Cantabio Pharmaceuticals (CTBO) 10-Q/A 2016 Q3 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

X	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2015
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________  to __________________

Commission File Number: 000-54905

Cantabio Pharmaceuticals Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-54905	99-0373067
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2225 East Bayshore Road #223 Palo Alto, California (Address of principal executive offices)		94303 (Zip Code)

(650)320-1765

Registrant’s telephone number, including area code

N/A

(Former name or former address, if changed since last report)

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

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

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

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

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

As of March 16, 2016, there were 26,805,270 shares of the issuer’s common stock issued and outstanding.

Explanatory Note

We are filing this Amendment No. 1 (the “Amendment”) on Form 10-Q/A to amend our Quarterly Report  on Form 10-Q for the three months ended December 31, 2015 (the “Original Filing”) that was filed with the Securities and Exchange Commission on March 18, 2016.  The unaudited interim financial information presented in the Original Filing was not reviewed by an outside independent accounting firm as required by the rules of the SEC. 

The March 31, 2015 Condensed Consolidated Balance Sheet and the Condensed Consolidated Statements of Operations had been improperly consolidated to take account of the merger which occurred during December 2015.  As a result we are amending and restating portions of the following items in our unaudited interim financial information: (i) our Condensed Consolidated Balance Sheets as of March 31, 2015, (ii) our Condensed Consolidated Statement of Operations for the nine-month periods ended December 31, 2015 and 2014, (iii) the “Accumulated Deficit” and “Total” columns in our Condensed Consolidated Statement of Stockholders’ Equity (Deficit) and (iv) our Condensed Consolidated Statements of Cash Flows.

For the convenience of the reader, this Form 10-Q/A sets forth the Original Filing in its entirety. However, this Form 10-Q/A only amends and restates Items 1, 2 and 4 of Part I of the Original Filing, in each case, solely as a result of, and to reflect, the restatement, and no other information in the Original Filing is amended hereby. The foregoing items have not been updated to reflect other events occurring after the Original Filing or to modify or update those disclosures affected by subsequent events. In addition, pursuant to the rules of the SEC, Item 6 of Part II of the Original Filing has been amended to contain currently dated certifications from the Company’s Chief Executive Officer and Chief Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, and are attached as Exhibits 31.1, 31.2, 32.1 and 32.2 to this report.

Except for the foregoing amended information, this Form 10-Q/A continues to speak as of the dates of the Original Filing, and the Company has not updated the disclosures contained herein to reflect events that occurred at a later date. Other events occurring after the filings of the Original Filing or other disclosures necessary to reflect subsequent events will be addressed in any reports filed with the SEC subsequent to this filing.

CANTABIO PHARMACEUTICALS, INC

FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Interim Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of December 31, 2015 and March 31, 2015 (unaudited)	2
	Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2015 (as restated) and 2014 (unaudited)	3
	Condensed Consolidated Statement of Stockholders’ Equity (Deficit) for the nine months ended December 31, 2015 (as restated) (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2015  (as restated)  and 2014 (as restated) (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4.	Controls and Procedures	12
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	13
Item 1A.	Risk Factors	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Mine Safety Disclosures	13
Item 5.	Other Information	13
Item 6.	Exhibits	13
SIGNATURES		14

1

PART I – FINANCIAL INFORMATION

CANTABIO PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	December 31,			March 31,
	2015			2015
				(as restated)
ASSETS
Current Assets
Cash	$	100,857		$	209
Total Current Assets		100,857			209
TOTAL ASSETS	$	100,857		$	209
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable		7,187			214
Accrued technology Access fee		90,000			214,745
Due to officers		57,108			3,706
Note Payable Related Party		34,253
Total Current Liabilities		188,548			218,665
TOTAL LIABILITIES	$	188,548		$	218,665
Stockholders' Deficit
Common stock,  $0.001 par value, ( 100,000,000 shares authorized 26,129,594     and 26,129,594 shares issued and outstanding as of  December 31, 2015 and March 31, 2015)		26,130			26,130
Stock Subscriptions		450,000			-
Accumulated deficit		(563,821	)		(244,586	)
Total Stockholders' Equity (Deficit)		(87,691	)		(218,456	)
TOTAL LIABILITIES & STOCKHOLDERS' (DEFICIT)	$	100,857		$	209

