UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ X . QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~August~~November 3130, 2016

☐ . TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ____________ to ____________

Commission file number: 000-53207

NEXUS BIOPHARMA, INC.

(Exact name of small business issuer as specified in its charter)

Nevada

75-3267338

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

8 Hillside Ave, Suite 108, Montclair, NJ 07042

(Address of principal executive offices)

(973) 524-6100

(Registrants telephone number, including area code)

Plata Resources, Inc., 2911 Park Avenue, Pasay City, Metro Manila, Philippines,

Former fiscal year end: December 31

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ X .Yes ☐ .No

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ X .Yes ☐ .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; as defined within Rule 12b-2 of the Exchange Act.

☐. Large accelerated filer ☐. Accelerated filer ☐. Non-accelerated filer ☒X . Smaller reporting company

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

The number of shares outstanding of each of the issuer's classes of common equity as of ~~October~~April 246, ~~2016~~2017: 64,300,000 shares of common stock.

Contents

		Page
		Number
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements	13
	Consolidated Balance Sheets as of August 31, 2016 (unaudited) and February 29, 2016	1
	Consolidated Balance Sheets as of November 30, 2016 (unaudited) and February 29, 2016	3
	Consolidated Statements of Operations for the Three and Six Months Ended August 31, 2016 and 2015 (unaudited)	2
	Consolidated Statements of Operations for the Three and Nine Months Ended November 30, 2016 and 2015 (unaudited)	4
	Consolidated Statement of Stockholder's Equity at August 31 2016 (unaudited)	3
	Consolidated Statement of Stockholder's Equity at November 30, 2016 (unaudited)	5
	Consolidated Statements of Cash Flows for the Six Months Ended August 31, 2016 and 2015 (unaudited)	4
	Consolidated Statements of Cash Flows for the Nine Months Ended November 30, 2016 and 2015 (unaudited)	6
	Notes to Condensed Consolidated Unaudited Financial Statements	5
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	811
Item 3	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4	Controls and Procedures	1314
PART II	OTHER INFORMATION
Item 1	Legal Proceedings	1415
Item 1A	Risk Factors	1415
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	1415
Item 3	Defaults Upon Senior Securities	1415
Item 4	Mine Safety Disclosures	1415
Item 5	Other Information	1415
Item 6	Exhibits	15
SIGNATURES		16

PART I - FINANCIAL INFORMATION

Item 1 – Financial Statements

NEXUS BIOPHARMA, INC.

Consolidated Balance Sheets as of November 30, 2016 (unaudited) and February 29, 2016

		August 31				February 29
			November 30		February 29
		~~2016~~	2016		2016	~~2016~~
		~~(Unaudited)~~	(Unaudited)
ASSETS
CURRENT ASSETS
~~Cash~~	Cash	$	~~62,441~~302	$	9,925	$	~~9,925~~
Total Current Assets			62,441				9,925
	Sub-lease receivable		8,991		-
Intangible Asset, net			7,770				-
	Total Current Assets		9,293		9,925
TOTAL ASSETS		$	70,211			$	9,925
	Furniture and equipment, net		1,632		-
LIABILITIES AND STOCKHOLDERS' DEFICIT
	Intangible asset, net		7,323		-
LIABILITIES
	TOTAL ASSETS	$	18,248	$	9,925
Accounts payable and accrued expenses		$	839,977			$	735,606
LIABILITIES AND STOCKHOLDERS' DEFICIT
Stock payable			100,000				-
LIABILITIES
Note payable			292,500				-
	Accounts payable and accrued expenses	$	824,261	$	735,606
Total Current Liabilities			1,232,477				735,606
	Stock payable		200,000		-
Convertible notes payable - net of unamortized debt discount of $15,555 and 18,889			44,445				41,111
	Note payable		292,500		-
Total Long Term Liabilities			44,445				41,111
	Total Current Liabilities		1,316,761		735,606
TOTAL LIABILITIES			1,276,922				776,717
	Convertible notes payable - net of unamortized debt discount of $13,888 and 18,889		46,112		41,111
STOCKHOLDERS' DEFICIT
	Total Long Term Liabilities		46,112		41,111
Common stock, $.00001 par value; 100,000,000 shares authorized; 64,309,655 and 31,552,524 shares issued and outstanding, respectively			643				315
	TOTAL LIABILITIES		1,362,873		776,717
Additional paid-in-capital			1,839,991				1,841,240
STOCKHOLDERS' DEFICIT
Accumulated stockholders' deficit			(3,047,345	)			(2,608,347	)
	Common stock, $.001 par value; 750,000,000 shares authorized; 64,309,655 and 31,552,524 shares issued and outstanding, respectively		64,310		31,553
Total Stockholders' Deficit			(1,206,711	)			(766,792	)
	Additional paid-in-capital		1,776,324		1,810,002
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	70,211			$	9,925
	Accumulated stockholders' deficit		(3,185,259)		(2,608,347)
	Total Stockholders' Deficit		(1,344,625)		(766,792)
	TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	18,248	$	9,925

~~The accompanying notes are an integral part of these financial statements.~~3

NEXUS BIOPHARMA, INC.

Consolidated Statements of Operations for the Three and Six Months Ended November 30, 2016 and 2015

	Three months ended						Six months ended
	August 31, 2016			August 31, 2015			August 31, 2016			August 31, 2015
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
OPERATING EXPENSES
General and administrative	$	161,403		$	761,222		$	409,417		$	803,273
Research and development		8,904			7,500			16,404			110,900
Total Operating Expenses		170,307			768,722			425,821			914,173
OTHER INCOME (EXPENSE)
Interest expense, net		(9,033	)		-			(13,177	)		-
NET LOSS	$	(179,340	)	$	(768,722	)	$	(438,998	)	$	(914,173	)
BASIS AND DILUTED NET LOSS PER SHARE	$	0.00		$	(0.29	)	$	(0.01	)	$	(0.37	)
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIS AND DILUTED		61,155,309			2,606,524			47,408,459			2,452,598

(unaudited)

The accompanying notes are an integral part of these financial statements.


