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: May 31, 2013

or

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

For the transition period from __________________to __________________

Commission file number: 000-52218

PEDIATRX INC.
(Exact name of registrant as specified in its charter)

3250 NE 1st. Ave., Suite 305, Miami, Florida 33137
(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code: (908) 975-0753

90 Fairmount Road West, Califon, New Jersey 07830
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.

Yes [ X ]    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).

Yes [ X ]    No [   ]

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes [  ]   No [ X ]

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APPLICABLE TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court

Yes [   ] No [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
20,836,000 shares of common stock are issued and outstanding as of July 29, 2013.

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TABLE OF CONTENTS

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

(A Development Stage Company)

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PediatRx Inc.
(A Development Stage Company)
Balance Sheets

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

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PediatRx Inc.
(A Development Stage Company)
Statements of Operations

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

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PediatRx Inc.
(A Development Stage Company)
Statements of Stockholders’ Equity (Deficit)

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

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PediatRx Inc.
(A Development Stage Company)
Statements of Cash Flows

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

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PediatRx Inc.
(A Development Stage Company)
Notes to the Financial Statements
May 31, 2013

The accompanying unaudited condensed financial statements of PediatRx Inc. (the “Company” or PediatRx”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X.

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three month periods and for the period from the date of inception have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms “Company”, “we” , “us” or “our” mean PediatRx Inc.

Certain information and note disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended February 28, 2013.

From the date of its acquisition of Granisol^® (granisetron #C1) oral solution (“Granisol”), on July 23, 2010, until early this year, the Company engaged in the pharmaceutical business. First approved in 2008, Granisol is an oral, liquid granisetron HCl solution. The Food and Drug Administration has approved Granisol’s use in cancer care to prevent nausea and vomiting associated with cancer therapy.

On January 26, 2012, the Company entered into a binding term sheet with Apricus Biosciences, Inc. for (1) a Co-Promotion Agreement in the United States for Granisol (the “Co-Promotion Agreement”), (2) the assignment of the Company’s interest in its Co-Promotion Agreement with Bi-Coastal Pharmaceutical Corp. for Aquoral to Apricus and (3) a Sale Agreement providing for the sale of the Company’s interest in Granisol outside of the United States. Also in the Term Sheet, we entered into a non-binding arrangement for the sale of our company to Apricus in a proposed merger transaction.

On February 21, 2012, and as contemplated in the term sheet, the Company entered into three definitive agreements (a Co-Promotion Agreement, an Assignment Agreement and an Asset Purchase Agreement) and one side letter with Apricus.

In the Co-Promotion Agreement, the Company granted to Apricus the right to manufacture Granisol, the exclusive right to commercialize Granisol in six U.S. states and the non-exclusive right to commercialize Granisol in all other U.S. States. In addition, the Company agreed that, for a period of five years from the effective date of the Co-Promotion Agreement, it would not license any co-promotion rights in the non-exclusive states to any third party. Each party agreed to cooperate with the other in respect of promotional materials and efforts on terms specified in the Co-Promotion Agreement.

In the Assignment Agreement, the Company assigned all of its rights and responsibilities under its co-promotion agreement with Bi-Coastal for Aquoral

In the Asset Purchase Agreement, the Company sold to Apricus all of its rights related to Granisol in all countries and territories outside of the United States. It also agreed that it, and its officers and directors, would not compete in the field of anti-emetic products in certain areas outside of the United States.

As consideration for entering into these three Agreements the Company received an initial payment of $325,000 from Apricus. The Co-Promotion agreement provided for the payment of a royalty based upon Apricus’ U.S. generated net operating income related to Granisol. The company has recognized revenues of $260,000 associated with the exclusive rights for Apricus to commercialize Granisol in six states. In addition, the company has recognized a gain on sale of product rights totaling $64,900 associated with the Asset Purchase Agreement.

The Term Sheet also contemplated the merger of the Company with Apricus and provided that Apricus would pay a $1,000,000 break fee (in the form of unregistered Apricus common stock) if the two companies had not merged by June 1, 2012

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PediatRx Inc.
(A Development Stage Company)
Notes to the Financial Statements
May 31, 2013

On June 27, 2012, the Company entered in to a Termination Agreement with Apricus pursuant to which the parties terminated discussions regarding the proposed merger of the two companies. Pursuant to the Termination Agreement, Apricus issued and delivered to the Company 373,134 shares of its common stock in payment of the break fee. The Company has since sold all of these Apricus shares.

The Company has decided to divest itself of the balance of its pharmaceutical assets and engage in the digital media business.

The Company has evaluated Granisol and believes that upon sale the company will be able to receive the net realizable value of $200,000 net of any commissions as currently stated on the balance sheet as of May 31, 2013.

The Company’s financial statements as of May 31, 2013 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has a net loss of $81,144 for the three month period ended May 31, 2013 (May 31, 2012 - $ 324,957, cumulative - $ 2,648,408) and a working deficit at May 31, 2013 of $294,579 (February 29, 2013 – working capital deficit of $138,435). The losses from operations of the Company raise substantial doubt about the Company’s ability to continue as a going concern.

