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~~August 31, 2017

[ ]	TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

From the transition period from to .

Commission File Number 000-52735

METASTAT, INC.

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

Nevada	20-8753132
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

27 Drydock Ave, 2nd Floor

Boston, Massachusetts 02210

(Address of principal executive offices)

(617) 531-6500

(Issuer’s telephone number)

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, ~~smaller reporting company,~~ or ana ~~emerging~~smaller ~~growth~~reporting company. See ~~the~~ definitions of “large accelerated filer,”, “accelerated filer,” and “smaller reporting company,” ~~and~~ ~~“emerging growth company”~~ in Rule 12b-2 of the ~~Exchange~~ Exchange Act.:

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

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

As of ~~July~~October 1412, 2017, there were 5,~~225~~677,~~573~~383 shares of the registrant’s common stock, $0.0001 par value, issued and outstanding.

TABLE OF CONTENTS

			Page
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements	1
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1519
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	1924
	Item 4.	Controls and Procedures	1924
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	2024
	Item 1A.	Risk Factors	2024
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2026
	Item 3.	Defaults Upon Senior Securities	2026
	Item 4.	Mine Safety Disclosures	2026
	Item 5.	Other Information	2026
	Item 6.	Exhibits	2026

-i-

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MetaStat, Inc.

Condensed Consolidated Balance Sheets

	May 31, 2017	February 28, 2017
	August 31,	February 28,
	2017	2017
ASSETS	(Unaudited)	(Audited)
Current Assets:
Cash and cash equivalents	$~~152~~1,~~211~~734,297	$782,707
Account receivable	23,300	-
Prepaid expenses	40,504	20,856
Prepaid expenses	40,535	20,856
Total Current Assets	1,774,801	803,563
Total Current Assets	216,046	803,563
Equipment
(net of accumulated depreciation of $287,900
(net of accumulated depreciation of $309,537 and $265,234, respectively)	398,782	414,635
and $265,234, respectively)	391,969	414,635
Refundable deposits	43,600	43,600
TOTAL ASSETS	$~~651~~2,~~615~~217,183	$1,261,798
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Current Liabilities:
Accounts payable	$~~668~~531,~~866~~749	$572,195
Accrued expense	251,567	179,680
Accrued expenses	201,365	179,680
Deferred research & development reimbursement	64,989	177,517
Deferred research and development reimbursement	204,974	177,517
Convertible note payable (net of debt discount of $6,315 and $10,914, respectively)	993,685	989,086
Convertible note payable (net of discount $1,576 and $10,914, respectively)	998,424	989,086
Accrued interest payable	4166,~~095~~300	15,890
Accrued dividends on Series B Preferred Stock	1516,~~638~~270	15,638
Total Current Liabilities	2,~~035~~019,~~840~~082	1,950,006
Warrant liability	145,330	2,106,972
Derivative warrant liability	96,038	2,106,972
Total Liabilities	2,181,170	4,056,978
TOTAL LIABILITIES	2,115,120	4,056,978
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' EQUITY (DEFICIT)
Series A convertible preferred stock ($0.0001 par value; 1,000,000 shares authorized; 874,257 shares issued and outstanding as of May 31, 2017 and February 28, 2017)	87	87
Series A convertible preferred stock ($0.0001 par value; 1,000,000 shares authorized; 0 and 874,257 shares issued and outstanding as of August 31, 2017 and February 28, 2017, respectively)	-	87
Series A-2 convertible preferred stock ($0.0001 par value; 1,000,000 shares authorized; 70,541 shares issued and outstanding as of May 31, 2017 and February 28, 2017)	7	7
Series A-2 convertible preferred stock ($0.0001 par value; 1,000,000 shares authorized; 299,904 and 70,541 shares issued and outstanding as of August 31, 2017 and February 28, 2017, respectively)	30	7
Series B convertible preferred stock ($0.0001 par value; 1,000 shares authorized; 217 and 213 shares issued and outstanding as of May 31, 2017 and February 28, 2017, respectively)	-	-
Series B convertible preferred stock ($0.0001 par value; 1,000 shares authorized; 222 and 213 shares issued and outstanding as of August 31, 2017 and February 28, 2017,	-	-
Common stock ($0.0001 par value; 150,000,000 shares authorized; 4,807,942 and 4,707,942 shares issued and outstanding as of May 31, 2017 and February 28, 2017, respectively)	481	471
Common Stock, ($0.0001 par value; 150,000,000 shares authorized; 5,677,383 and 4,707,942 shares issued and outstanding as of August 31, 2017 and February 28, 2017, respectively)	568	471
Additional paid-in-capital	2527,~~064~~459,~~862~~472	23,523,140
Accumulated deficit	(2627,~~594~~358,~~992~~007)	(26,318,885)
Total stockholders' deficit	(1102,~~529,555)~~063	(2,795,180)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$651,615	$1,261,798
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$2,217,183	$1,261,798

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

-1-

Table of Contents

MetaStat, Inc.

Unaudited Condensed Consolidated Statements of Operations

	For the three months ended
	Three Months Ended		Six Months Ended
	May 31, 2017	May 31, 2016
	August 31, 2017	August 31, 2016	August 31, 2017	August 31, 2016
Research collaboration revenue	$23,300	$-
Revenue	$-	$-	$23,300	$-
Total Revenue	~~23,300~~-	-	23,300	-
Operating Expenses
General & administrative	~~570~~459,~~605~~628	~~555~~615,~~681~~849	1,030,233	1,171,530
Research & development	~~189~~322,~~444~~907	~~271~~356,~~123~~168	512,351	627,291
Total Operating Expenses	~~760~~782,~~049~~535	~~826~~972,~~804~~017	1,542,584	1,798,821
Other Expenses (income)
Interest expense	2930,~~804~~039	~~304~~401,~~646~~990	59,843	706,636
Other income, net	(66267)	(~~267~~102)	(333)	(50)
Change in fair value of warrant liability	(~~490~~49,~~380~~292)	34(96,~~492~~241)	(539,672)	(61,749)
Change in fair value of put option embedded in notes payable	-	53,999
Change in fair value of put embedded in note payable	-	(510,867)	-	(456,868)
Settlement expense	-	115
Loss on sale of notes receivable	-	112,500	-	112,500
Total Other Expenses (Income)	(~~460~~19,~~642~~520)	~~392~~(92,~~985~~516)	(480,162)	300,469
Net Loss	$(~~276~~763,~~107~~015)	$(1879,~~219,789~~501)	$(1,039,122)	$(2,099,290)
Loss attributable to common shareholders and loss per common share:
Net loss	$(~~276~~763,~~107~~015)	$(1879,~~219,789~~501)	$(1,039,122)	$(2,099,290)
Deemed dividend on Series B Preferred Stock issuance	-	(708,303)
Deemed Dividend on Series B Preferred Stock issuance	-	-	-	(708,303)
Accrued dividend on Series B Preferred Stock	(23,457)	(73,442)
Accrued dividends - Series B Preferred Stock	(24,557)	(73,452)	(48,014)	(146,894)
Loss attributable to common shareholders	$(299,564)	$(2,001,534)
Deemed Dividend to Series B Preferred Stockholders for exchange of warrants	-	(29,311)	-	(29,311)
Net loss per share, basic and diluted	$(0.06)	$(1.08)
Deemed dividend related to warrants exercise price modification	(31,139)	-	(31,139)	-
Weighted average of shares outstanding, basic and diluted	4,774,669	1,847,140
Loss attributable to common shareholders	$(818,711)	$(981,982)	$(1,118,275)	$(2,983,517)
Net loss per share, basic and diluted	$(0.16)	$(0.46)	$(0.22)	$(1.50)
Weighted average of shares outstanding	5,245,819	2,127,833	5,002,635	1,987,487

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

-2-

Table of Contents

MetaStat, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

	For the three months ended
	Six Months Ended
	May 31, 2017	May 31, 2016
	August 31, 2017	August 31, 2016
Cash Flows from Operating Activities:
Net loss	$(~~276~~1,~~107~~039,122)	$(12,~~219~~099,~~789~~290)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation	2244,~~666~~303	2347,~~766~~532
Share-based compensation	70133,~~470~~896	~~119~~362,~~086~~326
Accretion of debt discount included in interest expense	4,599	279,593
Amortization of debt discount	9,338	652,879
Change in fair value of warrant liability	(490,380)	34,492
Loss on sale of notes receivable and assets	-	112,500
Change in fair value of put option embedded in notes payable	-	53,999
Change in fair value of warrant liability	(539,672)	(61,749)
Change in fair value of put embedded in notes payable	-	(456,868)
Net changes in assets and liabilities:
Prepaid expenses	(19,~~679~~648)	~~(971)~~87,538
Accounts receivable	(23,300)	-
Deferred research and development reimbursement	27,457	-
Accounts payable and accrued expenses	~~168~~4,~~558~~896	~~266~~507,~~299~~022
Deferred research and development reimbursement	(112,528)	-
Accrued interest	50,410	52,000
Interest payable	25,205	24,000
Net cash used in operating activities	(1,328,142)	(796,110)
Net Cash used in Operating Activities	(630,496)	(419,525)
Cash Flows from Investing Activities:
Purchase of equipment	(28,450)	-
Proceeds received from sale of notes receivable	-	12,500
Net cash (used in) provided by investing activities	(28,450)	12,500
Cash Flows from Financing Activities:
Proceeds from issuance of debt, net of debt issuance costs	-	122,790
Proceeds from issuance of common stock and warrants, net of offering costs	-	126,487
Proceeds from issuance of common stock, preferred stock and warrants, net of offering costs	2,308,182	462,565
Payment of short-term debt	-	(3979,~~241~~295)
Net Cash provided by Financing Activities	-	210,036
Net cash provided by financing activities	2,308,182	506,060
Net decrease in cash and cash equivalents	(630,496)	(209,489)
Net increase (decrease) in cash and cash equivalents	951,590	(277,550)
Cash and cash equivalents:
Cash at the beginning of the period	782,707	363,783
Cash at the end of the period	$152,211	$154,294
Cash and cash equivalents at the end of the period	$1,734,297	$86,233
Supplemental Disclosure of Non-cash Financing Activities:
Supplemental Disclosure of Non-Cash Financing Activities:
Warrant liability associated with note payable	$-	$15,225
Deemed dividend related to Series B Preferred Stock BCF adjustment for conversion price adjustment	$-	$708,303
Series B Preferred stock paid in kind dividend	$47,382	$146,399
Series B Preferred PIK dividend	$23,457	$72,476
Series B Preferred stock accrued dividends	$48,014	$146,894
Series B Preferred Stock accrued dividends	$23,457	$73,442
Issuance of common stock to convert Series A preferred stock	$87	$-
Issuance of common stock to convert accrued expenses	$23,657	$-
Reclassification between warrant liability and additional paid-in-capital	$1,471,262	$-
Issuance of common stock and warrants as payment of accounts payable	$-	$32,000
Issuance ofcommon stock and warrants as payment on accounts payable	$-	$32,000
Warrants issued to placement agents	$185,063	$35,859
Deemed dividend related to Series B Preferred Stock BCF adjustment for conversion price adjustment	$-	$708,303
Deemed dividend to Series B Preferred stock holders upon exercising Most Favored Nation option	$-	$29,311
Deemed dividend related to warrants exercise price modification	$31,139	$-
Issuance of warrants in connection with OID Notes amendment	$-	$44,095
Financing of insurance premium through notes payable	$-	$158,400
Warrants issued to placement agents	$-	$15,400

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

-3-

Table of Contents

MetaStat, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1 – DESCRIPTION OF BUSINESS AND GOING CONCERN

MetaStat, Inc. (“we,” “us,” “our,” the “Company,” or “MetaStat”) is a pre-commercial biotechnology company focused on discovering and developing personalized therapeutic (Rx) and diagnostic (Dx) treatment solutions for cancer patients. Our Mena isoform “driver-based” diagnostic biomarkers also serve as novel therapeutic targets for anti-metastatic drugs. MetaStat is developing therapeutic product candidates and paired companion diagnostics based on a novel approach that makes the Mena isoform protein a ~~drugable~~druggable target. Our core expertise includes an understanding of the mechanisms and pathways that drive tumor cell invasion and metastasis, as well as drug resistance to certain targeted therapies and cytotoxic chemotherapies. MetaStat’s head office, research laboratories, and state-of-the-art CLIA-certified diagnostic laboratory are located in Boston, MA. The Company was incorporated on March 28, 2007 under the laws of the State of Nevada.

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, MetaStat Biomedical, Inc., a Delaware corporation and all significant intercompany balances have been eliminated byin consolidation.

These interim unaudited financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States and should be read in conjunction with the Company’s audited consolidated financial statements and related footnotes for the year ended February 28, 2017, included in the Company’s Annual Report on Form 10-K as filed with the United States Securities and Exchange Commission (“SEC”) on May 30, 2017. These unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position as of ~~May~~August 31, 2017 and its results of operations and cash flows for the interim periods presented and are not necessarily indicative of results for subsequent interim periods or for the full year. These interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and allowed by the relevant SEC rules and regulations; however, the Company believes that its disclosures are adequate to ensure that the information presented is not misleading.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has experienced net losses and negative cash flows from operations since its inception. The Company has sustained cumulative losses of approximately $2627.64 million as of ~~May~~August 31, 2017, has negative working capital and has not generated positive cash flows from operations. The Company has raised approximately $2.3 million from a common stock financing during the three months ended August 31, 2017, however the continuation of the Company as a going concern is dependent upon continued financial support from its shareholders, the ability of the Company to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company cannot make any assurances that additional financings will be available to it and, if available, completed on a timely basis, on acceptable terms or at all. If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact its business and operations and could also lead to the reduction or suspension of the Company’s operations and ultimately force the Company to cease operations. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Subsequent to May 31, 2017, the Company completed a private placement for gross proceeds of approximately $2.14 million (See Note 12).

NOTE 2 – CAPITAL STOCK

The Company has authorized 160,000,000 shares of capital stock, par value $0.0001 per share, of which 150,000,000 are shares of common stock and 10,000,000 are shares of “blank-check” preferred stock.

Our board of directors (the “Board”) is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights, which could adversely affect the voting power or other rights of the holders of common stock. The preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control of the Company.

Common Stock

The holders of our common stock are entitled to one vote per share. In addition, the holders of our common stock will be entitled to receive ratably such dividends, if any, as may be declared by our Board out of legally available funds; however, the current policy of our Board is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our common stock will be entitled to share ratably in all assets that are legally available for distribution.

