UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

[ ] TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from_________ to____________

Commission file number: 00054082

PROSALUTIS HOLDINGS INC.

British Columbia, Canada

N/A

State or other jurisdiction of

(I.R.S. Employer

incorporation or organization

Identification No.)

804- 750 West Pender Street, Vancouver, British Columbia, Canada V6C 2TZ

(Address of principal executive offices)

778-654-3221

(Registrant’s telephone number)

GREENFLAG VENTURES INC.

(Former name, former address and former fiscal year)

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.

Yes [ ]

No [x]

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 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, or a smaller reporting company.

Large accelerated filer

[ }

Accelerated filer

[ ]

Non-accelerated filer

[ }

Smaller reporting company

[x]

The Company’s outstanding common shares as of September 30, 2016 was 102,558,842

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements.

The financial statements for the quarter ended September 30, 2016 are provided herein.

Prosalutis Holdings Inc. (formerly Greenflag Ventures Inc.)

Condensed Consolidated Interim Financial Statements

For The Quarter Ended September 30, 2016

(Expressed in US Dollars)

Prosalutis Holdings Inc. (formerly Greenflag Ventures Inc.)

Condensed consolidated statements of financial position

(Unaudited – prepared by management)

(Expressed in US dollars)


	Notes	September 30, 2016
ASSETS
Current assets
Cash and cash equivalents		$ 12,242
Receivables		3,487
		15,729
Non-current assets
Note Receivable Intangible Asset - Technology	4 1	378,161 100,000
TOTAL ASSETS		$ 493,890
LIABILITIES
Trade payables and accrued liabilities Note Payable	5 7	$ 442,449 300,000
Convertible loan	6	64,287
TOTAL LIABILITIES		806,736
SHAREHOLDERS’ EQUITY (DEFICIENCY)
Common Stock	8	3,657,687
Additional paid-in-capital	8	352,796
Accumulated deficit		(4,323,329)
TOTAL EQUITY (DEFICIENCY)		(312,846)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$ 493,890

See accompanying notes to the unaudited condensed consolidated interim financial statements

Prosalutis Holdings Inc. (formerly Greenflag Ventures Inc.)

Condensed consolidated interim statements of loss and comprehensive loss

(Unaudited – prepared by management)

(Expressed in US dollars)


	Quarter Ended September 30, 2016

EXPENSES

Interest and bank charges Office and miscellaneous	$ 4,360 1,000
Shareholder communication	1,500
Transfer agent, filing fees and shareholder relations	750

Total expenses	(7,610)


Net income (loss) and comprehensive income (loss) for the period	$ (7,610)

Basic and diluted net income (loss) per common share	$ (0.0001)

Weighted average number of common shares outstanding	102,551,842

See accompanying notes to the unaudited condensed consolidated interim financial statements

Prosalutis Holdings Inc. (formerly Greenflag Ventures Inc.)

Condensed consolidated interim statement of changes in shareholders’ equity

(Unaudited – prepared by management)

(Expressed in US dollars)


			Share capital
	Notes	Number of voting common shares		Amount	Reserve	Deficit	Total
Balance at June 30, 2016 Shares issued for debt conversion (Note 7 and 8)		50,051,842 2,500,000		$ 3,605,187 2,500	$ 255,296 97,500	$ (4,315,719) -	$ (455,236) 100,000
Shares issued for intellectual property (Note 1 and 7)		50,000,000		50,000	-	-	50,000
Comprehensive loss for the quarter		-		-	-	(7,610)	(7,610)
Balance at September 30, 2016		102,551,842		$ 3,657,687	$ 352,796	$ (4,323,329)	$ (313,846)

See accompanying notes to the unaudited condensed consolidated interim financial statements

Prosalutis Holdings Inc. (formerly Greenflag Ventures Inc.)

Condensed consolidated interim statements of cash flows

Quarter ended September 30, 2016

(Unaudited – prepared by management)

(Expressed in US dollars)


		Quarter Ended September 30, 2016
Operating activities
Income (loss) for the period		$ (7,610)
Changes in non-cash working capital items:
Increase (decrease) in trade payables and accrued liabilities		7,610
Net cash flows provided by (used in) operating activities		-
Increase (decrease) in cash and cash equivalents		-
Cash and cash equivalents, beginning of period		12,242
Cash and cash equivalents, end of period		$ 12,242

See accompanying notes to the unaudited condensed consolidated financial statements.

