Indicate by check mark whether the Registrant (1) has
filed all reports required by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days:
Yes [ ] No [X]
Indicate by check mark whether the registrant has
submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§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, a
smaller reporting company, or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
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]
Indicate the number of shares outstanding of each of
the issuer’s classes of common stock, as of the latest practicable date.
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying interim financial statements have
been prepared in accordance with the instructions to Form 10-Q. Therefore, they
do not include all information and footnotes necessary for a complete
presentation of financial position, results of operations, cash flows, and
stockholders’ equity in conformity with accounting principles generally
accepted in the United States of America. Except as disclosed herein, there has
been no material change in the information disclosed in the notes to the
financial statements included in the Company’s Registration Statement on
Form 10-12G for the year ended March 31, 2017. In the opinion of management,
all adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included, and all such adjustments
are of a normal recurring nature. Operating results for the three and six
months ended September 30, 2017 are not necessarily indicative of the results
that can be expected for the year ending March 31, 2018.
1
ETERNELLE SKINCARE PRODUCTS INC.
BALANCE SHEETS
(UNAUDITED)
|
|
|
September 30, 2017
|
|
|
March 31, 2017
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
3,306
|
|
|
$
|
—
|
|
|
Total
Current Assets
|
|
|
3,306
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Website
|
|
|
16,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
19,306
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
42,230
|
|
|
$
|
37,230
|
|
|
Related-party advances
|
|
|
52,799
|
|
|
|
13,263
|
|
|
Accrued compensation
|
|
|
221,192
|
|
|
|
221,192
|
|
|
Other accrued liabilities
|
|
|
10,000
|
|
|
|
10,000
|
|
|
Total Current Liabilities
|
|
|
326,221
|
|
|
|
281,685
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
Common
stock: $0.001 par value; 675,000,000 shares authorized; 156,062,660 shares
issued and outstanding
|
|
|
156,063
|
|
|
|
156,063
|
|
|
Additional
paid-in capital
|
|
|
692,763
|
|
|
|
692,763
|
|
|
Accumulated
deficit
|
|
|
(1,155,741
|
)
|
|
|
(1,130,511
|
)
|
|
Total
Stockholders’ Deficit
|
|
|
(306,915
|
)
|
|
|
(281,685
|
)
|
|
Total Liabilities and
Stockholders’ Deficit
|
|
$
|
19,306
|
|
|
$
|
—
|
|
The accompanying notes are an integral part of these
unaudited financial statements.
2
ETERNELLE SKINCARE PRODUCTS INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
$
|
8,144
|
|
|
$
|
21
|
|
|
$
|
25,247
|
|
|
$
|
21
|
|
|
Total
Operating Expenses
|
|
|
8,144
|
|
|
|
21
|
|
|
|
25,247
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
|
(8,144
|
)
|
|
|
(21
|
)
|
|
|
(25,247
|
)
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency gain
|
|
|
17
|
|
|
|
—
|
|
|
|
17
|
|
|
|
—
|
|
|
Net Loss
|
|
$
|
(8,127
|
)
|
|
$
|
(21
|
)
|
|
$
|
(25,230
|
)
|
|
$
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Loss per
Common Share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Weighted Average Number of
Common Shares Outstanding
|
|
|
156,062,660
|
|
|
|
156,062,660
|
|
|
|
156,062,660
|
|
|
|
156,062,660
|
|
The accompanying notes are an integral part of these
unaudited financial statements.
3
ETERNELLE SKINCARE PRODUCTS INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
For the Six Months Ended
|
|
|
|
|
September 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Cash Flows From
Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(25,230
|
)
|
|
$
|
(21
|
)
|
|
Changes in operating assets
and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
5,000
|
|
|
|
|
|
|
Net cash used for operating activities
|
|
|
(20,230
|
)
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From
Investing Activities:
|
|
|
|
|
|
|
|
|
|
Website development
|
|
|
(16,000
|
)
|
|
|
—
|
|
|
Net cash used for investing activities
|
|
|
(16,000
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From
Financing Activities:
|
|
|
|
|
|
|
|
|
|
Related-party advances
|
|
|
39,536
|
|
|
|
21
|
|
|
Net cash provided by financing activities
|
|
|
39,536
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in cash and
equivalents
|
|
|
3,306
|
|
|
|
—
|
|
|
Cash and cash equivalents,
beginning of period
|
|
|
—
|
|
|
|
—
|
|
|
Cash and cash equivalents,
end of period
|
|
$
|
3,306
|
|
|
$
|
—
|
|
The accompanying notes are an integral part of these
unaudited financial statements.
4
ETERNELLE SKINCARE PRODUCTS INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2017
AND 2016
(Unaudited)
NOTE
1 – NATURE OF OPERATIONS
Eternelle Skincare Products Inc. (the
“Company” or “Eternelle”) was incorporated in the State
of Nevada, United States of America, on November 18, 2005.
