809 Highlight All Clear Highlights
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3 Sustainability 1 Wind
7 Breach 9 Claims
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4 Default 13 Delay
7 Dependent 9 Difficult
6 Doubtful 1 Fraud
1 Impairment 8 Lack
3 Late 16 Limitations
3 Liquidation 33 Loss
1 Problems 1 Suspended
107 Agreement 6 Better
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18 Gains 25 Growth
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DOCUMENT: forms1a.htm


As filed with the Securities and Exchange Commission on  April 21 , 2017
 
Registration No. 333- 216650
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
__________________________
AMENDMENT NO. 1
TO
FORM S-1/A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________
 
BIOLABMART INC.
(Exact name of registrant as specified in its charter)
 

Wyoming
2836
81-3623646
(State or other jurisdiction of
(Primary Standard Industrial
(I.R.S. Employer
incorporation or organization)
Classification Code Number)
Identification Number)
     
   
777 Brickell Avenue, Suite 500
Miami, Florida 33131
(786) 620-2140
 
   (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)  
 
__________________________
 
Jonah Meer
Chief Executive Officer
BioLabMart Inc.
777 Brickell Avenue, Suite 500
Miami, Florida 33131
(786) 620-2140
(Name, address, including zip code, and telephone number, including area code, of agent for service)
 
__________________________
Copies to:
Nancy Brenner, Esq.
Brenner & Associates, PLLC
147 Woodbine Road
 Roslyn Heights, NY 11577
(917) 282-4272
 
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [X]
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
   
Large accelerated filer[  ]
Accelerated filer [  ]
Non-accelerated filer[  ] (Do not check if a smaller reporting company)
Smaller reporting company [X]
 
Emerging growth company [X]
 
       If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [  ]
 

 
i

 
CALCULATION OF REGISTRATION FEE

         
Proposed
   
Proposed
       
         
Maximum
   
Maximum
       
         
Offering
   
Aggregate
   
Amount of
 
Title of Each Class of Securities
 
Amount to be
   
Price Per
   
Offering
   
Registration
 
TO  to be Registered
 
Registered(1)
   
Share
   
Price
   
Fee
 
                         
Common Stock, par value $0.0001
    1,124,000     $ 0.25 (3)   $ 281,000.00     $ 32.57  
                                 
Common Stock, par value $0.0001, issuable upon exercise of warrants
    562,000 (2)   $ 0.40 (4)   $ 224,800.00     $ 26.05  
                                 
Total
    1,686,000             $ 505,800.00     $ 58.62 *  

 
(1)
Includes such indeterminate number of additional shares of common stock, pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), that may be issued as a result of stock splits, stock dividends or similar transactions.
 
(2)
Represents warrants to purchase shares of common stock exercisable at $0.40 per share, expiring on December 31, 2019 (the “Warrants”).
 
(3)
 
 
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933. In accordance with Rule 457(o), the offering price of the common stock at $0.25 has been arbitrarily determined by us and bears no relationship to assets, earnings or other valuation criteria.
Represents shares of common stock issuable upon the exercise of warrants and calculated pursuant to Rule 457(g) based upon the exercise price of the warrants
    * Previously paid
 
__________________________
 
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.


 
ii

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
 
SUBJECT TO COMPLETION, DATED  APRIL __, 2017
 
PRELIMINARY PROSPECTUS
 
BioLabMart Logo
 
BIOLABMART INC.
 
1,124,000 Shares of Common Stock $0.0001 par value
and
562,000 Shares of Common Stock $0.0001 par value Issuable upon Exercise of Warrants
 
This prospectus relates to the offer and sale from time to time by the selling stockholders named in this prospectus of up to 1,124,000shares of our common stock $0.0001 par value (the “Common Shares”, and together with the Warrant Shares (as defined below), the “Shares”), and 562,000 shares of our common stock $0.0001 par value issuable upon the exercise of the Warrants.

We currently lack a public market for our common stock. Our common stock is not traded on any national exchange. The fixed price of $0.25 has been arbitrarily determined as the selling price. The selling stockholders may sell shares of our common stock only at a fixed price of $0.25 per share until such time, if at all, that our shares are quoted on the Over-The-Counter Bulletin Board and thereafter at prevailing market prices or in privately negotiated prices. See “Plan of Distribution.”
 
The Company intends to apply for approval from FINRA for our common stock to be eligible for trading on the Over-The-Counter Bulletin Board. However, a market has not yet developed.  There is no assurance that the Company will receive such approval, and if it does receive such approval, there can be no assurance that a trading market will develop, or, if developed, that it will be sustained.

Such registration does not mean that the selling stockholders will offer or sell any of these shares.
 
We have agreed to bear the expenses relating to the registration of the shares for the selling stockholders.
 
We will not receive any proceeds from the sales of shares of our common stock by the selling stockholders. However, if the selling stockholders exercise their Warrants for cash then in the future we may receive up to an aggregate of $224,800 in additional proceeds upon the exercise of the Warrants.

 
1

 
 
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CONSIDER CAREFULLY THE SECTION ENTITLED "RISK FACTORS" IN THIS PROSPECTUS BEGINNING ON PAGE 7.
 
We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
 
We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act ("JOBS Act").
 

 
 

 
April     , 2017

 


 
2

 

 

 
 
Page
Cautionary Note Regarding Forward-Looking Statements   4
  4
  6
  7
  16
  16
  17
  17
Selling Stockholders   17
  19
Market Price for our Common Equity and Related Stockholder Matters   23
Securities Authorized for Issance under Equity Compensation Plans   23
  23
Description of Property   26
  26
  27
  28
  29
  30
  32
  33
  36
  37
  37
 
You should rely only on the information contained in this prospectus, and any supplement or amendment to this prospectus. Neither we nor the selling stockholders have authorized anyone to provide you with additional or different information. Neither we nor the selling stockholders take responsibility for, nor can provide any assurance as to the reliability of, any other information that others may give you. Neither we nor the selling stockholders are making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that the information contained in this prospectus is accurate only as of the date of this prospectus.


 
This prospectus contains “forward-looking statements”. Forward-looking statements reflect the current view about future events. When used in this prospectus, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements, include, but are not limited to, statements contained in this prospectus relating to our business strategy, our future operating results and liquidity and capital resources outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, a continued decline in general economic conditions nationally and internationally; decreased demand for our products; market acceptance of our products; our ability to protect our intellectual property rights; the impact of any infringement actions or other litigation brought against us; competition from other providers and products; our ability to develop and commercialize new and improved products; our ability to raise capital to fund continuing operations; changes in government regulation; our ability to complete customer transactions and capital raising transactions; and other factors (including the risks contained in the section of this prospectus entitled “Risk Factors”) relating to our industry, our operations and results of operations and any businesses that may be acquired by us. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.
 
Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law we do not intend to update any of the forward-looking statements to conform these statements to actual results.
 
 
This summary highlights information contained in other parts of this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in the Shares , you should carefully read this entire prospectus, including our financial statements and the related notes and the information set forth under the sections titled “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
 
Unless the context requires otherwise, references in this prospectus to “BioLabMart,” “we,” “us” and “our” refer to BioLabMart Inc. Unless otherwise specified, all references to “dollars,” “US$” or “$” in this prospectus are to United States dollars. Our financial statements are prepared in accordance with generally accepted accounting principles in the United States of America.
 
Overview
 
The Company
 
The Company was incorporated under the laws of the State of Wyoming on August 22, 2016.
 
The Company is a startup preclinical stage biotechnology company engaged in developing solutions to combat neuro-degenerative diseases and neuronal injuries. The Company is working to develop what it believes to be a novel stem cell system to repair and regenerate neuronal damage. The system incorporates what we believe to be unique stem cell treatments, cell modifications and a novel delivery system. Our preliminary focus is on Traumatic Brain Injury, Parkinson’s disease, Huntington’s disease and Alzheimer’s, although we believe such cell system can be effective in dealing with strokes and spinal cord injuries as well.
 
The Company raised an aggregate of $281,000 between November 2, 2016 and January 27, 2017 from 37 accredited investors in a private placement offering under Regulation D.
 
The Company has not yet hired any permanent staff and presently relies heavily on its two co-founders, Jonah Meer and Ido Merfeld, who are its sole officers and directors to manage its day to day business.  We currently outsource all professional services to third parties to maintain lower operational costs.
 
Messrs. Meer and Merfeld as the holders of the Company’s issued and outstanding shares of the Company’s Class A Preferred Stock collectively have 66 2/3% of the voting rights of the Company. Acting together, they will be able to influence the outcome of all corporate actions requiring approval of our stockholders.

On December 14, 2016, the Company entered into a license and research funding agreement (“License Agreement”) with Ariel University R&D Co., Ltd., (“Ariel”), a wholly owned subsidiary of Ariel University of Samaria, based in Ariel, Israel (“AU”). Under the terms of the License Agreement, the Company paid Ariel $100,000 to fund and further research for 12 months (with an option to extend such research financing and research period) by Professor Danny Baranes, the principal investigator and his research team relating to cell treatment with conditioned medium for neuronal tissue regeneration and repair. In consideration therefor and for other payments under the License Agreement, the Company received an exclusive worldwide royalty- bearing license in Ariel patents and know-how to develop and commercialize products based on or incorporating conditioned medium for neuronal tissue regeneration and/or repair, resulting from Ariel’s research or technology or the Company’s research funding (the “Products”).
 
Under the License Agreement, the Company is required to use its best efforts to develop and commercialize the Products in accordance with development milestones set forth in the Agreement.  The License Agreement provides that the Company make royalty payments of 4% of net sales (which may be increased if any patent is challenged by the Company or its affiliates or decreased if there is a valid patent claim) within 30 days of each calendar quarter for the later of (i) 15 years from the date of the first sale in a country and (ii) until the last to expire of Ariel’s patents in a country. The Company may provide a sublicense for cash in a bonafide arm’s length transaction. The Company agreed to pay Ariel 15% of any consideration received by the Company in connection with any such sublicense (except royalties on net sales) within 30 days of receipt. The Company is also required to make milestone payments of (i) $130,000 upon the successful completion of clinical FDA Phase II trials and (ii) $390,000 upon the successful completion of clinical FDA Phase III trials, within 6 months of completion. Any late payments under the License Agreement will bear interest at 3% plus LIBOR.
 
Upon the earliest occurrence of the Company’s (or any affiliates of the Company): (i) underwritten public offering with proceeds of at least $25 million, (ii) consolidation, merger or reorganization, or (iii) sale of all or substantially all of its shares or assets, the Company is obligated to issue to Ariel an immediately exercisable warrant for that number of shares equal to 4% of (a) the issued and outstanding shares of the Company at the time of issuance. The License Agreement provides that the Company is obligated, at its expense, to register shares exercised pursuant to the warrant by Ariel within 6 months of a request by Ariel by either “piggyback” or a demand registration.
 
Patent expenses incurred by Ariel under the License Agreement will be reimbursed by the Company. Any infringement action instituted by a party to the License Agreement that results in a recovery in excess of such party’s expenses will belong 85% to the party bringing such action and 15% to the other party.
 
Under the License Agreement, at the Company's discretion, Ariel will transfer its technology to the Company upon the earliest to occur of (i) a successful Phase II FDA trial of a product developed under the Agreement; (ii) the acquisition of the Company by a third party of at least 45% of the share capital of the Company in a bonafide transaction valued at least at $100 million and the assumption of the License Agreement by such third party, or (iii) Ariel's written consent.
 
The License Agreement provides that each of the Company and Ariel are required to keep the other party’s proprietary information confidential for the longer of (i) the term of the License Agreement and seven years from the date of disclosure. The License Agreement shall continue in effect until all of the Company’s payment obligations under the Agreement have been made. After the expiration of the License Agreement, the Company will have a non-exclusive worldwide license to the Ariel technology. The Company can terminate the License Agreement for any reason upon 60 days prior written notice in which event Ariel will be required to reimburse the Company for any unused research funds. The License Agreement will terminate upon a material breach of either party that is not cured in 30 days from notice thereof, or by bankruptcy, dissolution, liquidation or the discontinuance of business. Ariel may immediately terminate the License Agreement upon a challenge to its patent validity by the Company or an affiliate of the Company. Without Ariel’s prior written consent, the Company may not assign the License Agreement except to an affiliate or to a successor entity in a merger or acquisition provided the assignee assumes the License Agreement obligations.
 
AU is an accredited Israeli university located in the Israeli town of Ariel in the West Bank. AU has 26 departments offering various degrees. In 2014, AU initiated a Ph.D. programs for Doctorate studies. It has a student population of approximately 14,000. The Molecular Biology Department offers a variety of laboratory courses in which students apply the theoretical knowledge they have acquired.
 
Neurodegenerative disease is an umbrella term for a range of conditions which primarily affect the neurons in the human brain. Neurons are the building blocks of the nervous system which includes the brain and spinal cord. Mature neurons normally do not reproduce or replace themselves, so when they become damaged or die they cannot be replaced by the body. Examples of neurodegenerative diseases include Parkinson’s, Alzheimer’s, and Huntington’s disease. Neurodegenerative diseases are incurable and debilitating conditions that result in progressive degeneration and / or death of nerve cells. This causes problems with movement (called ataxias), or mental functioning (called dementias). Dementias are responsible for the greatest burden of disease with Alzheimer’s representing approximately 60-80% of cases, according to the Alzheimer’s Association.
 
According to the Harvard NeuroDiscovery Center, today, 5 million Americans suffer from Alzheimer's disease; 1 million from Parkinson's; 400,000 from multiple sclerosis; 30,000 from amyotrophic lateral sclerosis and 30,000 from Huntington's disease. Because neurodegenerative diseases strike primarily in mid- to late-life, the incidence is expected to increase as the population ages. If left unchecked 30 years from now, more than 12 million Americans  may suffer from neurodegenerative diseases.  We believe that finding treatments and cures for neurodegenerative diseases is a goal of increasing urgency.
 
Our Mission and Principal Product
 
Our mission is to develop and license novel stem cell solutions and systems to repair and regenerate neuronal damage. The Company through its License Agreement with Ariel is working on identifying product candidate solutions. The Company is working to produce and deliver a proprietary modified stem cell system that would be implanted at the target site and will induce neuronal recovery and/or slowdown of degenerative damage.

On January 9, 2017, Ariel filed a US provisional patent application related to our neural cell development research. A U.S. provisional patent application provides the means to establish an early effective filing date for a later filed non-provisional patent application. It does not mature into an issued patent unless the applicant files a regular non-provisional patent application within one year. Subject to positive efficacy findings, we currently intend to file for a non-provisional application within one year of the filing of the provisional application.

Business Uncertainties and Going Concern Risk
 
To date, we have not yet developed any candidate for product development nor generated any revenue from the sales of products or services. There are several conditions that we must satisfy before we will be able to generate revenue, including but not limited to, successful development of clinical studies, U.S. Food and Drug Administration (“FDA”) clearance for any products developed, manufacturing of a commercially-viable version of our system and demonstration of safety and effectiveness sufficient to generate commercial orders by customers for any product we may develop. To date, we have not achieved any of these conditions, and the successful achievement of such conditions will require significant time and expenditures. Because we have not generated any revenues, we are significantly dependent on funding from outside investors and sources. There is no guarantee that such funding will be available at all or in sufficient amounts to satisfy our required expenditures. Furthermore, even if we are able to raise sufficient capital to manufacture a commercially-viable version of our product and to receive FDA clearance, we do not currently have any contract or other arrangement to sell the product. Accordingly, we cannot assure you that we will ever be able to generate any revenue from the sales of products.
 
We estimate that we will need approximately $100,000 to carry out our planned operations for the next 12 months. There is substantial doubt that we can continue as an on-going business after the next twelve months unless we obtain additional capital to pay our expenditures. We do not currently have sufficient resources to accomplish all of the conditions necessary for us to commercialize a product and generate revenue.
 
We will need additional financing to allow us to continue to grow our business operations, including for the testing of the technology and the FDA review process. We do not currently have sufficient revenues or cash on hand to meet our operational overhead, or planned operations.  We estimate that based on our current plans and projections that we will have sufficient funds to conduct corporate operations, including complying with public company reporting requirements through December 31, 2017. However, we do not have cash on hand to begin any clinical trials of our research product, if and when we are successful in reaching that stage, and it will be necessary to raise funds for such trials. We estimate the cost of initial trials will require us to seek additional financing in an amount up to $5 million. We hope to cover interim cash shortfalls by selling additional shares in our company and through additional loans from CubeSquare LLC, a Florida limited liability company (“CubeSquare”), controlled by Jonah Meer, our Chief Executive Officer. CubeSquare LLC which made a $10,000 loan in September 2016 to the Company and has agreed to loan the Company up to an additional $15,000 on similar terms. We will also bear other costs, including professional fees associated with being a reporting company with the Securities and Exchange Commission ("SEC”). We estimate these costs to be approximately $40,000 for the next12 months.
 
 
Regulation D Offering
 
On January 27, 2017, the Company closed a private offering negotiated and consummated under Regulation D of the Securities Act of 1933, as amended, to 37 accredited investors for the sale of an aggregate of 1,124,000 shares of common stock at a purchase price of $0.25 per share of common stock, par value $0.0001 per share, for aggregate gross proceeds of $281,000. For every two shares of common stock purchased, an investor received a common stock purchase warrant (the “Warrant”) to purchase one share of common stock at an exercise price of $0.40 per share. The warrant is immediately exercisable and expires on December 31, 2019. If the shares issuable under the Warrant are not registered, the Warrant may be exercised on a cashless basis. The exercise price of the Warrant is subject to adjustment for stock dividends and splits and in the event of certain fundamental corporate transactions of the Company, the warrant holder is entitled to alternate consideration. Except upon 61 days’ prior written notice to the Company, the warrant may not be exercised if giving effect to such exercise, the holder thereof will own in excess of 9.9% of the Company’s issued and outstanding common stock. The Company paid no commissions in connection with the offering.
 
Convertible Debenture
 
On September 1, 2016, the Company entered into a convertible debenture agreement with CubeSquare. Jonah Meer, our Chief Executive Officer is the managing member of CubeSquare. Ido Merfeld, our President, is a 25% owner of CubeSquare. Under the debenture agreement, CubeSquare loaned $10,000 and agreed to loan the Company, on the same terms and conditions, an additional $15,000. The loan bears interest at 8% per annum (which will increase to 12% if an event of default as described in the debenture agreement occurs) and is due on July 1, 2017, or immediately upon an event of default. Interest is payable, at CubeSquare’s option, in cash or common stock. Any portion of the loan and unpaid interest are convertible at any time at the option of CubeSquare into shares of common stock of the Company at a conversion price per share of the greater of (i) $0.0625, if the Company’s shares are not trading on a public market, and (ii) if the Company’s shares are listed for trading on a public market, an amount equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days prior to the date of the notice of conversion from the holder.
 
