MetaStat (MTST) 10-Q 2014 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2013

OR

[   ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

From the transition period from              to             .

Commission File Number 000-52735

METASTAT, INC.

(Exact name of small business issuer as specified in its charter)

Nevada	20-8753132
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

8 Hillside Avenue, Suite 207

Montclair, New Jersey 07042

(Address of principal executive offices)

(973) 744-7618

(Issuer’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]  No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X]  No [   ]

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [   ]  No [X]

As of January 13, 2014, 21,561,898 shares of the registrant’s common stock, $0.0001 par value, were issued and outstanding.

TABLE OF CONTENTS

			Page
PART I.	FINANCIAL INFORMATION		1
	Item 1.	Financial Statements	1
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
	Item 4.	Controls and Procedures	16
PART II.	OTHER INFORMATION		17
	Item 1.	Legal Proceedings	17
	Item 1A.	Risk Factors	17
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
	Item 3.	Defaults Upon Senior Securities	17
	Item 4.	Mine Safety Disclosures	17
	Item 5.	Other Information	17
	Item 6.	Exhibits	17

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PART I. FINANCIAL INFORMATION

Item  1. Financial Statements

MetaStat, Inc.

(A Development Stage Company)

Unaudited Consolidated Balance Sheets

	November 30,			February 28,
	2013			2013
ASSETS
CURRENT ASSETS
Cash	$	488,108		$	969,188
Prepaid Insurance		42,654			-
Total Current Assets		530,762			969,188
PROPERTY AND EQUIPMENT
EQUIPMENT (net of accumulated depreciation of $28,710 and $1,271, respectively)		208,393			53,326
OTHER ASSETS
Refundable deposit		4,667			-
TOTAL ASSETS	$	743,822		$	1,022,514
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued liabilities	$	240,896		$	168,005
Short term note payable		10,536			-
Convertible debentures - net of discount of $139,879		1,847,121			716,957
Accrued interest payable		91,477			1,940
TOTAL LIABILITIES		2,190,030			886,902
STOCKHOLDERS' EQUITY
Preferred stock, 10,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.0001 par value; 150,000,000 shares authorized; 21,469,435 and 21,054,418 shares issued and outstanding, respectively		2,147			2,106
Paid-in-capital		9,393,529			5,495,985
Accumulated deficit as a development stage company		(10,841,884	)		(5,362,479	)
Total equity		(1,446,208	)		135,612
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	743,822		$	1,022,514

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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MetaStat, Inc.

(A Development Stage Company)

Unaudited Consolidated Statement of Expenses

	Three Months			Three Months			Nine Months			Nine Months			Period from Inception (July 22, 2009)
	ended			ended			ended			ended			to
	November 30, 2013			November 30, 2012			November 30, 2013			November 30, 2012			November 30, 2013
Revenue
Interest income	$	20		$	94		$	81		$	442		$	677
Total Revenue		20			94			81			442			677
OPERATING EXPENSES
General & administrative		479,116			364,110			1,406,419			1,237,808			4,071,603
Research & development		90,261			45,000			234,976			378,517			1,776,179
Depreciation		3,538			2,800			10,342			8,213			22,738
Accretion - discount		196,190			-			559,496			-			560,996
Warrant Expense		-			149,995			-			149,995			378,688
Stock-based compensation		648,087			(5,806	)		3,268,253			5,259			4,032,357
Total  Operating Expenses		1,417,192			556,099			5,479,486			1,779,792			10,842,561
NET LOSS	$	(1,417,172	)	$	(556,005	)	$	(5,479,405	)	$	(1,779,350	)	$	(10,841,884	)
Basic & Diluted Net Loss Per Share	$	(0.07	)	$	(0.03	)	$	(0.26	)	$	(0.09	)
Weighted shares outstanding		21,469,435			21,054,418			21,413,084			20,825,840

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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MetaStat, Inc.

(A Development Stage Company)

Unaudited Consolidated Statement of Cash Flows

	Nine Months			Nine Months			Period from Inception (July 22, 2009) to November 30, 2013
	ended			ended
	November 30, 2013			November 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(5,479,405	)	$	(1,779,350	)	$	(10,841,884	)
Adjustments to reconcile net loss to net
cash used in  operating activities:
Interest payable		89,537		��	-			91,477
Depreciation expense		10,342			8,213			22,738
Warrant expense		-			149,995			378,688
Option expense		1,944,261			-			1,944,261
Common stock issued for services		1,323,992			5,259			2,088,097
Accretion of discount		559,497						560,997
Changes in assets and liabilities:
Prepaid expenses and other current assets		(42,654	)		-			(42,654	)
Refundable deposit		(4,668	)		-			(4,668	)
Accounts payable		72,891			(250,034	)		240,896
NET CASH USED IN OPERATING ACTIVITIES		(1,526,207	)		(1,865,917	)		(5,562,052	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for purchase of fixed assets		(165,409	)		(290,507	)		(231,131	)
NET CASH USED IN INVESTING ACTIVITIES		(165,409	)		(290,507	)		(229,002	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of stock		-			880,000			3,418,755
Proceeds from subscription receivables		-			865,000			865,000
Payments on short-term debt		(62,641	)		-			(62,641	)
Borrowings on short-term debt		73,177			-			73,177
Borrowings on convertible debentures		1,200,000			-			1,987,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,210,536			1,745,000			6,281,291
NET INCREASE (DECREASE) IN CASH		(481,080	)		(411,424	)		488,108
Cash at the beginning of the year		969,188			878,340			-
Cash at the end of the year	$	488,108		$	466,916		$	488,108
SUPPLEMENTAL DISCLOSURES:
Interest Paid	$	-		$	-		$	-
Income taxes paid	$	-		$	-		$	-
NON-CASH TRANSACTIONS
Recapitalization of PVSO shareholders	$	-		$	-		$	8
Debt discount	$	629,332		$	-		$	700,875

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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METASTAT INC.

