Attached files

file filename
EX-32 - EXHIBIT 32.2 - E-Qure Corp.exh32_2.htm
EX-32 - EXHIBIT 32.1 - E-Qure Corp.exh32_1.htm
EX-31 - EXHIBIT 31.2 - E-Qure Corp.exh31_2.htm
EX-31 - EXHIBIT 31.1 - E-Qure Corp.exh31_1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________

FORM 10-Q
___________________

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

 

For the quarterly period ended June 30, 2017

  

 

Commission file number 0-54862
 

E-QURE CORP.
(Exact Name Of Registrant As Specified In Its Charter)

Delaware 47-1691054
(State of Incorporation) (I.R.S. Employer Identification No.)
    
20 West 64th Street, Suite 39G, New York, NY 10023
(Address of Principal Executive Offices) (ZIP Code)

Registrant's Telephone Number, Including Area Code: +(972) 54 427777

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act) or a smaller reporting company .

Large accelerated filer ¨ Accelerated filer ¨ Non-Accelerated filer ¨ Smaller reporting company x

On August 17, 2017, the Registrant had 22,237,745 shares of common stock outstanding.



 

TABLE OF CONTENTS

Item
Description
Page
 

PART I - FINANCIAL INFORMATION

 
ITEM 1.    FINANCIAL STATEMENTS - UNAUDITED. 3
     Balance Sheets 3
     Statements of Operations 4
     Statements of Cash Flows 5
     Notes to Unaudited Interim Financial Statements 6
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS. 12
ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 14
ITEM 4.    CONTROLS AND PROCEDURES. 15
   

PART II - OTHER INFORMATION

   
ITEM 1.    LEGAL PROCEEDINGS. 15
ITEM 1A.    RISK FACTORS. 15
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 15
ITEM 3.    DEFAULT UPON SENIOR SECURITIES. 15
ITEM 4.    MINE SAFETY DISCLOSURE. 15
ITEM 5.    OTHER INFORMATION. 15
ITEM 6.    EXHIBITS. 16

 


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS Back to Table of Contents

 

E-QURE CORP.
Balance Sheets
At June 30, 2017 (Unaudited) and December 31, 2016
Back to Table of Contents
    
June 30, 2017 December 31, 2016
Assets
Current assets:
   Cash $ 7,620 $ 292,976
   Other assets and prepaid expenses   99,632   115,132
      Total current assets 107,252 408,108
   
        Total Assets $ 107,252 $ 408,108
 
Liabilities and Stockholders' Equity (Deficit)
 
Current liabilities:
   Accounts payable - trade $ 47,194 $ 1,564
   Loan from shareholder   57,172 -
     Total current liabilities 104,366 1,564
 
Stockholders' equity (deficit):
   Preferred stock, $0.00001 par value; 20,000,000 shares authorized; no shares issued and outstanding - -
   Common stock, $0.00001 par value; 500,000,000 shares authorized; and
     22,237,745 issued and outstanding at June 30, 2017 and 22,012,562 at December 31, 2016 222 220
   Additional paid in capital 31,318,144 31,171,843
   Stock payable 21,000 -
   Accumulated deficit (31,336,480) (30,765,519)
     Total stockholders' equity 2,886 406,544
       Total Liabilities and Stockholders' Equity $ 107,252 $ 408,108
 
See Summary of Significant Accounting Policies and Notes to Financial Statements.


E-QURE CORP.
Statements of Operations
For The Three and Six Months Ended June 30, 2017 and 2016
(Unaudited)

Back to Table of Contents

 
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016
  

Revenues

$

-

$

-

$

-

$

-

 
Expenses
General and administrative

189,751

197,634

398,829

449,387

Research and development

39,287

7,309

172,132

45,757

Total

229,038

204,943

570,961

495,144

 
Loss from continuing operations before income taxes

(229,038)

(204,943)

(570,961)

(495,144)

Income tax

-

-

-

-

Net loss

$

(229,038)

$

(204,943)

$

(570,961)

$

(495,144)

 
(Loss) per common share - basic and diluted
Basic and diluted net loss

$

(0.01)

$

(0.01)

$

(0.03)

$

(0.02)

 
Weighted average number of common shares outstanding (basic and diluted)

22,188,111

22,012,562

22,100,822

22,012,562

 
See Notes to Unaudited Interim Financial Statements.