Nature and continuance of operations

Prosalutis Holdings Inc. (“Prosalutis” or the “Company”) was incorporated on November 25, 2009, under the laws of the province of British Columbia, Canada. On March 18, 2016 the Company’s name was changed from Green Flag Ventures Inc. to Prosalutis Holdings Inc.

From July through September 2015, the Company issued 20,661,500 common shares and completed a reverse merger with American First Financial Inc. (“American First”), a private British Columbia company, pursuant to a reorganization agreement dated July 27, 2015 whereby American First acquired 60% of the issued and outstanding common shares of the Company in exchange for 100% of the issued and outstanding common shares of American First.

Prior to the reverse merger, American First completed a reorganization with WTTJ, Corp, a corporation incorporated under the laws of the State of Michigan (“WTTJ”) pursuant to a reorganization agreement dated July 1, 2015 whereby WTTJ acquired 100% of the issued and outstanding common shares of American First in exchange for 82% of the issued and outstanding common shares of WTTJ.

On March 15, 2016 the Company entered into an exclusive rights agreement whereby the Company agreed to issue 100,000,000 shares in exchange for all rights, title, and interest in intellectual property and all associated patents, patents pending, patent applications, copyright and trademarks relating to a drug trade named SPT1000, a natural metabolite, which has a strong anti-inflammatory effect in the brain (“Technology”). The Company agreed to provide a minimum of $1,500,000.00 USD on a best efforts basis in development and production funding for the continued and further enhancement, improvement, modification and commercialization of the Technology. The Company also agreed to pay a ten percent (10%) royalty based on total net profits received from the commercial sales of the Technology to a third party. As of September 30, 2016 all 100,000,000 shares have been issued.

The head office, principal address and registered and records office of the Company are located at 1800 – 999 West Hastings Street, Vancouver, British Columbia, V6C 2W2.

These unaudited condensed consolidated interim financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. The Company’s continuation as a going concern is dependent upon the successful results from its activities and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. Management intends to finance operating costs over the next twelve months with loans from directors and companies controlled by directors and or private placement of common shares.

Significant accounting policies and basis of preparation

Statement of compliance and conversion to International Financial Reporting Standards

The consolidated annual financial statements, including comparatives, have been prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”) using accounting policies consistent with International Financial reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations of the IFRS Interpretations Committee (“IFRIC”).

Basis of preparation

The financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The consolidated annual financial statements are presented in US dollars unless otherwise noted, which have been converted from the Company’s functional currency, Canadian dollars.

Intangible Asset

The Company capitalizes acquisition and development costs associated with the Technology as intangible assets. The amount capitalized represents fair value at the time the mineral rights are acquired. Upon commencement of commercial production, the Technology will be amortized over its useful life.

Capital management

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company. The Board of Directors does not establish quantitative returns on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. Management considers the Company’s capital structure to primarily consist of the components of shareholder’s equity.

The Company will continue to execute its business model and if it has adequate financial resources to do so. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during the three months ended September 30, 2016. The Company is not subject to externally imposed capital requirements.

Note receivable

On October 1, 2015, the Company received a promissory note in the amount of $378,161 in exchange for the issuance of 10,000 common shares of the Company. The promissory note carries an interest rate of 3% per annum, compounded annually, on the unpaid balance and the note is due on October 1, 2020.

Should the holder of the note sell any common shares, the equal prorated amount of the promissory note is due within 7 days of any sale of common shares.

Trade payables and accrued liabilities


	September 30, 2016
Trade payables	$ 200,688
Due to related parties	218,230
Accrued liabilities	23,777
	$ 442,695

Convertible loan

On April 8, 2013 the Company received $64,287 in convertible loan subscriptions. The loan has bears interest at 10% with interest payable semi-annually. For the quarter ended September 30, 2016, the Company has accrued $1,607 of interest expense. Upon conversion, the loan will convert into 170 units at a price of $380.00 per unit. Each unit will consist of one common share and one non-transferable share purchase warrant. Each warrant is exercisable at a price of $380.00 per share in the first year and $760.00 per share thereafter. In relation to the convertible loan subscription, the Company paid a finder’s fee of $6,429 and 17 Agent’s Warrants. The Agent’s Warrants were valued at $3,857 using the Black-Scholes Model and the following assumptions:


Expected life of agent’s warrants	1.5 years
Annualized volatility	131.20%
Risk-free interest rate	1.16%
Dividend rate	0%

Note Payable

On September 1, 2015 the Company entered into a consulting agreement for outreach, radio, and television services with a third party consultant. The services include the following: broadcast of radio & tv interviews, re-broadcast of interviews, newsletter outreach, ancillary press services, company spokesperson services, general financial public relations services, broker dealer introduction services, as well as counsel regarding strategic business and financial plans. In exchange for the services, the Company agreed to a fee of $35,000 due within 60 days, in addition to $400,000 worth stock in the Company, restricted for a maximum of six months. In conjunction with the consulting agreement, the Company signed a promissory note for $400,000 due on October 2, 2015 with a 3% annual interest rate.

As of September 30, 2016 the $35,000 fee had not yet been paid and is on the balance sheet in trade payables and accrued liabilities. During the quarter, the Company issued 2,500,000 shares in order to settle $100,000 of the $400,000 promissory note. As of September 30, 2016 the remaining balance due on the promissory note of $300,000 is on the balance sheet in note payable. Additionally, $3,000 in interest expense related to the promissory note for the quarter ended September 30, 2016 has been recorded on the income statement under interest and bank charges as well as on the balance sheet in trade payables and accrued liabilities.

Share capital

Authorized share capital

Unlimited number of voting common shares without par value and unlimited number of non-voting common shares without par value.

Share Consolidation

On March 18, 2016 the Company approved a reverse split of its common stock with a ratio of one post-split share for every 1,000 shares issued and outstanding on that date, resulting in a reduction of its issued and outstanding common shares from 51,841,769 to 51,842 shares. All share and related option information presented in these financial statements and accompanying footnotes has been adjusted retroactively to reflect the decreased number of shares resulting from the split.

Share issuances

On August 3, 2016, the Company issued 50,000,000 shares valued at $50,000.00 as consideration towards the Technology as per the exclusive rights agreement.

On September 22, 2016, the Company issued 2,500,000 shares to pay down $100,000 of the $400,000 promissory note referenced in Note 7.

Stock options

The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with the Exchange requirements, grant to directors, officers, employees and technical consultants to the Company, non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 10% of the Company’s issued and outstanding common shares. Under the plan, an option’s maximum term is five years from the grant date

During the quarter ended September 30, 2016 there were no stock options outstanding.

Warrants

There were no changes in warrants during the quarter ended September 30, 2016.

Details of warrants outstanding as at September 30, 2016 are as follows:


Number of Shares	Exercise Price	Expiry Date

67.6	$22,700.00	July 27, 2018*
7.17 -	22,700.00	August 7, 2018**

74.77

*the exercise price of the warrants increases by $4,500.00 every year on July 27^th until their expiry on July 27, 2018.

**the exercise price of the warrants increases by $4,500.00 every year on August 7^th until their expiry on August 7, 2018.

Agent’s Warrants

The changes in agent’s warrants during the quarter ended September 30, 2016:


	Three months ended September 30, 2016
	Number of warrants	Weighted average exercise price
Warrants outstanding, beginning of quarter	4.53	$ 27,200.00
Warrants outstanding, end of quarter	4.53	$ 27,200.00
Warrants exercisable, end of quarter	4.53	$ 27,200.00

Details of agent’s warrants outstanding as September 30, 2016 are as follows:


Number of Agent’s Warrants	Exercise Price	Expiry Date

3.81	$27,200.00	July 27,2018*
.717	27,200.00	August 7, 2018**

4.527

*the exercise price of the warrants increases by $4,500.00 every year on July 27^th until their expiry on July 27, 2018.

**the exercise price of the warrants increases by $4,500.00 every year on August 7^th until their expiry on August 7, 2018.

Reserve

The reserve records items recognized as share-based compensation expense until such time that the stock options are exercised, at which time the corresponding amount will be transferred to share capital. If the options expire unexercised, the amount remains in the reserves.

Related party transactions

Related party balances

The following amounts due to related parties are included in trade payables and accrued liabilities:

September 30,

2016

Companies controlled by former directors of the Company

224,543

These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

The Company did not incur any related party transactions with companies that are controlled by directors, former directors, or key management personnel of the Company during the quarter ended September 30, 2016.