(A Development Stage Company)

Notes to Condensed Consolidated Financial Statements

November 30, 2013

(Unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS AND GOING CONCERN

MetaStat, Inc. (“we,” “us,” “our,” the “Company,” or “MetaStat”) is a development stage life sciences company focused on developing and commercializing novel diagnostic technologies and therapeutics for the early and reliable prediction and treatment of systemic metastasis - cancer that spreads from a primary tumor through the bloodstream to other areas of the body. Systemic metastasis is responsible for greater than 90% of all solid tumor cancer related deaths and as such, we believe more accurate risk stratification and effective treatment of metastatic disease and/or the prevention of systemic metastasis is needed to improve patient outcomes.

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, MetasStat BioMedical, Inc., a Delaware corporation. All significant intercompany balances and transactions have been eliminated in consolidation.  These interim financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States consistent with those applied in, and should be read in conjunction with, the Company’s audited consolidated financial statements and related footnotes for the year ended February 28, 2013 included in the Company’s Annual Report on Form 10-K as filed with the United States Securities and Exchange Commission (“SEC”) on May 28, 2013. These financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position as of November 30, 2013 and its results of operations and cash flows for the interim periods presented and are not necessarily indicative of results for subsequent interim periods or for the full year. These interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and allowed by the relevant SEC rules and regulations; however, the Company believes that its disclosures are adequate to ensure that the information presented is not misleading. Certain amounts in prior periods have been reclassified to conform to current presentation.

Going Concern

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of November 30, 2013, the Company has an accumulated deficit of $10,841,884. The continuation of the Company as a going concern is dependent upon continued financial support from its shareholders, the ability of the Company to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company cannot make any assurances that additional financings will be available to it and, if available, completed on a timely basis, on acceptable terms or at all.  If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact it’s business and operations, which would likely cause the price of its common stock to decline. It could also lead to the reduction or suspension of the Company’s operations and ultimately force the Company to go out of business. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 2- EQUITY

On April 5, 2013, the Company issued 303,013 shares of common stock to members of its scientific advisory board and clinical advisory board vesting over a period of ten years or upon the listing of the Company on a national exchange. The Company valued the shares for a total fair value of $984,792 on the grant date and has amortized the expense each quarter based upon the vested portion. As of November 30, 2013, the Company has recognized $984,792 in stock compensation expense in connection with these shares.

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On April 9, 2013, the Company issued 100,000 shares of common stock to an advisor and member of its board of directors for services. The Company valued the shares for a total fair value of $305,000 on the grant date and has amortized the expense each quarter based upon the vested portion. As of November 30, 2013, the Company has recognized $305,000 in stock compensation expense in connection with these shares.

On April 18, 2013, the Company issued 12,000 shares of common stock to a consultant for services. The Company valued the shares for a total fair value of $34,200 on the grant date and has amortized the expense each quarter based upon the vested portion. As of November 30, 2013, the Company has recognized $34,200 in stock compensation expense in connection with these shares.

NOTE 3 – STOCK OPTIONS

During the nine months ended November 30, 2013, the Company issued options to purchase 823,500 shares of common stock at $3.25 per share to members of its management team, members of its board of directors, members of its scientific advisory board and clinical advisory board and a consultant. The options vest in four equal installments on each of May 31, 2013, August 31, 2013, November 30, 2013 and February 28, 2014 and expire on April 5, 2023. These options have a total fair value of $2,592,349, as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 1.72%; (2) an expected term of 10 years; (3) an expected volatility of 134%; and (4) zero expected dividends.  As of November 30, 2013, the Company recognized $1,944,261 in stock option expense.

The following table summarizes common stock options issued and outstanding:

	Options		Weighted average exercise price		Aggregate intrinsic value		Weighted average remaining contractual life (years)
Outstanding at February 28, 2013		1,116,500	$	0.68	$	2,526,500		8.86
Granted		823,500	$	3.25		-		9.35
Exercised		-		-		-		-
Forfeited		-		-		-		-
Expired		-		-		-		-
Outstanding at November 30, 2013		1,940,000	$	1.77	$	733,500		8.63

As of November 30, 2013, 896,500 options are exercisable at $0.68 per share with a weighted average life of 8.11 years and 823,500 options are exercisable at $3.25 with a weighted average life of 9.35 years. Additionally, 220,000 options with an exercise price of $0.68 and a weighted average life of 8.11 years have yet to vest.