So long as the loan is outstanding, the Company may not merge, reorganize, restructure, reverse split its stock, consolidate or sell all or substantially all of its assets without giving seven days prior written notice to CubeSquare, in which case, CubeSquare can put the note to the Company at 125% of the then outstanding principal and interest.
 
The debenture agreement also provides for anti-dilution protection (with certain exceptions) if the Company engages in other transactions at a lower price per share. The Company has the right to redeem the loan for 6 months, in whole or in part, at 125% of the principal amount being redeemed and accrued interest thereon. The Company must reserve 150% of the number of shares issuable upon conversion of the loan. The Company may not engage in short sales. Except upon 61 days prior written notice to the Company, CubeSquare may not convert the loan if as a result of such conversion, CubeSquare and its affiliates would own in excess of 9.9% of the total issued and outstanding shares of the Company.
 
Corporate Information
 
Our principal executive offices are located at 777 Brickell Avenue, Suite 500, Miami, Florida 33131 and our telephone number is (786) 620-2140.
 

     
Shares offered by the selling stockholders
 
Up to 1,686,000 shares of common stock which includes 562,000 shares issuable upon the exercise of the Warrants.
     
Common stock outstanding prior to the offering
 
11,544,000
     
Common stock outstanding after the offering (1)
 
12,106,000
     
Offering Price
 
The selling stockholders may sell their Shares offered under this prospectus at only at a fixed price of $0.25 per share until such time, if at all, that our shares are quoted on the Over-The-Counter Bulletin Board and thereafter at prevailing market prices or in privately negotiated prices. See “Plan of Distribution.”
     
Use of proceeds
 
We will not receive any proceeds from the sales of shares of our common stock by the selling stockholders. However, if the selling stockholders exercise their Warrants for cash then in the future we may receive up to an aggregate of $224,800 in additional proceeds upon the exercise of the Warrants. We expect to use any such proceeds for (a) expenses associated with the License Agreement (b) SEC registration, listing and clearance fees; (c) branding and marketing; and (d) general corporate purposes. See “Use of Proceeds.”
     
Risk factors
 
You should read the “Risk Factors” section of this prospectus for a discussion of factors to consider carefully before deciding to invest in the Shares.
     
 
 
 
     
   
 (1)The number of shares of our common stock that will be outstanding immediately after this offering is based on 11,544,000 shares of common stock outstanding as of April 21, 2017 and excludes an aggregate of 160,000 shares of  common stock issuable upon the exercise of a convertible note and 580,000 shares subject to stock grants under the Plan which have not vested.
 
 
 



 
 
Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below together with all of the other information contained in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. The risks described below may not be all of the risks facing our company. Additional risks not presently known to us or that we currently consider immaterial may also impair our business operations. You could lose all or part of your investment due to any of these risks.
 
Risks Related to Our Company
 
We have a very limited operating history and have a history of operating losses.
 
We were incorporated in Wyoming on August 22, 2016 and have limited operations to date. We have no assets other than cash and cash equivalents and our License Agreement. Since our inception, we have incurred significant net losses. As of December 31, 2016, our accumulated deficit was ($169,240).
 
We are heavily dependent upon the ability and expertise of our Chief Executive Officer and President and the loss of such individuals could have a material adverse effect on our business, operating results or financial condition.
 
We currently do not have any employees.  We rely on Jonah Meer, our Chief Executive Officer and Ido Merfeld, our President for our operations. Our success is dependent upon the ability, expertise, judgment, discretion and good faith of these individuals. Any loss of the services of Mr. Meer or Mr. Merfeld would have a material adverse effect on our business, operating results or financial condition.
 
Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements.

In connection with our management’s assessment, our report from our independent registered public accounting firm for the fiscal year ended December 31, 2016 includes an explanatory paragraph stating the Company has negative working capital and has not generated revenues to cover operating expenses.  These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially and adversely affected and we may be unable to continue as a going concern.
 
We are a startup company and anticipate that we will incur substantial net losses for the foreseeable future. We may never achieve or sustain profitability.
 
We have a very limited operating history. We have had no revenues to date nor anticipate any in the foreseeable future. Even if we are successful in developing a successful product and receiving FDA clearance and launching a product into the market, we expect to continue to incur substantial losses for the foreseeable future as we continue to sell and market a singular product and research and develop, and seek regulatory approvals for, other potential product candidates.
 
We are subject to all of the business risks and uncertainties associated with any new business enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources, lack of revenue and the risk that we will not achieve our growth objective. If sales revenue from any potential product candidates that receive marketing clearance from the FDA or other regulatory body is insufficient, if we are unable to develop and commercialize any of our potential product candidates, or if our product development is delayed, we may never achieve or sustain profitability.
 
We will require additional financing to carry out our plan of operations and if we are unable to obtain such financing, our business may fail.
 
We currently have limited working capital and liquid assets. We held cash totaling $155,242 as at December 31, 2016. To date, we have not generated any revenue from the sales of products. There are a number of conditions that we must satisfy before we will be able to generate revenue, including but not limited to the identification, successful testing and approval and development of a product. While we are currently seeking additional funding, we do not currently have sufficient resources to accomplish any of these conditions necessary for us to generate revenue. We will therefore require substantial additional funds in order to continue to conduct research and development and to obtain regulatory clearance and approval necessary to bring a product candidate to market, to establish effective marketing and sales capabilities and to develop other product candidates. Our existing capital resources will not be sufficient to enable us to fund the completion of the development and commercialization of our current our product candidate. We cannot determine with certainty the duration and completion costs of the current or future development and commercialization of our product candidate or if, when, or to what extent we will generate revenues from the commercialization and sale of our current product candidate or potential future product candidates for which we obtain regulatory approval. We may never succeed in achieving regulatory approval for our current product candidate and any potential future product candidates. We may be unable to raise the additional funding to finance our business on commercially reasonable terms, or at all. If we are unable to obtain additional financing as needed, we may be required to reduce the scope of our operations and pursue only those projects that can be funded through cash flows generated from its existing operations, if any.
 
 
Raising additional capital by issuing securities or through debt financings or licensing arrangements may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights.
 
To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take certain actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through strategic partnerships with third parties, we may have to relinquish valuable rights, future revenue streams, research programs, or otherwise grant licenses on terms that are not favorable to us. If we are unable to raise additional capital when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts, or grant rights to develop and market potential future product candidates that we would otherwise prefer to develop and market ourselves. Any of these events could adversely affect our ability to achieve our product development and commercialization goals.
 
Risks relating to boycotts concerning Ariel University

Ariel University and its staff have been the target of boycotts, both in Israel and overseas, for its location beyond the Green Line, in what those boycotting view as the Palestinian territories. Boycotting of research associated with Ariel under our License Agreement would have material negative consequences.

We currently only have one product candidate, which is still in development, and we have not applied for clearance from the FDA to commercially distribute the product in the United States or clearance from any countries outside the United States, and we may never obtain such clearances.
 
We currently are dependent on the potential development of a single product candidate, what we believe to be a novel stem cell system to repair and regenerate neuronal damage. We are still developing this product, and we cannot begin marketing and selling the product in the United States until we obtain clearances from the FDA. We have not yet submitted applications for regulatory clearance in the United States. The process of obtaining regulatory clearance is expensive and time-consuming and can vary substantially based upon, among other things, the type, complexity and novelty of a product. Changes in regulatory policy, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application may cause delays in the clearance of a product candidate or rejection of a regulatory application altogether. In addition, varying interpretations of the data obtained from pre-clinical and clinical testing could delay, limit, or prevent marketing authorization from the FDA or regulatory clearance of a product candidate. Any marketing authorization from the FDA or regulatory clearance we ultimately obtain may be limited or subject to restrictions or post-market commitments that render the product candidate not commercially viable. If our attempts to obtain marketing authorization are unsuccessful, we may be unable to generate sufficient revenue to sustain and grow our business.
 
We are and will continue to be dependent in significant part on outside scientists and third-party research institutions for our research and development.
 
We currently have no employees available to perform the research and development necessary to commercialize what we believe to be our novel stem cell delivery system and potential future product candidates. We therefore rely at present, and will continue to rely on third-party research institution collaborators for this capability.
 
We entered into the License Agreement with Ariel for research concerning conditioned medium cell treatment for tissue regeneration and repair. As part of the Agreement, we selected a Principal Investigator and R&D Manager, who have also joined our Science Advisory Board. We are very reliant on these two individuals to lead and manage the research. Should they be unable or unwilling to continue performing their duties under the Agreement there can be no assurance that suitable replacements can be found.
 
The License Agreement may be terminated in the event of a material breach by the Company.
 
Under the terms of the License Agreement in the event of a material breach of the Agreement, Ariel may terminate the Agreement, after giving the Company 30 days to cure such breach. A material breach, includes a breach of a payment obligation by the Company. If Ariel were to terminate the Agreement, we will be unable to develop and commercialize any potential products obtained through research done under the Agreement.
 
We may encounter substantial delays in our clinical trials, or our clinical trials may fail to demonstrate the safety and efficacy of our product candidate to the satisfaction of applicable regulatory authorities.
 
Before obtaining marketing approval from regulatory authorities for the sale of our product candidate, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidate. Clinical testing is expensive, time consuming and uncertain as to outcome. We cannot guarantee that clinical trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of testing. Delays can be costly and could negatively affect our ability to complete a clinical trial. Since our research is done by third parties our control over the research process may be diminished. As we are dependent on third parties to conduct our clinical trials, we do not have complete control over the process, and issues with such third parties may result in further delays.
 
Our stem cell conditioned medium technology is a new “untested” form of neuronal regeneration and the medical community may not to adopt new therapies and technologies very rapidly, which may have a material adverse effect on our business and financial position.
 
The effectiveness of our stem cell product to treat neuro degenerative diseases has not been established in studies conducted in a controlled environment designed to produce scientifically significant results. Accordingly, our technology is a new “untested”, and therefore unproven, therapy. Unproven and untested technologies are usually more slowly adopted by the medical community as the medical community tends to be very conservative and does not adopt new “untested” therapies very rapidly. Physicians may elect not to use our products for a variety of reasons, including:

 
 
lack or perceived lack of evidence supporting the beneficial characteristics of our technology;
     
 
limited long-term data on the use of conditioned medium technology for therapy;
     
 
physicians’ perception that there are insufficient advantages of our product relative to currently available products;
     
 
hospitals may choose not to purchase our product;
 
 
group purchasing organizations may choose not to contract for our product, thus limiting availability of our products to hospital purchasers;
     
 
lack of coverage or adequate payment from managed care plans and other third-party payers for our product;
     
 
Medicare, Medicaid or other third-party payers may limit or not permit reimbursement for our product; and
     
 
the development of or improvement of competitive products.
 
If we are able to commercialize our product and the medical community reacts in a similar fashion to adopting our stem cell product we will not be able to generate significant revenues, if any.
 
In order to be successful, we must expand our products beyond our single product candidate by commercializing new potential product candidates, but we may not be able to do so in a timely fashion and at expected costs, or at all.
 
In order to be successful, we will need to expand our product line beyond our stem cell delivery system which is currently our only projected product candidate. To succeed in our commercialization efforts, we must effectively continue product development and testing, obtain regulatory clearances and approvals, and enhance our sales and marketing capabilities. There is no assurance that we will succeed in bringing our current or potential future product candidates to market. If we fail in bringing our product candidate to market, or experience delays in doing so, we will not generate revenues as planned and will need to curtail operations or seek additional financing earlier than otherwise anticipated.
 
The development of additional products is subject to the risks of failure inherent in the development of new, state of the art products based on new technologies. These risks include: (a) delays in product development or manufacturing; (b) unplanned expenditures for product development or manufacturing; (c) failure of new products to have the desired effect or an acceptable accuracy profile; (d) emergence of superior or equivalent products; (e) failure by any potential collaborative partners to successfully develop products; and (f) the dependence on third parties for the manufacture, development and sale of products. Our research and development efforts or those of potential collaborative partners may not result in any commercially viable products. If development efforts are not successful, or any products are not commercially successful, we are less likely to generate significant revenues, or become profitable.
 
We can provide no assurance that the development by others of new or improved products will not result in our present and future products from becoming obsolete.
 
The areas in which we plan to commercialize, distribute, and/or sell products involves rapidly developing technology. There can be no assurance that we will be able to establish ourselves in the field of stem cells regeneration therapy, or, if established, that we will be able to maintain our market position, if any. There can be no assurance that the development by others of new or improved products will not make our present and future products, if any, superfluous or obsolete.
 
If our intellectual property protection is inadequate, competitors may gain access to our technology and undermine our competitive position.
 
We regard our intended and future intellectual property as important to our success, and we intend to rely on patent law to protect our proprietary rights. Despite our precautions, unauthorized third parties may copy certain portions of our products or reverse engineer or obtain and use information that we regard as proprietary. We intend to seek patents in the future. We do not know if any future patent application will be issued within the scope of the claims we seek, if at all, or whether any patents we receive will be challenged or invalidated. Thus, we cannot assure you that any intellectual property rights that we may receive can be successfully asserted in the future or that they will not be invalidated, circumvented or challenged. In addition, the laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States. Our means of protecting any proprietary rights we may receive in the United States or abroad may not be adequate and competitors may independently develop a similar technology. Any failure to protect our proprietary information and any successful intellectual property challenges or infringement proceedings against us could have a material adverse effect on our business, financial condition, or results of operations.
 
 
Our future success depends on our ability to obtain approval on a patent for our technology, failing which we may be unable to protect our proprietary information and any competitive advantage.
 
Our future success will depend, in part, on our ability to obtain patent approval for the stem cell product. There can be no assurance that the patent applications made will result in the issuance of patents or that the term of the patents will be extendable after they expire in due course, which would prevent us from being able to protect our proprietary information and may have a material adverse effect on our business and financial condition.
 
Much of the know-how and technology that we have licensed may not be patentable, though we believe they may constitute trade secrets. There can be no assurance, however, that we will be able to meaningfully protect our trade secrets. To help protect our intellectual property rights and proprietary technology, we will require employees, consultants, advisors and collaborators to enter into confidentiality agreements. There can be no assurance that these agreements will provide meaningful protection for our trade secrets, knowhow or other proprietary information in the event of any unauthorized use or disclosure.
 
We may become subject to litigation claims and legal proceedings, including intellectual property litigation, such as patent infringement claims, which could adversely affect our business.
 
In time we, as well as certain of our directors and officers, may become subject to claims or lawsuits. These lawsuits may result in significant legal fees and expenses and could divert management’s time and other resources. If the claims contained in these lawsuits are successfully asserted against us, we could be liable for damages and be required to alter or cease certain of our business practices or development or commercialization of our product. Any of these outcomes could cause our business, financial performance and cash position to be negatively impacted.
 
Additionally, our commercial success will depend, in part, on not infringing on the patents or proprietary rights of others. There can be no assurance that the technologies and products used or developed by us will not infringe such rights. If such infringement occurs and we are not able to obtain a license from the relevant third party, we will not be able to continue the development, manufacture, use, or sale of any such infringing technology or product. There can be no assurance that necessary licenses to third-party technology will be available at all or on commercially reasonable term. In some cases, litigation or other proceedings may be necessary to defend against or assert claims of infringement or to determine the scope and validity of the proprietary rights of third parties. Any potential litigation could result in substantial costs to, and diversion of, our resources and could have a material and adverse impact on us.
 
An adverse outcome in any such litigation or proceeding could subject us to significant liabilities, require us to cease using the subject technology or require us to license the subject technology from the third party, all of which could have a material adverse effect on our business.
 
If our expenses are greater than anticipated, then we will have fewer funds with which to pursue our plan of operations and our financing requirements will be greater than anticipated.
 
We may find that the costs of carrying out our plan of operations are greater than we anticipate. Increased operating costs may cause the amount of financing that we require to increase. Investors may be more reluctant to provide additional financing if we cannot demonstrate that we can control our operating costs. There is no assurance that additional financing required as a result of our operating costs being greater than anticipated will be available to us. If we do not control our operating expenses, then we will have fewer funds with which to carry out our plan of operations with the result that our business may fail.
 
We may not be able to build an effective distribution network for our products.
 
We will likely need to rely on third party distributors to sell our product if and when developed. We cannot assure you that we will succeed in entering into and maintaining productive arrangements with an adequate number of distributors that are sufficiently committed to selling our products. The establishment of a distribution network is expensive and time consuming. If and when we launch new products and increase our marketing effort with respect to existing products, we will need to continue to retain skilled independent distributors with significant technical knowledge. In addition, the commissions we may pay any future distributors could increase over time which would result in higher sales and marketing expenses. Potential distributors may market and sell the products of our competitors. Even if the distributors market and sell products we may develop, our competitors may be able, by offering higher commission payments or other incentives, to persuade these distributors to reduce or terminate their sales and marketing efforts related to our products. The distributors may also help competitors solicit business from our existing customers. Some independent distributors may account for a significant portion of our sales volume, and, if we were to lose them, our sales could be adversely affected. Even if we engage and maintain suitable relationships with an adequate number of distributors, they may not generate revenue as quickly as we expect them to, commit the necessary resources to effectively market and sell our products, or ultimately succeed in selling our products.
 
We will need to engage a source for the manufacture of our product and the loss of this third-party manufacture could harm our business.
 
We do not intend to do our own manufacturing, thus will need to engage a third-party to manufacture and supply our stem cell delivery system. This manufacturer will also hold our inventory, warehouse and ship our products to a distribution center which will ship to customers as well as handle customer service related tasks. Our reliance on a single third-party manufacturer to supply us with our product and a separate vendor to provide such other distribution and warranty services may expose us to other risks such as lack of coordination and mutuality of interests that could delay our sales, or result in higher costs or lost product revenues. In particular, our manufacturer could:

 
encounter difficulties in achieving volume production, quality control and quality assurance or suffer shortages of qualified personnel, which could result in their inability to manufacture sufficient quantities of our commercially available product to meet market demand, or it could experience similar problems that result in the manufacture of insufficient quantities of our product candidate; and
     
 
fail to follow and remain in compliance with the FDA-mandated Quality System Regulations (“QSRs”), compliance which is required for all medical products or fail to document their compliance to QSRs, either of which could lead to significant delays in the availability of materials for our product.
 