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

2

CANTABIO PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ending						Nine Months Ending
	December 31,						December 31,
	2015			2014			2015			2014
							(as restated)			(as restated)
Revenues
Gross Sales	$	-		$	-		$	-		$	-
Net Sales		-			-			-			-
Operating Costs and Expenses
Research and Development		2,326			-			2,325			14,022
General & administrative		162,874			6,063			409,982			11,801
Total  Operating Costs and Expenses		165,200			6,063			412,307			25,823
Loss From Operations		(165,200	)		(6,063	)		(412,307	)		(25,823	)
Other Income & (Expenses)
Grant Income		-			-			-			34,744
Other income		107,884			1,953			107,884			1,953
Gain (loss) on foreign exchange		(8,198	)		22,235			(14,812	)		44,416
Total Other Income & (Expenses)		99,686			24,188			93,072			81,113
Net Income		(65,514	)		18,125			(319,235	)		55,290
Basic and Diluted Earnings (Loss) per share	$	(0.00	)	$	0.00		$	(0.01	)	$	0.00
Weighted average number of  common shares outstanding		26,129,594			26,129,594			26,129,594			26,129,594

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

  3

CANTABIO PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

	Common		Shares		Shares to be		Accumulated
	Shares		Par Value		Issued		Deficit			Total
							(as restated)			(as restated)
Balance,  April 1, 2015		26,129,594	$	26,130	$	-	$	(244,586	)	$	(218,456	)
Stock Subscriptions		-		-		450,000		-			450,000
Net Loss								(319,235	)		(319,235	)
Balance, December 31, 2015		26,129,594	$	26,130	$	450,000	$	(563,821	)	$	(87,691	)

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

4

CANTABIO PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	December 31,			December 31,
	2015			2014
	(as restated)			(as restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(319,235	)	$	55,290
Change in other receivable		-			(1,719	)
Change in accounts payable		6,973			(44,733	)
Change in accrued technology fee		(124,745	)
Change in due to officers		53,402			(8,822	)
Net cash used in operating activities		(383,605	)		16
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable related party		34,253
Stock Subscriptions		450,000			-
Net cash provided by financing activities		484,253
Effect of exchange rate changes on cash
Net increase (decrease) in cash		100,648
Cash at beginning of period		209			30
Cash at end of period	$	100,857		$	46

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

5

CANTABIO PHARMACEUTICALS, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 – ORGANIZATION AND DESCRIPTION OF THE BUSINESS

Cantabio Pharmaceuticals, Inc. (the “Company” or “Cantabio”) is a preclinical stage biotechnology company focusing on commercializing novel therapies and the intellectual property generated from research and development activities for Parkinson’s disease (PD) and Alzheimer’s disease (AD).  The Company’s strategy involves integrating therapeutic focus, target family biophysics, drug discovery technology and expertise into an innovative drug discovery approach, which synergizes to identify and develop small molecule pharmacological chaperones for clinical trials. In addition, the Company’s research efforts concentrate on the development of therapeutic proteins that can pass through the blood-brain barrier and supplement in vivo levels of proteins with display loss of function during disease conditions.

Merger Agreement

On December 17, 2015, we entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) with Gardedam Therapeutics, Inc. (“ Gardedam ”) and Cantabio Acquisition Inc., our wholly-owned subsidiary (“Merger Sub”), pursuant to which Gardedam would become our wholly-owned subsidiary. The Merger Agreement provided that, upon the terms and subject to the conditions thereof, Merger Sub will be merged with and into Gardedam (the “ Merger ”), with Gardedam continuing as the surviving corporation and as our wholly-owned subsidiary of Gardedam. The Merger was completed on the date of the Merger Agreement.

