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

FORM 10-Q

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~January~~July 31, 2017

[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________Commission ~~__________~~File Number: 333-196921

Commission File Number: 333-196921

GARMATEX HOLDINGS LTD.
(Exact name of registrant as specified in its charter)

Nevada	36-4752858
(State or other jurisdiction of incorporation	(I.R.S. Employer Identification No.)
or organization)
7458 Allison Place
Chilliwack, British Columbia, Canada	V4Z 1Z7
(Address of principal executive offices)	(Zip Code)

7458 Allison Place
Chilliwack, British Columbia, Canada	V4Z 1Z7
(Address of principal executive offices)	(Zip Code)

(778) 823-3104
Registrant’s telephone number, including area code

n/a
(Former name, former address and former fiscal year, if changed since last report)

Indicated 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 large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]

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 the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of March 15, 2017, there were 35,554,406 shares of common stock outstanding.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ ] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [X] Emerging growth company [X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Yes [ ] No [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of September 14, 2017, there were 35,690,434 shares of common stock outstanding.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3. Quantitative and Qualitative Disclosures about Market Risk	7
Item 4. Controls and Procedures	8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	11
Item 1A: Risk Factors	11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3. Defaults upon Senior Securities	11
Item 4. Mine Safety Disclosures	11
Item 5. Other Information	11
Item 6. Exhibits	11
SIGNATURES	12

	Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3. Quantitative and Qualitative Disclosures about Market Risk	6
Item 4. Controls and Procedures	6

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	7
Item 1A: Risk Factors	7
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	7
Item 3. Defaults upon Senior Securities	7
Item 4. Mine Safety Disclosures	7
Item 5. Other Information	7
Item 6. Exhibits	7

SIGNATURES	8

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our consolidated financial statements included in this Form 10-Q are as follows:

F-1	Consolidated Balance Sheets as of ~~January~~July 31, 2017, (unaudited) and April 30, ~~2016~~2017;
F-2	Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~January~~July 31, 2017 and 2016 (unaudited);
F-3	Consolidated Statements of Stockholders’ Equity (Deficit) for the ~~nine~~three months ended ~~January~~July 31, 2017 (unaudited);
F-4	Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~January~~July 31, 2017 and 2016 (unaudited);
F-4	Notes to Consolidated Financial Statements (unaudited).

These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended ~~January~~July 31, 2017 are not necessarily indicative of the results that can be expected for the full year.

GARMATEX HOLDINGS LTD.
(formerly known as Oaxaca Resources Corp.)

~~UNAUDITED~~INTERIM CONDESNED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~January~~July 31, 2017 and 2016

~~F-1~~(Unaudited)

GARMATEX HOLDINGS LTD. (formerly known as Oaxaca Resources Corp.)INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (~~Unaudited~~EXPRESSED IN US DOLLARS)

		January 31,			April 30,
		July 31,			April 30,
		2017			2016
ASSETS		2017			2017
ASSETS
		(unaudited)
Current
Cash	$	~~1,838~~51		$	5127,880
Due from related party – Note 3 and 4		664,285			79,776
Prepaid expenses		1,682			3,844
Total current assets		666,123			79,827
Due from related party – Note 4		-			85
Total assets	$	666,123		$	79,827
Total current assets		1,733			31,809
Sublicenses - Note 3		1			1
Total assets	$	1,734		$	31,810
LIABILITIES
Current
Accounts payable and accrued liabilities	$	653,~~217~~574		$	834,~~000~~155
Notes payable		-			79,776
Notes payable – Note 5		30,539			4,209
Total current liabilities		6,217			87,776
Due to related party – Note 4		9,689			2,576
Total current liabilities		93,802			40,940
Long term liabilities
Accrued interest payable – Note 4		5,505			3,659
Promissory notes payable – Note 5		40,700			40,700
Promissory notes payable – Note 4		40,700			40,700
Total long-term liabilities		40,700			40,700
Total long term liabilities		46,205			44,359
Total liabilities		134,502			81,640
Total liabilities		52,422			132,135
STOCKHOLDERS’ DEFICIT
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.001 par value 10,000,000 shares authorized, none issued and outstanding		-			-
Common stock, $0.001 par value – Note 5 1,125,000,000 shares authorized 35,392,641 and 31,500,000 shares issued and outstanding, respectively		35,393			31,500
Common stock, $0.001 par value – Note 6 1,125,000,000 shares authorized 35,690,434 and 35,627,934 shares issued and outstanding, respectively		35,690			35,628
Share subscriptions payable		55,000			-
Additional paid in capital		925,151			906,459
Share subscriptions receivable		(38,929	)		-
Obligation to issue shares		-			18,754
Additional paid in capital		726,694			25,460
Accumulated deficit		(1,093,609	)		(1,010,671	)
Accumulated deficit		(164,457	)		(109,268	)
Total stockholders’ deficit		(132,768	)		(49,830	)
Total stockholders’ equity (deficit)		613,701			(52,308	)
Total liabilities & stockholders’ deficit	$	1,734		$	31,810
Total liabilities & stockholders’ equity (deficit)	$	666,123		$	79,827

~~SEE~~The ~~ACCOMPANYING~~accompanying ~~NOTES~~notes ~~THAT~~are ~~ARE~~an ANintegral ~~INTEGRAL~~part ~~PART~~of ~~OF THESE~~these ~~CONSOLIDATED~~consolidated ~~UNAUDITED~~unaudited ~~FINANCIAL~~financial ~~STATEMENTS~~statements

~~F-2~~GARMATEX HOLDINGS LTD. (formerly known as Oaxaca Resources Corp.) INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

GARMATEX HOLDINGS LTD. (formerly known as Oaxaca Resources Corp.) CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

		For the Three Months Ended
		July 31,
		2017			2016
Operating expenses
Audit and accounting fees	$	7,178		$	3,174
Bank charges		306			13
Consulting fees		11,217			13,968
Investor relations		11,321			-
Foreign exchange loss		1,733			5,912
Legal fees		16,241			3,271
Marketing and social media		2,426			-
Transfer and filing fees		5,324			7,632

Total operating loss		(55,746	)		(33,970	)

Accretion expense – Note 5		(25,205	)		-
Impairment on note receivable – Note 5		(84	)		-
Interest income – Note 4		-			4,807
Interest expense – Note 5		(1,903	)		(615	)
Total other income (expense)		(27,192	)		4,192

Net loss for the period	$	(82,938	)	$	(29,778	)


Basic and diluted net loss per common share	$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding – basic and diluted		35,665,977			32,316,656

		Three Months Ended						Nine Months Ended
		January 31						January 31
		2017			2016			2017			2016
Operating expenses (income)
Audit and accounting fees	$	5,165		$	2,840		$	13,726		$	13,070
Bank charges		229			35			389			111
Consulting fees		2,271			-			18,524			-
Foreign exchange loss (gain)		(15,604	)		-			3,818			3
Legal fees		2,690			7,399			17,113			21,637
Office expenses		-			-			-			500
Transfer and filing fees		1,196			485			18,458			2,545
Total operating income (loss)		4,053			(10,759	)		(72,028	)		(37,866	)
Interest income – Note 3		7,977			-			18,686			-
Interest expense – Note 4		(616	)		(602	)		(1,847	)		(1,583	)
Total other income (expense)		7,361			(602	)		16,839			(1,583	)
Net income (loss)	$	11,414		$	(11,361	)	$	(55,189	)	$	(39,449	)
Basic and diluted net income (loss) per common share	$	0.00		$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of common shares outstanding – basic and diluted		34,914,380			31,500,000			33,487,773			31,782,613

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

~~SEE~~GARMATEX ~~ACCOMPANYING~~HOLDINGS LTD.(formerly ~~NOTES~~known ~~THAT~~as ~~ARE~~Oaxaca Resources ANCorp.) ~~INTEGRAL~~INTERIM ~~PART~~CONDENSED OFCONSOLIDATED ~~THESE~~STATEMENT ~~CONSOLIDATED~~OF ~~UNAUDITED~~STOCKHOLDERS’ ~~FINANCIAL~~DEFICIT ~~STATEMENTS~~(Unaudited)

F-3

					Additional
					Paid in		Shares to be			Accumulated
	Common Shares				Capital		Issued			Deficit			Total
	Number		Amount

Balance, April 30, 2016	31,500,000		31,500		25,460		-			(109,268	)		(52,308	)
Shares issued for cash received by Garmatex	875,000		875		271,017		-			-			271,892
Shares issued for note payable	250,000		250		79,526		-			-			79,776
Shares issued for cash	2,877,934		2,878		391,652		-			-			394,530
Shares issued for convertible debt	125,000		125		38,804		-			-			38,929
Subscription received	-		-		-		18,754			-			18,754
Beneficial conversion feature	-		-		100,000		-			-			100,000
Net loss	-		-		-		-			(901,403	)		(901,403	)
Balance, April 30, 2017	35,627,934	$	35,628	$	906,459	$	18,754		$	(1,010,671	)	$	(49,830	)
Shares issued for cash – Note 6	62,500		62		18,692		(18,754	)		-			-
Net loss	-		-		-		-			(82,938	)		(82,938	)
Balance, July 31, 2017	35,690,434	$	35,690	$	925,151	$	-		$	(1,093,609	)	$	(132,768	)

~~GARMATEX~~The ~~HOLDINGS LTD.(formerly~~accompanying ~~known~~notes asare ~~Oaxaca Resources~~an ~~Corp.)~~integral ~~CONSOLIDATED~~part ~~STATEMENT~~of OFthese ~~STOCKHOLDERS’~~unaudited ~~EQUITY~~interim ~~(DEFICIT)~~condensed ~~For~~consolidated ~~the~~financial ~~nine~~statements ~~months ended January 31, 2017 (Unaudited)~~

					Additional
					Paid in		Subscriptions			Subscriptions		Accumulated
	Common Shares				Capital		Receivable			Payable		Deficit			Total
	Number		Amount
Balance, April 30, 2016	31,500,000	$	31,500	$	25,460	$	-		$	-	$	(109,268	)	$	(52,308	)
Shares issued for cash loaned to related party:	1,000,000		1,000		270,892		-			-		-			271,892
Shares issued for note payable:	250,000		250		79,526		-			-		-			79,776
Shares issued for cash:	2,642,641		2,643		311,887		-			-		-			314,530
Subscription receivable:	-		-		38,929		(38,929	)		-		-			-
Subscription payable:	-		-		-		-			55,000		-			55,000
Net loss	-		-		-		-			-		(55,189	)		(55,189	)
Balance, January 31, 2017	35,392,641	$	35,393	$	726,694	$	(38,929	)	$	55,000	$	(164,457	)	$	613,701

GARMATEX HOLDINGS LTD.
(formerly known as Oaxaca Resources Corp.)
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

SEE ACCOMPANYING NOTES THAT ARE AN INTEGRAL PART OF THESE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

		For the Three Months Ended
		July 31, 2017			July 31, 2016
Cash flows used in operating activities
Net loss for the period	$	(82,938	)	$	(29,778	)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment on notes receivable		84			-
Accretion of debt discount		25,205			-
Interest expense		1,903			615
Unrealized foreign exchange		2,292			-
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		20,556			29,397
Prepaid expenses		1,898			(4,807	)
Net cash used in operating activities		(31,000	)		(4,573	)

Cash flows used in investing activities
Advanced to related party		-			(130,010	)
Net cash used in investing activities		-			(130,010	)

Cash flows from financing activities
Cash received for common stock issuable		-			138,531
Proceeds from due to related party notes		7,114			-
Payments on note payable		(3,656	)		-
Net cash provided by financing activities		3,458			138,531

Effect of foreign exchange rate changes on cash		(287	)		-

Change in cash during the period		(27,829	)		3,948
Cash, beginning of the period		27,880			51
Cash, end of the period	$	51		$	3,999


Interest and taxes paid in cash	$	-		$	-

FSupplemental Cash Flow Information -4 Note 7

~~GARMATEX~~The ~~HOLDINGS~~accompanying ~~LTD.(formerly~~notes ~~known~~are asan ~~Oaxaca Resources~~integral ~~Corp.)~~part ~~CONSOLIDATED~~of ~~STATEMENT~~these OFunaudited interim ~~CASH~~condensed ~~FLOWS~~consolidated ~~(Unaudited)~~ financial statements