E-QURE CORP.

Statements of Cash Flows

For The Six Months Ended June 30, 2017 and 2016
(Unaudited)

Back to Table of Contents

  
For the six For the six
months ended months ended
June 30, 2017 June 30, 2016
 

Cash flows from operating activities:

   Net loss

$

(570,961)

$

(495,144)

Adjustments required to reconcile net loss to cash used in operating activities:
   Stock-based compensation 107,176 229,231
   Shares for services 60,127 -
Changes in assets and liabilities:
   Increase (decrease) in prepaid expenses 5,000 -
   Increase (decrease) in accounts payable and accrued expenses

56,130

15,365

     Cash provided by (used in) operating activities

(342,528)

(250,548)

  
Cash flow from financing activities:
   Proceeds from shareholder loan 57,172 -
     Cash provided by financing activities

57,172

-

  
Change in cash

(285,356)

(250,548)

Cash - beginning of period

292,976

880,639

Cash - end of period

$

7,620

$

630,091

 
See Notes to Unaudited Interim Financial Statements.

 

E-Qure Corp.
Notes to Unaudited Interim Financial Statements
June 30, 2017
Back to Table of Contents

1. The Company and Significant Accounting Policies

Organizational Background

E-Qure Corp. ("EQURE" or the "Company") is a Delaware corporation with offices in Israel. E-QURE CORP. ("EQURE") owns IP of innovate technology of wound healing device (BST).

Basis of Presentation:

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenue to cover its operating costs, and as such, has incurred an operating loss since inception.

Significant Accounting Policies

Use of Estimates

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

Cash and Cash Equivalents

For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There were no cash equivalents as of June 30, 2017 and December 31, 2016.

Property and Equipment

New property and equipment are recorded at cost. Property and equipment included in the bankruptcy proceedings and transferred to the Trustee had been valued at liquidation value. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 5 years. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place.

Valuation of Long-Lived Assets

We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

Stock-Based Compensation

Stock-based awards are accounted for using the fair value method in accordance with ASC 718, Share-Based Payments. Our primary type of share-based compensation consists of stock options. We use the Black-Scholes option pricing model in valuing options. The inputs for the valuation analysis of the options include the market value of the Company’s common stock, the estimated volatility of the Company’s common stock, the exercise price of the warrants and the risk free interest rate.

Accounting For Obligations And Instruments Potentially To Be Settled In The Company’s Own Stock

We account for obligations and instruments potentially to be settled in the Company’s stock in accordance with FASB ASC 815, Accounting for Derivative Financial Instruments. This issue addresses the initial balance sheet classification and measurement of contracts that are indexed to, and potentially settled in, the Company’s own stock.

Fair Value of Financial Instruments

FASB ASC 825, “Financial Instruments,” requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. FASB ASC 825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. At June 30, 2017 and December 31, 2016, the carrying value of certain financial instruments (cash and cash equivalents, accounts payable and accrued expenses.) approximates fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates.

Fair Value Measurements

The Company measures fair value under a framework that utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of inputs which prioritize the inputs used in measuring fair value are:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Other inputs that are observable, directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs.

Level 3: Unobservable inputs are used when little or no market data is available, which requires the Company to develop its own assumptions about how market participants would value the assets or liabilities. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques in its assessment that maximize the use of observable inputs and minimize the use of unobservable inputs. The following table presents the Company’s financial assets and liabilities that are carried at fair value, classified according to the three categories described above:

Fair Value Measurements at June 30, 2017

Quoted Prices in Active

Significant Other

Significant

Markets for Identical Assets

Observable Inputs

Unobservable Inputs

Total

(Level 1)

(Level 2)

(Level 3)

None

$

-

$

-

$

-

$

-

Total assets and liabilities at fair value

$

-

$

-

$

-

$

-

 

Fair Value Measurements at December 31, 2016

Quoted Prices in Active

Significant Other

Significant

Markets for Identical Assets

Observable Inputs

Unobservable Inputs

Total

(Level 1)

(Level 2)

(Level 3)

None

$

-

$

-

$

-

$

-

Total assets and liabilities at fair value

$

-

$

-

$

-

$

-

When the Company changes its valuation inputs for measuring financial assets and liabilities at fair value, either due to changes in current market conditions or other factors, it may need to transfer those assets or liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. For the fiscal periods ended June 30, 2017 and December 31, 2016, there were no significant transfers of financial assets or financial liabilities between the hierarchy levels.