The Company accounted for the transaction as a reverse merger, with the operations of Gardedam being the accounting acquirer and the historical financial statements of Gardedam presented.  The statement of stockholders equity was retroactively adjusted to reflect the shares outstanding of the legal acquirer, which resulted in a retroactive adjustment to the par value of common stock outstanding for Gardedam and an adjustment to accumulated deficit for the difference.

Restatement of Financial Information

Our March 31, 2015 Condensed Consolidated Balance Sheet had been improperly consolidated to take account of the merger which occurred during December 2015.  As a result we amended and restated portions of the following items in our unaudited interim financial information: (i) our Condensed Consolidated Balance Sheets as of March 31, 2015, (ii) our Condensed Consolidated Statement of Operations for the nine-month periods ended December 31, 2015 and 2014, (iii) the “Accumulated Deficit” and “Total” columns in our Condensed Consolidated Statement of Stockholders’ Equity (Deficit) and (iv) our Condensed Consolidated Statements of Cash Flows.

The effects of the restatement are as follows:

6

Restated Condensed Consolidated Balance Sheets
	As at March 31, 2015
	As Previously			Restatement
	Reported			Adjustments			As Restated
Accounts Payable		18,798			(18,584	)		214
Note Payable Related Party		8,804			(8,804	)		-
Total Liabilities		246,053			(27,388	)		218,665
Accumulated Deficit		(271,974	)		27,388			(244,586	)
Total Stockholders' Equity (Deficit)		(245,844	)		27,388			(218,456	)
Restated Condensed Consolidated Statements Of Operations
	Nine Months Ending December 31 2015
	As Previously			Restatement
	Reported			Adjustments			As Restated
General and Administrative		391,407			18,575			409,982
Total Operating Costs and Expenses		393,732			18,575			412,307
Loss From Operations		(393,732	)		(18,575	)		(412,307	)
Net Income		(300,660	)		(18,575	)		(319,235	)
	Nine Months Ending December 31 2014
	As Previously			Restatement
	Reported			Adjustments			As Restated
General and Administrative		31,421			(19,620	)		11,801
Total Operating Costs and Expenses		45,443			(19,620	)		25,823
Loss From Operations		(45,443	)		19,620			(25,823	)
Net Income		21,539			33,751			55,290
Restated Consolidated Statement Of Changes In Stockholders’ Equity (Deficit)
	As Previously			Restatement
	Reported			Adjustments			As Restated
Balance, April 1, 2015		(237,031	)		18,575			(218,456	)
Net Loss		(277,646	)		(41,589	)		(319,235	)
Restated Condensed Consolidated Statements Of Cash Flows
	Nine Months Ending December 31 2015
	As Previously			Restatement
	Reported			Adjustments			As Restated
Net income (loss)		(300,660	)		(18,575	)		(319,235	)
Change in accounts payable		(11,611	)		18,584			6,973
Net cash used in operating activities		(383,614	)		9			(383,605	)
Proceeds from notes payable related party		25,449			8,804			34,253
Net cash provided by financing activities		475,449			8,804			484,253
Effect of exchange rate changes on cash		8,813			(8,813	)		-
Net increase (decrease) in cash		100,812			(164	)		100,648
	Nine Months Ending December 31 2014
	As Previously			Restatement
	Reported			Adjustments			As Restated
Net income (loss)		35,670			19,620			55,290
Change in accounts payable		(35,580	)		(9,153	)		(44,733	)
Net cash used in operating activities		(11,469	)		11,485			16
Proceeds from notes payable related party		5,900			(5,900	)		-
Net cash provided by financing activities		5,900			(5,900	)		-
Net increase (decrease) in cash		(5,900	)		5,900			-
Cash at beginning of period		4,597			(4,567	)		30

7

NOTE 2 – LIQUIDITY AND GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going concern. As of December 31, 2015, the Company has an accumulated deficit of approximately $0.5 million and a working capital deficit of $0.1 million. This and other factors raise substantial doubt about the Company's ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital and continue profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements.