			Three months ended				None months ended
			November 30, 2016		November 30, 2015		November 30, 2016		November 30, 2015

OPERATING EXPENSES
	General and administrative	$	121,459	$	51,247	$	530,875	$	854,520
	Research and development		7,500		107,935		23,904		218,835

	Total Operating Expenses		128,959		159,182		554,779		1,073,355

OTHER INCOME (EXPENSE)
	Interest expense, net		(8,956)		-		(22,133)		-

NET LOSS		$	(137,915)	$	(159,182)	$	(576,912)	$	(1,073,355)

BASIS AND DILUTED NET LOSS PER SHARE		$	0.00	$	(0.06)	$	(0.01)	$	(0.42)

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIS AND DILUTED			64,309,656		2,606,524		53,132,560		2,550,426

NEXUS BIOPHARMA, INC.

Consolidated Statement of ~~Stockholders~~Stockholder's ~~Deficit~~Equity at November 30, 2016

For the six months ended August 31, 2016

(unaudited)

										Additional						Total
	Common Stock				Additional				Total
		Common Stock								Paid-in			Accumulated			Stockholders'
					Paid-in		Accumulated		Stockholders'
	Shares	~~Shares~~	Amount		Capital	~~Amount~~	Deficit		Deficit	~~Capital~~			~~Deficit~~			~~Deficit~~
Balance at February 29, 2016	31,552,524	$	31,~~552,524~~553	$	1,810,002	$	~~315~~(2,608,347)	$	(766,792)	$	~~1,841,240~~		$	~~(2,608,347~~	)	$	~~(766,792~~	)
Issuance of common stock for services	4,457,132		4,457~~,132~~		87,343		45-		91,800		~~91,755~~			-			~~91,800~~
Cancellation of shares	(35,500,000)		(35,500~~,000~~)	)	35,500		~~(355~~-	)	-		~~355~~						-
Adjustment due to the reverse merger	63,800,000		63,800~~,000~~		(156,521)		~~638~~-		(92,721)		~~(93,359~~	)					~~(92,721~~	)
Net loss	-		-		-		-(576,912)		(576,912)		-			~~(438,998~~	)		~~(438,998~~	)
Balance at August 31, 2016			64,309,656			$	643			$	1,839,991		$	(3,047,345	)	$	(1,206,711	)
Balance at November 30, 2016 (unaudited)	64,309,656	$	64,310	$	1,776,324	$	(3,185,259)	$	(1,344,625)

~~The accompanying notes are an integral part of these financial statements.~~5

NEXUS BIOPHARMA, INC.

Consolidated Statements of Cash Flows for the Six Months Ended November 30, 2016 and 2015

	For the six months ended
	August 31, 2016			August 31, 2015
	(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(438,998	)	$	(914,173	)
Adjustments to reconcile net loss to net cash used by operating activities
Amortization of debt discount		3,334			-
Amortization expense		480			-
Stock based compensation		91,800			625,000
Change in operating assets and liabilities
Accounts payable and accrued expenses		11,650			267,121
NET CASH USED IN OPERATING ACTIVITIES		(331,734	)		(22,052	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for website development costs		(8,250	)		-
NET CASH USED IN INVESTING ACTIVITIES		(8,250	)		-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		292,500
Proceeds from equity line of credit		100,000			-
NET CASH PROVIDED BY FINANCING ACTIVITIES		392,500			-
NET INCREASE (DECREASE) IN CASH		52,516			(22,052	)
Cash at the beginning of the period		9,925			22,052
Cash at the end of the period	$	62,441		$	-
NON CASH TRANSACTIONS
Cancellation of shares		355			-
Adjustment due to the reverse merger		92,721			-
SUPPLEMENTAL DISCLOSURES:
Interest paid	$	-		$	-
Income taxes paid	$	-		$	-

(unaudited)

The accompanying notes are an integral part of these financial statements.


			November 30, 2016		November 30, 2015
			November 30, 2016		November 30, 2015

CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss	$	(576,912)	$	(1,073,355)
	Adjustments to reconcile net loss to net cash used by operating activities
	Amortization of debt discount		5,001		-
	Depreciation and Amortization expense		984		-
	Stock based compensation		91,800		625,000
	Change in operating assets and liabilities
	Sub-lease receivable		(8,991)		-
	Accounts payable and accrued expenses		(4,066)		426,303
NET CASH USED IN OPERATING ACTIVITIES			(492,184)		(22,052)

CASH FLOWS FROM INVESTING ACTIVITIES
	Cash paid for furniture and equipment		(1,689)		-
	Cash paid for website development costs		(8,250)		-
NET CASH USED IN INVESTING ACTIVITIES			(9,939)		-

CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from notes payable		292,500		-
	Proceeds from equity line of credit		200,000		-
NET CASH PROVIDED BY FINANCING ACTIVITIES			492,500		-

NET DECREASE IN CASH			(9,623)		(22,052)

Cash at the beginning of the period			9,925		22,052

Cash at the end of the period		$	302	$	-

SUPPLEMENTAL DISCLOSURES:
	Interest paid	$	-	$	-
	Income taxes paid	$	-	$	-

NON CASH TRANSACTIONS
	Cancellation of shares	$	35,500	$	-
	Adjustment due to the reverse merger	$	92,721	$	-

NEXUS BIOPHARMA, INC.

Notes to Consolidated Financial Statements

~~August 31~~November 30, 2016 and 2015

(Unaudited)

NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN

Nexus BioPharma, Inc. (”we”, “our”, “NBP”, “the Company”) was incorporated in Delaware on April 17, 2013. During this time the Company devoted substantially all of its efforts to activities such as financial planning and raising capital. The Company did not have any transactions from incorporation date through the period ended February 28, 2014.

NBP is a life science company focused on the development and commercialization of a pharmaceutical preparation to treat obesity and the symptoms of type 2 diabetes.

On February 1, 2016, the Company effected a 1 for 13.5 reverse stock split of its common stock. All share information in the financial statements for fiscal years 2016 and 2015 reflect the impact of the reverse stock split.

Reverse merger

On May 17, 2016 the Company entered into an Agreement and Plan of Reorganization (“Merger Agreement”) by and among Nexus Bio Pharma, Inc. a Nevada corporation (“Nexus”), the Company and Nexus Acquisition Corp. (“Acquisition Corp.”), a Delaware corporation and wholly owned subsidiary of Nexus. The Merger Agreement closed on June 9, 2016 and resulted in the following:

Acquisition Corp. merged with the Company with the latter as the surviving company in the merger. The Company shall continue its corporate existence under the name “Nexus Biopharma, Inc”.”

