See accompanying notes to condensed unaudited financial statements.financialstatements.

ARAX HOLDINGS CORP.
CORP

NOTES TO THE CONDENSED UNAUDITED FINANCIALSTATEMENTS

FOR THE THREE AND NINE MONTH PERIODS ENDEDPERIODENDED

JULY 31, 2015 AND 2014January 2016

NOTE 1–ORGANIZATION ANDNATURE OF BUSINESSOFBUSINESS

Arax Holdings Corp. (“the Company”(the “Company”, “we”, “our” or “us”) was incorporated under the laws of the State of Nevada on February 23, 2012 with a business plan to sell hot dogs from mobile hot dog stands throughout the major cities in Mexico

Effective January 16, 2014, Vladimir Leonov, the Chief Executive Officer, majority shareholder and sole directorMexico. As of the Company sold 8,000,000 shares of common stockfiling of the Company (approximately 77% of the issued and outstanding shares of common stock of the Company) owned by him to Thru Pharma, LLC (d/b/a pharmaCline), a Delaware limited liability company (“Thru Pharma”),10 K for total cash consideration of $275,000 in a private transaction (the “Acquisition”). The Acquisition resulted in a change in control of the Company. Simultaneous with the closing of the Acquisition, Mr. Leonov resigned as a director and from all offices he held withlast year, the Company and Steven J. Keough, was elected as a director ofstated that Management believes that the Company and appointed as the Company’s Chief Executive Officer, President, Secretary and Treasurer.

Following the changes in control and management of the Company related to the Acquisition, we have been reevaluating our business plan. We have been assessing potential new business models to replace our previous business model relating to hot dog stands in Mexico. While it is quite possible there will be a newbest business model for us, we have not finalizedour investors is to pursue business activity in the decision.Life Sciences sector of the United States and internationally. We have been reviewing business sectors other thanwill continue to assess these opportunities and structures as well as the food sector the Company is currently engaged invarious pre-requisite actions needed to finalize and it is possible that aimplement any new business model could relate to a new business sector other than the food sector. It is also possible anybusinessmodel.

This new business model could entail a capital restructuring of the Company in order to provide new capital and a broader base of shareholders. Such a capital restructuring of the Company could involve a merger or acquisition of assets through various techniques, including a possible reverse-merger. At July 31, 2015,Additional asset acquisitions and as of the date of this filing, we continue to assess these opportunities and structures as well as the various pre-requisite actions needed to finalize and implement any new business model.transfers mayoccur.

Pursuant to a revision to a certain Consulting Agreement dated as of October 8, 2013, by and between Thru Pharma and Strategic Universal Advisors, LLC (“Strategic”), as amended effective January 17, 2014, andon or about February 9, 2015, and most recently on October 20, 2015, with full effect as of April 1, 2015 (the “Consulting Agreement”), Thru Pharma transferred (effective April, 2014) 7,660,000and Strategic agreed that the intent of the Consulting Agreement ab initio was to provide Strategic with a 3% equity ownership of Thru Pharma in the event that a PUBCO M&A transaction did not occur prior to the end of the Consulting Agreement. Thru Pharma and Strategic agreed and stipulated that 753,504 shares of Arax Holdings would equal 3% of Thru Pharma as the Company’s common stockequity payment under the Consulting Agreement, with transfer subject to Strategic (“the Transfer”) as partial compensation for consultingfurther provisions stated below. As Thru Pharma was the sole beneficiary of the services provided to Thru Pharma by Strategic.Strategic under the Consulting Agreement, no part of the value of the consideration for services provided under the Consulting Agreement has been recognized as an expense by the Company.

In connection with earlier amendments to the Transfer,Consulting Agreement, Strategic granted to Mr. Keough, a control person of the Company and Thru Pharma, an irrevocable proxy (“the Irrevocable(the “Irrevocable Proxy”), to vote all of said 7,660,000 shares ofthe common stock untilin the later of (i)Company under certain conditions. That proxy no longer exists under the achievementterms of the objectives by Thru Pharma and Strategic set out in the consulting Agreement and (ii) June 30, 2015[DC1]. To date the objectives in the consulting Agreement with Strategic have not been met and Mr. Keough remains the control person for the company with the voting rights of all said 7,660,000 shares.most recentamendment.

