UNITED STATES

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington,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 April 30, 2016ended: July 31, 2023

OR

o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto _______to _______

Commission File Number: Number 333-185928

ARAX HOLDINGS CORP.

(Exact Namename of Registrantregistrant as Specifiedspecified in Its Charter)its charter)

820 E Park Ave, Bldg. D200
TallahasseeFL. 32301

2329 N. Career Avenue Suite 317(564) 234-7009

Sioux Falls, SD 57107(Issuer’s telephone number including area code)

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

Securities registered pursuant to Section 12(b) of Principal Executive Offices)the Act:

(605) 553-2238

(Registrant’s Telephone Number, Including Area Code)

Indicate by check markCheck whether the registrantissuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the precedingpast 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☒ No ☐

YesxNoo

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☒ No ☐

YesxNoo

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yesx☐Noo☒

IndicateState the number of shares outstanding of each of the issuer’s classes of common stock,equity as of the latest practicable date:date. As of August 25, 2023, there were 117,625,624 common shares outstanding.

Arax Holdings Corp.

CONTENTS

PART I.1 – FINANCIAL INFORMATION

ITEMItem 1. FINANCIAL STATEMENTS– Financial Statements

*Denotes a loss of less than $(0.01) per share

See accompanying notes to condensed unaudited financial statements

See accompanying notes to condensed unaudited financial statements

ARAX HOLDINGS CORP.

CONDENSED BALANCE SHEETS

JULY 31, 2023 AND 20152022

(Unaudited)

April 30, 2016

NOTE 1–ORGANIZATION AND NATUREDESCRIPTION OF BUSINESS

Arax Holdings Corp. (the “Company”, “we”, “our” or “us”) was incorporated under the laws of the State of Nevada on February 23, 2012.

The Company currently has no operations from a continuing business other than the expenditures related to running the Company and currently has no revenue from continuing operations.

Management intends to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction. Our executives have experience in business consulting, although no assurances can be given that they can identify and implement a viable business strategy or that any such strategy will result in profits. Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and presented in accordance with accounting principles generally accepted in the United States of America (US GAAP).

The accompanying balance sheet at October 31, 2022, has been derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed financial statements as of July 31, 2023 and for the three, six and nine months ended July 31, 2023 and 2022 have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and should be read in conjunction with the audited financial statements and related notes to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2022 as filed with the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all material adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been made to the condensed financial statements. The condensed financial statements include all material adjustments (consisting of normal recurring accruals) necessary to make the condensed financial statements not misleading as required by Regulation S-X Rule 10-01. Operating results for the three six and nine months ended July 31, 2023 are not necessarily indicative of the results that may be expected for the year ending October 31, 2023 or any future periods.  

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these financial statements. The Company has incurred operating losses since its inception. As of July 31, 2023, the Company had a working capital equity of $19,400,626 and an accumulated deficit of $4,204,751.

Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. The Company is currently being funded by a company related to its Chairman, Michael Pieter Loubser. The Company will be required to continue to rely on this entity until its operations become profitable.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The most significant estimates relate to income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

Cash and cash equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company has no cash equivalents.

Stock-based Compensation

The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

Net Loss per Share

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. The Company has 100,000,000 and 100,000,000 shares issuable upon the conversion of preferred stock that were not included in the computation of dilutive loss per share because their inclusion is antidilutive for the three six and nine months ended July 31, 2023 and 2022, respectively.

NOTE 3 – EQUITY

The Company has authorized 10,000,000 shares of $0.001 par value, preferred stock. As of July 31, 2023 and October 31, 2022 there were 10,000,000 shares of preferred stock issued and outstanding.

The Company has authorized 950,000,000 shares of $0.001 par value, common stock. As of July 31, 2023 there were 117,570,915 shares of common stock, and October 31, 2022 there were 10,335,294 shares of common stock issued and outstanding.