Earnings per Common Share

We compute net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

Income Taxes

We have adopted ASC 740, Accounting for Income Taxes. Pursuant to ASC 740, we are required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in effect when the differences are expected to reverse. ASC 740 provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Realization of our net deferred tax assets is dependent upon our generating sufficient taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and from net operating loss, or NOL, carryforwards. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all of our net deferred tax asset. Management will continue to evaluate the realizability of the deferred tax asset and its related valuation allowance. If our assessment of the deferred tax assets or the corresponding valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination. Our tax rate may also vary based on our results and the mix of income or loss in domestic and foreign tax jurisdictions in which we operate.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and to the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we will reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We will record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.

ASC 740 which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.

Uncertain Tax Positions

The Financial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109, Accounting for Income Taxes” (“FIN No. 48”) which was effective for the Company on January 1, 2007.  FIN No. 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under FIN No. 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.  The tax benefits recognized in the financial statements from such position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.  FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure requirements.

Our federal and state income tax returns are open for fiscal years ending on or after December 31, 2008. We are not under examination by any jurisdiction for any tax year. At June 30, 2017, we had no material unrecognized tax benefits and no adjustments to liabilities or operations were required under FIN 48.

Recent Accounting Pronouncements

In May 2017, the FASB issued Update 2017-09 - Compensation - Stock Compensation (Topic 718): Effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. Early adoption is permitted. This adoption is not expected to have a material impact on our financial position or results of operations.

In February 2017, FASB issued Update 2017-06 - Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting (a consensus of the Emerging Issues Task Force). Under Topic 960, investments in master trusts are presented in a single line item in the statement of net assets available for benefits. Similar guidance is not provided in Topic 962 or 965, which has resulted in diversity in practice. For each master trust in which a plan holds an interest, the amendments in this Update require a plan's interest in that master trust and any change in that interest to be presented in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. Topics 960 and 962 require plans to disclose their percentage interest in the master trust and a list of the investments held by the master trust, presented by general type, within the plan's financial statements. Stakeholders said that the disclosure can be misleading when the plan has a divided interest in the individual investments of the master trust (that is, when the plan has a specific, rather than a proportionate, interest in the master trust). The amendments in this Update remove the requirement to disclose the percentage interest in the master trust for plans with divided interests and require that all plans disclose the dollar amount of their interest in each of those general types of investments, which supplements the existing requirement to disclose the master trust's balances in each general type of investments. Early adoption is permitted. This adoption is not expected to have a material impact on our financial position or results of operations.

In the opinion of management, the information furnished in these interim financial statements reflects all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of and for the six-month periods ended June 30, 2017 and 2016. All such adjustments are of a normal recurring nature. The Financial Statements do not include some information and notes necessary to conform to annual reporting requirements.

2. Stockholders' Equity

Common Stock

We are currently authorized to issue up to 500,000,000 shares of $0.00001 par value common stock. All issued shares of common stock are entitled to vote per share basis.

Recent Issuances of Common Stock During the Period ended June 30, 2017:

On April 20, 2017, we issued 225,000 shares valued at $39,128 using the share price on the date of grant to two consultants for services provided. During the three months ended June 30, 2017, we authorized the issuance of 75,000 additional shares to the same two consultants valued at $0.14 or $21,000, which was recorded as stock payable.

Recent Issuances of Common Stock During the Period ended June 30, 2016:

During the six months ended June 30, 2016, we did neither issue any shares nor receive any stock receivable.