As part of the currently amended Consulting Agreement, Thru Pharma also agreed thatto transfer 753,504 Company shares to Strategic upon the closing of a merger or acquisition (an “M&A Transaction”) of a public entity, resulting in Thru Pharma being the controlling owner of the entity that was the subject of the M&A Transaction, and Thru Pharma would cause such entity to also issue to Strategic a non-qualified stock option or warrant to purchase 1,000,000 (one million)600,000 (six hundred thousand) shares of common stock of the entity that was the subject of the M&A Transaction. Such option or warrant will be of five-year duration, exercisable at $0.10 per share, and shall vest in four equal amounts of 150,000 shares with the greaterfirst annual vesting to occur 60 (sixty) days following the completion of the fair market value per share on the date of the grant or $0.10 per share,PUBCO M&A Transaction, as well as other routine terms.

Notwithstanding anything to the contrary provided in the Consulting Agreement or elsewhere, in no event would Thru Pharma be directly and/or indirectly obligated to enter into or complete any particular M&A Transaction, including, but not limited to, any M&A Transaction with the Company.

Effective July 1, 2015, Thru Pharma and Catalyst Funding, LLC, entered into an Original Issue Discount Revolving Secured Convertible Promissory Note (the “Catalyst Note”) and a Securities Purchase Agreement (the “Catalyst SPA”). The transaction is secured by a grant of security interest to 100% of the Company stock held by or for Thru Pharma. The Catalyst Note and Catalyst SPA are intended to facilitate funding essential work relating to multi-year auditing of Thru Pharma financials. The total available fundsare $200,000, and Thru Pharma has only drawn $75,000. A Commitment Fee of Company stock in the amount of 35,294 shares was authorized for issue to Catalyst as part of the transaction.

The Company’s status as a “shell company” as of the date of this report remains unchanged.

NOTE 2–GOING CONCERN GOINGCONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has not generated any revenues as of JulyJanuary 31, 2015.2016. The Company has incurred losses since Inception (February 23, 2012) resulting in an accumulated deficit of $104,016$114,380 as of JulyJanuary 31, 20152016 and stockholders’ deficit of $68,168.$78,532. The Company currently has a working capital deficit, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.oftime.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it can be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financiallybecomefinancially viable and continue as a going concern.goingconcern.

NOTE 3–SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES3–SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES

Basis of PresentationofPresentation

The Company has adopted an October 31 fiscal year end.yearend.

The accompanying unaudited financial statements have been prepared in accordance with the instructions from Regulation S-X and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments that are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim period, and to make the financial statements not misleading, have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim period are not necessarily indicative of operations for a fullyear.

Development Stage CompanyStageCompany

The Company is in the development stage as defined under the then current Financial Accounting Standards Board(“FASB”)Accounting Standards Codification (“ASC”) 915-205 “Development-Stage Entities��Entities” and among the additional disclosures required as a development stage company that its financial statements were identified as those of a development stagecompany,and that the statements of operations, stockholders’ deficit and cash flows disclosed activity since the date of its Inception (February 23, 2012) as a development stagecompany.Effective June 10, 2014FASBchanged its regulations with respect to Development Stage Entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions. The Company has elected to early adopt these provisions and consequently these additional disclosures are not included in these financial statements.financialstatements.

Use of EstimatesofEstimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.thoseestimates.

Cash and Cash EquivalentsCashEquivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.cashequivalents.

FairValueof Financial InstrumentsFinancialInstruments

The Company’s financial instruments consist of amounts due to a relatedparty.The carrying amount of these financial instruments approximates fair value due to length ofmaturity.

IncomeTaxes

Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized.berealized.

The Company accounts for income taxes under the provisions of Financial Accounting Standards Board(“FASB”)Accounting Standards Codification (“ASC”) 740, “Accounting for Income TaxesTaxes.”. It prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As a result, the Company has applied a more-likely-than-not recognition threshold for all tax uncertainties. The guidance only allows the recognition of those tax benefits that have a greater than 50% likelihood of being sustained upon examination by the various taxing authorities. The Company is subject to taxation in the United States. All of the Company’s tax years are subject to examination by Federal and State jurisdictions.Statejurisdictions.

The Company classifies penalties and interest related to income taxes as income tax expense in the Statements of Operations.

Revenue RecognitionRecognition

The Company will recognize revenue in accordance with Accounting Standards Codification No. 605, “Revenue Recognition” (“ASC-605”ASC- 605”), ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.berequired.

Advertising

The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $0 in advertising costs during the three and nine months ended July 31, 2015 and 2014.January 31,2016.

Basic Income (Loss) Per SharePerShare

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during theyear.The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity instruments. There were no such potentially dilutive debt or equity instruments issued or outstanding during the three and nine month periods ending July 31, 2015 and 2014.January 31,2016.

Recent Accounting AccountingPronouncements

The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on thecompany.