		For the Nine Months Ended
		January 31,			January 31,
		2017			2016
Cash flows used in operating activities
Net loss	$	(55,189	)	$	(39,449	)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		23,562			26,443
Prepaid expenses		-			250
Interest receivable		(18,686	)		-
Accrued long term interest payable		1,846			1,583
Net cash used in operating activities		(48,467	)		(11,173	)
Cash flows used in investing activities
Advanced to related party		(323,028	)		-
Net cash used in investing activities		(323,028	)		-
Cash flows from financing activities
Cash received for common stocks		314,530			-
Cash received for common stock issuable		55,000			-
Proceeds from due to related party notes		-			7,600
Proceeds from note payable		-			3,600
Net cash provided by financing activities		369,530			11,200
Effect of foreign exchange rate changes on cash		3,752			-
Increase in cash during the period		1,787			27
Cash, beginning of the period		51			58
Cash, end of the period	$	1,838		$	85
Supplemental information
Non-cash financing and investing activities
Common stock issued for note payable	$	79,776		$	-
Common stock issued for cash loaned to related party	$	271,892		$	-
Common stock subscription receivable	$	38,929		$	-
Operating expenses paid directly by related party	$	19,805		$	-
Reallocation from Capital stock to Additional paid in capital upon the return to treasury of 480,000 shares of common stock for $nil consideration.				$	480
Interest and taxes paid in cash	$	-		$	-

GARMATEX HOLDINGS LTD.
(formerly known as Oaxaca Resources Corp.)
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)
For the three months ended July 31, 2017 and 2016

SEE ACCOMPANYING NOTES THAT ARE AN INTEGRAL PART OF THESE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

Note 1	Basis of Presentation

	While the information presented in the accompanying interim consolidated financial statements for the three months ended July 31, 2017 and 2016 is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented in accordance with the accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements (and notes thereto) for the years ended April 30, 2017 and 2016 included elsewhere in the Company’s 10K filed with the SEC on July 31, 2017.

	Operating results for the three months ended July 31, 2017 are not necessarily indicative of the results that can be expected for the year ending April 30, 2018.

Note 2	Nature of Operations and Ability to Continue as a Going Concern

	On August 15, 2016, the Company changed its corporate name from Oaxaca Resources Inc. to Garmatex Holdings Ltd. Oaxaca Resources Corp. (the “Company”) was incorporated in the State of Nevada, United States of America on April 9, 2014. The Company was formed for the purpose of acquiring and developing mineral properties. The Company’s year-end is April 30.

	These interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these interim unaudited consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company has yet to achieve profitable operations, has an accumulated deficit of $1,093,609 and expects to incur further losses in the development of its business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing from shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on acceptable terms, if at all. The interim unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

~~F-5~~GARMATEX HOLDINGS LTD. (formerly known as Oaxaca Resources Corp.) Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) For the three months ended July 31, 2017 and 2016Page 2

~~GARMATEX~~On ~~HOLDINGS~~April ~~LTD.~~8, ~~(formerly~~2016, ~~known~~the asCompany ~~Oaxaca~~entered ~~Resources~~into ~~Corp~~a definitive Arrangement Agreement with Garmatex Technologies, Inc.), ~~NOTES~~a private TOcompany ~~THE~~incorporated ~~CONSOLIDATED~~under ~~FINANCIAL~~the ~~STATEMENTS~~laws of the Province of British Columbia, ~~January~~Canada 31("Garmatex"), ~~2017~~pursuant to which the Company has agreed to acquire all of the issued and outstanding securities of Garmatex in exchange for equivalent securities of the Company by way of a statutory arrangement (~~Unaudited~~the “Arrangement”) pursuant to the Business Corporations Act (British Columbia). The purpose of the Arrangement is for the Company, through the acquisition of Garmatex, to engage in Garmatex’s business of developing and supplying scientifically-engineered fabric technologies. As of the date of this report, the Arrangement Agreement with Garmatex Technologies has expired as conditions of the merger had not yet been satisfied. The two companies continue to negotiate with the intention of reaching a new agreement. All other agreements between them remain intact.

Note 1	Basis of Presentation
	While the information presented in the accompanying interim consolidated financial statements for the three and nine months ended January 31, 2017 and 2016 is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented in accordance with the accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements (and notes thereto) for the years ended April 30, 2016 and 2015 included elsewhere in the Company’s 10K filed with the SEC on August 8, 2016.
	Operating results for the three and nine months ended January 31, 2017 are not necessarily indicative of the results that can be expected for the year ending April 30, 2017.
Note 2	Nature of Operations and Ability to Continue as a Going Concern
	On August 15, 2016, the Company changed its corporate name from Oaxaca Resources Inc. to Garmatex Holdings Ltd. Oaxaca Resources Corp. (the “Company”) was incorporated in the State of Nevada, United States of America on April 9, 2014. The Company was formed for the purpose of acquiring and developing mineral properties. The Company’s year-end is April 30.
	These interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these interim unaudited consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company has yet to achieve profitable operations, has an accumulated deficit of $164,457 and expects to incur further losses in the development of its business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing from shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available or on acceptable terms, if at all. The interim unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

On March 8, 2017, the Company executed an amended, effective August 15, 2016, to the Arrangement, which allowed for an extension of the termination date to May 31, 2017 and settlement of all the loans issued under the previously entered Secured and Subordinated Loan Agreement, dated March 15, 2016, which in aggregate was CDN $953,988. In consideration of the settlement, Garmatex granted a non-exclusive technology Sublicense Agreement, dated March 8, 2017, and a Garmatex Trademark and Technology License Agreement, dated March 9, 2017, to their trade secret formulae and trademarks (note 3).

FUpon entering the Sublicense and License Agreements, management has determined that the Company ceased to be a shell company as defined in Rule 12b-62 promulgated under the Securities Exchange Act of 1934 because the Company is now able to fully exploit their intended business model.

~~GARMATEX~~Effective ~~HOLDINGS~~August ~~LTD~~15, 2016, the Company effected a forward stock split on the basis of 12.5:1. ~~Notes~~As tosuch, the ~~Unaudited~~Company’s ~~Consolidated~~authorized ~~Financial~~capital ~~Statements~~was ~~January~~increased 31from 90,000,000 ~~2017~~shares ~~Page~~of 2common stock, par value $0.001 to 1,125,000,000 shares of common stock, par value $0.001 and all shares of common stock issued and outstanding were increased on the basis of twelve and one half new shares for each one old shares. These consolidated financial statements give retroactive effect to such forward split and all share and per share amounts have been adjusted accordingly.

	On April 8, 2016, the Company entered into a definitive Arrangement Agreement with Garmatex Technologies, Inc., a private company incorporated under the laws of the Province of British Columbia, Canada ("Garmatex"), pursuant to which the Company has agreed to acquire all of the issued and outstanding securities of Garmatex in exchange for equivalent securities of the Company by way of a statutory arrangement (the “Arrangement”) pursuant to the Business Corporations Act (British Columbia). The purpose of the Arrangement is for the Company, through the acquisition of Garmatex, to engage in Garmatex’s business of developing and supplying scientifically-engineered fabric technologies. As of the year ending January 31, 2017, this agreement has expired and the Company is currently negotiating an updated agreement and has not yet closed as subjects to this agreement have not yet been satisfied.
Note 3	Technology Sublicensing Agreement
	Effective August 15, 2016, the Company effected a forward stock split (the “Company Forward Stock Split”) on the basis of 12.5:1. As such, the Company’s authorized capital was increased from 90,000,000 shares of common stock, par value $0.001 to 1,125,000,000 shares of common stock, par value $0.001 and all shares of common stock issued and outstanding were increased on the basis of twelve and one half new shares for each one old shares. These interim unaudited consolidated financial statements give retroactive effect to such forward split and all share and per share amounts have been adjusted accordingly.
	The Company entered into a non-exclusive Sublicense Agreement, dated March 8, 2017 and a Garmatex Trademark & Technology License Agreement, dated March 9, 2017, (collectively, “Master Sublicense Agreement”) with Garmatex whereby the Company was granted various intellectual property rights related to the design, development and manufacturing of various scientifically-engineered fabric technologies and performance technologies; including a patented T3® design, Bact-Out®, CoolSkin®, WarmSkin®, Kottinu™, ColdSkin™, SteelSkin™, Satinu™, CamoSkin™, RecoverySkin™, SlimSkin™, AbsorbSkin™ and IceSkin™ (collectively the foregoing are referred to hereinafter as the “Products”).
Note 3	Related Party Transactions
	Pursuant to the terms of the agreement, the Company acquired the rights to further develop, commercialize, market and distribute certain proprietary inventions and know-how related to the Products. The term of the non-exclusive Sublicense Agreement will continue in perpetuity until the Arrangement Agreement, dated April 8, 2016, is fully completed and Garmatex becomes a wholly owned subsidiary of the Company. Should the Arrangement Agreement not be completed, the Sublicense Agreement will continue in perpetuity unless otherwise agreed upon or amended by both parties.
	Management considers all directors, officers and persons with a significant influence over the operations of the Company to be related parties.
	During the year ended April 30, 2015, the Company’s former President loaned $5,000 to the Company and the Company issued a promissory note in the amount of $5,000. The promissory note is unsecured, bears interest at 6% per annum, and matures on December 31, 2018. As of the year ended April 30, 2016, this note payable and a $22,000 note payable from fiscal 2014 were no longer classified as related party and reclassified to third party note payable.
	During the year ended April 30, 2016, a company with a former common director loaned a total of $7,600 to the Company in exchange for the issuance by the Company of promissory notes in the aggregate amount of $7,600. The promissory notes are unsecured, bear interest at 6% per annum, and mature on December 31, 2018. This loan was assigned to the former President during April 30, 2016 and is a part of the $40,700 note payable due as of April 30, 2016, see note 4.
	On April 22, 2016, the Company received a promissory note in the amount of CDN$100,000 (US$79,776) from Garmatex Technologies(i), pursuant to the secured and subordinated loan agreement dated April 8, 2016. The notes were bearing interest at 5% per annum and payable semi-annually prior to maturity. Repayment of the notes, together with all outstanding interest accrued, will be due and payable on the earlier of; (a) nine months from the advancement date, (b) the closing of the Arrangement Transactions, and (c) 90 calendar days from the termination of the LOI or any formal Arrangement Transaction agreement which supersedes the LOI. The lender at all times has right to convert any portion of the principal and interest outstanding into securities of the Borrower.

~~F-7~~GARMATEX HOLDINGS LTD. (formerly known as Oaxaca Resources Corp.) Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) For the three months ended July 31, 2017 and 2016Page 3

~~GARMATEX~~As ~~HOLDINGS~~consideration ~~LTD~~for entering into the Master Sublicense Agreement, the Company has agreed to the following terms and conditions: (i) the Parties shall enter into Amendment No. ~~Notes~~1 to the ~~Unaudited~~Arrangement ~~Consolidated~~ Agreement, ~~Financial~~pursuant ~~Statements~~to ~~January~~which, among other things, the term “Termination Date” will be amended to mean May 31, 2017, ~~Page~~or 3such later date as may be mutually agreed to in writing by the Parties; and (ii) settlement of all the loans issued under the previously entered Secured and Subordinated Loan Agreement, dated March 15, 2016 which in aggregate was CDN $953,988 ($711,586).

