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

FORM 10-Q

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

For the quarterly period ended July 31, 2016

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: 333-185928

ARAX HOLDINGS CORP.
(Exact Name of Registrant as Specified in Its Charter)

Nevada
 
99-0376721
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer Identification No.)

2329 N. Career Avenue Suite 317
Sioux Falls, SD 57107
(Address of Principal Executive Offices)

(605) 553-2238
(Registrant’s Telephone Number, Including Area Code)

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 ☐

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 ☒     No ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company”, in Rule 12b-2 of the Exchange Act.

Large accelerated filer
 
Accelerated filer
Non-accelerated filer  
 
Smaller reporting company
(Do not check if smaller reporting company)
 
Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒     No ☐

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
10,335,294 shares of common stock were issued and outstanding as of June 12, 2017.


     

 
Arax Holdings Corp.
Form 10-Q Index

PART 1
FINANCIAL INFORMATION
 
   
Page
Item 1.
Financial Statements
F-1
 
Condensed Balance Sheets as of July 31, 2016 and October 31, 2015 (restated) (unaudited)
F-1
 
Condensed Statements of Operations (unaudited) for the three and nine months ended July
31, 2016 and 2015
F-2
 
Condensed Statements of Cash Flows (unaudited) for the nine months ended July 31, 2016
and 2015
F-3
 
Notes to Condensed Financial Statements (unaudited) for the nine months ended
July 31, 2016 and 2015
F-4
     
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
3
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
5
Item 4.
Controls and Procedures
5
     
PART II.     
OTHER INFORMATION
 
     
Item 1.
Legal Proceedings
7
Item 1a.
Risk Factors 7
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
7
Item 3.
Defaults Upon Senior Securities 7
Item 4.
Mine Safety Disclosures 7
Item 5.
Other Information 7
Item 6.
Exhibits 7
 
Signatures
8
 
Exhibit Index
9
     

 
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Arax Holdings Corp
Condensed Balance Sheets
(Unaudited)
 
 
 
July 31, 2016
   
October 31, 2015
 
         
(Restated)
 
ASSETS
           
             
  Current assets
 
$
-
   
$
-
 
  Total current assets
   
-
     
-
 
                 
TOTAL ASSETS
 
$
-
   
$
-
 
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
  Current liabilities:
               
Loans from related party
 
$
211,149
   
$
37,682
 
Convertible Notes payable, net of $0 and $43,188 debt
discount, respectively
   
27,500
     
69,312
 
Accrued Interest Payable
   
11,281
     
1,923
 
Liability for stock to be issued
   
65,400
     
50,281
 
Derivative Liability
   
2,389
     
5,500
 
  Total current liabilities
   
317,719
     
164,698
 
                 
   Total liabilities
   
317,719
     
164,698
 
                 
  Stockholders' deficit:
               
                 
Common stock, $0.001 par value; 75,000,000 shares
authorized;
               
10,335,294 and 10,300,000 shares issued and
outstanding,
   
10,335
     
10,300
 
respectively
               
Additional paid-in capital
   
328,410
     
258,564
 
Accumulated deficit
   
(656,464
)
   
(433,562
)
  Total stockholders' deficit
   
(317,719
)
   
(164,698
)
                 
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT
 
$
-
   
$
-
 
 
See accompanying notes to condensed unaudited financial statement
     
F-1

 
Arax Holdings Corp.
Condensed Statements of Operations
(Unaudited)


   
For the Three Months
Ended
   
For the Nine Months
Ended   
 
 
 
July 31,
   
July 31,   
 
   
2016
   
2015
   
2016
   
2015
 
         
(Restated)
         
(Restated)
 
REVENUE
 
$
-
   
$
-
   
$
-
   
$
-
 
                                 
OPERATING EXPENESES
                               
General and administrative cost
   
14,542
     
2,533
     
28,491
     
17,264
 
Professional Fees
   
110,418
     
5,500
     
143,426
     
49,546
 
TOTAL OPERATING EXPENSES
   
124,960
     
8,033
     
171,917
     
66,810
 
                                 
NET LOSS FROM OPERATIONS
   
(124,960
)
   
(8,033
)
   
(171,917
)
   
(66,810
)
                                 
OTHER EXPENSE
                               
Interest Expense
   
(3,676
)
   
-
     
(54,096
)
   
-
 
Change in Fair Value of Derivative
   
2,098
     
-
     
3,111
     
-
 
TOTAL OTHER EXPENSE
   
(1,578
)
   
-
     
(50,985
)
   
-
 
                                 
NET LOSS BEFORE INCOME TAXES
   
(126,538
)
   
(8,033
)
   
(222,902
)
   
(66,810
)
                                 
Provision for Income Taxes
   
-
     
-
     
-
     
-
 
                                 
NET LOSS
 
$
(126,538
)
 
$
(8,033
)
 
$
(222,902
)
 
$
(66,810
)
                                 