NOTE 4–STOCKHOLDERS’ DEFICIT STOCKHOLDERS’DEFICIT

Common Stock

The Company is authorized to issue 75,000,000 shares of common stock with a par value of $0.001 per share.pershare.

No shares of common stock were issued during the three and nine month periods ended July 31, 2015 or 2014.January 31,2016.

The Company had 10,300,000 shares of common stock issued and outstanding as of July 31, 2015.January 31,2016.

Additional Paid in CapitalinCapital

The Company owed its principal shareholder and Chief Executive Officer Vladimir Leonov, a total of $4,221 as of October 31, 2013, in the form of an unsecured loan. The note was due on demand and was non-interest bearing.

During the nine months ended July 31, 2014, Mr. Leonov advanced the Company a further $627 for working capital purposes.

Effective January 16, 2014, coincidental with the sale of his controlling interest in the Company, Mr. Leonov forgave repayment of his outstanding loan balance which was credited to additional paid in capital at that time.None

NOTE 5 ––RELATED PARTYTRANSACTIONS

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or directors. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.

The Company owed its former principal shareholder and Chief Executive Officer Vladimir Leonov, a total of $4,221 as of October 31, 2013, in the form of an unsecured loan. The note was due on demand and was non-interest bearing.

During the three months ended January 31, 2014, Mr. Leonov advanced the Company a further $627 for working capital purposes.

Effective January 16, 2014, coincidental with the sale of his controlling interest in the Company, Mr. Leonov forgave repayment of his outstanding loan balance which was credited to additional paid in capital at that time.

The Company owed its principal shareholder, Thru Pharma, a total of $68,168$78,532 as of JulyJanuary 31, 2015,2016, in the form of an intercompanya related party payable. It is due on demand and is non-interest bearing.non-interestbearing.

NOTE 6 – INCOME–TAXESINCOME TAXES

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.orsettled.

As of JulyJanuary 31, 2015,2016, the Company had a net operating loss carry-forward of approximately $104,016$114,380 that may be used to offset future taxable income and begins to expire in 2031. Because of the change in ownership that occurred on January 16, 2014, net operating loss carry forwards could be limited as to use in future years.futureyears.

NOTE 7 – COMMITMENTS AND CONTINGENCIESANDCONTINGENCIES

Legal

On June 4, 2014, the Company waswe were named as a defendant in a lawsuit filed by AMERIFINANCIAL, INC. (“AMERIFINANCIAL”), of Houston, Texas. The action relatesrelated primarily to a contract dispute between AMERIFINANCIAL and the Company’s formerour majority shareholder, THRU PHARMA, LLC. The dispute alleged an unpaid balance of $171,870 and five membership units in THRU PHARMA, LLC. The dispute doesdid not allege any actions or inactions by the Company’sour officers or representatives acting on behalf of the Company.our behalf. Counsel for THRU PHARMA, LLC, has requested the Companythat we be dismissed from thethis lawsuit, as it iswe were not a party to the disputed contract. As the Company has been advised by its legal counselcontract, and there iswas no legal basis for the Company being a part of the lawsuit, thelawsuit. The Company hasdid not recognizedrecognize a liability in connection with it. On November 18, 2014, counsel for THRU PHARMA, LLC, filed an Original Answer and Request for Rule 194 Disclosures with the court. The filing included a general denial of all allegations against all defendants. withit.

On August 31, 2015, a hearing for a summary judgement on behalf of AMERIFINANCIAL, INC.the Judge in this Harris County, Texas, case ruled that the only remaining Defendant was only successful against THRU PHARMA, LLC. AOn January 8, 2016, THRU PHARMA and AMERIFINANCIAL, INC. reached settlement of the dispute. Subsequent to this quarter plaintiff submitted a motion to dismiss ARAX HOLDINGS CORP. from this case is in process.on February 12, 2016.

NOTE 8 – SUBSEQUENT EVENTSSUBSEQUENTEVENTS

In accordance with ASC 855-10, “Subsequent Events”, the Company has analyzed its operations subsequent to JulyJanuary 31, 20152016 to the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements.financialstatements.

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements which reflect management’s expectation or belief concerning future events that involve risks and uncertainties. Our actions, results and performance could differ materially from what is contemplated by the forward-looking statements contained in this Report. Factors that might cause differences from the forward-looking statements include those referred to or identified in our Annual report on Form 10K filed with the SEC on February 13, 2015 and other factors that may be identified elsewhere in this Report. Reference should be made to such factors and all forward-lookingforward- looking statements are qualified in their entirety by the above cautionary statements.cautionarystatements.