The condensed consolidated balance sheet as of December 31, 2015, condensed consolidated statements of operations for the three months and nine months ended December 31, 2015 and 2014, condensed consolidated statement of stockholders’ equity (deficit) and cash flows for the nine months ended December 31, 2015 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2014, and notes thereto included in the Company’s 8-K, which was filed with the SEC on December 18, 2015, which also includes interim financial statements as of September 30, 2015

8

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles of the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.

Fair Value of Financial Instruments

The Company's financial instruments consist of cash, stock subscription receivable, accounts payable, and a loan payable to a related party. The carrying amounts of these financial instruments approximate fair value due either to length of maturity or interest rates that approximate prevailing rates unless otherwise disclosed in these financial statements.

Recent Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-03 , Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03), which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU 2015-03 is effective for the interim and annual periods ending after December 15, 2015, but early adoption is permitted. The Company early adopted ASU 2015-03 and such adoption did not result in a material change to the financial statements.

NOTE 4 – Material Agreements

Garaffinity Collaboration Agreement

On December 23, 2009, the Company entered into a collaboration agreement with Garaffinity, GmbH.  Graffinity GmbH was subsequently acquired by NovAliX Deutschland GmbH, and on November 12, 2015 the Company renegotiated the terms of the agreement setting aside all unperformed terms and modifying the payable as laid out below.

 NovAliX Collaboration Agreement

On November 12, 2015, the Company finalized the amendment to its collaboration agreement with NovAliX Deutschland GmbH, which modifies the remaining amount owed of approximately $215,000 as of March 31, 2015 to approximately $120,000 on November 12, 2015.  The amended agreement set aside, along with any unperformed actions under the prior contract, and stated that the new collaboration agreement would constitute the entire agreement and understanding between NovAliX and the Company.  NovAliX granted the company a worldwide, perpetual, non-exclusive right to sublicense to use certain compounds, synthesized compounds and other information provided by NovAlix  to use against the DJ-1 protein.

The Collaboration agreement resulted in a reduction in the Company’s accounts payable approximately $107,000, which was recorded in other income (expense). The agreement requires three payments of approximately $32,000, $37,000 and $49,000. The first payment was made by December 31, 2015.  The remaining payments are due June 2016 and December 2016, respectively.

NOTE 5 – RELATED PARTY TRANSACTIONS

Gergely Toth

On March 31, 2015 Gergely Toth was owed approximately $6,000 in fees and expenses relating to his activities as CEO of Gardedam.  To date these fees and expenses have not been paid and so are included in Due to officers.

Toth and Associates LTD

On April 1, 2015, the Company entered into a consulting agreement with Toth and Associates, LTD for Dr. Toth to act as the Company’s CEO.  The agreement calls for a monthly salary of approximately $12,000 and bonuses as follows (A) upon raising of capital on behalf of, or as part of the Company, an amount equal to 1.5% of the capital raised, (B) increasing the performance of the Company as measured by valuation in either an agreed valuation in the context of an investment or, in the case of a public company, market capitalization reaching $30.0 million, a fixed bonus of $50,000, payable wholly or in mutually agreed tranches over a 6 month period subsequent to the valuation event and (C) on the issuance of new stock for the purposes of a capital raise of an amount over $5.0 million, common stock equal to 1% of the Company’s post-investment issued share capital.

The Company incurred consulting fees of approximately $120,000 for the nine months ended December 31, 2015. As of December 31, 2015 Toth and Associates LTD was owed approximately $21,000 and is included in Due to officers.

Capro LTD

On April 1, 2015, the Company entered a consulting agreement with Capro, LTD for Dr. Thomas Sawyer to act as the Company’s COO.  The agreement calls for a monthly salary of approximately $10,000 and bonuses as follows (A) upon raising of capital on behalf of, or as part of the Company, an amount equal to 1.5% of the capital raised, (B) increasing the performance of the Company as measured by valuation in either an agreed valuation in the context of an investment or, in the case of a public company, market capitalization reaching $30.0 million, a fixed bonus of $50,000, payable wholly or in mutually agreed tranches over a 6 month period subsequent to the valuation event and (C) on the issuance of new stock for the purposes of a capital raise of an amount over $5.0 million, common stock equal to 1% of the Company’s post-investment issued share capital.  