-4-

Table of Contents

Series A Convertible Preferred Stock

Pursuant to the Certificate of Designation of Rights and Preferences of the Series A Preferred Stock (the “Series A Preferred Stock” or “Series A Preferred”), the terms of the Series A Preferred Stock are as follows:

-4-

Table of Contents

MetaStat, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Ranking

The Series A Preferred Stock will rank (i) senior to our common stock, (ii) pari passu with our Series A-2 Preferred Stock (as defined below), and (iii) junior to our Series B Preferred Stock (as ~~defined~~ defined below) with respect to distributions of assets upon the liquidation, dissolution or winding up of the Company.

Dividends

The Series A Preferred Stock is not entitled to any dividends.

Liquidation Rights

In the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Series A Preferred Stock an amount equal to the fair market value as determined in good faith by the Board.

Voluntary Conversion; Anti-Dilution Adjustments

Each fifteen (15) shares of Series A Preferred Stock shall be convertible into one share of common stock (the “Series A Conversion Ratio”). The Series A Conversion Ratio is subject to customary adjustments for issuances of shares of common stock as a dividend or distribution on shares of the common stock, or mergers or reorganizations.

Voting Rights

The Series A Preferred Stock has no voting rights. The common stock into which the Series A Preferred Stock is convertible shall, upon issuance, have all of the same voting rights as other issued and outstanding common stock, and none of the rights of the Series A Preferred Stock.

Series A-2 Convertible Preferred Stock

Pursuant to the Certificate of Designation of Rights and Preferences of the Series A-2 Convertible Preferred Stock (the “Series A-2 Preferred Stock” or “Series A-2 Preferred”), the terms of the Series A-2 Preferred Stock are as follows:

Ranking

The Series A-2 Preferred will rank (i) senior to our common stock, (ii) pari passu with our Series A Preferred Stock, and (iii) junior to our Series B Preferred Stock (as defined below) with respect to distributions of assets upon the liquidation, dissolution or winding up of the Company.

Dividends

The Series A-2 Preferred is not entitled to any dividends.

Liquidation Rights

In the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of the Series A-2 Preferred shall be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Series A-2 Preferred an amount of cash, securities or other property to which such holder would be entitled to receive with respect to each such share of Preferred Stock if such shares had been converted to common stock immediately prior to such liquidation, dissolution or winding-up of the Company.

Voluntary Conversion; Anti-Dilution Adjustments

Each share of Series A-2 Preferred shall, at any time, and from time to time, at the option of the holder, be convertible into ten (10) shares of common stock (the “Series A-2 Conversion Ratio”). The Series A-2 Conversion Ratio is subject to customary adjustments for issuances of shares of common stock as a dividend or distribution on shares of common stock, or mergers or reorganizations.

-5-

Table of Contents

Conversion Restrictions

The holders of the Series A-2 Preferred may not convert their shares of Series A-2 Preferred into shares of common stock if the resulting conversion would cause such holder and its affiliates to beneficially own (as determined in accordance with Section 13(d) of the Exchange Act, and the rules thereunder) in excess of 4.99% or 9.99% of the common stock outstanding, when aggregated with all other shares of common stock owned by such holder and its affiliates at such time; provided, however, that such holder may elect to waive these conversion restrictions.

-5-

Table of Contents

MetaStat, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Voting Rights

The Series A-2 Preferred has no voting rights. The common stock into which the Series A-2 Preferred is convertible shall, upon issuance, have all of the same voting rights as other issued and outstanding common stock, and none of the rights of the Series A-2 Preferred.

Series B Convertible Preferred Stock

Pursuant to the Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Series B Preferred Stock” or “Series B Preferred”), the terms of the Series B Preferred Stock are as follows:

Ranking

The Series B Preferred Stock will rank senior to our Series A Preferred Stock, Series A-2 Preferred Stock and common stock with respect to distributions of assets upon the liquidation, dissolution or winding up of the Company.

Stated Value

Each ~~shares~~share of Series B Preferred Stock will have a stated value of $5,500, subject to adjustment for stock splits, combinations and similar events (the “Stated Value”).

Dividends

Cumulative dividends on the Series B Preferred Stock accrue at the rate of 8% of the Stated Value per annum, payable quarterly on March 31, June 30, September 30, and December 31 of each year, from and after the date of the initial issuance. Dividends are payable in kind in additional shares of Series B Preferred Stock valued at the Stated Value or in cash at the sole option of the Company. At ~~May~~August 31, 2017 and February 28, 2017, the ~~dividends~~ dividends payable to the holders of the Series B Preferred Stock amounted to approximately $16,000 and $16,000, respectively. During the three and six months ended ~~May~~August 31, 2017, the Company issued 4.3501 and ~~May~~8.6149 shares of Series B Preferred Stock, respectively, for payment of dividends amounting to approximately $23,000 and $47,000, respectively. During the three and six months ended August 31, 2016, the Company issued 4 13.~~2648~~4407 and 1326.~~1771~~6178 shares of Series B Preferred Stock, respectively, for payment of dividends amounting to approximately $2374,000 and $72146,000, respectively.

Liquidation Rights

If the Company voluntarily or involuntarily liquidates, dissolves or winds up its affairs, each holder of the Series B Preferred Stock will be entitled to receive out of the Company’s assets available for distribution to stockholders, after satisfaction of liabilities to creditors, if any, but before any distribution of assets is made on the Series A Preferred Stock or common stock or any of the Company’s shares of stock ranking junior as to such a distribution to the Series B Preferred Stock, a liquidating distribution in the amount of the Stated Value of all such holder’s Series B Preferred Stock plus all accrued and unpaid dividends thereon. At ~~May~~August 31, 2017 and February 28, 2017, the ~~value~~ value of the liquidation preference of the Series B Preferred Stock aggregated to approximately $1.2 million and $1.19 million, respectively.

Conversion; Anti-Dilution Adjustments

Each share of Series B Preferred Stock will be convertible at the holder’s option into common stock in an amount equal to the Stated Value plus accrued and unpaid dividends thereon through the conversion date divided by the then applicable conversion price. The initial conversion price was $8.25 per share (the “Series B Conversion Price”) and is subject to customary adjustments for issuances of shares of common stock as a dividend or distribution on shares of common stock, or mergers or reorganizations, as well as “full ratchet” anti-dilution adjustments for future issuances of other Company securities (subject to certain standard carve-outs) at prices less than the applicable Series B Conversion Price.

The issuance of shares of common stock pursuant to the 2016 Unit Private Placement (as defined in Note 3) triggered the full ratchet anti-dilution price protection provision of the Series B Preferred Stock. Accordingly, the Series B Conversion Price was adjusted from $8.25 to $2.00 per share. The issuance of shares of common stock pursuant to the 2017 Common Stock Private Placement (as defined in Note 3) triggered the full ratchet anti-dilution price protection provision of the Series B Preferred Stock. Accordingly, the Series B Conversion Price was adjusted from $2.00 to $0.83 per share.

The Series B Preferred Stock is subject to automatic conversion (the “Mandatory Conversion”) at such time when the Company’s common stock has been listed on a national stock exchange such as the NASDAQ, New York Stock Exchange or NYSE MKT; provided, that, on the Mandatory Conversion date, a registration statement providing for the resale of the shares of common stock underlying the Series B Preferred Stock is effective. In the event of a Mandatory Conversion, each share of Series B Preferred Stock will convert into the number of shares of common stock equal to the Stated Value plus accrued and unpaid dividends divided by the applicable Series B Conversion Price.

-6-

Table of Contents

MetaStat, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Voting Rights

The holders of the Series B Preferred Stock shall be entitled to the number of votes equal to the number of shares of common stock into which such Series B Preferred Stock could be converted for purposes of determining the shares entitled to vote at any regular, annual or special meeting of stockholders of the Company, and shall have voting rights and powers equal to the voting rights and powers of the common stock (voting together with the common stock as a single class).

Most Favored Nation

For a period of up to 30 months after March 31, 2015, if the Company issues any New Securities (as defined below) in a private placement or public offering (a “Subsequent Financing”), the holders of Series B Preferred Stock may exchange all of the Series B Preferred Stock at their Stated Value plus all Series A Warrants (as defined below) issued to the Series B Preferred Stock holders for the securities issued in the Subsequent Financing on the same terms of such Subsequent Financing. This right expires upon the earlier of (i) September 30, 2017 and (ii) the consummation of a bona fide underwritten public offering in which the Company receives aggregate gross proceeds of at least $5,000,000. “New Securities” means shares of the common stock, any other securities, options, warrants or other rights where upon exercise or conversion the purchaser or recipient receives shares of the common stock, or other securities with similar rights to the common stock, subject to certain standard carve-outs. This right expired on September 30, 2017 pursuant to the Certificate of Designation of Rights and Preferences of the Series B Preferred Stock.

NOTE 3 – EQUITY ISSUANCES

Common stock financing – the 2016 Unit Private Placement

During the ~~three~~six months ended ~~May~~August 31, 2016, the Company entered into a subscription agreement pursuant to a private placement (the “2016 Unit Private Placement”) with a number of accredited investors pursuant to which the Company issued an aggregate of 2049.5 units consisting of an aggregate of ~~100~~247,~~000 shares~~500 shares of common stock and five-year warrants to purchase 50123,~~000~~ 750 shares of common stock at a purchase price of $3.00 per share (the “2016 Unit Warrants”) for an aggregate purchase price of of $~~200~~495,000. After deducting placement agent fees and other ~~offering~~ offering expenses, including legal expenses, net proceeds amounted to to approximately $~~126~~390,000. Additionally, the Company issued an aggregate of 1024,~~000~~750 placement agent warrants in substantially the same form as the 2016 Unit Warrants.

Registration Rights Agreement

Pursuant to a registration rights agreement entered into by the parties, the Company agreed to file a registration statement with the SEC providing for the resale of the shares of common stock and the shares of common stock underlying the Warrants issued pursuant to the 2016 Unit Private Placement on or before the date which is forty-five (45) days after the date of the final closing of the 2016 Unit Private Placement. The Company will use its commercially reasonable efforts to cause the registration statement to become effective within one hundred fifty (150) days from the filing date. The Company has received a waiver from a majority of the 2016 Unit Private Placement investors extending the filing date of the registration statement to no later than December 15, 2016. The Company filed the Registration Statement on Form S-1 with the SEC on December 14, 2016, which was declared effective by the SEC on January 5, 2017.

Deemed Dividend due to Conversion Price Adjustment

During the ~~three~~six months ended ~~May~~August 31, 2016, as a result of the adjustment of the Series B Conversion Price from $8.25 to $2.00 per share due to the 2016 Unit Private Placement, the Company recorded a non-cash deemed dividend, amounting to approximately $708,000. The expense was measured at the intrinsic value of the beneficial conversion feature for each issuance of Series B Preferred Stock in the Series B Preferred private placement and was limited to the amount of Series B Preferred Stock allocated proceeds less previously recognized beneficial conversion features.

~~Issuances~~Most ofFavored ~~common~~Nation ~~stock~~Exchange ~~for~~– ~~services~~the MFN Exchange

~~During~~On July 12, 2016, the ~~three~~Company ~~months~~and ~~ended~~one ~~May~~Series ~~31,~~B ~~2016,~~Preferred Stock shareholder (the ~~Company~~“Exchange ~~issued~~Purchaser”) entered into an ~~aggregate~~exchange ofagreement 25effective July 1,~~000~~ ~~shares~~2016 of(the ~~common~~“Exchange Agreement”) ~~stock~~whereby tothe aExchange ~~consultant~~Purchaser ~~for~~elected to ~~services~~exercise ~~that~~their ~~vested~~Most ~~over~~Favored aNation ~~two-month~~exchange ~~term~~right ~~and~~into the securities offered pursuant to ~~settle~~the ~~$32,000~~2016 ofUnit Private Placement (the ~~accounts~~“MFN ~~payable~~Exchange”). Accordingly, ~~The~~the ~~fair~~Exchange Purchaser ~~value~~tendered all of ~~the~~their 19.4837 shares ~~amounted~~of toSeries B Preferred Stock and approximately $462,000 onof ~~the~~accrued ~~grant~~and ~~date,~~unpaid dividends offor ~~which~~an aggregate exchange amount of approximately $14109,000, ~~was~~plus ~~recognized~~9,000 ~~into~~Series ~~general~~A Warrants with an exercise price of $10.50 per share originally issued in connection with the Series B Private Placement for an aggregate of 54,652 shares of common stock and ~~administrative~~warrants ~~expense~~to purchase 27,326 shares of common stock at an ~~during~~exercise price of $3.00 per share. Additionally, the ~~three~~parties entered ~~months~~into ~~ended~~a ~~May~~joinder 31agreement, and the Exchange Purchaser was granted all rights and benefits under the 2016 Unit Private Placement financing agreements.

~~During~~The Company analyzed and determined that the ~~three~~MFN ~~months~~Exchange ~~ended~~is ~~May~~a contingent ~~31,~~beneficial ~~2017,~~conversion ~~the~~feature ~~Company~~that ~~issued~~should anbe recognized ~~aggregate~~upon ofthe ~~100,000~~occurrence ~~shares~~ of ~~common~~the ~~stock~~contingent toevent ~~members~~based ofon its ~~Board~~intrinsic ~~that~~value ~~vested~~at ~~immediately~~the commitment date. ~~The~~Since ~~fair~~the ~~value~~Company had fully recognized all allocated proceeds of the ~~shares~~Series ~~amounted~~B toPreferred Stock ~~approximately~~in ~~$130,000~~previously onrecognized ~~the~~beneficial ~~grant~~conversion ~~date~~features, ~~which~~no beneficial conversion was recognized ~~into general~~upon ~~and~~the ~~administrative~~exchange ~~expense~~of ~~during~~ the Series ~~three~~B ~~months~~Preferred ~~ended May~~Stock ~~31,~~in ~~2017~~the MFN Exchange.

For the three and six months ended August 31, 2016, the Company recorded a non-cash deemed dividend to Additional Paid-in Capital of approximately $29,000 in connection with the MFN Exchange equal to the excess fair value of the warrants received over the fair value of the Series A Warrants.

-7-

Table of Contents

~~NOTE~~MetaStat, ~~4 – STOCK OPTIONS~~Inc.

