Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2016

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 5(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________________ to ______________________________

Commission File Number 33-55254-41


BIOETHICS, LTD.
(Exact name of registrant as specified in charter)

NEVADA	87-0485312
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1661 Lakeview Circle, Ogden, Utah	84403
(Address of principal executive offices)	(Zip Code)

(801) 399-3632
(Issuer ’ s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [ ]

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

Large accelerated filer

[ ]

Accelerated filer

[ ]

Non-accelerated filer

[ ]

Smaller reporting company

[X]

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

Yes [X] No [ ]

As of November 14, 2016, the issuer had outstanding 116,000,000 shares of common stock, par value $0.001.

BIOETHICS, LTD.

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2016

INDEX

PART I Financial Information

Item 1 .

Financial Statements (Unaudited)

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

and Results of Operations

Item 3 . Quantitative and Qualitative Disclosures About Market Risk

Item 4 . Controls and Procedures

PART II Other Information

Item 1 . Legal Proceedings

Item 1A . Risk Factors

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

Item 3 . Defaults Upon Senior Securities

Item 4 . Mine Safety Disclosures

Item 5 . Other Information

Item 6 . Exhibits

SIGNATURES

PART I – FINANCIAL INFORMATION

BIOETHICS, LTD.

CONTENTS

PAGE

Unaudited Balance Sheets,

September 30, 2016 and December 31, 2015

Unaudited Statements of Operations,

For the three and nine months ending September 30, 2016 and 2015

Unaudited Statements of Cash Flows,

For the nine months ended September 30, 2016 and 2015

Notes to Unaudited Financial Statements for the nine months

ended September 30, 2016 and 2015


BIOETHICS, LTD.
Balance Sheets
(Unaudited)

ASSETS

			September 30,	December 31,
			2016	2015

CURRENT ASSETS

	Cash and cash equivalents		$ 69,919	$ 24,653
	Prepaid expenses		1,875	-
	Notes receivable		-	50,000
		Total Current Assets	71,794	74,653

		TOTAL ASSETS	$ 71,794	$ 74,653

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

	Accounts payable		$ 2,657	$ 2,815
	Accrued interest - related party		4,500	2,250
	Accrued interest		12,664	4,356
	Notes payable		35,000	-
	Notes payable - related party		25,000	25,000
	Convertible notes payable (net of discount of $-0- and $58,334,
	respectively)		100,000	41,666
		Total Current Liabilities	179,821	76,087

		TOTAL LIABILITIES	179,821	76,087

STOCKHOLDERS' EQUITY (DEFICIT)

	Preferred stock, $0.01 par value; 25,000,000 shares
	authorized, -0- shares issued and outstanding		-	-
	Common stock, $0.001 par value; 150,000,000 shares
	authorized, 116,000,000 shares issued and outstanding		116,000	116,000
	Additional paid-in capital		385,414	385,414
	Accumulated deficit		(609,441)	(502,848)
		Total Stockholders' Equity (Deficit)	(108,027)	(1,434)

		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 71,794	$ 74,653

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


BIOETHICS, LTD.
Statements of Operations
(Unaudited)

			For the Three Months Ended		For the Nine Months Ended
			September 30,		September 30,
			2016	2015	2016	2015


NET REVENUES			$ -	$ -	$ -	$ -

OPERATING EXPENSES

	General and administrative		18,898	13,343	42,185	29,758

		Total Operating Expenses	18,898	13,343	42,185	29,758

LOSS FROM OPERATIONS			(18,898)	(13,343)	(42,185)	(29,758)

OTHER INCOME (EXPENSES)

	Interest income		1,383	-	4,484	-
	Interest expense (including amortization of debt discount
	of $8,334, $-0-, $58,334 and $-0-, respectively)		(12,310)	(19,253)	(68,892)	(20,753)

		Total Other Income (Expenses)	(10,927)	(19,253)	(64,408)	(20,753)

NET LOSS BEFORE INCOME TAXES			(29,825)	(32,596)	(106,593)	(50,511)

PROVISION FOR INCOME TAXES			-	-	-	-

NET LOSS			$ (29,825)	$ (32,596)	$ (106,593)	$ (50,511)

BASIC AND DILUTED LOSS PER SHARE			$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING			116,000,000	116,000,000	116,000,000	116,000,000

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


BIOETHICS, LTD.
Statements of Cash Flows
(Unaudited)