9

The Company incurred consulting fees of approximately $94,000 for the nine months ended December 31, 2015. As of December 31, 2015, Capro, LTD was owed approximately $15,000 and is included in Due to officers.

Eden Professional LTD

On April 1, 2015, the Company entered a consulting agreement with Eden Professional LTD for Mr. Simon Peace to act as the Companies CFO.  The agreement calls for a monthly salary of GBP £ 4,176 and bonuses as follows (A) upon raising of capital on behalf of, or as part of the Company, an amount equal to 1.5% of the capital raised, (B) increasing the performance of the Company as measured by valuation in either an agreed valuation in the context of an investment or, in the case of a public company, market capitalization reaching $30.0 million, a fixed bonus of $50,000, payable wholly or in mutually agreed tranches over a 6 month period subsequent to the valuation event and (C) on the issuance of new stock for the purposes of a capital raise of an amount over $5.0 million, common stock equal to 1% of the Company’s post-investment issued share capital.

The Company incurred consulting fees of approximately $67,000 for the nine months ended December 31, 2015.  As of December 31, 2015, Eden Professional, LTD was owed approximately $15,000 and is included in Due to officers.

NOTE 6 – NOTES PAYABLE RELATED PARTIES

Officers of the Company have loaned funds to fund operating expenses. The loans are unsecured, non-interest bearing, and had no specific terms of repayment. As of December 31, 2015 the balance of the loans was approximately $34,000.

NOTE 7 – CAPITAL STOCK

Through December 31, 2015 the Company has received $0.45 million in connection with a capital raise.  The Company expects to close the financing in the first quarter of fiscal 2017.   

NOTE 8 - SUBSEQUENT EVENTS

Issuance of common stock

Subsequent to the quarter ended December 31, 2015 the Company issued approximately 0.7 million shares of common stock in satisfaction of $0.1 million of stock subscriptions received in advance.

10

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this report.

This report contains forward looking statements relating to our Company's future economic  performance,  plans and objectives of management for future operations, projections of revenue  mix  and  other financial items that are  based on the beliefs of, as well as assumptions made  by  and  information currently  known  to,  our  management.  The words "expects”, “intends”, “believes”, “anticipates”, “may”, “could”, “should" and similar expressions and variations thereof are intended to identify forward-looking statements.  The cautionary statements set forth in this section are intended to emphasize that actual results may differ materially from those contained in any forward looking statement.

As of December 31, 2015, we had $100,857 cash on hand and in the bank. This amount will not satisfy our cash requirements for the next twelve months or until such time that additional proceeds are raised. We plan to satisfy our future cash requirements - primarily legal and accounting fees - by additional equity financing. This will likely be in the form of private placements of common stock.  Additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.

If we are unsuccessful in raising the additional proceeds through a private placement offering, we will then have to seek additional funds through debt financing, which could be highly difficult for us to secure. Therefore, we depend upon the success of the any private placement offering and failure thereof would result in our having to seek capital from other sources such as debt financing, which may not even be available to us. However, if such financing were available, we would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing and determine whether the business could manage the debt load. If we cannot raise additional proceeds via a private placement of our common stock or secure debt financing we would be required to cease as a business. As a result, investors in our common stock would lose all of their investment.

We did not generate any revenue during the nine months ended December 31, 2015 and 2014.   We incurred operating expenses in the amount of $412,307 in the nine months ended December 31, 2015. These operating expenses were primarily comprised of general and administrative expenses of $409,982. Based on the foregoing management believes that substantial doubt about our ability to continue as a going concern.

As of the date of this quarterly report, the current funds available to the Company will not be sufficient to continue operations. The cost of maintaining our reporting status is estimated to be approximately $115,000 over the next 12 months.