Stock Options

On January 1, 2015, the board of director approved the 2015 Employee Incentive Plan. The total number of shares of Common Stock reserved for issuance by the Company either directly as Stock Awards or underlying Options granted under this Plan is 5,000,000 shares of Common Stock. On January 1, 2015, the Company granted options as follows under its 2015 Employee Incentive Plan: (i) Professor Ohry was granted options to purchase 250,000 shares of the Registrant's common stock ("Option Shares") at an exercise price equal to one dollar ($1.00) per Option Share. The Option Shares shall vest pursuant to the terms of a Scientific Advisory Board Agreement dated January 1, 2015 (the "Ohry SAB Agreement"). Provided the Ohry SAB Agreement remains in effect, 75,000 shares shall vest July 1, 2015, and the remaining 175,000 Option Shares shall vest at the rate of 25,000 Option Shares per quarter on the first day of each consecutive quarter; (ii) Dr. Ben Zion Weiner was granted options to purchase 350,000 Option Shares at an exercise price equal to one dollar ($1.00) per Option Share. The Option Shares shall vest pursuant to the terms of a Scientific Advisory Board Agreement dated January 1, 2015 (the "Weiner SAB Agreement"). Provided the Weiner SAB Agreement remains in effect, 105,000 Option Shares shall vest July 1, 2015 and the remaining 245,000 Option Shares shall vest at the rate of 35,000 Option Shares per quarter on the first day of each consecutive quarter; and (iii) Michel Sessler was granted options to purchase 150,000 Option Shares at an exercise price equal to one dollar ($1.00) per Option Share. The Option Shares shall vest pursuant to the terms of a Scientific Advisory Board Agreement dated January 1, 2015 (the "Sessler SAB Agreement"). Provided the Sessler SAB Agreement remains in effect, 45,000 Option Shares shall vest July 1, 2015 and the remaining 105,000 Option Shares shall vest at the rate of 15,000 Option Shares per quarter on the first day of each consecutive quarter.

Following is a table summarizing options still outstanding and exercisable along with exercise price and range of remaining term.

Type Quantity Exercise Price Term
Avi Ohry 250,000 $1.00 24 Months
Dr. Ben Zion Weiner 350,000 $1.00 24 Months
Michael Sessler 150,000 $1.00 24 Months
Total 750,000    

During the six months ended June 30, 2017 and the year ended December 31, 2016, we expensed $107,176 and $501,298, respectively, in relation to options granted. As of June 30, 2017, the options below are fully vested.

  Options
Outstanding at December 31, 2014 -
Granted 750,000
Exercised -
Outstanding at December 31, 2015 750,000
Granted -
Exercised -
Outstanding at December 31, 2016 750,000
Granted -
Exercised -
Outstanding at June 30, 2017 750,000

3. Related Party Transactions

During the six months ended June 30, 2017, we received a loan of $57,172 from the chairman of the board to help finance the Company. The imputed interest on the loan is 10% and the principal and accrued interest is due on demand. As of June 30, 2017 and December 31, 2016, no interest were due.

On January 1, 2015, the board of director approved the 2015 Employee Incentive Plan. The total number of shares of Common Stock reserved for issuance by the Company either directly as Stock Awards or underlying Options granted under this Plan is 5,000,000 shares of Common Stock. On January 1, 2015, the Company granted options as follows under its 2015 Employee Incentive Plan: (i) Professor Ohry was granted options to purchase 250,000 shares of the Registrant's common stock ("Option Shares") at an exercise price equal to one dollar ($1.00) per Option Share. The Option Shares shall vest pursuant to the terms of a Scientific Advisory Board Agreement dated January 1, 2015 (the "Ohry SAB Agreement"). Provided the Ohry SAB Agreement remains in effect, 75,000 shares shall vest July 1, 2015, and the remaining 175,000 Option Shares shall vest at the rate of 25,000 Option Shares per quarter on the first day of each consecutive quarter; (ii) Dr. Ben Zion Weiner was granted options to purchase 350,000 Option Shares at an exercise price equal to one dollar ($1.00) per Option Share. The Option Shares shall vest pursuant to the terms of a Scientific Advisory Board Agreement dated January 1, 2015 (the "Weiner SAB Agreement"). Provided the Weiner SAB Agreement remains in effect, 105,000 Option Shares shall vest July 1, 2015 and the remaining 245,000 Option Shares shall vest at the rate of 35,000 Option Shares per quarter on the first day of each consecutive quarter; and (iii) Michel Sessler was granted options to purchase 150,000 Option Shares at an exercise price equal to one dollar ($1.00) per Option Share. The Option Shares shall vest pursuant to the terms of a Scientific Advisory Board Agreement dated January 1, 2015 (the "Sessler SAB Agreement"). Provided the Sessler SAB Agreement remains in effect, 45,000 Option Shares shall vest July 1, 2015 and the remaining 105,000 Option Shares shall vest at the rate of 15,000 Option Shares per quarter on the first day of each consecutive quarter. See also footnote 2 above.