~~During~~Notes ~~the three months ended May 31, 2016, the Company issued options~~ to ~~purchase~~Unaudited ~~50,000~~Condensed ~~shares~~Consolidated ~~of common stock at $2.19 per~~Financial share to a non-executive member of its Board. These 50,000 options vest in three equal installments on each of May 26, 2017, May 26, 2018, and May 26, 2019 and expire on May 26, 2026. These options had a total fair value of approximately $87,000 as calculated using the Black-Scholes model.Statements

~~During~~Common ~~the~~stock ~~three~~financing ~~months~~– ~~ended~~Additional ~~May 31,~~ 2016, ~~the~~Unit ~~Company issued~~Private options to purchase 50,000 shares of common stock at $2.19 per share to a non-executive member of its Board for performing other services. These 50,000 options vest upon achieving a certain milestone and expire on May 26, 2026. These options will be measured and recognized when vesting becomes probable.Placement

~~During~~First ~~the~~Closing ~~three months ended May 31, 2017, the Company issued options to purchase an aggregate 55,000 shares~~ of ~~common stock at 3.00 per share to its President and Chief Executive Officer and a member of its management team. These options expire on April 4, 2027. 18,334 of these options vest on~~ the ~~first~~Additional ~~anniversary~~2016 ~~date~~Unit ofPrivate April 4, 2018, and then 36,666 of these options vest in equal monthly installments over a twenty-four-month period. These options had a total fair value of approximately $60,000 as calculated using the Black-Scholes model.Placement

~~During~~On August 31, 2016, the ~~three~~Company ~~months~~entered ~~ended~~into ~~May~~a ~~31,~~subscription agreement ~~2017,~~pursuant to a private placement (the “Additional 2016 Unit Private Placement”) with an accredited investor pursuant to which the Company issued an aggregate of ~~39,999~~8.75 units ~~unvested~~consisting ~~options~~of toan ~~purchase~~aggregate of 43,750 shares of common stock at 8an effective price of $2.2500 per share (the “Effective Price”) and five-year warrants to ~~certain~~purchase ~~members~~21,875 shares of common ~~the~~stock ~~Company’s~~at ~~Board~~a ~~were terminated~~purchase ~~upon~~price ~~resignation~~of ~~from~~$3.00 per share (the “Additional ~~board.~~2016 ~~The~~Unit ~~Company~~Warrants”) ~~recognized~~for an aggregate apurchase ~~credit~~price of $87,500. After deducting placement agent fees and other offering expenses, including legal expenses, net proceeds amounted to approximately $~~146~~73,000. ~~for~~Additionally, the ~~true-up~~Company issued an aggregate of ~~forfeitures related~~438 toplacement ~~these~~agent ~~unvested~~warrants ~~options~~in ~~during~~substantially the same ~~three~~form ~~months~~as ~~ended~~the ~~May 31,~~Additional ~~2017~~2016 Unit Warrants.

~~The~~Pursuant ~~weighted~~to ~~average~~the ~~inputs~~subscription toagreement, for a period of one hundred eighty (180) days following the ~~Black~~final closing of the Additional 2016 Unit Private Placement, the investors shall have “full-~~Scholes~~ratchet” ~~model~~anti-dilution ~~used~~price toprotection (the ~~value~~“Price Protection”) based on certain issuances by the Company of common stock ~~options~~or ~~granted~~securities ~~during~~convertible ~~the~~into ~~three~~shares ~~months~~of common ~~ended~~stock ~~May~~at an effective price per share less than the 31Effective Price (a "Down-round Issuance"), ~~2017~~whereby ~~and~~the ~~2016~~Company would ~~are~~be asrequired ~~follows:~~to issue the investors additional shares of common stock and Warrants.

	May 31, 2017	May 31, 2016
Expected volatility	129.0%	100.0%
Expected dividend yield	0.00%	0.00%
Risk-free interest rate	1.95%	1.65%
Expected term	6.01 years	6.00 years

Accounting for the Price Protection Provision

~~For~~The Company analyzed the ~~three~~Price ~~months~~Protection ~~ended~~provision ~~May~~for ~~31,~~embedded derivatives ~~2016~~that require bifurcation. The Company evaluated the Price Protection provision for both the issuance of additional shares of common stock and additional Warrants in connection with a Down-round Issuance in accordance with ASC 480 and ASC 815. In connection with the potential issuance of additional shares of common stock, the Company ~~recognized~~concluded that since the embedded ~~approximately~~down-round ~~$105~~feature is within the equity host contract,~~000~~ ofthe ~~compensation~~embedded Price ~~expense~~Protection provision would be considered clearly and closely related to ~~stock~~the equity host under ASC 815-15-25-1(a) and that the ~~options~~Price Protection provision should not be bifurcated. In connection with the potential issuance of additional Warrants, the Company concluded that the freestanding Warrants are not indexed to the Company’s common stock within the scope of ~~which~~ASC ~~approximately~~815-40 ~~$88,000~~and therefore was initially bifurcated and measured at fair value and recorded as a derivative liability in the Condensed Consolidated Balance Sheet. The derivative liability was measured at fair value on an ongoing basis, with changes in fair value recognized in ~~general~~the statement of operations. The Price Protection ~~and~~provision ~~administrative~~expired ~~expenses~~on ~~and~~April ~~approximately~~30, ~~$17~~2017,~~000~~ resulting in ~~research~~the ~~and~~reclassification ~~development~~of ~~expenses~~these warrants to equity (see Note 5).

~~For~~Common ~~the~~stock ~~three~~financing ~~months~~– ~~ended~~the ~~May 31,~~ 2017, ~~the~~Common ~~Company~~Stock ~~recognized a~~Private credit of approximately $96,000 of compensation expense related to stock options, of which a credit of approximately $113,000 was recognized in general and administrative expenses and expense of approximately $16,000 in research and development expenses.Placement

~~The~~Between ~~following~~June ~~table~~23, ~~summarizes~~2017 and August 3, 2017, the Company completed closings of a private placement (the “2017 Common Stock Private Placement”) with existing and new institutional and accredited investors pursuant to which the Company issued (i) an aggregate of 811,158 shares of common stock, ~~options~~(ii) ~~issued~~229,363.2 ~~and~~shares of Series A-2 Preferred Stock convertible into 2,293,632 shares of common stock and (iii) reduced the exercise price of outstanding aswarrants to purchase 536,434 shares of ~~May~~common stock from $3.00 to $2.00 per share (see Note 5), for an aggregate purchase price of approximately $2.57 million, including the conversion of approximately $22,000 of compensation payable to our Chief Executive Officer. After deducting placement agent fees and other offering expenses, the Company received net proceeds of approximately $2.31 million. Additionally, the Company issued the placement agent five-year warrants to purchase an aggregate of 162,486 shares of common stock with an exercise price equal to $1.27 per share, and a cashless exercise provision. The effective purchase price of the 2017: Common Stock Private Placement was $0.83 per share.

	Options	Weighted average exercise price	Aggregate intrinsic value	Weighted average remaining contractual life (years)
Outstanding at February 28, 2017	966,474	$5.71	$-	8.87
Granted:	55,000	$3.00	-	-
Expired and forfeited:	(39,999)	$8.25	-	-
Outstanding and expected to vest at May 31, 2017	981,475	$5.46	$-	8.72
Exercisable at May 31, 2017	350,477	$9.96	$-	7.95

Conversion Price Adjustment

During the six months ended August 31, 2017, as a result of the 2017 Common Stock Private Placement, the Series B Conversion Price was adjusted from $2.00 to $0.83 per share. No non-cash deemed dividend was recorded to recognize any contingent beneficial conversion feature related to this conversion price change as all proceeds of the Series B Preferred have already been offset by previously recognized beneficial conversion features.

Issuances of common stock for services

During the six months ended August 31, 2016, the Company issued an aggregate of 25,000 shares of common stock to a consultant for services that vested over a two-month term and to settle $32,000 of accounts payable. The fair value of the shares amounted to approximately $46,000 on the grant date, of which approximately $14,000 was recognized into general and administrative expense during the six months ended August 31, 2016.

During the six months ended August 31, 2017, the Company issued an aggregate of 100,000 shares of common stock to members of its Board that vested immediately. The fair value of the shares amounted to approximately $130,000 on the grant date, which was recognized into general and administrative expense during the six months ended August 31, 2017.

-8-

Table of Contents

~~The following table breaks down exercisable and unexercisable common stock options by exercise price as of May 31~~MetaStat, ~~2017:~~ Inc.

Exercisable			Unexercisable
Number of Options	Exercise Price	Weighted Average Remaining Life (years)	Number of Options	Exercise Price	Weighted Average Remaining Life (years)
160,555	$2.00	9.11	319,445	$2.00	9.11
16,668	$2.19	8.99	83,332	$2.19	8.99
-	$3.00	-	176,000	$3.00	9.68
30,000	$3.55	8.68	-	$8.10	-
1,068	$8.10	7.67	-	$8.25	-
40,001	$8.25	8.01	40,000	$10.20	8.05
41,434	$10.20	4.61	-	$10.50	-
3,334	$11.25	7.97	3,333	$11.25	7.97
11,112	$16.50	7.38	8,888	$16.50	7.38
8,068	$22.50	7.67	-	$22.50	-
38,237	$48.75	5.85	-	$48.75	-
350,477	$9.96	7.95	630,998	$2.95	9.15

Notes to Unaudited Condensed Consolidated Financial Statements

AsNOTE of4 ~~May~~– ~~31,~~STOCK 2017, we had approximately $172,000 of unrecognized compensation related to employee and consultant stock options that are expected to vest over a weighted average period of 1.15 years and, approximately $500,000 of unrecognized compensation related to employee stock options whose recognition is dependent on certain milestones to be achieved. Additionally, there were 173,333 stock options with a performance vesting condition that were granted to consultants which will be measured and recognized when vesting becomes probable.OPTIONS

During the six months ended August 31, 2016, the Company issued options to purchase 50,000 shares of common stock at $2.19 per share to a non-executive member of its Board. These 50,000 options vest in three equal installments on each of May 26, 2017, May 26, 2018, and May 26, 2019 and expire on May 26, 2026. These options had a total fair value of $86,500 as calculated using the Black-Scholes model.

During the six months ended August 31, 2016, the Company issued options to purchase 50,000 shares of common stock at $2.19 per share to a non-executive member of its Board for performing other services. These 50,000 options vest upon achieving a certain milestone and expire on May 26, 2026. These options will be measured and recognized when vesting becomes probable.

During the three and six months ended August 31, 2016, the Company issued options to purchase an aggregate of 440,000 shares of common stock at $2.00 per share to members of its management team. These options expire on July 7, 2026. 73,333 of these options vested immediately and 146,667 of these options vest in equal monthly installments over a twenty-four-month period. 220,000 options are subject to certain milestone-based vesting. These options had a total fair value of approximately $622,000 as calculated using the Black-Scholes model. The Company has not recognized any stock based compensation for the options with performance-vesting conditions, and expects to recognize the compensation expense when vesting become probable, which has not yet occurred.

During the three and six months ended August 31, 2016, the Company issued options to purchase an aggregate of 100,000 shares of common stock at $2.00 per share to a non-executive member of its Board. These options expire on July 7, 2026. These options had a total fair value of approximately $143,000 as calculated using the Black-Scholes model. 33,333 of these options vested immediately and 66,667 of these options vest in equal monthly installments over a twenty-four-month period.

During the three and six months ended August 31, 2016, the Company issued options to purchase an aggregate of 240,000 shares of common stock at $2.00 per share to consultants. These options expire on July 7, 2026. 33,333 of these options vest on the first anniversary date and then 66,667 of these options vest in equal monthly installments over a twenty-four-month period. 140,000 of these options are subject to certain milestone-based vesting and the Company will measure the fair value of these options with vesting contingent on achieving certain performance-based milestones and recognize the compensation expense when vesting becomes probable.

During the six months ended August 31, 2017, the Company issued options to purchase an aggregate 55,000 shares of common stock at 3.00 per share to its President and Chief Executive Officer and a member of its management team. These options expire on April 4, 2027. 18,334 of these options vest on the first anniversary date of April 4, 2018, and then 36,666 of these options vest in equal monthly installments over a twenty-four-month period. These options had a total fair value of approximately $60,000 as calculated using the Black-Scholes model.

During the six months ended August 31, 2017, an aggregate of 39,999 unvested options to purchase shares of common stock at 8.25 per share to certain members of the Company’s Board were terminated upon resignation from the board. The Company recognized a credit of approximately $146,000 for the true-up of forfeitures related to these unvested options during the six months ended August 31, 2017.

The weighted average inputs to the Black-Scholes model used to value the stock options granted during the six months ended August 31, 2017 and 2016 are as follows:

	August 31,	August 31,
	2017	2016
Expected volatility	129%	98.98 – 102.74%
Expected dividend yield	0.00%	0.00%
Risk-free interest rate	1.95%	0.97% – 1.65%
Expected Term	6.01 years	5.47 years

For the six months ended August 31, 2016, the Company recognized approximately $348,000 of compensation expense related to stock options, of which approximately $288,000 was recognized in general and administrative expenses and approximately $60,000 in research and development expenses.

-9-

Table of Contents

MetaStat, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

For the three months ended August 31, 2016, the Company recognized approximately $243,000 of compensation expense related to stock options, of which approximately $200,000 was recognized in general and administrative expenses and approximately $43,000 in research and development expenses.

For the six months ended August 31, 2017, the Company recognized a credit of approximately $59,000 of compensation expense related to stock options, of which a credit of approximately $89,000 was recognized in general and administrative expenses and an expense of approximately $30,000 in research and development expenses.

For the three months ended August 31, 2017, the Company recognized approximately $38,000 of compensation expense related to stock options, of which approximately $24,000 was recognized in general and administrative expenses and approximately $14,000 in research and development expenses.