NOTE 4 – WARRANTS

The following table summarizes common stock purchase warrants issued and outstanding:

	Warrants		Weighted average exercise price		Aggregate intrinsic value		Weighted average remaining contractual life (years)
Outstanding at February 28, 2013		2,732,074	$	1.12	$	6,489,388		3.52
Granted		161,813		2.51		-		3.68
Exercised		-		-		-		-
Forfeited		-		-		-		-
Expired		-		-		-		-
Outstanding at November 30, 2013		2,893,887	$	1.20	$	1,143,289		3.05

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The following table summarizes common stock purchase warrants issued and outstanding:

Warrants exercisable at November 30, 2013 are:

Exercise				Weighted average		Exercisable number of
prices		Number of shares		remaining life (years)		shares
$	0.68		220,000		2.96		220,000
$	0.91		1,497,124		3.17		1,497,124
$	1.40		786,250		2.74		786,250
$	1.50		150,000		2.85		150,000
$	2.10		83,333		3.96		83,333
$	2.50		8,480		4.27		8,480
$	3.00		148,700		3.25		148,700

NOTE 5 – CONVERTIBLE NOTES

As of November 30, 2013, we had $1,487,000 aggregate principal amount of Convertible Notes outstanding due December 31, 2013 (the “2013 Notes”).  Warrants are valued as a discount to convertible debt of $616,896 and can be converted into common stock within a four year period.  For the nine months ended November 30, 2013, $553,102 is recognized as accretion expensed. The 2013 Notes bear interest at the rate of 8% per annum, mature on December 31, 2013 and rank senior to the Company’s currently issued and outstanding indebtedness and equity securities.  Upon the closing by us of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to us of at least $3,500,000 in the aggregate inclusive of the 2013 Notes, the outstanding principal amount of the 2013 Notes together with all accrued and unpaid interest thereunder (the “Outstanding Balance”) shall automatically convert into such securities, including warrants, as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing).  Commencing six months following the issuance date of the 2013 Notes, the noteholders shall have the right, at their option, to convert the Outstanding Balance into shares of common stock at a conversion price of $2.50 per share. The Company analyzed the transaction for derivative liability and determined it did not apply.

As of November 30, 2013, we had $500,000 aggregate principal amount of Convertible Notes outstanding due May 31, 2014 (the “2014 Notes”).  Warrants are valued as a discount to convertible debt of $83,978 and can be converted into common stock within a four year period.  For the nine months ended November 30, 2013 $6,394 is recognized as accretion expensed. The 2014 Notes bear interest at the rate of 8% per annum, mature on May 31, 2014 and rank pari passu to the 2013 Notes and senior to the Company’s currently issued and outstanding and equity securities.  Upon the closing by us of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to us of at least $3,500,000 in the aggregate inclusive of the 2013 Notes and the 2014 Notes, the outstanding principal amount of the 2014 Notes together with all accrued and unpaid interest thereunder (the “Outstanding Balance”) shall automatically convert into such securities, including warrants, as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing).  Commencing six months following the issuance date of the 2014 Notes, the noteholders shall have the right, at their option, to convert the Outstanding Balance into shares of common stock at a conversion price of $1.50 per share. The Company analyzed the transaction for derivative liability and determined it did not apply.

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NOTE 6 – COMMITMENT

Lease Agreement

Effective as of September 1, 2013, the Company entered into an agreement of lease with Long Island High Technology Incubator, Inc. in connection with the Company’s new drug discovery research facility located in Stony Brook, New York. The term of the lease is for one year, from September 1, 2013 through August 31, 2014, and the rent payable thereunder is $28,000 per year, payable in monthly installments of $2,333.

NOTE 7 – SUBSEQUENT EVENTS

License Agreements

On December 7, 2013, we entered into two separate worldwide exclusive license agreements with the Massachusetts Institute of Technology (“MIT”) and its David H. Koch Institute for Integrative Cancer Research at MIT and its Department of Biology, Albert Einstein College of Medicine of Yeshiva University, a division of Yeshiva University (“Einstein”), and Montefiore Medical Center (“Montefiore” and, together with MIT and Einstein, the “Licensors”).  The diagnostic license agreement (the “Diagnostic License Agreement”) covers pending patent applications, patent disclosures, and technology surrounding discoveries of alternatively spliced mRNA and protein isoform markers for the diagnosis and prognosis of cancer through the epithelial to mesenchymal transition (“EMT”) in epithelial solid tumor cancers.  The therapeutic license agreement (the “Therapeutic License Agreement” and, together with the Diagnostic License Agreement, the “License Agreements”) covers pending patent applications, patent disclosures, and technology surrounding discoveries of alternatively spliced mRNA and protein isoform markers for the treatment and/or prevention of cancer through the EMT in epithelial solid tumor cancers. The License Agreements call for certain customary payments such as a license signing fee, reimbursement of patent expenses, annual license maintenance fees, milestone payments, and the payment of royalties on sales of products or services covered under the agreement. The intellectual property covered by the License Agreements includes International Patent Application number WO 2012/116248 A1 entitled “Alternatively Spliced mRNA Isoforms as Prognostic and Therapeutic Tools for Metastatic Breast Cancer and Other Invasive/Metastatic Cancers”, by Christopher B. Burge, Wu Albert Cheng, John Condeelis, Frank B. Gertler, Maja Oktay and Irina M. Sharpiro.

In accordance with the terms of the Diagnostic License Agreement, we paid a license signing fee of $15,000 in connection with entering into the Diagnostic License Agreement and in accordance with the terms of the Therapeutic License Agreement, we paid a license signing fee of $5,000 in connection with entering into the Therapeutic License Agreement.  Pursuant to the License Agreements, we are required to make a series of annual minimum royalty or “license maintenance” payments for each license beginning on January 1, 2015.  For a period of five years on each anniversary, we are required to make additional payments in amounts that gradually increase each year. The payments are $10,000 in 2015, $15,000 in 2016, $25,000 in 2017, $37,500 in 2018 and $50,000 in 2019.  We are required to make additional payments of $50,000 every year each license is in effect thereafter.  The license maintenance fee pursuant to the Therapeutic License Agreement shall not be due for as long as the Diagnostic License Agreement is in effect.  Additionally, these annual license maintenance payments will be credited to running royalties due on net sales earned in the same calendar year.