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. As of May 31, 2013, the Company’s assets consisted of cash and cash equivalents of $199,993. Management believes that the Company’s capital resources are not currently adequate to continue operating and maintaining its business strategy for the fiscal year ending February 28, 2014. The Company will seek to raise capital through additional debt and/or equity financings to allow the Company to fund its operations in the future. Although the Company has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail or cease operations. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

As of May 31, 2013, the Company was in the process of transitioning to its new operating business and expects to incur operating losses for the next twelve months as it moves forward. This new operating business encompasses entrance into the social discovery aspects of the internet; primarily development of an engagement website with mobile and tablet application.

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PediatRx Inc.
(A Development Stage Company)
Notes to the Financial Statements
May 31, 2013

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PediatRx Inc.
(A Development Stage Company)
to the Financial Statements May 31, 2013

Effective May 28, 2010, PediatRx entered into a consulting agreement with Dr. Cameron Durrant, a shareholder of the Company, to assist management in the identification of opportunities available to the Company in the healthcare industry and to recommend terms of potential acquisitions. Dr. Durrant’s agreement with the Company dated May 28, 2010 was terminated and replaced with a new agreement on September 24, 2010.

On September 24, 2010, with retroactive effect to July 1, 2010, the Company entered into a second consulting agreement with Dr. Cameron Durrant. Pursuant to the consulting agreement, Dr. Durrant agreed to perform such duties as are regularly and customarily performed by the Chief Executive Officer of a corporation. The term of the consulting agreement is one year from July 1, 2010. On July 1, 2011, the agreement was extended for an additional two year period. On January 1, 2012, Dr. Durrant agreed to forgo any further consulting fees.

During the three month period ended May 31, 2013, the Company incurred consulting fees of $0 (May 31 2012 - $0, cumulative – $387,000) in connection with Dr. Durrant’s consulting agreements. The Company has recorded a payable to Dr. Durrant of $0 and $170,253 related to consulting fees as of May 31, 2013 and May 31, 2012, respectively. In addition, the Company has recorded a payable to Dr. Durrant of $0 and $51,342 related to business establishment expenses incurred by Dr. Durrant that are unreimbursed to him as of May 31, 2013 and May 31, 2012, respectively.

On September 14, 2010, with retroactive effect to July 1, 2010, the Company entered into an employment agreement with Mr. David Tousley, Chief Financial Officer, Treasurer and Secretary of PediatRx. Pursuant to the employment agreement, Mr. Tousley agreed to perform such duties as are regularly and customarily performed by the Chief Financial Officer of a Corporation. Mr. Tousley is also eligible to receive an annual bonus and an annual stock option award at the end of each year at the discretion of the Board of Directors of PediatRx. The term of the employment agreement is two years from July 1, 2010, unless both parties agree to extend.

As of March 1, 2012, the Company gave notice to Mr. Tousley, that it will be terminating the employment agreement between Mr. Tousley and the Company pursuant to Section 6.3(b) of Mr. Tousley’s Employment Agreement. As a result, Mr. Tousley’s employment agreement was terminated effective October 31, 2012.

On March 8, 2013, the Company entered into a Business Development/Advisory Services Agreement with Phys Pharma LLC, a company of which Dr. Durrant is a principal, pursuant to which Phys Pharma agreed to provide the Company a list of select biopharmaceutical companies which might have an interest in acquiring Granisol and assist the Company in marketing and selling Granisol to the prospective purchasers. If the Company sells Granisol to the prospective purchaser introduced by Phys Pharma, the Company agreed to pay Phys Pharma a fee in an amount equal to 20% of the net proceeds received by the Company at closing.

On April 5, 2013, and pursuant to a purchase and sale agreement dated for reference March 5, 2013, Dr. Cameron Durrant, our President, Chief Executive Officer and director, sold to Constantin Dietrich, a director of our company, 4,250,000 shares of our common stock for total consideration of $51,000. Mr. Dietrich paid the $51,000 purchase price for these shares using cash on hand. In addition, Mr. Dietrich assumed all of Dr. Durrant’s obligations under the Lock-Up Agreement between Dr. Durrant and our company dated February 9, 2011, pursuant to which 2,833,333 of the 4,250,000 shares sold by Dr. Durrant remain “locked up”. Our company has consented to the transfer of the shares and to the assignment and assumption of the obligations under the Lock-Up Agreement. Also on April 5, 2013, and pursuant to a purchase and sale agreement dated for reference March 8, 2013, David Tousley, our former Chief Financial Officer, Secretary, Treasurer and director, sold to Joseph Carusone, our Vice President, Investor Relations and a member of our Board of Directors, 400,000 shares of our common stock for total consideration of $9,600. Mr. Carusone paid the $9,600 purchase price for these shares using cash on hand. In addition, Mr. Carusone assumed all of Mr. Tousley’s obligations under the Lock-Up Agreement between Mr. Tousley and our company dated February 9, 2011, pursuant to which 266,666 of the 400,000 shares sold by Mr. Tousley remain “locked up”. Our company has consented to the transfer of the shares and to the assignment and assumption of the obligations under the Lock-Up Agreement.

