E-QURE CORP. - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION

Edgar Glimpses |

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 , 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 (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 , 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 down 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.

On , the Company entered into an agreement with Austen Biolnnovation Institute ("ABIA"), for purpose of ABIA: (i) obtaining an Investigational Device Exemption (IDE) approval from the FDA; and (ii) conducting a clinical trial for the Registrant's BST Device, a prerequisite for securing FDA approval in the U.S. market. After determining that ABIA was unable, because of substantial financial difficulties and key personnel losses, to perform its obligation, we demanded that ABIA fully-refund the monies paid to ABIA. We subsequently commenced a lawsuit against ABIA. The Company signed a settlement agreement with ABIA from which it received $300,000 in satisfaction of all claims against ABIA.

The Company engaged IMARC Research Inc. to provide a broad range of services related to its BST Device and the FDA application process. On , the Company 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. We are dependent upon the success of our FDA application for us to be able to market our BST Device in the U.S.

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 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:

? We may not be able to raise additional funds we may need to complete the clinical trials.

? Competitors may develop alternatives that render BST Device redundant or unnecessary.

? We may not have a sufficient and sustainable intellectual property position.

? Our device may be shown to have harmful side effects or other characteristics that indicate it is unlikely to be safe and effective

? Our device may not receive regulatory approval.

? Even if our device receives regulatory approval, it may not be accepted by patients, the medical community or third-party payers.



14







Recent Developments


On , the Company reported that it entered into an exclusive distribution agreement (the "Distribution Agreement") with Chemipal Ltd, a closely-held Tel-Aviv Stock Exchange listed company organized under the laws of the State of Israel ("Chemipal"). Chemipal has been actively engaged in the distribution of medical products in srael since 1941. Under the Distribution Agreement, the Registrant has granted Chemipal exclusive distribution rights to the BST Device and the accompanying disposable electrodes (sometimes collectively, the "Products") in Israel for an initial 5 year term, subject to Chemipal satisfying a minimum purchase quota of $3 million during the term.

On , the Registrant confirmed certain information that it had received from ABIA stating that it had sustained financial difficulties and key personnel losses that would adversely a ffect 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 , the Company commenced legal action against ABIA in the Supreme Court of the State of New York, New York County alleging the breach of contract against ABIA of the Clinical Trial Agreement dated (the "CTA") based upon, among other reasons: (i) the failure of ABIA to commit sufficient personnel to the Company's BST device project; (ii) misrepresenting the ability of its staff to perform its obligations under the CTA; (iii) failing to provide the FDA with adequate evidence to support the IDE applications and providing incorrect responses to the FDA; and (v) misappropriating the Company's funds for use on other ABIA projects and expenses rather than in fulfillment of its contract obligations. The Lawsuit seeks approximately $475,000 in actual damages, representing the fees paid by the Company to ABIA, loss of profits in an amount not less than $3 million and reasonable attorneys' fees and costs and expenses. During , the Company signed settlement agreement with ABIA on the amount of $300,000.

The Company engaged IMARC Research Inc. to provide a broad range of services related to its BST Device and the FDA application process. On , the Company 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. We are dependent upon the success of our FDA application for us to be able to market our BST Device in the U.S.

On , 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 , 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.



15






On , 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 , 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 down to complete closure and/or cure.

Results of Operations during the three months ended as compared to the three months ended

We have not generated any revenues during the three months ended and 2018. We had operating expenses mainly related to general and administrative expenses and research and development expenses. During the three months ended , we incurred a net loss from operations of $182,347 due to general and administrative expenses of $153,108 and research and development expenses of $29,239 as compared to a net loss from operation of $92,201 due to general and administrative expenses of $82,312 and research and development expenses of $9,889 in the same period in the prior year.

Our R&D expenses increased by $19,350 during the three months ended 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 as compared to the six months ended

We have not generated any revenues during the six months ended and 2018. We had operating expenses mainly related to general and administrative expenses and research and development expenses. During the six months ended , we incurred a net loss from operations of $346,399 due to general and administrative expenses of $273,579 and research and development expenses of $72,820 as compared to a net loss from operation of $202,906 due to general and administrative expenses of $188,124 and research and development expenses of $14,782 in the same period in the prior year.

Our R&D expenses increased by $58,038 during the six months ended 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 , we had current assets of $118,053 consisting of cash as compared to current assets of $390,495 at consisting of cash in the same amount. As of and , we had other assets of $0 and $4,882, respectively. We had total assets of $118,053 as of and $395,377 as of . We had current liabilities of $291,880 as of consisting of $1,564 in accrued interest, accrued salary of $252,580 and $37,736 in short-term notes payable to related parties. We had current liabilities of $224,676 as of consisting of $1,564 in accounts payable, $157,810 in accrued salary, accrued expenses of $27,566 and $37,736 in short-term notes payable to related parties. We had no long-term liabilities as of and .

We used $272,442 in our operating activities during the six months ended , which was due to a net loss of $346,399 offset by imputed interest of $1,871, an increase in accounts payable and accrued expenses of $67,204 and an increase in prepaid expenses and other assets of $4,882. We used $51,375 in our operating activities during the six months ended , which was due to a net loss of $202,906 offset by imputed interest charges of $9,456, an increase in prepaid expenses of $21,000, an increase in other assets of $7,000 and in increase in accounts payable and accrued expenses of $114,075.



16






We had no financing activities during the six months ended . We financed our negative cash flow from operations during the six months ended through proceeds from the issuance of $52,628 in short-term debt to related parties.

We had no investing activities during the six months ended and 2018.

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 2018 and 2017. 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 net loss of $346,399 during the six months ended and $2,013,838 during the year ended and had accumulated deficits of $33,978,924 and $33,632,525 as of and , respectively.

The Company had no revenues from operations during the six months ended and 2018. As of , the Company had $118,053 cash on hand and had negative working capital of $173,827.

We believe that our current cash on hand of $118,053, as of , will be sufficient to meet our operating requirements throughout the fiscal year 2019. We require additional financing at satisfactory terms and conditions, of which there can be no assurance, in order to satisfy our 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 2020. 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.

Our future financing transactions may include the issuance of equity and/or debt securities. In the event that we seek to raise funds through additional private placements of equity or convertible debt, the trading price of our common stock could be adversely effected. Further, if we issue additional equity or debt securities, stockholders may experience dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. We are not aware of any material trend, event or capital commitment, which would or could potentially adversely affect our liquidity. We do not have any arrangements with potential investors or lenders to provide us with any additional financing and there can be no assurance that any such additional financing will be available when required in order to proceed with the business plan.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Comments

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     

INTERVIEW: CEO Jorge Fernandez - iBlades

Equities.com's Sam Mitchell interview iBlades CEO, Jorge Fernandez