The Company issued 107,235,621 common stock during the nine month period ended July 31, 2023 and no common stock during the nine month period ended July 31, 20222. This common stock represented the acquisition of the Core Business Holdings of which 90,215,096 shares of common stock was issued and 4,870,134 to be issued. The remainder of the common stock issued represented the conversion of the convertible notes the Company had issued in the nine months ending July 31, 2023

Preferred Stock

On March 31, 2021 the Company issued 10,000,000 shares of Series A Preferred Stock with a par value of $0.001. The Series A shares are convertible into common stock on a 10 for 1 basis and were issued in return for a reduction of $16,166 of related party debt. Due to the thinly traded nature of the Company’s stock and its status as a “shell”, the Company used the par value of the common stock, which was determined to be $100,000, to value this issuance and recorded $16,166 for repayment of the loan and $83,834 as share-based compensation in the Company’s Statements of Operations.

NOTE 4 – COMMITMENTS AND CONTINGENCIES

The Company did not have any contractual commitments of July 31, 2023 and October 31, 2022.

COVID-19

On March 11, 2020, the World Health Organization (“WHO”) declared the Covid-19 outbreak to be a global pandemic. In addition to the devastating effects on human life, the pandemic has had a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. Most US states and many countries now lifted policies that were intended to stop or slow the further spread of the disease.

There are no comparable events that provide guidance as to the effect the Covid-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. We do not yet know the full extent of the effects on the economy, the markets we serve, our business, or our operations.

NOTE 5 – ADVANCES FROM RELATED PARTY

An entity controlled by the Company’s Chairman has advanced an aggregate of $57,757 to the Company as of July 31, 2023 and October 31, 2022. These funds were used to pay corporate expenses of the Company, and the payments were made directly to the vendors by this entity.

NOTE 6 – SUBSEQUENT EVENTS

In accordance with FASB ASC 855-10, Subsequent Events, the Company has analyzed its operations subsequent to July 31, 2023, 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. 

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

Overview

Arax Holdings Corp. (the “Company”, “we”, “our” or “us”) was incorporated under the laws of the State of Nevada on February 23, 20122012. Our financial statements accompanying this Report have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. We have a minimal operating history and minimal revenues or earnings from operations.

Plan of Operation

The Company has operations from a continuing business providing software and logistics services to a company in South Africa. The Company intends to develop this relationship while expanding in other areas of the world. The Company has acquired financial licenses in Switzerland under the entity Cilandro and is currently working to provide Central Business Digital Currencies for various entities worldwide. The Company will continue to develop software solutions that work exclusively on the Core Blockchain to maximize its potential for revenue generation in this new technology released in May of 2022. The Company has entered into consulting and design agreements from continuing business and is in the process of evaluating additional acquisitions of software technologies.

Management intends to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction. Our Chief Executive Officer has experience in business consulting, although no assurances can be given that he can identify and implement a viable business strategy or that any such strategy will result in profits. Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies.

Given our limited capital resources, we may consider a business combination with an entity which has recently commenced operations, is a developing company or is otherwise in need of additional funds for the development of new products or services or expansion into new markets or is an established business experiencing financial or operating difficulties and is in need of additional capital. Alternatively, a business combination may involve the acquisition of, or merger with, an entity which desires access to the U.S. capital markets.

As of the date of this Report, our management has completed the acquisition of certain technologies and software businesses including the Core Business Holdings Group and Cilandro. These businesses, technology and any other target business that are selected may be financially unstable or in the early stages of development. In such event, we expect to be subject to numerous risks inherent in the business and operations of a financially unstable or early-stage entity. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk or in which our management has limited experience, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

Our management anticipates that we will likely only be able to effect one business combination due to our limited capital. This lack of diversification will likely pose a substantial risk in investing in the Company for the indefinite future because it will not permit us to offset potential losses from one venture or operating territory against gains from another. The risks we face will likely be heightened to the extent we acquire a business operating in a single industry or geographical region.

We anticipate that the selection of a business combination will be a complex and risk-prone process. Because of general economic conditions, including unfavorable conditions caused by the coronavirus pandemic, rapid technological advances being made in some industries and shortages of available capital, management believes that there are a number of firms seeking business opportunities at this time at discounted rates with which we will compete. We expect that any potentially available business combinations may appear in a variety of different industries or regions and at various stages of development, all of which will likely render the task of comparative investigation and analysis of such business opportunities extremely difficult and complicated. Once we have developed and begun to implement our business plan, management intends to fund our working capital requirements through a combination of our existing funds and future issuances of debt or equity securities. Our working capital requirements are expected to increase in line with the implementation of a business plan and commencement of operations.