	During the nine months ended January 31, 2017, the Company received promissory notes in the aggregate amount of CDN$778,118 (US$594,920) from Garmatex Technologies, pursuant to the secured and subordinated loan agreement dated April 8, 2016. The notes were bearing interest at 5% per annum and payable semi-annually prior to maturity. Repayment of the notes, together with all outstanding interest accrued, will be due and payable on the earlier of; (a) nine months from the advancement date, (b) the closing of the Arrangement Transactions, and (c) 90 calendar days from the termination of the LOI or any formal Arrangement Transaction agreement which supersedes the LOI. The lender at all times has right to convert any portion of the principal and interest outstanding into securities of the Borrower.
	During the nine months ended January 31, 2017, under the above agreement the Company recorded due from related party of $271,892 for cash received directly by Garmatex Technologies on behalf of the Company for common shares sold and $323,028 advanced to Garmatex Technologies. Additionally, there were repayments of $25,345 pursuant to notes receivable of $670,944 of which $19,805 was to pay for operating expenses on behalf of the Company in the current year and $5,540 was used for payments of accounts payable on behalf of the Company. As of January 31, 2017, the balance of notes receivable was $645,599.
	During the nine months ended January 31, 2017, the Company recorded interest income of $18,686 (2015 - $nil) pursuant to notes receivable of $645,599. Total accrued interest on all outstanding notes receivable as of January 31, 2017, was $18,686 (April 30, 2016 - $nil).
	During the nine months ended January 31, 2017, our principal executive offices were provided to us at no cost by the Company CEO, president, chief financial officer, and treasurer.
	The Company has performed an analysis of the related party loan balance under ASC 810-10, and has determined the loan represents a variable interest in Garmatex. Garmatex Technologies is a variable interest entity (“VIE”) and depends on the Company, as well as additional parties, for continuing financial support in order to maintain operations. However, the Company cannot make key operating decisions considered to be most significant to the VIE, and is therefore not considered to be the primary beneficiary. The Company’s maximum exposure to loss approximates to the carrying value of the related party loan balance at January 31, 2017.
Note 4	Notes Payable
	During the year ended April 30, 2016, a shareholder, with less than a 5% equity interest in the Company, loaned a total of $6,100 to the Company. The Company issued promissory notes in the aggregate amount of $6,100. The promissory notes are unsecured, bear interest at 6% per annum, and mature on December 31, 2018.
	On March 16, 2016, promissory note holders unconditionally assigned all of their right, title and interest in and under those promissory notes executed in favour of the holder totalling $13,700 to a non-related party.
	On April 22, 2016, the Company entered into a subscription agreement to issue 250,000 shares of common stock in the Company at a price of CDN$0.40 per common share for proceeds of CDN$100,000 which are being held in trust by Garmatex Technologies. As of April 30, 2016, outstanding share subscriptions had not yet been issued by the Company as such the Company has a note payable due to the subscriber of CDN$100,000 (US$79,776). Pursuant to the subscription agreement dated June 17, 2016, the subscription was accepted by the Company and the shares were issued on June 3, 2016 and is therefore no longer accounted for as a note payable.

The Company performed an analysis of the non-monetary transaction under ASC 845-10, and determined the fair value of the Master Sublicense Agreement to be equal to the book value of the loan, which the Company had written down to $1.00 due to the uncertainty of its recoverability and the uncertainty that the Company will be able to generate future revenues under the Master Sublicense Agreement.

F-8

Note 4	Related Party Transactions

	Management considers all directors, officers and persons with a significant influence over the operations of the Company to be related parties.

	On March 8, 2017, the Company executed an amendment, effective August 15, 2016, to the Arrangement Agreement dated April 8, 2016. The amendment has allowed for settlement of all the loans issued under the previously entered Secured and Subordinated Loan Agreement, dated March 15, 2016 which in aggregate was $953,988 CDN (US$711,586) including accrued interest. In return Garmatex granted a non-exclusive technology sublicense to the trade secret formulae and trademarks for the CoolSkin, RecoverySkin, SlimSkin, Kottinu, AbsorbSkin, ColdSkin, SteelSkin, WarmSkin, and IceSkin products. Due to the uncertainty in recoverability of the loans issued under the Secured and Subordinated Loan Agreement, the Company recorded an impairment to the loan receivable of $711,585, the remaining $1.00 was applied to the carrying value of the sublicense agreement.

	On April 19, 2017, the Company received a promissory note in the amount of CDN $60,000 ($45,159) and on April 21, 2017, the Company received a promissory note in the amount of CDN $20,000 ($15,108), both from Garmatex, pursuant to the secured and subordinated loan agreement dated April 8, 2016. The notes were bearing interest at 5% per annum and payable semi-annually prior to maturity. Repayment of the notes, together with all outstanding interest accrued, will be due and payable on the earlier of; (a) nine months from the advancement date, (b) the closing of the Arrangement Transactions, and (c) 90 calendar days from the termination of the LOI or any formal Arrangement Transaction agreement which supersedes the LOI. The lender at all times has right to convert any portion of the principal and interest outstanding into securities of the Borrower. Due to the uncertainty in recoverability of the loans issued under the Secured and Subordinated Loan Agreement, the Company recorded an impairment to the loan receivable of $58,576.

GARMATEX HOLDINGS LTD. (formerly known as Oaxaca Resources Corp.) Notes to the ~~Unaudited~~ Interim Condensed Consolidated Financial Statements ~~January~~(Unaudited) For the three months ended July 31, 2017 ~~Page~~and 2016Page 4

	During the nine months ended January 31, 2017, the Company charged interest expense of $1,847 (2015 - $1,583) pursuant to notes payable of $40,700. Total accrued interest on all outstanding notes payable as of January 31, 2017, was $5,506 (April 30, 2016 - $3,659).
Note 5	Capital Stock
	a) Authorized share capital
	The authorized common stock of the Company consists of 1,125,000,000 shares of common stock with par value of $0.001 and 10,000,000 shares of preferred stock with a par value of $0.001. As of January 31, 2017, the Company had 35,392,641 shares of common stock and no shares of preferred stock outstanding.
	b) Issued share capital
	On June 3, 2016, the Company issued 1,000,000 common shares of the Company at a price of $0.40 CAD per Unit for aggregate proceeds of $400,000 CDN ($310,821 USD) pursuant to a private placement agreement. The proceeds of $271,892 USD were received directly by Garmatex Technologies, Inc. on behalf of the Company and recorded as due from related party, see note 3. As of January 31, 2017, $50,000 CDN ($38,929 USD) remains outstanding to be received and is presented as a subscription receivable.
	On June 17, 2016, the Company issued 250,000 common shares of the Company at a price of $0.40 CAD per Unit to satisfy a note payable in the amount of $100,000 CDN ($79,776 USD) which was due as of April 30, 2016, see note 4.
	On August 15, 2016, the Company issued 125,000 common shares at a price of $0.40 CDN per common share for consideration of $50,000 CDN ($38,531 USD) pursuant to a subscription agreement.
	On August 15, 2016, the Company issued 294,112 common shares at a price of $0.34 per common share for consideration of $100,000 pursuant to a subscription agreement.
	On October 5, 2016, the Company issued 223,529 common shares at a price of $0.34 per common share for consideration of $76,000 pursuant to a subscription agreement.
	On November 22, 2016, the Company completed a private placement agreement pursuant to which it issued 2,000,000 common shares at a price of $0.05 per common share for consideration of $100,000.
	c) Shares to be issued

During the three months ended July 31, 2017, the Company recorded interest income of $nil (2016 - $4,807) pursuant to the above notes receivable. Total accrued interest on all outstanding notes receivable as of July 31, 2017, was $nil (April 30, 2017 - $85). The Company recorded an impairment to the interest receivable of $85 due to the impairment recorded on the loan receivable as of April 30, 2017.

FThe Company has performed an analysis of the related party loan balance under ASC 810-910, and determined the loan represents a variable interest in Garmatex. Garmatex is a variable interest entity (“VIE”) and depends on the Company, as well as additional parties, for continuing financial support in order to maintain operations. However, the Company cannot make key operating decisions considered to be most significant to the VIE, and is therefore not considered to be the primary beneficiary. The Company’s maximum exposure to loss approximates to the carrying value of the related party loan balance at July 31, 2017.

~~GARMATEX~~As ~~HOLDINGS~~of ~~LTD.~~July ~~Notes~~31, to2017, the ~~Unaudited~~Company ~~Consolidated~~recorded ~~Financial~~due ~~Statements~~to ~~January~~related 31party of $9,689 (April 30, 2017 ~~Page~~- 5$2,576) owing to the current CEO, president, chief financial officer, treasurer, and sole director relating to outstanding management fees and reimbursements.

~~Included~~During inthe ~~Shares~~three tomonths beended ~~issued at January 31~~April 30, 2017 isand ~~an amount of $55~~2016,~~000~~ ~~in cash received for~~ the ~~subscription~~principal ofexecutive ~~shares.~~offices ~~These shares~~ were ~~issued~~provided ~~subsequent~~at tono ~~January~~cost ~~31,~~by the ~~2017~~Company’s ~~pursuant~~current toCEO, ~~subscription~~president, ~~agreements~~chief ~~dated~~financial ~~February~~officer, 22treasurer, ~~2017~~and sole director.

d) Warrants

Note 5	Notes Payable

	On March 31, 2017, the Company issued a promissory note in the aggregate amount of CDN$5,000 for a legal retainer paid directly to, Harper Grey LLP, on behalf of the Company, totalling $3,656 (CDN$5,000) by a non-related party. The promissory note is unsecured, bears no interest, and matures on May 15, 2017. The Company repaid this promissory note on May 10, 2017.

	On April 28, 2017, the Company issued a convertible loan agreement in the aggregate principal amount of $100,000. This convertible loan agreement is unsecured, bears interest at 5% per annum, compounded annually, is convertible at $0.20 per common share, and is due in full including principal and accrued interest at its date of maturity on April 28, 2018. The Company recorded a debt discount of $100,000 related to the beneficial conversion feature. The expense was measured at the intrinsic value of the beneficial conversion feature at the commitment date and is being amortized as accretion expense over maturity using the effective interest method. For the three months ended July 31, 2017, the Company incurred $25,205 (2016 - $nil) in accretion expense pursuant to this debt discount.

	On July 6, 2017, the convertible loan holder unconditionally assigned all of their right, title, and interest in the convertible note.

	On July 28, 2017, the Company agreed to issue a promissory note, bearing interest at 5% per annum, in the aggregate amount of $2,210 (CDN $2,760) and $2,575 for amounts paid directly to Clark Wilson LLP and Malone Bailey LLP, respectively, on behalf of the Company to a non-related party.

AtGARMATEX ~~January~~HOLDINGS ~~31,~~LTD. (formerly ~~2017,~~known as Oaxaca Resources Corp.) Notes to the ~~Company~~Interim Condensed ~~had~~Consolidated Financial Statements (Unaudited) ~~1,946,321~~For ~~share~~the ~~purchase~~three ~~warrants~~months ~~outstanding~~ended asJuly ~~follows:~~31, 2017 and 2016Page 5

	Exercise	Expiry
Number	Price	Date
625,000	$0.60	June 17, 2018
62,500	$0.60	July 17, 2018
147,056	$0.60	July 28, 2018
111,765	$0.60	October 3, 2018
200,000	$0.60	November 22, 2018
800,000	$0.60	November 22, 2018
1,946,321

During the three months ended July 31, 2017, the Company charged interest expense of $1,903 (2016 - $615) pursuant to notes payable of $40,700 and convertible notes payable of $100,000. Total accrued interest on all outstanding notes payable as of July 31, 2017, was $8,004 (April 30, 2017 - $6,101).

	During the nine months ended January 31, 2017, the Company issued an aggregate of 1,946,321 warrants, along with the 3,892,641 common stock issued for cash and in settlement of a note payable, exercisable at a weighted average exercise price of $0.60 per share for a period of two years from the date of issuance, pursuant to subscription agreements. Each warrant entitles the holder the right to purchase one common share.
Note 6	Subsequent Events
	In June 2016, the Company accepted a subscription agreement (the “June 2016 Subscription”) for the purchase of 375,000 Units for total consideration of $150,000 CDN, of which $100,000 CDN was received during the nine months ended January 31, 2017 and $50,000 CDN was recorded as a subscription receivable. On February 22, 2017, the Company and subscriber mutually agreed to rescind this subscription agreement and treat it as void ab initio. Per a return to treasury agreement dated on the same day, the shareholder agreed to return the shares to the treasury of the Company for the sole purpose of retiring the shares and entering into a new subscription agreement. Under the terms of the new subscription agreement, the Company has agreed to issue 375,000 Units at a price of $0.40 CDN per Unit for consideration of $150,000 CDN, of which $100,000 CDN was received during the nine months ended January 31, 2017 pursuant to the June 2016 Subscription noted above, and $50,000CDN is expected to be received through a settlement of debt as described below. Each Unit issued consists of one common share in the capital of the Company and one-half of one non-transferable common share purchase warrant. Each warrant will entitle the holder to acquire one common share at a price of $0.60 USD per warrant share.