The following table summarizes common stock options issued and outstanding:

	Options	Weighted average exercise price	Aggregate intrinsic value	Weighted average remaining contractual life (years)
Outstanding at February 28, 2017	966,474	$5.71	$-	8.87
Granted:	55,000	$3.00	$-	-
Expired and forfeited:	(60,000)	$8.25	$-	-
Outstanding and expected to vest at August 31, 2017	961,474	$5.40	$-	8.49
Exercisable at August 31, 2017	349,892	$9.62	$-	7.76

The following table breaks down exercisable and unexercisable common stock options by exercise price as of August 31, 2017:

Exercisable			Unexercisable
Number of Options	Exercise Price	Weighted Average Remaining Life (years)	Number of Options	Exercise Price	Weighted Average Remaining Life (years)
178,888	$2.00	8.85	301,112	$2.00	8.85
16668	$2.19	8.74	83,332	$2.19	8.74
1,083	$3.00	9.23	174,917	$3.00	9.43
30,000	$3.55	8.43	-	$3.55	-
1,068	$8.10	7.42	-	8.10	-
20,000	$8.25	7.80	40,000	$8.25	7.80
41,434	$10.20	4.35	-	$10.20	-
3,334	$11.25	7.72	3,333	$11.25	7.72
11,112	$16.50	7.13	8,888	$16.50	7.13
8,068	$22.50	7.42	-	$22.50	-
38,237	$48.75	5.60	-	$48.75	-
349,892	$9.62	7.76	611,582	$2.98	8.90

As of August 31, 2017, we had approximately $133,000 of unrecognized compensation related to employee and consultant stock options that are expected to vest over a weighted average period of 1.25 years and, approximately $500,000 of unrecognized compensation related to employee stock options whose recognition is dependent on certain milestones to be achieved. Additionally, there were 173,333 stock options with a performance vesting condition that were granted to consultants which will be measured and recognized when vesting becomes probable.

-10-

Table of Contents

NOTE 5 – WARRANTS

For the ~~three~~six months ended ~~May~~August 31, 2016, the Company issued warrants to purchase an aggregate of 9,092 shares of common stock in connection with the issuance of the ~~OID~~original ~~Notes pursuant to~~issue ~~the~~discount ~~March~~promissory ~~2016~~notes ~~OID Note Purchase Agreements~~ dated between March 3 and 15, 2016~~, referenced in Note 6~~. These warrants were initially exercisable at $8.25 per share and expire between March 3 and 15, 2021. These warrants vested immediately. These warrants contained an anti-dilution price protection provision, which required the warrants to be recorded as derivative warrant liability. Such clause will lapse upon completion of a Qualified Offering, as defined in the warrant agreement. These warrants were recorded as a debt discount based on their fair value. Following the 2017 Common Stock Private Placement, these warrants are now exercisable at $0.83 per share.

For the ~~three~~six months ended ~~May~~August 31, 2016, the Company issued warrants to purchase an aggregate of 5060,000 shares of common stock to investors and placement agents in connection with the issuance of common stock pursuant to the 2016 Unit Private Placement referenced in Note 3. These warrants are exercisable at $3.00 per share and expire on May 26, 2021. These warrants vested immediately. These warrants do not contain any provision that would require liability treatment, therefore they were classified as equity in the Condensed Consolidated Balance Sheet.

For the three and six months ended ~~May~~August 31, ~~2017~~2016, the Company ~~issued~~ issued warrants to purchase an aggregate of 3788,500 shares of common stock in connection with the issuance of common stock pursuant to athe ~~consultant~~2016 ~~for~~Unit ~~advisory~~Private ~~services.~~Placement referenced in Note 3. These warrants are exercisable at $3.00 per share and expire ~~between March 31, 2021~~on ~~and~~June ~~May 31~~7, 2021. These warrants vested immediately. ~~The~~These ~~fair~~warrants ~~value~~do ofnot ~~these~~contain ~~warrants~~any ~~was~~provision ~~determined~~that towould berequire ~~approximately~~liability ~~$37~~treatment,~~000, as~~ ~~calculated~~therefore ~~using~~they ~~the~~were ~~Black-Scholes~~classified ~~model.~~as ~~Average~~equity ~~assumptions used~~ in the ~~Black-Scholes model included: (1) a discount rate of 1.83%;~~Condensed ~~(2)~~Consolidated anBalance ~~expected term of 5~~Sheet.0 years; (3) an expected volatility of 131%; and (4) zero expected dividends. For the three months ended May 31, 2017, the Company recognized approximately $37,000 of stock-based compensation for these warrants.

For the three and six months ended ~~May~~August 31, ~~2017~~2016, the Company ~~reclassified~~ ~~approximately~~issued ~~$1.5~~warrants ~~million~~to ofpurchase ~~derivative~~an ~~warrant~~aggregate ~~liability~~of 27,326 toshares of ~~equity~~common stock in connection with the ~~lapse~~MFN ofExchange areferenced ~~price protection provision, that had resulted~~ in ~~these instruments being classified~~Note as3. aThese ~~derivative~~warrants ~~warrant~~are ~~liability~~exercisable at ~~issuance~~$3.00 ~~The~~per ~~fair~~share ~~value~~and ofexpire on ~~these~~June ~~warrants~~7, ~~was~~2021. ~~determined~~These towarrants bevested ~~approximately $1~~immediately.5 ~~million~~Additionally, asin ~~calculated~~connection ~~using~~with the ~~Black-Scholes~~MFN ~~model.~~Exchange, ~~Average assumptions used in~~ the ~~Black-Scholes~~Company ~~model~~cancelled ~~included:~~warrants ~~(1)~~to purchase aan ~~discount~~aggregate ~~rate~~of 9,000 shares of 1common stock.~~81%;~~ These ~~(2)~~warrants anwere ~~expected~~originally ~~term~~issued ofin ~~4.46~~connection ~~years;~~with ~~(3)~~the anissuance ~~expected volatility~~ of ~~124%;~~Series B Preferred Stock and ~~(4)~~were ~~zero~~exercisable ~~expected~~at ~~dividends~~$10.50 per share.

For the three and six months ended August 31, 2016, the Company issued warrants to purchase an aggregate of 45,459 shares of common stock in connection with the amendments to the OID Notes referenced in Note 6. These warrants are exercisable at $2.00 per share and expire between August 11, 2021 and August 18, 2021. These warrants vested immediately. The fair value of these warrants was determined to be approximately $44,000, as calculated using the Black-Scholes model and were recorded as a debt discount based on their fair value.

For the three and six months ended August 31, 2016, the Company issued warrants to purchase an aggregate of 21,875 shares of common stock in connection with the Additional 2016 Unit Private Placement referenced in Note 3. These warrants are exercisable at $3.00 per share and expire on August 30, 2021. These warrants vested immediately. As discussed in Note 3, due to the Price Protection provision, these warrants were initially classified as a derivative liability and measured at fair value.

For the three and six months ended August 31, 2016, in connection with the Additional 2016 Unit Private Placement, the Company issued placement agent warrants to purchase an aggregate of 438 shares of common stock. These placement agent warrants were issued on August 31, 2016, are exercisable at $3.00 per share and expire on August 30, 2021. These placement agent warrants vest immediately. The fair value of these warrants was determined to be approximately $400, as calculated using the Black-Scholes model. Weighted-average assumptions used in the Black-Scholes model included: (1) a discount rate of 1.18 %; (2) an expected term of 5.0 years; (3) an expected volatility of 102%; and (4) zero expected dividends.

For the six months ended August 31, 2017, the Company issued warrants to purchase an aggregate of 37,500 shares of common stock to a consultant for advisory services. These warrants are exercisable at $3.00 per share and expire between March 31, 2021 and May 31, 2021. These warrants vested immediately. The fair value of these warrants was determined to be approximately $37,000, as calculated using the Black-Scholes model. Average assumptions used in the Black-Scholes model included: (1) a discount rate of 1.83%; (2) an expected term of 5.0 years; (3) an expected volatility of 131%; and (4) zero expected dividends. For the six months ended August 31, 2017, the Company recognized approximately $37,000 of stock-based compensation for these warrants.

-11-

Table of Contents

MetaStat, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

For the six months ended August 31, 2017, the Company reclassified approximately $1.5 million of derivative warrant liability to equity in connection with the lapse of a Price Protection provision referenced in Note 3, that had resulted in these instruments being classified as a derivative warrant liability at issuance. The fair value of these warrants was determined to be approximately $1.5 million, as calculated using the Black-Scholes model. Average assumptions used in the Black-Scholes model included: (1) a discount rate of 1.81%; (2) an expected term of 4.46 years; (3) an expected volatility of 124%; and (4) zero expected dividends.

For the three and six months ended August 31, 2017, the Company issued warrants to purchase an aggregate of 37,500 shares of common stock to a consultant for advisory services. These warrants are exercisable at $3.00 per share and expire between June 30, 2021 and August 31, 2021. These warrants vested immediately. The fair value of these warrants was determined to be approximately $25,000, as calculated using the Black-Scholes model. Average assumptions used in the Black-Scholes model included: (1) a discount rate of 1.81%; (2) an expected term of 5.0 years; (3) an expected volatility of 131%; and (4) zero expected dividends. For the three and six months ended August 31, 2017, the Company recognized approximately $25,000 of stock-based compensation for these warrants.

For the three and six months ended August 31, 2017, in connection with the 2017 Unit Private Placement, the Company reduced the exercise price of outstanding warrants to purchase 536,434 shares of common stock from $3.00 to $2.00 per share. The Company recorded a non-cash deemed dividend of approximately $31,000 equal to difference in the aggregated fair value of these warrants on the measurement dates as calculated using the Black-Scholes model.

For the three and six months ended August 31, 2017, in connection with the 2017 Unit Private Placement, the Company issued placement agent warrants to purchase an aggregate of 162,486 shares of common stock. These placement agent warrants were issued between June 23, 2017 and August 3, 2017, are exercisable at $1.27 per share and expire between June 22, 2022 and August 2, 2022. These placement agent warrants vest immediately. The fair value of these warrants was determined to be approximately $185,000, as calculated using the Black-Scholes model. Weighted-average assumptions used in the Black-Scholes model included: (1) a discount rate of 1.78 %; (2) an expected term of 5.0 years; (3) an expected volatility of 130%; and (4) zero expected dividends.

The following table summarizes common stock purchase warrants issued and outstanding:

	Warrants	Weighted average exercise price	Aggregate ~~intrinsic value~~intrinsicvalue	Weighted average remaining contractual life (years)
Outstanding at February 28, 2017	2,698,694	$5.11	$-	4.21
Granted:	37237,~~500~~486	31.0082	-
Cancelled/Expired/Exercised	(4,671)	31.50	-
Cancelled/Expired/Exercised:	(4,671)	31.50	-
Outstanding at May 31, 2017	2,731,523	$5.04	$-	3.98
Outstanding at August 31, 2017	2,931,509	$4.56	$-	3.81

~~-9-~~ Warrants exercisable at August 31, 2017 are:

Exercise	Number	Weighted average	Exercisable
Prices	of shares	remaining life (years)	number of shares
$0.83	119,429	3.04	119,429
$0.91	43,636	3.45	43,636
$1.27	162,486	4.83	162,486
$2.00	581,893	4.06	581,893
$3.00	1,653,974	4.19	1,653,974
$8.25	9,134	2.99	9,134
$10.50	126,978	2.6	126,978
$15.00	556	2.75	556
$18.75	695	2.75	695
$22.50	209,754	0.88	209,754
$31.50	21,241	1.07	21,241
$37.50	1,733	0.37	1,733
$4.56	2,931,509	3.81	2,931,509

-12-

Table of Contents

~~Warrants exercisable at May 31~~MetaStat, ~~2017 are:~~Inc.

Exercise Prices	Number of shares	Weighted average remaining life (years)	Exercisable number of shares
$2.00	164,888	2.39	164,888
$2.20	43,636	3.70	43,636
$3.00	2,152,908	0.11	2,152,908
$8.25	9,134	3.24	9,134
$10.50	126,978	2.85	126,978
$15.00	556	3.00	556
$18.75	695	3.00	695
$22.50	209,754	1.13	209,754
$31.50	21,241	1.32	21,241
$37.50	1,733	0.62	1,733
	2,731,523	3.98	2,731,523

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 6 – NOTES PAYABLE

Promissory Note

On July 31, 2015, the Company entered into a note purchase agreement, which was subsequently amended, whereby it issued and sold a non-convertible promissory note in the principal amount of $1.2 million (the “Promissory Note”) and a warrant to purchase 43,636 shares of the Company’s common stock. Effective October 21, 2016, $600,000 principal amount of the Promissory Note plus $48,000 of accrued and unpaid interest was exchanged into the securities issued in a private placement. In January 2017, the remaining unpaid principal balance and accrued interest were exchanged into a convertible note (see Convertible Note below).

During the three months ended ~~May~~August 31, 2016, the Company ~~recognized~~ recognized approximately $~~138~~153,000 of interest expense related to ~~the~~ the Promissory Note, as amended, including amortization of debt discount of approximately $~~114~~125,000 and accrued interest expense of approximately $2428,000. Additionally, the Company recognized a ~~loss of~~gain of approximately $29294,000 in the three months ended ~~May~~August 31, 2016 due to the change in estimated fair value of athe ~~bifurcated~~Voluntary ~~derivative~~Exchange ~~liability related to an exchange~~ provision ~~in the Promissory Note~~.

During the six months ended August 31, 2016, the Company recognized approximately $291,000 of interest expense related to the Promissory Note, as amended, including amortization of debt discount of approximately $239,000 and accrued interest expense of approximately $52,000. Additionally, the Company recognized a gain of approximately $265,000 in the six months ended August 31, 2016 due to the change in estimated fair value of the Voluntary Exchange provision.

OID Notes

In February 2016, the Company entered into an OID note purchase agreement dated February 12, 2016 (the “February 2016 OID Note Purchase Agreement”). Pursuant to the February 2016 OID Note Purchase Agreement, the Company received an aggregate purchase price of $500,000 and issued OID promissory Notes (the “OID Notes”) in the aggregate principal amount of $600,000 and warrants (the “OID Warrants”) to purchase an aggregate of 36,367 shares of the Company’s common stock.

The Company entered into OID note purchase agreements between March 4 and 15, 2016 (the “March 2016 OID Note Purchase Agreements”) with various accredited investors. Pursuant to the March 2016 OID Note Purchase Agreements, the Company issued OID Notes with an aggregate purchase price of $125,000 and OID Warrants to purchase 9,902 shares of the Company’s common stock. The OID Notes issued in March 2016 have a principal amount equal to $150,000 or 120% of the purchase price.

Pursuant to the March 2016 closings of the OID Note private placement, the principal amount was first allocated to the fair value of the OID Warrants in the amount of approximately $15,000, next to the value of the original issuance discount in the amount of $25,000, then to the fair value of a bifurcated derivative liability related to an exchange provision in the OID Notes in the amount of approximately $33,000, and lastly to the debt discount related to offering costs of approximately $2,000 with the difference of approximately $75,000 representing the initial carrying value of the OID Notes issued in March 2016.