We anticipate that we will incur operating losses in the next 12 months, principally costs related to sell hot dogs from mobile hot dog stands throughoutour being obligated to file reports with the major citiesSEC. Our prospects must be considered in Mexico. Aslight of the filingrisks, expenses and difficulties frequently encountered by companies in their early stage of the 10Kdevelopment.  Such risks for last year, the Company stated that Management believes that the best business model for our investors is to pursue business activity in the Life Sciences sector of the United States and internationally. We will continue to assess these opportunities and structures as well as the various pre-requisite actions needed to finalize and implement any new business model.

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. Additional asset acquisitions and transfers may occur.

The Company is a majority-owned subsidiary of Thru Pharma, LLC, and these financialsus include, but are presented on a stand-alone basis. All transactions with Thru Pharma have been identified in Note 4: Stockholders' Deficit and Note 5: Related party transactions.

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, on 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 and Strategic agreed that the intent of the Consulting Agreement ab initio was to provide Strategic with a 3% equity ownership of Thru Pharma n 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 equity payment under the Consulting Agreement, with transfer subject to the further provisions stated below. As Thru Pharma was the sole beneficiary of the services provided by 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 Consulting Agreement, Strategic granted to Mr. Keough, a control person of the Company and Thru Pharma, an irrevocable proxy (the “Irrevocable Proxy”), to vote all of the common stock in the Company under certain conditions. That proxy no longer exists under the terms of the most recent amendment.

As part of the currently amended Consulting Agreement, Thru Pharma agreed to 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 stock warrant to purchase 600,000 (six hundred thousand) shares of common stock of the entity that was the subject of the M&A Transaction. Such 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 first annual vesting to occur 60 (sixty) days following the completion of the 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, Araxan evolving 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 grantunpredictable business model, recognition 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 funds are $200,000,revenue sources, and the Company has only drawn $75,000,management of growth. To address these risks, we must, among other things, develop, implement, and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain, and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition, and results of operations.

Limited Operating History; Need for which the CompanyAdditional Capital

We cannot guarantee we will be successful in our business operations. We have not generated any revenue since inception. Our business is obligor. A Commitment Fee of Company stocksubject to risks inherent in the amountestablishment of 35,294 shares was authorized for issue to Catalyst as part of the transaction recorded as an initial debt discount of $14,118. In the event that the Company isa new business enterprise, including limited capital resources.

If we are unable to timely make payments under this Agreement, Catalyst has the optionmeet our needs for cash from either our operations or possible alternative sources, then we may be unable to develop our operations.

Off-Balance Sheet Arrangements

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 gaining control of the Thru Pharma shares in the Company.operations, liquidity, capital expenditures, or capital resources that is material to investors.

Going Concern

The Company’s status as a “shell company”independent registered public accounting firm auditors’ report on our October 31, 2022 financial statements expressed an opinion that our capital resources as of the date of this report remains unchanged.

NOTE 2–GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuationtheir Audit Report were not sufficient to sustain operations or complete our planned activities for the upcoming year. Our current lack of the Companycash and limited resources raise substantial doubt about our ability to continue as a going concern. However, the Company hasIf we do not generated any revenues as of April 30, 2016. The Company has incurred losses since Inception (February 23, 2012) resulting in an accumulated deficit of $531,948 as of April 30, 2016 and stockholders’ deficit of $189,303. 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.

Management anticipates that the Company will be dependent, for the near future, onobtain additional investment capital to fund operating expenses. The Company intends to position itself so that it canfunds, we may no longer 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.concern and will cease operation which means that our shareholders will lose their entire investment. 

NOTE 3–SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCritical Accounting Principles

BasisThe preparation of Presentation

The Company has adopted an October 31 fiscal year end.

The accompanying unauditedconsolidated financial statements have been prepared in accordance with US GAAP requires 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 full year.

Development Stage Company

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” and among the additional disclosures required as a development stage company that its financial statements were identified as those of a development stage company, 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 stage company. Effective June 10, 2014 FASB changed 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.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requiresCompany’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amountamounts of revenues and expenses during the reporting period. Actual results couldcan, and in many cases will, differ from those estimates. We have not identified any critical accounting policies.

Cash and Cash EquivalentsResult of Operations

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

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. 