Note 6

Capital Stock

~~F-10~~a) Authorized share capital

~~GARMATEX~~The ~~HOLDINGS~~authorized ~~LTD.~~common ~~Notes~~stock toof the Company ~~Unaudited~~consists of 1,125,000,000 shares of common stock with par value of ~~Consolidated~~$0.001 ~~Financial~~and ~~Statements~~10,000,000 ~~January~~shares of preferred stock with a par value of $0.001. As of July 31, 2017, ~~Page~~the 6Company had 35,690,434 shares of common stock and no shares of preferred stock outstanding.

On February 22, 2017, the Company entered into an Assignment of Debt agreement with Garmatex Technologies and agreed to take assignment of a convertible debenture outstanding in the aggregate amount of CDN $50,000. For consideration of payment, the Company received a promissory note in the amount of CDN$50,000 from Garmatex Technologies, pursuant to the secured and subordinated loan agreement dated April 8, 2016. The notes were bearing interest at 5% per annum and payable semi-annually prior to maturity. Repayment of the notes, together with all outstanding interest accrued, will be due and payable on the earlier of; (a) nine months from the advancement date, (b) ~~the~~Issued ~~closing~~share of the Arrangement Transactions, and (c) 90 calendar days from the termination of the LOI or any formal Arrangement Transaction agreement which supersedes the LOI. The lender at all times has right to convert any portion of the principal and interest outstanding into securities of the Borrower. capital

On ~~February~~June 235, 2017, the Company ~~issued~~agreed ~~161~~to issue 62,~~765~~500 ~~Units~~units at a price of CDN $0.3440 per ~~Unit~~unit ~~pursuant~~for toconsideration ~~the~~of CDN $5525,000 ~~consideration~~(US$18,754) which is included in shares to be issued at ~~January~~April 3130, 2017 pursuant ~~(see~~to ~~Note~~a 5)subscription agreement. Each ~~Unit~~unit issued consists of one common share in the capital of the Company and one-half of one non-transferable common share purchase warrant. Each warrant will entitle the holder to acquire one common share at a price of $0.60 ~~USD~~ per warrant share.

Onc) February 28, 2017, the Company agreed to issue 73,529 Units at a price of $0.34 USD per Unit for consideration of $25,000 pursuant to a subscription agreement. Each Unit issued consists of one common share in the capital of the Company and one-half of one non-transferable common share purchase warrant. Each warrant will entitle the holder to acquire one common share at a price of $0.60 USD per warrant share. As of the date of this report, these Units have not been issued. Warrants

OnAt ~~March~~July 131, 2017, the Company ~~received a promissory note in the amount of CDN$30~~had 2,~~473 (US$23~~095,~~000) from~~217 ~~Garmatex~~share ~~Technologies,~~purchase ~~pursuant~~warrants to the secured and subordinated loan agreement dated April 8, 2016. The notes were bearing interest at 5% per annum and payable semi-annually prior to maturity. Repayment of the notes, together with all outstanding ~~interest~~as ~~accrued,~~follows: will be due and payable on the earlier of; (a) nine months from the advancement date, (b) the closing of the Arrangement Transactions, and (c) 90 calendar days from the termination of the LOI or any formal Arrangement Transaction agreement which supersedes the LOI. The lender at all times has right to convert any portion of the principal and interest outstanding into securities of the Borrower.

On March 8, 2017, the Company executed an amendment, effective August 15, 2016, to the Arrangement Agreement dated April 8, 2016 which proposed to carry out a transaction pursuant to which the Company purchased all the issued and outstanding securities of Garmatex Technologies, Inc. The amendment has allowed for an extension of the termination date of the arrangement agreement to May 31, 2017 and settlement of all the loans issued under the previously entered Secured and Subordinated Loan Agreement, dated March 15, 2016 which in aggregate was $953,988 CDN. In return Garmatex Technologies, Inc. has granted a non-exclusive technology sublicense to the trade secret formulae and trademarks for the CoolSkin, RecoverySkin, SlimSkin, Kottinu, AbsorbSkin, ColdSkin, SteelSkin, WarmSkin, and IceSkin products.

		Exercise	Expiry
Number		Price	Date
437,500	$	0.60	June 17, 2018
62,500	$	0.60	July 17, 2018
147,056	$	0.60	July 28, 2018
111,765	$	0.60	October 3, 2018
1,000,000	$	0.60	November 22, 2018
80,883	$	0.60	February 17, 2019
187,500	$	0.60	February 22, 2019
36,764	$	0.60	March 23, 2019
31,250	$	0.60	June 5, 2019

2,095,217

OnDuring ~~March 9, 2017,~~ the ~~Company~~ ~~entered~~three ~~into~~months anended ~~assignment~~July ~~agreement~~31, 2017, ~~with~~the ~~Garmatex~~Company ~~Technologies,~~issued ~~to receive~~an ~~all~~aggregate of ~~the right~~31,250 ~~title~~warrants, ~~and~~exercisable ~~interest~~at ina weighted ~~and~~average toexercise ~~100~~price ~~shares~~ of ~~Common Stock~~$0.60 ofper ~~Garmatex,~~share ~~Inc.,~~for a ~~Delaware~~period ~~Corporation,~~of atwo ~~wholly~~years from ~~owned~~the ~~subsidiary~~date of ~~Garmatex~~ ~~Technologies~~issuance, ~~which~~pursuant ~~represents~~to ~~100%~~subscription ofagreements. Each warrant entitles the ~~issued~~holder ~~and~~the ~~outstanding shares~~right to purchase one common share.

~~F-11~~Note 7 Supplemental Cash Flow Information

Investing and financing activities that do not have a direct impact on current cash flows are excluded from the statement of cash flows.

GARMATEX HOLDINGS LTD.
(formerly known as Oaxaca Resources Corp.)
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)
For the three months ended July 31, 2017 and 2016
Page 6

	Three Months	Three Months
	Ended	Ended
	July 31, 2017	July 31, 2016

Common stock issued for note payable	-	79,776
Common stock issued for cash loaned to related party	-	271,892
Common stock issued for convertible note payable	-	38,929
Operating expenses paid directly by related party	-	19,805
Operating expenses paid directly by non-related party	4,785	-

Note 8	Commitments

	Pursuant to a Marketing and Consulting Agreement, dated April 24, 2017, the Company committed to pay a retainer of $5,000 per month until June 24, 2017 and $10,000 per month from July 24, 2017 until March 24, 2018. As additional consideration for services, the Company also agreed to issue 112,000 shares of common stock on July 24, 2017 as per the Form 8-K filed with the SEC on June 23, 2017.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

~~Certain~~This ~~statements,~~quarterly ~~other~~report ~~than~~contains ~~purely~~“forward-looking ~~historical~~statements”. All ~~information,~~statements ~~including~~other ~~estimates,~~than ~~projections,~~ statements ~~relating~~of tohistorical ~~our~~fact ~~business plans, objectives, and expected operating results, and the assumptions upon which those statements~~ are ~~based, are~~ “forward-looking statements.” ~~These~~for ~~forward-looking~~purposes ~~statements~~of ~~generally~~federal ~~are~~and ~~identified~~state bysecurities ~~the words “believes~~laws,” ~~“project~~including,” ~~“expects,” “anticipates,” “estimates,”~~but ~~“intends,”~~not ~~“strategy,”~~limited ~~“plan~~to,” ~~“may,”~~statements ~~“will,”~~regarding: ~~“would,”~~the ~~“will be~~plans,” ~~“will~~strategies ~~continue,” “will likely result,”~~ and ~~similar~~objections ~~expressions.~~of ~~Forward-looking~~management ~~statements~~for ~~are~~future ~~based~~operations; ~~on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from~~ the ~~forward-looking statements. Our ability to predict results or the actual effect of~~ future plans or ~~strategies~~business isof ~~inherently uncertain. Factors which could have a material adverse effect on~~ our ~~operations and~~ company; future ~~prospects on a consolidated basis include, but are not limited to: changes in~~ economic conditions~~, legislative/regulatory~~ ~~changes,~~or ~~availability~~performance; ~~of capital, interest rates, competition,~~ and ~~generally~~any ~~accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking~~ statements ~~and~~of ~~undue reliance~~assumptions ~~should~~underlying ~~not~~any beof ~~placed~~the ~~on such statements~~foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except as required by applicable law, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe the expectations reflected in the forward-looking statements in this report are reasonable, actual results could differ materially from those projected or assumed in any forward-looking statements. All forward-looking statements are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

	•	our current lack of working capital;

	•	a possible inability to raise additional financing;

	•	an inability to close the Arrangement with GTBC (each as defined herein) on the terms expected or at all;

	•	the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain;

	•	deterioration in general or regional economic conditions;

	•	adverse state or federal legislation or regulations that increase the costs of compliance;

	•	inability to efficiently manage our operations; and

	•	the unavailability of funds for capital expenditures.

As used in this quarterly report on Form 10-Q, the terms “we”, “us”, “our”, the “Company” and “Garmatex Holdings” refer to Garmatex Holdings Ltd., a Nevada corporation, and our wholly-owned subsidiary, ORC Exploration LLC, a Nevada corporation, unless otherwise specified.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We were incorporated under the laws of the State of Nevada on April 9, 2014. Our fiscal year end is April 30. ~~Our~~Following ~~principal~~incorporation, ~~offices~~we commenced ~~are~~the ~~currently~~business ~~located~~of ata ~~7458~~mineral ~~Allison~~exploration ~~Place~~company. On May 8, ~~Chilliwack~~2014, ~~British~~we incorporated ~~Columbia~~our wholly-owned subsidiary, ~~Canada~~ORC Exploration LLC, for the purposes of mineral exploration. On May 20, 2014, we acquired an option to acquire a 100% legal and beneficial ownership interest in the Elizabeth mineral claim, located in the Omineca Mining District in the central part of the Province of British Columbia. Our ~~telephone~~initial ~~number~~mining ~~is:~~exploration ~~(778)~~program, which was scheduled to ~~823-3104~~commence in the second quarter of the fiscal year ending April 30, 2015, was delayed until the fourth quarter due to forest fire concerns.

Due to a dearth of available financing options, which has ~~Following~~affected ~~incorporation~~many junior mining companies in recent years, we ~~commenced~~subsequently ~~the~~ran ~~business~~ out of afunds ~~mineral~~to proceed with our planned exploration ~~company~~program. OnAs ~~May~~a 8result, ~~2014,~~our management wedecided ~~incorporated~~to ~~our~~seek ~~wholly-owned~~out ~~subsidiary,~~other ~~ORC~~potential ~~Exploration~~business ~~LLC,~~operations and management skills for the ~~purposes~~continuation of ~~mineral~~our ~~exploration~~business. OnIn ~~May~~connection 20therewith, effective ~~2014~~June 8, we2015, ~~acquired~~our anchief ~~option~~executive ~~to acquire~~officer a(“CEO”) ~~100%~~and ~~legal~~sole ~~and~~director, Jose ~~beneficial~~Montes, ~~ownership~~resigned ~~interest~~all inpositions ~~the~~as ~~Elizabeth~~an ~~mineral~~officer ~~claim,~~and ~~located~~director inof ~~the~~our ~~Omineca~~company, and ~~Mining~~we ~~District~~appointed inMike ~~the~~Gilliland ~~central~~to ~~part~~serve ofas ~~the~~our ~~Province~~sole ofofficer ~~British~~and ~~Columbia~~director. ~~Our~~Effective ~~initial~~March ~~mining~~14, ~~exploration program~~2016, ~~which was scheduled to~~Mr. ~~commence~~Gilliland inresigned ~~the~~all ~~second~~positions ~~quarter~~as ofan ~~the~~officer ~~fiscal~~and ~~year~~director ~~ending~~of ~~April~~our 30company, ~~2015,~~and we ~~was~~appointed ~~delayed~~Devon ~~until~~Loosdrecht ~~the~~to ~~fourth~~serve ~~quarter~~as ~~due~~our tosole ~~forest~~officer ~~fire~~and ~~concerns~~director.