On April 26, 2013, the Company entered into a non-binding letter of intent with Lakefield Media Holding AG to acquire the Slickx name, technology, source code, domain name and all other tangible and intangible assets relating to internet portals and platforms commonly known as “Slickx” for $50,000. This letter of intent also provides that for a period of one year, the Company will have the exclusive right to acquire Lakefield or its assets and the parties agreed to negotiate a definitive agreement for such an acquisition in exchange for a maximum of 10,650,000 shares of our common stock.

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PediatRx Inc.
(A Development Stage Company)
 Notes to the Financial Statements May 31, 2013

Constantin Dietrich, a director of the Company, is the founder and Chief Executive Officer of Lakefield.

On May 17, 2013, the Company entered into a definitive Web Site Asset Purchase Agreement with Lakefield Media Holding AG and its wholly-owned subsidiary, Flawsome XLerator GmbH, pursuant to which the Company acquired the internet domain name “Slickx.com”, the website and related software, intellectual property rights, accounts, contracts, goodwill and infrastructure for $50,000. This transaction was completed on May 21, 2013.

Effective February 18, 2011, the Board of Directors adopted and approved the 2011 stock option plan. The purpose of the 2011 stock option plan is to enhance the long-term stockholder value of the Company by offering opportunities to directors, key employees, officers, independent contractors and consultants of the company to acquire and maintain stock ownership in the company in order to give these persons the opportunity to participate in the company’s growth and success, and to encourage them to remain in the service of the company. A total of 2,000,000 shares of our common stock are available for issuance and during the twelve-month period after the first anniversary of the adoption of the 2011 stock option plan by the Board of Directors. During each twelve-month period thereafter, the Board of Directors is authorized to increase the number of shares issuable by up to 500,000 shares.

As of February 28, 2013, unrecognized compensation costs related to non-vested stock option awards totaled $0. During the year ended February 28, 2012, unrecognized compensation cost was reduced by approximately $178,000 for estimated forfeitures of unvested stock options as a result of notice provided to Mr. Tousley of termination of his employment agreement effective October 31, 2012. On May 23, 2012, the Company agreed with all option holders to cancel any and all options outstanding as of that date. As a result, the Company expensed all unrecognized compensation costs as of the cancelation date. Total stock-based compensation expense for the three month period ended May 31, 2013 and May 31, 2012 was $0 and $132,138, respectively. There were no stock options outstanding or granted during the period ended May 31, 2013.

The Company has losses to carry forward for income tax purposes as of May 31, 2013. There are no current or deferred tax expenses for the period ended May 31, 2013 due to the Company’s loss position. The Company has fully reserved for any future benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carry-forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This quarterly report contains forward-looking statements. All statements other than statements of historical facts contained in this quarterly report, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue” or the negative of these terms or other comparable terminology. Such forward-looking statements include, without limitation, statements regarding our future products and statements regarding our anticipated future cash position.

We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Moreover, we are a new entrant to the social media business and our management cannot predict all of the risks we will face in establishing our company in this industry, nor can we assess the impact that these risk factors might have on our business or the extent to which any risk factor, or any combination of risk factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

As used in this quarterly report and unless otherwise indicated, the terms “we”, “us”, “PediatRx” and “our” refer to PediatRx Inc., a Nevada corporation. Unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in PediatRx’s capital stock.

Our Business

Granisol

We have decided not to focus on the pharmaceutical industry and we are looking to divest the balance of our pharmaceutical assets. We recognized an impairment charge in the fourth quarter of 2013 to reduce the carrying amount of our pharmaceutical product rights to the estimated realizable value.

Slickx

On April 26, 2013, we entered into a non-binding letter of intent with Lakefield Media Holding AG to acquire the Slickx name, technology, source code, domain name and all other tangible and intangible assets relating to internet portals and platforms commonly known as “Slickx” for $50,000.

In addition, the letter of intent provides that for a period of one year, Lakefield will not enter into discussions or negotiations with respect to an acquisition of its assets or company. During this time, we may negotiate with Lakefield the terms of a sale of all of the remaining assets of Lakefield, either by way of an asset sale or through the sale of all of the outstanding securities of Lakefield, for consideration consisting of a maximum of 10,650,000 shares of our common stock.

Constantin Dietrich, a director of our company, is the founder and Chief Executive Officer of Lakefield.

The completion of the transactions contemplated by the letter of intent is subject to the entry into definitive formal agreements. There is no assurance that the transactions contemplated by the letter of intent will be completed as planned or at all.

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On May 17, 2013, we entered into a Web Site Asset Purchase Agreement with Lakefield Media Holding AG and its wholly-owned subsidiary, Flawsome XLerator GmbH to acquire the internet domain name “Slickx.com”, the website and related software, intellectual property rights, accounts, contracts, goodwill and infrastructure for $50,000. On May 21, 2013, we completed the acquisition of these assets and paid $50,000 to Lakefield.

Functions and Services

We plan to enable users to not only consume digital content from the lifestyle, fashion and entertainment industry, but also to find, create and share the content within these verticals in which they are interested. Our service will connect consumers, creators and advertisers in an environment that is both engaging and social. By building a media network that delivers curated quality content we will offer a global platform that will enable the user to find, share and connect with like-minded people and opinion-leaders. The service is planned to be available on multiple platforms including web, tablet and mobile.