Each share of common stock of the Company prior to the merger converted into 4.8552632 shares of common stock, par value $0.001 per share, of Nexus. Nexus then cancelled 35,500,000 shares of its common stock that were outstanding prior to the merger.

The Company’s stockholders shall receive convertible promissory notes corresponding to their proportional ownership interest of NBP common stock which shall be convertible into newly created shares of preferred stock of Nexus. The Nexus preferred shares shall be convertible into 36,000,000 shares of Nexus common stock. The convertible notes will be issued once Nexus has the preferred shares in place.

The transaction is accounted for as a reverse acquisition and the Company is considered the accounting acquirer for financial reporting purposes. The historical consolidated financial statements include the operations of the accounting acquirer for all periods presented.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements. Accordingly, such interim financial statements do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete annual financial statements. The information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the financial statements not misleading. The balance sheet as of February 29, 2016 has been derived from the Company’s annual financial statements that were audited by an independent registered public accounting firm, but does not include all of the information and footnotes required for complete annual financial statements. The financial statements included in this Quarterly Report should be read in conjunction with the financial statements and the notes thereto included in the Company’s Report on Form 8-K/A filed on June 915, 2016.

5Going Concern

These financial statements have been prepared on a going concern basis. The Company has incurred losses since inception and has a working capital deficit, which raises substantial doubt about The Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the Company’s ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through a private placement and public offering of its common stock. The 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.

NEXUS BIOPHARMA, INC.

Notes to Consolidated Financial Statements

~~August 31~~November 30, 2016 and 2015

(Unaudited)

~~Going Concern~~NOTE 2 – LICENSE AGREEMENT AND COMMITMENTS

~~These financial statements have been prepared on a going concern basis.~~ The Company ~~has~~entered ~~incurred~~in ~~losses~~to ~~since~~a ~~inception~~Patent and ~~has a~~Technology ~~working~~License ~~capital~~Agreement ~~deficit,~~with ~~which~~the ~~raises~~Albert ~~substantial~~Einstein ~~doubt~~College ~~about~~of ~~The~~Medicine ~~Company’s~~(Licensors) ~~ability~~in toMarch ~~continue as a going concern~~2014. ~~Its ability~~The toagreement ~~continue~~grants ~~as a going concern is dependent upon~~ the Company’s ~~ability~~a toworld-wide ~~generate~~exclusive ~~profitable~~license ~~operations~~to inmaterials ~~the future~~ and~~/or~~ tomethods ~~obtain~~for ~~the~~use ~~necessary~~in ~~financing~~the todiagnosis ~~meet its obligations~~ and ~~repay~~treatment ~~its~~of ~~liabilities~~cancers, ~~arising~~obesity ~~from~~and ~~normal~~diabetes ~~business operations~~with ~~when~~inhibitors ~~they~~of ~~come~~Fyn ~~due~~kinase. ~~Management~~In ~~has~~return ~~plans~~the toCompany ~~seek~~has ~~additional~~agreed ~~capital through~~ a ~~private~~license ~~placement~~fee ~~and~~to ~~public~~Licensors, ~~offering of~~to ~~its~~reimburse ~~common~~licensors ~~stock.~~patent ~~The~~expenses ~~financial~~thus ~~statements~~far doincurred, ~~not include any adjustments relating~~ to ~~the~~pay ~~recoverability~~all ~~and~~future ~~classification of~~patent ~~recorded assets~~expenses, orpay ~~the~~a ~~amounts~~royalty ofon ~~and~~any ~~classification~~sales of ~~liabilities~~product ~~that~~using ~~might~~licensed betechnology, ~~necessary~~as inwell ~~the~~as ~~event~~certain ~~the~~minimum ~~Company~~royalties ~~cannot continue~~and inmilestone ~~existence~~payments.

NOTE 2 – LICENSE AGREEMENT AND COMMENTMENTS

The Company entered in to a Patent and Technology License Agreement with the Albert Einstein College of Medicine in March 2014. The agreement grants the Company a world-wide exclusive license to materials and methods for use in the diagnosis and treatment of cancers, obesity and diabetes with inhibitors of Fyn kinase. In return the Company has agreed to pay a license fee, to reimburse the licensor patent expenses thus far incurred, to pay all future patent expenses, pay a royalty on any sales of product using licensed technology, as well as certain minimum royalties and milestone payments.

Pursuant to the License Agreement, we are also obligated to make the following royalties and payments to the Licensors:

● Royalty payment equivalent to 3% of net sales. ● Royalty payment of minimum of a specified percentage of net sales in case the Company pays royalties to unaffiliated third parties for patent rights. Pay 20% of any net proceeds that the Company will receive pursuant to a sublicense agreement that the Company will enter into with other parties. ● Issue 30% of the Company outstanding common stock to the Licensors calculated on a fully diluted, as converted basis. Accordingly, we issued 126,984 common shares valued at $857,143 which was charged to research and development expense in the statements of operations. ● Non-refundable license fee of $25,000 upon execution of License Agreement. ● License maintenance fee of $30,000 on each of the first, second, third and fourth anniversary of the License Agreement. The payment may be credited against royalties made during the twelve month period. ● License maintenance fee of $50,000, and $75,000 on the fifth and sixth anniversaries of the License Agreement, respectively. Each payment may be credited against royalties made during each such twelve month period. ● License maintenance fee of $100,000 on the seventh and each subsequent anniversary of the License Agreement. Each payment may be credited against royalties made during each such twelve month period. Milestone payments ranging from $100,000 to $750,000 if certain milestones are achieved.·

~~Additionally,~~Royalty ~~under~~payment ~~the~~equivalent ~~license agreement the Company is obligated~~ to offer new shares to the licensor on a fully diluted basis for all new stock issues with the sale terms offered under the new issue. The License Agreement will terminate upon expiration of the patent. The initial payment of $30,000, due March 3,% ~~2015 was not made and the second annual payment, due March 3, 2016 was not made. As~~ of ~~the~~net ~~date of this filing the Company has not received any demand for payment or notice of default from Albert Einstein College of Medicine~~sales. ~~The Company plans to pay these minimum royalty payments as soon as adequate funds are available.~~

6·

Royalty payment of minimum of a specified percentage of net sales in case the Company pays royalties to unaffiliated third parties for patent rights.

Pay 20% of any net proceeds that the Company will receive pursuant to a sublicense agreement that the Company will enter into with other parties.