The OID Notes were subsequently amended in August 2016, extending the maturity date of the OID Notes in exchange for among other, (i) an increased principal amount of the OID Notes by 10% to $825,000 in the aggregate from $750,000 in the aggregate, and (ii) the issuance of an aggregate of 45,459 common stock purchase warrants with an exercise price of $2.00 per share and a term of five years.

In October 2016, $553,000 principal amount of OID Notes were exchanged into the securities issued in ~~a private~~the ~~placement~~Additional 2016 Unit Private Placement. Accordingly, the Company recorded a loss on extinguishment of approximately $555,000. Additionally, the Company repaid $8,000 of OID Notes.

-10-

Table of Contents

In November 2016, the Company exercised its sole option to further extend the maturity date to its outstanding OID Note in the aggregate of $264,000 principal amount of OID Note. In consideration for the extension, the Company increased the principal amount of the OID Note by 10% or to $26,400 to $290,400 in the aggregate. In January 2017, the remaining outstanding OID Note was exchanged into a convertible note (see Convertible Note below).

During the three months ended ~~May~~August 31, 2016, the Company ~~recognized~~ recognized approximately $~~166~~248,000 of interest expense related to the OID Notes, as amended, including amortization of debt discount. Additionally, the Company recognized a ~~loss~~gain of approximately $25217,000 in the three months ended ~~May~~August 31, 2016 due to the change in estimated fair ~~value~~ value of athe ~~bifurcated~~OID ~~derivative~~Note ~~liability~~Voluntary ~~related to an exchange~~Exchange provision ~~in the OID Notes~~.

During the six months ended August 31, 2016, the Company recognized approximately $414,000 of interest expense related to the OID Notes, as amended, including amortization of debt discount. Additionally, the Company recognized a gain of approximately $191,000 in the six months ended August 31, 2016 due to the change in estimated fair value of the OID Note Voluntary Exchange provision.

-13-

Table of Contents

MetaStat, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Convertible Note

On January 17, 2017, the Company entered into an exchange agreement, pursuant to which the Company issued a new convertible promissory note in the principal amount of $1,000,000 (the “Convertible Note”) in exchange (the “Debt Exchange”) for the cancellation of (i) $600,000 principal amount of the Promissory Note plus $96,000 of accrued and unpaid interest thereon, and (ii) $290,400 principal amount of the OID Note. The Convertible Note is convertible into shares of common stock at $2.00 per share and accrues interest at a rate of 10% per annum. The Convertible Note matured on September 30, 2017 and provides for a 10 business day cure period that expires on October 16, 2017.

~~During~~The Company is currently in the ~~three~~process ~~months~~of ~~ended~~negotiating ~~May~~an ~~31,~~extension of ~~2017~~the maturity date of the Convertible Note with the holder thereof, which we expect will be finalized shortly. In the ~~Company~~event ~~recognized~~we ~~approximately~~do ~~$30,000~~not ofreach ~~interest~~an ~~expense~~agreement ~~related~~with the noteholder to extend the maturity date of the Convertible Note, ~~including~~the ~~amortization~~noteholder ofmay exercise its default rights. There can be no assurance that we will be able to raise additional debt ~~discount~~or ofequity financing in an amount ~~approximately~~sufficient $5to enable us to retire these obligations and meet our other obligations. Following the expiration of the cure period,~~000~~ the noteholder may bring suit against us and ~~accrued~~foreclose ~~interest~~on ~~expense~~all of ~~approximately~~our ~~$25,000~~assets and business by reason of our default.

During the three months ended August 31, 2017, the Company recognized approximately $30,000 of interest expense related to the Convertible Note, including amortization of debt discount of approximately $5,000 and accrued interest expense of approximately $25,000.

During the six months ended August 31, 2017, the Company recognized approximately $60,000 of interest expense related to the Convertible Note, including amortization of debt discount of approximately $10,000 and accrued interest expense of approximately $50,000.

The following table summarizes the notes payable:

	Convertible Note Payable	Discount	Voluntary Exchange Feature	Debt, Net
	Convertible Note		Debt,
February 28, 2017 balance	$1,000,000	$(10,914)	$-	$989,086
	Payable	Discount	Net
Amortization of debt discount	-	4,599	-	4,599
February 28, 2017 balance	$1,000,000	$(10,914)	$989,086
May 31, 2017 balance	$1,000,000	$(6,315)	$-	$993,685
Amortization of debt discount	-	9,338	9,338
August 31, 2017 balance	$1,000,000	$(1,576)	$998,424

NOTE 7 – FAIR VALUE MEASUREMENTS

In accordance with ASC 820, Fair Value Measurements, financial instruments were measured at fair value using a three-level hierarchy which maximizes use of observable inputs and minimizes use of unobservable inputs:

●	Level 1: Observable inputs such as quoted prices in active markets for identical instruments

●	Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the market

●	Level 3: Significant unobservable inputs supported by little or no market activity. Financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, for which determination of fair value requires significant judgment or estimation.

Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. At ~~May~~August 31, 2017 and February 28, 2017, the warrant liability ~~balances~~balance ~~were~~was classified as as Level 3 instruments.

Derivative Warrant Liability

At May 31, 2017 and February 28, 2017, the warrant liability balances of approximately $0.15 million and $2.1 million, respectively, were classified as Level 3 instruments.

The following table sets forth the changes in the estimated fair value for our Level 3 classified derivative warrant liability:

	Promissory Note Warrants	Series B Warrant	PPM Warrants	Total
Fair value at February 28, 2017	$157,204	$35,690	$1,914,078	$2,106,972
Change in fair value	(3778,~~366~~024)	(1018,~~198~~832)	(442,816)	(~~490~~539,~~380~~672)
Reclassification of warrant liability to equity	-	-	(1,471,262)	(1,471,262)
Fair value at May 31, 2017	$119,838	$25,492	$-	$145,330
Fair value at August 31, 2017	$79,180	$16,858	$-	$96,038

In connection with the initial closing of the Series B Preferred private placement on December 31, 2014, the Company issued a warrant to purchase an aggregate of 30,334 shares of common stock (the “Series B Warrant”), originally exercisable at $8.25 per share and expiring on March 31, 2020. The Series B Warrant contains a full-~~ratchet anti~~14-dilution price protection provision that requires liability treatment and the exercise price of the Series B Warrant was adjusted to $2.00 during the year ended February 28, 2017. The fair value of the Series B Warrant at May 31, 2017 and February 28, 2017 was determined to be approximately $25,000 and $36,000, respectively, as calculated using the Monte Carlo simulation. The Monte Carlo simulation as of May 31, 2017 and February 28, 2017 used the following assumptions: (1) a stock price of $1.15 and $1.50, respectively; (2) a risk-free rate of 1.41% and 1.50%, respectively; (3) an expected volatility of 129% and 131%, respectively; and (4) a fundraising event to occur on June 30, 2017 and May 31, 2017, respectively, that would result in the issuance of additional common stock.

-11-

Table of Contents

In connection with the ~~issuance~~initial closing of the ~~Promissory~~Series ~~Note~~B Preferred private placement on ~~July~~December 31, ~~2015~~ 2014, the Company issued a warrant to purchase an aggregate of 43 30,~~636~~334 shares of common stock (the “Series B Warrant”), originally exercisable at $8.25 per share and expiring on ~~July~~March 31, 2020. ~~This~~The ~~warrant~~Series B Warrant contains a full-ratchet anti-dilution price protection provision that requires liability treatment. ~~and~~The ~~the~~ exercise price of the ~~this~~Series ~~warrant~~B Warrant was adjusted to $2.00 per share during the year ended February 28, 2017 and subsequently adjusted to $0.83 per share in August 2017 as a result of the 2017 Common Stock Private Placement. The fair value of the ~~warrant~~Series B Warrant at ~~May~~August 31, 2017 and February 28, 2017 was determined to be approximately $3817,000 and $5136,000, respectively, as calculated using the Monte Carlo simulation. The Monte Carlo simulation as of ~~May~~August 31, 2017 and February 28, 2017 used the following assumptions: (1) ~~stock~~a stock price of $10.1576 and $1.50, respectively; (2) a risk-free rate of 1.4739% and 1.5750%, respectively; (3) an expected volatility of ~~129~~131% and 131%, respectively; and (4) a fundraising event to occur on ~~June~~January 3031, ~~2017~~ 2018 and May 31, 2017, respectively, that would result in the issuance of additional common stock.

In connection with the ~~amendment~~issuance of the Promissory Note on ~~February~~July 31, 122015, ~~2016,~~ the Company issued a warrant to purchase an aggregate of 43,636 shares of common stock, ~~initially~~originally exercisable at $8.25 per share and expiring on ~~February~~July 1131, ~~2021~~2020. This warrant contains a full-ratchet anti-dilution price protection provision that requires liability treatment. ~~and~~The ~~the~~ exercise price of this warrant was adjusted to $2.2000 per share during the year ended February 28, 2017 and subsequently adjusted to $0.83 per share in August 2017 as a result of the 2017 Common Stock Private Placement. The fair ~~value~~ value of the warrant at ~~May~~August 31, 2017 and February 28, 2017 was determined to be approximately $4025,000 and $51,000, respectively, as calculated using the Monte Carlo simulation. The Monte Carlo simulation as of ~~May~~August 31, 2017 and February 28, 2017 used the following assumptions: (1) stock price of $10.1576 and $1.50, respectively; (2) a risk-free rate of 1.5543% and 1.6857%, respectively; (3) an expected volatility of ~~129~~131% and 131%, respectively; and (4) a fundraising event to occur on ~~June~~January 3031, ~~2017~~ 2018 and May 31, 2017, respectively, that would result in the ~~issuance~~ issuance of additional common stock.

In connection with the ~~issuance~~amendment of ~~OID~~the ~~Notes~~Promissory inNote on February 12, 2016, the Company issued ~~warrants~~a warrant to purchase an aggregate of 36 43,~~367~~636 shares of common stock~~. These warrants were issued between February 12 and 22~~, ~~2016, were~~ initially exercisable at $8.25 per share and ~~expire~~expiring ~~between~~on February 11 ~~and 21~~, 2021. ~~These~~This ~~warrants contain~~warrant acontains ~~full-~~a ratchet anti-dilution price protection provision that requires liability treatment. ~~and~~The ~~the~~ exercise price of ~~these warrants~~this ~~were~~warrant was adjusted to $2.0020 per share during the year ended February 28, 2017 and subsequently adjusted to $0.91 per share in August 2017 as a result of the 2017 Common Stock Private Placement. The fair value of ~~these~~the ~~warrants~~warrant at ~~May~~August 31, 2017 and February 28, 2017 was determined to be approximately $3426,000 and $4451,000, respectively, as calculated using the Monte Carlo simulation. The Monte Carlo simulation as of ~~May~~August 31, 2017 and February 28, 2017 used the following ~~weighted-average~~ assumptions: (1) stock price of $10.1576 and $1.50, respectively; (2) a risk-free rate of 1.5550% and 1.68%, respectively; (3) an expected volatility of ~~129~~131% and 131%, respectively; and (4) a fundraising event to occur on ~~June~~January 3031, ~~2017~~ 2018 and May 31, 2017, respectively, that would result in the ~~issuance~~ issuance of additional common stock.

In connection with the issuance of OID Notes in ~~March~~February 2016, the Company issued warrants to purchase an aggregate of 936,~~092~~367 shares of of common stock. These warrants were issued between February ~~March~~12 4 and 15 22, 2016, were initially exercisable at $8.25 per share and expire between ~~March~~February 411 and 1521, 2021. These warrants contain a full-ratchet anti-dilution price protection provision that requires liability treatment. ~~and~~The ~~the~~ exercise price of these warrants were adjusted to $2.00 per share during the year ended February 28, 2017 and subsequently adjusted to $0.83 per share in August 2017 as a result of the 2017 Common Stock Private Placement. The fair value of these warrants at May 31, 2017 and February 28, 2017 was determined to be approximately $822,000 and ~~approximately~~ $1144,000, respectively, as calculated using the Monte Carlo simulation. The Monte Carlo simulation as of ~~May~~August 31, 2017, and February 28, 2017 used the following weighted-average assumptions: (1) stock price of $10.15 76 and $1.50, respectively; (2) a risk-free rate of 1.5650% and 1.6968%, respectively; (3) an expected volatility of ~~129~~131% and 131%, respectively; and (4) a fundraising event to occur on ~~June~~January 3031, ~~2017~~ 2018 and May 31, 2017, respectively, that would result in the ~~issuance~~ issuance of additional common stock.

-15-

Table of Contents

MetaStat, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

In connection with the issuance of OID Notes in March 2016, the Company issued warrants to purchase an aggregate of 9,092 shares of common stock. These warrants were issued between March 4 and 15, 2016, were initially exercisable at $8.25 per share and expire between March 4 and 15, 2021. These warrants contain a full-ratchet anti-dilution price protection provision that requires liability treatment. The exercise price of these warrants were adjusted to $2.00 per share during the year ended February 28, 2017 and subsequently adjusted to $0.83 per share in August 2017 as a result of the 2017 Common Stock Private Placement. The fair value of these warrants at August 31, 2017 and February 28, 2017 was determined to be approximately $6,000 and approximately $11,000, respectively, as calculated using the Monte Carlo simulation. The Monte Carlo simulation as of August 31, 2017, and February 28, 2017 used the following weighted-average assumptions: (1) stock price of $0.76 and $1.50, respectively; (2) a risk-free rate of 1.51% and 1.69%, respectively; (3) an expected volatility of 131% and 131%, respectively; and (4) a fundraising event to occur on January 31, 2018 and May 31, 2017, respectively, that would result in the issuance of additional common stock.

In connection with the private placement of common stock and warrants that closed in October 2016, the Company issued warrants to purchase an aggregate of 1,617,506 shares of common stock (the “PPM Warrants”). These PPM Warrants were issued between August 31, 2016 and October 30, 2016, are exercisable at $3.00 per share and expire between August 30, 2021 and October 29, 2021. These warrants contain a full-ratchet anti-dilution price protection provision that requires liability treatment. The fair value of these warrants at February 28, 2017 was determined to be approximately $1.9 million, as calculated using the Monte Carlo simulation. The Monte Carlo simulation as of February 28, 2017 used the following weighted-average assumptions: (1) stock price of $1.50; (2) a risk-free rate of 1.66%; (3) an expected volatility of 131%; and (4) a fundraising event to occur on May 31, 2017, that would result in the issuance of additional common stock. The price protection provision expired on April 30, 2017, and the Company reclassified approximately $1.5 million of derivative warrant liability to equity, as referenced in Note 5.