Stock Option Issuances

On December 16, 2013, the Company granted an aggregate of 740,000 non-qualified stock options to the Company’s employees and consultants pursuant to the terms set forth in the Company’s Amended and Restated 2012 Omnibus Securities Incentive Plan. The 740,000 granted options have an exercise price of $1.50 per share and expire on December 16, 2023. 100,000 options vest immediately and 640,000 options vest upon the Company achieving certain milestones, which to date, have not been achieved.

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Warrant Issuance

On December 17, 2013, the Company entered into a consulting agreement whereby the Company issued to the consultant 17,500 common stock purchase warrants with a term of four years and an exercise price equal to $2.50 per share.

2013 Note Amendments

On December 31, 2013, the Company entered into certain amendments to its outstanding 2013 Notes with the holders of an aggregate of $1,387,000 principal amount of 2013 Notes (the “Amendments”), whereby the holders of the 2013 Notes extended the maturity date of the 2013 Notes to June 30, 2014 from December 31, 2013.   In consideration for entering into the Amendments, the Company (i) reduced the conversion price of the 2013 Notes to $1.50 per share from $2.50 per share, (ii) reduced the exercise price of an aggregate of 128,700 warrants issued in connection with the issuance of the 2013 Notes to $2.10 per share from $3.00 per share, (iii) issued an aggregate of 92,468 common stock purchase warrants with an exercise price of $2.10 per share and a term of four years, and (iv) issued an aggregate of 92,468 shares of the Company’s common stock.

Additionally, the Company has agreed to repay the principal amount of $100,000 plus accrued interest of 2013 Notes to a holder thereof.

Additional 2014 Notes

On January 14, 2014, the Company accepted subscriptions pursuant to separate Convertible Note and Warrant Purchase Agreements entered into with certain accredited investors identified therein for the issuance and sale in a private placement consisting of, in the aggregate: (a) $700,000 of convertible promissory notes (the “Additional 2014 Notes”) convertible into shares of the Company’s common stock and (b) four-year warrants to purchase up to 116,667 shares of common stock at an exercise price of $2.10 per share.  

The Additional 2014 Notes bear interest at the rate of 8% per annum, mature on June 30, 2014 and rank pari passu to the Company’s issued and outstanding convertible promissory notes  and senior to the Company’s issued and outstanding equity securities.  Upon the closing by the Company of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to the Company of at least $5,000,000 in the aggregate, and the Company, prior to or concurrent with the completion of the Qualified Financing (the “Qualified Financing Threshold Amount”), the outstanding principal amount of the Additional 2014 Notes, together with all accrued and unpaid interest thereunder (the “Outstanding Balance”), shall automatically convert into such securities, including warrants of the Company, as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing). For purposes of determining whether the Qualified Financing Threshold Amount has been satisfied, such amount shall include (i) the Outstanding Balance of the Additional 2014 Notes (each pursuant to the formula stated above) then outstanding, and (ii) the outstanding principal amount of the 2013 Notes and 2014 Notes together with all accrued and unpaid interest thereunder (pursuant to the same formula as stated above and therein).  Following the issuance date of the Additional 2014 Notes, the lenders shall have the right, at their option, to convert the Outstanding Balance into shares of common stock at a conversion price of $1.50 per share.

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

References in this report to “we,” “us,” “our,” “the Company” and “MetaStat” refer to MetaStat, Inc. and its subsidiary. References to the “SEC” refer to the United States Securities and Exchange Commission.

Forward-Looking Statements

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this interim report. Our consolidated financial statements have been prepared in accordance with U.S. GAAP. Our consolidated financial statements and the financial data included in this interim report reflect our reorganization and have been prepared as if our current corporate structure had been in place throughout the relevant periods. The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expect,” “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended February 28, 2013. Readers are cautioned not to place undue reliance on these forward-looking statements.

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information appearing in our Annual Report on Form 10-K for the year ended February 28, 2013.

Business Overview

We are a development stage life sciences company that is focused on developing and commercializing novel diagnostic technologies and therapeutics for the early and reliable prediction and treatment of systemic metastasis - cancer that spreads from a primary tumor through the bloodstream to other areas of the body. Systemic metastasis is responsible for greater than 90% of all solid tumor cancer related deaths and as such, we believe more accurate risk stratification and effective treatment of metastatic disease and/or the prevention of systemic metastasis is needed to improve patient outcomes.

We are developing two function-based diagnostic product lines, MetaSite Breast™ and MenaCalc™, which are based on the identification and understanding of the pivotal role of the mena protein and its isoforms, a common pathway for the development of systemic metastatic disease in all epithelial-based solid tumors. The MetaSite Breast™ test measures the process of systemic metastasis and is intended for early stage breast cancer patients. MenaCalc™, a platform of diagnostic assays based on the measurement of the balance of the mena protein isoforms, is broadly applicable in solid epithelial-based cancers, including breast, prostate, lung and colorectal. Both our MetaSite Breast™ and MenaCalc™ diagnostics are designed to accurately predict the probability of systemic metastasis and to allow clinicians to better "customize" cancer treatment decisions by positively identifying patients with a high-risk of systemic metastasis who need aggressive therapy and by sparing patients with a low-risk of systemic metastasis from the harmful side effects and expense of chemotherapy.

Additionally, we are developing our MenaBloc™ therapeutic program that aims to build upon mena biology and alternative splicing events as a driver of disease progression to exploit novel targets that provide precision medicines in oncology.