If we are unable to obtain adequate supplies of our product that meet our specifications and quality standards, it will be difficult for us to compete effectively. We have no supply agreements in place with any and any future manufacturer may change the terms of any future orders or choose not to supply us with products in the future. Furthermore, if a manufacturer fails to perform its obligations, we may be forced to purchase our product from other third-party manufacturers, which we may not be able to do on reasonable terms or in sufficient time, if at all. In addition, if we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines. The delays associated with the verification of a new manufacturer or the re-verification of an existing manufacturer could negatively affect our ability to produce and distribute our product in a timely manner.
 
 
If and when we sell our products, we may be liable for product liability claims and we may not carry sufficient product liability insurance.
 
The products that we intend to develop may expose us to potential liability from personal injury claims by end-users of the product. We intend to carry product liability insurance to protect us against the risk that in the future a product liability claim or product recall could materially and adversely affect our business. Inability to obtain sufficient insurance coverage at an acceptable cost or otherwise to protect against potential product liability claims could prevent or inhibit the commercialization of our intended products. We cannot assure you that if and when we commence distribution of products that we will be able to obtain or maintain adequate coverage on acceptable terms, or that such insurance will provide adequate coverage against all potential claims. Moreover, even if we maintain adequate insurance, any successful claim could materially and adversely affect our reputation and prospects, and divert management’s time and attention. If we are sued for any injury allegedly caused by our future products our liability could exceed our total assets and our ability to pay the liability.
 
We qualify as an "emerging growth company" under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
 
 
·
have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; 
 
·
comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); 
 
·
submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay" and "say-on-frequency;" and 
 
·
disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive's compensation to median employee compensation. 
 
We will remain an "emerging growth company" for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. 
 
Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. 
 
Since we have elected under Section 107 of the JOBS Act to use the extended transition period with respect to complying with new or revised accounting standards, our financial statements may not be comparable to companies that comply with public company effective dates making it more difficult for an investor to compare our results with other public companies.
 
Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 102(b)(2)(B) of the Act for complying with new or revised accounting standards. In other words, as an emerging growth company we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. 
 
We are a small company with limited resources compared to some of our current and potential competitors and we may not be able to compete effectively.
 
There is potential that we will face intense competition from other companies, some of which can be expected to have longer operating histories and more financial resources and manufacturing and marketing experience than us. Increased competition by larger and better financed competitors could materially and adversely affect our business, financial condition and our results of operations.
 
To be competitive, we will require a continued high level of investment in research and development, marketing, sales and client support. We may not have sufficient resources to maintain research and development, marketing, sales and client support efforts on a competitive basis which could materially and adversely affect our business, financial condition and our results of operations.
 
We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively
 
The biopharmaceutical industry, and the rapidly evolving market for stem cell therapies in particular, is characterized by intense competition and rapid innovation. Our competitors may be able to develop other compounds or drugs that are able to achieve similar or better results. Our potential competitors include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities, and other research institutions. Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations as well as established sales forces. Smaller or early- stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized, or less costly than our product candidates or may develop proprietary technologies or secure patent protection that we may need for the development of our technologies and products
 
Even if we obtain regulatory approval of our product candidates, we may not be the first to market and that may affect the price or demand for our product candidates. Additionally, the availability and price of our competitors’ products could limit the demand and the price we are able to charge for our product candidates. We may not be able to implement our business plan if the acceptance of our product candidates is inhibited by price competition or the reluctance of physicians to switch from existing methods of treatment to our product candidates, or if physicians switch to other new drug or biologic products or choose to reserve our product candidates for use in limited circumstances.
 
 
 
The costs to meet our reporting and other requirements as a public company subject to the Securities Exchange Act of 1934 will be substantial and may result in us having insufficient funds to operate and expand our business.
 
If and when we become a public reporting company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, and will incur ongoing and significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting requirements. We intend to file a Form 8-A to register our common stock under Section 12(g) of the Securities Exchange Act of 1934 following the effectiveness of the registration statement of which this prospectus is a part. We will continue to incur costs associated with the rules implemented by the SEC and any other exchange on which our common stock may become listed. These rules and regulations will increase our legal and financial compliance costs and may make some activities more time-consuming and costly and as a result, we may not have sufficient funds to grow our operations. These laws and regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, or as our executive officers.

Several people who work for us at the University may be subject to conflicts of interest.
 
Several people who provide research services under the License Agreement work for AU. Each of them provides services to us on a non-full times basis. Each may devote substantial time to other matters at the University, including consulting relationships with other corporate entities, and may have responsibilities to these other entities. Because of these relationships, some of the persons who provide services to us may be subject to conflicts of interest. Such conflicts may include deciding how much time to devote to our affairs.

Since our officers and directors work part-time for other companies, their other activities for those other companies may involve a conflict of interest with regard to the amount of time they dedicate to our business.
 
Our officers and directors are not required to work exclusively for us and do not devote all of their time to our operations.   Therefore, it is possible that a conflict of interest with regard to their time may arise based on their work for such other companies.  Their other activities may prevent them from devoting time to our operations, which could slow our operations and may reduce our financial results because of the slowdown in operations. 

Risks Related to Government Regulation

Before we can market and sell our products, we will be required to obtain approval and clearance by the FDA and foreign regulatory authorities. These approvals and clearances will take significant time and require significant research, development, and clinical study expenditures, and ultimately may not succeed.
 
The research, testing, manufacturing, labeling, approval, selling, import, export, marketing, and distribution of drug products, including biologics, are subject to extensive regulation by the FDA and other regulatory authorities in the United States. We are not permitted to market any biological drug product in the United States until we receive a Biologics License from the FDA. We have not previously submitted a Biologics License Application (“BLA”) to the FDA, or similar approval filings to comparable foreign authorities. A BLA must include extensive preclinical and clinical data and supporting information to establish that the product candidate is safe, pure, and potent for each desired indication. The BLA must also include significant information regarding the chemistry, manufacturing, and controls for the product, and the manufacturing facilities must complete a successful pre- license inspection. We expect the novel nature of our product candidate to create further challenges in obtaining regulatory approval. The FDA may also require a panel of experts, referred to as an Advisory Committee, to deliberate on the adequacy of the safety and efficacy data to support licensure. The opinion of the Advisory Committee, although not binding, may have a significant impact on our ability to obtain licensure of the product candidates based on the completed clinical trials. Accordingly, the regulatory approval pathway for our product candidates may be uncertain, complex, expensive, and lengthy, and approval may not be obtained.

We will also be required to comply with costly and time-consuming compliance by foreign regulatory authorities if we want to sell our products outside of the United States.
 
Ethical, social and legal concerns about research regarding stem cells, could result in regulations restricting or prohibiting the processes we may use. Federal and state agencies, congressional committees and foreign governments have expressed interest in further regulating biotechnology. More restrictive regulations or claims that our products are unsafe or pose a hazard could prevent us from commercializing any products. New government requirements may be established that could delay or prevent regulatory approval of our product candidates under development. It is impossible to predict whether legislative changes will be enacted, regulations, policies or guidance changed, or interpretations by agencies or courts changed, or what the impact of such changes, if any, may be.
 
Obtaining FDA clearance will be costly, may result in time-consuming delays and will subject us to ongoing compliance costs and regulatory risk for non-compliance.
 
Obtaining FDA clearance, or approval can be expensive and uncertain, and generally takes several years, and generally requires detailed and comprehensive scientific and clinical data. Notwithstanding the expense, these efforts may never result in FDA clearance. Even if we were to obtain regulatory clearance, it may not be for the uses we believe are important or commercially attractive, in which case we would not be permitted to market our product for those uses.
 
The FDA can delay, limit or deny clearance or approval of a product for many reasons, including:

 
we may not be able to demonstrate to the FDA’s satisfaction that our product candidate is safe and effective, sensitive and specific diagnostic tests, for its intended users;
     
 
the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required; and
     
 
the manufacturing process or facilities we use may not meet applicable requirements.
 
In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval or clearance of our products under development or impact our ability to modify our currently approved or cleared products on a timely basis.
 
Even if granted pre-market approval for any future product would likely place substantial restrictions on how our product is marketed or sold, and FDA will continue to place considerable restrictions on our products and operations. In addition, manufacturers must register their manufacturing facilities, list the products with FDA, and comply with requirements relating to labeling, marketing, complaint handling, adverse event reporting, reporting of corrections and removals, and import and export. FDA monitors compliance with these other requirements through periodic inspections. If our facilities or those of our manufacturers or suppliers are found to be in violation of applicable laws and regulations, or if we or our manufacturers or suppliers fail to take satisfactory corrective action in response to an adverse inspection, the regulatory authority could take enforcement action. Additionally, the FDA and other regulatory authorities have broad enforcement powers. Regulatory enforcement or inquiries, or other increased scrutiny on us, could affect the perceived safety and efficacy of our product candidate and dissuade our customers from using our product candidate, if and when it is authorized for marketing.
 
We have limited experience in the clinical trials process, they may proceed more slowly than anticipated,
 
Clinical trials are complex, expensive, time consuming, uncertain and are subject to substantial and unanticipated delays. Clinical trials generally involve a substantial number of patients in a multi-year study. Because we do not have the experience or the infrastructure necessary to conduct clinical trials, we will have to hire one or more contract research organization (“CRO”), to conduct trials on our behalf. CRO contract negotiations may be costly and time consuming and we will rely heavily on the CRO to ensure that our trials are conducted in accordance with regulatory and industry standards. We may encounter problems with our clinical trials and any of those problems could cause us or the FDA to suspend those trials, or delay the analysis of the data derived from them.
 
Delays in our clinical trials may result in increased development costs for our product candidate, which could cause our stock price to decline and limit our ability to obtain additional financing. In addition, if one or more of our clinical trials are delayed, competitors may be able to bring products to market before we do, and the commercial viability of our product candidate could be significantly reduced.
 
We will be substantially dependent on third parties to conduct clinical trials.
 
As we are required to conduct clinical trials to obtain FDA clearance, we need to rely heavily on third parties over the course of our clinical trials, and as a result will have limited control over the clinical investigators and limited visibility into their day-to-day activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol and legal, regulatory, and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities. We and these third parties are required to comply with current good clinical practices, or cGCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in clinical development. Regulatory authorities enforce these cGCPs through periodic inspections of trial sponsors, principal investigators, and trial sites. If we or any of these third parties fail to comply with applicable cGCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional nonclinical or clinical trials before approving our marketing applications. We cannot be certain that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the cGCP regulations. In addition, our clinical trials may be required to be conducted with a large number of test patients. Our failure or any failure by these third parties to comply with these regulations or to recruit a sufficient number of patients may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.
 
Any third parties conducting our clinical trials are not and will not be our employees and, except for remedies available to us under our agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our ongoing preclinical, clinical, and nonclinical programs. These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical studies or other drug development activities, which could affect their performance on our behalf. If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed, or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize our product candidate. As a result, our financial results and the commercial prospects for our product candidate would be harmed, our costs could increase, and our ability to generate revenue could be delayed.
 
If any of our relationships terminate with these third-party CROs, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms. Switching or adding additional CROs involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new CRO begins work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter similar challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition, and prospects.
 
If we are unable to obtain a reimbursement code from the U.S. Department of Health and Human Services so that our product is covered under Medicare and Medicaid, this would have a negative impact on our intended sales and would have a material adverse effect on our business, financial condition and operating results.
 
We will need to apply to the U.S. Department of Health and Human Services for reimbursement code so that our product candidate is covered under Medicare and Medicaid. There can be no assurance that our application will be successful, or that we will be able to obtain a reimbursement code in a timely manner. In the event that we do not obtain a reimbursement code, our customers may be unable to obtain reimbursement for their purchases under private or government-sponsored insurance plans which would have a negative impact on sales and have a material adverse effect on our business, financial condition and operating results. In addition, Medicare and its administrative contractors as well as other insurers must find that our product meets their medical necessity requirements for the treatment of patients or they will not pay for the product. In addition, there is a risk that the payment amount for the product is too low to incentivize customer adoption.
 
If hospitals and other healthcare providers are unable to obtain coverage or adequate reimbursement for procedures performed with our products our product will not likely be widely used.
 
In the United States, the commercial success of any future products will depend, in part, on the extent to which governmental payers at the federal and state levels, including Medicare and Medicaid, private health insurers and other third-party payers provide coverage for and establish adequate reimbursement levels for procedures utilizing our products. Hospitals and other healthcare providers that purchase our product for treatment of their patients generally rely on third-party payers to pay for all or part of the costs and fees associated with our products as part of a “bundled” rate for the associated procedures. The existence of coverage and adequate reimbursement for our products and the procedures performed with them by government and private payers critical to market acceptance of our existing and future products. Neither hospitals nor physicians are likely to use our product and any future products if they do not receive adequate reimbursement for the procedures utilizing our products.
 
Many private payers currently base their reimbursement policies on the coverage decisions and payment amounts determined by the CMS, which administers the Medicare program. Others may adopt different coverage or reimbursement policies for procedures performed with our products, while some governmental programs, such as Medicaid, have reimbursement policies that vary from state to state, some of which may not pay for the procedures performed with our products in an adequate amount, if at all. A Medicare national or local coverage decision denying coverage for one or more of our products could result in private and other third-party payers also denying coverage for our products. Third-party payers also may deny reimbursement for our products if they determine that a product used in a procedure was not medically necessary, was not used in accordance with cost-effective treatment methods, as determined by the third-party payer, or was used for an unapproved use. Unfavorable coverage or reimbursement decisions by government programs or private payers underscore the uncertainty that our products face in the market and could have a material adverse effect on our business.
 
Many hospitals and clinics in the United States belong to group purchasing organizations, which typically incentivize their hospital members to make a relatively large proportion of purchases from a limited number of vendors of similar products that have contracted to offer discounted prices. Such contracts often include exceptions for purchasing certain innovative new technologies, however. Accordingly, the commercial success of our products may also depend to some extent on our ability to either negotiate favorable purchase contracts with key group purchasing organizations and/or persuade hospitals and clinics to purchase our product “off contract.”
 
 
The healthcare industry in the United States has experienced a trend toward cost containment as government and private payers seek to control healthcare costs by paying service providers lower rates. While we believe that hospitals will be able to obtain coverage for procedures using our products, the level of payment available to them for such procedures may change over time. State and federal healthcare programs, such as Medicare and Medicaid, closely regulate provider payment levels and have sought to contain, and sometimes reduce, payment levels. Private payers frequently follow government payment policies and are likewise interested in controlling increases in the cost of medical care. In addition, some payers are adopting pay-for-performance programs that differentiate payments to healthcare providers based on the achievement of documented quality-of-care metrics, cost efficiencies, or patient outcomes. These programs are intended to provide incentives to providers to deliver the same or better results while consuming fewer resources. As a result of these programs, and related payer efforts to reduce payment levels, hospitals and other providers are seeking ways to reduce their costs, including the amounts they pay for medical products. We may not be able to sell our products profitably if third-party payers deny or discontinue coverage or reduce their levels of payment below that which we project, or if our production costs increase at a greater rate than payment levels. Adverse changes in payment rates by payers to hospitals could adversely impact our ability to market and sell our products and negatively affect our financial performance.
 
In international markets, medical product regulatory requirements and healthcare payment systems vary significantly from country to country, and many countries have instituted price ceilings on specific product lines. We cannot assure you that our products will be considered cost-effective by international third-party payers, that reimbursement will be available or, if available, that the third-party payers’ reimbursement policies will not adversely affect our ability to sell our products profitably. Any failure to receive regulatory or reimbursement approvals would negatively impact market acceptance of our products in any international markets in which those approvals are sought.

Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.
 
As a result of the 2016 election in the United States, there is great political uncertainty concerning the fate of the Affordable Care Act and other healthcare laws. The United States Congress is expected to draft legislation to repeal parts of the Affordable Care Act, but it is uncertain when such legislation would be passed and whether Congress would replace the law and what  any replacement law would encompass. We cannot predict any initiatives that may be adopted in the future. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products, which could result in reduced demand for any future products that we may develop and/or pricing pressures for such products.
 
Risks Related to Our Common Stock, the Warrants and this Offering
 
A decline in the price of our common stock could affect our ability to raise any required working capital and adversely impact our operations.
 
A decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise any required capital for our operations. Because we intend to fund the Company in the future primarily through the sale of equity securities, a decline in the price of our common stock could have an adverse effect upon our liquidity and our continued operations. A reduction in our ability to raise equity capital in the future may have a material adverse effect upon our business plan and operations. If our stock price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations.

Our common stock does not have a trading market. If and when a market develops the price of our common stock may be volatile; we caution you as to the highly illiquid nature of an investment in our shares.

Our common stock is currently not approved for trading. To be approved we must successfully register the shares under this offering, and then find a FINRA member firm willing to make a market in our stock. We may fail in that endeavor in which case there will be no public market for our stock. We anticipate that our stock will be quoted on the OTCQB electronic quotation service operated by OTC Markets Group Inc. Even if we are successful a well-established market for our common stock may never develop in the United States.

Trading in stocks quoted on the OTCQB is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance or future prospects of our business. Moreover, the OTCQB is not a stock exchange, and trading of securities on the OTCQB is often more sporadic than the trading of securities listed on a quotation system like Nasdaq or a stock exchange like the NYSE. Accordingly, stockholders may have difficulty reselling any of the shares.

We will not be required to comply with certain provisions of the Sarbanes­Oxley Act for as long as we remain an "emerging growth company."

We are not currently required to comply with the SEC rules that implement Sections 302 and 404 of the Sarbanes­Oxley Act, and are therefore not required to make a formal assessment of the effectiveness of our internal controls over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with certain of these rules, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting. Though we will be required to disclose changes made in our internal control procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an "emerging growth company" as defined in the JOBS Act.

Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an "emerging growth company." At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

Reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
 
As an "emerging growth company", we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes­Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
 
 
The market price of our common stock is likely to be highly volatile and subject to wide fluctuations, and you may be unable to resell your shares at or above the price at which you acquired them, or at all.
 
Securities of microcap and small-cap companies have experienced substantial volatility in the past, often based on factors unrelated to the companies’ financial performance or prospects. We believe that trading in our stock, if it occurs at all, will likely be subject to significant volatility since, among other reasons, we do not have nor will we have in the foreseeable future an active trading market in our stock. Factors unrelated to our performance that may affect the price of our common stock include the following: the extent of analytical coverage available to investors concerning our business may be limited if investment banks with research capabilities do not follow us, a reduction in trading volume and general market interest in our common stock may affect an investor’s ability to trade significant numbers of shares of our common stock; the size of our public float may limit the ability of some institutions to invest in our common stock; and a substantial decline in the price of shares of our common stock that persists for a significant period of time could cause our common stock, if listed on an exchange, to be delisted from such exchange, further reducing market liquidity. As a result of any of these factors, the market price of our common stock at any given point in time may not accurately reflect our long-term value. The price of our common shares may increase or decrease in response to a number of events and factors, including: changes in financial estimates; our acquisitions and financings; quarterly variations in our operating results; the operating and share price performance of other companies that investors may deem comparable; and purchase or sale of blocks of our common stock. These factors, or any of them, may materially adversely affect the prices of our common shares regardless of our operating performance. We caution you as to the highly illiquid nature of an investment in our shares.
 