Financial risk management

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash held in bank accounts. The Company’s cash and cash equivalents are held at large Canadian financial institution in interest bearing accounts. The Company has no investment in asset backed commercial paper. The Company’s secondary exposure to risk is on its other receivables. This risk is minimal as receivables consist primarily of refundable government goods and services sales taxes.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents.

Historically, the Company's sole source of funding has been the issuance of equity securities for cash, primarily through private placements. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.

Foreign exchange risk

The Company has a trivial balance denominated in a foreign currency and believes it has no significant foreign currency risk.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The risk that the Company will realize a loss as a result of a decline in the fair value of the short-term investments included in cash and cash equivalents is minimal.

Classification of financial instruments

Financial assets included in the statement of financial position are as follows:


	September 30, 2016
Cash and cash equivalents	$ 12,242
	$ 12,242

Financial liabilities included in the statement of financial position are as follows:


	September 30, 2016
Non-derivative financial liabilities:
Trade payables Note Payable	$ 442,449 300,000
Convertible loan	64,287
	$ 806,736

Fair value

The fair value of the Company’s financial assets and liabilities approximates the carrying amount.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

The fair value of the Company’s receivables, accounts payable and accrued liabilities, approximate their carrying values. The Company’s other financial instruments, being cash and cash equivalents, are measured at fair value using Level 1 inputs. During the year there were no transfers between levels.

10.

Segmented information

The Company operates in one reportable operating segment, being business development in North America.

11.

Subsequent Events

The Company evaluated subsequent events through October 1, 2016. As of October 1, 2016, the Company has no material subsequent events.

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the 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. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any or our forward-looking statements. Our future financial condition and results of operations, as well as any 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:

increased competitive pressures from existing competitors and new entrants;

our ability to raise adequate working capital;

deterioration in general or regional economic conditions;

adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

loss of customers or sales weakness;

inability to achieve sales levels or other operating results;

the unavailability of funds for capital expenditures; and

operational inefficiencies.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Factors That May Affect Our Results of Operations” in this document.

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

Note Regarding Forward Looking Statements.

This quarterly report on Form 10-Q of Prosalutis Holdings Inc. (formerly Greenflag Ventures Inc.) for the period ended September 30, 2016, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements which, by definition, involve risks and uncertainties. In particular, statements under the Sections; Description of Business, Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements. Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.

The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the costs and effects of legal proceedings.


	(a)	an abrupt economic change resulting in an unexpected downturn in demand;
	(b)	governmental restrictions or excessive taxes on land;
	(c)	over-abundance of companies developing commercial properties to lease space or sell the developed building;
	(d)	economic resources to support the development of our projects;


	(e)	expansion plans, access to potential clients, and advances in technology; and
	(f)	lack of working capital that could hinder the land acquisition for development of our projects.

Financial information provided in this Form 10-Q, for periods subsequent to September 30, 2016, is preliminary and remains subject to audit. As such, this information is not final or complete, and remains subject to change, possibly materially.

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

This Management’s Discussion and Analysis (“MD&A”) is dated FE unless otherwise indicated and should be read in conjunction with the unaudited condensed interim financial statements of Prosalutis Holdings Inc. (“the Company”, “we”, “our” or “us”) for the three months ended September 30, 2016, and the related notes thereto. These condensed consolidated interim unaudited financial statements, have been prepared using accounting policies consistent with International Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations of the IFRS Interpretations Committee (“IFRIC”).

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Driven common shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) if it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

Further information about the Company and its operations can be obtained from the offices of the Company or from www.sedar.com.

Cautionary Note Regarding Forward-Looking Information

Certain statements contained in the following MD&A constitute forward-looking statements. Such forward looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

Operating Expenses

There was no revenue realized in the quarter ended September 30, 2016.

General and administrative expenses for the quarter ended September 30, 2016 were $7,857 of which $4,607 represented loan interest on $64,287 of loans payable of $1,607 and loan interest on notes payable of $400,000 of $3,000.