NOTE 8 – EQUIPMENT

Equipment consists of the following:

	Estimated Useful Lives	May 31, 2017	February 28, 2017
	Estimated
Research equipment	7 years	$601,720	$601,720
	Useful Lives	August 31, 2017	February 28, 2017
Research equipment	7 years	$630,170	$601,720
Computer equipment	5 years	78,149	78,149
		679,869	679,869
		708,319	679,869
Accumulated depreciation and amortization		(~~287~~309,~~900~~537)	(265,234)
Equipment, net		$~~391~~398,~~969~~782	$414,635

Depreciation and amortization expense was approximately $2322,000 and approximately $24,000 for the three months ended ~~May~~August 31, 2017 ~~and~~ ~~May~~and August 31, 2016, respectively. Depreciation of equipment utilized in research and development activities is included in research and development expenses and amounted to approximately $1921,000 and approximately $20,000 for the three months ended ~~May~~ August 31, 2017 and ~~May~~August 31, 2016, respectively. All other depreciation is included in general and administrative expense and amounted to approximately $41,000 and approximately $4,000 for the three months ended ~~May~~August 31, 2017 and ~~May~~ August 31, 2016, respectively.

~~-12-~~ Depreciation and amortization expense was approximately $44,000 and approximately $48,000 for the six months ended August 31, 2017 and August 31, 2016, respectively. Depreciation of equipment utilized in research and development activities is included in research and development expenses and amounted to approximately $41,000 and approximately $40,000 for the six months ended August 31, 2017 and August 31, 2016, respectively. All other depreciation is included in general and administrative expense and amounted to approximately $3,000 and approximately $7,000 for the six months ended August 31, 2017 and August 31, 2016, respectively.

-16-

Table of Contents

~~NOTE~~MetaStat, ~~9 - – LICENSE AGREEMENTS AND COMMITMENTS~~Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 9 - LICENSE AGREEMENTS AND COMMITMENTS

License Agreements

Pursuant to the License Agreement, we are required to make annual license maintenance fee payments beginning August 26, 2011. We have satisfied all license maintenance payments due through ~~May~~August 31, 2017. We are required to make payments of $100,000 in ~~2017~~2018 and every year the license is in effect thereafter. These annual license maintenance fee payments will be credited to running royalties due on net sales earned in the same calendar year, if any. We are in compliance with the License Agreement.

Pursuant to the Second License Agreement, as amended, we are required to make annual license maintenance fee payments beginning on January 3, 2013. We have satisfied all license maintenance payments due through August 31, 2017. We are required to make ~~maintenance~~ maintenance payments of $5,000 in 2018, $60,000, in 2019 and 2020, and $100,000 in 2021 and every year the license is in effect thereafter. These annual license maintenance fee payments will be credited to running royalties due on net sales earned in the same calendar year, if any. ~~The~~We ~~license maintenance payment of $5,000 for 2017 is currently outstanding, pending invoice. As such, we~~ are in compliance with the Second License Agreement.

Pursuant to the Alternative Splicing Diagnostic License Agreement and the Alternative Splicing Therapeutic License Agreement, we are required to make annual license maintenance fee payments for each license beginning on January 1, 2015. We have satisfied all license maintenance payments due through ~~May~~August 31, 2017. We are required to make additional payments of $37,500 in 2018, and $50,000 in 2019 and every year each license is in effect thereafter. We are in compliance with the Alternative Splicing License Agreements.

Pursuant to the Antibody License Agreement, we are required to make license maintenance fee payments beginning on January 1, 2015. We have satisfied all license maintenance payments due through ~~May~~August 31, 2017. We are required to make additional ~~payments~~ payments of $15,000 in 2018 and $20,000 in 2019 and every year the ~~license~~ license is in effect thereafter. These annual license maintenance ~~fee~~ fee payments will be credited to running royalties due on net sales earned in the same calendar year, if any. We are in compliance with the Antibody License Agreement.

Lease Agreements

On August 28, 2014, we entered into a lease agreement, subsequently amended (the “Boston Lease”) for our diagnostic laboratory and office space located at 27, Drydock Ave, 2nd Floor, Boston, MA 02210 (the “Boston Property”). We paid a $40,000 security deposit in connection with entering into the Boston Lease. Effective April 6, 2016, we entered into an amendment to the Boston Lease (the “Boston Lease Amendment”), whereby we extended the term by one year from September 1, 2016 to August 31, 2017. The basic rent payable under the Boston Lease Amendment is $17,164 per month plus additional monthly payments including tax payments and operational and service costs.

WeOn ~~have~~July ~~entered~~26, ~~into~~2017, awe ~~letter~~entered ofinto ~~intent~~an amendment to ~~amend~~ the second lease ~~agreement~~amendment for the Boston Property ~~and anticipate entering into definitive documentation for the second lease amendment~~ (the “Second Boston Lease Amendment”) ~~shortly~~. The Second Boston Lease Amendment isextended ~~anticipated to extend~~ the term (the “Second Extension Period”) for five years ~~from~~ from September 1, 2017 through August 31, 2022. Monthly basic rent payments are ~~anticipated~~approximately ~~to be~~ $23,~~355~~000 for the first year of the ~~Second~~ Second Extension Period, approximately $24,~~056~~000 for the second year of the ~~Second~~ Second Extension Period, approximately $2425,~~777~~000 for the third year of the Second Extension Period, approximately $25,~~521~~000 for the fourth year of the Second Extension Period, and approximately $26,~~286~~000 for the fifth year of the Second ~~Extension~~ Extension Period.

Effective March 1, 2015, we entered into a lease agreement for short-term office space in New York, NY. WeThe term of the lease is month-to-month and may be terminated upon twenty-one (21) days’ notice. The basic rent payment is $1,400 per month and we paid a $2,100 security deposit in connection with entering into the lease. Effective December 1, 2015, we amended our lease agreement for the short-term office space in New York, NY. The term of the lease isremains month-to-month and may bestill be terminated with twenty-one (21) days’ notice. The basic rent payment isincreased to $2,400 per month and we paid an additional $1,500 security deposit in connection with the amended lease.

NOTE 10 – ~~NET~~LICENSE ~~LOSS~~AGREEMENT ~~PER~~WITH ~~SHARE~~ASET THERAPEUTICS, LLC

~~Basic~~Effective ~~net~~August ~~loss~~31, ~~per~~2016, ~~common~~the ~~share~~Company isand ~~computed~~ASET ~~based~~Therapeutics, ~~on the weighted~~LLC ~~average~~(“ASET”) ~~number~~entered ofinto ~~common~~a ~~shares~~mutual ~~outstanding~~release ~~during~~of ~~the period. Restricted~~claims ~~shares issued~~ with ~~vesting conditions~~ ~~that~~respect ~~have~~to ~~not been met at~~ the ~~end~~termination of the ~~period~~Memorandum ~~are~~of ~~excluded~~Understanding ~~from~~dated ~~the~~July ~~computation of the weighted average shares. As of May 31~~14, ~~2017~~2014, ~~and~~ ~~May~~as 31amended, ~~2016,~~the ~~11,536~~License and ~~11,536,~~Development ~~respectively, restricted~~and ~~shares~~Commercialization ofAgreement ~~common~~dated ~~stock~~November ~~were~~25, ~~excluded~~2014 ~~from~~and ~~the~~all ~~computation of the~~other ~~weighted~~related ~~average~~documents ~~shares~~and agreements.

~~Diluted~~The ~~net~~Company ~~loss~~assessed ~~per~~the ~~common~~collectability ~~share~~of isits ~~calculated~~notes ~~giving~~receivable ~~effect to~~in ~~all~~connection ~~dilutive~~with ~~potential~~two ~~common~~past ~~shares~~due ~~that~~promissory ~~were~~notes ~~outstanding~~of ~~during~~ASET in the aggregate principal amount of $125,000 held by the ~~period~~Company (the “ASET Notes”). ~~Diluted~~The ~~potential~~Company ~~common~~determined ~~shares~~that ~~generally~~the probability ~~consist~~of repayment of the ASET Notes had decreased ~~incremental~~significantly ~~shares~~and ~~issuable~~were ~~upon~~to ~~exercise~~be orwritten ~~conversion~~off. ofOn ~~stock~~August 30, 2016, the ~~options~~Company ~~and~~entered ~~warrants~~into a sale and ~~shares~~assignment ~~issuable~~agreement ~~from~~with ~~convertible~~a ~~securities~~non-affiliated shareholder, aswhereby ~~well~~the asCompany ~~nonvested~~sold ~~restricted~~the ~~shares~~ASET Notes for gross proceeds of $12,500. The Company recorded a loss on sale of notes receivable of approximately $113,000 for the three and six months ended August 31, 2016.

-1317-

Table of Contents

~~In computing diluted loss per share for the years ended May 31~~MetaStat, ~~2017~~ and May 31, 2016, no effect has been given to the common shares issuable at the end of the period upon the conversion or exercise of the following securities as their inclusion would have been anti-dilutive:Inc.

	May 31, 2017	May 31, 2016
Stock options	981,475	526,976
Warrants	2,731,523	967,934
Preferred stock	1,361,837	1,906,404
Convertible debt	520,548	-
Total	5,595,383	3,401,314

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 11 – COLLABORATIVE AND OTHER RELATIONSHIPS

Research and Development Reimbursements

In connection with our business strategy, we may enter into research and development and other collaboration agreements. Depending on the arrangement, we may record payments as advances, funding receivables, payable balances or non-product income with our partners, based on the nature of the cost-sharing mechanism and activity within the collaboration.

On September 29, 2016, the Company entered into an amendment (the “MTA Amendment”) to a previously executed pilot materials transfer agreement (the “MTA” and together with the Amendment, the “Research Agreement”) with Celgene Corporation (“Celgene”), to conduct a mutually agreed upon pilot research project (the “Pilot Project”). The MTA Amendment provides for milestone payments to the Company of up to approximately $973,000. Under the terms of the Research Agreement, Celgene will provide certain proprietary materials to the Company and the Company will evaluate Celgene’s proprietary materials in the Company’s metastatic cell line and animal nonclinical models. The milestone schedule calls for Celgene to pay the Company approximately $487,000 upon execution of the MTA Amendment, which the Company has received, and the balance in accordance with the completion of three (3) milestones to Celgene’s reasonable satisfaction. The term of the Research Agreement iswas ~~one (1) year, unless~~ extended by the parties through December 22, 2017. Either party may terminate the Research ~~Agreement~~ Agreement with thirty (30) days prior written notice.

The Company recognizes the upfront payment as a deferred research and development reimbursement in the Consolidated Balance Sheet and will amortize the deferred research and development reimbursement as incurred over the term of the Research Agreement. For the three and six months ended ~~May~~August 31, 2017, the Company recorded approximately $~~133~~249,000 and $362,000 in deferred research and development reimbursement, and, at ~~May~~August 31, 2017, the Company had a deferred research and development reimbursement amount of approximately $65205,000.

The Company will recognize deferred research and development reimbursement for each subsequent milestone in the period in which the milestone is achieved. As of ~~May~~August 31, 2017, ~~none~~three of ~~the~~four milestones have been successfully achieved, and the Company has received aggregate milestone payments of approximately $876,000 or 90% of the total, of which approximately $389,000 was received during the three and six months ended August 31, 2017.

Research Collaboration Revenue

We currently do not sell any products and do not have any product-related revenue. From time to time, we may enter into research and development collaboration arrangements, in which we are reimbursed for either all or a portion of the research and development costs incurred. We record these payments as revenue in the statement of operations. We recognize revenue upon delivery and acceptance of the test results or other deliverables.

NOTE 12 – ~~SUBSEQUENT~~NET ~~EVENTS~~LOSS PER SHARE

~~Celgene~~Basic ~~Research~~net ~~Agreement~~loss per common share is computed based on the weighted average number of common shares outstanding during the period. Restricted shares issued with vesting condition that have not been met at the end of the period are excluded from the computation of the weighted average shares. As of August 31, 2017, and 2016, 11,536 and 10,417 restricted shares of common stock, respectively, were excluded from the computation of the weighted average shares.

OnDiluted ~~June~~net ~~16,~~loss ~~2017,~~per common share is calculated giving effect to all dilutive potential common shares that were outstanding during the ~~Company~~period. ~~received~~Diluted ~~payment~~potential common shares generally consist of incremental ~~approximately~~shares issuable upon exercise of stock options and ~~$243~~warrants,~~000~~ shares issuable from ~~Celgene~~convertible ~~for~~securities, ~~satisfactory~~and ~~completion~~unvested restricted ofshares. When dilutive, warrants classified as liabilities are included in the ~~second~~potential common shares and any ~~milestone~~change ~~pursuant~~in tofair value of the ~~Research~~warrant ~~Agreement~~for ~~between~~the period presented is excluded from the net loss. For the periods ended August 31, 2017 ~~parties~~and 2016, the liability warrants were not dilutive.

~~Private~~In ~~Placement~~computing diluted loss per share for the periods ended August 31, 2017 and 2016, no effect has been given to the common shares issuable at the end of the period upon the conversion or exercise of the following securities as their inclusion would have been anti-dilutive:

On June 23, 2017, pursuant to the initial closing of a private placement, the Company issued an aggregate of 359,348 shares of common stock and approximately 229,363.2 shares of Series A-2 Preferred, convertible into 2,293,632 shares of common stock and repriced an aggregate of 474,829 warrants, for an aggregate purchase price of approximately $2.14 million. After deducting placement agent fees and other offering expenses, the Company received net proceeds of approximately $2.0 million. Additionally, in connection with the private placement, the Company will issue an aggregate of 136,830 placement agent warrants with a term of five years, an exercise price equal to $1.27 per share, and a cashless exercise provision.

	August 31,	August 31,
	2017	2016
Stock options	961,474	1,263,309
Warrants	2,931,509	1,142,532
Preferred stock	4,469,177	1,888,552
Convertible debt	533,150	-
Total	8,895,310	4,294,393

~~-14-~~ NOTE 13 – SUBSEQUENT EVENTS

Issuance of Stock Options

On October 11, 2017, we issued options to purchase an aggregate of 21,000 shares of common stock at $0.89 per share to employees. These options expire on October 11, 2027 and are subject to time-based vesting.