			For the Nine Months Ended
			September 30,
			2016	2015

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss			$ (106,593)	$ (50,511)
Adjustments to reconcile net loss to net cash
used by operating activities:
		Amortization of debt discount	58,334	16,667
Changes in operating assets and liabilities:
		Prepaid expenses	(1,875)	5,625
		Interest receivable	-	-
		Accounts payable	(158)	6,128
		Accrued interest - related party	2,250	1,500
		Accrued interest	8,308	1,836

		Net Cash Used by Operating Activities	(39,734)	(18,755)

CASH FLOWS FROM INVESTING ACTIVITIES

		Proceeds from payments on notes receivable	50,000	-

		Net Cash Provided by Investing Activites	50,000	-

CASH FLOWS FROM FINANCING ACTIVITIES

		Proceeds from notes payable	35,000	100,000

		Net Cash Provided by Financing Activites	35,000	100,000

INCREASE IN CASH AND CASH EQUIVALENTS			45,266	81,245

CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD			24,653	11,634

CASH AND CASH EQUIVALENTS AT
END OF PERIOD			$ 69,919	$ 92,879

SUPPLEMENTAL DISCLOSURES:

	Cash paid for interest		$ -	$ 750
	Cash paid for income taxes		$ -	$ -

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

BIOETHICS, LTD.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2016 and 2015

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization - Bioethics, Ltd. ( “ the Company ” ) was organized under the laws of the State of Nevada on July 26, 1990. The Company was organized to provide a vehicle for participating in potentially profitable business ventures which may become available through the personal contacts of, and at the complete discretion of, the Company ’ s officers and directors. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the nine months ended September 30, 2016 and 2015 have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company ’ s December 31, 2015 audited financial statements. The results of operations for the periods ended September 30, 2016 and 2015 are not necessarily indicative of the operating results for the full year.

NOTE 2 - STOCKHOLDERS ’ EQUITY (DEFICIT)

Common Stock - In July 1990, in connection with its organization, the Company issued 1,000,000 shares of its previously authorized but unissued common stock. Total proceeds from the sale of stock amounted to $1,000 (or $.001 per share).

In May 1998, the Company issued 10,000,000 shares of its previously authorized but unissued common stock. Total proceeds from the sale of stock amounted to $40,000 (or $.004 per share). The issuance of common stock resulted in a change in control of the Company.

As discussed in NOTE 6, the Company recorded a debt discount totaling $100,000 in connection with a convertible note payable issued during the year ended December 31, 2015. This resulted in a corresponding increase of $100,000 to additional paid-in capital.

NOTE 3 RELATED PARTY TRANSACTIONS

Management Compensation - During the nine months ended September 30, 2016 and 2015, the Company did not pay any compensation to its officers and directors.

Office Space - The Company has not had a need to rent office space. An officer/shareholder of the Company is allowing the Company to use his home as a mailing address, as needed, at no expense to the Company.

Notes Payable - Between January 2010 and March 2014, the Company borrowed $91,000 from a minority stockholder of the Company pursuant to unsecured promissory notes, which were due on demand and accrued interest at 6% per annum. In June 2014, the principal amount of $91,000, along with accrued interest of $14,000, was purchased by the Company ’ s then-sole officer and director and settled via the issuance of 105,000,000 shares of common stock of the Company. This resulted in a change of control, as the former officer and director now owns 90.5% of the Company ’ s issued and outstanding stock. In December 2014, the Company borrowed $25,000 from this majority shareholder pursuant to an unsecured promissory note, which is due on demand and accrues interest at 12% per annum, or $750 per quarter. The note has accrued $5,250 in interest since its inception, of which $4,500 remains payable at September 30, 2016.

NOTE 4 – NOTE RECEIVABLE

On November 16, 2015, the Company paid $50,000 for a secured promissory note. The note bears interest at 10% per annum and was due on or before May 16, 2016. Any amount of principal and interest on the note that is not paid when due shall bear default interest at the rate of 18% per annum until paid in full. The note is secured by 500,000 shares of the borrower ’ s common stock. On August 5, 2015, the Company received payment in full on its outstanding note receivable. Total cash collected included $50,000 in principal and $4,484 in accrued interest.

NOTE 5 - NOTE PAYABLE

On June 14, 2016, the Company issued a promissory note in the original principal amount of $35,000 to a lender. The Note is due on June 14, 2017 and carries an interest rate of 8% per annum. Interest expense for the nine months ended September 30, 2016 totaled $828, resulting in accrued interest at September 30, 2016 of $828.