The market price of our common stock may be affected by many other variables which are not directly related to our success and are, therefore, not within our control. These include other developments that affect the breadth of the public market for shares of our common stock and the attractiveness of alternative investments. The effect of these and other factors on the market price of our common stock is expected to make our common stock price volatile in the future, which may result in losses to investors.

In the past, stockholders have often instituted securities class action litigation after periods of volatility in the market price of a company’s securities. If a stockholder were to file any such class action suit against us, we would incur substantial legal fees and our management’s attention and resources would be diverted from operating our business to respond to the litigation, which could harm our business.
 
Our Chief Executive Officer and our President have 66 2/3% of the voting rights of the Company.

For so long as the Class A Preferred Stock is issued and outstanding, the holders of Class A Preferred Stock shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote with the common stock, with the holders of Class A Preferred Stock being entitled to 66 2/3% of the total votes on all such matters, regardless of the actual number of shares of Class A Preferred Stock then outstanding. Because the holders of the Series A Preferred Stock have 66 2/3% of the voting rights of the Company if they act together, they will be able to influence the outcome of all corporate actions requiring approval of our stockholders, including the election of directors and approval of significant corporate transactions, which may result in corporate action with which other stockholders do not agree. If the Series A Preferred stockholders vote in favor of the foregoing actions, they will have sufficient voting power to approve such actions and no other stockholder approvals will be required.
 
As a result, Mr. Meer and Mr. Merfeld will have significant influence over the management and affairs of the Company and control over matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or our assets, for the foreseeable future. Their interests may differ from the interests of other stockholders and thus result in corporate decisions that are disadvantageous to other shareholders.
 
We are authorized to issue up to 100 million shares of common stock and we may issue significantly more shares to raise capital, which would result in substantial dilution to your investment in our shares.
 
Our Articles of Incorporation authorize the issuance of 100 million shares of common stock. This amount may be increased by our Board who can issue shares for such consideration and on such terms and conditions as are established by our board of directors without the approval of any of our shareholders. Any additional financings effected by us may result in the issuance of additional securities without stockholder approval and the substantial dilution in the percentage of common stock held by our then existing stockholders. Moreover, the common stock issued in any such transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our current stockholders. Our Board has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock or preferred stock are issued in connection with a financing, dilution to the interests of our stockholders will occur and the rights of the holders of common stock might be materially and adversely affected.
 
We have not paid any dividends and do not foresee paying dividends in the future.
 
We intend to retain earnings, if any, to finance the growth and development of our business and do not intend to pay cash dividends on shares of our common stock in the foreseeable future. The payment of future cash dividends, if any, will be reviewed periodically by the board of directors and will depend upon, among other things, conditions then existing including earnings, financial condition and capital requirements, restrictions in financing agreements, business opportunities and other factors.
 
A significant portion of our outstanding common stock may be sold into the public market in the future, which could cause the market price of our common stock to drop significantly, even if our business is doing well.
 
Sales of a substantial number of shares of our common stock in the public market could occur in the future. These sales, or the market perception that the holders of a large number of shares of our common stock intend to sell shares, could reduce the market price of our common stock.
 
 
 
Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.
 
Our stock is a penny stock. The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000, not including any equity in that person’s or person’s spouse’s primary residence, or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
 
FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
 
In addition to the “penny stock” rules promulgated by the SEC, the FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.
 
Anti-takeover provisions may limit the ability of another party to acquire us, which could cause our stock price to decline.
 
Though not now, we may be or in the future we may become subject to Wyoming’s control share law. The law focuses on the acquisition of a “controlling interest” which means the ownership of outstanding voting shares sufficient, but for the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors: (i) one-fifth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more. The ability to exercise such voting power may be direct or indirect, as well as individual or in association with others. The effect of the control share law is that the acquiring person, and those acting in association with it, obtains only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of stockholders. The control share law contemplates that voting rights will be considered only once by the other stockholders. Thus, there is no authority to strip voting rights from the control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed by the control share law. If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval of voting rights is entitled to demand fair value for such stockholder’s shares.
 
Wyoming’s control share law may have the effect of discouraging takeovers of the corporation. In addition to the control share law, Wyoming has a business combination law which prohibits certain business combinations between Wyoming corporations and “interested stockholders” for three years after the “interested stockholder” first becomes an “interested stockholder,” unless the corporation’s board of directors approves the combination in advance. For purposes of Wyoming law, an “interested stockholder” is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (ii) an affiliate or associate of the corporation and at any time within the three previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term “business combination” is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquiror to use the corporation’s assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders. The effect of Wyoming’s business combination law is to potentially discourage parties interested in taking control of the Company from doing so if it cannot obtain the approval of our board of directors.
 
 
We will not receive any proceeds from the sales of shares of our common stock by the selling stockholders. However, if the selling stockholders exercise their Warrants for cash then in the future we may receive up to an aggregate of $224,800 in additional proceeds upon the exercise of the Warrants. We expect to use any such proceeds for (a) expenses associated with the License Agreement (b) SEC registration, listing and clearance fees; (c) branding and marketing; and (d) general corporate purposes.
 
 
We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future.
 
 
 
The Shares to be sold by the selling stockholders are shares of common stock that are currently issued and outstanding, or, with respect to the Warrant Shares, that will be issued and outstanding upon the exercise of the Warrants. Accordingly, there will not be any dilution to our existing stockholders or new investors from the sale of the Shares.
 
However, the Warrant Shares are not currently issued and outstanding. Accordingly, there will be dilution to our existing stockholders and new investors from the issuance of any Warrant Shares, issuable upon the exercise of the Warrants.
 
 
As a result of there being no established public market for our shares, the offering price of the shares has been determined arbitrarily by us. The price does not bear any relationship to our assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the number of shares to be offered and the offering price, we took into consideration our cash on hand and the amount of money we would need to implement our business plan. In addition, no investment banker, appraiser, or other independent third party has been consulted concerning the offering price for the shares or the fairness of the offering price used for the shares Accordingly, the offering price should not be considered an indication of the actual value of the securities.  The selling stockholders may sell shares of our common stock only at a fixed price of $0.25 per share until such time, if at all, that our shares are quoted on the Over-The-Counter Bulletin Board and thereafter at prevailing market prices or at privately negotiated prices. See “Plan of Distribution.” The exercise price of the Warrants was similarly arbitrarily determined.
 
 
This prospectus covers the resale by the selling stockholders of up to an aggregate of 1,686,000 shares of common stock, which includes 562,000 shares of common stock issuable upon the exercise of the Warrants.

 The private placement offering by which the selling stockholders acquired their securities from us were exempt under the registration provisions of the Securities Act. We received gross proceeds of $281,000 from the closing of the private placement offering.
 
The selling stockholders, may, from time to time, offer and sell pursuant to this prospectus any or all of the shares referred to above, The selling stockholders may also sell, transfer or otherwise dispose of all or a portion of their shares in transactions exempt from the registration requirements of the Securities Act. We may from time to time include additional selling stockholders in supplements or amendments to this prospectus.
 
The selling stockholders may sell some, all or none of its shares. We do not know how long the selling stockholders will hold the shares before selling them, and we currently have no agreements, arrangements or understandings with the selling stockholders regarding the sale of any of the shares.
 
 The following table sets forth the shares beneficially owned, as of March 10, 2017 by the selling stockholders prior to the offering contemplated by this prospectus, the number of shares that the selling stockholders may offer and sell from time to time under this prospectus and the number of shares which the selling stockholders would own beneficially if all such offered shares are sold.
 
Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act. The percentage of shares beneficially owned prior to the offering is based on 11,544,000 shares of our common stock outstanding as of April 21, 2017 .
 
None of the selling stockholders are a registered broker-dealer or an affiliate of a registered broker-dealer except that Jack Eizikovitz is a broker and the President and Chief Executive Officer of International Correspondent Trading Inc., a registered broker-dealer.   Mr. Eizikovitz, purchased the shares being registered for resale in the ordinary course of business, and at the time of the purchase, had no agreements or understandings, directly or indirectly, with any person to distribute the securities. None of the selling stockholders or any of their respective affiliates have held a position or office, or had any other material relationship, with us or any of our predecessors or affiliates. The selling stockholders have acquired their shares solely for investment and not with a view to or for resale or distribution of such securities.
 
 
 

 
Securities Beneficially
 
Securities
 
Securities Beneficially
Name of Selling
Owned Prior to this
 
to be Sold in the
 
Owned After this
Security Holder
Offering
 
Offering
 
Offering
 
Shares
   
%
 
Shares Issuable upon the exercise
of Warrants
   
%
 
Shares
 
Shares Issuable upon the exercise
of Warrants
 
Shares
   
%
 
Shares Issuable upon the exercise
of Warrants
 
%
Ray Arias
20,000
   
*
 
10,000
   
*
 
20,000
 
10,000
 
0
   
*
 
0
 
*
Adithya Bathena
20,000
   
*
 
10,000
   
*
 
20,000
 
10,000
 
0
   
*
 
0
 
*
Carl Borenstein
40,000
   
*
 
20,000
   
*
 
40,000
 
20,000
 
0
   
*
 
0
 
*
Israel Bornstein
10,000
   
*
 
5,000
   
*
 
10,000
 
5,000
 
0
   
*
 
0
 
*
Shmuel Bornstein
10,000
   
*
 
5,000
   
*
 
10,000
 
5,000
 
0
   
*
 
0
 
*
Caswell LLC(1)
40,000
   
*
 
20,000
   
*
 
40,000
 
20,000
 
0
   
*
 
0
 
*
Elan A. Cohen
4,000
   
*
 
2,000
   
*
 
4,000
 
2,000
 
0
   
*
 
0
 
*
Nicholas A. Davidge
100,000
   
*
 
50,000
   
*
 
100,000
 
50,000
 
0
   
*
 
0
 
*
Thomas Duszynski
4,000
   
*
 
2,000
   
*
 
4,000
 
2,000
 
0
   
*
 
0
 
*
Michal Tsarfati Efrat & Dror Efrat
40,000
   
*
 
20,000
   
*
 
40,000
 
20,000
 
0
   
*
 
0
 
*
Jack & Bonnie Eizikovitz
100,000
   
*
 
50,000
   
*
 
100,000
 
50,000
 
0
   
*
 
0
 
*
Matthew Feser
8,000
   
*
 
4,000
   
*
 
8,000
 
4,000
 
0
   
*
 
0
 
*
Ronald & Nadine Finger
20,000
   
*
 
10,000
   
*
 
20,000
 
10,000
 
0
   
*
 
0
 
*
Glenwood Partners, L.P.(2)
50,000
   
*
 
25,000
   
*
 
50,000
 
25,000
 
0
   
*
 
0
 
*
Ronald Glickman
4,000
   
*
 
2,000
   
*
 
4,000
 
2,000
 
0
   
*
 
0
 
*
Oscar Grossman
20,000
   
*
 
10,000
   
*
 
20,000
 
10,000
 
0
   
*
 
0
 
*
Shanna Kimble
40,000
   
*
 
20,000
   
*
 
40,000
 
20,000
 
0
   
*
 
0
 
*
Al Lieberman
100,000
   
*
 
50,000
   
*
 
100,000
 
50,000
 
0
   
*
 
0
 
*
Maoz Everest Holdings Ltd.(3)
4,000
   
*
 
2,000
   
*
 
4,000
 
2,000
 
0
   
*
 
0
 
*
Eric Meer
6,000
   
*
 
3,000
   
*
 
6,000
 
3,000
 
0
   
*
 
0
 
*
Nitza Meerfeld
80,000
   
*
 
40,000
   
*
 
80,000
 
40,000
 
0
   
*
 
0
 
*
Oren Meiri
40,000
   
*
 
20,000
   
*
 
40,000
 
20,000
 
0
   
*
 
0
 
*
Charles Messenger
20,000
   
*
 
10,000
   
*
 
20,000
 
10,000
 
0
   
*
 
0
 
*
Elliot Moskowitz
20,000
   
*
 
10,000
   
*
 
20,000
 
10,000
 
0
   
*
 
0
 
*
Mark Moskowitz
40,000
   
*
 
20,000
   
*
 
40,000
 
20,000
 
0
   
*
 
0
 
*
Julio Hernandez & Francisco Navarro
40,000
   
*
 
20,000
   
*
 
40,000
 
20,000
 
0
   
*
 
0
 
*
Aliza Pollak
4,000
   
*
 
2,000
   
*
 
4,000
 
2,000
 
0
   
*
 
0
 
*
Eric Pollak
4,000
   
*
 
2,000
   
*
 
4,000
 
2,000
 
0
   
*
 
0
 
*
Elie Pollak
8,000
   
*
 
4,000
   
*
 
8,000
 
4,000
 
0
   
*
 
0
 
*
Theodore Pollak
12,000
   
*
 
6,000
   
*
 
12,000
 
6,000
 
0
   
*
 
0
 
*
William Rosenberg
4,000
   
*
 
2,000
   
*
 
4,000
 
2,000
 
0
   
*
 
0
 
*
Robert Rosenblatt
40,000
   
*
 
20,000
   
*
 
40,000
 
20,000
 
0
   
*
 
0
 
*
Julian Seewald
100,000
   
*
 
50,000
   
*
 
100,000
 
50,000
 
0
   
*
 
0
 
*
Brian Sowa
12,000
   
*
 
6,000
   
*
 
12,000
 
6,000
 
0
   
*
 
0
 
*
Henry Steinmetz
10,000
   
*
 
5,000
   
*
 
10,000
 
5,000
 
0
   
*
 
0
 
*
Tama Tax Planning and Finances Ltd.(4)
10,000
   
*
 
5,000
   
*
 
10,000
 
5,000
 
0
   
*
 
0
 
*
Guy Zahavi
40,000
   
*
 
20,000
   
*
 
40,000
 
20,000
 
0
   
*
 
0
 
*
*Represents less than 1%
 
(1)Patrick Salisbury, managing partner of Caswell LLC has sole voting and investment power over shares held by Caswell LLC
(2)Glenn Bagwell, manager of Glenwood Partners, L.P., has sole voting and investment power over shares held by Glenwood  Partners, L.P.
(3)Elchanan (Nani) Maoz , owner of Maoz Everest Holdings Ltd. has sole voting and investment power over shares held by Maoz Everest Holdings Ltd.
(4)Erez Sagiv, owner of Tama Tax Planning and Finances Ltd. (“Tama”) has sole voting and investment power over shares held by Tama.
 
 
 
You should read the following discussion and analysis of our financial condition and results of operations together with the section entitled “Selected Financial Data” and our financial statements and related notes appearing in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this prospectus, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
 
Overview
 
The Company was incorporated under the laws if the State of Wyoming on August 22, 2016.

The Company is a startup preclinical stage biotechnology company engaged in developing solutions to combat neuro-degenerative diseases and neuronal injuries. The Company is working to develop what it believes to be a novel stem cell system to repair and regenerate neuronal damage. We believe that the system incorporates unique stem cell treatments, cell modifications and a novel delivery system. Our preliminary focus is on Traumatic Brain Injury, Parkinson’s, Huntington’s disease and Alzheimer’s, although we believe it can be effective in dealing with strokes and spinal cord injuries as well.

The Company raised an aggregate of $281,000 between November 2, 2016 and January 27, 2017 from 37 accredited investors in a private placement offering under Regulation D.

On December 14, 2016, the Company entered into the License Agreement with Ariel, a wholly owned subsidiary of AU. Under the terms of the License Agreement, the Company paid Ariel $100,000 to fund and further research for 12 months (with an option to extend such research financing and research period) by Professor Danny Baranes, the principal investigator and his research team relating to cell treatment with conditioned medium for neuronal tissue regeneration and repair. In consideration therefor and for other payments under the License Agreement, the Company received an exclusive worldwide royalty- bearing license in Ariel patents and know-how to develop and commercialize products based on or incorporating conditioned medium for neuronal tissue regeneration and/or repair, resulting from Ariel’s research or technology or the Company’s research funding (the “Products”).

Under the License Agreement, the Company is required to use its best efforts to develop and commercialize the Products in accordance with development milestones set forth in the Agreement. The License Agreement provides that the Company make royalty payments of 4% of net sales (which may be increased if any patent is challenged by the Company or its affiliates or decreased if there is a valid patent claim) within 30 days of each calendar quarter for the later of (i) 15 years from the date of the first sale in a country and (ii) until the last to expire of Ariel’s patents in a country. The Company may provide a sublicense for cash in a bonafide arm’s length transaction. The Company agreed to pay Ariel 15% of any consideration received by the Company in connection with any such sublicense (except royalties on net sales) within 30 days of receipt. The Company is also required to make milestone payments of (i) $130,000 upon the successful completion of clinical FDA Phase II trials and (ii) $390,000 upon the successful completion of clinical FDA Phase III trials, within 6 months of completion. Any late payments under the License Agreement will bear interest at 3% plus LIBOR.

Upon the earliest occurrence of the Company’s (or any affiliate’s of the Company): (i) underwritten public offering with proceeds of at least $25 million, (ii) consolidation, merger or reorganization, or (iii) sale of all or substantially all of its shares or assets, the Company is obligated to issue to Ariel an immediately exercisable warrant for that number of shares equal to 4% of (a) the issued and outstanding shares of the Company at the time of issuance. The License Agreement provides that the Company is obligated, at its expense, to register shares exercised pursuant to the warrant by Ariel within 6 months of a request by Ariel by either “piggyback” or a demand registration.

Patent expenses incurred by Ariel under the License Agreement will be reimbursed by the Company. Any infringement action instituted by a party to the License Agreement that results in a recovery in excess of such party’s expenses will belong 85% to the party bringing such action and 15% to the other party.

Under the License Agreement, at the Company's discretion, Ariel will transfer its technology to the Company upon the earliest to occur of (i) a successful Phase II FDA trial of a product developed under the Agreement; (ii) the acquisition of the Company by a third party of at least 45% of the share capital of the Company in a bonafide transaction valued at least at $100 million and the assumption of the License Agreement by such third party, or (iii) Ariel's written consent.