4. Prepaid Expense and Other Receivables

As of June 30, 2017, the Company has $41,816 in prepaid expenses representing prepaid legal services to legal consultant pursuant to an arrangement with the Company's legal consultant, of which $35,250 in legal services have been provided subsequent to June 30, 2017.

As of June 30, 2017, the Company has $57,816 in Other Receivables from the Company's legal consultant, of which approximately $6,500 has been paid to or for the benefit of the Company subsequent to June 30, 2017.

5. Going Concern

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenue to cover its operating costs, and as such, has incurred an operating loss since inception. These and other factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

6. Subsequent Events

There were no subsequent events following the period ended June 30, 2017 through the date the financial statements were issued that would materially affect the financial statements.

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION Back to Table of Contents

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Plan of Operations

In January 2014, Mr. Weissberg negotiated with Lifewave Ltd., a public company organized under the laws of the State of Israel, for the purpose of acquiring certain of Lifewave's IP assets pertaining to a wound healing device. The Registrant signed a patent purchase agreement with Lifewave on January 6, 2014 (the "Agreement"), the closing of which was subject to several material conditions, including our ability of raising equity capital sufficient to develop and commercially exploit the technology.

On June 4, 2014, we completed the purchase of all right, title and interest to certain IP assets, including rights to a wound treatment device. The IP assets, including the wound healing device, acquired by the Registrant are designed for wound treatment incorporating Bioelectrical Signal Therapy ("BST Device"). The BST Device implements patented and proprietary electrical stimulation technologies to treat hard-to-cure wounds and ulcers up to complete closure and/or cure.

Pursuant to the Agreement, the Registrant has agreed to pay Lifewave a royalty of from 10% to 20% of the profits (as defined in the Agreement) generated from the BST Device.

In June 2014, the Registrant entered into an agreement with the Austen BioInnovation Institute in Akron ("ABIA" or the "Institute"), for the purpose of bringing our BST Device to the U.S. market.

The Company's management selected ABIA's Product Innovation and Commercialization Division, which has significant expertise in wound healing, clinical trial development, and regulatory operations, to spearhead its pre-market clinical trial program, which is necessary to apply for regulatory approval from the United States Food and Drug Administration ("FDA") to distribute the BST Device in the United States. As part of the Institute's fully integrated regulatory and device development service Offerings, ABIA will prepare on behalf of the Company an application to obtain FDA approval. The initial trial will include 70 patients in a double-arm, randomized, multi-center study to assess the safety and efficacy of the BST Device in patients with Stage II and III pressure and venous stasis ulcers; and submit data to the FDA to obtain approval.

On December 18, 2015, the Registrant confirmed certain information that it had received from ABIA that, while ABIA still anticipated that it would be able to provide the Registrant with a final draft of the IDE application, ABIA had sustained financial difficulties and key personnel losses that would likely adversely effect its ability to perform under the Agreement on a timely basis, if at all. As a result, the Registrant requested that ABIA fully refund the monies paid to ABIA under the Agreement. In addition, the Registrant agreed to engage a professional regulatory consultant, who was a former member of ABIA's regulatory staff, to serve as the Registrant's FDA regulatory consultant on an interim basis, subject to the execution of a separate services agreement. The Registrant is also evaluating the advisability of engaging another firm to replace ABIA, which process may be expected to delay the IDE approval process for the BST Device.

The Company's success is dependent upon the successful FDA clinical trial of its BST Device. The Device may need additional development and may never achieve safety or efficacy. The Company believes that its design and procedure show promise, but the path to commercial success, even if development milestones are met, may take more time and might be more costly.

There are a number of potential obstacles the Company might face, including the following:

Ÿ  We may not be able to raise additional funds we may need to complete the clinical trials.
Ÿ  Competitors may develop alternatives that render BST Device redundant or unnecessary.
Ÿ  We may not have a sufficient and sustainable intellectual property position.
Ÿ  Our device may be shown to have harmful side effects or other characteristics that indicate it is unlikely to be safe and effective.
Ÿ  Our device may not receive regulatory approval.
Ÿ  Even if our device receives regulatory approval, it may not be accepted by patients, the medical community or third-party payers.

During the three months ended June 30, 2017, we received a loan of $57,172 from the chairman of the board to help finance the Company. The imputed interest on the loan is 10% and principal and accrued interest is due on demand.