~~Due~~On toApril a8, ~~dearth~~2016, ofwe ~~available~~entered ~~financing~~into ~~options,~~an ~~which~~arrangement ~~has~~agreement ~~affected~~(the “Arrangement ~~many~~Agreement”) ~~junior~~with ~~mining~~Garmatex ~~companies~~Technologies, inInc. ~~recent years~~(“GTBC”), wea ~~subsequently~~private company ~~ran~~incorporated ~~out~~under the laws of ~~funds~~the toProvince ~~proceed~~of ~~with~~British ~~our~~Columbia, pursuant ~~planned~~to ~~exploration~~which ~~program.~~we Asagreed ato ~~result,~~acquire ~~our~~all ~~management~~of ~~decided~~the tooutstanding ~~seek~~securities ~~out~~of ~~other~~GTBC ~~potential~~ in ~~business~~exchange ~~operations~~for ~~and~~the ~~management~~issuance ~~skills~~of ~~for~~equivalent ~~the~~securities ~~continuation~~ of our ~~business.~~company Inby ~~connection~~way ~~therewith,~~of ~~effective~~a statutory ~~June~~arrangement 8,(the ~~2015,~~“Arrangement”) ~~our~~under ~~chief~~the ~~executive~~Business ~~officer~~Corporations Act (~~“CEO”~~British Columbia). ~~and~~The ~~sole~~Arrangement ~~director,~~Agreement ~~Jose~~contained ~~Montes~~customary representations, ~~resigned~~warranties, ~~all~~and ~~positions as~~conditions anto ~~officer~~closing. ~~and~~The ~~director~~closing of the Arrangement ~~Company,~~Exchange ~~and~~(the we“Closing”) ~~appointed~~would ~~Mike~~only ~~Gilliland~~occur toonce ~~serve~~we ascomplete ~~our~~a ~~sole officer and director. Effective March 14~~name change, ~~2016,~~forward ~~Mr.~~stock-split ~~Gilliland~~and ~~resigned~~was ~~all~~provided ~~positions~~with asaudited anfinancial ~~officer~~statements from ~~and~~Garmatex, ~~director~~with ofsuch ~~our~~financial ~~company,~~statements ~~and~~being weprepared ~~appointed~~by ~~Devon~~an independent ~~Loosdrecht~~ accounting tofirm ~~serve~~registered aswith ~~our~~the ~~sole~~Public ~~officer~~Company ~~and~~Accounting ~~director~~Oversight Board (PCAOB).

WeEffective ~~are~~August ~~currently~~15, ~~seeking new~~2016, ~~business opportunities~~we completed a merger with ~~established~~our wholly-owned ~~business~~subsidiary, ~~entities~~Garmatex toHoldings. ~~affect~~Ltd., a ~~merger~~Nevada corporation, orwhich ~~other form~~was ofincorporated ~~business~~solely ~~combination~~to ~~with~~effect a change in our ~~company~~name. OnAs ~~April 8~~a result, ~~2016,~~ we ~~entered into~~have anchanged ~~arrangement~~our ~~agreement~~name ~~(the~~from “~~Arrangement Agreement”)~~Oaxaca ~~with~~Resources ~~Garmatex Technologies, Inc~~Corp.” (to “Garmatex Holdings Ltd.”). Also, aeffective ~~private~~August ~~company~~15, ~~incorporated~~2016, ~~under~~we ~~the~~effected ~~laws~~a oftwelve ~~the Province~~and one-half ofto ~~British~~one ~~Columbia,~~forward ~~pursuant~~stock tosplit ~~which~~of weour ~~have~~authorized ~~agreed~~and toissued ~~acquire~~and ~~all of the~~ outstanding common ~~securities~~stock. ofAs ~~Garmatex~~a inresult, ~~exchange~~our ~~for~~authorized ~~the~~capital ~~issuance~~ of ~~equivalent~~ ~~securities~~common ofstock ~~our~~increased ~~company~~from 90,000,000 byshares ~~way~~ of acommon ~~statutory~~stock ~~arrangement~~with ~~(the~~a ~~“Arrangement”)~~par ~~under~~value ~~the~~of ~~Business~~$0.001 ~~Corporations~~and ~~Act~~10,000,000 shares ~~(British Columbia).~~of Inpreferred ~~the~~stock ~~event~~with ~~that~~a ~~the~~par ~~Arrangement~~value isof ~~successfully~~$0.001 ~~completed~~to 1,125,000,000 weshares ~~will commence~~of common ~~operating~~stock ~~Garmatex’s~~with ~~business,~~a ~~which~~par isvalue ~~the~~of ~~development~~$0.001 and ~~supply~~10,000,000 shares of ~~scientifically~~ ~~engineered~~preferred ~~fabric~~stock with ~~technologies.~~a Aspar value of ~~the~~$0.001 ~~date~~and ofour ~~this~~previously ~~report~~outstanding 2,520,000 ~~the~~shares ~~Company~~of common ~~has~~stock ~~executed~~increased anto ~~amendment~~31, ~~effective August 15~~500,000 ~~2016,~~shares toof ~~the~~common ~~Arrangement~~stock ~~Agreement~~outstanding. ~~which~~There are ~~has~~no ~~allowed~~shares ~~for an extension~~ of ~~the~~preferred ~~termination~~stock ~~date~~currently ~~to May 31, 2017~~outstanding. ~~The~~We ~~agreement has~~changed ~~not~~our ~~yet~~name ~~closed~~and effected forward-split as ~~subjects~~per tothe ~~this~~terms ~~Arrangement~~and ~~Agreement~~conditions ~~have~~of ~~not~~the ~~yet been met~~Arrangement Agreement.

~~Completion~~As of the ~~Arrangement~~date ~~is subject to a number~~ of ~~conditions~~this asreport, in the Arrangement Agreement. ~~There~~with GTBC ~~can~~has beexpired ~~no assurance that the Arrangement will be completed~~ as ~~proposed~~conditions orof ~~at all. In~~ the ~~event~~merger ~~that~~had ~~the Arrangement is~~ not ~~successfully completed,~~yet webeen ~~expect that we will continue to seek out new business opportunities~~satisfied. We continue ~~anticipate that any new acquisition or business opportunity that we may be party~~ to ~~will~~negotiate ~~require~~with ~~additional~~GTBC ~~financing.~~with ~~There can be no assurance, however, that we will be able to acquire~~ the ~~financing~~intention ~~necessary to enable us to pursue our plan~~ of ~~operation~~reaching ~~and~~a ~~enter~~new ~~into such an~~ agreement. All Ifother weagreements ~~require~~between ~~additional~~us ~~financing~~ and weGTBC ~~are~~remain ~~unable to obtain such funds, our business will fail~~intact.

4We entered into and executed a non-exclusive Sublicense Agreement dated March 8, 2017 and the Garmatex Trademark & Technology License Agreement dated March 9, 2017 (collectively, “Master Sublicense Agreement”) with Garmatex Technologies, Inc. a company formed under the laws of the Province of British Columbia, Canada (“GTBC”) whereby we were granted various Intellectual Property Rights related to the design, development and manufacturing of various scientifically-engineered fabric technologies and performance technologies; including a patented T3® design, Bact-Out®, CoolSkin®, WarmSkin®, Kottinu™, ColdSkin™, SteelSkin™, Satinu™, CamoSkin™, RecoverySkin™, SlimSkin™, AbsorbSkin™ and IceSkin™ (collectively the foregoing are referred to hereinafter as the “Licensed IP”).

~~Even~~Pursuant ifto wethe ~~are~~terms ~~able~~of tothe ~~complete~~agreement, we acquired the ~~Arrangement~~rights to orfurther ~~commence~~develop, acommercialize, ~~different~~market ~~new~~and ~~business~~distribute ~~opportunity~~certain proprietary inventions and ~~obtain~~know-how related to the ~~necessary~~Products. ~~funding~~In exchange, ~~there~~we isagreed noto ~~assurance~~the following ~~that~~terms weand ~~will~~conditions: be(i) ~~able~~the toParties ~~generate~~shall ~~any~~enter ~~revenue,~~into orAmendment ~~that~~No. ~~any~~1 to ~~revenue~~the ~~that~~Arrangement ~~may~~Agreement; beand ~~generated~~(ii) ~~will~~we ~~be sufficient~~agreed to ~~provide~~cancel avarious ~~return~~loans made pursuant to ~~our~~a ~~investors~~Loan Agreement between us and GTBC in the aggregate amount of $953,988.00CDN.

InFollowing ~~implementing~~the aexecution ~~structure~~of ~~for~~the aMaster ~~particular~~Sublicense ~~business~~Agreement ~~acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture or other business combination with another corporation or entity. We may also acquire~~and ~~stock~~the orgrant ~~assets~~ of ~~an existing business. Upon~~ the ~~consummation~~license ofthereunder arelated ~~transaction,~~to itthe isLicensed ~~likely that our present management will no longer be in control of our company. In addition~~IP, itwe isare ~~likely~~now ~~that~~able to ~~some~~fully orimplement ~~all of~~ our ~~current~~intended ~~management~~business ~~will~~plan ~~resign~~ and beplan ~~replaced~~of ~~by one or more new officers or directors~~operations.

WeOur anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. We believe that there are numerous firms in various industries seeking the perceived benefits of being a publicly reporting corporation. Business opportunities may be available in many different industries and with businesses at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Business opportunities that we believe are in the best interests of our company to pursue may be scarce or we may be unable to obtain opportunities that we want. We can provide no assurance that we will be able to locate compatible business opportunities.

~~Currently,~~We weplan doto ~~not~~provide ~~have~~performance afabric ~~source~~solutions ofin ~~revenue.~~virtually every Wesector ~~are~~that ~~not~~has ~~able~~textile toapplications. ~~fund~~Our ~~our~~primary ~~cash~~strategy ~~requirements~~is ~~through~~to deploy our ~~current~~performance ~~operations.~~fabrics ~~Historically,~~as ~~we have been able to raise~~ a ~~limited~~premium ~~amount~~ingredient ofbrand, ~~capital~~similar ~~through~~to ~~private~~Gore-Tex® ~~placements~~in the ofouterwear ~~our equity stock~~market, ~~but~~or ~~we are~~akin ~~uncertain~~to ~~about~~Intel® ~~our~~in ~~continued~~the ~~ability~~computer ~~to raise funds privately~~space. ~~Further,~~We we believe that our ~~company~~future ~~may~~fabrics ~~have~~will ~~difficulties~~be ~~raising~~superior ~~capital~~in ~~until~~performance werelative ~~locate~~to acurrent ~~prospective~~market “standards” ~~business~~and ~~through~~have ~~which~~a wewide ~~can~~range ~~pursue our plan~~ of ~~operation.~~applications Ifin wemultiple ~~are~~clothing ~~unable~~and totextile ~~secure~~categories ~~adequate~~including, ~~capital~~but tonot ~~continue~~limited ~~our~~to, ~~acquisition~~sports ~~efforts~~apparel, ~~our~~medical, sleepwear, ~~shareholders~~linens, ~~may~~undergarments, ~~lose~~military, ~~some~~designer orwear, ~~all~~protective, industrial ~~of their investment~~ and ~~our~~first ~~business may fail~~responders.

Our business model is to co-develop fabric with manufacturers ~~Results~~to obtain exclusive licenses of ~~Operations~~technology ~~for~~and purchase fabric technology to build on our technology portfolio. We plan to commercialize these inventions by selling bolts of fabric directly to retailers and wholesalers. We plan to control the ~~three~~proprietary process of the technology for IP protection and ~~nine~~do ~~months~~not intend ~~ended~~to ~~January~~own 31any manufacturing facilities, ~~2017~~which will effectively allow us to scale.