On October 11, 2017, we issued options to purchase an aggregate of 360,000 shares of common stock at $0.89 per share to consultants. These options expire on October 11, 2027 and are subject to time-based and milestone-based vesting.

Issuance of Restricted Stock Units

On October 11, 2017, we issued 100,000 restricted stock units (“RSU’s”) to non-executive board members. These RSU’s vest quarterly for active service and settle on the 5th anniversary of issuance, unless accelerated due to departure from our board of directors or a change of control.

Employment Agreement with Douglas A. Hamilton

Effective as of October 11, 2017, we have agreed to enter into an employment agreement with Douglas A. Hamilton to serve as our president and chief executive officer for a term of two years. The employment agreement to be entered into with Mr. Hamilton will provide for a base salary of $260,000 and an annual milestone bonus, at the sole discretion of the board of directors and the compensation committee, equal to 150% of Mr. Hamilton’s compensation thereunder, based on his attainment of certain financial, clinical development, and/or business milestones to be established annually by the Company’s board of directors or compensation committee. The employment agreement will be terminable by either party at any time. In the event of termination by the Company without cause or by Mr. Hamilton for good reason not in connection with a change of control, as those terms will be defined in the agreement, he will be entitled to six months’ severance. In the event of termination by the Company without cause or by Mr. Hamilton for good reason in connection with a change of control, as those terms are defined in the agreement, he will be entitled to twelve months’ severance. The employment agreement will contain standard confidential and proprietary information, and one-year non-competition and non-solicitation provisions.

Additionally, our board of directors awarded Mr. Hamilton a bonus of $153,500 and issued Mr. Hamilton 200,000 RSU’s. These RSU’s are fully vested and settle on the 5th anniversary of issuance, unless accelerated due to termination or departure from the Company or a change of control.

-18-

Table of Contents

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

References in this report to “we,” “us,” “our,” “the Company” and “MetaStat” refer to MetaStat, Inc. and its subsidiary. References to the “SEC” refer to the U.S. Securities and Exchange Commission.

Forward-Looking Statements

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this interim report. Our consolidated financial statements have been prepared in accordance with U.S. GAAP. Our consolidated financial statements and the financial data included in this interim report reflect our reorganization and have been prepared as if our current corporate structure had been in place throughout the relevant periods. The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expect,” “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended February 28, 2017. Readers are cautioned not to place undue reliance on these forward-looking statements.

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information appearing in our Annual Report on Form 10-K for the year ended February 28, 2017.

Business Overview

We are a pre-commercial biotechnology company focused on discovering and developing personalized therapeutic (Rx) and diagnostic (Dx) treatment solutions for cancer patients. Our Mena isoform “driver-based” diagnostic biomarkers also serve as novel therapeutic targets for anti-metastatic drugs. MetaStat is developing therapeutic product candidates and paired companion diagnostics based on a novel approach that makes the Mena isoform protein a ~~drugable~~druggable target. Our core expertise includes an understanding of the mechanisms and pathways that drive tumor cell invasion and metastasis, as well as drug resistance to certain targeted therapies and cytotoxic chemotherapies.

Going Concern

Since our inception, we have generated significant net losses. As of August 31, 2017, we had an accumulated deficit of approximately $27.4 million. At August 31, 2017, we have a negative working capital. We incurred net losses of approximately $1.0 million and $2.1 million for the six months ended August 31, 2017 and 2016, respectively. We expect our net losses to continue for at least the next several years as we develop our pre-commercial product candidates. We anticipate that a substantial portion of our capital resources and efforts will be focused on research and development activities and other general corporate purposes.

We have raised approximately $2.3 million from a common stock financing during the three months ended August 31, 2017. However, we currently anticipate that our cash and cash equivalents will not be sufficient to fund our operations for the next twelve months, without raising additional capital. Our continuation as a going concern is dependent upon continued financial support from our shareholders, our ability to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding our ability to continue as a going concern. We cannot make any assurances that additional financings will be available to us and, if available, completed on a timely basis, on acceptable terms or at all. If we are unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact our business and operations and could also lead to the reduction or suspension of our operations and ultimately force us to cease our operations.

Since our inception, we have generated significant net losses. As of May 31, 2017, we had an accumulated deficit of approximately $26.6 million. At May 31, 2017, we have negative working capital. We incurred net losses of approximately $0.28 million and approximately $1.22 million for the three months ended May 31, 2017 and 2016, respectively. We expect our net losses to continue for at least the next several years as we develop our pre-commercial product candidates. We anticipate that a substantial portion of our capital resources and efforts will be focused on research and development activities and other general corporate purposes.

Including the gross proceeds of approximately $2.14 million from our June 2017 private placement, we currently anticipate that our cash and cash equivalents will not be sufficient to fund our operations for the next twelve months, without raising additional capital. Our continuation as a going concern is dependent upon continued financial support from our shareholders, our ability to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding our ability to continue as a going concern. We cannot make any assurances that additional financings will be available to us and, if available, completed on a timely basis, on acceptable terms or at all. If we are unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact our business and operations and could also lead to the reduction or suspension of our operations and ultimately force us to cease our operations.

Critical Accounting Policies and Significant Judgments and Estimates

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

Our significant accounting policies are described in Note 2 to our consolidated financial statements included in the Form 10-K for the year ended February 28, 2017. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our financial statements.

-1519-

Table of Contents

Stock-based Compensation

We account for share-based payment awards issued to employees and members of our Board by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line basis over the requisite service period, generally the vesting period. For awards issued to non-employees, the measurement date is the date when the performance is complete or when the award vests, whichever is the earliest. Accordingly, non-employee awards are remeasured at each reporting period until the final measurement date. The fair value of the award is recognized as stock-based compensation over the requisite service period, generally the vesting period.

Debt and Equity Instruments

We analyze debt and equity instruments for various features that would generally require either bifurcation and derivative accounting, or recognition of a debt discount or premium under authoritative guidance.

Detachable warrants issued in conjunction with debt are measured at their relative fair value, if they are determined to be equity instrument, or their fair value, if they are determined to be liability instruments, and recorded as a debt discount.

Conversion features that are in the money at the commitment date constitute a beneficial conversion feature that is measured at its intrinsic value and recognized as debt discount or deemed dividend. Debt discount is amortized as interest expense over the maturity period of the debt using the effective interest method.

Any contingent beneficial conversion feature would be recognized when and if the contingent event occurs based on its intrinsic value at the commitment date.

Derivative Financial Instruments and Fair Value

We account for certain warrants and exchange features embedded in notes payable that are not deemed to be indexed to the Company’s own stock in accordance with the guidance contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging (“ASC 815”) and ASC Topic 480, Distinguishing Liabilities From Equity (“ASC 480”). Such instruments are classified as liabilities and measured at their fair values at the time of issuance and at each reporting period, which change in fair value being recognized in the statement of operations. The fair values of these instruments have been estimated using Monte Carlo simulations and other valuation techniques.

Research and Development Reimbursements

From time to time, we may enter into research and development agreements in which we share expenses or are reimbursed for research and development expenses with a collaborative partner. We analyze revenue recognition in connection with collaborative arrangements in accordance with the guidance contained ASC Topic 808, Collaborative Arrangements (“ASC 808”) and ASC Topic 605, Revenue Recognition (“ASC 605”). We record payments received from our collaborative partners as an offset to research and development expenses, which are discussed in Note 11, Collaborative and Other Relationships to these consolidated financial statements.

Research Collaboration Revenue

Financial Operations Overview

General and Administrative Expenses

Our general and administrative expenses primarily consist of personnel and related costs, including stock-based compensation, legal fees relating to both intellectual property and corporate matters, accounting and audit related costs, insurance, corporate communications and investor relations expenses, information technology and internet related costs, office and facility rents and related expenses, and fees for consulting and other professional services.

We anticipate that our general and administrative expenses will increase in the future to support continued research, development and commercialization activities, including potential partnership and/or collaboration agreements, intellectual property and corporate legal expenses, and public company operating costs, including offering and related expenses in connection with a potential uplisting to a national stock exchange, SEC and exchange compliance, insurance, and investor relations and corporate communication costs. These increases will likely also include increased costs related to facilities and information technology expansion, the hiring of additional personnel and increased fees to outside consultants, lawyers and accountants, among other expenses.

-1620-

Table of Contents

Research and Development Expenses

Historically, the majority of research and development expenses were focused on our prognostic diagnostic tests for breast cancer, including the MetaSite Breast™ and MenaCalc™ tests. We have initiated research and development activities focused on our MenaINV and related driver-based biomarkers, which support our integrated Rx/Dx product development strategy focused on anti-metastatic therapeutics and companion diagnostics. Research and development activities are central to our business model and we expect future research and development expenses to be focused on our MenaINV and related biomarkers in support of our integrated Rx/Dx product development strategy.

We charge all research and development expenses to operations as they are incurred. Any nonrefundable advance payments for goods or services to be received in the future for use in research and development activities will be deferred and capitalized. Such capitalized amounts will be expensed as the related goods are delivered or the services are performed.

We do not record or maintain information regarding costs incurred in research and development on a program or project specific basis. Our research and development staff, outside consultants and contract research organizations are deployed across several programs and/or indications. Additionally, many of our costs are not attributable to individual programs and/or indications. Therefore, we believe that allocating costs on the basis of time incurred by our employees does not accurately reflect the actual costs of a project.

Our therapeutic and companion diagnostic product development programs are in early development stages. Since product candidates in later stages of development generally have higher development costs than those in earlier stages of development, we expect research and development costs relating to therapeutic and companion diagnostic programs to increase significantly for the foreseeable future as those programs progress. We are unable to determine the duration and completion costs of our research and development programs or when, if ever, and to what extent we will receive cash inflows from the commercialization and sale of any product candidate.

Results of Operations

Comparison of the Three Months Ended ~~May~~August 31, 2017 and ~~May~~ August 31, 2016

Revenues. ~~Research collaboration revenue in connection with certain research and development activities was approximately $23,000 for the three months ended May 31, 2017.~~ There were no revenues for the three months ended ~~May~~August 31, 2017 and 2016, respectively.

General and Administrative Expenses. General and administrative expense was approximately $~~571~~460,000 for the three months ended ~~May~~August 31, 2017 as as compared to approximately $~~556~~616,000 for the three months ended ~~May~~ August 31, 2016. This represents an aggregate ~~increase~~decrease of approximately $15156,000. Stock-based compensation was approximately $1749,000 for the three months ended ~~May~~August 31, 2017 as compared to approximately $88200,000 for the three months ended ~~May~~ August 31, 2016. Excluding non-cash stock-based compensation ~~expense~~ expense and depreciation expense, general and administrative ~~expenses~~ ~~increased~~expenses decreased by approximately $884,000 to approximately $~~552~~409,000 for the three months ended ~~May~~August 31, 2017 from approximately $~~464~~413,000 for the three months ended ~~May~~August 31, 2016.

~~Increased~~Slightly decreased general and administrative spending was primarily due to ~~increases~~ decreases in ~~payroll~~accounting and ~~related~~audit ~~costs~~expenses ~~including a bonus~~ of approximately $5741,000, ~~consulting~~public ~~expense~~company expenses, including investor relations and corporate communications of approximately $2218,000, corporate legal expenses of approximately $1312,000, and ~~rent~~insurance costs of approximately $10,000. These ~~increased~~decreased general and ~~administrative~~ ~~costs~~administrative expenses were ~~partially~~ offset by ~~decreases~~increases ~~related~~in to intellectual property and patent legal expenses of approximately $1730,000, ~~and investor~~ ~~relations~~payroll and ~~corporate~~related ~~communications~~ costs of approximately $26,000 and rent of approximately $109,000. We expect general and administrative expenses to increase slightly for the remainder of the fiscal year ending February 28, 2018 with projected increases in rent and office related costs, consulting expenses, and professional fees related to intellectual property and patents, among others, as compared to the fiscal year ended February 28, 2017.

Research and Development Expenses. Research and development expenses decreased by approximately $8233,000 to approximately $~~189~~323,000 for the three months ended ~~May~~August 31, 2017 from approximately $~~271~~356,000 for the ~~three~~ three months ended ~~May~~August 31, 2016. Excluding non-cash stock-based compensation expense and depreciation expense, research and development expenses decreased by approximately $824,000 to approximately $~~152~~288,000 , for the three months ended ~~May~~August 31, 2017 from approximately $~~234~~292,000 for the three months ended ~~May~~August 31, 2016.

~~Reduced~~Slightly reduced research and development spending was primarily due to decreases in consulting expense of approximately $6552,000 ~~and~~ ~~payroll and related costs of approximately $26,000~~ partially offset by increases in ~~laboratory~~licensing ~~and~~fees ~~consumables~~ of approximately $528,000 , and ~~rent~~laboratory and ~~office~~consumables ~~related~~expenses ~~costs~~ of approximately $323,000. We expect research and development expenses to increase for the remainder of this fiscal year ending February 28, 2018 as we we conduct research and development activities based on our ~~integrated~~ integrated Rx/Dx strategy and incur payroll and related expense for ~~new~~ new employees and increased consulting expenses. Research and development expenses include approximately $~~113~~249,000 of amortized deferred research and development reimbursement earned by us in connection with our collaborative arrangement as described in Note 11.

~~-17-~~ Other (Income) Expense. Other expense amounted to income of approximately $20,000 for the three months ended August 31, 2017, as compared to income of approximately $93,000 for the three months ended August 31, 2016. This represents a change of approximately $73,000. This change was mostly due in part to a decrease in gains from the change in fair value of the warrant liability and of the put liability on the notes payable of approximately $47,000 and $511,000, respectively, offset by decreases of approximately $372,000 and $113,000 in interest expense and a loss on sale of notes receivable, respectively.

Net Loss. As a result of the factors described above, we had a net loss of approximately $763,000 for the three months ended August 31, 2017 as compared to a net loss of approximately $879,000 for the three months ended August 31, 2016.

-21-

Table of Contents

~~Other~~Comparison ~~(Income) Expense. Other expense amounted to income~~ of ~~approximately $461,000 for~~ the ~~three~~ ~~months~~Six ~~ended~~Months ~~May~~Ended August 31, 2017~~, as compared to expense of approximately~~ ~~$393,000~~and ~~for~~August ~~the three months ended May~~ 31, 2016. This represents a change of approximately $854,000. This change was due in part to an increase of approximately $525,000 in the change in fair value of the warrant liability, a decrease of approximately $275,000 due to the decrease in interest expense and a decrease of approximately $54,000 in the change in fair value of the put liability on the notes payable.