Issue 30% of the Company outstanding common stock to the Licensors calculated on a fully diluted, as converted basis. Accordingly, we issued 126,984 common shares valued at $857,143 which was charged to research and development expense in the statements of operations.

Non-refundable license fee of $25,000 upon execution of License Agreement.

License maintenance fee of $30,000 on each of the first, second, third and fourth anniversary of the License Agreement. The payment may be credited against royalties made during the twelve month period.

License maintenance fee of $50,000, and $75,000 on the fifth and sixth anniversaries of the License Agreement, respectively. Each payment may be credited against royalties made during each such twelve month period.

License maintenance fee of $100,000 on the seventh and each subsequent anniversary of the License Agreement. Each payment may be credited against royalties made during each such twelve month period.

Milestone payments ranging from $100,000 to $750,000 if certain milestones are achieved.

Additionally, under the license agreement the Company is obligated to offer new shares to the licensors on a fully diluted basis for all new stock issues with the sale terms offered under the new issue. The License Agreement will terminate upon expiration of the patent. The initial payment of $30,000, due March 3, 2015 was not made and the second annual payment, due March 3, 2016 was not made. As of the date of this filing the Company has not received any demand for payment or notice of default from Albert Einstein College of Medicine. The Company plans to pay these minimum royalty payments as soon as adequate funds are available.

NOTE 3—RELATED PARTY TRANSACTIONS

The Company has an employment agreement with the principal officer and stockholder providing for a base salary of $43,750 and $131,250 in the three and nine months ended November 30, 2016, respectively and $36,250 and $108,750 in the three months and nine ended November 30, 2015, respectively. The base salary shall be increased at the end of each year to reflect the change in the consumer price index and the board of directors may award increases in the base salary greater than those provided above.

If the officer continues active employment after 2016, compensation will be negotiated. The Company’s obligation under the employment agreement accrues only as the service is rendered. As of November 30, 2016 and February 29, 2016, unpaid salaries to the CEO amounted to $181,472 and $193,915, respectively.

On March 1, 2014, the Company entered into a consulting agreement with a principal stockholder providing monthly payments of $5,000 plus reimbursable travel expenses for a period of six months, after which, the agreement shall automatically renew for an additional three month term unless terminated by either party with 15 day prior notice. On June 1, 2014, the Company entered into a new agreement with the principal stockholder with the same terms as the previous one except that the monthly fee was increased to $7,500. Total consulting fees incurred for the three months and nine months ended November 30, 2016 amounted to $22,500 and $52,500 respectively. For the three months and nine months ended November 30, 2015 no services were rendered under the agreement; and therefore, no consulting fee expense was recorded.

NEXUS BIOPHARMA, INC.

Notes to Consolidated Financial Statements

~~August 31~~November 30, 2016 and 2015

(Unaudited)

NOTE 3 – RELATED PARTY TRANSACTIONS

The Company has an employment agreement with the principal officer and stockholder providing for a base salary of $43,750 and $87,500 in the three and six months ended August 31, 2016, respectively and $36,250 and $72,500 in the three months and six ended August 31, 2015, respectively. The base salary shall be increased at the end of each year to reflect the change in the consumer price index and the board of directors may award increases in the base salary greater than those provided above.

If the officer continues active employment after 2016, compensation will be negotiated. The Company’s obligation under the employment agreement accrues only as the service is rendered. . As of August 31, 2016 and 2015, unpaid salaries to the CEO amounted to $193,773 and $110,100, respectively.

On March 1, 2014, the Company entered into a consulting agreement with a principal stockholder providing monthly payments of $5,000 plus reimbursable travel expenses for a period of six months, after which, the agreement shall automatically renew for an additional three month term unless terminated by either party with 15 day prior notice. On June 1, 2014, the Company entered into a new agreement with the principal stockholder with the same terms as the previous one except that the monthly fee was increased to $7,500. Total consulting fees incurred for the three months ended August 31, 2016 and 2015 amounted to $15,000 and $0 respectively. Total consulting fees incurred for the six months ended August 31, 2016 and 2015 amounted to $30,000 and $0, respectively.

NOTE 4 – SHORT TERM DEBT

Short term notes payable consist of an unsecured note payable of $292,500 with an interest rate of 10% and is due in April 2017.

NOTE 5 – CONVERTIBLE NOTES PAYABLE

Convertible notes were issued during December 2015 and January 2016 with principal amounts totaling to $60,000. The notes are non-interest bearing and have a term of three years. The notes ~~shall~~were contemplated to automatically convert into the Company’s planned units offering with each unit consisting of two shares of common stock and one warrant at a price of $1 per unit. An aggregate of 60,000 warrants were issued with the notes. These warrants have an exercise price of $1.50 per share and a term of 3 years. The relative fair value of the warrants amounting to $20,000 was recognized as a debt discount and amortized over the term of the notes. Amortization expense for the three and ~~six~~nine months ended ~~August~~November 3130, 2016 was $1,667 and $35,~~334~~001, respectively.

NOTE 6 – EQUITY

~~Common and~~Shares ~~preferred~~for ~~stock~~ service

~~The Company~~Subsequent isto ~~authorized~~February to29, ~~issue_100~~2016,~~000,000~~ ~~shares~~the ofCompany ~~common~~issued ~~stock~~4,457,132 ~~with~~(post-merger) ashares ~~par value~~ of ~~$0.0001~~common ~~per~~stock ~~share~~for ~~and~~consulting ~~50,000,000~~services ~~shares of preferred stock,~~ with a ~~par~~fair value ~~$0.00001 per share. There was no preferred stock outstanding as~~ of ~~August 31~~$91, ~~2016 and February 29, 2016~~800.

Shares for services

During the six months ended August 31, 2016, the Company issued 4,457,132 (post-merger) shares of common stock for consulting services with a fair value of $91,800.

Equity Line of Credit

The Company entered into an Equity Line of Credit Agreement (the “ELOC”) with Corelli Capital A.G. (“CCAG”) on June 14, 2016. The terms of the agreement provide that the Company shall issue and sell to CCAG up to $2,250,000 of the Company’s common stock. The Company can request in separate transactions a maximum advance amount of $200,000 in exchange for the issuance of the equivalent amount of common stock valued at the current market price. The first advance amount will be calculated at $0.20 per share. The agreement will expire, either seven months from the agreement date or, when the investor shall have made the payment of advances totaling $2,250,000, whichever comes first. The Company requested an advance for $200,000 on June 22, 2016 of which $100,000 was received as of August 31, 2016 and ~~is reported in~~ the ~~consolidated balance sheet as stock payable. The Company received the~~ remaining $100,000 was received on September 7, 2016. Under the terms of the ELOC the Company will issue 1,000,000 shares in return for the first funding of $200,000, but as of November 30, 2016 the 1,000,000 share have not been issued. As of January 14, 2017 the equity line of credit agreement has expired.

