [Member]
9 Months Ended
Sep. 30, 2018
$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Dividend yield 0.00%
Stock Price $ 0.25
Exercise Price $ 0.40
Maximum [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Expected volatility 119.33%
Risk-free interest rate 1.60%
Expected life (years) 2 years 11 months 1 day
Minimum [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Expected volatility 97.90%
Risk-free interest rate 1.47%
Expected life (years) 2 years 8 months 16 days
XML 43 R34.htm IDEA: XBRL DOCUMENT v3.10.0.1
Capital Stock (Details 1) - Stock Purchase Warrants [Member] - $ / shares
9 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Warrants    
Outstanding - Beginning balance [1] 54,000 502,000
Granted [1] 64,000
Forfeited/Canceled [1]
Exercised [1] 2,000 512,000
Outstanding - Ending balance [1] 52,000 54,000
Weighted Average Exercise Price    
Outstanding - Beginning balance $ 0.40 $ 0.40
Granted 0.40
Forfeited/Canceled
Exercised 0.40 [2] 0.40 [3]
Outstanding - Ending balance $ 0.40 $ 0.40
[1] Each two shares of common stock purchased under the private placement provides for one warrant to acquire an additional share of common stock together with the payment of $0.40.
[2] During the nine-month period ended September 30, 2018, investors exercised 2,000 share purchase warrants and received 1,715 underlying shares for exercise on a cashless basis.
[3] During the year ended December 31, 2017, investors exercised 512,000 share purchase warrants and received 442,960 underlying shares for exercise on a cashless basis.
XML 44 R35.htm IDEA: XBRL DOCUMENT v3.10.0.1
Capital Stock (Details Textual) - USD ($)
1 Months Ended 9 Months Ended 12 Months Ended
Jun. 23, 2018
Feb. 06, 2018
Dec. 14, 2017
Dec. 13, 2017
Sep. 16, 2018
Apr. 23, 2018
Jan. 23, 2018
Sep. 30, 2018
Dec. 31, 2017
Capital Stock (Textual)                  
Common stock, shares authorized               100,000,000 100,000,000
Common stock, par value               $ 0.0001 $ 0.0001
Series A Preferred Shares, shares issued               2,000 2,000
Series A Preferred Shares, shares outstanding               2,000 2,000
Series A Preferred Shares, authorized               10,000 10,000
Series A Preferred Shares, par value               $ 0.001 $ 0.001
Shares issued for advisory services, value           75,000      
Subscriptions shares                 128,000
Warrant, description   The Company received a warrant exercise notice in respect of 2,000 warrants from a subscriber and issued 1,715 shares of common stock on a cashless exercise basis as per the cashless exercise formula contained in the warrant.              
Warrants received underlying shares for exercise on a cashless basis                 442,960
Investor relations agreement, description The Company gave notice of rescission of the agreement to such firm and requested the return of the consulting fee paid and the 75,000 shares of common stock. As a result, the Company has not recorded any fees for services rendered past June 23, 2018. A total of $10,000 representing April 2018 and May 2018 monthly consulting fees is reflected in the statement of operations and a total of $150,000, the fair market value of the issued shares, was expensed on issue.         The Company issued 75,000 shares of its common stock in respect of an investor relations services agreement which was rescinded on June 23, 2018 (Note 6(5)). The shares were valued at the fair market value on the date of issuance for a total of $150,000, or $2.00 per share.      
Additional share of common stock per share               $ 0.40  
License Agreement Terms [Member]                  
Capital Stock (Textual)                  
Share issued for agreement       119,950          
Conversion value       $ 335,860          
Conversion of stock par value       $ 2.80          
Investors [Member]                  
Capital Stock (Textual)                  
Warrant exercise               2,000  
Warrants received underlying shares for exercise on a cashless basis               1,715  
Scientific Advisors [Member]                  
Capital Stock (Textual)                  
Share issued for agreement     290,000            
Conversion value     $ 812,000            
Conversion of stock par value     $ 2.80            
Private Placement [Member]                  
Capital Stock (Textual)                  
Sale and issuance of common stock         22,728   312,500    
Total proceeds of subscriptions amount         $ 25,000   $ 500,000   $ 32,000
Investor relations agreement, description             The Company issued 10,000 shares for advisory services (Note 6(4)). The shares were valued at fair market value on the date of issuance for a total of $28,000 or $2.80 per share.    
Warrant [Member]                  
Capital Stock (Textual)                  
Warrant exercise [1]               2,000 512,000
Series A Preferred Stock [Member]                  
Capital Stock (Textual)                  
Preferred stock, conversion basis, description               The Series A Preferred Stock is redeemable at the option of the Company at any time, in whole or in part, upon 10 trading days prior notice, at a price of $1.00 per share plus 4% per annum from the date of issuance (the "Stated Value"). The holders of the Series A Preferred Stock are entitled to a liquidation preference equal to the Stated Value, prior to the holders of other preferred stock or common stock. The holders of the Series A Preferred Stock have the right to convert such stock into common stock at a conversion rate equal to the Stated Value as of the conversion date divided by the average closing price of the common stock for the five previous trading days. The Company is required to reserve sufficient number of shares for the conversion of the Series A Preferred Stock. The holders of Class A Preferred Stock shall vote together as a single class with the holders of the Company's common stock and the holders of any other class or series of shares entitled to vote with the common stock, with the holders of Class A Preferred Stock being entitled to 66 2/3% of the total votes on all such matters, regardless of the actual number of shares of Class A Preferred Stock then outstanding.  
[1] Each two shares of common stock purchased under the private placement provides for one warrant to acquire an additional share of common stock together with the payment of $0.40.
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Subsequent Events (Details) - Subsequent Event [Member]
Oct. 08, 2018
USD ($)
shares
Subsequent Events (Textual)  
Sale and issuance of common stock | shares 22,728
Total proceeds of subscriptions amount | $ $ 25,000
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