The License Agreement provides that each of the Company and Ariel are required to keep the other party’s proprietary information confidential for the longer of (i) the term of the License Agreement and seven years from the date of disclosure. The License Agreement shall continue in effect until all of the Company’s payment obligations under the Agreement have been made. After the expiration of the License Agreement, the Company will have a non-exclusive worldwide license to the Ariel technology. The Company can terminate the License Agreement for any reason upon 60 days prior written notice in which event Ariel will be required to reimburse the Company for any unused research funds. The License Agreement will terminate upon a material breach of either party that is not cured in 30 days from notice thereof, or by bankruptcy, dissolution, liquidation or the discontinuance of business. Ariel may immediately terminate the License Agreement upon a challenge to its patent validity by the Company or an affiliate of the Company. Without Ariel’s prior written consent, the Company may not assign the License Agreement except to an affiliate or to a successor entity in a merger or acquisition provided the assignee assumes the License Agreement obligations.

We qualify as an "emerging growth company" under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to: 
 
 
have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; 
 
comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); 
 
submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay" and "say-on-frequency;" and 
 
disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. 
 
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. 
 
We will remain an "emerging growth company" for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. 

We intend to file a Form 8-A to register our common stock under Section 12(g) of the Securities Exchange Act of 1934 following the effectiveness of the registration statement of which this prospectus is a part.

 

Plan of Operations

To date we have not yet developed any candidate for product development nor generated any revenue from the sales of products or services.

In the next 12 months, we plan to have our research team further develop our proprietary coral based and non-coral based conditioned medium for tissue regeneration and repair and conduct experiments that will present its efficacy in neuronal damage recovery as it relates to our product candidate.
 
To date we have produced approximately 50 types of conditioned medium based on corals skeleton and other proprietary effectors and we are now analyzing their content and measuring their efficacy in neuronal damage recovery.

On January 9, 2017, Ariel filed a US provisional patent application related to our neural cell development research. A U.S. provisional patent application provides the means to establish an early effective filing date for a later filed non-provisional patent application. It does not mature into an issued patent unless the applicant files a regular non-provisional patent application within one year. Subject to positive efficacy findings, we currently intend to file for a non-provisional application within one year of the filing of the provisional application.

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

We will continue exploring sources of additional funding, including available grants that we have preliminarily identified as well as other available avenues of debt and equity financings.
 
There is substantial doubt that we can continue as an on-going business after the next twelve months unless we obtain additional capital to pay our expenditures. We do not currently have sufficient resources to accomplish all of the conditions necessary for us to generate revenue.
 
Results of Operations
 
Revenue

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

Research and Development Expenses

During the year ended December 31, 2016, the Company incurred research and development costs of $156,000, which amount includes $100,000 paid upon entering into the License Agreement and $56,000 recorded as stock based compensation in respect to certain stock awards.
 
We expect our research and development expenses to increase significantly over the next several years as if and when we increase personnel costs, conduct clinical trials and prepare regulatory filings for our product candidate.

Results of Operations
 
From Inception Date August 22, 2016 through December 31, 2016
 
The following table summarizes our results of operations for the year ended December 31, 2016:

   
Inception Date
(August 22, 2016)
Through
December 31, 2016
Operating expenses:
       
Research and development expenses
   
156,000
 
Professional fees
   
2,792
 
General and administrative expenses
   
6,578
 
Total operating expenses
   
165,370
 
         
Income (loss) from operations
   
(165,370
)
         
Interest expense
   
(3,870
)
         
Net (loss)
   
(169,240
)
 
Revenues
 
During the fiscal year ended December 31, 2016 we did not generate any revenues.

 
Operating Expenses

Total operating expenses for the year ended December 31, 2016 were $169,240 which consisted of professional fees of $2,792, general and administrative expenses of $6,578 and research and development expenses of $156,000. We anticipate our operating expenses to increase substantially as we begin our first full year of operations

Interest Expense, net
 
Interest expense, net was $3,870 for the year ended December 31, 2016. Interest expense represents accrued interest on the convertible note and accretion of the debt discount related thereto of $3,583.
 
Statement of Cash Flows
 
From Inception Date August 22, 2016 through December 31, 2016
 
The following table summarizes our cash flows for the period presented:
       
   
Inception Date
(August 22, 2016)
Through
December 31, 2016
 
Cash used in operating activities
   $ (106,772  
Cash used in/provided by investing activities
    -  
Cash provided by financing activities
    262,014  
Net increase in cash and cash equivalents
   $ 155,242  
 
During the year ended December 31, 2016, our net cash increased by $155,242 which included net cash used in operating activities of $106,772 from our startup in operations and the funding of the License Agreement, and net cash provided by financing activities of $262,014 mainly from the closing of our private placement offering and proceeds received from the issuance of a $10,000 convertible note, as well as issuance of shares to our co-founders.
 
Cash Used in Operating Activities
 
Operating activities for the fiscal year ended December 31, 2016 used cash of $106,772. This includes our net loss of $169,240 less adjustments for non-cash items such as issuance of preferred stock to directors of $2,598, stock awards to Science Advisors of $56,000 and accretion of debt discount of $3,583 as well as an increase to accounts payable of $287 related to interest accrued on our convertible note.
 
Cash Provided by Investing Activities
 
There was no cash provided by investing activities for the year ended December 31, 2016.
 
Cash Provided by Financing Activities
 
During the year ended December 31, 2016, financing activities provided cash of $262,014 which consisted of: issuance of share capital of $251,000 from our private placement offering, proceeds of $10,000 received from the issuance of a convertible note, and proceeds of $1,014 from shares issued to our co-Founders
 
 
Liquidity and Capital Resources
 
We currently have limited working capital and liquid assets. Our cash and cash equivalents as of December 31, 2016 were $155,242. We are in the early stage of development and have no revenues There are a number of conditions that we must satisfy before we will be able to commercialize our potential product and generate revenue, including successful development of a product candidate, which includes clinical trials, FDA approval, demonstration of effectiveness sufficient to generate commercial orders by customers, establishing production capabilities as well as effective marketing and sales capabilities for our product. While we are currently seeking additional funding, we do not currently have sufficient resources to accomplish any of these conditions necessary for us to generate revenue. We will therefore require substantial additional funds in order to continue to conduct the research and development and regulatory clearance and approval activities necessary to bring our product to market and to establish effective marketing and sales capabilities, as well as and to develop other product candidates.
 
We will have to continue to rely on equity and debt financing. There can be no assurance that financing, whether debt or equity, will always be available to us in the amount required at any particular time or for any particular period or, if available, that it can be obtained on terms satisfactory to us. Without additional financing, we do not believe our resources will be sufficient to meet our operating and capital needs beyond the fourth quarter of 2017.
 
Going Concern
 
Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, does not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. Our report from our independent registered public accounting firm for the fiscal year ended December 31, 2016 includes an explanatory paragraph stating the Company has negative working capital and has not generated revenues to cover operating expenses.  These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially and adversely affected and we may be unable to continue as a going concern.
 
Off Balance Sheet Arrangements
 
We have no off-balance sheet arrangements.
 
Critical Accounting Policies and Estimates
 
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements that have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). This preparation requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. U.S. GAAP provides the framework from which to make these estimates, assumption and disclosures. We choose accounting policies within U.S. GAAP that management believes are appropriate to accurately and fairly report our operating results and financial position in a consistent manner. Management regularly assesses these policies in light of current and forecasted economic conditions. Actual results could differ from those estimates made by management. While there are a number of significant accounting policies affecting our financial statements, we believe the critical accounting policies involving the most complex, difficult and subjective estimates and judgments are: valuation of non-monetary transactions, stock compensation for services, valuation of options and valuation of income taxes.

Research and Development Costs: The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, “Research and Development”. Research and development costs were $156,000 for the year ended December 31, 2016, including a total of $56,000 allocated to the issuance of stock awards to certain scientific advisors.

Stock-based compensation: For stock-based compensation the Company follows the guidance codified in the Compensation – Stock Compensation Topic of FASB ASC (“ASC 718”). The Company determines the value of stock issued at the date of grant. It also determines at the date of grant, the value of stock at fair market value or the value of services rendered (based on contract or otherwise) whichever is more readily determinable.

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

Recently Issued Accounting Pronouncements

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. ASU 2016-15 requires adoption on a retrospective basis unless it is impracticable to apply, in which case the Company would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently evaluating the effect that adopting this new accounting guidance will have on its condensed consolidated cash flows and related disclosures.

In March 2016, the FASB issued ASU No. 2016-09, Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The new guidance will change how companies account for certain aspects of share-based payments to employees. Under existing accounting guidance, tax benefits and certain tax deficiencies arising from the vesting of share-based payments are recorded in additional paid-in-capital. The new guidance will require such benefits or deficiencies to be recognized as income tax benefits or expenses in the statement of operations.  Companies are required to apply the new guidance prospectively. The new standard is effective for fiscal years beginning after December 15, 2016.
 
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the consolidated balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the consolidated income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the potential impact of the adoption of this standard.
 
 
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities . The amendments in this update revise the accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The amendments are effective for annual reporting periods after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the potential impact of the adoption of this standard.
 
In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes . The amendments in this update simplify the presentation of deferred income taxes to require that deferred tax liabilities and assets are classified as noncurrent in a statement of financial position. The amendments are effective for annual reporting periods beginning after December 15, 2016 and interim reporting periods within those annual periods. Early adoption is permitted. We have adopted the provisions of this standard early, the impact of which on our consolidated financial statements was not significant.
 
In April 2015, the FASB issued ASU 2015-03, Interest- Imputation of Interest (Subtopic 835-30) . This guidance is to simplify the presentation of debt issuance costs by recognizing a debt liability in the balance sheet as a direct deduction from that debt liability consistent with the presentation of a debt discount. The amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. We have adopted this standard and the adoption did not have a material impact on our financial position.

 
Market Information
 
We currently lack a public market for our common stock. Our common stock is not traded on any national exchange. The fixed price of $0.25 has been arbitrarily determined as the selling price. The selling stockholders may sell shares of our common stock only at a fixed price of $0.25 per share until such time, if at all, that our shares are quoted on the Over-The-Counter Bulletin Board and thereafter at prevailing market prices or in privately negotiated prices.
 
The Company intends to apply for approval from FINRA for our common stock to be eligible for trading on the Over-The-Counter Bulletin Board. However, a market has not yet developed. There is no assurance that the Company will receive such approval, and if it does receive such approval, there can be no assurance that a trading market will develop, or, if developed, that it will be sustained.
 
As of April 21, 2017 , there were approximately 41 stockholders of record of our common stock.
 
Dividend Policy
 
The Company has never paid dividends on its common stock and does not anticipate that it will pay dividends in the foreseeable future. It intends to use any future earnings for the expansion of its business. Any future determination of applicable dividends will be made at the discretion of the board of directors and will depend on the results of operations, financial condition, capital requirements and other factors deemed relevant.
 
 
The following table provides information regarding our equity compensation plans as of December 31, 2016:
 
Equity Compensation Plan Information
 
Plan category
 
Number of securities to be issued upon exercise of outstanding options, warrants and rights (1)
   
Weighted-average exercise price of outstanding options, warrants and rights
   
Number of securities remaining available for future issuance under equity compensation plans
 
                   
Equity compensation plans approved by security holders
   
-
                 
Equity compensation plans not approved by security holders
   
1,142,000
     
0.40
     
8,858,000
 
 
(1)
Represents (i) 562,000 share purchase warrants exercisable at $0.40 per share and (ii) a total of 580,000 stock awards which vest as to 50% in fiscal 2017 and 50% in fiscal 2018.
 
BUSINESS
 
Our Business

BioLabMart Inc. was incorporated under the laws if the State of Wyoming on August 22, 2016.

BioLabMart Inc. is a startup preclinical stage biotechnology company engaged in developing solutions to combat neuro-degenerative diseases and neuronal injuries. The Company is working to develop a novel stem cell system to repair and regenerate neuronal damage. We believe that the system incorporates unique stem cell treatments, cell modifications and a novel delivery system. Our preliminary focus is on Traumatic

 
The Company has no employees and presently relies heavily on its two co-founders Jonah Meer and Ido Merfeld who are its sole officers and directors to manage its day to day business.

We currently outsource all professional services from third parties to maintain lower operational costs.
 
Neurodegenerative disease is an umbrella term for a range of conditions which primarily affect the neurons in the human brain. Neurons are the building blocks of the nervous system which includes the brain and spinal cord. Neurons normally don’t reproduce or replace themselves, so when they become damaged or die they cannot be replaced by the body. Examples of neurodegenerative diseases include Parkinson’s, Alzheimer’s, and Huntington’s disease. Neurodegenerative diseases are incurable and debilitating conditions that result in progressive degeneration and / or death of nerve cells. This causes problems with movement (called ataxias), or mental functioning (called dementias). Dementias are responsible for the greatest burden of disease with Alzheimer’s representing approximately 60-80% of cases, according to the Alzheimer’s Association

Our Mission and Principal Product

Our mission is to develop and license novel stem cell solutions and systems to repair and regenerate neuronal damage. The Company through its License Agreement with Ariel is working on identifying product candidate solutions. The Company is working to produce and deliver a proprietary modified stem cell system that would be implanted at the target site and will induce neuronal recovery and/or slowdown of degenerative damage.  Research under the License Agreement commenced upon its execution and is currently on course with internally established timelines.

Professor Danny Baranes, the principal investigator, and his research team will carry out further research relating to cell treatment with conditioned medium for neuronal tissue regeneration and repair. A conditioned medium is a cell culture that interactes with cells under certain conditions. Such conditions induce a change in the cultured cells in the way that they secrete to the medium a different set of biological molecules including cytokines, growth factors, exosomes and other signaling molecules. These  secreted biological molecules change the biological impact of the medium on other cells and possibly can promote cell damage recovery, cell proliferation and cell migration.
 
We are researching neuronal, astrocytes and mesenchymal stem cells conditioned medium. To date, we have produced approximately 50 types of conditioned medium based on corals skeleton and other proprietary treatments and we are now analyzing their content and measuring their efficacy in neuronal damage recovery model.

There can be no assurance however that the research will progress or be successful in achieving its goals.
 
Our Market
 
Our market is in the stem cell regeneration therapy market. According to Robin R. Young’s Stem Cell Summit Executive Summary-Analysis and Market Forecasts 2014-2024, the United States stem cell therapy market is estimated to grow from an estimated $237 million in 2013 to more than $5.7 billion in 2020. We believe our novel stem cell system to repair and regenerate neuronal damage, provides us with significant market opportunity.
 
Market Competition
 
The biotechnology and pharmaceutical industries are characterized by intense and rapidly changing competition to develop new technologies and proprietary products, and any product candidates that we successfully develop and commercialize will have to compete with existing therapies and new therapies that may become available in the future. While we believe that our novel approaches and scientific expertise in our ability to produce and deliver cultured growth mediums containing molecules of superior regenerative efficacy will provide us with competitive advantages, we face potential competition from many different sources, including larger and better-funded pharmaceutical, specialty pharmaceutical and biotechnology companies, as well as from academic institutions and governmental agencies and public and private research institutions that may develop potentially competitive products or technologies. To the extent that we develop product candidates for indications with larger patient populations, we expect to experience particularly intense competition from larger and better funded pharmaceutical and biotechnology companies. Any product candidate that we may develop will compete with such larger and better funded pharmaceutical and biotechnology companies, established drugs or solutions and new drug candidates being developed by others, that may currently be in clinical trials.
 
Currently there are no approved products for our lead product candidate. We believe the key competitive factors that will affect the success of our product candidate, if approved, are likely to be their efficacy, safety, convenience of administration and delivery, price, the level of generic competition and the availability of reimbursement from government and other third-party payors.
 
Many of our potential competitors, alone or with their strategic partners, have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of treatments and the commercialization of those treatments. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.
 
Research and Development
 
The Company spent $156,000 since inception on research and development activities.
 
Licensed Intellectual Property
 
Pursuant to the License Agreement the Company has an exclusive, worldwide, royalty bearing license for the sole purpose of developing, manufacturing, using, offering for sale and selling the Products. Ariel has filed the following provisional patent application:

U.S. Patent
Application No.
Application
Filing Date
 
Status
U.S.
Patent No.
 
Issue Date
 
Subject Matter
62/443,826
(Provisional)
1/9/2017
Pending
N/A
N/A
Methods, compositions and devices related to neural cell development
 
 
A U.S. provisional patent application provides the means to establish an early effective filing date for a later filed nonprovisional patent application.
 
As our research progresses we or Ariel intend to file for additional patents. Additionally, we expect to file for trademarks.

 
Government Regulation

The research, testing, manufacturing, labeling, approval, selling, import, export, marketing, and distribution of drug products, including biologics, are subject to extensive regulation by the FDA and other regulatory authorities in the United States. We are not permitted to market any biological drug product in the United States until we receive a Biologics License from the FDA. We have not previously submitted a BLA to the FDA, or similar approval filings to comparable foreign authorities. A BLA must include extensive preclinical and clinical data and supporting information to establish that the product candidate is safe, pure, and potent for each desired indication. The BLA must also include significant information regarding the chemistry, manufacturing, and controls for the product, and the manufacturing facilities must complete a successful pre- license inspection. We expect the novel nature of our product candidates to create further challenges in obtaining regulatory approval. The FDA may also require a panel of experts, referred to as an Advisory Committee, to deliberate on the adequacy of the safety and efficacy data to support licensure. The opinion of the Advisory Committee, although not binding, may have a significant impact on our ability to obtain licensure of the product candidates based on the completed clinical trials. Accordingly, the regulatory approval pathway for our product candidates may be uncertain, complex, expensive, and lengthy, and approval may not be obtained.

We will also be required to comply with costly and time-consuming compliance by foreign regulatory authorities if we want to sell our products outside of the United States.

Ethical, social and legal concerns about research regarding stem cells, could result in regulations restricting or prohibiting the processes we may use. Federal and state agencies, congressional committees and foreign governments have expressed interest in further regulating biotechnology. More restrictive regulations or claims that our products are unsafe or pose a hazard could prevent us from commercializing any products. New government requirements may be established that could delay or prevent regulatory approval of our product candidates under development. It is impossible to predict whether legislative changes will be enacted, regulations, policies or guidance changed, or interpretations by agencies or courts changed, or what the impact of such changes, if any, may be.

The FDA Review, Clearance and Approval Process

In the USA, an investigational new drug application (“IND”) is required for nearly all new drugs entering clinical trials. The IND comprises three sections: chemistry and manufacturing controls (“CMC”), clinical study design, and nonclinical studies. The nonclinical studies section mainly concerns safety and toxicity in animals using the clinically intended route of administration and a product very similar, if not identical, to that which will be used in the clinic. This section typically includes a description of efficacy studies in relevant disease models. The CMC section pertains to manufacturing processes and quality control systems for ensuring consistency and the absence of potentially deleterious agents in the final product. Each of the sections of the IND must provide reviewers with a sufficient amount of detail to determine the potential safety of any product before allowing evaluation in humans.