The following are the hierarchical levels of inputs to measure fair value: 

The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable & accrued expenses, certain notes payable and notes payable - related party, approximate their fair values because of the short maturity of these instruments. 

The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 2.  

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature. 

Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. 

Original Issue Discount

For certain convertible debt issued, the Company may provide the debt holder with an original issue discount. The original issue discount would be recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt. 

Income Taxes

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 assetsThree Months Ended July 31, 2023 Compared to the amounts expected to be realized.Three Months Ended July 31, 2022

The Company accounts for income taxes under the provisionsWe had $226,886.00 of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “Accounting for Income Taxes.” 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.

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

Revenue Recognition

The Company will recognize revenue in accordance with Accounting Standards Codification No. 605, “Revenue Recognition” (“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.

Advertising

The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $0 in advertising costs during the six months ended April 30, 2016.

Basic Income (Loss) Per Share

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 the year. 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 months ending July 31, 2023 and nine month periodsno revenue for the three months ending April 30, 2016.

Recent 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 the company.

NOTE 4–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. 35,294 shares of common stock were issuedJuly 31, 2022. We anticipate generating additional revenues during the six month period ended April 30, 2016. The shares were issued as part of an incentive to enter into convertible notes that were owed as of October 31, 2015 with a relative fair value of $11,881.

The Company had 10,335,294 shares of common stock issued and outstanding as of April 30, 2016.

Additional Paid in Capital

During the six months ended April 30, 2016, the Company owed 40,000stock subscription payable for compensation to a consultant for work performed with ThruPharma, a related party, for a value of $23,500 and recorded as a related party expense.

NOTE 5–RELATED PARTY TRANSACTIONS

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 is owed by its principal shareholder, Thru Pharma, a total of $54,872 as of April 30, 2016, in the form of a related party payable. It is due on demand and is non-interest bearing.

NOTE 6–INCOME 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.

As of April 30, 2016, the Company had a net operating loss carry-forward of approximately $531,948 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.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

On June 4, 2014, we were named as a defendant in a lawsuit filed by AMERIFINANCIAL, INC. (“AMERIFINANCIAL”), of Houston, Texas. The action related primarily to a contract dispute between AMERIFINANCIAL and our majority shareholder, Thru Pharma, LLC. The dispute did not allege any actions or inactions by our officers or representatives acting on our behalf. Counsel for Thru Pharma, LLC, requested that we be dismissed from this lawsuit, as we were not party to the disputed contract, and there was no legal basis for the Company being a part of the lawsuit. Accordingly, the Company did not recognize a liability in connection with the claim.

On August 31, 2015, the Judge in this Harris County, Texas, case ruled that the only remaining Defendant was Thru Pharma, LLC. On January 8, 2016, Thru Pharma and AMERIFINANCIAL, INC. reached settlement of the dispute. Subsequently this case was dismissed.

NOTE 8 – CONVERTIBLE DEBT AND DERIVATIVE LIABILITIES

The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accountingrelated to a revolving convertible note in which the Company can borrow up to $200,000, which includes a 10% OID. The Company issued the first tranche of the convertible note totaling $75,000, of which $65,000 was paid in cash, $2,500 was paid for legal fees, and the OID of $7,500, which included a ratchet provision in the conversion price of $.95 or a price equal to 60% of the last equity transaction completed by the Company as part of a subscription agreement, whichever is lower. The note has a maturity date of nine months after funding and also includes a fifty percent premium which is added on 90 days after funding. The note is to be paid off in installments of $19,453 for the six months after the ninety day period. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company has estimated the fair value of these embedded derivatives for convertible debentures using a multinomial lattice model as of April 30, 2016 and October 31, 2015.

The fair values of the derivative instruments are measured each quarter, which resulted in a loss of $10,344 and derivative expense of $0 during the six months ended April 30, 2016. As of April 30, 2016, the fair market value of the derivatives aggregated $15,844 using the following assumptions: estimated 0.18 to 1-year term, estimated volatility of 162.21% to 164.20%, and a discount rate of 0.22% to 0.56%.

The fair values of the derivative instruments are measured each quarter, which resulted in a gain of $19,934 and derivative expense of $25,434 during thecurrent fiscal year ended October 31, 2015. As2023. Our net income for the three month period ended July 31, 2023 was $401,460.66 and a net loss of October$11,122 for July 31, 2015,2023.