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Clinical studies of 585 patients in the aggregate for the MetaSite Breast™ test and 1,203 patients in the aggregate for the MenaCalc™ breast cancer test have successfully been completed to date.  In 2014, we plan to initiate additional clinical utility studies for both the MetaSite Breast™ and MenaCalc™ breast cancer tests.  We anticipate establishing a laboratory that will be a clinical reference laboratory as defined under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”). Based on CLIA certification, we anticipate commencing initial marketing of the MetaSite Breast™ test in 2015 followed by our MenaCalc™ diagnostic assay for breast cancer by late 2015. We plan to initially market to a select number of physicians and cancer centers in targeted markets in the United States. We expect this will subsequently be followed by a national rollout. We believe a subsequent increase in demand will result from the publication of further studies in one or more peer-reviewed scientific/medical journals and the presentation of study results at gatherings such as the ASCO meeting and the San Antonio Breast Cancer Symposium. Initially, we expect our reference laboratory will have the capacity to process up to 1,000 tests per quarter, and our current expansion plan contemplates that we will have capacity to process up to 15,000 tests per quarter by the end of calendar 2015.

We believe the key factors that will drive broader adoption of our function-based diagnostic assays will be acceptance by healthcare providers of their clinical benefits, demonstration of the cost-effectiveness of using our tests, expansion of our sales force and increased marketing efforts and expanded reimbursement by third-party payors. Reimbursement by third-party payors is essential to our commercial success. In general, clinical laboratory testing services, when covered, are paid under various methodologies, including prospective payment systems and fee schedules. Reimbursement from payors depends upon whether a service is covered under the patient’s policy and if payment practices for the service have been established. As a relatively new diagnostic test, we may be considered investigational by payors and not covered under current reimbursement policies. Until we reach agreement with an insurer on contract terms or establish a policy for payment of our function-based diagnostic tests, we expect to recognize revenue on a cash basis.

Upon commercialization of the MetaSite Breast™ test, we will begin working with third-party payors to establish reimbursement coverage policies. Where policies are not in place, we will pursue case-by-case reimbursement. We believe that as much as 20% of our future revenues may be derived from tests billed to Medicare. We will begin working with many payors, including Medicare, to establish policy-level reimbursement, which, if in place, will allow us to recognize revenues upon submitting an invoice. We do not expect to recognize the majority of revenues in this manner until calendar 2015 at the earliest.

Since our inception, we have generated significant net losses. As of November 30, 2013, we had an accumulated deficit of $10,841,884. We incurred net losses of $1,417,172 and $556,005 in the quarters ended November 30, 2013 and November 30, 2012, respectively. We expect our net losses to continue for at least the next several years. We anticipate that a substantial portion of our capital resources and efforts will be focused on research and development both to develop additional tests for breast cancer and to develop products for other cancer indications, scale up our commercial organization, and other general corporate purposes. Our financial results will be limited by a number of factors, including establishment of coverage policies by third-party insurers and government payors, our ability in the short term to collect from payors often requiring a case-by-case manual appeals process, and our ability to recognize revenues other than from cash collections on tests billed until such time as reimbursement policies or contracts are in effect. Until we receive routine reimbursement and are able to record revenues as tests are processed and reports delivered, we are likely to continue reporting net losses.

Going Concern

As of November 30, 2013, the Company had an accumulated deficit of $10,841,884. The Company currently anticipates that its cash and cash equivalents will be sufficient to fund its operations through May 2014 without raising additional capital. The continuation of the Company as a going concern is dependent upon continued financial support from its shareholders, the ability of the Company to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company cannot make any assurances that additional financings will be available to it and, if available, completed on a timely basis, on acceptable terms or at all.  If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact it’s business and operations, which would likely cause the price of its common stock to decline. It could also lead to the reduction or suspension of the Company’s operations and ultimately force the Company to go out of business.

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Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as revenues and expenses during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ materially from those estimates under different assumptions or conditions.

Revenue Recognition

We have generated no revenues since our inception. Product revenues for our first product, the MetaSite Breast™ test, are expected to be generated from the projected commercial launch in 2015, and are expected to be recognized on a cash basis because we will have limited collection experience and a limited number of contracts.  In accordance with our policy, revenues for tests performed will be recognized on an accrual basis when the related costs are incurred, provided there is a contract or coverage policy in place and the following criteria are met:

● persuasive evidence that an arrangement exists;

● delivery has occurred or services rendered;

● the fee is fixed and determinable; and

● collectability is reasonably assured.

Determination of the last two criteria will be based on management’s judgment regarding the nature of the fee charged for products or services delivered and the collectability of those fees.

We expect to generally bill third-party payors for the MetaSite Breast™ test upon generation and delivery of a “Metastasis Score” report to the physician. Accordingly, we take assignment of benefits and the risk of collection with the third-party payor. We expect to bill the patient directly for amounts owed after multiple requests for payment have been denied or only partially paid by the insurance carrier. As a new test, the MetaSite Breast™ test may be considered investigational by payors and not covered under their reimbursement policies. Consequently, we expect to pursue case-by-case reimbursement where policies are not in place or payment history has not been established.

Financial Operations Overview

Revenues

We currently do not have any revenues. We expect to derive our revenues from product sales and operate in one industry segment. Initially, our product revenues will be derived solely from the sale of the MetaSite Breast™ test. Payors will be generally billed upon generation and delivery of a Metastasis Score report to the physician. Product revenues will be recorded on a cash basis unless a contract or policy is in place with the payor at the time of billing and collectability is reasonably assured.  Initially, all product revenues recognized will probably reflect cash collections.