Revenue Model

We plan to generate revenue from the following:

Advertisements

One of the major benefits of advertising on a social media site is that advertisers can take advantage of the users’ demographic information and target their ads appropriately. We may sell advertisement space to companies that may be interested in targeting our subscribers. We anticipate that interested advertisers will include premium brand advertisers as well as local and regional advertisers who are looking for innovative new and exciting formats to carefully target the consumer to create an experience that benefits consumers and advertisers. The focus will be to offer content with targeted advertising that reaches the right audience with the right content and the right advertising.

Subscriptions

As the service matures, we may offer paid subscription services that enhance and augment the user experience. Further, there may be a cost for the consumer to download the application.

Competition

We will face substantial competition from dominant digital media companies and websites such as gawker.com and glam.com, well as Facebook application providers in the social media space such as Pinterest. We believe that users often utilize multiple digital and social media websites or applications, and the use of one of these website or application is not necessarily the exclusion of others.

Achieving a critical mass of users or subscribers is crucial for digital and social websites and applications. Even though we seek to offer products and services that are unique in the industry, superior in quality, and more appealing than those of our competitors, we will need to establish a solid initial user base and critical mass.

Although we believe that we have access to the tools and certain inherent efficiencies to attract the initial user base, we need to that at a lower cost per visitor than certain of our traditional online competitors in order to essentially become successful. We also believe that the industry offers substantial room for growth as social networking application platforms and mobile platforms continue to expand and as the Internet especially mobile continues to become the primary source to engage with social media activities and consume, create and share news, events and other lifestyle-related content.

Marketing and Sales Strategy

The use of the Internet is continuing to evolve as a global platform for doing business. We anticipate that our major focus in the first year will be to enhance the Slickx website and the cultivation of our user base. We anticipate using various online marketing methods such as Facebook’s viral channels, online marketing programs and other advertising and marketing programs in order to drive traffic to our own website. We plan to take advantage of a well balanced mix of online and offline marketing strategies.

Our primary target market is focused on Internet users who already participate in social media websites. We therefore plan to take advantage of various well-established online marketing programs and make them an integral part of our long-term strategy. Our marketing campaigns will monitor daily statistics and track information such as interests, favorite topics and most read stories in order to quickly get synchronized with our Internet audience.

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We plan to participate in other marketing activities that will also aim to raise awareness of the Slickx.com brand and attract users by promoting the unique content and quality of our product and services. We plan to primarily advertise through Internet and mobile advertising and will have to run extensive user acquisition campaigns at any given time, targeting various classifications of users.

We plan to use media buying and in-house tools to effectively and efficiently track, measure and optimize the success of our advertising campaigns. We plan to initiate a marketing strategy with a focus on campaigns that we believe will produce a positive return on ad-spend in the medium- to long-term.

Online Advertising

The majority of our advertising and promotional activities will be concentrated on online advertising campaigns and Search Engine Marketing (SEM). SEM is a form of internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) like Google or Bing through optimization and advertising. SEM may use search engine optimization (SEO), that adjusts or rewrites website content to achieve a higher ranking in search engine results pages or use pay per click listings.

We have selected Google because of its success and popularity for web users wishing to find something using internet search. The Google Adwords program will allow us to customize the text of our advertisements, the frequency of each advertisement’s appearance, and the length of the advertising contract. For our purposes, we believe that this will give us the maximum amount of flexibility and allow us to closely monitor the costs of the marketing campaign.

Using this strategy will allow us also to design our own ads, and to select target locations such as a city or state and use keywords in our ads. A keyword is a word that is used by an Internet user who is performing an online search to find out information on a specific topic.

Optimizing Our Website

We plan to work with the web site development contractor to optimize our websites in terms of Search Engine Optimization (SEO). SEO is a technique which helps search engines find and rank a website or –page higher than others by affecting their visibility in a search engine’s “natural” or un-paid (“organic”) search results. Its objective is getting traffic from the “free,” “organic,” “editorial” or “natural” listings on search engines such as the major search engines Google, Yahoo and Bing that have such results. In general it is believed that a result (site) that appears earlier or higher and more frequently in the search results list on SERPs will get more visitors (traffic) from that search engine. SEO may target various kinds of search, including name search, local or image search, video search or search for events and news. Based on the type of search, SERPs Web pages and other content such as videos or local listings are shown and ranked based on what the search engine considers most relevant to users. Payment is not involved, as it is with paid search ads (SEM)

As part of our internet marketing strategy, we regard SEO to consider how search engines work, what users search for, the actual search terms or keywords typed into search engines and which search engines are preferred by their targeted audience. Thus, SEO may involve editing our website’s and –pages’ content, HTML and associated coding to both increase its relevance to specific keywords and to remove barriers to the indexing activities of search engines. We therefore plan to work with the web site development contractor to develop a series of keywords or meta-tags for each of the pages of our web site. Meta-tags are keywords that are added to a web page to make it easier to find that specific web page through search engines, web browser software and other applications. The information is not intended to be seen by the casual Internet user. Search engines like Google and Yahoo are designed to seek out these keywords when someone is performing an Internet search for a specific topic.