NOTE 6 - CONVERTIBLE NOTE PAYABLE

On July 25, 2015, the Company issued a promissory note in the original principal amount of $100,000 to a lender. The Note is due on demand at any time after July 31, 2016 and carries an interest rate of 10% per annum. The Note shall be due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of common stock of the Company at a conversion rate of $0.25 per share. The Company recognized a beneficial conversion feature and recorded a debt discount in the amount of $100,000, which was amortized over the life of the promissory note. During the nine months ended September 30, 2016, the Company recorded $58,334 as amortization of debt discount on the statements of operations, resulting in an unamortized debt discount of $-0- and net convertible note balance of $100,000 at September 30, 2016. Interest expense for the nine months ended September 30, 2016 totaled $7,479, resulting in accrued interest at September 30, 2016 and December 31, 2015 of $11,836 and $4,356, respectively.

NOTE 7 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has incurred losses since its inception and has no on-going operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans, additional sales of its common stock or through a possible business combination. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 8 - LOSS PER SHARE

The following data show the amounts used in computing loss per share:


	For the	For the
	Nine Months	Nine Months
	Ended	Ended
	September 30,	September 30,
	2016	2015

Loss from continuing operations
applicable to common
stockholders (numerator)	$ (106,593)	$ (50,511)

Weighted average number of
common shares outstanding
used in loss per share calculation
during the period (denominator)	116,000,000	116,000,000

Dilutive loss per share was not presented, as the Company had no common share equivalents for all periods presented that would affect the computation of diluted loss per share. In addition, the Company has experienced continuing losses, so inclusion of any common share equivalents would result in an anti-dilutive effect.

NOTE 9 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and determined there are no additional events to disclose.

Note 10 – DEVELOPMENT STAGE OPERATIONS

On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued update ASU 2014-10, “ Development Stage Entities ” (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholders ’ equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015. As such, the Company has not labeled the financial statements as those of a development stage entity and has not presented inception-to-date information on the respective financial statements.

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

You should read the following discussion in conjunction with our financial statements, which are included elsewhere in this report. The following information contains forward-looking statements. (See “ Forward-Looking Statements ” below and “ Risk Factors. ” )

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements reflect the Company ’ s views with respect to future events based upon information available to it at this time. These forward-looking statements are subject to certain uncertainties and other factors that could cause actual results to differ materially from these statements. These uncertainties and other factors include, but are not limited to the risk factors described herein under the caption “ Risk Factors. ” The words “ anticipates, ” “ believes, ” “ estimates, ” “ expects, ” “ plans, ” “ projects, ” “ targets ” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in assumptions, future events or otherwise.

General

The Company is a shell company that conducts no active business operations and is seeking business opportunities for acquisition or participation by the Company.

The Report of Independent Registered Public Accounting Firm on the Company ’ s 2015 audited financial statements addresses an uncertainty about the Company ’ s ability to continue as a going concern, indicating that the Company has incurred losses since its inception and has no on-going operations. The report further indicates that these factors raise substantial doubt about the Company ’ s ability to continue as a going concern. At September 30, 2016, the Company had a working capital deficit of $108,027 and an accumulated deficit since inception of $609,441. The Company incurred net losses of $106,593 and $50,511 for the nine months ended September 30, 2016 and 2015, respectively. The Company has not entered into any agreements or arrangements for the provision of additional debt or equity financing and there can be no assurance that it will be able to obtain the additional debt or equity capital required to continue its operations.

The Three and Nine Months ended September 30, 2016 compared to September 30, 2015

The Company did not conduct any operations during the three and nine month periods ended September 30, 2016 or 2015. At September 30, 2016, the Company had cash in the amount of $69,919, compared to cash at December 31, 2015 in the amount of $24,653. At September 30, 2016, the Company had total current assets of $71,794, compared to $74,653 at December 31, 2015. At September 30, 2016 the Company had total current liabilities of $179,821, compared to $76,087 at December 31, 2015. The increase in current liabilities mainly represents the issuance of a promissory note for $35,000 and the accrual of general corporate expenses incurred. The Company had a working capital deficit of $108,027 at September 30, 2016 compared to a working capital deficit of $1,434 at December 31, 2015.

The Company did not generate revenues during the three and nine month periods ending September 30, 2016 or 2015. The Company incurred general and administrative expenses of $18,898 during the three months ended September 30, 2016, compared to $13,343 during the three months ended September 30, 2015. During the nine months ended September 30, 2016, the Company incurred $42,185 in general and administrative expenses compared to $29,758 during the nine months ended September 30, 2015. Such expenses consist primarily of legal and accounting fees as well as taxes and annual fees required to maintain the Company ’ s corporate status.