The Company’s business is to develop and market
skincare products. Its plan is to build a state-of-the-art online store with a
direct marketing and sales funnel aimed at targeted channels, using internet,
social media, and content marketing. The Company’s marketing approach
uses vetted channels that encompass several steps to gauge performance data
from marketing tests against other campaigns in real-time with the ability to
modify content delivery to targeted consumers immediately. The Company will
engage a team with proprietary algorithmic software to assist in making these
marketing decisions. Management believes this will provide the Company a
distinct advantage over other companies that outsource marketing and
advertising efforts to third parties.
The skincare space is well-suited for
direct-to-consumer sales, and there are several channels that Eternelle will
leverage to introduce its unique branding and creative advertising assets.
Creating brand visibility, along with the back-end support to process orders,
is one of Eternelle’s key strengths over smaller competitors in the
space. In addition, Eternelle will create a brand that allows visibility and
awareness to be molded organically, thereby increasing the brand’s value
quickly.
The Company is currently negotiating with the intent
to engage a cosmetic and skincare manufacturer, as well as developing its
marketing and sales strategy. The Company’s activities are subject to
significant risks and uncertainties, including the need for additional capital
to carry out its plan of operation and competition from existing consumer
product companies.
NOTE 2 – BASIS OF PRESENTATION OF INTERIM
FINANCIAL STATEMENTS
The Company prepares its financial statements in
accordance with accounting principles generally accepted in the United States
of America. The accompanying interim unaudited financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information in accordance with the instructions to Form 10-Q
and Article 8 of Regulation S-X. In our opinion, all adjustments (consisting of
normal recurring adjustments) considered necessary for a fair presentation have
been included.
Operating results for the three and six months ended September
30, 2017 are not necessarily indicative of the results that may be expected for
the year ending March 31, 2018. Notes to the unaudited interim financial
statements that would substantially duplicate the disclosures contained in the
audited financial statements for the year ended March 31, 2017 have been
omitted. This report should be read in conjunction with the audited financial
statements and the footnotes thereto for the fiscal year ended March 31, 2017
included within the Company’s Form 10-12G as filed with the Securities
and Exchange Commission.
NOTE 3 – GOING
CONCERN
These financial statements have been prepared in
conformity with accounting principles generally accepted in the United States
of America (“U.S. GAAP”), which contemplate the continuation of the
Company as a going concern. The Company has incurred losses from operations and
had an accumulated deficit of $1,155,741 as of September 30, 2017. The Company
also has excess liabilities over assets of $306,915. These factors raise doubt
about the Company’s ability to continue as a going concern.
Management’s plans are to actively seek capital
to enable the Company to add new products and/or services to ultimately achieve
profitability. However, management cannot provide assurance that they can raise
sufficient capital and whether the Company will ultimately achieve
profitability, become cash flow positive, or raise additional debt and/or
equity capital. If the Company is unable to raise additional capital in the
near future or meet financing requirements, management expects that the Company
will need to curtail operations, seek additional capital on less favorable
terms, and/or pursue other remedial measures.
5
These financial statements do not include any
adjustments related to the recoverability and classification of assets or the
amounts and classification of liabilities that might be necessary should the
Company become unable to continue as a going concern.
NOTE 4 –SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited financial
statements and related disclosures have been prepared in accordance with U.S.
GAAP applicable to interim financial information and with the instructions to
Form 10-Q. In the opinion of management, all adjustments, consisting of only
those of a normal recurring nature, considered necessary for a fair
presentation of the financial position and interim results of Eternelle as of
and for the periods presented have been included. Results for interim periods
are not necessarily indicative of those that may be expected for a full year.
The year-end balance sheet data was
derived from audited financial statements; however, the accompanying interim
notes to the financial statements do not include all disclosures required by
U.S. GAAP. The financial information included herein should be read in
conjunction with Eternelle’s financial statements and related notes for
the year ended March 31, 2017 as filed in the Company’s Registration
Statement on Form 10-12G.
Revenue Recognition
Revenue is recognized on a gross basis
upon shipment or upon receipt of products by the customer, depending on the
agreed-upon terms, provided that: there are no uncertainties regarding customer
acceptance; persuasive evidence of an agreement exists documenting the specific
terms of the transaction; the sales price is fixed or determinable; and
collectibility is reasonably assured. Management assesses the business
environment, the customer’s financial condition, historical collection
experience, accounts receivable aging, and customer disputes to determine
whether collectibility is reasonably assured. If collectibility is not
considered reasonably assured at the time of sale, the Company does not
recognize revenue until collection occurs. The Company expects to begin
recognizing revenue in the fourth quarter of this fiscal year.