Cost of Product Revenues

Cost of product revenues represents the cost of materials, direct labor, costs associated with processing tissue samples including histopathology, anatomical pathology, paraffin extraction, and quality control analyses, license fees and delivery charges necessary to render an individualized test result. Costs associated with performing our test will be recorded as tests are processed. License fees to third-party vendors would be recorded at the time product revenues are recognized or in accordance with other contractual obligations. We expect that license fees will represent a significant component of our cost of product revenues and are expected to remain so for the foreseeable future.

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General and Administrative Expenses

General and administrative expenses from our inception through November 30, 2013 were $4,071,603. Our general and administrative expenses consist primarily of personnel related costs, legal costs, including intellectual property, accounting costs and other professional and administrative costs. 

Research and Development Expenses

Research and development expenses from our inception through November 30, 2013 were $1,776,179 and substantially all of these expenses were focused on the research and development of the MetaSite Breast™ test. During this time, the MetaSite Breast™ test was not the only product under development. Research and development expenses also represent costs incurred to develop our MenaCalc™ platform of diagnostic assays in breast, lung, and prostate cancers and initial research on our MenaBloc™ therapeutic platform.

We charge all research and development expenses to operations as they are incurred. All potential future product programs, apart from the MetaSite Breast™ test for breast cancer metastasis, are in the clinical research phase, and the earliest we expect another cancer program to reach the clinical development stage is 2014. However, the expected time frame that a product related to one of these other cancers can be brought to market is uncertain given the technical challenges and clinical variables that exist between different types of cancers.

We do not record or maintain information regarding costs incurred in research and development on a program or project specific basis. Our research and development staff working under sponsored research agreements and consulting agreements and associated infrastructure resources are deployed across several programs. Many of our costs are thus not attributable to individual programs. We believe that allocating costs on the basis of time incurred by our employees does not accurately reflect the actual costs of a project.

As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development programs or when, if ever, and to what extent we will receive cash inflows from the commercialization and sale of a product.

Selling and Marketing Expenses

Our selling and marketing expenses that we expect to incur coincident with the launch of the MetaSite Breast™ test will consist primarily of personnel costs and education and promotional expenses. We expect these expenses will include the costs of educating physicians, laboratory personnel and other healthcare professionals regarding our technologies, how our MetaSite Breast™ test was developed and validated and the value of the quantitative information that the MetaSite Breast™ test provides. Selling and marketing expenses will also include the costs of sponsoring continuing medical education, medical meeting participation and dissemination of our scientific and economic publications related to the MetaSite Breast™ test. Sales and marketing expenses from our inception through November 30, 2013 were $0.

Results of Operations

Comparison of the Nine Months Ended November 30, 2013 and November 30, 2012

Revenues.  There were no revenues for the nine months ended November 30, 2013 and November 30, 2012, respectively, because we have not yet commercialized any of our function-based diagnostic tests.

Cost of Product Revenues.  No cost of product revenues were recorded in the nine months ended November 30, 2013 and November 30, 2012, respectively, because we have not yet commercialized any of our function-based diagnostic tests.

General and Administrative Expenses.  General and administrative expenses totaled $1,406,419 for the nine months ended November 30, 2013 as compared to $1,237,808 for the nine months ended November 30, 2012. This represents an increase of $168,611 for the nine months ended November 30, 2013 over the nine months ended November 30, 2012. This increase was due in part to increased costs for salaries, legal, including intellectual property, accounting and other professional costs.

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Research and Development Expenses.  Research and development expenses were $234,976 for the nine months ended November 30, 2013 as compared to $378,517 for the nine months ended November 30, 2012. This represents a decrease of $143,541 for the nine months ended November 30, 2013 over the nine months ended November 30, 2012.  This decrease resulted primarily from the completion of the MetaSite Breast™ validation study.

Selling and Marketing Expenses.  There were no selling and marketing expenses recorded for the nine months ended November 30, 2013 and November 30, 2012, respectively, because we have not yet commercialized any of our function-based diagnostic tests.

Accretion Discount.  Accretion discount were $559,496 for the nine months ended November 30, 2013 as compared to $0 for the nine months ended November 30, 2012.

Warrant Expense. Warrant expenses were $0 for the nine months ended November 30, 2013 as compared to $149,995 for the nine months ended November 30, 2012.

Stock-based Compensation. Stock-based compensation was $3,268,253 for the nine months ended November 30, 2013 as compared to $5,259 for the nine months ended November 30, 2012.

Interest Income and Other Income/ Expense.  We recorded interest income of $81 during the nine months ended November 30, 2013 and $442 during the nine months ended November 30, 2012.

Interest Expense.  We made no interest payments on borrowings during the nine months ended November 30, 2013 and November 30, 2012, respectively.

Net Loss. As a result of the factors described above, we had a net loss of $5,479,405 for the nine months ended November 30, 2013 as compared to $1,779,350 for the nine months ended November 30, 2012.

Liquidity and Capital Resources

Since our inception, we have incurred significant losses and, as of November 30, 2013, we had an accumulated deficit of $10,841,884.  We have not yet achieved profitability and anticipate that we will continue to incur net losses for the foreseeable future. We expect that our research and development, general and administrative and selling and marketing expenses will continue to grow and, as a result, we will need to generate significant product revenues to achieve profitability. We may never achieve profitability.