Intellectual Property

We own one registered trademark for Granisol and an unregistered trade-mark “Slickx”.

We are planning to develop the Slickx website and intend to protect its contents by registering for appropriate copyright and trademark protection where we deem such registration necessary or beneficial. We have not conducted any independent searches or other inquiry into patents or other intellectual property which may be owned by others and which may constrain our business plan, nor have we received independent opinions of counsel on such matters.

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Governmental Regulations

We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet, many of which are still evolving and could be interpreted in ways that could harm our business. In the United States and abroad, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories based on the nature and content of the materials searched, the ads posted, or the content provided by users. Any court ruling or other governmental action that imposes liability on providers of online services for the activities of their users and other third parties could harm our business. In addition, rising concern about the use of social media technologies for illegal conduct, such as the unauthorized dissemination of national security information, money laundering or supporting terrorist activities may in the future produce legislation or other governmental action that could require changes to our products or services, restrict or impose additional costs upon the conduct of our business or cause users to abandon material aspects of our service.

In the area of information security and data protection, many states have passed laws requiring notification to users when there is a security breach for personal data, or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to practically implement. The costs of compliance with these laws may increase in the future as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws may subject us to significant liabilities.

We are also subject to federal, state, and foreign laws regarding privacy and protection of member data. We intend to post on our website our privacy policy and user agreement, which describe our practices concerning the use, transmission and disclosure of member data. Any failure by us to comply with our posted privacy policy or privacy related laws and regulations could result in proceedings against us by governmental authorities or others, which could harm our business. In addition, the interpretation of data protection laws, and their application to the Internet is unclear and in a state of flux. There is a risk that these laws may be interpreted and applied in conflicting ways from state to state, country to country, or region to region, and in a manner that is not consistent with our current data protection practices. Complying with these varying international requirements could cause us to incur additional costs and change our business practices. Further, any failure by us to adequately protect our members’ privacy and data could result in a loss of member confidence in our services and ultimately in a loss of members and customers, which could adversely affect our business.

In addition, because we anticipate that our services will be accessible worldwide, certain foreign jurisdictions have claimed and others may claim that we are required to comply with their laws, including in jurisdictions where we have no local entity, employees, or infrastructure.

Research and Development Activities

Expenditures attributable to research and development of Granisol over the last two fiscal years were zero.

We have plans to undertake certain research and development activities during the first year of operation related to the development of the Slickx website.

Employees

At present, we have no employees. Cameron Durrant, our President, Chief Executive Officer, Chief Financial Officer, Treasurer and director serves our company pursuant to a consulting agreement. We intend to conduct our social media business largely through agreements with consultants and other independent third parties.

Subsidiaries

We plan to effect a name change by merging with our wholly-owned Nevada subsidiary named “Quint Media Inc.” with our company as the surviving corporation under the new name “Quint Media Inc.” In addition, we plan to effect a three for one forward stock split of our authorized common stock and our issued and outstanding shares of common stock. The name change and the forward stock split are to be effective on a date to be coordinated and confirmed with FINRA.

Liquidity and Capital Resources

Our financial condition at May 31, 2013 and February 28, 2013 for the respective items are summarized as follows:

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We have suffered recurring losses from inception. Our ability to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new or existing shareholders, and our ability to achieve and maintain profitable operations.

Working Deficit 

As of May 31, 2013, our working deficit increased due largely to the acquisition of the SlickX and Flawsome assets for $75,000 and cash used to fund our operations of $37,491.

Cash Flows

Cash Used in Operating Activities

Our cash used in operating activities for the three months ended May 31, 2013, compared to our cash used in operating activities for the three months ended May 31, 2012, decreased due to the reduction of our operations as compared to the previous years’ quarter.

Cash Used in Financing Activities

Our cash used in financing activities for the three months ended May 31, 2013, compared to our cash provided by financing activities for the three months ended May 31, 2012, increased due to the repayment of $200,000 of promissory notes.

Cash Used in Investing Activities

Our cash used in investing activities for the three months ended May 31, 2013, compared to our cash provided by financing activities for the three months ended May 31, 2012, increased due to the acquisition of SlickX and Flawsome assets.

Cash Requirements

We estimate our operating expenses, excluding stock based compensation and amortization expense, and working capital requirements for the next 12 months to be as follows:

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Our management does not believe that our current capital resources will be adequate to continue operating our company and maintaining our business strategy for more than 12 months. Accordingly, we will have to raise additional capital in the near future to meet our working capital requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.

Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the three month periods ended May 31, 2013 and May 31, 2012.

Revenues

We have recognized $(589) in medicaid refunds during the three month period ended May 31, 2013 and $68,577 of product sales during the three month period ended May 31, 2012. This decrease of $69,166 is due to the discontinuation of product sales and sales returns.

Cost of Goods Sold

We have recognized $0 in cost of goods sold during the three month period ended May 31, 2013, and $28,186 during the three month period ended May 31 2012. This decrease of $28,186 is due to the discontinuation of product sales.

Expenses

The table below shows our expenses for the three month periods ended May 31, 2013 and May 31, 2012.