Warrants

As of ~~August~~November 3130, 2016, the Company has an aggregate of 60,000 warrants outstanding and exercisable with a weighted average exercise price of $1.50 and a weighted average remaining term of 2.415 years.

NOTE 7 –LEASES

The Company leases its New Jersey facilities under an operating lease. This lease, which terminates on July 31 2017, requires monthly payments of $6,491. The lease can be terminated with notice given at least ninety days prior to the intended date of termination. The Company is also obligated to pay additional rent to cover the lessee’s share of taxes and operating costs in excess of specified base amounts. Rent expense for the three and nine months ended November 30, 2016 were $17,873 and $24,447, respectively.

Additionally, the Company has sub-leased a portion of its office space under two agreements. The first sub-lease, which terminates on July 31 2017, requires monthly payments of $2,164. The lease can be terminated with notice given at least sixty days prior to the intended date of termination. The second sub-lease, which terminates on July 31 2017, requires monthly payments of $2,500. The lease can be terminated with notice given at least ninety days prior to the intended date of termination. The Company has recorded the rent collected or accrued under the sub-leases as a reduction of rent expense. Rent expense and sublease rentals for both the three and nine months ended November 30, 2016 amounted to $24,447 and $18,655, respectively.

NEXUS BIOPHARMA, INC.

Notes to Consolidated Financial Statements

November 30, 2016 and 2015

(Unaudited)

The Company has executed a new operating lease on November 18, 2016 for facilities in Houston, Texas to begin February 1, 2017. This lease, which terminates on December 31, 2017, requires monthly payments of $500.

Future minimum lease payments and sublease rentals under the aforementioned operating leases are as follows:


Year ended February 28,		Rent		Sublease rentals

2017	$	19,974	$	13,991
2018	$	37,457	$	23,319

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes to the consolidated financial statements included elsewhere in this Form 10-Q. The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expect,” “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading “Risk Factors” in the reports we file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements.

Business Overview

We are a life science company focused on the development and commercialization of a pharmaceutical preparation to treat obesity and the symptoms of type 2 diabetes. ~~For~~We ~~our~~believe ~~first~~that ~~product~~a ~~opportunity~~drug wethat ~~have~~will ~~engaged~~step ~~Charles~~up ~~River~~the ~~Laboratories~~body’s ~~for~~metabolism ~~the discovery~~ of afat ~~small~~will ~~molecule~~address ~~drug~~the ~~that~~biggest ~~activates~~health ~~metabolic~~problem ~~pathways~~in tothe ~~increase~~world, ~~energy expenditure~~obesity. InObesity ~~completed~~is ~~animal~~also ~~trials~~implicated ~~our~~as ~~proprietary approach~~a tocausative ~~the~~and ~~pharmaceutical~~an ~~activation~~additive ofto ~~this~~a ~~LKB-1~~host ~~AMPK~~of ~~(Adenosine~~other ~~Monophosphate~~conditions, ~~dependent Protein~~the ~~Kinase)~~most ~~pathway~~important ~~resulted~~of inwhich ~~increased~~are ~~energy~~Type ~~expenditure~~2 diabetes, ~~decreased~~cardiovascular ~~fat~~disease ~~mass~~ and ~~resulting~~cancer. ~~weight~~Type ~~loss~~II diabetes, ~~lower~~which ~~blood glucose,~~now ~~improved~~consumes ~~insulin~~roughly ~~sensitivity,~~one ~~lower~~sixth ~~cholesterol~~of every health care dollar in America, ~~and~~is ~~lower~~a ~~blood~~direct ~~triglyceride~~result ~~levels~~of obesity.

For our first product opportunity we have engaged Charles River Laboratories for the discovery of a small molecule drug that activates metabolic pathways to increase energy expenditure. In completed animal trials our proprietary approach to the pharmaceutical activation of this LKB-1 AMPK (Adenosine Monophosphate dependent Protein Kinase) pathway resulted in increased energy expenditure, decreased fat mass and resulting weight loss, lower blood glucose, improved insulin sensitivity, lower cholesterol, and lower blood triglyceride levels.

Unlike most other FDA approved weight loss drugs, our strategy does not depend on a pharmaco-neurological manipulation of the higher-brain centers for appetite and/or satiety. Rather, our proprietary drug approach targets the master energy regulatory pathway that has been proven to exist not only in higher mammals, but also in all living cells that possess a nucleus. Because an intensive aerobic and resistance strength-training regime is the natural way to activate these pathway effects, we believe that our drug will help obese patients mimic the effect of a more healthy lifestyle and lose weight.

~~We believe~~On ~~that~~November a16, ~~drug~~2017 ~~that~~we ~~will~~were ~~step~~selected upto become a resident company at the ~~body’s~~Johnson ~~metabolism~~& ofJohnson ~~fat~~Innovation, ~~will~~JLABS ~~address~~facility at the ~~biggest~~Texas ~~health~~Medical ~~problem~~Center in ~~the world~~Houston, ~~obesity.~~ ~~Obesity~~(JLABS is@ ~~also~~TMCx). ~~implicated~~The asCompany ahas ~~causative~~therefor ~~and~~relocated anits ~~additive~~headquarters to aHouston, ~~host~~Texas as of ~~other~~February ~~conditions~~1, ~~the~~2016. ~~most~~The ~~important~~Company ofwill ~~which are~~begin ~~Type~~by 2occupying ~~diabetes,~~office ~~cardiovascular~~space ~~disease~~ and ~~cancer.~~will ~~Type~~later IIexpand ~~diabetes,~~its ~~which~~physical ~~now~~operations ~~consumes~~to ~~roughly~~take ~~one~~advantage ~~sixth~~of the availability of ~~every~~laboratory ~~health care~~facilities ~~dollar~~and inequipment ~~America,~~and isespecially the access to expertise and mentoring that make this a ~~direct~~compelling ~~result~~opportunity offor ~~obesity~~the Company.