The regulatory route for licensure of an eventual drug based on MSC-CM will likely require a Biological License Application (BLA) as opposed to a New Drug Application (“NDA”), the latter which generally pertains to drugs of well defined composition. Within the FDA there are two centers responsible for oversight and approval of new drugs, The Center for Biologics Evaluation and Research (“CBER”) and the Center for Drug Evaluation and Research (“CDER”). Jurisdictional oversight of biologics generally falls to CBER: with important exceptions for less complex entities, such as monoclonal antibodies and recombinant proteins. Therefore, the complexity of MSC-CM whether wholly or partially fractioned, likely will place it under the review of CBER.

Clinical Trials

The first step, a preclinical phase, is to find a promising agent, which involves taking advantage of the advances made in understanding a disease, pharmacology, computer science, and chemistry. Breaking down a disease process into its components can provide clues for targeting drug development. For example, if an enzyme is determined to be a key component of a disease process, a researcher might seek ways to inhibit this enzyme. Advances in basic science might help by ascertaining the active enzyme site. Numerous compounds might be synthesized and tested before a promising agent emerges. Computer modeling often helps select what compounds might be the most promising.

The next step before attempting a clinical trial in humans is to test the drug in living animals, usually rodents. The FDA requires that certain animal tests be conducted before humans are exposed to a new molecular entity. The objectives of early in vivo testing are to demonstrate the safety of the proposed medication. For example, tests should prove that the compound does not cause chromosomal damage and is not toxic at the doses that would most likely be effective. The results of these tests are used to support the IND application that is filed with the FDA. The IND application includes chemical and manufacturing data, animal test results, including pharmacology and safety data, the rationale for testing a new compound in humans, strategies for protection of human volunteers, and a plan for clinical testing. If the FDA is satisfied with the documentation, the stage is set for phase 1 clinical trials.

Phase 1 studies focus on the safety and pharmacology of a compound. During this stage low doses of a compound are administered to a small group of healthy volunteers who are closely supervised. In cases of severe or life-threatening illnesses, volunteers with the disease may be used. Generally, 20 to 100 volunteers are enrolled in a phase 1 trial. These studies usually start with very low doses, which are gradually increased. On average, about two thirds of phase 1 compounds will be found safe enough to progress to phase 2.

Phase 2 studies examine the effectiveness of a compound. To avoid unnecessarily exposing a human volunteer to a potentially harmful substance, studies are based on an analysis of the fewest volunteers needed to provide sufficient statistical power to determine efficacy. Typically, phase 2 studies involve 100 to 300 patients who suffer from the condition the new drug is intended to treat. During phase 2 studies, researchers seek to determine the effective dose, the method of delivery (eg, oral or intravenous), and the dosing interval, as well as to reconfirm product safety. Patients in this stage are monitored carefully and assessed continuously. A substantial number of these drug trials are discontinued during phase 2 studies. Some drugs turn out to be ineffective, while others have safety problems or intolerable side effects.

Phase 3 trials are the final step before seeking FDA approval. During phase 3, researchers try to confirm previous findings in a larger population. These studies usually last from 2 to 10 years and involve thousands of patients across multiple sites. These studies are used to demonstrate further safety and effectiveness and to determine the best dosage. Despite the intense scrutiny, a product receives before undergoing expensive and extensive phase 3 testing, approximately 10% of medications fail in phase 3 trials.

If a drug survives the clinical trials, an NDA is submitted to the FDA. An NDA contains all the preclinical and clinical information obtained during the testing phase. The application contains information on the chemical makeup and manufacturing process, pharmacology and toxicity of the compound, human pharmacokinetics, results of the clinical trials, and proposed labeling. An NDA can include experience with the medication from outside the United States as well as external studies related to the drug.

After receiving an NDA, the FDA completes an independent review and makes its recommendations. The Prescription Drug User Fee Act of 1992 (PDUFA) was designed to help shorten the review time. This act allowed the agency to collect user fees from pharmaceutical companies as financial support to enhance the review process. The 1992 act specifies that the FDA reviews a standard drug application within 12 months and a priority application within 6 months. Application for drugs similar to those on the market are considered standard, whereas priority applications represent drugs offering important advances in addition to existing treatments. If during the review the FDA staff feels there is a need for additional information or corrections, they will make a written request to the applicant. During the review process it is not unusual for the FDA to interact with the applicant staff.

Once the review is complete, the NDA might be approved or rejected. If the drug is not approved, the applicant is given the reasons why and what information could be provided to make the application acceptable. Sometimes the FDA makes a tentative approval recommendation, requesting that a minor deficiency or labeling issue be corrected before final approval. Once a drug is approved, it can be marketed.

 
 
Some approvals contain conditions that must be met after initial marketing, such as conducting additional clinical studies. For example, the FDA might request a postmarketing, or phase 4, study to examine the risks and benefits of the new drug in a different population or to conduct special monitoring in a high-risk population. Alternatively, a phase 4 study might be initiated by the sponsor to assess such issues as the longer term effects of drug exposure, to optimize the dose for marketing, to evaluate the effects in pediatric patients, or to examine the effectiveness of the drug for additional indications. Postmarketing surveillance is important, because even the most well-designed phase 3 studies might not uncover every problem that could become apparent once a product is widely used. Furthermore, the new product might be more widely used by groups that might not have been well studied in the clinical trials, such as elderly patients. A crucial element in this process is that physicians report any untoward complications. The FDA has set up a medical reporting program called Medwatch to track serious adverse events. The manufacturer must report adverse drug reactions at quarterly intervals for the first 3 years after approval including a special report for any serious and unexpected adverse reactions.
 
Employees
 
As of April 21 , 2017, we do not have any employees. Our two executive officers are responsible for the day-to-day operations of our company.
 
Legal Proceedings
 
There are no pending legal proceedings to which we are a party or in which any director, officer or affiliate of ours, any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us. 

 
On October 21, 2016, the Company entered into a month to month lease agreement for office space at 777 Brickell Avenue, Suite 500, Miami, Florida 33131 for $70 per month. The Company believes that this lease is adequate for its current needs, and provides it with the flexibility and ability to expand when necessary.
 
 
Executive Officers, Significant Employees and Directors
 
The following table sets forth the names, ages and positions, of our current executive officers and directors.

Name
 
Age
 
Position
Jonah Meer
 
61
 
Chief Executive Officer, Chief Financial Officer, Secretary and Director
Ido Merfeld
 
52
 
President and Director
 
Our directors are elected for a term of one year and serve such director's successor is duly elected and qualified. Each executive officer serves at the pleasure of the Board.
 
The Company has no nominating, audit or compensation committees at this time. The entire Board participates in the nomination and audit oversight processes and considers executive and director compensation. Given the size of the Company and its stage of development, the entire Board is involved in such decision making processes. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executive officers or directors.
 
Jonah Meer, Chief Executive Officer, Chief Financial Officer, Secretary and a Director
 
Mr. Meer has served as our Chief Executive Officer, Chief Financial Officer, Secretary and a Director since the formation of the Company on September 22, 2016. Mr. Meer is an attorney, accountant and entrepreneur. His career started in 1979 and has been spent both in the financial services industry and in the investment world. He has held many executive and fiduciary roles with numerous private and public companies and entities, including a dozen years as Chief Operating Officer of a U.S. broker dealer. Separately he has served on numerous public and private company boards of directors. Since 1998 he has been CEO of jBroker Global Inc., and since 2013 its successor entity,  jTrade Global LLC, a software  marketing company ,  In 2005 he was appointed by the Equity Committee to serve as a Bankruptcy Trustee in the Southern District of New York to wind down a complex Liquidating Trust, which was finally terminated in 2015. In 2004 Mr. Meer established ANS Investments, a private company investing in special situations and  alternative investments.  In 2016, he founded CubeSquare, a private investment company, to invest in special situations and alternative investments involving public and pre-public companies. Neither ANS Investments nor CubeSquare have a controlling interest in any public company and neither are registered investment advisors. He received his Masters of Law degree from New York University, in addition to holding juris doctor and accounting degrees. As a co-founder and Chief Executive Officer, Mr.Meer is involved with the Company’s day to day operations which led to his appointment to the Board.
 
Ido Merfeld, President and a Director
Mr. Merfeld has served as our President and a Director since the formation of the Company on September 22, 2016. In October 1991, Mr. Merfeld co-founded Ivory Software Systems based in Tel Aviv Israel, a start-up company specializing in servicing the financial services industry both in Israel and abroad (“Ivory”). Ivory developed and maintains software, infrastructure and products that allow large financial institutions to trade in the global securities markets on a real time basis. In 1998 he co-founded jBroker Global Inc., a U.S. company covering the distributing and selling of the group’s products and services in both the US and Europe. In the last 10 years, he has also been involved in the establishment of several other startup companies including the establishment of a new Art Exchange in Luxemburg and a financial education internet company in the UK. In 2014 Mr. Merfeld, resigned as CEO of Ivory to become its Chairman. He now spends time enrolled in the molecular biology department at Ariel University. He previously received his B.A. in Computer Science, Statistics & Economics from Bar-Ilan University in Israel. As a co-founder and President, Mr.Merfeld is involved with the Company’s day to day operations which led to his appointment to the Board.

Scientific Advisors

Professor Danny Baranes
 
Professor Baranes is Head of the Department of Molecular Biology at Ariel University, and the Principal Investigator for research in connection with the License Agreement. Professor Baranes did his post-doctoral fellowship in neuroscience in the lab of the Nobel laureate Dr. Eric Kandel at Columbia University. Professor Baranes continued on to McGill University, and returned to Israel in 2000 where he has held several positions at Ben Gurion University before joining Ariel University in 2009. He has received numerous international awards, published dozens of articles in leading international scientific journals as well having given numerous lectures and presentations. Professor Baranes received his PhD. in Biochemistry from Hebrew University.

 
Dr. Liat Hammer
 
Dr. Hammer is currently Lab Manager at Ariel University involved in the management of various projects in the field of tissue engineering in vitro and in vivo (brain, cardiomyocyte, liver) and supervising the work of PhDs and M.Sc. students.

Previously, after receiving her PhD. in 2007, Dr. Hammer spent 6 years as a senior researcher for a biopharmaceutical company developing an innovative strategy to heal diabetic wounds and ulcers. In that capacity she also exercised supervisory positions and was responsible for coordination and strategic planning, arranging all relevant data, writing patent drafts and patents maintenance. She received her PhD. in Molecular & Cell Biology from Bar-Ilan University in Israel.
 
Board Observer
 
Dr. Yitshak Francis was appointed by Ariel, as provided by the License Agreement, as a non-voting Board observer relating to the License Agreement between Ariel and the Company. Dr. Yitshak ("Itsik") Francis received his Biology undergraduate degree from the Technion and his PhD in Medical Molecular Biology from University College London. After his PhD, he joined Columbia University as a post doctorate and after two years became an Associate Research Scientist. During his role as an Associate Research Scientist, he worked on a variety of drug development projects. Additionally, he was a co-founder and CEO of Citta Pharmaceuticals, a Columbia University spin-off biotechnology company that develops drugs for treating Alzheimer’s disease. During his role as a CEO, he was responsible for business development, management and fundraising. Currently Dr. Francis serves as Director of Business Development at Ariel Scientific Innovations (Ariel University’s tech transfer company), where he facilitates the translation of academic life science projects to the industry.
 
Director Independence
 
Our Board of Directors does not include any independent directors.
 
Family Relationships
 
There are no family relationships among our directors and officers.
 
Involvement in legal proceedings
 
There are no legal proceedings that have occurred within the past ten years concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one's participation in the securities or banking industries, or a finding of securities or commodities law violations.
 
 

The following table provides certain information regarding compensation awarded to, earned by or paid to persons serving as our Chief Executive Officer during fiscal 2016 (a "named executive officer").
 
Summary Compensation Table

   Name and Principal
 
Fiscal
         
Option awards
         
All other
Compensation
       
Position  
Year
   
Salary ($)
   
($)
   
Bonus ($)
   
($)(1)
   
Total ($)
 
Jonah Meer
 
2016
      -      -       -      1,299     1,299  
                                     
Chief Executive Officer
                                   
 
(1)  
Represents fair value of voting control of preferred stock purchased by directors, upon formation of Company, in excess of cost.
 
 
2016 Stock Option and Stock Award
 
On December 14, 2016, the Board adopted the BioLabMart Inc 2016 Stock Option and Stock Award Plan (the “Plan”). The Plan provides for the award of stock options (incentive and non-qualified), stock awards and stock appreciation rights to officers, directors, employees and consultants who provide services to the Company. The terms of awards under the Plan are made by the Administrator of the Plan appointed by the Company’s Board of Directors (the “Board”), or in the absence of an Administrator, by the Board. The Company has reserved 10 million shares for issuance under the Plan.
 
On December 14, 2016, the Board awarded to each of its Science Advisors, Prof. Danny Baranes and Dr. Liat Hammer, 440,000 shares of common stock of which 150,000 shares vested on December 14, 2016, 145,000 shares vest on December 14, 2017, and 145,000 shares vest on December 14, 2018, provided such advisors are still providing services to the Company.
 
Outstanding Equity Awards
 
Our directors or executive officers do not hold any unexercised options, stock that had not vested, or equity incentive plan awards.
 
Compensation of Directors
 
During the year ended December 31, 2016, no compensation has been paid to our directors in consideration for their services rendered in their capacities as directors.
 

At inception on August 22, 2016, the Company issued 5,060,000 shares of common stock at par value and 1,000 shares of Series A Preferred Stock at par value to Mr. Meer, the Company’s CEO, CFO and Secretary for cash totaling $507 of which $506 was paid in respect to the issuance of the common stock and $1 was paid for the Series A Preferred stock.

At inception on August 22, 2016, the Company issued 5,060,000 shares of common stock at par value and 1,000 shares of Series A Preferred Stock at par value to Mr. Ido Merfeld, President of the Company, for cash totaling $507, of which $506 was paid in respect to the issuance of the common stock and $1 was paid for the Series A Preferred stock. 
 
Each share of Series A preferred stock has a stated value of $0.001 per share and accrues 4% per annum for determination of liquidation, conversion or redemption. The shares convert at the option of the holder into shares of common stock at the market value of the common. The Series A Preferred vote as a single class and maintain 66 2/3% of the total votes as long as any shares of Series A remain outstanding. The Preferred Series A contain liquidation preference (senior rank to all common); are not to be amended without the holder’s approval.
 
As a result of the super voting rights allocated to the Series A preferred stock, management conducted a valuation of the fair value of the issued shares. 

The Series A preferred shares issued were valued based upon industry specific control premiums and the fair value of the Company’s common stock at the time of the transaction applying Statement of Financial Accounting Standard ASC 820-10-35-37 Fair Value in Financial Instruments as of the issuance date of August 22, 2016.  As a result of the third party valuation of the fair value of the Series A Preferred Stock issued to our officers and directors, the Company recorded additional stock-based compensation as general and administrative expenses of $2,598 during the year ended December 31, 2016 with respect to the shares issued.
 
On September 1, 2016, the Company entered into a convertible debenture agreement with CubeSquare. Jonah Meer, our Chief Executive Officer is the managing member of CubeSquare. Ido Merfeld, our President, is a 25% owner of CubeSquare. Under the debenture agreement, CubeSquare loaned $10,000. Cube Square has agreed to loan the Company an additional $15,000 on the same terms and conditions if requested by the Company. The loan bears interest at 8% per annum (which will increase to 12% if an event of default as described in the debenture agreement occurs) and is due on July 1, 2017, or immediately upon an event of default. Interest is payable, at CubeSquare’s option, in cash or common stock. Any portion of the loan and unpaid interest are convertible at any time at the option of CubeSquare into shares of common stock of the Company at a conversion price per share of the greater of (i) $0.0625, if the Company’s shares are not trading on a public market, and (ii) if the Company’s shares are listed for trading on a public market, an amount equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days.
 
So long as the loan is outstanding, the Company may not merge, reorganize, restructure, reverse split its stock, consolidate or sell all or substantially all of its assets without giving seven days prior written notice to CubeSquare, in which case, CubeSquare can put the note to the Company at 125% of the then outstanding principal and interest.
 
The debenture agreement also provides for anti-dilution protection (with certain exceptions) if the Company engages in other transactions at a lower price per share. The Company has the right to redeem the loan for 6 months, in whole or in part, at 125% of the principal amount being redeemed and accrued interest thereon. The Company must reserve 150% of the number of shares issuable upon conversion of the loan. The Company may not engage in short sales. Except upon 61 days prior written notice to the Company, CubeSquare may not convert the loan if as a result of such conversion, CubeSquare and its affiliates would own in excess of 9.9% of the total issued and outstanding shares of the Company.

On December 14, 2016, the Board awarded pursuant to the Plan, each of its Science Advisors, Prof. Danny Baranes and Dr. Liat Hammer, 440,000 shares of common stock 150,000 of which shares vested upon issuance, 145,000 shares vest on December 14, 2017 and 145,000 shares each to vest on December 14, 2108, provided the advisors are still providing services to the Company.

 
 
 
The following table sets forth information relating to the beneficial ownership of our common stock as of April 21 , 2017, by:

 
Each of our directors and executive officers;
     
 
All of our directors and officers as a group;
     
 
each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding shares of common stock;
 
The number of shares beneficially owned by each entity, person, director or executive officer is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days. Except as otherwise indicated, the persons named in the table have sole voting and investment power with respect to all shares of common stock held by that person.
 
Shares of our common stock that a person has the right to acquire within 60 days are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise indicated in the footnotes to the table, the information presented in this table is based on 11,544,000 shares of our common stock outstanding as of April 21 , 2017. The business address for each beneficial owner below is c/o BioLabMart Inc., Suite 500, 777 Brickell Avenue, Miami, Florida 33131.

   
 
Amount and Percentage of Beneficial
Name and Address of Beneficial Owner
Ownership
 
Shares
   
%
 
Directors and Executive Officers:
         
 
Jonah Meer
         
       Chief Executive Officer, Chief Financial Officer, Secretary and Director
5,060,000
   
43.83
%(1)
     
         
Ido Merfeld          
       President and Director
5,060,000
   
43.83
%(1)
       
         
           
All executive officers and directors as a group (2 persons):
10,120,000     
87.66
%
           
   (1) Messrs. Meer and Merfeld are the holders of the Company’s issued and outstanding Series A preferred stock For so long as the Class A Preferred Stock is issued and outstanding, the holders of Class A Preferred Stock shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote with the common stock, with the holders of Class A Preferred Stock being entitled to 66 2/3% of the total votes on all such matters.