In the three month period ended May 31, 2013, our expenses decreased because of scaled back pharmaceutical operations.

Going Concern

Our financial statements and information for the period ended May 31, 2013, have been prepared by our management on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We have decided not to focus on the pharmaceutical industry and we are looking to divest our pharmaceutical assets. We have generated limited revenues to date and have incurred a net loss of $81,144 during the 3 month period ended May 31, 2013, and $2,648,408 from inception (March 18, 2005) through May 31, 2013. We cannot provide any assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional funds through the sale of debt and/or equity.

On May 31, 2013, we had cash and cash equivalents of $199,993. Our management does not believe that our current capital resources will be adequate to continue operating our company and maintaining our business strategy for more than 12 months. If we are unable to raise additional capital in the near future, we expect that we will need to curtail operations, liquidate any assets that we might own, seek additional capital on less favorable terms and/or pursue other remedial measures. Our financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Future Financing

We will require additional financing to fund our planned operations. We currently do not have committed sources of additional financing and may not be able to obtain additional financing particulary, if the volatile conditions of the stock and financial markets, and more particularly the market for early development stage company stocks persist.

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to further delay or further scale down some or all of our activities or perhaps even cease the operations of the business.

Since inception we have funded our operations primarily through equity and debt financings and we expect that we will continue to fund our operations through the equity and debt financing, either alone or through strategic alliances. If we are able to raise additional financing by issuing equity securities, our existing stockholders’ ownership will be diluted. Obtaining commercial or other loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his, her, or its investment in our common stock. Further, we may continue to be unprofitable.

Off-Balance Sheet Arrangements

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls and procedures

We maintain “disclosure controls and procedures”, as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure.

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As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, as amended, our management, with the participation of our principal executive officer and principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our management concluded that as of the end of the period covered by this quarterly report on Form 10-Q, our disclosure controls and procedures were not effective.

The ineffectiveness of our disclosure controls and procedures was due a material weakness which we identified in our internal control over financial reporting primarily attributable to limited SEC reporting expertise within our company. Due to our development stage, we have limited financial ability to remedy this staffing deficiency at this time.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended May 31, 2013 that have materially affected, or are reasonably likely to materially affect our internal control over financing report.

PART II – OTHER INFORMATION ITEM 1. LEGAL PROCEEDING

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS

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

Risks Related to Our Company

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.

During the three month period ended May 31, 2013, we generated net loss of $81,144. From inception through May 31, 2013, we incurred an aggregate loss of $2,648,408. We anticipate that we will continue to generate losses and will require additional funding to remain in business. On May 31, 2013, we had cash and cash equivalents of $199,993. In order to fund our anticipated budget for the next 12 months, excluding any development or product acquisition costs, we believe that we will need to raise in excess of $1,000,000. This amount could increase if we encounter difficulties that we cannot anticipate at this time. We have traditionally raised our operating capital from the sale of equity securities and the placement of notes payable, but there can be no assurance that we will continue to be able to do so.

These circumstances raise substantial doubt about our ability to continue as a going concern, as described in the explanatory paragraph to our independent auditors’ report on our financial statements for the year ended February 28, 2013. Although our financial statements raise substantial doubt about our ability to continue as a going concern, they do not reflect any adjustments that might result if we are unable to continue our business. Our financial statements contain additional note disclosure describing the circumstances that lead to this disclosure by our independent auditors.

Our substantial debt and other financial obligations could impair our financial condition and our ability to fulfill our debt obligations. Any refinancing of this substantial debt could be at significantly higher interest rates.

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As of May 31, 2013, we had total debt of $300,000. This debt is currently past due and will continue to accrue interest at 12% until paid. Our substantial indebtedness and other current financial obligations and any that we may become a party to in the future could:

• impair our ability to obtain financing in the future for working capital, capital expenditures, partnerships, acquisitions or general corporate purposes;

 

• have a material adverse effect on us if we fail to comply with financial and affirmative and restrictive covenants in debt agreements and an event of default occurs as a result of a failure that is not cured or waived;

• require us to dedicate a substantial portion of our cash flow for interest payments on our indebtedness and other financial obligations, thereby reducing the availability of our cash flow to fund working capital and capital expenditures;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

• place us at a competitive disadvantage compared to our competitors that have proportionally less debt.

If we are unable to meet our debt service obligations and other financial obligations, we could be forced to restructure or refinance our indebtedness and other financial transactions, seek additional equity capital or sell our assets. We might then be unable to obtain such financing or capital or sell our assets on satisfactory terms, if at all. Any refinancing of our indebtedness could be at significantly higher interest rates, and/or incur significant transaction fees.

If we do not successfully divest our pharmaceutical assets, we may not have sufficient capital to pursue our new social media business.

We have decided not to focus on the pharmaceutical industry and we are looking to divest our pharmaceutical assets. If we do not successfully divest our pharmaceutical assets and we do not raise additional capital to pursue our social media projects, we will have to revisit our business strategy in an effort to determine what changes may be required in order for us to continue our operations. Further, we may need to consider raising additional capital or financing in order to continue as a going concern even if we do not pursue such projects or if the sale of our pharmaceutical assets is not completed. No assurance can be given whether we would be able to successfully raise capital or financing in such circumstances or, if so, under what terms.