Financial Operations Overview

Upon commercialization of the Company’s obesity therapeutic, we will begin working with third-party payors to establish reimbursement coverage policies. Where policies are not in place, we will pursue case-by-case reimbursement. We believe that as much as 20% of our future revenues may be derived from product(s) billed to Medicare. We will begin working with many payors, including Medicare, to establish policy-level reimbursement, which, if in place, will allow us to recognize revenues upon submitting an invoice. We do not expect to recognize the majority of revenues in this manner until calendar 2022, at the earliest.

Since our inception, we have generated significant net losses. As of ~~August~~November 3130, 2016, we had an accumulated deficit of $3,~~047~~185,~~345~~259. We incurred net losses of $~~179~~137,~~340~~915 and $~~768~~159,~~722~~ 182 in the three months ended ~~August 31~~November 30, 2016 and 2015, respectively and $~~438~~576,~~998~~912 and $~~914~~1,~~173~~073,355 for the ~~six~~nine months ended ~~August 31~~November 30, 2016 and 2015, respectively. We expect our net losses to continue for at least the next several years. We anticipate that a substantial portion of our capital resources and efforts will be focused on research and development, both to develop our initial obesity therapeutic and to develop additional products for obesity and type 2 diabetes, scale up our commercial organization, and other general corporate purposes. Our financial results will be limited by a number of factors, including establishment of coverage policies by third-party insurers and government payors, our ability in the short term to collect from payors often requiring a case-by-case manual appeals process, and our ability to recognize revenues other than from cash collections on therapeutics billed until such time as reimbursement policies or contracts are in effect. Until we receive routine reimbursement and are able to record revenues as therapeutics are prescribed and delivered, we are likely to continue reporting net losses.

811

Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as revenues and expenses during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ materially from those estimates under different assumptions or conditions.

We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our financial statements.

Revenue Recognition

We have generated no revenues since our inception. Product revenues for our first product, our therapeutic for the treatment of obesity, are expected to be generated from the projected commercial launch in 2022, and are expected to be recognized on a cash basis because we will have limited collection experience and a limited number of contracts. In accordance with our policy, revenues for tests therapeutic prescribed will be recognized on an accrual basis when the related costs are incurred, provided there is a contract or coverage policy in place and the following criteria are met:

~~● persuasive evidence that an arrangement exists; ● delivery has occurred or services rendered; ● the fee is fixed and determinable; and ● collectability is reasonably assured.~~·

persuasive evidence that an arrangement exists;

delivery has occurred or services rendered;

the fee is fixed and determinable; and

collectability is reasonably assured.

Determination of the last two criteria will be based on management’s judgment regarding the nature of the fee charged for products or services delivered and the collectability of those fees.

We expect to generally bill third-party payors for our obesity therapeutic upon the filling of a patient prescription. Accordingly, we take assignment of benefits and the risk of collection with the third-party payor. We usually bill the patient directly for amounts owed after multiple requests for payment have been denied or only partially paid by the insurance carrier. As a new drug, our obesity therapeutic may be considered investigational by payors and not covered under their reimbursement policies. Consequently, we expect to pursue case-by-case reimbursement where policies are not in place or payment history has not been established.

Contract revenues are expected to be derived from studies conducted with biopharmaceutical and pharmaceutical companies and will be recognized on a contract specific basis. Under certain contracts, our input, measured in terms of full-time equivalent level of effort or running a set of assays through our laboratory under a contractual protocol, will trigger payment obligations and revenues will be recognized as costs are incurred or assays are processed. Certain contracts May have payment obligations that are triggered as milestones are complete, such as completion of a successful set of experiments. In these cases, revenues are recognized when the milestones are achieved.

Clinical Collaborator Costs

We expect to enter into collaboration and clinical trial agreements with clinical collaborators and record these costs as research and development expenses. We plan to record accruals for estimated study costs comprised of work performed by our collaborators under contract terms. All clinical collaborators will be expected to enter into agreements with us, which specify work content and payment terms.

Results of Operations

Comparison of the Three and ~~Six~~Nine Months Ended ~~August~~November 3130, 2016 and ~~August~~November 3130, 2015

Revenues. There were no revenues for the three and ~~six~~nine months ended ~~August~~November 3130, 2016 and ~~August~~November 3130, 2015, respectively, because we have not yet commercialized our obesity therapeutic.

Cost of Product Revenues. No cost of product revenues were recorded in the three months and six months ended August 31, 2016 and August 31, 2015, respectively, because we have not yet commercialized our obesity therapeutic.12

~~General~~Cost ~~and~~of ~~Administrative~~Product ~~Expenses~~Revenues. ~~General and~~ ~~administrative~~No ~~expenses~~cost ~~totaled~~of ~~$161,403~~product ~~for~~revenues ~~the~~were ~~three~~recorded ~~months~~in ~~ended August 31, 2016 as compared to $761,222 for~~ the three months ~~ended~~ ~~August 31, 2015. General~~ and ~~administrative~~nine ~~expenses totaled $409,417 for the six~~ months ended ~~August~~November 3130, 2016 asand ~~compared to~~November ~~$803~~30,~~273~~ ~~for the six months ended August 31,~~ 2015~~. This represents a decrease of $599~~,~~819~~ ~~for the three months and $393~~respectively,~~856 for~~ ~~the~~because ~~six~~we ~~months~~have ~~ended~~not ~~August~~yet ~~31,~~commercialized ~~2016. This~~our ~~decrease~~obesity was due in part to stock based compensation of $625,000 in the 2015 period versus no stock based compensation costs and normal costs for legal, accounting and other professional costs in the 2016 periodtherapeutic.