 
 
There has been no market for our securities.  Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with FINRA for our common stock to be eligible for trading on the Over the Counter Bulletin Board. We do not yet have a market maker who has agreed to file such application.  The selling security holders will be offering the shares of common stock being covered by this prospectus at a fixed price of $0.25. per share until a market develops, if at all, and thereafter at prevailing market prices or privately negotiated prices. The fixed price of $0.25 has been arbitrarily determined. Once a market has developed for our common stock t he selling stockholders may, from time to time, sell, transfer, or otherwise dispose of any or all of their Shares on any stock exchange, market, or trading facility on which the Shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. The selling stockholders may use any one or more of the following methods when disposing of Shares:
 
 
on any national securities exchange or quotation service on which the Shares may be listed or quoted at the time of sale;
     
 
in the over-the-counter market;
     
 
in the transactions otherwise than on these exchanges or systems or in the over-the-counter market;
     
 
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
     
 
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
     
 
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
     
 
an exchange distribution in accordance with the rules of the applicable exchange;
     
 
privately negotiated transactions;
     
 
short sales;
     
 
through the listing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise;
     
 
broker-dealers may agree with the selling stockholders to sell a specified number of such Shares at a stipulated price;
     
 
a combination of any such methods of sale; and
     
 
any other method permitted pursuant to applicable law.
 
The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.
 
If the selling stockholders effect such transactions by selling Shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions, or commissions from the selling stockholders or commissions from purchasers of the Shares  for whom they may act as agent or to whom they may sell as principal (which discounts, concessions, or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the Shares, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short and deliver Shares to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.
 
The selling stockholders and any broker-dealers or agents participating in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such distributions. In such event, any commissions received, or any discounts or concessions allowed to, such broker-dealers or agents may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
 
Under the securities laws of some states, the Shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the Shares may not be sold unless such Shares and Warrants have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
 
 
There can be no assurance that any selling stockholder will sell any or all of the Shares registered pursuant to this registration statement of which this prospectus forms a part.
 
The selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act, and the rules and regulations thereunder, including, without limitation, the anti-manipulation rules of Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.
 
In addition, to the extent applicable we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act. We have agreed to indemnify the selling stockholders against liabilities to the extent such liabilities arise from an untrue statement or alleged untrue statement in a registration statement or prospectus filed under the Securities Act.
 
The Company does not believe that any other selling stockholder is an “underwriter” within the meaning of the Securities Act.
 
Neither we nor the selling stockholders can presently estimate the amount of compensation that any agent will receive. We know of no existing arrangements between the selling stockholders, any other stockholder, broker, dealer, underwriter, or agent relating to the sale or distribution of the shares offered by this prospectus. At the time a particular offer of shares is made, a prospectus supplement, if required, will be distributed that will set forth the names of any agents, underwriters, or dealers and any compensation from the selling stockholder, and any other required information.
 
We will pay all of the expenses incident to the registration, offering, and sale of the shares to the public other than commissions or discounts of underwriters, broker-dealers, or agents. Any commissions, discounts or other fees payable to brokers-dealers in connection with any sale of the shares of common stock will be borne by the selling stockholders, the purchasers participating in such transaction, or both.
 
We and the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations under it, including, without limitation, Rule 10b-5.
 
This offering will terminate on the date that all shares offered by this prospectus have been sold by the selling stockholders.
 
Our common stock is not quoted on any exchange and there is no market for our common stock.
 
Penny Stock Rules
 
The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “institutional accredited investors.” The term “institutional accredited investor” refers generally to those accredited investors who are not natural persons and fall into one of the categories of accredited investor specified in subparagraphs (1), (2), (3), (7) or (8) of Rule 501 of Regulation D promulgated under the Securities Act, including institutions with assets in excess of $5,000,000.
 
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form required by the SEC, and impose a waiting period of two business days before effecting the transaction. The risk disclosure document provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account.
 
The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.
 
These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
 
 
 
General
 
The following description of our capital stock is intended as a summary only. We refer you to our articles of incorporation and bylaws which have been filed as exhibits to the registration statement of which this prospectus is a part, and to the applicable provisions of the Wyoming General Corporation Law.
 
Our authorized capital stock consists of 100 million shares of common stock par value $0.0001per share and 10,000 shares of preferred stock, par value $0.001. As of April 21, 2017, there were 11,544,000 shares of our common stock and 2,000 shares of our Series A preferred stock issued and outstanding.
 
Common Stock

Each holder of shares of our common stock is entitled to one vote for each share held of record on all matters submitted to the vote of stockholders, including the election of directors. The holders of shares of common stock have no preemptive, conversion, subscription or cumulative voting rights. There is no provision in our articles of incorporation or bylaws that would delay, defer or prevent a change in control of our company.

Preferred Stock

Our Board may issue preferred stock in one or more series without shareholder approval. Our Board may determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could make it more difficult for a third party to acquire, or could discourage a third party from acquiring, a majority of our outstanding voting stock. The rights of holders of our common stock described above, will be subject to, and may be adversely affected by, the rights of any preferred stock that we may designate and issue in the future.
 
On September 20, 2016, the Company filed a Certificate of Designation creating a series of preferred stock consisting of 10,000 shares and designated as the Series A Preferred Stock. The Series A Preferred Stock is redeemable at the option of the Company at any time, in whole or in part, upon 10 trading days prior notice, at a price of $1.00 per share plus 4% per annum from the date of issuance (the “Stated Value”). The holders of the Series A Preferred Stock are entitled to a liquidation preference equal to the Stated Value, prior to the holders of other preferred stock or common stock. The holders of the Series A Preferred Stock have the right to convert such stock into common stock at a conversion rate equal to the Stated Value as of the conversion date divided by the average closing price of the common stock for the five previous trading days. The Company is required to reserve sufficient number of shares for the conversion of the Series A Preferred Stock. The holders of Class A Preferred Stock shall vote together as a single class with the holders of the Company’s common stock and the holders of any other class or series of shares entitled to vote with the common stock, with the holders of Class A Preferred Stock being entitled to 66 2/3% of the total votes on all such matters, regardless of the actual number of shares of Class A Preferred Stock then outstanding.

Warrants

As of  April 21 , 2017 warrants to purchase a total of 562,000 shares of our common stock at an exercise price of $0.40 per share were outstanding. The warrants expire December 31, 2019.

If the shares issuable under the Warrant are not registered, the Warrant may be exercised on a cashless basis. The exercise price of the Warrant is subject to adjustment for stock dividends and splits and in the event of certain fundamental corporate transactions of the Company, the warrant holder is entitled to alternate consideration. Except upon 61 days prior written notice to the Company, the warrant may not be exercised if giving effect to such exercise, the holder thereof will own in excess of 9.9% of the Company’s issued and outstanding common stock.
 
Anti-Takeover Effects of Our Articles of Incorporation and Wyoming General Corporation Law
 
Our Articles of Incorporation provide for the issuance of up to 100 million shares of our common stock par value $0.0001. Our authorized but unissued shares of common stock will be available for future issuance without stockholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. Our board has the authority to issue an unlimited additional amount of shares. The existence of unlimited authorized but unissued shares of common stock could render more difficult or discourage an attempt to obtain control of a majority of our common stock by means of a proxy contest, tender offer, merger or otherwise.
 
Though not now, we may be or in the future we may become subject to Wyoming’s control share law. The law focuses on the acquisition of a “controlling interest” which means the ownership of outstanding voting shares sufficient, but for the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors: (i) one-fifth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more. The ability to exercise such voting power may be direct or indirect, as well as individual or in association with others. The effect of the control share law is that the acquiring person, and those acting in association with it, obtains only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of stockholders. The control share law contemplates that voting rights will be considered only once by the other stockholders. Thus, there is no authority to strip voting rights from the control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed by the control share law. If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval of voting rights is entitled to demand fair value for such stockholder’s shares.
 
Wyoming’s control share law may have the effect of discouraging takeovers of the corporation. In addition to the control share law, Wyoming has a business combination law which prohibits certain business combinations between Wyoming corporations and “interested stockholders” for three years after the “interested stockholder” first becomes an “interested stockholder,” unless the corporation’s board of directors approves the combination in advance. For purposes of Wyoming law, an “interested stockholder” is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (ii) an affiliate or associate of the corporation and at any time within the three previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term “business combination” is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquiror to use the corporation’s assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders. The effect of Wyoming’s business combination law is to potentially discourage parties interested in taking control of the Company from doing so if it cannot obtain the approval of our board of directors.
 
 
U.S. HOLDERS AND NON-U.S. HOLDERS OF OUR COMMON STOCK AND WARRANTS
 
The following discussion is a summary of the material U.S. federal income tax consequences to U.S. Holders and Non-U.S. Holders (each as defined below and, together “Holders”) of the purchase, ownership and disposition of our Securities. This does not purport to be a complete analysis of all potential tax effects to Holders of Securities. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or foreign tax laws are not included in this discussion, and Holders should consult their own tax advisors as to these matters. This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), final, temporary and proposed Treasury Regulations promulgated thereunder, judicial decisions and administrative pronouncements of the Internal Revenue Service (the “IRS”), in effect as of the date of this offering. These authorities may change or be subject to differing interpretations. Any such change may be applied retroactively in a manner that could adversely affect a Holder. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance that the IRS or a court will not take a contrary position regarding the tax consequences of the purchase, ownership and disposition of Securities.
 
This discussion is limited to Holders that hold Securities as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment) and that did not purchase our common stock and Warrants directly from us in the form of investment units in the Offshore Offering and private placement. This discussion does not address all U.S. federal income tax consequences relevant to a Holder’s particular circumstances, including the impact of the unearned income Medicare contribution tax. In addition, it does not address consequences relevant to Holders subject to special rules, including, without limitation:

 
banks, insurance companies and other financial institutions;
     
 
real estate investment trusts or regulated investment companies;
     
 
brokers, dealers or traders in securities;
     
 
“controlled foreign corporations,” “passive foreign investment companies” and corporations that accumulate earnings to avoid U.S. federal income tax;
     
 
partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes;
     
 
tax-exempt organizations or governmental organizations;
     
 
persons who hold or receive our common stock or Warrants pursuant to the exercise of any employee stock option or otherwise as compensation;
     
 
tax-qualified retirement plans;
     
 
U.S. expatriates and certain former citizens or long-term residents of the United States;
     
 
U.S. Holders whose functional currency is not the United States dollar;
     
 
persons holding our common stock or Warrants as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment; and
     
 
persons subject to the alternative minimum tax.
 
If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our common stock or Warrants, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding our common stock or Warrants and the partners in such partnerships should consult their own tax advisors regarding the U.S. federal income tax consequences to them.
 
 
THIS DISCUSSION IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTENDED AS TAX ADVICE. INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK OR WARRANTS ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
 
U.S. Holders
 
For purposes of this discussion, a “U.S. Holder” is any beneficial owner of Securities that is, for U.S. federal income tax purposes:

 
an individual who is a citizen or resident of the United States;
     
 
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia;
     
 
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
     
 
a trust that (i) is subject to the primary supervision of a U.S. court and the control of one or more U.S. persons (within the meaning of Section 7701(a)(30) of the Code), or (ii) has made a valid election under applicable Treasury Regulations to continue to be treated as a U.S. person.
 
If you are not a U.S. Holder, this section does not apply to you. Please see the discussion under “Non-U.S. Holders” below.
 
Distributions on Common Stock
 
As described in the section captioned “Dividend Policy,” we do not anticipate declaring or paying distributions to Holders of our common stock in the foreseeable future. Any cash distributions we make to U.S. Holders of shares of our common stock generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in our common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the common stock and will be treated as described under “U.S. Holders—Sale or Other Taxable Disposition of Common Stock or Warrants” below.
 
Dividends we pay to a U.S. Holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided the common shares are held for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and certain other holding period requirements are met, dividends we pay to a non-corporate U.S. Holder generally will constitute “qualified dividends” that will be subject to tax at the maximum tax rate accorded to long-term capital gains. Dividends paid by us will generally be treated as income from U.S. sources. U.S. Holders should consult their own tax advisors regarding the holding period and other requirements that must be satisfied in order to qualify for the reduced maximum tax rate on dividends.
 
To the extent distributions are paid in a currency other than the U.S. dollar, for the purposes of applying the above, the amount of a distribution generally will be translated into U.S. dollars based on applicable currency exchange rates at the time the distribution is actually or constructively received by the U.S. Holder, regardless of whether the distribution is converted into U.S. dollars on the date of receipt. If the distribution is converted into U.S. dollars on the date of receipt, a U.S. Holder generally will not be required to recognize foreign currency gain or loss in respect of the distribution. A U.S. Holder‘s tax basis in the foreign currency received will equal the U.S. dollar amount included in income. Any gain or loss realized by a U.S. Holder on a subsequent conversion of the foreign currency for a different U.S. dollar amount generally will be U.S. source ordinary income or loss.
 
Sale or Other Taxable Disposition of Common Stock or Warrants
 
Upon a sale, exchange or other taxable disposition of a Security, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis in the Security. Generally, the amount of gain or loss recognized will be an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition, translated into U.S. dollars based on applicable currency exchange rates at the time such amounts are received or accrued, and (ii) the U.S. Holder’s adjusted tax basis in its disposed common stock or Warrants. A U.S. Holder’s adjusted tax basis in the common stock or Warrants generally will equal the U.S. Holder’s acquisition cost of such security (translated into U.S. dollars based on applicable currency exchange rates at the time of the acquisition) less, in the case of common stock and as described further below, the U.S. dollar value of any prior distributions treated as a return of capital on such stock. If a U.S. Holder purchases or sells common stock and Warrants together in a single transaction in which the purchase price for each of the common stock and Warrants was not separately stated, the U.S. Holder generally would be required to allocate the purchase price among the subject common shares and Warrants so acquired or disposed of, as applicable, based on the relative fair market values of each (at the time of the acquisition or disposition, as applicable). U.S. Holders who purchase or sell common stock and Warrants in a single transaction should consult with their tax advisors regarding such allocation.
 
Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for the Securities disposed of exceeds one year. Long-term capital gains recognized by non-corporate U.S. Holders will be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
 
Exercise or Lapse of a Warrant
 
A U.S. Holder generally will not recognize taxable gain or loss on the acquisition of common stock upon exercise of a Warrant. The U.S. Holder’s aggregate tax basis in the share of our common stock received upon exercise of a Warrant generally will be an amount equal to the sum of the U.S. Holder’s tax basis in the Warrant prior to exercise and the Warrant exercise price (translated into U.S. dollars based on applicable currency exchange rates at the time of exercise). The U.S. Holder’s holding period for the common stock received upon exercise of a Warrant generally will begin on the date following the date of exercise of the Warrant and will not include the period during which the U.S. Holder held the Warrant. If a Warrant lapses unexercised, a U.S. Holder generally will recognize a capital loss equal to such Holder’s tax basis in the Warrant, which will be long-term capital loss if the Warrant was held by the U.S. Holder for more than one year.
 
Net investment income tax
 
An additional 3.8% tax is imposed on the “net investment income” of non-corporate U.S. Holders, and on the undistributed “net investment income” of certain estates and trusts. Among other items, “net investment income” generally includes dividends paid on our common stock and certain net gain from the sale or other taxable disposition of Securities, less certain deductions. U.S. Holders should consult their own tax advisors concerning the potential effect, if any, of this tax on holding Securities in such U.S. Holder’s particular circumstances.
 
 
Backup withholding and information reporting
 
For non-corporate U.S. Holders, information reporting requirements, on IRS Form 1099, generally will apply to:

 
dividend payments or other taxable distributions on our common stock made to the non-corporate U.S. Holder within the United States or by a United States payor; and
     
 
the payment of proceeds to the non-corporate U.S. Holder from the sale of a share of common stock or Warrants effected at a United States office of a broker or through certain U.S.-related financial intermediaries.
 
Additionally, backup withholding may apply to such payments if the non-corporate U.S. Holder:

 
fails to provide an accurate taxpayer identification number;
     
 
is notified by the IRS that it has failed to report all interest and dividends required to be shown on its U.S. federal income tax returns; or
     
 
in certain circumstances, fails to comply with applicable certification requirements.
 
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-corporate U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
 
Non-U.S. Holders
 
For purposes of this discussion, a Non-U.S. Holder is a beneficial owner of Securities that, for U.S. federal income tax purposes, is neither a U.S. Holder (as defined above) nor a partnership or other pass-through entity. If you are not a Non-U.S. Holder, this section does not apply to you.
 
Distributions on Common Stock
 
As described in the section captioned “Dividend Policy,” we do not anticipate declaring or paying distributions to Holders of our common stock in the foreseeable future. Any distributions we make on our common stock in cash will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles.
 
Subject to the discussion below regarding backup withholding and payments made to certain foreign accounts, dividends paid to a Non-U.S. Holder of our common stock that are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends (or such lower rate as may be specified by an applicable income tax treaty).
 
Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and first be applied against and reduce a Non-U.S. Holder’s adjusted tax basis in its common stock, but not below zero. Any excess will be treated as capital gain and will be treated as described below under “Non-U.S. Holders – Sale or Other Taxable Disposition of Common Stock or Warrants.”
 
To the extent distributions are paid in a currency other than the U.S. dollar, for the purposes of applying the above, the amount of a distribution (and any related withholding obligation) generally will be translated into U.S. dollars based on applicable currency exchange rates at the time the distribution is paid to the Non-U.S. Holder.
 
Non-U.S. Holders will be entitled to a reduction in or an exemption from withholding on dividends as a result of either (i) qualifying for the benefits of an applicable income tax treaty or (ii) the Non-U.S. Holder holding our common stock in connection with the conduct of a trade or business within the United States and dividends being paid in connection with that trade or business. To claim such a reduction in or exemption from withholding, the Non-U.S. Holder must provide the applicable withholding agent with a properly executed (i) IRS Form W-8BEN or W-8BEN-E (or applicable successor form) claiming an exemption from or reduction of the withholding tax under the benefit of an applicable income tax treaty, (ii) IRS Form W-8ECI (or applicable successor form) stating that the dividends are effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States, or (iii) a suitable substitute form, as may be applicable. These certifications must be provided to the applicable withholding agent prior to the payment of dividends and must be updated periodically. Non-U.S. Holders that do not timely provide the applicable withholding agent with the required certification, but that qualify for a reduced rate under an applicable income tax treaty, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
 
Subject to the discussion below regarding backup withholding and payments made to certain foreign accounts, if dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable), then, although exempt from U.S. federal withholding tax (provided the Non-U.S. Holder provides appropriate certification, as described above), the Non-U.S. Holder will be subject to U.S. federal income tax on such dividends on a net income basis at the regular graduated U.S. federal income tax rates. In addition, a Non-U.S. Holder that is or is treated as a corporation for U.S. federal income tax purposes may be subject to an additional branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on its effectively connected earnings and profits for the taxable year that are attributable to such dividends, as adjusted for certain items. Non-U.S. Holders should consult their own tax advisors regarding their entitlement to benefits under any applicable income tax treaty.
 