                                 
NET LOSS PER SHARE: BASIC AND DILUTED
 
$
(0.01
)
 
$
(0.00
)  *
 
$
(0.02
)
 
$
(0.01
)
                                 
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING: BASIC AND DILUTED
   
10,335,294
     
10,300,000
     
 10,326,037
     
10,300,000
 

 
*Denotes a loss of less than $(0.01) per share


See accompanying notes to condensed unaudited financial statements
     
F-2

 
Arax Holdings Corp.
Condensed Statements of Cash Flows
(Unaudited)


   
For the Nine Months Ended July 31,
 
             
   
2016
   
2015
 
         
(Restated)
 
 CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss for the period
 
$
(222,902
)
 
$
(66,810
)
                 
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
               
Stock and warrants issued as compensation
   
85,000
     
-
 
 Related party payable for services
   
250
     
-
 
Change in fair value of derivative
   
(3,111
)
   
-
 
Amortization of debt discount
   
43,188
     
-
 
Changes in assets and liabilities:
               
Accrued interest payable
   
9,358
     
-
 
                 
NET CASH USED IN OPERATING ACTIVITIES
   
(88,217
)
   
(66,810
)
                 
 CASH FLOWS FROM INVESTING ACTIVITIES:
   
-
     
-
 
 NET CASH FLOWS FROM INVESTING ACTIVITIES:
   
-
     
-
 
                 
 CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from related party loans
   
88,217
     
66,810
 
 NET CASH FLOWS FROM FINANCING ACTIVITIES:
   
88,217
     
66,810
 
                 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS:
   
-
     
-
 
                 
CASH, BEGINNING OF PERIOD
   
-
     
-
 
                 
CASH, END OF PERIOD
 
$
-
   
$
-
 
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
               
Interest paid
 
$
-
   
$
-
 
Income taxes paid
 
$
-
   
$
-
 
                 
SUPPLEMENTAL SCHEDULE OF NON-CASH
               
 INVESTING AND FINANCING ACTIVITIES:
               
Related Party payments for operating expenses and repayment of debt
 
$
85,250
   
$
-
 
TOTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
 
$
85,250
   
$
-
 


See accompanying notes to condensed unaudited financial statements
     
F-3

 
ARAX HOLDINGS CORP.
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JULY 31, 2016 AND 2015
    
NOTE 1 ORGANIZATION AND NATURE OF BUSINESS

Arax Holdings Corp. (the “Company”, “we”, “our” or “us”) was incorporated under the laws of the State of Nevada on February 23, 2012 with a business plan to sell hot dogs from mobile hot dog stands throughout the major cities in Mexico. As of the filing of the 10K for last year, the Company stated that Management believes that the best business model for our investors is to pursue business activity in the Life Sciences sector of the United States and internationally. We will continue to assess these opportunities and structures as well as the various pre-requisite actions needed to finalize and implement any new business model.

This new business model could entail a capital restructuring of the Company in order to provide new capital and a broader base of shareholders. Such a capital restructuring of the Company could involve a merger or acquisition of assets through various techniques, including a possible reverse-merger. Additional asset acquisitions and transfers may occur.

The Company is a majority-owned subsidiary of Thru Pharma, LLC, and these financials are presented on a stand-alone basis. All transactions with Thru Pharma have been identified in Note 4: Stockholders' Deficit and Note 5: Related party transactions.

Pursuant to a revision to a certain Consulting Agreement dated October 8, 2013, between Thru Pharma and Strategic Universal Advisors, LLC (“Strategic”), as amended effective January 17, 2014, on or about February 9, 2015, and most recently on October 20, 2015, with full effect as of April 1, 2015 (the “Consulting Agreement”), Thru Pharma and Strategic agreed that the intent of the Consulting Agreement ab initio was to provide Strategic with a 3% equity ownership of Thru Pharma in the event that a PUBCO M&A transaction did not occur prior to the end of the Consulting Agreement. Thru Pharma and Strategic agreed and stipulated that 753,504 shares of the Company would equal 3% of Thru Pharma as the equity payment under the Consulting Agreement, with transfer subject to the further provisions stated below. As Thru Pharma was the sole beneficiary of the services provided by Strategic under the Consulting Agreement, no part of the value of the consideration for services provided under the Consulting Agreement has been recognized as an expense by the Company.

In connection with earlier amendments to the Consulting Agreement, Strategic granted to Mr. Keough, a control person of the Company and Thru Pharma, an irrevocable proxy (the “Irrevocable Proxy”), to vote all of the common stock in the Company under certain conditions. That proxy no longer exists under the terms of the most recent amendment.