Sources of Liquidity

Since our inception, substantially all of our operations have been financed through the sale of our common stock and convertible promissory notes. Through November 30, 2013, we had received net proceeds of $4,283,755 through the sale of common stock to investors and $1,987,000 from the sale of convertible promissory notes.  As of November 30, 2013, we had cash and cash equivalents of $488,108 and net debt of $1,857,657.  As a result of the most recent sale of shares of common stock and convertible promissory notes through November 30, 2013, we have issued and outstanding warrants to purchase 2,893,887 shares of our common stock at a weighted average exercise price of $1.20, which will result in proceeds to us of approximately $3.47 million if all outstanding warrants are exercised.

Cash Flows

As of November 30, 2013, we had $488,108 in cash and cash equivalents, compared to $466,916 on November 30, 2012. 

Net cash used in operating activities was $1,526,207 for the nine months ended November 30, 2013 compared to $1,865,917 for the nine months ended November 30, 2012. The decrease in cash used of $339,710 was primarily due to a reduction in professional fees.

Net cash used in investing activities was $165,409 for the nine months ended November 30, 2013, compared to $290,507 for the nine months ended November 30, 2012. This decrease of $125,098 was attributed to a decrease in cash paid for certificate of deposits and for the purchase of equipment. We expect amounts used in investing activities to increase in fiscal year 2014 and beyond as we grow our corporate operations, expand research and development activities and establish our commercial laboratory.

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Net cash provided by financing activities during the nine months ended November 30, 2013 was $1,210,536 compared to $1,745,000 for the nine months ended November 30, 2012. Financing activities consisted primarily of the sale of convertible promissory notes and warrants for the nine months ended November 30, 2013 and the sale our common stock and warrants for the nine months ended November 30, 2012, respectively.

Contractual Obligations

As of November 30, 2013, we had the following contractual commitments:

	Payments Due by Period
									More
			Less than						than 5
Contractual Obligations	Total		1 Year		1-3 Years		4-5 Years		Years
	(In thousands)
License Agreement	$	455	$	30	$	225	$	200	$	(a)
Second License Agreement	$	297	$	12	$	110	$	175		(b)

Third License Agreement $ 297 $ 12 $ 110 $ 175                 (c)

 (a) Amount of additional payments depends on several factors, including the duration of the License Agreement, which depends on expiration of the last patent to be issued pursuant to the License Agreement. That duration is uncertain because the last patent has not yet been issued.

 (b) Amount of additional payments depends on several factors, including the duration of the Second License Agreement, which depends on expiration of the last patent to be issued pursuant to the Second License Agreement. That duration is uncertain because the last patent has not yet been issued.

  (c) Amount of additional payments depends on several factors, including the duration of the Third License Agreement, which depends on expiration of the last patent to be issued pursuant to the Third License Agreement. That duration is uncertain because the last patent has not yet been issued.

License Agreement

The Company entered into a Patent and Technology License Agreement (the “License Agreement”) with the Albert Einstein College of Medicine of Yeshiva University, Massachusetts Institute of Technology, Cornell University, and the IFO-Regina Elena Cancer Institute (together the “Licensors”) during August 2010.  In conjunction with entering into the License Agreement, the Company also entered into a Stock Subscription Agreement (the “Subscription Agreement”) and a Stockholders Agreement (the “Stockholders Agreement”) with the Licensors, which included provisions such as participation rights in future financings, co-sale rights, and certain limited anti-dilution rights. The Subscription Agreement and Stockholders Agreement were terminated as of February 27, 2012.  The License Agreement grants the Company a world-wide exclusive license to materials and methods for use in the diagnosis and treatment of metastatic spread of solid tumor cancers.  In return, the Company has agreed to grant Company equity to the Licensors, to reimburse the Licensors patent expenses thus far incurred, to pay all future patent expenses, pay a royalty on any sales of product using licensed technology, as well as certain minimum royalties and milestone payments.

Pursuant to the License Agreement, we are required to make a series of annual minimum royalty or “license maintenance” payments under the License Agreement beginning on the first anniversary date, or August 26, 2011.  For a period of seven years on each anniversary, we are required to make additional payments in amounts that gradually increase beginning in year five. To date, we have satisfied the payments for 2011, 2012 and 2013 in the amount of $30,000, respectively. We are required to make additional payments of $30,000 in 2014, $50,000 in 2015, $75,000 in 2016 and $100,000 in 2017 and every year the license is in effect thereafter.

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Second License Agreement and Third License Agreement

Additionally, effective in March 2012, the Company entered into two additional license agreements with the Albert Einstein College of Medicine of Yeshiva University (“Einstein”). The second license agreement with Einstein (the “Second License Agreement”) and the third license agreement with Einstein (the “Third License Agreement”) both cover pending patent applications, patent disclosures, cell lines and technology surrounding discoveries in the understanding of the underlying mechanisms of systemic metastasis in solid epithelial cancers. The Second License Agreement and the Third License Agreement both require certain customary payments such as a license signing fee, reimbursement of patent expenses, annual license maintenance fees, milestone payments, and the payment of royalties on sales of products or services covered under such agreements.

Pursuant to the Second License Agreement, we are required to make a series of annual minimum royalty or “license maintenance” payments beginning on the first anniversary date of the effective date, or January 3, 2013.  For a period of seven years on each anniversary, we are required to make additional payments in amounts that gradually increase beginning in year three. We have satisfied the license maintenance payment of $12,000 for the first anniversary in 2013. We are required to make additional payments of $12,000 in 2014, $30,000 in each of 2015, 2016, $50,000 in 2017, $75,000 in 2018 and $100,000 in 2019 and every year the license is in effect thereafter.