We ~~generated~~are noin ~~revenues for~~ the ~~nine~~market ~~months ending January 31, 2017 and 2016. We do not expect~~ to ~~generate~~further ~~revenues~~acquire ~~until~~technologies wefrom inventors ~~have~~looking ~~established~~for a ~~new~~commercialization ~~business plan and operations and successfully implemented such business plan~~partner.

Currently, we do not have a source of revenue. We are not able ~~Three~~to ~~months~~fund ~~ended~~our ~~January~~cash 31requirements through our current operations. Historically, ~~2017~~we have ~~compared~~been able to ~~three~~raise ~~months~~a ~~ended~~limited ~~January~~amount 31of capital through private placements of our equity stock, ~~2016~~but we are uncertain about our continued ability to raise funds privately.

WeResults ~~incurred operating income~~ of ~~$4,053~~Operations for the three months ended ~~January~~July 31, 2017~~, compared with operating expenses of $10,759 for the three months ended January 31, 2016~~. The most significant changes in operating expenses comprised of a foreign exchange recovery of $15,604 (2015 - $nil) and legal fees of $2,690 (2015 - $7,399). The difference between periods was attributable to the foreign exchange on promissory notes received from Garmatex Technologies and decreased legal fees due to an additional legal invoice which was missed and included in the prior year period.

We ~~incurred~~generated ~~other~~no ~~income~~revenues ~~of $7,361~~ for the three months ~~ended~~ending ~~January~~July 31, 2017, asand ~~compared to other expenses of ($602) for the three months ended January 31,~~ 2016. ~~Our~~We ~~other~~do ~~income~~not ~~consisted~~expect ofto ~~interest~~generate ~~expense~~revenues ofuntil ~~$616~~we ~~(2015-$602) and~~have ~~interest~~established ~~income~~a new ofbusiness ~~$7,977~~plan ~~(2015 - $nil). Interest expense for 2017~~ and ~~2016~~operations ~~included $616~~ and ~~$602,~~successfully ~~respectively,~~implemented tosuch ~~reflect the interest accrued on promissory notes issued during the periods~~business plan.

WeThree ~~incurred a net income of $11,414 for the three~~ months ended ~~January~~July 31, 2017, as compared ~~with~~to ~~a net loss of $11,361 for the prior year~~ three~~-month~~ ~~period. The reason for this income as opposed to the prior year loss is due to a foreign~~months ~~exchange~~ended ~~recovery~~July ~~of $15~~31,~~604~~ ~~due~~2016 ~~to the value of promissory notes in Canadian dollars at the balance sheet date.~~

~~Nine~~We ~~months~~incurred operating expenses of $55,746 for the three months ended ~~January~~July 31, 2017, compared towith ~~nine~~operating expenses of $33,970 for the three months ended ~~January~~July 31, 2016. The most significant changes in operating expenses comprised of legal fees of $16,241 (2016 - $3,271) and audit fees of $7,178 (2016 - $3,174). The difference between periods was attributable to the additional legal fees for the current quarter ending related to the Arrangement Agreement with Garmatex, the investor relations agreement with Core IR, and other matters relating to legal filings required. Audit fees also increased due to the changeover of auditors for the year ending April 30, 2017.

5We incurred other expenses of $27,192 for the three months ended July 31, 2017, as compared to other income of $4,192 for the three months ended July 31, 2016. Our other expenses consisted of interest expense of $1,903 (2016 - $615), interest income of $nil (2016 - $4,807), and accretion expense of $25,205 (2016 - $nil). Interest expense for 2017 and 2016 included $1,903 and $615, respectively, to reflect the interest accrued on promissory notes issued during the periods.

We incurred ~~operating~~a ~~expenses~~net loss of $7282,~~028~~938 for the ~~nine~~three months ended July ~~January~~ 31, 2017, as compared with ~~operating~~a ~~expenses~~net loss of $3729,~~866~~778 for the ~~nine~~prior ~~months~~year three-month ~~ended January 31, 2016~~period. The ~~most~~reason ~~significant~~for ~~changes~~the increase in ~~operating~~loss ~~expenses~~is ~~comprised~~due oflargely to ~~consulting~~accretion ~~fees~~expense recorded on convertible debt of $1825,~~254~~2005 (~~2015~~2016 - $nil), ~~and filing~~ legal fees of $1816,~~458~~241 (~~2015~~2016 - $23,~~545~~271)., ~~The~~and ~~difference~~audit ~~between~~and ~~periods~~accounting ~~was mostly attributable to a one-time fee for a mining consultants firm as well as the addition of monthly consulting~~ fees ~~to the President~~ of ~~the Company which were not present in the prior comparable period. The difference is also attributable to increased filing fees due to the merger~~$7,178 ~~name~~(2016 ~~change~~- $3, ~~forward split, and annual filings with SEDAR~~174).

We incurred other income of $16,839 for the nine months ended January 31, 2017, as compared to ($1,583) for the nine months ended January 31, 2016. Our other income consisted of interest expense of $1,847 (2015-$1,583) and interest income of $18,686 (2015 - $nil). Interest expense for 2016 and 2015 included $1,847 and $1,583, respectively, to reflect the interest accrued on promissory notes issued during the periods.

We incurred a net loss of $55,189 for the nine months ended January 31, 2017, as compared with a net loss of $39,449 for the prior year nine-month period.

Liquidity and Capital Resources

As of ~~January~~July 31, 2017, we had total current assets of $~~666~~1,~~123~~733, consisting of cash in the amount of $51 and prepaid expenses of $1,~~838~~682. We had current liabilities of $93,802 as of July 31, 2017. Accordingly, we had a working capital deficit of $92,069 as of July 31, 2017. As of April 30, 2017, we had total current assets of $31,809, consisting of cash in the amount of $27,880, prepaid expenses of $3,844 and due from related party ~~notes~~ of ~~664,285~~$85. We had current liabilities of $640,~~217~~940 as of ~~January~~April 3130, 2017. Accordingly, we had a working capital deficit of $~~659~~9,~~906~~131 as of ~~January~~April 3130, 2017.

Operating Activities

Operating activities used $4831,~~467~~000 in cash for the ~~nine~~three months ended ~~January~~July 31, 2017 as compared to $114,~~173~~573 used for the prior ~~nine~~three months ended July ~~January~~ 31, 2016. The decrease in cash was attributable to the increase in net loss ~~and interest~~ ~~receivable~~ for the current period.

Investing Activities

Investing activities used cash of $~~323,028~~nil for the ~~nine~~three months ended ~~January~~July 31, 2017 as compared to $~~nil~~130,010 for the ~~nine~~three months ended ~~January~~July 31, 2016. The ~~increase~~decrease in the use of cash was due to the advance of funds to Garmatex Technologies in the prior year.

Financing Activities

Financing activities provided cash of $~~369~~3,~~530~~458 for the ~~nine~~ three months ended ~~January~~July 31, 2017, as compared to $11138,~~200~~531 for the ~~nine~~three months ended July ~~January~~ 31, 2016, which comprised of $~~314~~7,~~530~~114 in ~~funds~~due ~~received~~to ~~for~~related ~~common~~party ~~stock,~~payables ~~$55,000 in~~offset ~~funds~~by ~~received~~a ~~for~~promissory ~~shares~~note torepayment be$3,656 ~~issued in the Company~~(CDN$5,000) ~~and~~compared to $11138,~~200~~531 in ~~related~~funds received ~~and~~for ~~third~~common ~~party~~stock ~~borrowings~~ in ~~2015~~2016.

Based upon our current financial condition, we do not expect to have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund future operations through new business sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our future business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

Outstanding Share Data

As of July 31, 2017, there were 35,690,434 shares of common stock outstanding. In addition, as of July 31, 2017, there 2,095,217 share purchase warrants outstanding and 500,000 shares of common stock were issuable upon conversion of the convertible loan in the aggregate principal amount of $100,000 at the conversion price of $0.20 per share. As of September 14, 2017, there were 35,690,434 shares of common stock outstanding.

Going Concern

Our financial statements have been prepared assuming that we will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred cumulative losses of $~~164~~1,~~457~~093,609 through ~~January~~July 31, 2017, expect to incur further losses in the development of our new business and have been dependent on funding operations through the issuance of convertible debt and private sale of equity securities. These conditions raise substantial doubt about our ability to continue as a going concern. Management’s plans include continuing to finance operations through the private or public placement of debt and/or equity securities and the reduction of expenditures. However, no assurance can be given at this time as to whether we will be able to achieve these objectives.

As discussed in the notes to our unaudited consolidated financial statements, we have no established source of revenue. This has raised substantial doubt for our auditors about our ability to continue as a going concern. Without realization of additional capital, it would be unlikely for us to continue as a going concern.

Off Balance Sheet Arrangements

~~The~~We ~~Company~~have ~~has~~ performed an analysis of the related party loan balance under ASC 810-10, and has determined that the loan represents a variable interest in Garmatex. Garmatex Technologies is a variable interest entity (“VIE”) and depends on the Company, as well as additional parties, for continuing financial support in order to maintain operations. However, the Company cannot make key operating decisions considered to be most significant to the VIE, and is therefore not considered to be the primary beneficiary. Our maximum exposure to loss approximates to the carrying value of the due from related party loan balance on the Balance Sheet at ~~January~~July 31, 2017.

Other than noted above, we have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.

Critical Accounting Policies

InOur ~~December~~interim ~~2001,~~condensed ~~the~~consolidated ~~SEC~~financial ~~requested~~statements ~~that~~and accompanying ~~all~~notes ~~registrants~~are ~~list~~prepared ~~their~~in ~~most~~accordance ~~“critical~~with generally accepted accounting principles ~~polices”~~used in the ~~Management~~United ~~Discussion~~States ~~and Analysis~~(“GAAP”). ~~The~~Preparing ~~SEC~~financial ~~indicated~~statements requires ~~that~~management ato ~~“critical~~make ~~accounting~~estimates ~~policy”~~and isassumptions ~~one~~that ~~which~~affect isthe ~~both~~reported ~~important~~amounts toof ~~the~~assets, ~~portrayal~~liabilities, ofrevenue, aand ~~company’s~~expenses. ~~financial~~These ~~condition~~estimates and assumptions ~~results,~~are ~~and~~affected ~~requires~~by management’s ~~most~~application ~~difficult,~~of ~~subjective~~accounting orpolicies. ~~complex~~We believe ~~judgments,~~that ~~often~~understanding asthe abasis ~~result~~and nature of the ~~need~~estimates toand ~~make~~assumptions involved ~~estimates~~with ~~about~~ the ~~effect~~following aspects of ~~matters~~our ~~that~~financial ~~are~~statements is critical to ~~inherently~~an ~~uncertain~~understanding of our financial statements.

There have been no significant changes in the critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended April 30, 2017 as filed with the SEC on July 31, 2017.

Recently Adopted Accounting Pronouncements

For fiscal years beginning after December 15, 2016:

In November 2015, the FASB issued ASC 2015-17 “Income Taxes (Topic 740) – Balance Sheet Classification of Deferred Taxes” guidance simplifying the presentation of deferred tax liabilities and assets requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. Early adoption is permitted. The standard became effective for the Company on May 1, 2017. The adoption of this standard did not have any effect on its financial condition, results of operations and cash flows.

In August 2014, the FASB issued ASC 2014-15 “Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” new guidance which provides details on when and how to disclose going concern uncertainties. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year and to provide certain footnote disclosures if conditions or events raise substantial doubt about an entity’s ability to continue as a going concern. Early adoption is permitted. The standard became effective for the Company on May 1, 2017. The adoption of this standard did not have any effect on its financial condition, results of operations and cash flows.

Recently Issued Accounting Pronouncements

InFor November 2015, FASB issued Accounting Standards Update No. 2015-17 Income Taxes: Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”). ASU 2015-17 eliminates the requirement to bifurcate deferred taxes between current and non-current on the balance sheet and requires that deferred tax liabilities and assets be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public entities in fiscal years beginning after December 15, ~~2016,~~2017: and for interim periods within those fiscal years. The amendments for ASU-2015-17 can be applied retrospectively or prospectively and early adoption is permitted. The adoption of this standard is not expected to have a material impact for any period presented.