As part of the currently amended Consulting Agreement, Thru Pharma agreed to transfer 753,504 Company shares to Strategic upon the closing of a merger or acquisition (an “M&A Transaction”) of a public entity, resulting in Thru Pharma being the controlling owner of the entity that was the subject of the M&A Transaction, and Thru Pharma would cause such entity to also issue to Strategic a stock warrant to purchase 600,000 (six hundred thousand) shares of common stock of the entity that was the subject of the M&A Transaction. Such warrant will be of five-year duration, exercisable at $0.10 per share, and shall vest in four equal amounts of 150,000 shares with the first annual vesting to occur 60 (sixty) days following the completion of the PUBCO M&A Transaction, as well as other routine terms.

Notwithstanding anything to the contrary provided in the Consulting Agreement or elsewhere, in no event would Thru Pharma be directly and/or indirectly obligated to enter into or complete any particular M&A Transaction, including, but not limited to, any M&A Transaction with the Company.

Effective July 1, 2015, Arax and Catalyst Funding, LLC, entered into an Original Issue Discount Revolving Secured Convertible Promissory Note (the “Catalyst Note”) and a Securities Purchase Agreement (the “Catalyst SPA”). The transaction is secured by a grant of security interest to 100% of the Company stock held by or for Thru Pharma. The Catalyst Note and Catalyst SPA are intended to facilitate funding essential work relating to reporting and accounting costs. The total available funds are $200,000, and the Company has only drawn $75,000, and for which the Company is obligor. A Commitment Fee of Company stock in the amount of 35,294 shares was authorized for issue to Catalyst as part of the transaction recorded as an initial debt discount of $14,118. In the event that the Company is unable to timely make payments under this Agreement, Catalyst has the option of gaining control of the Thru Pharma shares in the Company.

On March 1, 2017, the Company’s majority shareholder, Thru Pharma LLC entered into a merger agreement with Kasten, Inc., a Nevada corporation (“Kasten”), whereby Kasten was the surviving corporation. As part of the merger agreement, the shares in the Company held by Thru Pharma were withheld from the agreement and the Company was no longer identified as a subsidiary of Thru Pharma thereby effectively spinning out the Company and excluding it from the surviving entity.  Kasten has been identified as party to and co-guarantor of the Catalyst note.  The Company is in the process of settling the note with Catalyst whereby funds used to satisfy the note are being provided by its Chief Executive Officer, Steven J. Keough whereas Mr. Keough will be effectively purchasing the 8,000,000 common shares in the Company and the Arax Holdings Corp receivable (listed on the books of the Company as a related party payable in the amount of $211,149 for the nine months ended July 31, 2016) in exchange for extinguishing the note.  The 8,000,000 shares are currently collateralizing the Catalyst loan. Upon satisfaction of the note, the Company’s related party payable will be due to Mr. Keough, and he will become the majority shareholder in the Company.
     
F-4


ARAX HOLDINGS CORP.
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JULY 31, 2016 AND 2015
    
NOTE 1 ORGANIZATION AND NATURE OF BUSINESS (CONTINUED)

 The Company’s status as a “shell company” as of the date of this report remains unchanged.

NOTE 2 GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has not generated any revenues as of July 31, 2016. The Company has incurred losses since Inception (February 23, 2012) resulting in an accumulated deficit of $656,464 as of July 31, 2016 and stockholders’ deficit of $317,719. The Company currently has a working capital deficit, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it can be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company has adopted an October 31 fiscal year end.

The accompanying unaudited financial statements have been prepared in accordance with the instructions from Regulation S-X and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments that are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim period, and to make the financial statements not misleading, have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim period are not necessarily indicative of operations for a full year.

Development Stage Compan y

The Company is in the development stage as defined under the then current Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915-205 “Development-Stage Entities” and among the additional disclosures required as a development stage company that its financial statements were identified as those of a development stage company, and that the statements of operations, stockholders’ deficit and cash flows disclosed activity since the date of its Inception (February 23, 2012) as a development stage company. Effective June 10, 2014 FASB changed its regulations with respect to Development Stage Entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions. The Company has elected to early adopt these provisions and consequently these additional disclosures are not included in these financial statements.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications
 
Certain prior year amounts have been reclassified to conform to the current period presentation. The reclassifications had no effect on the net loss or cash flows of the Company.
     
F-5

 
ARAX HOLDINGS CORP.
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JULY 31, 2016 AND 2015

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of July 31, 2016 the Company had no cash equivalents.

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. 

The following are the hierarchical levels of inputs to measure fair value: 
 
·
Level 1 - Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities.

·
Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

·
Level 3 - Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.
 
The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable and accrued expenses, certain notes payable and notes payable - related party, approximate their fair values because of the short maturity of these instruments. 

The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 2.  

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature. 

Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. 

Original Issue Discount

For certain convertible debt issued, the Company may provide the debt holder with an original issue discount. The original issue discount would be recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt. 
     
F-6

 
ARAX HOLDINGS CORP.
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JULY 31, 2016 AND 2015

Income Taxes

Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized.