Pursuant to the Third License Agreement, we are required to make a series of annual minimum royalty or “license maintenance” payments beginning on the first anniversary date of the effective date, or January 3, 2013.  For a period of seven years on each anniversary, we are required to make additional payments in amounts that gradually increase beginning in year three. We have satisfied the license maintenance payment of $12,000 for the first anniversary in 2013. We are required to make additional payments of $12,000 in 2014, $30,000 in each of 2015, 2016, $50,000 in 2017, $75,000 in 2018 and $100,000 in 2019 and every year the license is in effect thereafter.

Beginning as early as the second half of calendar 2013, we intend to enter into arrangements for the acquisition of laboratory equipment, computer hardware and software, leasehold improvements and office equipment. We cannot at this time provide assurances that we will be able to enter into agreements with vendors on terms commercially favorable to us or that we will be able to enter into such arrangements without securing additional financing.

We currently sublease administrative and office space under a sublease on a month-to-month basis for at a cost of $1,200 per month.

Operating Capital and Capital Expenditure Requirements

We currently anticipate that our cash and cash equivalents will be sufficient to fund our operations through May 2014 without raising additional capital. We expect to continue to incur substantial operating losses in the future and to make capital expenditures to keep pace with the expansion of our research and development programs and to scale up our commercial operations, which we expect to fund in part with the proceeds of the recent financing activities. It may take several years to move any one of a number of product candidates in clinical research through the development and validation phases to commercialization. We expect that the remainder of the net proceeds and our existing cash and cash equivalents will be used to fund working capital and for capital expenditures and other general corporate purposes, such as licensing technology rights, partnering arrangements for the processing of tests outside the United States or reduction of contractual obligations. A portion of the net proceeds may also be used to acquire or invest in complementary businesses, technologies, services or products. We have no current plans, agreements or commitments with respect to any such acquisition or investment, and we are not currently engaged in any negotiations with respect to any such transaction.

The amount and timing of actual expenditures may vary significantly depending upon a number of factors, such as the progress of our product development, regulatory requirements, commercialization efforts, the amount of cash used by operations and progress in reimbursement. We expect that we will receive limited payments for the MetaSite Breast™ test billings following its launch from the beginning of our marketing efforts into the foreseeable future. As reimbursement contracts with third-party payors are put into place, we expect an increase in the number and level of payments received for the MetaSite Breast ™ test billings.

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We cannot be certain that any of our future efforts to develop future products will be successful or that we will be able to raise sufficient additional funds to see these programs through to a successful result.

Our future funding requirements will depend on many factors, including the following:

  ●   the rate of progress in establishing reimbursement arrangements with third-party payors;

  ●   the cost of expanding our commercial and laboratory operations, including our selling and marketing efforts;

  ●   the rate of progress and cost of research and development activities associated with expansion of products for breast cancer;

  ●   the rate of progress and cost of research and development activities associated with products in the research phase focused on cancer, other than breast cancer;

  ●   the cost of acquiring or achieving access to tissue samples and technologies;

  ●   the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

  ●   the effect of competing technological and market developments;  

  ●   the cost and delays in product development as a result of any changes in regulatory oversight applicable to our products; and

  ●   the economic and other terms and timing of any collaborations, licensing or other arrangements into which we may enter.

Until we can generate a sufficient amount of product revenues to finance our cash requirements, which we may never do, we expect to finance future cash needs primarily through public or private equity offerings, debt financings, borrowings or strategic collaborations. The issuance of equity securities may result in dilution to stockholders. We cannot make any assurances that additional financings will be completed on a timely basis, on acceptable terms or at all. If we are unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact our business and operations, which would likely cause the price of our common stock to decline. It could also lead to the reduction or suspension of our operations and ultimately force the Company to go out of business.

Item 3.                 Quantitative and Qualitative Disclosures about Market Risks

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness, as of November 30, 2013, of the design and operation of our disclosure controls and procedures, as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports 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 our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

None.

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PART II. OTHER INFORMATION

Item  1. Legal Proceedings

None.

Item  1A. Risk Factors

There have been no material changes in the Company’s risk factors from those previously disclosed in the Company’s Annual Report on Form 10-K, initially filed with the SEC on May 28, 2013, except for the following risk factor:

If the Company is unable to continue as a going concern, its securities will have little or no value.

The report of the Company's independent registered public accounting firm that accompanies the Company's audited consolidated financial statements for the years ended February 28, 2013 and February 29, 2012 contains a going concern qualification in which such firm expressed substantial doubt about the Company's ability to continue as a going concern. As of November 30, 2013, the Company had an accumulated deficit of $10,841,884. The Company currently anticipates that its cash and cash equivalents will be sufficient to fund its operations through May 2014,  without raising additional capital. The continuation of the Company as a going concern is dependent upon continued financial support from its shareholders, the ability of the Company to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company cannot make any assurances that additional financings will be available to it and, if available, completed on a timely basis, on acceptable terms or at all.  If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact it’s business and operations, which would likely cause the price of its common stock to decline. It could also lead to the reduction or suspension of the Company’s operations and ultimately force the Company to go out of business.

Item  2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item  4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

(b) Exhibits

Exhibit No.	Description
31.1	Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Interactive Data Files

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	METASTAT, INC.
Date: January 14, 2014	By:	/s/ Oscar L. Bronsther
		Oscar L. Bronsther, M.D., F.A.C.S. Chief Executive Officer (Principal Executive Officer)

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EXHIBIT INDEX

Exhibit No.	Description
31.1	Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Interactive Data Files