Sale or Other Taxable Disposition of Common Stock or Warrants
 
Subject to the discussion below regarding backup withholding and payments made to certain foreign accounts, a Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain realized upon the sale or other taxable disposition of a share of our common stock or Warrants unless:

 
the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable);
     
 
the Non-U.S. Holder is a non-resident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or
     
 
we are or have been a “U.S. real property holding corporation,” or USRPHC, for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. Holder held the common stock or Warrants.
 
 
Gain described in the first bullet point above will generally be subject to U.S. federal income tax on a net income basis at the regular graduated U.S. federal income tax rates. A Non-U.S. Holder that is a foreign corporation also may be subject to an additional branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on a portion of its effectively connected earnings and profits for the taxable year, as adjusted for certain items.
 
A Non-U.S. Holder described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty) on any gain derived from the sale or other taxable disposition, which may be offset by certain U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States) provided the Non-U.S. Holder timely files U.S. federal income tax returns with respect to such losses.
 
With respect to the third bullet point above, we believe that we are not, and do not anticipate that we will become, a USRPHC.
 
The method of determining the amount of gain by a Non-U.S. Holder on disposition of the common stock or Warrants generally will correspond to the method of determining the amount of gain (or loss) by a U.S. Holder on disposition of the common stock or Warrants, as described under “U.S. Holders — Sale or Other Taxable Disposition of Common Stock or Warrants” above. Non-U.S. Holders should consult their own tax advisors regarding potentially applicable income tax treaties that may provide for different rules, and the potential application of other exceptions to these taxes.
 
Exercise or Lapse of a Warrant
 
For certain Non-U.S. Holders engaged in the conduct of a trade or business in the United States, the U.S. federal income tax treatment of the exercise of a Warrant, or the lapse of a Warrant, generally will correspond to the U.S. federal income tax treatment of the exercise or lapse of a Warrant by a U.S. Holder, as described under “U.S. Holders — Exercise or Lapse of a Warrant” above. For all other Non-U.S. holders, the exercise or lapse of a Warrant generally will not be a U.S. taxable event.
 
Information Reporting and Backup Withholding
 
Subject to the discussion below regarding payments made to certain foreign accounts, a Non-U.S. Holder generally will not be subject to backup withholding with respect to payments of dividends on our common stock we make to the Non-U.S. Holder, provided the applicable withholding agent does not have actual knowledge or reason to know such Holder is a U.S. person and the Holder certifies its non-U.S. status by providing a valid IRS Form W-8BEN, W-8BEN-E or W-8ECI, or other applicable certification (or applicable successor form), or otherwise establishes an exception. However, information returns will be filed with the IRS in connection with any dividends on our common stock paid to the Non-U.S. Holder, regardless of whether any tax was actually withheld. Copies of these information returns may also be made available under the provisions of a specific treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder resides or is established.
 
Information reporting and backup withholding may apply to the proceeds of a sale of a share of our common stock or Warrants within the United States, and information reporting may (although backup withholding will generally not) apply to the proceeds of the sale of a share of our common stock or Warrants outside the United States conducted through certain U.S.-related financial intermediaries, in each case, unless the beneficial owner certifies under penalty of perjury that it is a Non-U.S. person on IRS Form W-8BEN or other applicable form or successor form (and the payor does not have actual knowledge or reason to know that the beneficial owner is a U.S. person) or otherwise establishes an exemption.
 
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
 
Additional Withholding Tax on Payments Made to Foreign Accounts
 
Withholding taxes may be imposed under the provisions of the law generally known as the Foreign Account Tax Compliance Act, or FATCA, on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on our common stock, or gross proceeds from the sale or other disposition of Securities paid to a “foreign financial institution” or a “non-financial foreign entity” (each as defined in the Code), unless (i) the foreign financial institution undertakes certain diligence and reporting obligations, (ii) the non-financial foreign entity either certifies it does not have any “substantial U.S. owners” (as defined in the Code) or furnishes identifying information regarding each substantial U.S. owner, or (iii) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (i) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain “specified U.S. persons” or “U.S.-owned foreign entities” (each as defined in the Code), annually report certain information about such accounts and withhold 30% on payments to non-compliant foreign financial institutions and certain other account Holders. An intergovernmental agreement between the United States and an applicable foreign country, or future Treasury Regulations or other guidance, may modify these requirements.
 
Under the applicable Treasury Regulations and recent guidance from the IRS, withholding under FATCA generally applies to payments of dividends on our common stock, and will apply to payments of gross proceeds from the sale or other disposition of Securities on or after January 1, 2019, and to certain “pass-thru” payments made on or after the later of January 1, 2019 and the date final Treasury Regulations are issued defining such pass-thru payments.
 
The FATCA withholding tax will apply to all withholdable payments without regard to whether the beneficial owner of the payment would otherwise be entitled to an exemption from imposition of withholding tax pursuant to an applicable tax treaty with the United States or U.S. domestic law. We will not pay additional amounts to Holders of our common stock or Warrants in respect of any amounts withheld.
 
Prospective investors should consult their own tax advisors regarding the potential application of withholding under FATCA to their investment in Securities.
 
 
Eilers Law Group, p.a. has opined on the validity of the shares being offered hereby.
 
 
 
 
The financial statements included in this prospectus and in the registration statement for the fiscal year ended December 31, 2016 have been audited by Heaton & Company, PLLC, an independent registered public accounting firm and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.
 
 
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the Shares. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information with respect to us and the Shares, reference is made to the registration statement and the exhibits and schedules filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and as such we refer you to the full text of such contract or other document filed as an exhibit to the registration statement. A copy of the registration statement and the exhibits and schedules filed therewith may be inspected without charge at the public reference room maintained by the SEC, located at 100 F Street N.E., Washington, D.C. 20549, and copies of all or any part of the registration statement may be obtained from such offices upon the payment of the fees prescribed by the SEC. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The website address is www.sec.gov.
 
We  will become  subject to the information and periodic reporting requirements of the Exchange Act and, in accordance therewith, we file periodic reports, proxy statements and other information with the SEC. Such periodic reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above.
 
BIOLABMART INC.

Table of Contents

   
Page
Report of Independent Registered Public Accounting Firm
 
F-1
Balance Sheet as of December 31, 2016
 
F-2
Statement of Operations for the year ended December 31, 2016
 
F-3
Statement of Changes in Stockholders’ Equity (Deficit) for the year ended December 31, 2016
 
F-4
Statement of Cash Flow for the year ended December 31, 2016
 
F-5
Notes to Audited Financial Statements
 
F-6 to F-11
 

 
37

 
 


Heaton & Company, PLLC
240 North East Promontory, Suite 200
Farmington, Utah 84025
 
 
 
                                                   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To The Board of Directors and Stockholders
BioLabMart Inc.

 
We have audited the accompanying balance sheet of BioLabMart Inc. (the “Company”) as of December 31, 2016, and the related statement of operations, stockholders' equity (deficit), and cash flows for the period from August 22, 2016 (inception) through December 31, 2016. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.     

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States of America).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BioLabMart Inc. as of December 31, 2016, and the results of its operations and cash flows for the period from August 22, 2016 (inception) through December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements referred to above have been prepared assuming the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company has experienced losses and has not generated revenues from its operations.  These factors raise substantial doubt that the Company will be able to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 
/s/ Heaton & Company, PLLC
Farmington, Utah
March 13, 2017

 
 
 
 240 N. East Promontory
Suite 200
Farmington, Utah
84025
 
(T) 801.218.3523
 
heatoncpas.com
 
 

 
F-1

 
 

BIOLABMART INC.
 
BALANCE SHEET

   
December 31,
2016
 
ASSETS
     
Current assets
     
Cash and cash equivalents
  $ 155,242  
Total current assets
    155,242  
         
TOTAL ASSETS
  $ 155,242  
         
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
       
         
Current liabilities
       
Accounts payable and accrued liabilities
  $ 287  
Convertible note – related party, net of debt discount
    3,583  
Total current liabilities
    3,870  
         
Total liabilities
    3,870  
         
Stockholders’ equity
       
Series A Preferred Shares: $0.001 par value, authorized 10,000; 2,000 shares issued and outstanding
    2  
Common stock, $0.0001 par value: shares authorized 100,000,000; 11,424,000 shares issued and outstanding
    1,142  
Additional Paid-in Capital
    319,468  
Accumulated deficit
    (169,240 )
Total stockholder’s equity
    151,372  
TOTAL LIABILITIES & EQUITY (DEFICIT)
  $ 155,242  

The accompanying notes are an integral part of these Financial Statements.
 
 

 
F-2

 

BIOLABMART INC.

STATEMENT OF OPERATIONS

   
Inception Date
(August 22, 2016)
Through
December 31, 2016
 
Net sales
  $ -  
         
Operating expenses:
       
Research and development expenses
    156,000  
Professional fees
    2,792  
General and administrative expenses
    6,578  
Total operating expenses
    165,370  
         
Income (loss) from operations
    (165,370 )
         
Interest expense
    (3,870 )
         
Net (loss)
    (169,240 )
         
Net (loss) per common shares (basic and diluted)
  $ (0.02 )
         
Weighted average shares outstanding
       
Basic and diluted
    10,406,779  

The accompanying notes are an integral part of these Financial Statements.
 

 
F-3

 
 

BIOLABMART INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

   
 
Series A Preferred Shares
 
Common Stock
   
Additional
Paid-in
   
Accumulated
   
Total
 
   
Shares
     
Amount
 
Shares
   
Amount
   
Capital
   
Deficit
   
Equity
 
Balance, August 22, 2016
 
-
   
$
-
   
-
   
$
-
   
$
-
   
$
-
   
$
-
 
Issuance of common stock and Series A preferred shares
 
2,000
     
2
   
10,120,000
     
1,012
     
2,598
             
3,612
 
Issuance of common stock for private placement
 
-
     
-
   
1,004,000
     
100
     
250,900
             
251,000
 
Shares issued for stock awards
 
-
     
-
   
300,000
     
30
     
55,970
             
56,000
 
Beneficial conversion feature associated with convertible note
                               
10,000
             
10,000
 
Net loss for the period
                                       
(169,240
)
   
(169,240
)
Balance, December 31, 2016
 
2,000
   
$
2
   
11,424,000
   
$
1,142
   
$
319,468
   
$
(169,240
)
 
$
151,372
 

The accompanying notes are an integral part of these Financial Statements.

 

 
F-4

 

BIOLABMART INC.

STATEMENT OF CASH FLOWS

   
Inception Date
(August 22, 2016)
Through
December 31, 2016
 
Cash Flows From Operating Activities
     
Net loss
  $ (169,240 )
Adjustments to reconcile net income to net cash provided from operating activities:
       
Preferred stock issued to Directors, valuation
    2,598  
Stock awards recorded as research and development expense
    56,000  
Accretion of debt discount
    3,583  
Changes in operating assets and liabilities:
       
Accounts payable and accrued liabilities
    287  
Net cash provided used by operating activities
    (106,772 )
         
Cash Flows From Investing Activities
       
Net cash provided from (used by) investing activities
    -  
         
Cash Flows From Financing Activities
       
Proceeds from issuance of common stock
    1,012  
Proceeds from sale of Series A preferred stock     2  
Proceeds from private placement
    251,000  
Proceeds from convertible note
    10,000  
Net cash provided from financing activities
    262,014  
         
Increase (decrease) in cash and cash equivalents
    155,242  
         
Cash and cash equivalents at inception date
    -  
Cash and cash equivalents at end of period
  $ 155,242  
         
Non-Cash Investing and Financing Activities:
       
Beneficial conversion feature
  $ 10,000  
         
SUPPLEMENTAL DISCLOSURES
       
Interest paid
  $ -  
Income taxes paid
  $ -  

The accompanying notes are an integral part of these Financial Statements.
 

 

 
F-5

 

BIOLABMART INC.
NOTES TO AUDITED FINANCIAL STATEMENTS

Note 1 – Description of Business and Basis of Presentation

Organization and nature of business:
 
BioLabMart Inc. (“BLM” and/or the "Company") was incorporated under the laws of the State of Wyoming on August 22, 2016. Our headquarters are located at 777 Brickell Avenue, Suite 500, Miami, FL 33131.
 
The Company is a startup preclinical stage biotechnology company engaged in developing solutions to combat neuro-degenerative diseases and neuronal injuries. The Company is working to develop a novel stem cell system to repair and regenerate neuronal damage. The system incorporates what we believe to be unique stem cell treatments, cell modifications and a novel delivery system. Our preliminary focus is on Traumatic Brain Injury, Parkinson’s disease, Huntington’s disease and Alzheimer’s, although we believe such cell system can be effective in dealing with strokes and spinal cord injuries as well.
 
On December 14, 2016, the Company entered into a license and research funding agreement (“License Agreement”) with Ariel University R&D Co., Ltd., (“Ariel”), a wholly owned subsidiary of Ariel University of Samaria, based in Ariel, Israel (“AU”). Under the terms of the License Agreement, Professor Danny Baranes, the principal investigator and his research team will carry out further research relating to cell treatment with conditioned medium for neuronal tissue regeneration and repair. In consideration for payments under the License Agreement, the Company received an exclusive worldwide royalty- bearing license in Ariel patents and know-how to develop and commercialize products based on or incorporating conditioned medium for neuronal tissue regeneration and/or repair, resulting from Ariel’s research or technology or the Company’s research funding (the “Products”).
 
Under the License Agreement, the Company is required to use its best efforts to develop and commercialize the Products in accordance with development milestones set forth in the Agreement.
 
To date we have raised sufficient capital to undertake the first phase of our business plan including the initial research and development as discussed above, and intend to complete a Form S-1 registration statement in order to register shares for our existing holders and obtain a listing on a public market to further enhance our access to capital as we grow.

Note 2 – Summary of Significant Accounting Policies

Financial Statement Presentation: The audited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
 
Fiscal year end: The Company has selected December 31 as its fiscal year end.

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

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

Research and Development Costs: The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, “Research and Development”. Research and development costs were $156,000 for the year ended December 31, 2016, including a total of $56,000 allocated to the issuance of stock awards to certain scientific advisors.

Advertising and Marketing Costs: Advertising and marketing costs are expensed as incurred and were $1,500 during the year ended December 31, 2016.

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

Stock-based compensation: For stock-based compensation the Company follows the guidance codified in the Compensation – Stock Compensation Topic of FASB ASC (“ASC 718”). The Company determines the value of stock issued at the date of grant. It also determines at the date of grant, the value of stock at fair market value or the value of services rendered (based on contract or otherwise) whichever is more readily determinable.



 
F-6

 

BIOLABMART INC.
NOTES TO AUDITED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

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

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

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

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

If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument.
 
Warrants: We account for common stock warrants in accordance with applicable accounting guidance provided in ASC Topic 815 “Derivatives and Hedging – Contracts in Entity’s Own Equity” (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement.  For warrants classified as equity instruments we apply the Black Scholes model.   Presently all warrants issued and outstanding are accounted for using the equity method.

Income taxes: The Company has adopted SFAS No. 109 – “Accounting for Income Taxes”. ASC Topic 740 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Basic and Diluted Loss Per Share: In accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

Potential common shares consist of the incremental common shares issuable upon the exercise of stock warrants (using the if-converted method). The computation of basic loss per share for the year ended December 31, 2016 excludes potentially dilutive securities of 502,000, because their inclusion would be antidilutive. As a result, the computations of net loss per share for each period presented is the same for both basic and fully diluted.
 
Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.
 
 
2016
 
Stock purchase warrants
    502,000  

 
F-7

 
BIOLABMART INC.
NOTES TO AUDITED FINANCIAL STATEMENTS

Note 2 – Summary of Significant Accounting Policies (continued)

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

Note 3 – Going Concern

The Company has experienced net losses to date, and it has not generated revenue from operations, we will need additional working capital to service debt and for ongoing operations, which raises substantial doubt about our ability to continue as a going concern. Management of the Company has developed a strategy to meet operational shortfalls which may include equity funding, short term or long term financing or debt financing, to enable the Company to reach profitable operations.
 
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amount and classification of liabilities that might cause results from this uncertainty.

Note 4 – Convertible Note – Related Party

On September 1, 2016, the Company entered into a convertible debenture agreement with CubeSquare, LLC, a related corporation of which our Chief Executive Officer is the managing partner. The Company received proceeds totaling $10,000 which bears interest at 8% per annum and is due on September 1, 2017. Interest shall accrue from the advancement date and shall be payable on maturity. Any portion of the loan and unpaid interest are convertible at any time at the option of the lender into shares of common stock of the Company at a conversion price of the greater of (i) $0.0625 per common share if the Company’s shares are not trading on a public market and; (ii) in the event the Company’s shares are listed for trading on a public market, the share price shall be equal to a 50% discount to  the average of the five (5) lowest trading prices during the previous twenty (20) trading days prior to the date of the Conversion Notice.

As of December 31, 2016, the outstanding principal balance under this note was $10,000.

In our evaluation of the financing arrangement, we concluded that the conversion features did not meet the definition of a derivative under ASC 815-10-15-83. Once the underlying shares are publicly traded and they are considered readily convertible to cash, the Company will evaluate the convertible debenture to decide if the conversion feature meets the definition of a derivative at that time.

As a result, the Company calculated the intrinsic value of the embedded beneficial conversion feature of $10,000 and this has been recorded at the discount on the convertible note.  The carrying value will be accreted over the term of the convertible debentures up to its face value of total of $10,000.

The carrying value of these convertible notes is as follows:

   
December 31, 2016
 
Face value of certain convertible notes
 
$
10,000
 
Less: unamortized discount
   
(6,417
)
Carrying value
 
$
3,583
 

As at December 31, 2016, the carrying values of the convertible debenture and accrued interest thereon were $3,583 and $287, respectively.  CubeSquare, LLC has agreed to provide the Company with additional funds on the same terms up to a cumulative funding amount of $25,000.

 
F-8

 

BIOLABMART INC.
NOTES TO AUDITED FINANCIAL STATEMENTS

Note 5 – License and Research Funding Agreement

On December 14, 2016, the Company entered License and Research Funding Agreement