The Company accounts for income taxes under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, “ Accounting for Income Taxes. ” It prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As a result, the Company has applied a more-likely-than-not recognition threshold for all tax uncertainties. The guidance only allows the recognition of those tax benefits that have a greater than 50% likelihood of being sustained upon examination by the various taxing authorities. The Company is subject to taxation in the United States. All of the Company’s tax years are subject to examination by Federal and State jurisdictions.

The Company classifies penalties and interest related to income taxes as income tax expense in the Statements of Operations.

Revenue Recognition

The Company will recognize revenue in accordance with Accounting Standards Codification No. 605, “Revenue Recognition” (“ASC- 605”), ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Advertising

The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $0 in advertising costs during the nine months ended July 31, 2016.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity instruments. There were no such potentially dilutive debt or equity instruments issued or outstanding during the three and nine month ended July 31, 2016.

Recent Accounting Pronouncements

The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on the company.
     
F-7

 
ARAX HOLDINGS CORP.
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JULY 31, 2016 AND 2015
     
NOTE 4 STOCKHOLDERS’ DEFICIT

Common Stock

The Company is authorized to issue 75,000,000 shares of common stock with a par value of $0.001 per share. The Company had 10,335,294 shares of common stock issued and outstanding as of July 31, 2016.

2016

For the nine months ended July 31, 2016, the Company issued 35,294 shares of common stock, valued at $11,881 ($0.337 per share) as part of an incentive to enter into convertible notes that were owed as of October 31, 2015.

2015

For the year ended October 31, 2015, the Company did not issue any common shares of Company stock.

Additional Paid in Capital

As of July 31, 2016, the Company owed $65,400 (50,000 common shares) for stock subscription payable for payments to a consultant for work performed with Thru Pharma, a related party, for a value of $27,000 and was recorded as a related party expense.  The remaining $38,400 was recorded during the year ended October 31, 2015 for the same consultant and was recorded as a related party expense.

NOTE 5 RELATED PARTY TRANSACTIONS

In support of the Company’s cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders or directors. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.

The Company owes its principal shareholder, Thru Pharma, a total of $211,149 as of July 31, 2016, in the form of a related party payable. It is unsecured, due on demand and non-interest bearing.

NOTE 6 INCOME TAXES

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

As of July 31, 2016, the Company had a net operating loss carry-forward of approximately $656,464 that may be used to offset future taxable income and begins to expire in 2031. Because of the change in ownership that occurred on January 16, 2014, net operating loss carry forwards could be limited as to use in future years.


NOTE 7 – CONVERTIBLE DEBT AND DERIVATIVE LIABILITIES

The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting related to a revolving convertible note in which the Company can borrow up to $200,000, which includes a 10% OID. The Company issued the first tranche of the convertible note totaling $75,000, of which $65,000 was paid in cash, $2,500 was paid for legal fees, and the OID of $7,500, which included a ratchet provision in the conversion price of the lower of $.95 or a price equal to 60% of the last equity transaction completed by the Company as part of a subscription agreement. The note had a maturity date of nine months after funding and also included a fifty percent premium which was added on 90 days after funding. The note was to be paid off in installments of $19,453 for the six months after the ninety day period.

The Company did not make the first installment payment under this agreement and was presented with a notice of default by noteholder on October 21, 2015.  Upon default, the note began to accrue interest in the amount of 24% per annum as well as an 18% late payment penalty began to accrue on unpaid interest. As of July 31, 2016 total accrued interest and penalties under this note was $11,281.
     
F-8

 
ARAX HOLDINGS CORP.
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JULY 31, 2016 AND 2015

NOTE 7 – CONVERTIBLE DEBT AND DERIVATIVE LIABILITIES (CONTINUED)

On November 30, 2015 and April 27, 2016, a related party made payments of $85,000 on the convertible note. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company has estimated the fair value of these embedded derivatives for convertible debentures using a multinomial lattice model as of July 31, 2016 and October 31, 2015.

The fair values of the derivative instruments are measured each quarter, which resulted in a gain of $3,111 and derivative expense of $0 during the nine months ended July 31, 2016. As of July 31, 2016, the fair market value of the derivatives aggregated $2,389 using the following assumptions: estimated 0.6 month, estimated volatility of 92%, and a discount rate of 0.38%.

The fair values of the derivative instruments are measured each quarter, which resulted in a gain of $19,934 and derivative expense of $25,434 during the year ended October 31, 2015. As of October 31, 2015, the fair market value of the derivatives aggregated $5,500 using the following assumptions: estimated 0.42 to 0.75-year term, estimated volatility of 133.49% to 243.69%, and a discount rate of 0.21% to 0.23%.

NOTE 8 – FAIR VALUE MEASUREMENT 

The Company uses the multinomial lattice model to calculate the fair value of the derivative liability. 

Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of July 31, 2016 and October 31, 2015 consisted of the following: 

     
Fair Value Measurements Using
 
Description
   
Total Fair
Value at
July 31, 2016
   
Quoted
Prices in
Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Unobservable
Inputs
(Level 3)
 
Derivative liability
   
$
2,389
   
$
   
$
2,389
   
$
 

     
Fair Value Measurements Using
 
Description
   
Total Fair
Value at
October 31, 2015
   
Quoted
Prices in
Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Unobservable
Inputs
(Level 3)
 
Derivative liability
   
$
5,500
   
$
   
$
5,500
   
$
 


NOTE 9 - STOCK PURCHASE OPTIONS AND WARRANTS

During the nine months ended July 31, 2016, the Company did not issue any options.

During the year ended October 31, 2015, the Company issued options to purchase common shares for a total of 37,500 shares of the Company’s Common Stock. The Company issued 37,500 options in conjunction with a consulting agreement entered into in February 2015. According to the consulting agreement, the Company is to issue 5,000 common shares or 7,500 options per month during the duration of their agreement. The options were valued using the multinomial lattice pricing model under the assumptions noted below.
     
F-9

 
ARAX HOLDINGS CORP.
NOTE TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JULY 31, 2016 AND 2015
      
NOTE 9 - STOCK PURCHASE OPTIONS AND WARRANTS (CONTINUED)

Stock Purchase Options

During the nine months ended July 31, 2016, the Company did not issue any options .

During the year ended October 31, 2015, the Company issued 37,500 stock purchase options for a value of $16,217 ($0.432 per share).  

The following table presents the assumptions used to estimate the fair values of the stock warrants and options granted:


   
Nine Months Ended
July 31, 2016
 
Year ended October
31, 2015
 
Expected volatility
 
162%
 
202-213
%
Expected dividends
 
0%
 
0
%
Expected term
 
3 Years
 
3 Years
 
Risk-free interest rate
 
0.76%
 
0.80-1.09
%

The following table summarizes the changes in options outstanding of the Company during the nine months ended July 31, 2016. 

Number
 
Weighted
 
Weighted
   
Expiration
 
Value if
 
of
 
Average
 
Average
   
Date (yrs)
 
Exercised
 
Options
 
Exercise
 
Grant Date
           
Date Issued
   
Price
 
Fair Value
           
Balance as of October 31, 2015
   
37,500
   
$
0.80
   
$
0.41
     
2.47
   
$
30,000
 
Granted
   
-
     
-
     
-
     
-
     
-
 
Exercised
   
-
     
-
     
-
     
-
     
-
 
Cancelled/Expired
   
-
     
-
     
-
     
-
     
-
 
Outstanding as of July 31, 2016
   
37,500
   
$
0.80
   
$
0.41
     
1.72
   
$
30,000
 

The following table summarizes the changes in options outstanding of the Company during the year ended October 31, 2015.
 
Date Issued
 
Number
of
Options
   
Weighted
Average
Exercise
Price
   
Weighted
Average
Grant Date
Fair Value
   
Expiration
Date (yrs)
   
Value if
Exercised
 
Balance as of October 31, 2014
   
   
$
   
$
     
   
$
 
Granted
   
37,500
     
0.80
     
0.41
     
2.64
     
30,000
 
Exercised
   
     
     
     
     
 
Cancelled/Expired
   
     
     
     
     
 
Outstanding as of October 31, 2015
   
37,500
   
$
0.80
   
$
0.41
     
2.47
   
$
30,000
 
     
F-10

 
ARAX HOLDINGS CORP.
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JULY 31, 2016 AND 2015
     
NOTE 9 - STOCK PURCHASE OPTIONS AND WARRANTS (CONTINUED)

Stock Purchase Warrants

During the nine months ended July 31, 2016, the Company issued warrants to purchase a total of 200,000 shares at $0.01 per share for professional services rendered.  The shares were valued at $58,000 ($0.29 per share).

During the year ended October 31, 2015, the Company issued warrants to purchase a total of 600,000 shares. The Company issued 600,000 warrants in conjunction with a consulting agreement entered into in July 2015. The warrants were valued using the multinomial lattice pricing model under the assumptions noted below for a value of $216,799.  

The following table presents the assumptions used to estimate the fair values of the stock warrants and options granted:

   
Nine Months Ended
July 31, 2016
 
Year ended
October 31, 2015
 
Expected volatility
 
162%
 
212
%
Expected dividends
 
0%
 
0
%
Expected term
 
3 years
 
3 Years
 
Risk-free interest rate
 
0.76%
 
1.08
%

The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the nine months ended July 31, 2016.

 
Number
 
Weighted
 
Weighted
   
Expiration
 
Value if
 
 
of
 
Average
 
Average
   
Date (yrs)
 
Exercised
 
 
Warrants
 
Exercise
 
Grant Date
           
 
     
Price
 
Fair Value
           
                         
Outstanding as of October 31,
2015
   
600,000
   
$
0.80
   
$
0.36
     
2.73
   
$
480,000
 
Granted
   
200,000
     
0.01
     
0.29
     
5.79
     
2,000
 
Exercised
   
-
     
-
     
-
     
-
     
-
 
Cancelled/Expired
   
-
     
-
     
-
     
-
     
-
 
Outstanding as of July 31,
2016
   
800,000
   
$
0.60
   
$
0.34
     
2.93
   
$
482,000
 

The following table summarizes the changes in warrants outstanding issued to employees and non-employees of the Company during the year ended October 31, 2015.