The following is management’s discussion and analysis of the financial condition and results of operations of theCompany,as well as our liquidity and capital resources. The discussion, including known trends and uncertainties identified by management, should be read in conjunction with the Company’s unaudited consolidated financial statements and related notes included in this Report, as well as our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended October 31, 2014.31,2014.

Overview

Arax Holdings Corp. (the “Company”, “we”, “our” or “us”) was incorporated under the laws of the State of Nevada on February 23, 2012 with a business plan to sell hot dogs from mobile hot dog stands throughout the major cities in Mexico. That has now changed and is discussed further below.

Effective January 16, 2014, VladimirLeonov,the Chief Executive Officer, majority shareholder and sole director of the Company sold 8,000,000 shares of our common stock (approximately 77% of the issued and outstanding shares of common stock of the Company) owned by him to Thru Pharma, LLC (d/b/a PharmaCline), a Delaware limited liability company (“Thru Pharma”), for total cash consideration of $275,000 in a private transaction (the “Acquisition”). The Acquisition resulted in a change in control of theCompany.Simultaneous with the closing of the Acquisition,Mr.Leonov resigned as a director and from all offices he held with us, and Steven J. Keough, was elected as our director and appointed as the Company’s Chief Executive Officer, waselected asourdirectorandappointedastheCompany’sChiefExecutiveOfficer,President, Secretary and Treasurer.SecretaryandTreasurer.

Following the changes in control and management of the Company related to the Acquisition, we have been reevaluating our business plan. We have been assessing potential new business models to replace our previous business model relating to hot dog stands in Mexico. While it is quite possible there will be a newAs of the filing of the 10K for last year, the Company stated that Management believes that the best business model for us, we have not finalizedour investors is to pursue business activity in the decision.Life Sciences sector of the United States and internationally. We have been reviewingwill continue to assess these opportunities and structures as well as the various pre-requisite actions needed to finalize and implement any new business sectors other than the food sector the Company is currently engaged in and it is possible that amodel.

This new business model could relate to a new business sector other than the food sector. It is also possible any new business model could entail a capital restructuring of the Company in order to provide new capital and a broader base of shareholders. Such a capital restructuring of the Company could involve a merger or acquisition of assets through various techniques, including a possible reverse-merger. At July 31, 2015,Additional asset acquisitions and transfers may occur. The Company may establish a presence on other markets as part of the date of this filing, we continue to assess these opportunities and structures as well as the various pre-requisite actions needed to finalize and implement any new business model.restructuring.

Results of OperationsofOperations

Three and Nine Month Period Ended JulyJanuary 31, 20152016 Compared to the Three and Nine Month Period Ended July 31, 2014January 31,2015

Revenue

WeNorevenue was recognized no revenue in the three and nine month period ended JulyJanuary 31, 2015 and 2014 as we2016. Operations have not commenced operations as yet.yet commenced.

Operating Expenses and Net Loss

During the three and nine month period ended JulyJanuary 31, 2015,2016, our operating expenses were $8,033 and $22,710, respectively, broadly similarnet loss was $3,300. There was a decrease of $4,257 compared to the operating expenses and net loss of $8,131 and $24,073$7,557 incurred during the three and nine months ended July 31, 2014. The $1,363 decrease in operating expenses in the nine months ended JulyJanuary 31, 2015 as compared to the nine months ended July 31, 2014 was principally due to reduceda reduction in legal fees incurred in the current period as opposed to the prior year.

Net Loss

Our net loss for the three and nine month period ended July 31, 2015 was $8,033 and $22,710, respectively, broadly similar to the net loss of $8,131 and $24,073, respectively, for the three and nine months ended July 31, 2014.fees.

Liquidity and Capital ResourcesCapitalResources

At JulyJanuary 31, 20152016 we had no assets and $68,168$78,532 of current liabilities compared to no assets and $45,458$75,232 of current liabilities at October 31, 2014.2015. The increase in our working capital deficit in for the ninethree months ended JulyJanuary 31, 20152016 is principally due to the operating losses we incurred in the period.theperiod.

Cash Flow for the NineThree Month Period Ended JulyJanuary 31, 20152016 Compared to NineThree Month Period Ended July 31, 2014January 31,2015

Operating Activities

During the ninethree months ended JulyJanuary 31, 20152016 we used $22,710$3,300 for operating activities compared to $23,616$9,557 used in operating activities during the ninethree months ended JulyJanuary 31, 2014.2015. The decrease in funds used in operating activities between the two periods related was due to a decrease in legal fees.fees and prepaid expenses.

Investing Activities

Weneither used nor generated cash flow from operatinginvesting activities during the ninethree month periods ended JulyJanuary 31, 2015 or 2014.2016 or2015.