Recent Developments

On July 18, 2016, the Company received the CE Certificate of Conformity and the ISO 13485 Certification. The CE Certification for our BST Wound Healing Device is a declaration that it complies with the requirements of the EU related to health, safety and environmental protections and acknowledges that the BST Device may be legally marketed in the EU. As a result, we are prepared to commence manufacturing and marketing for our BST Device in Europe as well as other non-European countries that accept the CE Certification. The ISO is the International Organization for Standardization, and represents that the company's quality systems and procedures satisfies the requirements for a comprehensive quality management for the design and manufacture of medical devices.

On October 14, 2016, the Registrant received notification from FDA that it has granted conditional approval to the IDE application, authorizing us to commence a clinical investigation of our BST Device for wound healing. The main condition set forth is that the trial shall begin initially with 10 patients, after which we will file a safety report with the FDA before proceeding with the trial, which contemplates testing the BST Device with 90 patients altogether.

On January 8, 2017, the Registrant entered into a five-year distribution agreement (the "Distribution Agreement") with TekMedica SAS, organized under the laws of Colombia ("TekMedica" or the "Distributor"). Pursuant to the Distribution Agreement, the Registrant granted TekMedica the exclusive rights to distribute the Registrant's medical device for the treatment of chronic wounds (the "BST Device™") and the accompanying disposable electrodes (sometimes collectively, the "Products") in Colombia (the "Territory").

The Distribution Agreement provides that Registrant will provide Distributor with supplies of the BST Devicee and disposable electrode for treatment of patients in hospitals, long-term care facilities, medical centers and out-patient clinics. The Distributor will make an initial advance payment to be applied against the first year's quota together with an initial order supported by a Letter of Credit with subsequent orders as part of the quota, as set forth in the Distribution Agreement, with minimum annual quota's during the five-year term. The Distributor will be responsible for securing any product certification, permit, license or approval that may be required in the Territory for the marketing, sale, sublicensing and delivery and use of the BST Devise and Products in the Territory.

On February 20, 2017, the Registrant received the official certification from the Israeli Ministry of Health authorizing the use of the Registrant's BST Device in Israel. The BST Device implements patented and proprietary electrical stimulation technologies to treat hard-to-cure wounds and ulcers up to complete closure and/or cure.

Results of Operations during the three months ended June 30, 2017 as compared to the three months ended June 30, 2016

We have not generated any revenues during the three months ended June 30, 2017 and 2016. We had operating expenses mainly related to general and administrative expenses and research and development expenses. During the three months ended June 30, 2017, we incurred a net loss from operations of $229,038 due to general and administrative expenses of $189,751 and research and development expenses of $39,287 as compared to a net loss from operation of $204,943 due to general and administrative expenses of $197,634 and research and development expenses of $7,309 in the same period in the prior year.

Our R&D expenses increased by $31,978 or 537% during the three months ended June 30, 2017 as compared to the prior year mainly due to increased expenses related to obtaining FDA approval for our BST device.

Results of Operations during the six months ended June 30, 2017 as compared to the six months ended June 30, 2016

We have not generated any revenues during the six months ended June 30, 2017 and 2016. We had operating expenses mainly related to general and administrative expenses and research and development expenses. During the six months ended June 30, 2017, we incurred a net loss from operations of $570,961 due to general and administrative expenses of $398,829 and research and development expenses of $172,132 as compared to a net loss from operation of $495,144 due to general and administrative expenses of $449,387 and research and development expenses of $45,757 in the same period in the prior year.

Our R&D expenses increased by $126,375 or 276% during the six months ended June 30, 2017 as compared to the prior year mainly due to increased expenses related to obtaining FDA approval for our BST device.

Liquidity, Capital Resources and Strategy

On June 30, 2017, we had total assets of $107,252 consisting of cash of $7,620 and receivables and prepaid expenses of $99,632. On December 31, 2016, we had total assets of $408,108, consisting of $292,976 in cash, $52,316 in prepaid expenses and accounts receivable of $62,816. We had total current liabilities of $104,366 as of June 30, 2017 consisting of $47,194 in accounts payable and $57,172 in loan from a related party. We had current liabilities of $1,564 at December 31, 2016 consisting of accounts payable in the same amount. We had no long-term liabilities as of June 30, 2017 and December 31, 2016.

We used $342,528 in our operating activities during the six months ended June 30, 2017, which was due to a net loss of $570,961 offset by non-cash stock compensation of $107,176, shares issued for services valued at $60,127,  an increase in prepaid expenses of $5,000 and an increase increase in accounts payable and accrued expenses $56,130.