~~Net Loss~~Revenues. As Research acollaboration ~~result~~revenue ofin ~~the~~connection ~~factors~~with ~~described~~certain ~~above,~~research weand ~~had~~development aactivities ~~net loss of approximately~~was approximately $~~0.28~~23,000 ~~million~~ for the ~~three~~six months ended ~~May~~August 31, 2017 ~~as compared~~. toThere awere ~~net~~no ~~loss~~revenues ~~of approximately $1.22 million~~ for the ~~three~~six months ended ~~May~~August 31, 2016.

General and Administrative Expenses. General and administrative expense was approximately $1.03 million for the six months ended August 31, 2017 as compared to approximately $1.17 million for the six months ended August 31, 2016. This represents an aggregate decrease of approximately $141,000. Stock-based compensation was approximately $104,000 for the six months ended August 31, 2017 as compared to approximately $288,000 for the six months ended August 31, 2016. Excluding non-cash stock-based compensation expense and depreciation expense, general and administrative expenses increased by approximately $47,000 to approximately $924,000 for the six months ended August 31, 2017 from approximately $877,000 for the six months ended August 31, 2016.

Increased general and administrative spending was primarily due to increases in payroll and related costs including a bonus of approximately $73,000, increased rent of approximately $18,000, and increased corporate and intellectual property expenses of approximately $15,000. These increased general and administrative costs were partially offset by decreases related to public company expenses, including investor relations and corporate communications of approximately $40,000, as well as accounting and audit expenses of approximately $33,000. We expect general and administrative expenses to increase slightly for the remainder of the fiscal year ending February 28, 2018 with projected increases in rent and office related costs, consulting expenses, and professional fees related to intellectual property and patents, among others, as compared to the fiscal year ended February 28, 2017.

Research and Development Expenses. Research and development expenses decreased by approximately $115,000 to approximately $512,000 for the six months ended August 31, 2017 from approximately $627,000 for the six months ended August 31, 2016. Excluding non-cash stock-based compensation expense and depreciation expense, research and development expenses decreased by approximately $86,000 to approximately $441,000 for the six months ended August 31, 2017 from approximately $527,000 for the six months ended August 31, 2016.

Reduced research and development spending was primarily due to decreases in consulting expense of approximately $118,000 and payroll and related costs of approximately $29,000 partially offset by increases in license fees of approximately $33,000, increased laboratory and consumables of approximately $15,000 and general expenses of approximately $10,000. We expect research and development expenses to increase for the remainder of this fiscal year ending February 28, 2018 as we conduct research and development activities based on our integrated Rx/Dx strategy and incur payroll and related expense for new employees and increased consulting expenses. Research and development expenses include approximately $362,000 of amortized deferred research and development reimbursement earned by us in connection with our collaborative arrangement as described in Note 11.

Other (Income) Expense. Other expense amounted to income of approximately $480,000 for the six months ended August 31, 2017, as compared to an expense of approximately $300,000 for the six months ended August 31, 2016. This represents a change of approximately $780,000. This change was due mostly to a decrease in interest expense on the notes payable of approximately $647,000, an increase in the gain from the change in fair value of the warrant liability of approximately $478,000, and a decrease in the loss on sale of notes receivable of approximately $113,000, offset by a decrease of approximately $457,000 in the gain from the change in fair value of the put liability on the notes payable.

Net Loss. As a result of the factors described above, we had a net loss of approximately $1.04 million for the six months ended August 31, 2017 as compared to a net loss of approximately $2.1 million for the six months ended August 31, 2016.

Liquidity and Capital Resources

Since our inception, we have incurred significant losses and, as of ~~May~~August 31, 2017, we had an accumulated deficit of approximately $2627.6 4 million. We have not yet achieved profitability and ~~anticipate~~ anticipate that we will continue to incur net losses for the ~~foreseeable~~ foreseeable future. We expect that our research and development, general and administrative and commercialization expenses will continue to grow and, as a result, we will need to generate significant product revenues to achieve profitability. We may never achieve profitability.

Sources of Liquidity

Since our inception, substantially all of our operations have been financed through the sale of our common stock, preferred stock, and promissory notes. Through ~~May~~August 31, 2017, we had received net proceeds of approximately $911.238 million through the sale of common stock and/or Series A-2 Preferred Stock to investors, approximately $0.26 million through the sale of Series A Preferred Stock to investors, approximately $3.39 million through the sale of Series B Preferred Stock to investors, approximately $3.46 million from the issuance of convertible promissory notes and approximately $1.82 million from the issuance of non-convertible promissory notes. As of ~~May~~August 31, 2017, we had cash and cash equivalents of approximately $~~152,000~~1.7 million and debt of approximately $1.0 million. Through ~~May~~August 31, 2017, we had issued and outstanding warrants to purchase 2,~~731~~931,~~523~~509 shares of our ~~common~~ common stock at a weighted average exercise price of $54.0456 per share, which could result in proceeds to us of approximately $13.~~8 million~~4 million if all outstanding warrants were exercised for cash.

~~Subsequent to May 31, 2017, we completed an initial closing of a private placement of our common stock for gross proceeds of approximately $2.14 million.~~ -22-

Table of Contents

Cash Flows

At ~~May~~August 31, 2017, we had approximately $~~152,000~~1.7 million in cash and ~~cash~~ cash equivalents, compared to approximately $~~154~~86,000 at ~~May~~August 31, 2016.

Net cash used in operating activities was approximately $01.633 million for the ~~three~~six months ended ~~May~~August 31, 2017, compared to approximately $0.428 million for the ~~three~~six months ended ~~May~~August 31, 2016. The increase in cash used of approximately $0.215 million was primarily due to increased operating expenses and faster payments of accounts payable for the six months ended August 31, 2017 as compared to slower payments and an increase in accounts payable the six months ended August 31, 2016. We expect amounts used in operating activities to increase in fiscal year 2018 and beyond as we grow our corporate operations.

Net cash ~~provided~~used byin ~~financing~~investing activities for the ~~three~~six months ended ~~May~~ August 31, 2017 was approximately $028,000 as compared to approximately $~~0.21~~13,000 ~~million~~ of net cash provided by financing activities for the ~~three~~ six months ended ~~May~~August 31, 2016. ~~Financing~~Investing activities consisted of purchases of equipment for the ~~three~~six months ended ~~May~~August 31, ~~2016 consisted primarily of~~2017 and proceeds from ~~issuance~~the sale of ~~non-convertible OID promissory~~ notes ~~and warrants~~receivable ~~and common stock and warrants~~ for the ~~three~~six months ~~ended~~ ~~May~~ended August 31, 2016 ~~partially offset by the payment of short-term debt~~.

Net cash provided by financing activities for the six months ended August 31, 2017 was approximately $2.3 million as compared to approximately $0.5 million for the six months ended August 31, 2016. Financing activities for the six months ended August 31, 2017 consisted primarily of proceeds from the issuance of common stock and Series A-2 Preferred Stock. Financing activities for the six months ended August 31, 2016 consisted primarily of proceeds from non-convertible OID promissory notes, common stock, Series A-2 Preferred Stock and warrants, partially offset by the payment of short-term debt.

Operating Capital and Capital Expenditure Requirements

~~Including~~We ~~the gross proceeds of approximately $2.14 million from our June 2017 private placement, we~~ currently anticipate that our cash and cash equivalents will not be sufficient to fund our operations for the next twelve months, without raising additional capital. We expect to continue to incur substantial operating losses in the future and to make capital expenditures to keep pace with the expansion of our research and development programs and to scale up our commercial operations, which we expect to fund in part with the proceeds of the recent financing activities. It may take several years to move any one of a number of product candidates in clinical research through the development and validation phases to commercialization. We expect that the remainder of the net proceeds and our existing cash and cash equivalents will be used to fund working capital and for capital expenditures and other general corporate purposes, such as licensing technology rights, partnering arrangements for the processing of tests outside the United States or reduction of contractual obligations. A portion of the net proceeds may also be used to acquire or invest in complementary businesses, technologies, services or products. We have no current plans, agreements or commitments with respect to any such acquisition or investment, and we are not currently engaged in any ~~negotiations~~ negotiations with respect to any such transaction.

~~-18-~~ The amount and timing of actual expenditures may vary significantly depending upon a number of factors, such as the progress of our product development, regulatory requirements, commercialization efforts, the amount of cash used by operations and progress in determining reimbursement.

Table of Contents

The amount and timing of actual expenditures may vary significantly depending upon a number of factors, such as the progress of our product development, regulatory requirements, commercialization efforts, the amount of cash used by operations and progress in reimbursement.

We cannot be certain that any of our future efforts to develop future products will be successful or that we will be able to raise sufficient additional funds to see these programs through to a successful result.

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

●

the rate of progress and cost of research and development activities associated with our therapeutic and companion diagnostic product development strategy;

●

the rate of progress and cost of research and development activities associated with our prognostic diagnostic tests for breast and other cancers;

●

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

●

the success of billing, and collecting receivables; and

●

the cost of expanding our commercial and laboratory operations, including our selling and marketing efforts.

Until we can generate a sufficient amount of revenues to finance our cash requirements, which we may never do, we expect to finance future cash needs primarily through public or private equity offerings, debt financings, borrowings or strategic collaborations. The issuance of equity securities may result in dilution to stockholders. We cannot make any assurances that additional financings will be completed on a timely basis, on acceptable terms or at all. If we are unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact our business and operations, which could cause the price of our common stock to decline. It could also lead to the reduction or suspension of our operations and ultimately force the Company to cease operations.

-23-

Table of Contents

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Not applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act of 1934 (“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to management, including principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Management carried out an evaluation, under the supervision of the Chief Executive Officer and Vice President, Finance, of the effectiveness of disclosure controls and procedures as of ~~May~~ August 31, 2017. Based upon that evaluation, management, including the ~~Chief~~ Chief Executive Officer and Vice President, Finance, concluded that ~~the~~ the design and operation of disclosure controls and procedures were effective.

Management's Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Securities Exchange Act of 1934, as amended. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of internal control over financial reporting as of ~~May~~August 31, 2017. In making this assessment, management used the criteria set forth by Internal Control—Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment using those criteria, management concluded that internal control over financial reporting was effective as of ~~May~~August 31, 2017.

As a smaller reporting company, we are not required to obtain an attestation report from our registered public accounting firm regarding internal controls over financial reporting.

Changes in Internal Control over Financial Reporting

We have had no changes in internal control over financial reporting during the three months ended ~~May~~August 31, 2017 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

-1924-

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

We have incurred significant indebtedness under our convertible note with a shareholder which matured on September 30, 2017.

On January 17, 2017, we issued a convertible promissory note in the principal amount of $1,000,000 (the “Convertible Note”) in exchange for the cancellation of (i) $600,000 principal amount of the Promissory Note plus $96,000 of accrued and unpaid interest, and (ii) $290,400 principal amount of the OID Note. The Convertible Note accrues interest at a rate of ten percent (10%) per annum commencing as of January 1, 2017, and may be prepaid upon 10 days’ advanced written notice by us at any time prior to the maturity date without penalty or premium. The noteholder has the right to convert the outstanding principal balance of the Convertible Note plus all accrued and unpaid interest thereon into shares of our common stock at a conversion price of $2.00 per share. The Convertible Note matured on September 30, 2017, and has a ten (10) business day cure period that expires on October 16, 2017.

We are currently in the process of negotiating an extension of the maturity date of the Convertible Note with the holder thereof, which we expect will be finalized shortly. In the event we do not reach an agreement with the noteholder to extend the maturity date of the Convertible Note, the noteholder may exercise its default rights. There can be no assurance that we will be able to raise additional debt or equity financing in an amount sufficient to enable us to retire these obligations and meet our other obligations. Following the expiration of the cure period, the noteholder may bring suit against us and foreclose on all of our assets and business by reason of our default.

Our ability to repay or to refinance our indebtedness depends on our future performance and ability to raise additional sources of cash, which is subject to economic, financial, competitive and other factors beyond our control. If we are unable to generate sufficient cash to service our indebtedness we may be required to adopt one or more alternatives, such as restructuring our debt or obtaining additional equity capital on terms that may be onerous or highly dilutive, or selling assets. If we desire to refinance our indebtedness, our ability to do so will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

If the Company is unable to continue as a going concern, its securities will have little or no value.

The report of the Company's independent registered public accounting firm that accompanies the Company's audited consolidated financial statements for the years ended February 28, 2017 and February 29, 2016 contains a going concern qualification in which such firm expressed substantial doubt about the Company's ability to continue as a going concern. As of ~~May~~August 31, 2017, the Company ~~had~~ had an accumulated deficit of approximately $2627.64 million. ~~Including~~The ~~the~~Company ~~gross~~has ~~proceeds~~raised of approximately $2.143 million from ~~its~~a ~~June~~common stock ~~2017~~financing ~~private~~during ~~placement~~the three months ended August 31, 2017. However, the Company currently anticipates that its cash and cash equivalents will not be sufficient to fund its operations for the next twelve months, without raising additional capital. The continuation of the Company as a going concern is dependent upon continued financial support from its shareholders, the ability of the Company to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company cannot make any assurances that additional financings will be completed on a timely basis, on acceptable terms or at all. If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact its business and operations, which could cause the price of its common stock to decline. It could also lead to the reduction or suspension of the Company’s operations and ultimately force the Company to go out of business.

-25-

Table of Contents

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

(b)

Exhibits

Exhibit No.		Description

	31.1	Certification of the Principal Executive and Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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

	101.INS*	XBRL Instance Document

	101.SCH*	XBRL Taxonomy Extension Schema

	101.CAL*	XBRL Taxonomy Extension Calculation Linkbase

	101.DEF*	XBRL Taxonomy Extension Definition Linkbase

	101.LAB*	XBRL Taxonomy Extension Label Linkbase

	101.PRE*	XBRL Taxonomy Extension Presentation Linkbase

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed note filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

-2026-

Table of Contents

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.

	~~METASTAT, INC.~~	METASTAT, INC.
Date: July 17, 2017	By:	/s/ Douglas A. Hamilton
Date: October 16, 2017	By:	/s/ Douglas A. Hamilton
		Douglas A. Hamilton President, Chief Executive Officer and Director (Principal Executive and Financial Officer)

-2127-

Filing Compare · MetaStat, Inc.