Efforts to expand will place a significant strain on our management, operational, financial and other resources.

Given sufficient capital, we plan to expand our operations by marketing our Slickx website, which will place a significant strain on our management, operations, technical performance and financial resources. There can be no assurance that we will be able to manage expansion effectively. Our current and planned personnel, systems, procedures, and controls may not be adequate to support and effectively manage our future operations, especially as we employ personnel in multiple geographic locations. We may not be able to hire, train, retain, motivate, and manage required personnel, which may limit our growth. If any of this were to occur, it could damage our reputation, limit our growth, negatively affect our operating results and harm our business. We do not currently have the required capital to market either of the offerings.

We are an early-stage company with a limited operating history, which may hinder our ability to successfully meet our objectives.

We are an early-stage company with a limited operating history upon which to base an evaluation of our new business. As a result, the revenue and income potential of our new business is unproven. In addition, because of our limited operating history, we have limited insight into trends that may emerge and affect our business. Errors may be made in predicting and reacting to relevant business trends and we will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies in evolving markets. We may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause our business, results of operations and financial condition to suffer.

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Our CEO and CFO is engaged elsewhere and his time and effort will not be devoted to our company full-time.

Our CEO and CFO is engaged in other positions with other companies. As a result, our company is and will continue to be managed on a part-time basis. Our business could be adversely impacted by the lack of full time management.

Our existing management team has no experience in operating a social media business or any other web based business.

Our current management does not have any experience in operating a social media site and has never operated a web-based business. We will be dependent on outside software engineers to drive our development. If our management is not able to execute on our business plan, it is likely stockholders would lose their entire investment.

Risks Relating to the Social Media Business

After a sale of our pharmaceutical assets, we will become a pure social media company in a highly competitive field with high investment costs and high risks.

After the sale of our pharmaceutical assets, we will be a social media company, provided that we are able to obtain additional financing to develop our website, Slickx. We must achieve a certain level of users of Slickx before it can be monetized and produce revenue for us. We will have to raise substantial additional capital to drive users to our website and eventually generate revenues and reach profitability, if ever. We will be dependent upon selling advertisements and finding other ways to monetize our users by selling add-on services. For a social application or site to be able to sell advertisements, it must first attract a sufficient number of users to gain the interest of advertisers in buying ads and offering products on the site or the application. It will take time, management effort and capital to attract users to our website. There can be no assurance that any users will come. These timeframes, along with the general state of development create additional uncertainty as to the potential success of our website. The application may not continue to work as we plan and even if it does, there can be no assurance that an economically viable level of users will come, that advertisers will want to advertise or that we can monetize it. Therefore, it will be costly to maintain the application and market it to attract users and advertisers.

We are entering a very crowded social media marketplace where existing competitors have years of experience, are well financed and have the name recognition to draw consumers, none of which we possess.

Our board of directors has determined that the future direction of our company will focus on development of Slickx website. This puts our business focus in a very competitive field dominated by several very large and well financed companies such as Facebook, MySpace and Twitter. These companies have established an online presence and community that have become destinations in and of themselves and it will be difficult to make inroads into this space. We will be dependent on a new twist to entry into this space but in the end, all social media sites have similar features and it is likely that if any part of our offering becomes compelling, the competitors will adjust their offerings to be directly competitive with us. This creates substantial uncertainty on our ability to survive in this space or to be able to attract enough users to be able to monetize our site to produce revenues.

The revenue models for our social media business require we first obtain a sufficient number of users of our website before we can sell advertisements or generate other revenue and it will take time to generate such users and to then monetize the site.

We will be dependent on selling advertisements and finding other ways to monetize our users by selling add-on services. For a social media site to be able to sell advertisements, they first must attract a sufficient number of users to gain the interest of advertisers in buying ads on the sites. It will take time and money to bring users to our site and there is no assurance any users will come. These time frames along with the general state of development create additional uncertainty as to the potential success of our company. The site may not work as we plan and even if they do there can be no assurance any users will come, that advertisers will want to advertise or that we can monetize them. Additionally, it will be costly to maintain the offerings and market them to attract users.

The security risks or perception of risks of using social media websites may discourage users from using our website.

We and other market participants must be able to transmit confidential information securely over public networks. Third parties may have the technology or know-how to breach the security of user data. Any breach could cause users to lose confidence in the security of our website and choose not use our site.

We cannot assure you that advances in computer capabilities, new discoveries in the field of cryptography or other events or developments will not result in a compromise or breach of the algorithms that we will use to protect user data. If any such compromise of our security were to occur, it could harm our reputation, business, prospects, financial condition and results of operations. A party who is able to circumvent our security measures could misappropriate information or cause interruptions in our operations. We may be required to expend significant capital and other resources to protect against such security breaches or to alleviate problems caused by such breaches. We cannot assure you that our security measures will prevent security breaches or that failure to prevent such security breaches will not harm our business, prospects, financial condition and results of operations.

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We may be liable if third parties misappropriate our users’ personal information.