Our general and administrative expenses consist of professional fees and other costs incurred in connection with maintaining the fair market valueCompany’s filings with the Securities and Exchange Commission and the payment of vendors associated with the issuance and trading of the derivatives aggregated $5,500 usingCompany’s securities, such as transfer agent fees. Consulting, software R & D, marketing and business development fees. These expenses were $2,564,715 and $11,122 for the following assumptions: estimated 0.42three month periods ended July 31, 2023 and 2022, respectively.

Nine Months Ended July 31, 2023 Compared to 0.75-year term, estimated volatilitythe Nine Months Ended July 31, 2022

We had $682,289.79 of 133.49% to 243.69%,revenue during the nine months ending July 31, 2023 and a discount rate of 0.21% to 0.23%.

NOTE 9 – FAIR VALUE MEASUREMENT 

The Company usesno revenue during themultinomial latticemodel to calculate nine months ending July 31,2022. We anticipate generating additional revenues during the fair value of the derivative liability. 

Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of April 30, 2016 and October 31, 2015 consisted of the following: 

NOTE 10 - STOCK PURCHASE OPTIONS AND WARRANTS

During the six months ended April 30, 2016, the Company did not issue options.

During thecurrent fiscal year ended October 31, 2015,2023. Our net losses for the Company issued options to purchase a totalnine month period ended July 31, 2023 and 2022 were $3,303,089 and $47,785 respectively.

Our general and administrative expenses consist of 37,500 sharesprofessional fees and other costs incurred in connection with maintaining the Company’s filings with the Securities and Exchange Commission and the payment of vendors associated with the issuance and trading of the Company’s Common Stock. The Company issued 37,500 options in conjunction with a consulting agreement entered into in February 2015. According to the consulting agreement, the Company is to issue 5,000 common shares or 7,500 options per month during the duration of their agreement. The optionssecurities, such as transfer agent fees. Consulting, marketing and business development fees. These expenses were valued using the multinomial lattice pricing model under the assumptions noted below.

Stock Purchase Options

During the six months ended April 30, 2016, the Company did not issuestock purchase options.

During the year ended October 31, 2015, the Company issued 37,500 stock purchase options for a value of $16,217.  

The following table presents the assumptions used to estimate the fair values of the stock warrants$3,985,379 and options granted:

The following table summarizes the changes in options outstanding of the Company during the six months ended April 30, 2016. 

The following table summarizes the changes in options outstanding of the Company during the year ended October 31, 2015.

Stock Purchase Warrants

During the year ended October 31, 2015, the Company issued warrants to purchase a total of 600,000 shares. The Company issued 600,000 warrants in conjunction with a consulting agreement entered into in July 2015. The warrants were valued using the multinomial lattice pricing model under the assumptions noted below.

During the six months ended April 30, 2016, the Company did not issue any stock purchase warrants.  

During the year ended October 31, 2015, the Company issued 600,000 stock purchase warrants for a value of $216,799.  

The following table presents the assumptions used to estimate the fair values of the stock warrants and options granted:

The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the six months ended April 30, 2016.

The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the year ended October 31, 2015.

NOTE 11 – SUBSEQUENT EVENTS

In accordance with ASC 855-10, “Subsequent Events”, the Company has analyzed its operations subsequent to April 30, 2016 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.

NOTE 12 – RESTATEMENT OF CONDENSED FINANCIAL STATEMENTS

This filing includes corrections to our previously issued financial statements$47,785 for the year ended October 31, 2015 and related quarterly interim periods, record related party payable due to two consultants related to consulting agreements with Thru Pharma to be paid with 7,500 options for the first consultant on a monthly basis convertible at $.80 per share entered into in February 2015 and the other to be paid in 10,000 common shares as stock payable. The Company issued 600,000 warrants on September 22, 2015 as payment for legal expenses that had not been recorded. The Company also entered into a convertible note agreement that previously had not been recorded that is considered a derivative or contain embedded features subject to derivative accounting related to a revolving convertible note where the Company can borrow up to $200,000, which includes a 10% OID. The Company issued the first tranche of the convertible note totaling $75,000, of which $65,000 was paid in cash, $2,500 was paid for legal fees, and an OID of $7,500, which included a ratchet provision in the conversion price of $.95 or a price equal to 60% of the last equity transaction completed by the Company as part of a subscription agreement. The note has a maturity date of nine months after funding and also includes a fifty percent premium totaling $37,500 which is added on 90 days after funding. The fair values of the derivative instruments are measured each quarter, which resulted in a gain of $19,934 and derivative expense of $25,434 during the year ended October 31, 2015. As of October 31, 2015, the fair market value of the derivatives aggregated $5,500 using the following assumptions: estimated 0.42 to 0.75-year term, estimated volatility of 133.49% to 243.69%, and a discount rate of 0.21% to 0.23%.