   
Number
of
Warrants
   
Weighted
Average
Exercise
Price
   
Weighted
Average
Grant Date
Fair Value
   
Expiration
Date (yrs)
   
Value if
Exercised
 
                               
Outstanding as of October 31, 2014
   
   
$
   
$
     
   
$
 
Granted
   
600,000
     
0.80
     
0.36
     
2.73
     
480,000
 
Exercised
   
     
     
     
     
 
Cancelled/Expired
   
     
     
     
     
 
Outstanding as of October 31, 2015
   
600,000
   
$
0.80
   
$
0.36
     
2.73
   
$
480,000
 
     
F-11

 
ARAX HOLDINGS CORP.
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JULY 31, 2016 AND 2015


NOTE 10 – SUBSEQUENT EVENTS

On March 1, 2017, the Company’s majority shareholder, Thru Pharma LLC entered into a merger agreement with Kasten, Inc., a Nevada corporation (“Kasten”), whereby Kasten was the surviving corporation. As part of the merger agreement, the shares in the Company held by Thru Pharma were withheld from the agreement and the Company was not identified as a subsidiary of Thru Pharma thereby effectively spinning out the Company and excluding it from the surviving entity.  Kasten has been identified as party to and co-guarantor of the Catalyst note.  The Company considers this note fully paid and is in the process of reclaiming shares pledged as collateral from Catalyst.  Funds used to satisfy the note are being provided by its Chief Executive Officer, Steven J. Keough whereas Mr. Keough will be effectively purchasing the 8,000,000 common shares in the Company and the Arax Holdings Corp receivable (listed on the books of the Company as a related party payable in the amount of $211,149 for the nine months ended July 31, 2016) in exchange for extinguishing the note.  The 8,000,000 shares are currently collateralizing the Catalyst loan. Upon satisfaction of the note, the Company’s related party payable will be due to Mr. Keough and he will become the majority shareholder in the Company.
     
F-12


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

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements which reflect management’s expectation or belief concerning future events that involve risks and uncertainties. Our actions, results and performance could differ materially from what is contemplated by the forward-looking statements contained in this Report. Factors that might cause differences from the forward-looking statements include those referred to or identified in our Annual report on Form 10K filed with the SEC on February 13, 2015 and other factors that may be identified elsewhere in this Report. Reference should be made to such factors and all forward- looking statements are qualified in their entirety by the above cautionary statements.

The following is management’s discussion and analysis of the financial condition and results of operations of the Company, as well as our liquidity and capital resources. The discussion, including known trends and uncertainties identified by management, should be read in conjunction with the Company’s unaudited consolidated financial statements and related notes included in this Report, as well as our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended October 31, 2015.

Overview

Arax Holdings Corp. (the “Company”, “we”, “our” or “us”) was incorporated under the laws of the State of Nevada on February 23, 2012 with a business plan to sell hot dogs from mobile hot dog stands throughout the major cities in Mexico. That has now changed and is discussed further below.

Effective January 16, 2014, Vladimir Leonov, the former Chief Executive Officer, majority shareholder and sole director of the Company sold 8,000,000 shares of our common stock (approximately 77% of the issued and outstanding shares of common stock of the Company) to Thru Pharma, LLC (d/b/a PharmaCline), a Delaware limited liability company (“Thru Pharma”), for total cash consideration of $275,000 in a private transaction (the “Acquisition”). The Acquisition resulted in a change in control of the Company. Simultaneous with the closing of the Acquisition, Mr. Leonov resigned as a director and from all offices he held with us, and Steven J. Keough, was elected as our director and appointed as the Company’s Chief Executive Officer, President, Secretary and Treasurer.

Following the changes in control and management of the Company related to the Acquisition, we have been reevaluating our business plan. As of the filing of the 10K for last year, the Company stated that Management believes that the best business model for our investors is to pursue business activity in the Life Sciences sector of the United States and internationally. We will continue to assess these opportunities and structures as well as the various pre-requisite actions needed to finalize and implement any new business model.

This new business model could entail restructuring of the Company to provide new capital and a broader base of shareholders. Such a capital restructuring of the Company could involve a merger or acquisition of assets through various techniques, including a possible reverse-merger. Additional asset acquisitions and transfers may occur. The Company may establish a presence on other markets as part of the restructuring.

Results of Operations

Three and nine months ended July 31, 2016 compared to the three and nine months ended July 31, 2015


Revenue

No revenue was recognized in the three and nine months ended July 31, 2016. Operations have not yet commenced.