~~Research~~General and ~~Development~~Administrative Expenses. ~~Research~~ General and ~~development~~administrative expenses ~~were~~totaled $8121,~~904~~459 for the three months ended ~~August~~November 3130, 2016 as compared to $751,~~500~~247 for the three months ended ~~August~~November 3130, 2015. ~~Research~~General and ~~development~~administrative expenses ~~were~~totaled $16530,~~404~~875 for the ~~six~~nine months ended ~~August~~November 3130, 2016 as compared to $~~110~~854,~~900~~520 for the ~~six~~nine months ended ~~August~~November 3130, 2015. This represents an increase of $170,~~404~~212 for the three months ~~ended August~~and ~~31,~~a ~~2016~~decrease ~~over~~of $323,645 for the ~~three~~nine months ended ~~August~~November 3130, ~~2015~~2016. ~~versus~~This aincrease ~~decrease~~for ~~of 94,496 over~~ the ~~six~~ three-month period~~. This three~~ ~~month~~was ~~increase~~due ~~was~~in ~~primarily as~~part ato ~~result~~increased ofcosts ~~payment~~for oflegal, ~~license~~accounting ~~associated~~and ~~fees~~other toprofessional ~~Albert~~costs ~~Einstein~~in ~~College~~the of2016 ~~Medicine, Inc~~period. The ~~six~~decrease for the nine-month ~~decrease~~period was due to a ~~result~~significant ofcharge ~~decreased~~due ~~R&D~~to ~~activity~~$625,000 ~~during~~of stock-based compensation in the 2015 period.

~~Interest~~Research ~~Expense,~~and ~~Net~~Development Expenses. ~~We recorded~~Research $7and ofdevelopment ~~interest~~expenses ~~income~~were ~~during~~$7,500 for the three months ended ~~August~~November 3130, 2016 ~~and~~as compared to $0107,935 ~~during~~for the three months ended ~~August~~November 3130, 2015~~, respectively~~. WeResearch ~~recorded~~and ~~$9,040~~development ofexpenses ~~interest~~were ~~expense~~$23,904 ~~during~~for the ~~three~~nine months ended ~~August~~November 3130, 2016 ~~and~~as compared to $0218,835 ~~during~~for the ~~six~~nine months ended ~~August~~November 3130, 2015~~, respectively~~. WeThis ~~recorded~~represents ~~$13,191~~a decrease of ~~interest~~$100,435 ~~expense~~for ~~during~~ the ~~six~~three months ended ~~August~~ 31November 30, 2016 ~~and~~over ~~$0 during~~ the ~~six~~three months ended ~~August~~November 3130, 2015 versus a decrease of 194,931 ~~respectively~~over the nine-month period. This three-month and nine month decrease was primarily as a result of decreased R&D activities.

~~Net~~Interest ~~Loss~~Expense, Net. As aWe ~~result~~ recorded $3 of ~~the~~interest ~~factors~~income ~~described~~during ~~above,~~the wethree ~~had~~months aended ~~net~~November ~~loss~~30, of2016 and $~~179,340~~0 ~~for~~during the three months ended ~~August~~November 3130, ~~2016~~2015. asWe ~~compared~~recorded to $~~768~~8,~~722 for~~959 of interest expense during the three months ended ~~August~~November 3130, ~~2015.~~2016 Asand a$0 ~~result~~during of the ~~factors~~nine ~~described~~months ~~above,~~ended weNovember ~~had~~30, a2015. ~~net~~We ~~loss~~recorded of $~~438~~22,~~998~~150 ~~for~~of interest expense during the ~~six~~ nine months ended ~~August~~November 3130, 2016 asand ~~compared to~~ $~~914,173~~0 ~~for~~during the ~~six~~nine months ended ~~August~~November 3130, 2015.

10Net Loss. As a result of the fact that we remain a development stage company with no product revenues as well as the other factors described above, we had a net loss of $137,915 for the three months ended November 30, 2016 as compared to $159,182 for the three months ended November 30, 2015 and we had a net loss of $576,912 for the nine months ended November 30, 2016 as compared to $1,073,355 for the nine months ended November 30, 2015.

Liquidity and Capital Resources

Since our inception, we have incurred significant losses and, as of ~~August~~November 3130, 2016, we had an accumulated deficit of $3,~~047~~185,~~345~~259. We have not yet achieved profitability and anticipate that we will continue to incur net losses for the foreseeable future. We expect that our research and development, general and administrative and selling and marketing expenses will continue to grow and, as a result, we will need to generate significant product revenues to achieve profitability. We may never achieve profitability.

Sources of Liquidity

Since our inception, our operations have been financed through the sale of our common stock and issuance of debt. Through ~~August~~November 3130, 2016, we had received net proceeds of approximately $310,801 through the sale of our common stock to investors. In December of 2015 and January of 2016 we entered into a Convertible Note Agreement with two investors for a total of $60,000. On April 20, 2016 we entered into an unsecured promissory note with Corelli Capital A.G. for the sum of $292,500.~~00.~~ We entered into an Equity Line of Credit Agreement with Corelli Capital A.G. on July 12, 2016. As of ~~August~~November 3130, 2016, we had cash and cash equivalents, of $~~62,441~~302.

Cash Flows

As of ~~August~~November 3130, 2016, we had $~~62,441~~302 in cash and cash equivalents, compared to $0 on ~~August~~November 3130, 2015.

Net cash used in operating activities was $~~331~~492,~~734~~ 184 for the ~~six~~nine months ended ~~August~~November 3130, 2016, compared to $22,052 for the ~~six~~nine months ended ~~August~~November 3130, 2015. The increase in cash used was primarily due to increased operating expenses.

Net cash used in investing activities was $89,~~250~~ 939 for the ~~six~~nine months ended ~~August~~November 3130, 2016, compared to $0 for the six months ended ~~August~~November 3130, 2015. We expect amounts used in investing activities to increase in fiscal year 2017 and beyond as we expand research and development activities and establish our proposed commercial laboratory.

Net cash provided by financing activities during the six months ended ~~August~~November 3130, 2016 was $~~392~~492,500, compared to $0 for the six months ended ~~August~~November 3130, 2015. This is mainly due to proceeds received from notes payable and the equity line of credit with Corelli Capital A.G.

Contractual Obligations

As of ~~August~~November 3130, 2016, we had the following contractual commitments:

We are required to make a series of annual minimum royalty payments under the License Agreement with Albert Einstein College of Medicine beginning on the first anniversary date, or March 3, 2015. The initial payment of $30,000, due March 3, 2015 was not made and the second annual payment, due March 3, 2016 was not made. As of the date of this filing the Company has ~~not~~ received ~~any demand~~an ~~for~~advice that payment oris due but no formal notice of default from Albert Einstein College of Medicine. The Company plans to pay these minimum royalty payments as soon as adequate funds are available.

For a period of seven years on each anniversary of the first payment, we are required to make additional payments in amounts that gradually increase beginning in year five. We are required to make additional payments of $30,000 in each of 2017 and 2018 and $50,000 in 2019, $75,000 in 2020, and $100,000 in 2021 and every year the License is in effect thereafter.