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- looking statements are qualified in their entirety by the above cautionary statements.

The following is management’s discussion and analysis of the financial condition and results of operations of the Company, 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, 2015.

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, Vladimir Leonov, 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 the Company. 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, 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. As of the filing of the 10K for last year, the Company stated that Management believes that the best business model for our investors is to pursue business activity in the Life Sciences sector of the United States and internationally. We will continue to assess these opportunities and structures as well as the various pre-requisite actions needed to finalize and implement any new business model.

This new business model could entail 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. Additional asset acquisitions and transfers may occur. The Company may establish a presence on other markets as part of the restructuring.

Results of Operations

Three and Six month Period Ended April 30, 2016 Compared to the Three and Six month Period Ended April 30, 2015

Revenue

No revenue was recognized in the six month period ended April 30, 2016. Operations have not yet commenced.

Operating Expenses

During the three and six month periods ended April 30, 2016, our operating expenses were $21,890July 31, 2023 and $40,690. There was a decrease of $6,980 and $18,087 compared to the operating expenses of $28,870 and $58,777 incurred during the three and six months ended April 30, 2015 due to decreases in professional fees as compared to prior periods.2022, respectively 

Other Income (Expenses)

During the three and six month periods ended April 30, 2016, our other income (expenses) were $33,922 and $57,696 compared to $0 during the three and six month period ended April 30, 2015. During the three and six month period ended April 30, 2016, our other income (expenses) comprised of interest expense of $19,912 and $47,352 from accrued interest on convertible notes and from the amortization of debt discount and OID, and $14,010 and $10,344 in change in fair value of derivative. By comparison, during the three and six month periods ended April 30, 2015 other income (expenses) were $0.

Net Loss

Our net loss for the three and six month period ended April 30, 2016 was $55,812 and $98,386 compared to $28,870 and $58,777 for the three and six months ended April 30, 2015, is due to the factors discussed above.

Liquidity and Capital Resources

At April 30, 2016Based upon our current operations, we had $0 in total assets and $189,303 of current liabilities compared to $0 in total assets and $114,417 of current liabilities at October 31, 2015. The increase in ourdo not have sufficient working capital deficit for the six months ended April 30, 2016 is principally due to the operating losses we incurred in the period.

Cash Flow for the Six month Period Ended April 30, 2016 Compared to Six month Period Ended April 30, 2015

Operating Activities

During the six months ended April 30, 2016 we used $16,940 for operating activities compared to $14,677 used in operating activities during the six months ended April 30, 2015. The increase in funds used in operating activities between the two periods was due primarily to an increase in legal fees.

Investing Activities

We neither used nor generated cash flows from investing activities during the six month periods ended April 30, 2016 or 2015.

Financing Activities

During the six months ended April 30, 2016 we received $16,940 in loans from Thru Pharma to fund our workingoperations over the next 12 months. It is likely we will need additional capital requirements foras a total balancecondition of $54,872 from related parties. In the six months ended April 30, 2015, Thru Pharma advanced the Company $14,677.

Historically, we have funded working capital requirements primarily through the proceedscontinuing development of the private placementsoftware platforms. Because of equity instruments and loans from related parties. We expect that workingthe uncertainties, we cannot be certain as to how much capital requirementswe need to raise or the type of securities we will be funded through advances from Thru Pharma, and through further issuancesrequired to issue. In connection with a reverse merger, we will be required to issue a controlling block of our securities. We have no lines of credit or other bank financing arrangements. securities to the target’s shareholders which will be very dilutive. 

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.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 implementtake advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business plan.operations.