Results of Operations for the nine months ended December 31, 2015, as compared to the nine months ended December 31, 2014.

Our expenses increased to $412,307 for the nine months ended December 31, 2015 from $25,823 in the nine months ended December 31, 2014.  This increase was primarily the result of an increase in the nine months ended December 31, 2015 of general and administrative fees in the same period to $409,982 from $11,801. 

We generated Other Income in the nine months ended December 31, 2015 of $93,072, which was mostly comprised of $107,884 due to reduction of a liability following renegotiation with NovAliX Deutschland GmbH, the remainder being gains on foreign exchange.  Other Income for the same period of 2014 was $81,113, of which $34,744 was from grant income and the remainder mostly foreign exchange gains.

Results of Operations for the three months ended December 31, 2015, as compared to the three months ended December 31, 2014.

Our expenses increased to $165,200 for the three months ended December 31, 2015 from $6,063 in the three months ended December 31, 2014.  This increase was primarily the result of consulting, legal and accounting fees incurred to complete the merger that took place in December 2015.

As we had no revenues or additional losses in either period, our net losses were the same as our total expenses.

11

Liquidity and Capital Resources

At December 31, 2015, we had $100,857 in current assets, consisting entirely of cash on hand. Our total current liabilities as of December 31, 2015, were $188,548. Thus, we had negative working capital of $87,691 as of December 31, 2015.

Cash Flows from Financing Activities. During the nine months ended December 31, 2015, financing activities provided $0.5 million in proceeds for the future issuance of common stock, compared to $0 during the same period last year.

Our financial statements indicate there is substantial doubt about our ability to continue as a going concern as we are dependent on our ability to obtain ongoing financing and ultimately to generate sufficient cash flow to meet our obligations on a timely basis. We can give no assurance that our plans and efforts to achieve the above steps will be successful.

OFF BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly Report, the current funds available to the Company will not be sufficient to continue operations. The cost of maintaining our reporting status is estimated to be $115,000 over the next year. Management believes that if the Company cannot raise sufficient revenues or maintain its reporting status with the SEC it will have to cease all efforts directed towards the Company.  As such, any investment previously made would be lost in its entirety.    

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.  Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. As a result of this evaluation and the need to restate our unaudited interim financial information presented herein, management concluded that our disclosure controls and procedures were not effective for the period ended December 31, 2015, due to the following:

1. Lack of Segregation of Duties:  Management is aware that there is a lack of segregation of accounting duties as a result of limited personnel.  

2. There is currently a lack of accounting personnel with the requisite knowledge of Generally Accepted Accounting Principles in the U.S. (“GAAP”) and the financial reporting requirements of the U.S. Securities and Exchange Commission;

3. Lack of Functioning Audit Committee:  We do not have an Audit Committee; our board of directors currently acts as our Audit Committee.  We do not have an independent director and out current director is not considered a “Financial Expert,” within the meaning of Section 407 of the Sarbanes-Oxley Act.

Changes in internal controls. There were no changes in our internal control over financial reporting that occurred during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II:  OTHER INFORMATION

Item 1. Legal Proceedings.

None.

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

31.1	Certification of Principal Executive Officer and Acting Principal Accounting Officer pursuant to Rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934
32.1	Certification Of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
32.2	Certification Of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

Exhibit 101

101.INS - XBRL Instance Document

101.SCH - XBRL Taxonomy Extension Schema Document

101.CAL - XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF - XBRL Taxonomy Extension Definition Linkbase Document

101.LAB - XBRL Taxonomy Extension Label Linkbase Document

101.PRE - XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

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

Cantabio Pharmaceuticals Inc.

By: /s/ Gergely Toth

Gergely Toth

Its: President, Chief Executive Officer, Director (Principal Executive Officer).

March 22, 2016

By: /s/ Simon Peace

Simon Peace

Its: Chief Financial Officer, Director (Principal Accounting Officer)

March 22, 2016

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