~~Beginning in~~We ~~the~~currently ~~second~~lease ~~half~~administrative ofand ~~calendar~~office ~~2017,~~space wefrom ~~intend~~JLABS to@ ~~enter~~TMCx ~~into~~at ~~arrangements~~2450 ~~for~~Holcombe ~~the acquisition of laboratory equipment~~Boulevard, ~~computer hardware and software~~Houston, ~~leasehold~~Texas ~~improvements~~77021 ~~and office equipment. We cannot at this time provide assurances that we will be able to enter into agreements with vendors~~ on ~~terms~~a ~~commercially~~twelve ~~favorable~~month tolease usfor oran ~~that~~annual wecost ~~will~~of ~~be able to enter into such arrangements without securing additional financing~~$6,000.

We ~~currently~~ ~~lease~~had ~~approximately~~previously 3reported that beginning in the second half of calendar 2017,~~000~~ ~~square~~we ~~feet~~had intended to enter into arrangements for the acquisition of ~~administrative~~laboratory equipment, computer hardware and software, leasehold improvements and office ~~space~~equipment. onBecause of our residence with JLABS @ TMCx, we will have access at a ~~month-~~nominal increased lease cost to~~-month~~ ~~basis~~laboratory ~~for~~facilities anand ~~annual~~equipment ~~cost of~~and ~~$25.00~~accordingly ~~per~~will ~~square~~no ~~foot~~longer enter into separate arrangements for such equipment.

11Item 3 – Quantitative and Qualitative Disclosures About Market Risk

~~Operating Capital~~The Company is a smaller reporting Company as defined by Rule 12b-2 of the Securities Act of 1934 and ~~Capital~~is ~~Expenditure~~not ~~Requirements~~required to provide the information under this item.

We expect to continue to incur substantial operating losses in the future and to make capital expenditures to keep pace with the expansion of our research and development programs, which we expect to fund in part with the proceeds of private placements of our securities. It may take several years to move any one of a number of product candidates in clinical research through the development phase and validation phase to commercialization. We expect that the proceeds from the sale of our securities and our existing cash and cash equivalents will be used to fund working capital and for capital expenditures and other general corporate purposes, such as licensing technology rights, partnering arrangements, or reduction of debt obligations. However, there can be no assurance that we will be able obtain financing, if at all or upon terms that will be acceptable to us.

As a result of the recent economic recession, and the continuing economic uncertainty, it has been difficult for companies to obtain equity or debt financing. While the credit markets have improved over the last year, it remains difficult for smaller companies to obtain financing on reasonable terms.

The amount and timing of our actual expenditures vary significantly depending upon a number of factors, such as the progress of our product development, regulatory requirements, commercialization efforts, the amount of cash used by operations and progress in reimbursement. We expect that we will receive limited payments for our weight loss drug billings from the beginning of our marketing efforts into the foreseeable future. As reimbursement contracts with third-party payors are put into place, we expect an increase in the number and level of payments received for our weight loss drug billings.

We currently anticipate that our cash on hand as well as drawdowns from our Equity Line of Credit Agreement (see “Sources of Liquidity”) will be sufficient to fund our operations for at least the next 12 months. We cannot be certain that any of our future efforts to secure reimbursement contract programs or development of future products will be successful or that we will be able to raise sufficient additional funds to see these programs through to a successful result.

Our future funding requirements will depend on many factors, including the following:

● the rate of progress in establishing reimbursement arrangements with third-party payors;

● the cost of expanding our commercial operations, including our selling and marketing efforts;

● the rate of progress and cost of research and development activities associated with expansion of our products;

● the rate of progress and cost of research and development activities associated with products in the research phase focused on neurodegenerative disease;

● the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

● the effect of competing technological and market developments;

● the cost and delays in product development as a result of any changes in regulatory oversight applicable to our products; and

● the economic and other terms and timing of any collaborations, licensing or other arrangements into which we may enter.

Until we can generate a sufficient amount of product revenues to finance our cash requirements, which we may never do, we expect to finance future cash needs primarily through public or private equity offerings, debt financings, borrowings or strategic collaborations. The issuance of equity securities may result in dilution to stockholders. We do not know whether additional funding will be available on acceptable terms, or at all. If we are not able to secure additional funding when needed, we may have to delay, reduce the scope of or eliminate one or more research and development programs or selling and marketing initiatives. In addition, we may have to work with a partner on one or more of our product development programs or market development programs, which would lower the economic value of those programs to our company.

Item 4 - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s Principal Executive Officer and Principal Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are not effective in ensuring that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the periods specified in the Commission’s rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff: (i) no segregation of duties in incompatible functions; and (ii) lack of controls over the financial process, specifically, there are no multiple levels of review. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.

Changes in Internal Control over Financial Reporting

We have not made a change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended ~~August~~November 3130, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

1314

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

To the best of our knowledge, we are not a party to any legal proceedings that, individually or in the aggregate, are deemed to be material to our financial condition or results of operations.

Item 1A - Risk Factors

Not applicable

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

~~During the quarter, the Company sold 500,000 shares of its common stock under the Equity Line of Credit Agreement at a price of $~~None.~~20 per share for gross proceeds of $100,000.~~

The issuance of the shares of common stock was deemed to be exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) thereof, as a transaction by an issuer not involving a public offering.

Item 3 - Defaults Upon Senior Securities

No disclosure required.

Item 4 - Mine Safety Disclosures

No disclosure required.

Item 5 - Other Information

No disclosure required.

Item 6 - Exhibits

Index to Exhibits

Exhibit No.		Description
31.1*		Certification of Principal Executive Officer and Principal Financial and Accounting Officer, pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
31.2*		Certification of Principal Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
32.1*		Certification of Principal Executive Officer and Principal Financial and Accounting Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**		XBRL Instance Document.
101.SCH**		XBRL Taxonomy Extension Schema Document.
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document.


*	Filed herewith
**	Furnished herewith

SIGNATURES

Pursuant 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.

	Nexus BioPharma, Inc.
Date: October 24, 2016	By:	/s/ Warren Lau
Date: April 10, 2017	By:	/s/ Warren Lau
		Warren Lau, Chief Executive Officer
		(Principal Executive Officer) and Chief Financial Officer (Principal Financial and Accounting Officer)

Filing Compare · NEXUS BIOPHARMA INC