~~Management~~In ~~does~~August ~~not~~2016, ~~believe~~the ~~that~~Financial ~~any~~Accounting ~~other~~Standards ~~recently~~Board (“FASB”) issued, ~~but~~ASC ~~not~~2016-15 ~~yet~~“Statement ~~effective,~~of ~~accounting~~Cash ~~standard~~Flows if(Topic ~~currently~~230) ~~adopted~~– Classification ~~would~~of ~~have~~Certain aCash ~~material~~Receipts ~~effect~~and onCash Payments”. These amendments are intended to provide guidance for each of the ~~accompanying~~eight ~~financial~~issues ~~statements~~included, to reduce the current and potential future diversity in practice. Early adoption is permitted including in an interim period.

In January 2016, the FASB issued ASC 2016-01 “Financial WeInstruments do– ~~not~~Overall ~~expect~~(Subtopic ~~the~~825-10) ~~adoption~~– Recognition and Measurement of Financial ~~recently~~Assets ~~issued~~and ~~accounting~~Liabilities” ~~pronouncements~~a new standard related primarily to accounting ~~have~~for aequity ~~significant~~investments, ~~impact~~financial onliabilities ~~our~~where ~~results~~the offair ~~operations~~value option has been elected, and the presentation and disclosure requirements for financial ~~position~~instruments. There will no longer be an available-for-sale classification and therefore, orno ~~cash~~changes ~~flow~~in fair value will be reported in other comprehensive income for equity securities with readily determinable fair values. Early adoption is permitted.

For fiscal years beginning after December 15, 2018:

In July 2017, the Financial Accounting Standards Board (“FASB”) issued ASC 2017-11 “Earnings Per Share (Topic 260), Distinguishing Liability from Equity (Topic 480), and Derivatives and Hedging (Topic 815) – (i) Accounting for Certain Financial Instruments with Down Round Features (ii) Replace of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments.” The amendments in (i) change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features and to help clarify existing disclosure requirements. The amendments in (ii) recharacterize the indefinite deferral of certain provisions and do not have an accounting effect.

We are currently evaluating the impact of the above standards on our consolidated financial statements. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on our present or future consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

“Disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

Our principal executive officer and principal financial officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of ~~January~~July 31, 2017. Based on this evaluation he concluded that, as of ~~January~~July 31, 2017, our disclosure controls and procedures were not effective such that the information relating to us that is required to be disclosed in our SEC reports: (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (ii) is accumulated and communicated to our management, including our principal executive and financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter July 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Internal Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors or all fraud. Any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements, due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns may occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risk.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material pending legal proceedings to which our company is a party or of which any of our properties is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

We know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is a party adverse to our company or has a material interest adverse to our company.

Item 1A. Risk Factors.

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this report in evaluating our company before purchasing our securities. Our operating results and financial condition could be seriously harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks.

Risks Related to Our Business

~~Business~~The ~~opportunities~~sale ~~that~~of wefabric ~~believe~~is ~~are~~a innew ~~the~~operation ~~best interests~~ of ~~our~~ours ~~company~~with ~~may be scarce or we may be unable to obtain the ones that we want. If we are unable to obtain~~ a ~~business opportunity that we believe~~limited isoperating inhistory ~~the best interests of our company, we may never recommence operations~~ and ~~will~~ gohistory ~~out~~ of business~~. If we go out of business~~, ~~investors~~revenue ~~will~~generation ~~lose~~or ~~their~~production ~~entire investment in our company~~history.

We ~~are,~~have ~~and~~never ~~will~~been ~~continue~~engaged ~~to be, an insignificant participant~~ in the ~~number~~sale of ~~companies seeking a suitable business opportunity or business combination~~fabric. AThere ~~large number of established and well-financed entities, including~~could ~~venture capital firms, are actively seeking suitable business opportunities or business combinations which may also~~ be ~~desirable~~limited ~~target~~value ~~candidates~~to ~~for~~the ~~us. Virtually~~current ~~all~~portfolio ~~such~~of ~~entities~~technologies ~~have significantly greater financial resources, technical expertise~~ and ~~managerial~~raise ~~capabilities than we do. We are,~~significant ~~consequently,~~doubt atabout aour ~~competitive~~commercial ~~disadvantage in identifying possible business opportunities and successfully completing a business combination~~viability. WeOur ~~will~~future ~~also compete~~operations ~~with numerous other small public companies seeking suitable business opportunities or business combinations. If we~~ are ~~unable~~dependent ~~to obtain a business~~upon ~~opportunity~~many ~~that~~factors, weincluding ~~believe is in~~ the ~~best~~ability ~~interests~~to ofcreate ~~our~~sales ~~company,~~from weits ~~may never~~current ~~recommence operations and will go out~~ portfolio of ~~business~~technology. ~~If we go out of business, investors will lose their entire investment in our company.~~

Operating results may fluctuate depending on a number of factors which may cause the value of our shares to decrease significantly.

Operating results may fluctuate as a result of a number of factors, many of which will be outside of our control. As a result of these fluctuations, financial planning and forecasting may be more difficult and comparisons of operating results on a period-to-period basis may not necessarily be meaningful. Our business can be seasonal in nature, reflecting overall economic conditions as well as client budgeting and buying patterns in the textile and technical apparel industries. This may result in the fluctuation of operating results. Further, the cyclicality and seasonality of our business could become more pronounced and may cause operating results to fluctuate more widely.

Additional funds for our planned operations will be required.

We will need substantial funding for our planned operations. No assurances can be given that we will be able to raise the additional funding that will be required for such activities. To meet such funding requirements, we will be required to undertake additional equity financing, which would be dilutive to shareholders. Debt financing, if available, may also involve restrictions on financing and operating activities. There is no assurance that additional financing will be available on terms acceptable to us or at all. If we are unable to obtain additional financing as needed, we will be required to reduce the scope of our operations.

Third-party technology licenses may not continue to be available to us in the future.

We will rely on certain technology that we license from GTBC. These third-party technology licenses may not in the future be available to us on commercially reasonable terms, or at all. The loss of any of these technology licenses could result in delays in performance of work until our company identifies, licenses and integrates equivalent technology, and it may not be able to identify, license or integrate any such equivalent technology in a timely manner or at all. Any resulting delays in performance could damage our reputation, which could materially adversely affect our business, operating results or financial condition.

Others may assert intellectual property infringement claims against us.

Infringement or misappropriation claims (or claims for indemnification resulting from such claims) against us may be asserted or prosecuted, regardless of their merit, and any such assertions or prosecutions may adversely affect our business and/or operating results. Irrespective of the validity or the successful assertion of such claims, we would incur significant costs and diversion of resources relating to the defense of such claims, which could have an adverse effect on our business, operating results or both.

If any claims or actions are asserted against us, we may seek to obtain a license of a third-party’s intellectual property rights; however, under such circumstances such a license may not be available on reasonable terms or at all. Any such litigation could result in a material adverse effect on the business, prospects, and financial results of our company.

Adverse economic conditions may have an adverse effect on the business and financial results of our company.

Textiles and garments may be considered discretionary items for consumers. Factors affecting the level of consumer spending for such discretionary items include general economic conditions, particularly those in Canada and the United States, and other factors such as consumer confidence in future economic conditions, fears of recession, the availability of consumer credit, level of unemployment, tax rates and the cost of consumer credit. As global economic conditions continue to be volatile or economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable. The current volatility in the United States economy in particular has resulted in an overall slowing in growth in the retail sector because of decreased consumer spending, which may remain depressed for the foreseeable future. These unfavorable economic conditions may lead consumers to delay or reduce purchase of fabric products and therefore have a material adverse effect on our financial condition.

Unpredictability of demand could negatively influence our product offerings, plans operations and strategies.

Our success depends on our ability to identify and originate product trends as well as to anticipate and react to changing consumer demands in a timely manner. All of our future products are subject to changing consumer preferences that cannot be predicted with certainty. If we are unable to introduce new products or novel technologies in a timely manner or our new products or technologies are not accepted by our customers, our competitors may introduce similar products in a timelier fashion, which could hurt our goal to be viewed as a leader in performance fabric innovation. Our new products may not receive consumer acceptance as consumer preferences could shift rapidly to different types of performance fabrics or away from these types of products altogether, and our future success depends in part on our ability to anticipate and respond to these changes. Failure to anticipate and respond in a timely manner to changing consumer preferences could lead to, among other things, lower sales and excess inventory levels. Even if we are successful in anticipating consumer preferences, our failure to effectively introduce new products that are accepted by consumers could result in a decrease in net revenue and excess inventory levels, which could have a material adverse effect on our financial condition.

A growing competitive market in technologically advanced textiles could affect our ability to gain market share.

The market for performance textiles is highly competitive. It includes increasing competition from established companies who are expanding their production and marketing of performance products, as well as from frequent new entrants to the market. There can be no assurance that other companies with greater financial and technological resources will not develop similar scientifically advance fabric technologies similar to our company’s or with greater perceived benefits which would affect our ability to compete successfully against existing competitors or future entrants into the market.

Raw materials required in the manufacture of products may be susceptible availability and pricing and quality fluctuations and may adversely affect our financial results.

Our business will rely on externally sourced raw materials in our manufacturing operations, and will business with a broad range of suppliers to ensure steady supplies of high-quality raw materials at competitive prices. Many of the parts or materials used in manufacturing of our textiles are anticipated to be made from oil. If the price of crude oil rises, the purchase price of such parts or materials may increase as well. Further, unanticipated contingencies among these suppliers or if parts and materials procured by these suppliers suffer from quality problems or are in short supply, we may be forced to discontinue production. Such events, if occurred, may adversely affect our financial position and results of operations.

Brand leaders are slow to adopt new technologies and the long business development cycle could delay the return on investment of resources required to develop our business.

Textile innovation for customized product development is a collaborative effort between suppliers, our company and the customer. All play a key role to ensure the functionality and performance of the products are developed to meet the customer’s specific technical textile requirements. Technological advances in textiles are slow to be adopted by large multinational companies and approvals must be had at many stages of the buying process. As a result, the extended business development cycle and delayed of return on investment may have an adverse effect our financial condition.

We have limited resources for marketing of our products and we may not be able to attract sufficient paying customers to make our business sustainable.

We have limited resources for marketing of our products. Our future sales will depend in large part on our ability to attract sufficient paying customers to make our business profitable and sustainable. Also, we may not be able to attract and retain personnel or be able to build an efficient and effective marketing force, which could negatively impact sales of our products, and reduce our revenues and profitability.

Our ability to implement our business and marketing strategy.

The implementation of our business and marketing strategy will depend on a number of factors. These include our ability to (i) find and hire reliable and sufficiently skilled third-party marketing personnel, (ii) make our products known and establish a trusted brand to our potential end user customers, (iii) establish a significant paying customer base, (iv) obtain adequate financing on favorable terms in order to fund our business, (v) maintain appropriate procedures, policies and systems; (vi) hire, train and retain skilled employees, and (vii) operate successfully and profitably within an environment of increasing competition. Our inability to manage any or all of these factors could impair our ability to implement our business strategy successfully, which could have a material adverse effect on our business, financial condition and the results of our operations.

Our operating results may prove unpredictable.

Our operating results are likely to fluctuate significantly in the future due to a variety of factors, many of which we have no control over. Factors that may cause our operating results to fluctuate significantly include: the level of commercial acceptance by the public of our products; fluctuations in the demand for our products; the amount and timing of operating costs and capital expenditures relating to the operation of and/or expansion of our business, operations, infrastructure and general economic conditions. If realized, any of these risks could have a material adverse effect on our business, financial condition and the results of operations.

The current state of capital markets, particularly for small companies, is expected to reduce our ability to obtain the financing necessary to continue our business. If we cannot raise the funds that we need to continue acquisitions and fund future business opportunities, we will go out of business and investors will lose their entire investment in our company.

Like other smaller companies, we face difficulties in raising capital for our continued operations and to consummate a business opportunity with a viable business. We may not be able to raise money through the sale of our equity securities or through borrowing funds on terms we find acceptable.