Going Concern QualificationItem 3. Quantitative and Qualitative Disclosures About Market Risk

The independent auditors’ review report accompanyingMarket risk is the Company’s October 31, 2015 financial statements contained an explanatory paragraph expressing substantial doubt about our abilitysensitivity of income or loss to continue as a going concern. The ability to continue as a going concern is dependent upon generating profitable operationschanges in interest rates, foreign exchanges, commodity prices, equity prices, and other market-driven rates or prices. We are not presently engaged in any substantive commercial business. Accordingly, the future or obtaining the necessary financing to meetrisks associated with foreign exchange rates, commodity prices, and equity prices are not significant. Our debt obligations and repay liabilities arising from normal business operations when they come due. Our financial statements have been prepared assumingcontain interest rates that we will continue as a going concernare fixed 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 Arrangements

As of the date of this report, we do not have any off-balance sheet arrangements that haveenter into derivatives or are reasonably likely to have a currentother financial instruments for trading 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.speculative purposes.

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.

4. Controls and Procedures

Evaluation of

(a) Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined inAs of July 31, 2023 being the end of the period covered by this Report, we carried out an evaluation required by Rule 15d-15(e) under13a-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” and “internal control over financial reporting” as of the end of the period covered by this Quarterly Report.

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the CompanySEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. Our principal executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”), pursuant to Rule 13a- 15(b) under the Exchange Act. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in theour reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officerour principal executive officer and Principal Financial Officer,principal financial officer, as appropriate to allow timely decisions regarding required disclosure.disclosure, due to material weaknesses in our control environment and financial reporting process.

Our management, including our principal executive officer and principal financial officer, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision- making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The Company’s management carried out an evaluation,design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the supervision anddegree of compliance with the participation of its Chief Executive Officer and its Principal Financial Officer,policies or procedures may deteriorate.

Because of the effectiveness of the Company’s disclosure controlsinherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and procedures as of April 30, 2016. Based upon this evaluation, our management concluded that the Company’s disclosure controls and procedures were not effective as of April 30, 2016.be detected.

(b) Management’s AnnualQuarterly Report on Internal Control over Financial Reporting.Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). Internal control over financial reporting is a process designed by, 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 reportingprinciples and includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;the assets of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures of the Company are being made only in accordance with authorizations of the authorization of our board of directorsmanagement and management;directors; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of ourthe Company’s assets that could have a material effect on ourthe financial statements.

UnderBased on our evaluation under the supervision and with the participationframework described above, as of July 31, 2023, our management includingconcluded that we had “material weaknesses” (as such term is defined below) in our Chief Executive Officercontrol environment and Principal Financial Officer, we conducted an evaluationfinancial reporting process consisting of the effectivenessfollowing as of the Evaluation Date:

1)       The Company does not have sufficient segregation of duties within accounting functions due to its limited staff and limited resources;

2)       The Company does not have an independent board of directors or an audit committee;

3)       The Company does not have written documentation of our internal control overpolicies and procedures; and

4)       All of the Company’s financial reporting based on the criteria established in Internal Control – Integrated Framework issuedis conducted by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).a financial consultant.

A material weakness“material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’sa company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessmentbasis by the company’s internal controls.

We plan to rectify these weaknesses by implementing an independent board of the effectivenessdirectors, establishing written policies and procedures for our internal control of financial reporting, and hiring additional accounting personnel at such time as we complete a reverse merger or similar business acquisition.

(c) Change in Internal Control over Financial Reporting

There were no significant changes to our internal control over financial reporting as of April 30, 2016,(as defined in Rules 13a-15(f) and 15d-15(f) under the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

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.

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 April 30, 2016 based on criteria established in Internal Control — Integrated Framework issued by COSO.

This Form 10-Q does not include an attestation report ofExchange Act) during our registered public accounting firm regarding internal control over financial 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.

Changes in Internal Control over Financial Reporting.

During the most recently completedsecond fiscal quarter there has been improvement inthat could materially affect, or are reasonably likely to materially affect, our internal control over financial reporting. Management plans

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1a. Risk Factors

We are a smaller reporting company and are not required to routinely assess its internal control over financial reporting against appropriate standards, andprovide the information under this item pursuant to make changes as determined necessary and according to the scope of business operations.Regulation S-K.