Operating Expenses

During the three months ended July 31, 2016, our operating expenses were $124,960 compared to $8,033 during the same period in the prior year. The increase of $116,927 was due to the incursion of professional and other fees associated with amending and filing quarterly and annual 10Q and 10K reports.


During the nine months ended July 31, 2016, our operating expenses were $171,917 compared to $66,810 during the same period in the prior year. The increase of $105,107 was due to the incursion of professional and other fees associated with amending and filing quarterly and annual 10Q and 10K reports.
     
3

 
Other Income (Expenses)

During the three and nine months ended July 31, 2016, our other net expenses were $1,578 and $50,985 compared to $0 for the same periods in the prior year. During the three and nine months ended July 31, 2016, our other net expenses were comprised of interest expense of $3,676 and $54,096 from accrued interest on convertible notes and from the amortization of debt discount and OID offset by other income of $2,098 and $3,111 resulting from the change in fair value of the derivative imbedded in the conversion feature of the convertible note.

Net Loss

Our net loss for the three and nine months ended July 31, 2016 was $126,538 and $222,902 compared to $8,033 and $66,810, respectively for the same period in the prior year, is due to the factors discussed above.

Liquidity and Capital Resources

At July 31, 2016 we had $0 in total assets and $317,719 of current liabilities compared to $0 in total assets and $114,417 of current liabilities at October 31, 2015. The increase in our working capital deficit for the nine months ended July 31, 2016 is principally due to the operating losses we incurred in the period.

Cash flows for the nine months ended July 31, 2016 and July 31, 2015

Operating Activities

During the nine months ended July 31, 2016 we used $98,217 for operating activities compared to $22,710 used in operating activities during the nine months ended July 31, 2015. The increase in funds used in operating activities between the two periods was due primarily to an increase in professional and other fees associated with amending and filing quarterly and annual 10Q and 10K reports as well as interest amortization of debt discount of $43,188 and stock based compensation in the amount of $27,000.


Investing Activities

We neither used nor generated cash flows from investing activities during the nine month periods ended July 31, 2016 or 2015.

Financing Activities

During the nine months ended July 31, 2016 we received $88,217 in loans from Thru Pharma to fund our working capital requirements for a total balance of $211,149 from related parties. In the nine months ended July 31, 2015, Thru Pharma advanced the Company $22,710.

Historically, we have funded working capital requirements primarily through the proceeds of the private placement of equity instruments and loans from related parties. We expect that working capital requirements will be funded through advances from Thru Pharma, and through further issuances of our securities. We have no lines of credit or other bank financing arrangements. Additional issuances of equity or issuances of convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to implement our business plan.
     
4

 
Going Concern Qualification

The independent auditors’ review report accompanying the Company’s October 31, 2015 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The ability to continue as a going concern is dependent upon generating profitable operations in the future or obtaining the necessary financing to meet obligations and repay liabilities arising from normal business operations when they come due. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

Off-Balance Sheet Arrangements

As of the date of this report, we do not have any 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 are material to investors.

ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 4.
CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act 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 the Company’s management, including its Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management carried out an evaluation, under the supervision and with the participation of its Chief Executive Officer and its Principal Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures as of July 31, 2016. Based upon this evaluation, our management concluded that the Company’s disclosure controls and procedures were not effective as of July 31, 2016.

Management’s Annual Report on Internal Control over Financial Reporting.

Our internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Principal Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
     
5

 
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of July 31, 2016, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.


1.
We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.


2.
We improved cash controls – As of July 31, 2016, the Company has segregated cash handling and accounting functions. Management also requires segregated review of all disbursements. Any effects of previous period poor cash controls were mitigated by the fact the Company had limited transactions in their bank accounts.


Accordingly, the Company concluded these control deficiencies resulted in a possibility that a material misstatement of the unaudited financial statements will not be prevented or detected on a timely basis by the Company’s internal controls.

As a result of the weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of July 31, 2016 based on criteria established in Internal Control — Integrated Framework issued by COSO.

This Form 10-Q does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Form 10-Q.

Changes in Internal Control over Financial Reporting.

During the most recently completed fiscal quarter, there has been improvement in our internal control over financial reporting. Management plans to routinely assess its internal control over financial reporting against appropriate standards, and to make changes as determined necessary and according to the scope of business operations.
     
6

 
PART II.
OTHER INFORMATION


ITEM 1.
LEGAL PROCEEDINGS

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of May 5, 2017, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

On June 4, 2014, the Company was named as a defendant in a lawsuit filed by AMERIFINANCIAL, INC. (“AMERIFINANCIAL”), of Houston, Texas. The action related primarily to a contract dispute between AMERIFINANCIAL and our majority shareholder, Thru Pharma, LLC. The dispute did not allege any actions or inactions by our officers or representatives acting on our behalf. Counsel for Thru Pharma, LLC, requested that we be dismissed from this lawsuit, as we were not party to the disputed contract, and there was no legal basis for the Company being a part of the lawsuit. Accordingly, the Company did not recognize a liability in connection with the claim.