Website
Expenditures related to the planning and operation of
the Company’s website are expensed as incurred. Expenditures related to the
website application and infrastructure development are capitalized and amortized
over the website’s estimated useful life of three (3) years. As the
website was recently completed, we will begin amortizing website costs in
October 2017.
Recent
Accounting Pronouncements
The Financial Accounting Standards Board issues
Accounting Standards Updates (“ASU”) to amend the authoritative
literature in the Accounting Standards Codification (“ASC”). There
have been a number of ASUs to date that amend the original text of the ASC. The
Company believes those updates issued-to-date either (i) provide supplemental
guidance, (ii) are technical corrections, (iii) are not applicable to the
Company, or (iv) are not expected to have a significant impact on the Company.
NOTE 5 –
RELATED-PARTY TRANSACTIONS
The Company’s Chief Executive Officer
(“CEO”) advanced $39,536 to the Company during the six months ended
September 30, 2017 to pay for website development costs and operating expenses.
The advances are due on demand and carry no interest. The related-party
advances totaled $52,799 and $13,263 as of September 30, 2017 and March 31,
2017, respectively.
6
NOTE
6 – COMMITMENTS AND CONTINGENCIES
The Company is not currently involved
with and does not have knowledge of any pending or threatened litigation
against the Company or any of its officers.
NOTE 7 – SUBSEQUENT EVENTS
Subsequent to September 30, 2017, the
Company’s CEO advanced additional funds totaling $8,376 to pay for
operating costs.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In this Quarterly Report, “Company,”
“our company,” “us,” and “our” refer to Eternelle
Skincare Products Inc., unless the context requires otherwise.
Forward-Looking Statements
The following information contains certain
forward-looking statements. Forward-looking statements are statements that
estimate the happening of future events and are not based on historical fact.
Forward-looking statements may be identified by the use of forward-looking
terminology, such as “may,” “could,”
“expect,” “estimate,” “anticipate,”
“plan,” “predict,” “probable,”
“possible,” “should,” “continue,” or
similar terms, variations of those terms or the negative of those terms. The
forward-looking statements specified in the following information have been
compiled by our management on the basis of assumptions made by management and
considered by management to be reasonable. Our future operating results,
however, are impossible to predict and no representation, guaranty, or warranty
is to be inferred from those forward-looking statements.
Business of Issuer
The business of Eternelle Skincare Products Inc. (the
“Company” or “Eternelle”) is to develop and market
skincare products. Peptides are the latest innovation in skincare as science
has proven that peptides can help manage wrinkles in skin and reverse the signs
of aging. Using proprietary peptide blends, the Company is developing a number
of skincare products that demonstrate strong efficacy in providing youthful,
healthy skin and significant anti-aging benefits to both women and men.
Our skincare products address various skincare needs.
These products include moisturizers and serums for the face and around the
eyes.
|
|
1.
|
Skin Brightener – A unique pigment clarifying serum that addresses uneven production of melanin. It synergistically targets areas of hyper pigmentation.
|
|
|
2.
|
Vitamin C Peptide – Plant-based collagen serum created to resist damage from aging, sun damage, and environmental exposure.
|
|
|
3.
|
Skin Moisturizer – A super fruit, antioxidant rich crème that contains age defying peptides and vitamin C that significantly minimizes visible signs of aging.
|
Our Company has developed its proprietary skincare
formulations, and we will use internationally recognized experts in the
manufacturing of specialized, professional quality products that meet the
demands of day and resort spa, medical spa, and eco spa markets.
We’re currently negotiating with the intent to
engage a cosmetic and skincare manufacturer. With profound knowledge and
expertise in cosmetic chemistry and professional skincare, this manufacturer
has established itself as a leader in cutting edge formulations and product
innovation in the field of skincare.
This manufacturer offers custom product formulation
and manufacturing, allowing our Company to develop proprietary blends in order
to privately brand our collection.
7
This supplier manufactures products in accordance with
Good Manufacturing Procedures (GMP). It also follows the recommendations of the
United States Food and Drug Administration and Health Canada and also adheres
to the Quality Assurance Guidelines of the Cosmetic, Toiletry, and Fragrance
Association. These guidelines enable us to guarantee the consistency and
quality of our products from batch to batch. The manufacturer performs
toxicity, microbiological, temperature, and stability tests on all formulations.
They do not test on animals, and they select all botanicals for freshness,
purity of source, quality, and potency. Every product will be researched and
tested by the supplier’s manufacturing team before it is approved for
sale.
We expect to launch our products by March 2018.
Financial Results and Trends
Results of Operations for the Six Months
Ended September 30, 2017 and 2016
At present, the Company has no revenue. Net
loss increased from $21 for the six months ended September 30, 2016 to $25,230
for the six months ended September 30, 2017 due to higher general and
administrative expenses.
