QRONS INC. This Quarterly Report on Form 10-Q contains predictions, estimates and other
forward-looking statements relating to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as "may," "should," "intends," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," or "continue"
or the negative of these terms or other comparable terminology. Forward-looking
statements involve known and unknown risks, uncertainties and other factors
including the risks set forth in the section entitled "Risk Factors" in our
prospectus, as filed with the
Forward-looking statements represent our management's beliefs and assumptions only as of the date of this Report. You should read this Report with the understanding that our actual future results may be materially different from what we expect.
All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.
The management's discussion and analysis of our financial condition and results
of operations are based upon our condensed unaudited financial statements, which
have been prepared in accordance with accounting principles generally accepted
in
The following discussion of our financial condition and results of operations
should be read in conjunction with the notes to the unaudited financial
statements appearing elsewhere in this Report and the Company's audited
financial statements for the fiscal year ended
The Company has relied primarily on its two co-founders,
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.
Plan of Operations
We are an innovative biotechnology company dedicated to developing biotech
products, treatments and technologies that create a platform to combat neuronal
diseases. We seek to engage in strategic arrangements with companies and
institutions that are developing breakthrough technologies in the fields of
artificial intelligence and machine learning, molecular biology, stem cells and
tissue engineering, for deployment in the fight against neuronal diseases. Our
search is focused on researchers based in
To date, the Company has collaborated with universities and scientists in the fields of regenerative medicine, tissue engineering and 3D printable hydrogels to develop a treatment that integrates proprietary, engineer mesenchymal stem cells ("MSCs"), 3D printable implant, smart materials and a novel delivery system and has two product candidates for treating penetrating and non-penetrating (concussion-like) traumatic brain injuries, both integrating proprietary, anti-brain inflammation synthetic hydrogel and modified MSCs.
As a result of the Company's multidiscipline research effort in the field of
supramolecular and polymeric materials chemistry and neuronal tissue
engineering, on
We have not generated any revenue from the sale of products.
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Results of Operations
Three Months Ended
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.
Net Loss
We had net income of
Three Months ended
June 30,
2022 2021
Net sales $ - $ -
Operating expenses:
Research and development expenses 8,414 11,350
Professional fees 9,039 8,300
General and administrative expenses 13,611 23,148
Total operating expenses 31,064 42,798
Income (loss) from operations (31,064 ) (42,798 )
Other income (expense)
Interest expense (27,914 ) (111,758 )
Change in fair market value of derivative liabilities 130,650 189,130 Total other income (expense)
102,736 77,372
Net income (loss) $ 71,672 $ 34,574
Operating Expenses
Total operating expenses for the three months ended
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Other Income (Expense)
Other income in the three months ended
Six Months Ended
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.
Net Loss
We had a net loss of
For the Six Months Ended
June 30,
2022 2021
Net sales $ - $ -
Operating expenses:
Research and development expenses 17,346 23,186
Professional fees 53,905 23,940
General and administrative expenses 23,369 34,035
Total operating expenses 94,620 81,161
Income (loss) from operations (94,620 ) (81,161 )
Other income (expense)
Interest expense (62,531 ) (122,744 )
Change in fair market value of derivative liabilities (35,305 ) 3,170 Total other income (expense)
(97,836 ) (119,574 )
Net (loss) $ (192,456 ) $ (200,735 )
Operating Expenses
Total operating expenses for the six months ended
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Other Income (Expense)
Other expense in the six months ended
Operating Activities
Net cash used in operating activities was
Investing Activities
There were no investing activities during the six months ended
Financing Activities
Net cash provided by financing activities was
Liquidity and Capital Resources
As of
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As we continue to monitor the impact of the COVID-19 outbreak, we continue exploring sources of debt and equity financings as well as available grants. We are currently exploring and are in discussions for potential strategic alternatives in the biotechnology field which could advance our MSCs and neurodegenerative research. There can be no assurance the necessary financing will be available or that a suitable strategic partner will be identified. In such event, we may explore relationships with third parties to develop or commercialize products or technologies that we have not previously sought to develop or commercialize, decide to exit our existing business, cease operations altogether or pursue an acquisition of our company. However, without additional financing, we do not believe our resources will be sufficient to meet our operating and capital needs beyond the third quarter of 2022.
Offering
The Company filed a registration statement on Form S-1 with the
Going Concern
Our financial statements have been prepared assuming that we will continue as a
going concern and, accordingly, do not include adjustments relating to the
recoverability and realization of assets and classification of liabilities that
might be necessary should we be unable to continue in operation. Our report from
our independent registered public accounting firm for the fiscal year ended
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Critical Accounting Policies and Estimates
The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in Note 2 to our unaudited financial statements contained herein.
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
Stock-Based Compensation and Other Share-Based Payments: The Company records stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation, using the fair value method on grant date. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the equity instruments issued. The expense attributable to the Company's directors is recognized over the period the amounts are earned and vested, and the expense attributable to the Company's non-employees is recognized when vested, as described in Note 9, Stock Plan.
Advertising and Marketing Costs: Advertising and marketing costs are expensed as
incurred. The Company incurred no advertising and marketing costs during the six
months ended
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Warrants: The Company accounts for common stock warrants in accordance with
applicable accounting guidance provided in ASC 815 Derivatives and Hedging, as
either derivative liabilities or as equity instruments depending on the specific
terms of the warrant agreement. For warrants classified as equity instruments
the Company applies the Black Scholes model and expenses the fair value as
financing costs. For warrants classified as derivative financial instruments the
Company applies the
Recent 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.
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