We have had negative cash flows from operations and if we are not able to obtain further financing, our business operations may fail.

We had cash and cash equivalents in the amount of $51 and working capital of $(7,949) as of April 30, 2016. We anticipate that we will require additional financing while we are seeking a suitable business opportunity or business combination. Further, we anticipate that we will not have sufficient capital to fund our ongoing operations for the next twelve months. We would likely secure any additional financing necessary through a private placement of our common stock. There can be no assurance that any financing will be available to us, or, even if it is, if it will be offered on terms and conditions acceptable to us. Our inability to obtain additional financing in a sufficient amount when needed and upon terms and conditions acceptable to us, could have a material adverse effect upon our company. If additional funds are raised by issuing equity securities, dilution to existing or future shareholders will result. If adequate funds are not available on acceptable terms when needed, we may be required to delay, scale back or eliminate the development of any business opportunity that we may acquire.

Risks Associated with our Common Stock

Because Devon Loosdrecht controls a large percentage of our voting stock, he has the ability to influence matters affecting our stockholders.

Devon Loosdrecht, our CEO, president, chief financial officer, treasurer and sole director, owns over 46% of our common stock and controls a majority of the votes attached to our outstanding voting securities. As a result, he has the ability to influence matters affecting our stockholders, including the election of directors, the acquisition of assets, and the issuance of securities. Because he controls a majority of votes, it would be very difficult for investors to replace our management if they disagree with the way our business is being operated. Because the influence by Mr. Loosdrecht could result in management making decisions that are in the best interest of Mr. Loosdrecht and not in the best interest of the investors, you may lose some or all of the value of your investment in our common stock.

Our Articles of Incorporation exculpate our officers and directors from certain liability to our company or our stockholders.

Our Articles of Incorporation contain a provision limiting the liability of our officers and directors for their acts or failures to act, except for acts involving intentional misconduct, fraud or a knowing violation of law. This limitation on liability may reduce the likelihood of derivative litigation against our officers and directors and may discourage or deter our stockholders from suing our officers and directors based upon breaches of their duties to our company.

Risks Associated with our Common Stock

Our stock price may be volatile, which may result in losses to our shareholders.

The stock markets have experienced significant price and trading volume fluctuations, and the market prices of companies listed on the OTC Markets quotation system in which shares of our common stock are traded, have been volatile in the past and have experienced sharp share price and trading volume changes. The trading price of our common stock is likely to be volatile and could fluctuate widely in response to many factors, including the following, some of which are beyond our control:

	•	variations in our operating results;
	•	changes in expectations of our future financial performance, including financial estimates by securities analysts and investors;
	•	changes in operating and stock price performance of other companies in our industry;
	•	additions or departures of key personnel; and
	•	future sales of our common stock.

Domestic and international stock markets often experience significant price and volume fluctuations. These fluctuations, as well as general economic and political conditions unrelated to our performance, may adversely affect the price of our common stock.

Our common shares may become thinly traded and you may be unable to sell at or near ask prices, or at all.

We cannot predict the extent to which an active public market for trading our common stock will be sustained. Although the trading price of our common shares increased significantly recently, it has historically been sporadically or “thinly-traded” meaning that the number of persons interested in purchasing our common shares at or near bid prices at certain given time may be relatively small or non-existent.

This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community who generate or influence sales volume. Even if we came to the attention of such persons, those persons tend to be risk-averse and may be reluctant to follow, purchase, or recommend the purchase of shares of an unproven company such as ours until such time as we become more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels will be sustained.

The market price for our common stock is particularly volatile given our status as a relatively small company, which could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your purchase price if at all, which may result in substantial losses to you.

Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.

Because we can issue additional shares of common stock, our stockholders may experience dilution in the future.

We are authorized to issue up to 1,125,000,000 shares of common stock, of which 35,~~392~~690,~~641~~434 shares of common stock were issued and outstanding as of July 31, 2017. As of ~~January~~July 31, 2017, we have 2,095,217 warrants outstanding which could further dilution in the future if exercised. Our board of directors has the authority to cause us to issue additional shares of common stock without consent of our stockholders. Consequently, stockholders may experience dilution in their ownership of our stock in the future. As of September 14, 2017, there were 35,690,434 common shares and 2,095,217 warrants outstanding.

There is currently no established public trading market for our common stock, which makes it difficult for our stockholders to resell their shares.

There is currently no established public trading market for our common stock. There is a limited public market for our common stock through its quotation on the OTCPink quotation system operated by the OTC Markets Group. Trading in stocks quoted on the OTCPink is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated or have little to do with a company's operations or business prospects. Moreover, the OTCPink is not a stock exchange, and trading of securities on the OTCPink is often more sporadic than the trading of securities listed on a national securities exchange like the NASDAQ or the NYSE. Accordingly, stockholders may have difficulty reselling any of our shares. We cannot assure you that there will be a market for our common stock in the future.

~~Because~~We we do not ~~intend~~anticipate topaying ~~pay~~ any cash dividends onto our common ~~stock in the near future, our stockholders will not be able to receive a return on their shares unless they sell them~~ shareholders.

We presently do not anticipate ~~paying~~that ~~any~~we ~~cash~~will pay dividends on any of our common stock in the ~~near~~foreseeable future. ~~The~~If ~~declaration,~~ payment ~~and amount~~ of ~~any future~~ dividends ~~will~~does occur ~~be made~~ at ~~the~~some ~~discretion~~point ofin the ~~board of directors~~future, ~~and~~it ~~will~~would ~~depend~~be contingent upon, ~~among~~our ~~other~~revenues ~~things,~~and ~~our~~earnings, ~~results~~if ~~of operations~~any, ~~cash~~capital ~~flows~~requirements, and general financial condition,. ~~operating~~The payment ~~and~~of ~~capital~~any ~~requirements,~~common ~~and~~stock ~~other~~dividends ~~factors~~will be within the ~~board~~discretion ~~considers~~of ~~relevant~~our board of directors. We ~~may~~presently ~~never~~intend ~~pay~~to ~~any~~retain ~~dividends.~~all ~~Unless~~earnings weafter ~~pay~~paying ~~dividends~~the interest for the preferred stock, if any, to implement our ~~stockholders~~business ~~will~~plan; accordingly, we do not beanticipate ~~able~~the todeclaration ~~receive a~~of ~~return~~any ondividends ~~their~~for ~~shares~~common stock ~~unless~~in ~~they~~the ~~sell~~foreseeable ~~them~~future.

~~Our~~Volatility ~~stock~~in ~~is a penny stock. Trading of~~ our ~~stock~~common isshare ~~restricted~~price ~~by the SEC’s penny stock regulations, which~~ may ~~limit~~subject aus ~~stockholder’s ability~~ to securities ~~buy and sell our stock~~litigation.

~~Our stock is a penny stock.~~ The ~~SEC~~market ~~has~~for ~~adopted~~our ~~Rule~~common ~~15g-9 which generally defines “penny~~ stock” tois becharacterized ~~any~~by ~~equity security that has a market~~ significant price (volatility as ~~defined~~compared ~~in Rule 15g-9) less than $5.00 per share or an exercise price of less than $5.00 per share, subject~~ to ~~certain~~seasoned ~~exceptions. Our securities are covered by the penny stock rules~~issuers, ~~which~~and ~~impose~~we ~~additional~~expect ~~sales~~that ~~practice~~our ~~requirements on broker-dealers who sell to persons other than established customers and “accredited~~share ~~investors”.~~price ~~The~~will ~~term~~continue ~~“accredited investor” refers generally~~ to ~~institutions~~be ~~with~~more ~~assets~~volatile inthan ~~excess of $5,000,000 or individuals with~~ a ~~net~~seasoned ~~worth~~issuer infor ~~excess of $1,000,000 or annual income exceeding $200,000 or $300,000~~the ~~jointly~~indefinite ~~with their spouse~~future. ~~The~~In ~~penny~~the ~~stock rules require a broker-dealer~~past, ~~prior~~plaintiffs tohave aoften ~~transaction~~initiated insecurities ~~a penny stock not otherwise exempt from the rules, to deliver a~~class ~~standardized~~action ~~risk~~litigation ~~disclosure~~against ~~document in~~ a ~~form~~company ~~prepared~~following byperiods ~~the SEC, which provides information about penny stocks and the nature and level~~ of ~~risks~~volatility in the ~~penny stock~~ market. ~~The~~price ~~broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation~~ of ~~the broker-dealer and~~ its ~~salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account~~securities. ~~The~~We ~~bid and offer quotations~~may, ~~and~~in the ~~broker-dealer and salesperson compensation information~~future, ~~must~~ be ~~given to~~ the ~~customer~~target ~~orally~~of ~~or in writing~~similar ~~prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation~~litigation. InSecurities ~~addition,~~litigation ~~the~~could ~~penny~~result ~~stock rules require that prior to a transaction~~ in asubstantial ~~penny~~costs ~~stock not otherwise exempt from~~and ~~these~~liabilities ~~rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser~~ and ~~receive~~could ~~the purchaser~~divert management’s ~~written~~attention agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and ~~limit the marketability of our common stock~~resources.

10The elimination of monetary liability against our directors, officers and employees under Nevada law and the existence of indemnification rights of our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers and employees.

~~FINRA~~Our ~~sales~~Articles ~~practice~~of ~~requirements~~Incorporation contain a specific provision that eliminates the liability of our directors and officers for monetary damages to our company and shareholders. Further, we are prepared to give such indemnification to our directors and officers to the extent provided for by Nevada law. The foregoing indemnification obligations could result in our company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and resultant costs may also ~~limit~~discourage our company from bringing a lawsuit against directors and officers for breaches of their ~~stockholder’s~~fiduciary ~~ability~~duties, toand ~~buy~~may similarly discourage the filing of derivative litigation by our shareholders against our directors and ~~sell~~officers even though such actions, if successful, might otherwise benefit our ~~stock~~company and shareholders.

InOur ~~addition~~business to the “penny stock” rules promulgated by the SEC, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is ~~suitable~~subject ~~for that customer. Prior~~ to ~~recommending~~changing ~~speculative~~regulations ~~low~~related ~~priced securities~~ to ~~their~~ ~~non-institutional~~corporate ~~customers,~~governance ~~broker-dealers~~and ~~must~~public ~~make~~disclosure ~~reasonable~~that ~~efforts~~have ~~to obtain~~increased ~~information~~both ~~about~~our ~~the customer’s financial status, tax status, investment~~costs ~~objectives~~ and ~~other~~the ~~information.~~risk ~~Under interpretations~~ of ~~these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers~~noncompliance. ~~FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.~~

Because our common stock is publicly traded, we are subject to certain rules and regulations of federal, state and financial market exchange entities charged with the protection of investors and the oversight of companies whose securities are publicly traded. These entities, including the Public Company Accounting Oversight Board, the SEC and FINRA, have issued requirements and regulations and continue to develop additional regulations and requirements in response to corporate scandals and laws enacted by Congress, most notably the Sarbanes-Oxley Act of 2002. Our efforts to comply with these regulations have resulted in, and are likely to continue resulting in, increased general and administrative expenses and diversion of management time and attention from revenue-generating activities to compliance activities. Because new and modified laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Item 6. Exhibits
Exhibit Number	Description of Exhibit

31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

11Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~SIGNATURES~~GARMATEX HOLDINGS LTD.

~~Pursuant~~By: to/s/ ~~the~~Devon ~~requirements~~Loosdrecht Devon ofLoosdrecht ~~the~~Chief ~~Securities~~Executive ~~Exchange Act of 1934~~Officer, ~~this~~Chief ~~report~~Financial ~~has been signed below by the following persons on behalf of~~Officer, ~~the~~President,Secretary, ~~registrant~~Treasurer and insole ~~the~~Director ~~capacities and on the dates indicated.~~

~~GARMATEX~~Date: ~~HOLDINGS~~September ~~LTD.~~14, 2017

By: /s/ Devon Loosdrecht Devon Loosdrecht Chief Executive Officer, Chief Financial Officer, President,Secretary, Treasurer and sole Director

Date: March 15, 2017

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