We financed our negative cash flow from operations through cash on hand and a $57,172 loan from our chairman.

We used $250,548 in our operating activities during the six months ended June 30, 2016, which was due to a net loss of $495,144 offset by noncash stock compensation of $229,231 and an increase in accounts payable and accrued expenses of $15,365.

We financed our negative cash flow from operations during the six months ended June 30, 2016 through cash on hand.

We had no investing activities during the six months ended June 30, 2017 and 2016.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America with an auditor's going concern opinion for the years 2016 and 2015. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any revenues and no revenues are anticipated.

The Company has reported a total accumulated deficit of $31,336,480 as of June 30, 2017 and $30,765,519 as of December 31, 2016.

As of June 30, 2017, the Company had $7,620 cash on hand and had positive working capital of $2,886.

We believe that our current cash on hand of $7,620, as of June 30, 2017, may not be sufficient to meet our operating requirements throughout the ensuing twelve month period. If we are unable to manage our working capital requirements with funding received from our most recent equity capital raise, we may require additional financing at satisfactory terms and conditions, of which there can be no assurance, in order to satisfy its ongoing capital requirements for the next twelve months in order to execute our plan of operation as presently constituted.

We do not expect to generate cash flow from operations unless we receive FDA approval for our BST Device.

Our management believes that our operations will generate revenues in the US beginning of the fourth quarter of 2017. We expect that FDA approval for our BST Device will improve our ability to generate revenues from sales in other geographic areas. Our future ability to generate cash flows from operations will depend on the demand for our BST Device, as well as general economic, financial, competitive and other factors, many of which are beyond our control.

If and when we receive FDA approval of our BST Device, of which there can be no assurance, our business might not generate sufficient future cash flow in an amount sufficient to enable us to fund our liquidity needs, including working capital, capital expenditures, investments and other general corporate requirements.

Availability of Additional Capital

We have no commitments or arrangements, formal or otherwise, from any person or entity to provide us with any additional capital. The Company may be unable to implement its present plan of operation and this could have a material adverse effect on our business, prospects, financial condition and results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Back to Table of Contents

None.

ITEM 4. CONTROLS AND PROCEDURES Back to Table of Contents

Evaluation of disclosure controls and procedures.

As of June 30, 2017, the Company's chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures as provided under the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013), our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were ineffective as June 30, 2017. Management has identified corrective actions for the weakness and will periodically reevaluate the need to add personnel and implement improved review procedures during fiscal year 2017.

Changes in internal controls.

During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS Back to Table of Contents

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. However, from time to time, we may become a party to certain legal proceedings in the ordinary course of business.

ITEM 1A. RISK FACTORS  Back to Table of Contents

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1. Description of Business, subheading Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2016, which could materially affect our business, financial condition or future results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Back to Table of Contents

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES Back to Table of Contents

None.

ITEM 4. MINE SAFETY DISCLOSURE. Back to Table of Contents

Not applicable.

ITEM 5. OTHER INFORMATION Back to Table of Contents

Not applicable.

ITEM 6. EXHIBITS Back to Table of Contents

(a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

Exhibit Description of Exhibit
31.1 SSection 302 Certification of the Sarbanes-Oxley Act of 2002 of Ohad Goren, filed herewith.
31.2 Section 302 Certification of the Sarbanes-Oxley Act of 2002 of Gal Peleg, filed herewith.
32.1 Section 906 of the Sarbanes-Oxley Act of 2002 of Ohad Goren, filed herewith
32.2 Section 906 of the Sarbanes-Oxley Act of 2002 of Gal Peleg, filed herewith

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

E-Qure Corp.
 
Date: August 17, 2017 By: /s/ Ohad Goren
Name:  Ohad Goren
Title: Chief Executive Officer
 

 

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Date: August 17, 2017 By: /s/ Gal Peleg
Name:  Gal Peleg
   Title: Principal Accounting and Financial Officer

Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

E-Qure Corp.
 
Date: August 17, 2017 By: /s/ Ron Weissberg
Name:   Ron Weissberg
Title: Chairman

 

EE-Qure Corp.
 
Date: August 17, 2017 By: /s/ Dr. Michael Sessler
Name:  Dr. Michael Sessler
Title: Director