If third parties are able to penetrate our network security or otherwise misappropriate our users’ personal information, or if we give third parties improper access to our users’ personal information, we could be subject to liability. This liability could include claims for impersonation or other similar fraud claims. This liability could also include claims for other misuses of personal information, including unauthorized marketing purposes. These claims could result in litigation. Liability for misappropriation of this information could adversely affect our business. In addition, the Federal Trade Commission and state agencies have been investigating various Internet companies regarding their use of personal information. We could incur additional expenses if new regulations regarding the use of personal information are introduced or if government agencies investigate our privacy practices.

System and online security failures could harm our business and operating results.

Our services will depend on the efficient and uninterrupted operation of our computer and communications hardware systems. Our systems and operations will be vulnerable to damage or interruption from a number of sources, including fire, flood, power loss, telecommunications failure, break-ins, earthquakes and similar events. Our Internet host provider does not guarantee that our Internet access will be uninterrupted, error-free or secure. Our servers are also vulnerable to computer viruses, physical, electrical or electronic break-ins and similar disruptions. Any substantial interruptions could result in the loss of data and could completely impair our ability to generate revenues from our service. We do not presently have a full disaster recovery plan in effect to cover the loss of all facilities and equipment.

We currently do not have any patents associated with our Slickx website and if we are not able to develop intellectual property protection around our product offering, we may not be able to prevent competitors from recreating our product offering.

Other than certain unregistered trademarks, we do not have any intellectual property protection on the features and software behind our Slickx website. We are planning to develop our website and intend to protect its contents by registering for appropriate copyright and trademark protection where our management deems such registration necessary or beneficial, but there is no assurance that we will be able to obtain such protection. We have not conducted any independent searches or other inquiry into patents or other intellectual property which may be owned by others and which may constrain our business plan, nor have we received independent opinions of counsel on such matters.

If we do not respond to rapid technological changes, our services could become obsolete and we could lose users.

To remain competitive, we will need to continually enhance and improve the functionality and features of our social media website. We may face material delays in introducing new services, products and enhancements. If this happens, our users may forgo the use of our website and use those of our competitors. The Internet and the social media industry are rapidly changing. If competitors introduce new products and services using new technologies or if new industry standards and practices emerge, our existing website and our technology and systems may become obsolete. Our failure to respond to technological change or to adequately maintain, upgrade and develop our computer network and the systems used to process users’ uses of our website could harm our business, prospects, financial condition and results of operations.

Existing or future government regulation could harm our business, results of operation and financial condition.

We are subject to the same federal, state and local laws as other companies conducting business on the Internet. Today there are relatively few laws specifically directed towards conducting business on the Internet. However, due to the increasing popularity and use of the Internet, many laws and regulations relating to the Internet are being debated at the state and federal levels. These laws and regulations could cover issues such as user privacy, freedom of expression, pricing, fraud, quality of products and services, taxation, advertising, intellectual property rights and information security. Applicability to the Internet of existing laws governing issues such as property ownership, copyrights and other intellectual property issues, taxation, libel, obscenity and personal privacy could also harm our business. For example, United States and foreign laws regulate our ability to use user information and to develop, buy and sell mailing lists. The vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised thereby. Those laws that do reference the Internet are only beginning to be interpreted by the courts and their applicability and reach are therefore uncertain. These current and future laws and regulations could harm our business, results of operation and financial condition.

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The content of our website could expose us to various kinds of liability, which, if prosecuted successfully, could negatively impact our business.

We will face potential liability for negligence, copyright infringement, patent infringement, trademark infringement, defamation, and/or other claims based on the nature and content of the materials our user’s post. Various claims have been brought, and sometimes successfully prosecuted, against Internet content distributors. We could be exposed to liability with respect to the unauthorized duplication of content or unauthorized use of other parties’ proprietary technology. Any imposition of liability that is not covered by insurance, or is in excess of insurance coverage, could materially adversely affect our financial condition and results of operations. Any claim of infringement, with or without merit, could be time consuming, result in costly litigation or require us to enter into royalty or licensing agreements. Such royalty or licensing agreements might not be available on terms acceptable to us, or at all. As a result, any such claim of infringement against us could have a material adverse effect upon our business, financial condition, results of operations and cash flows.

Risks Relating to Our Common Stock

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our articles of incorporation authorize the issuance of up to 150,000,000 shares of common stock with a par value of $0.0001 per share. Our board of directors may choose to issue some or all of such shares to acquire one or more products and to fund our overhead and general operating requirements. The issuance of any such shares will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.

Trading of our stock is restricted by the Securities Exchange Commission’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our common stock.

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (known as “FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

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Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Although our common stock is currently listed for quotation on the OTCQB operated by the OTC Markets Group, trading through the OTCQB is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

We do not intend to pay dividends on any investment in the shares of stock of our company.

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in our company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

All of our outstanding promissory notes of $300,000 are past due and are due on demand. These notes accrue simple interest, calculated monthly in arrears, at a rate of 12% per annum commencing on the date of the promissory note and payable at maturity.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. Exhibits

Exhibits required by Item 601 of Regulation S-K:

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* Filed herewith.

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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.

PEDIATRX INC.

/s/ Cameron Durrant
Cameron Durrant
President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)