Financing Activities

During the ninethree months ended JulyJanuary 31, 20152016 we received $22,710 by way of$3,300 in loans from Thru Pharma to fund our working capital requirements.requirements for a total balance of $78,532 from related parties. In the ninethree months ended JulyJanuary 31, 2014, Mr. Leonov, formerly our principal shareholder and sole director and officer, had advanced the company $627 for working capital purposes and2015, Thru Pharma advanced the company $19,237 for a total of $19,864 in cash loaned from related parties.$9,557.

Historically,we have funded working capital requirements primarily through the proceeds of the private placement of equity instruments and loans from related parties.Weexpect that working capital requirements will be funded through advances from Thru Pharma, and through further issuances of our securities.Wehave no lines of credit or other bank financing arrangements. Additional issuances of equity or issuances of convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to implement our business plan.

Going Concern QualificationConcernQualification

The independent auditors’ review report accompanying the Company’s October 31, 20142015 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The ability to continue as a going concern is dependent upon generating profitable operations in the future or obtaining the necessary financing to meet obligations and repay liabilities arising from normal business operations when they come due. Our financial statements have been prepared assumingThe Company intends to position itself so that weit can be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

Off-Balance Sheet Arrangementsconcern.

Off-Balance Sheet Arrangements

As of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

toinvestors.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.thisItem.

Evaluation of Disclosure Controls and ProceduresandProcedures

The Company maintains disclosure controls and procedures (as defined in Rule 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in theSEC’srules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Principal FinancialOfficer,as appropriate to allow timely decisions regarding required disclosure.requireddisclosure.

The Company’s management carried out an evaluation, under the supervision and with the participation of its Chief Executive Officer and its Principal FinancialOfficer,of the effectiveness of the Company’s disclosure controls and procedures as of JulyJanuary 31, 2015.2016. Based upon this evaluation, our management concluded that the Company’s disclosure controls and procedures were not effective as of JulyJanuary 31, 2015.2016.

Management’sAnnual Report on Internal Control over Financial Reporting.

Our internal control over financial reporting is a process designedby,or under the supervision of, our Chief Executive Officer and Principal Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.financialstatements.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Principal FinancialOfficer,we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of JulyJanuary 31, 2015,2016 the Company determined that there were control deficiencies that constituted material weaknesses, as describedbelow.

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

As a result of the weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of JulyJanuary 31, 20152016 based on criteria established in Internal Control — Integrated Framework issued by COSO.

This Form 10-Q does not include an attestation report of our registered public accounting firm regarding internal control over financialoverfinancial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Form 10-Q.Form10-Q.

Changes in Internal Control over Financial Reporting.FinancialReporting.

During the most recently completed fiscal quarter, there has been improvement in our internal control over financial reporting. Management plans to routinely assess its internal control over financial reporting against appropriate standards, and to make changes as determined necessary and according to the scope of business operations.businessoperations.

On June 4, 2014, the Company waswe were named as a defendant in a lawsuit filed by AMERIFINANCIAL, INC. (“AMERIFINANCIAL”), of Houston, Texas. The action relatesrelated primarily to a contract dispute between AMERIFINANCIAL and the Company’s formerour majority shareholder, THRU PHARMA, LLC. The dispute alleged an unpaid balance of $171,870 and five membership units in THRU PHARMA, LLC. The dispute doesdid not allege any actions or inactions by the Company’sour officers or representatives acting on behalf of the Company.our behalf. Counsel for THRU PHARMA, LLC, has requested the Companythat we be dismissed from thethis lawsuit, as it iswe were not a party to the disputed contract. As the Company has been advised by its legal counselcontract, and there iswas no legal basis for the Company being a part of the lawsuit, thelawsuit. The Company hasdid not recognizedrecognize a liability in connection with it. On November 18, 2014, counsel for THRU PHARMA, LLC, filed an Original Answer and Request for Rule 194 Disclosures with the court. The filing included a general denial of all allegations against all defendants. withit.

On August 31, 2015, a hearing for a summary judgement on behalf of AMERIFINANCIAL, INC.the Judge in this Harris County, Texas, case ruled that the only remaining Defendant was only successful against THRU PHARMA, LLC. AOn January 8, 2016, THRU PHARMA and AMERIFINANCIAL, INC. reached settlement of the dispute. Subsequent to this quarter plaintiff submitted a motion to dismiss ARAX HOLDINGS CORP. from this case is in process.on February 12, 2016.

See Exhibit Index immediately following the signature page.signaturepage.

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.dulyauthorized.

Exhibit Index