Liquidity and Capital Resources
The Company requires significant cash to launch its
business and reduce its payables. The Company’s primary sources of
liquidity and capital resources have been related-party advances, which are not
sufficient prospectively. These factors raise substantial doubt about the
Company’s ability to continue as a going concern. We are actively
seeking to raise additional debt and/or equity capital to add new products
and/or services to commence material operations. If the Company is unable
to raise additional capital in the near future or meet financing requirements,
the Company may need to curtail or alter its plan of operation.
Cash Flow
The following table summarizes, for the periods
indicated, selected items in our condensed Statements of Cash Flows:
|
|
|
Six Months Ended
|
|
|
|
|
September 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Net cash (used in) provided
by:
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
$
|
(20,230
|
)
|
|
$
|
(21
|
)
|
|
Investing activities
|
|
$
|
(16,000
|
)
|
|
$
|
—
|
|
|
Financing activities
|
|
$
|
39,536
|
|
|
$
|
21
|
|
Operating Activities
Cash used in operating activities was $20,230 and $21
for the six months ended September 30, 2017 and 2016, respectively. The increase
in cash used in operating activities was primarily due to a higher net loss.
Investing Activities
Cash used in investing activities was $16,000 and $0
for the six months ended September 30, 2017 and 2016, respectively. The
increase in cash used in investing activities was primarily due to website
development costs.
Financing Activities
Cash provided by financing activities was $39,536 and
$21 for the six months ended September 30, 2017 and 2016, respectively. The
increase in cash provided by financing activities was primarily due to higher
related-party advances.
8
Off-Balance Sheet Arrangements
None.
WHERE YOU CAN FIND MORE INFORMATION
You are advised to read this Quarterly Report on Form
10-Q in conjunction with other reports and documents that we file from time to
time with the SEC. In particular, please read our Registration Statement on
Form 10-12G, Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K, and
Current Reports on Form 8-K that we file from time to time. You may obtain
copies of these reports directly from us or from the SEC at the SEC’s
Public Reference Room at 100 F. Street, N.E. Washington, D.C. 20549, and you
may obtain information about obtaining access to the Reference Room by calling
the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for
electronic filers at its website
http://www.sec.gov.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
We had no material changes in market risk from those
described in “Item 2—Quantitative and Qualitative Disclosures about
Market Risk” of our Registration Statement on Form 10-12G.
ITEM 4. CONTROLS AND PROCEDURES
This report includes the certification of our Chief
Executive Officer required by Rule 13a-14 of the Securities Exchange Act of
1934 (the “Exchange Act”). See Exhibits 31.1 and 31.2. This Item 4
includes information concerning the controls and control evaluations revered to
in those certifications.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that
are designed to ensure that information required to be disclosed in the reports
we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission’s (the “SEC”) rules and forms and that such
information is accumulated and communicated to our Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow for timely decisions
regarding required disclosure. In designing and evaluating the disclosure
controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and
management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. Our disclosure controls and
procedures were designed to provide reasonable assurance that the controls and
procedures would meet their objectives.
As required by SEC Rule 13a-15(b), our Chief Executive
Officer and Chief Financial Officer need to carry out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report. Based on the
foregoing, our Chief Executive Officer concluded that our disclosure controls
and procedures were effective as of September 30, 2017.
Management’s Report on Internal Control over
Financial Reporting
Our Chief Executive Officer and the Chief Financial
Officer are responsible for establishing and maintaining adequate internal
control over financial reporting and for the assessment of the effectiveness of
our internal control over financial reporting. Internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d(f) under the Exchange Act) is
a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
reporting purposes in accordance with U.S. GAAP. Internal control over
financial reporting includes those policies and procedures that (a) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of assets, (b) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP, (c) provide reasonable assurance
that receipts and expenditures are being made only in accordance with
appropriate authorization of management and the Board of Directors, and (d)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of assets that could have a material
effect on the financial statements.
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In connection with the preparation of our Annual
Report on Form 10-K for the year ended March 31, 2018, our Chief Executive
Officer and Chief Financial Officer will evaluate the effectiveness of our
internal control over financial reporting as of March 31, 2018.
Inherent Limitations on Internal
Controls
It should be noted that any system of
controls, however well designed and operated, can provide only reasonable and
not absolute assurance that the objectives of the control system are met. In
addition, the design of any control system is based in part upon certain
assumptions about the likelihood of certain events. Limitations inherent in any
control system include the following:
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Judgments
in decision-making can be faulty, and control and process breakdowns can
occur because of simple errors or mistakes;
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Controls
can be circumvented by individuals, acting alone or in collusion with others,
or by management override;
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The
design of any system of controls is based in part on certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future conditions;
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Over
time, controls may become inadequate because of changes in conditions or
deterioration in the degree of compliance with associated policies or
procedures; and
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The
design of a control system must reflect the fact that resources are
constrained, and the benefits of controls must be considered relative to
their costs.
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Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, have been detected.
10