Liquidity and Capital Resources

Currently, we have limited operating capital. The Company anticipates that it will require approximately $1,500,000 of working capital to complete all of its desired business activity during the next twelve months. The Company has earned limited revenue from its business operations. Our current capital and our other existing resources will be sufficient only to provide a limited amount of working capital, and, to date, the revenues generated from our business operations have not been sufficient to fund our operations or planned growth. As noted above, we will likely require additional capital to continue to operate our business, and to further expand our business. We may be unable to obtain the additional capital required. Our inability to generate capital or raise additional funds when required will have a negative impact on our operations, business development and financial results.

In the event we are not successful in reaching our sustained proceeds from convertible financing and private placement targets, we anticipate that depending on market conditions and our plan of operations, we may incur operating losses. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit to cover our operating expenses. Consequently, there remains the possibility that the Company may not continue to operate as a going concern in the long term. We are subject to many factors, which could detrimentally affect us. Many of these risk factors are outside management’s control, including demand for our product, our ability to hire and retain talented and skilled employees and service providers, as well as other factors.

The following discussion outlines the state of our liquidity and capital resources for the period ended September 30, 2016.

Liquidity

At September 30, 2016, the Company had negative working capital of $312,848 of which $12,242 was cash and equivalents. The Company manages its capital structure and makes adjustments to it, based on available funds to the Company.

As of September 30, 2016, the Company has no outstanding commitments except for its best effort commitment to fund $1,500,000 based on the Technology Agreement of March 15, 2016. The Company has not pledged any of its assets as security for loans, or otherwise and is not subject to any debt covenants. The Company has sufficient working capital at this time to meet its ongoing financial obligations.

Off-Balance Sheet Arrangements

As of the date of this filing, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company including, without limitation, such considerations as liquidity and capital resources that have not previously been discussed.

RELATED PARTY TRANSACTIONS

The following amounts due to related parties are included in trade payables and accrued liabilities:

Companies controlled by former directors of the Company

224,543

These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

The Company did not incur any additional related party transactions with companies that are controlled by directors, former directors, or key management personnel of the Company during the quarter ended September 30, 2016.

Critical Accounting Estimates

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses

during the reporting period. Actual outcomes could differ from these estimates. The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and the revision affects both current and future periods. Significant assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

• the inputs used in measurement for warrants

• the inputs used in measurement for share based payments expense

• the $nil provision for income taxes which is included in the unaudited condensed interim statements of comprehensive loss and recognition of deferred income tax assets and liabilities included in the year-end audited statement of financial position at December 31, 2015.

Change in Accounting Policies

Recent accounting pronouncements

The following standards, amendments, and interpretations have been adopted by the Company as of January 1, 2015. There was no impact on the financial statements as a result of the adoption of these standards, amendments, and interpretations:

IFRS 8 Operating Segments;

IAS 32 Financial Instruments; Presentation;

IAS 36 Impairment of Assets; and

IFRIC 21 Levies.

Financial Instruments

The Company's financial instruments, consisting of cash and cash equivalents of $12,242, approximate fair values due to the relatively short term maturities of the instruments. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

As at September 30, 2016, the Company had negative working capital of $312,848 and an accumulated deficit of $4,323,329. The Company’s continuation as a going concern is dependent upon the successful results from the successful development of its new drug product and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. Management intends to finance operating costs over the next twelve months with loans from directors and companies controlled by directors and or private placement of common shares.

For more information see Note 11 of the notes to the condensed consolidated interim financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is 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, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 15d-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2016.

PART II — OTHER INFORMATION

Item 1 - Legal Proceedings.

We know of no material pending legal proceedings to which our company or our subsidiary is a party or of which any of our properties, or the properties of our subsidiary, 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 our subsidiary or has a material interest adverse to our company or our subsidiary.

Item 1A – Risk Factors

As a smaller reporting company, we are not required to provide risk factors.

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

During the quarter ended September 30, 2016 we issued 50,000,000 shares of common stock that have not been registered for a total cash value of $50,000 in accordance with the Technology agreement of March 15, 2016. In addition we issued 2,500,000 shares of common stock that have not been registered for a value of $100,000 which was used to reduce the Company’s note payable from $400,000 to $300,000.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures.

None

ITEM 5. OTHER INFORMATION

None.

Item 6. Exhibits.


Exhibit Number		Description
31.1		Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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.

Prosalutis Holdings Inc.

By:/s/ Mauricio Gonzales

Mauricio Gonzales, Chief Executive Officer

Date: March 10, 2017

PROSALUTIS HOLDINGS INC. 10-Q