On August 31, 2015, the Judge in this Harris County, Texas, case ruled that the only remaining Defendant was Thru Pharma, LLC. On January 8, 2016, Thru Pharma and AMERIFINANCIAL, INC. reached settlement of the dispute. Subsequently this case was dismissed.
 

ITEM 1A. RISK FACTORS.
     
The Company is attempting to enter a new line of business which is highly competitive and if not a regulated today it may be regulated in the future.
 
Entering a new line of business has many risks including obtaining sufficient capital to cover startup expenses and to continue to fund operations until sales are sufficient to fund ongoing operations. The business line may never bring products to market. If the products do go to market, there is no guarantee that there will have enough sales to be profitable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
     
During the nine months ended July 31, 2016, the Company not issue any shares of common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
     
The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting related to a revolving convertible note in which the Company can borrow up to $200,000, which includes a 10% OID. The Company issued the first tranche of the convertible note totaling $75,000, of which $65,000 was paid in cash, $2,500 was paid for legal fees, and the OID of $7,500, which included a ratchet provision in the conversion price of the lower of $.95 or a price equal to 60% of the last equity transaction completed by the Company as part of a subscription agreement. The note had a maturity date of nine months after funding and also included a fifty percent premium which was added on 90 days after funding. The note was to be paid off in installments of $19,453 for the six months after the ninety day period.

The Company did not make the first installment payment under this agreement and was presented with a notice of default by noteholder on October 21, 2015.  Upon default, the note began to accrue interest in the amount of 24% per annum as well as an 18% late payment penalty began to accrue on unpaid interest. As of July 31, 2016 total accrued interest and penalties under this note was $9,533.

ITEM 4. MINE SAFETY DISCLOSURES .
   
Not applicable
 
ITEM 5. OTHER INFORMATION .
     
None

ITEM 6. EXHIBITS.
    
The following exhibits are included with this quarterly filing. Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our Registration Statement on Form S-1, filed under SEC File Number 333-207383, at the SEC website at www.sec.gov :
     
7

 
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.

 
ARAX HOLDINGS CORP.
     
Date: June 14, 2017
By:
/s/ Steven J. Keough
 
Name:
Steven J. Keough
 
Title:
President and Chief Executive Officer
(Principal Executive Officer, Principal
Financial Officer, and Principal Accounting Officer)
     
8

 
Exhibit Index


31.1
 
Certification of Principal Executive Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934.
31.2
 
Certification of Principal Financial Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934.
32.1
 
Certification of Principal Executive Officer pursuant to Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
32.2
 
Certification of Principal Financial Officer pursuant to Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
 
101.INS XBRL
 
Instance Document (furnished herewith)*
     
101.SCH XBRL
 
Taxonomy Extension Schema Document (furnished herewith)*
     
101.CAL XBRL
 
Taxonomy Extension Calculation Linkbase Document (furnished herewith)*
     
101.DEF XBRL
 
Taxonomy Extension Definition Linkbase Document (furnished herewith)*
     
101.LAB XBRL
 
Taxonomy Extension Label Linkbase Document (furnished herewith)*
     
101.PRE XBRL
 
Taxonomy Extension Presentation Linkbase Document (furnished herewith)*
 
 
9

EXHIBIT 31.1
 
CERTIFICATION
 
I, Steven J. Keough, certify that:
 
1.
I have reviewed this report on Form 10-Q.

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)
Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
 
 
Date: June 14, 2017
By:
/s/ Steven J. Keough
 
   
Steven J. Keough
 
   
Chief Executive Officer
 
 
 
 

EXHIBIT 31.2
 
CERTIFICATION
 
I, Steven J. Keough, certify that:
 
1.
I have reviewed this report on Form 10-Q.

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)
Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
 
 
Date: June 14, 2017
By:
/s/ Steven J. Keough
 
   
Steven J. Keough
 
   
Chief Financial Officer
 
 
 
 

EXHIBIT 32.1
 
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report of ARAX HOLDINGS CORP. (the “Company”) on Form 10-Q for the period ending July 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven J. Keough, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
 
(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
 
 
 
IN WITNESS WHEREOF, the undersigned has executed this certification as of the 14 th day of June, 2017.
 
 
By:
/s/ Steven J. Keough
 
   
Steven J. Keough
 
 
 
Chief Executive Officer
 
 
 
 

EXHIBIT 32.2
 
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report of ARAX HOLDINGS CORP. (the “Company”) on Form 10-Q for the period ending July 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven J. Keough, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
 
(3)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(4)
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
 
 
 
IN WITNESS WHEREOF, the undersigned has executed this certification as of the 14 th day of June, 2017.
 
 
By:
/s/ Steven J. Keough
 
 
 
Steven J. Keough
 
   
Chief Financial Officer