The Company incurred other expenses of $10,927 during the three months ended September 30, 2016 compared to $19,253 during the three months ended September 30, 2015. During the nine months ended September 30, 2016, the Company incurred other expenses of $64,408 compared to $20,753 during the nine months ended September 30, 2015. Total other expenses consist mainly of interest expense related to the notes payable due from the Company, netted with interest income of $1,383 and $4,484 generated for the three and nine months ended September 30, 2016, respectively ($0 interest income for the three and nine months ended September 30, 2015).

The Company incurred a net loss of $29,825 during the three months ended September 30, 2016, compared to a net loss of $32,596 during the three months ended September 30, 2015. During the nine months ended September 30, 2016, the Company incurred a net loss of $106,593, compared to $50,511 during the nine months ended September 30, 2015. The increase in net loss in 2016 as compared to 2015 is mainly the result of the amortization of debt discount in the amount of $58,334 related to the convertible promissory note which was recorded during the nine months ended September 30, 2016, as well as a $12,427 increase in general and administrative expenses.

The Company has never had substantial ongoing operations. As a result, since its inception on July 26, 1990, the Company has an accumulated deficit of $609,441.

Liquidity and Capital Resources

Net cash used by operating activities was $39,734 and $18,755 during the nine months ended September 30, 2016 and 2015, respectively.

Net cash provided by investing activities was $50,000 and $-0- during the nine months ended September 30, 2016 and 2015, respectively.

Net cash provided by financing activities was $35,000 and $100,000 during the nine months ended September 30, 2016 and 2015, respectively.

Since the Company does not generate any revenues from operations, it is dependent on sales of securities, loans, or contributions from its stockholders in order to pay its operating costs. In addition, in the event the Company locates a suitable candidate for potential acquisition, the Company will require additional funds to pay the costs of negotiating and completing the acquisition of such candidate. The Company has not entered into any agreement or arrangement for the provision of any additional funding and no assurances can be given that such funding will be available to the Company on terms acceptable to it or at all.

The Company cannot presently foresee the cash requirements of any business opportunity which may ultimately be acquired by the Company. However, since it is likely that any business it acquires will be involved in active business operations, the Company anticipates that an acquisition will result in increased cash requirements as well as increases in the number of employees of the Company.

Off-Balance Sheet Arrangements

The Company has not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.

Critical Accounting Policies

Due to the lack of current operations and limited business activities, the Company does not have any accounting policies that it believes are critical to facilitate an investor ’ s understanding of the Company ’ s financial and operating status.

Recent Accounting Pronouncements

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable. The Company is a “ smaller reporting company. ”

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ( “ the Exchange Act ” ) as of September 30, 2016, the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer, who is our sole officer and director, concluded that our disclosure controls and procedures as of September 30, 2016 were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC ’ s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer/Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during the quarter ended September 30, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In connection with an evaluation of the effectiveness of the Company ’ s internal control over financial reporting as of September 30, 2016, using the COSO framework (1992), our management, with the participation of our Chief Executive Officer/Chief Financial Officer identified a weakness in the Company ’ s internal control, which arises from the fact that the Company ’ s principal executive and principal financial officers are the same person, which does not allow for segregation of duties. Our management believes the materiality of this weakness is mitigated by the Company ’ s status as a shell company with no significant assets or liabilities, no business operations and a limited number of transactions each year, and that the weakness does not have a material effect on the accuracy and completeness of our financial reporting and disclosure as included in this report.

Part II---OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is not a party to any material pending legal proceedings and, to the best of its knowledge; its properties are not the subject of any such proceedings.

Item 1A. Risk Factors.

See the risk factors described in Item 1A of the Company ’ s annual report on Form 10-K for the fiscal year ended December 31, 2015.

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

None.

Item 3. Defaults Upon Senior Securities.

Not Applicable.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6.

Exhibits

The following documents are included as exhibits to this report:

(a)

Exhibits


Exhibit Number	SEC Reference Number	Title of Document	Location

31.1	31	Section 302 Certification of Chief Executive and Chief Financial Officer	This Filing
32.1	32	Section 1350 Certification of Chief Executive and Chief Financial Officer	This Filing
101.INS**		XBRL Instance Document	This Filing
101.SCH**		XBRL Taxonomy Extension Schema	This Filing
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase	This Filing
101.DEF**		XBRL Taxonomy Extension Definition Linkbase	This Filing
101.LAB**		XBRL Taxonomy Extension Label Linkbase	This Filing
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase	This Filing

**XBRL information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement or prospectus to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.

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.


	Bioethics, Ltd.


Date: November 14, 2016	By /s/ Mark A. Scharmann
	Mark A. Scharmann
	President, Chief Executive Officer and
	Chief Financial Officer
	(Principal Executive and Financial Officer)