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    QRON   US74737F1012

QRONS INC.

(QRON)
Delayed OTC Markets  -  10:04 2022-09-23 am EDT
0.2590 USD    0.00%
08/15QRONS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)
AQ
08/15Qrons Inc. Reports Earnings Results for the Second Quarter and Six Months Ended June 30, 2022
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05/16QRONS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)
AQ
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QRONS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

05/16/2022 | 01:41pm EDT

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 Securities and Exchange Commission (the "SEC") on March 28, 2022, that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements.

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 United States of America ("GAAP").

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 December 31, 2021, as filed with the SEC in its Annual Report on Form 10-K on March 11, 2022, along with the accompanying notes. As used in this Quarterly Report, the terms "we," "us," "our" and the "Company" means Qrons Inc.

The Company has relied primarily on its two co-founders, Jonah Meer, Chief Executive Officer, and Ido Merfeld, President, who are its sole directors to manage its day-to-day business and has outsourced professional services to third parties in an effort 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.




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 Israel, a country which is world-renowned for biotech innovations.

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.




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As a result of the Company's multidiscipline research effort in the field of supramolecular and polymeric materials chemistry and neuronal tissue engineering, on April 3, 2022, the Company filed a US provisional patent application for inventions of therapeutic polypseudorotaxane hydrogels, thereby providing the Company with the option to, in the future, seek protection for these inventions globally. The patent application relates generally to the treatment of pathological central nervous system conditions such as traumatic injury or neurodegenerative disease and the applications of uses of hydrogels in the treatment of such conditions.

We have not generated any revenue from the sale of products.



Results of Operations


Three Months Ended March 31, 2022 and March 31, 2021



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 $264,128 in the three months ended March 31, 2022 compared to a net loss of $235,309 in the three months ended March 31, 2021, as follows:



                                        For the Three Months Ended
                                                 March 31,
                                           2022               2021

Net sales                             $            -       $        -

Operating expenses:
Research and development expenses              8,932           11,836
Professional fees                             44,866           15,640
General and administrative expenses            9,758           10,877
Total operating expenses                      63,556           38,363

Loss from operations                         (63,556 )        (38,363 )

Other income (expense)
Interest expense                             (34,617 )        (10,986 )
Change in derivative liabilities            (165,955 )       (185,960 )
Total other income (expense)                (200,572 )       (196,946 )

Net loss                              $     (264,128 )     $ (235,309 )




Operating Expenses


Total operating expenses for the three months ended March 31, 2022 were $63,556 compared to total operating expenses of $38,363 for the three months ended March 31, 2021. The increase in operating expenses during the three months ended March 31, 2022 is due to an increase in professional fees from $15,640 for the three months ended March 31, 2021 to $44,866 for the three months ended March 31, 2022 partially offset by a decrease in research and development expenses from $11,836 for the three months ended March 31, 2021 to $8,932 for the three months ended March 31, 2022, and a small decrease in general and administrative expenses from $10,887 during the three months ended March 31, 2021 to $9,758 for the three months ended March 31, 2022. During the three months ended March 31, 2021, the Company incurred $11,836 of research and development expenses which included service fees related to certain research and development agreements of $3,100, technology licensing fees of $8,250 and lab supplies and expenses of $486,as compared to $8,932 in research and development fees for the three months ended March 31, 2022 which includes licensing fees of $6,250 and software license and equipment costs of $2,682. The increase in professional fees for the three months ended March 31, 2022 is due to an increase in accounting and legal fees related to the Company's filing of a registration statement and prospectus during the three months ended March 31, 2022 with no comparable expense during the three months ended March 31, 2021.




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Other Income (Expense)


Other expense in the three months ended March 31, 2022 was $200,572, which included a loss of $165,955 as a result of the change in value of derivative liabilities, and interest expense of $34,617 which is comprised of accretion of convertible notes of $29,291 and accrued interest on convertible notes payable of $5,326. Other expense in the three months ended March 31, 2021 was $196,946, which included a loss of $185,960 as a result of the change in value of derivative liabilities, and interest expense of $10,986 which is comprised of accretion of convertible notes of $88,833 and accrued interest on convertible notes payable of $2,153.



Operating Activities


Net cash used in operating activities was $29,411 for the three months ended March 31, 2022 compared to $28,189 for the three months ended March 31, 2021. Net cash used in operating activities for the three months ended March 31, 2022 was primarily the result of net loss, offset by non-cash items, accretion of debt discount of $29,291, an increase in derivative liabilities of $165,955, and changes to operating assets and liabilities, including an increase to prepaid expenses of $2,163, an increase to accounts payable of $41,054 and an increase to accounts payable-related parties of $580. Net Cash used in operating activities for the three months ended March 31, 2021 was primarily the result of net loss, offset by non-cash items including compensation in the form of stock options for research and development expense totalling $3,100, accretion of debt discount of $8,833, a loss from the change in derivative liabilities of $185,960 and changes to operating assets and liabilities, including an increase to prepaid expenses of $6,000, a increase to accounts payable of $17,623 and an decrease to accounts payable-related parties of $2,396.




Investing Activities



There were no investing activities during the three months ended March 31, 2022 and 2021.




Financing Activities



There were no financing activities during the three months ended March 31, 2022 and 2021.

Liquidity and Capital Resources

As of March 31, 2022, we had cash of $5,654 and prepaid expenses totalling $2,163. We are in the early stage of development and have experienced net losses to date and have not generated revenue from operations which raises substantial doubt about our ability to continue as a going concern. There are a number of conditions that we must satisfy before we will be able to commercialize potential products and generate revenue, including successful development of product candidates, 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. We do not currently have sufficient resources to accomplish any of these conditions necessary for us to generate revenue and expect to incur increasing operating expenses. We will require substantial additional funds for operations, the service of debt and to fund our business objectives. There can be no assurance that financing, whether debt or equity, will 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 favorable to us. If additional funds are raised by the issuance of equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing stockholders. We currently have no agreements, arrangements or understandings with any person or entity to obtain funds through bank loans, lines of credit or any other sources.

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 second quarter of 2022.




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Offering


The Company filed a registration statement on Form S-1 with the SEC on January 11, 2022, to offer and sell up to 2,500,000 shares of common stock in a self-underwritten primary offering at a fixed price of $0.70 per share which was declared effective on January 11, 2022. To date, no shares have been sold and there can be no assurance that the Company will be successful in selling any of the shares being offered.



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 December 31, 2021 includes an explanatory paragraph stating the Company has recurring losses and limited operations which raise substantial doubt about its ability to continue as a going concern. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned operations. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern.

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 $8,932 and $11,836 for the three months ended March 31 2022 and 2021, respectively.

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 11, Stock Plan.

Advertising and Marketing Costs: Advertising and marketing costs are expensed as incurred. The Company did not incur advertising and marketing costs during the three months ended March 31, 2022 and 2021.

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.

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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© Edgar Online, source Glimpses

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Financials (USD)
Sales 2021 - - -
Net income 2021 -1,07 M - -
Net Debt 2021 0,57 M - -
P/E ratio 2021 -9,96x
Yield 2021 -
Capitalization 3,44 M 3,44 M -
EV / Sales 2020 -
EV / Sales 2021 -
Nbr of Employees 3
Free-Float 23,9%
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Managers and Directors
Jonah Martin Meer Chief Executive Officer, CFO, Secretary & Director
Ido Merfeld President & Director
Liat Hammer Research Director
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