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 [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, 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.
Some of our statements under “Business,” “Properties,” “Legal Proceedings,”
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Notes to Financial
Statements and elsewhere in this report constitute “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange
Act”). In some cases, forward-looking statements are identified by terminology such as “may,” “will,” “should,” “could,”
“would,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “approximates,” “predicts,” “potential”
or “continue” or the negative of such terms and other comparable terminology.
Although we believe that the expectations reflected in these forward-looking statements
are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither
we nor anyone else assumes responsibility for the accuracy and completeness of such statements and is under no duty to
update any of the forward-looking statements after the date of this report.
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 Annual
Report on Form 10-K for the year ended March 31, 2019. 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 nine months ended December 31, 2019
are not necessarily indicative of the results that can be expected for the year ending March 31, 2020.
1
PEPTIDE TECHNOLOGIES, INC.
BALANCE SHEETS
(UNAUDITED)
|
|
December 31, 2019
|
|
March 31, 2019
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
3,137
|
|
$
|
88,546
|
|
|
Prepaid inventories
|
|
123,395
|
|
|
9,070
|
|
|
Inventories
|
|
124,226
|
|
|
—
|
|
|
Total Current Assets
|
|
250,758
|
|
|
97,616
|
|
|
|
|
|
|
|
|
|
|
Website, net of accumulated
amortization of $12,011 and $7,993 at December 31, 2019 and March 31, 2019, respectively
|
|
3,989
|
|
|
8,007
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
$
|
254,747
|
|
$
|
105,623
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
115,297
|
|
$
|
38,348
|
|
|
Related party advances
|
|
130,992
|
|
|
130,990
|
|
|
Accrued
compensation
|
|
221,192
|
|
|
221,192
|
|
|
Other accrued liabilities
|
|
22,695
|
|
|
14,778
|
|
|
Total
Current Liabilities
|
|
490,176
|
|
|
405,308
|
|
|
|
|
|
|
|
|
|
|
Notes payable
|
|
205,549
|
|
|
70,000
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
695,725
|
|
|
475,308
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Deficit
|
|
|
|
|
|
|
|
Common stock: $0.001 par value;
675,000,000 shares authorized; 127,112,660 shares issued and outstanding as of December 31, 2019 and March 31, 2019
|
|
127,113
|
|
|
127,113
|
|
|
Additional
paid-in capital
|
|
776,963
|
|
|
776,963
|
|
|
Accumulated deficit
|
|
(1,345,054
|
)
|
|
(1,273,761
|
)
|
|
Total
Stockholders’ Deficit
|
|
(440,978
|
)
|
|
(369,685
|
)
|
|
Total Liabilities and
Stockholders’ Deficit
|
$
|
254,747
|
|
$
|
105,623
|
|
The accompanying notes are an integral part of these unaudited financial statements.
2
PEPTIDE TECHNOLOGIES, INC.
STATEMENTS OF
OPERATIONS
(UNAUDITED)
|
|
Three
Months Ended
|
|
Nine Months
Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
|
2018
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
1,671
|
|
$
|
—
|
|
$
|
1,671
|
|
$
|
—
|
|
|
Total Sales
|
|
1,671
|
|
|
—
|
|
|
1,671
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
194
|
|
|
—
|
|
|
194
|
|
|
—
|
|
|
Total Cost of Sales
|
|
194
|
|
|
—
|
|
|
194
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
1,477
|
|
|
—
|
|
|
1,477
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
12,535
|
|
|
51,990
|
|
|
40,745
|
|
|
75,379
|
|
|
Sales and marketing
|
|
1,570
|
|
|
—
|
|
|
16,103
|
|
|
—
|
|
|
Research and
development
|
|
—
|
|
|
300
|
|
|
—
|
|
|
300
|
|
|
Total Operating Expenses
|
|
14,105
|
|
|
52,290
|
|
|
56,848
|
|
|
75,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
(12,628
|
)
|
|
(52,290
|
)
|
|
(55,371
|
)
|
|
(75,679
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(8,028
|
)
|
|
—
|
|
|
(17,917
|
)
|
|
—
|
|
|
Foreign currency gain
|
|
102
|
|
|
(1,455
|
)
|
|
1,995
|
|
|
(1,448
|
)
|
|
Net Loss
|
$
|
(20,554
|
)
|
$
|
(53,745
|
)
|
$
|
(71,293
|
)
|
$
|
(77,127
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
Diluted Loss per Common Share
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
Weighted Average Number of Common
Shares Outstanding
|
|
127,112,660
|
|
|
127,112,660
|
|
|
127,112,660
|
|
|
127,112,660
|
|
The accompanying notes are an integral part of these unaudited financial statements.
3
PEPTIDE TECHNOLOGIES, INC.
STATEMENTS OF CASH
FLOWS
(UNAUDITED)
|
|
For the Nine Months Ended
|
|
|
|
December
31,
|
|
|
|
2019
|
|
2018
|
|
|
Cash Flows from Operating
Activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(71,293
|
)
|
$
|
(77,127
|
)
|
|
Adjustments to reconcile net loss to
cash used in operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
4,018
|
|
|
4,019
|
|
|
Stock-based compensation
|
|
—
|
|
|
45,000
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Inventories
|
|
(124,226
|
)
|
|
—
|
|
|
Prepaid inventories
|
|
(114,325
|
)
|
|
—
|
|
|
Accounts payable and accrued
liabilities
|
|
84,866
|
|
|
4,585
|
|
|
Net cash used in operating activities
|
|
(220,960
|
)
|
|
(23,523
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows
from Investing Activities:
|
|
|
|
|
|
|
|
Website development
|
|
—
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Cash Flows
from Financing Activities:
|
|
|
|
|
|
|
|
Related party advances
|
|
2
|
|
|
53,874
|
|
|
Proceeds from
issuances of notes payable
|
|
135,549
|
|
|
—
|
|
|
Net cash provided by financing
activities
|
|
135,551
|
|
|
53,874
|
|
|
|
|
|
|
|
|
|
|
(Decrease) Increase in cash and
equivalents
|
|
(85,409
|
)
|
|
30,351
|
|
|
Cash and cash
equivalents, beginning of period
|
|
88,546
|
|
|
1,728
|
|
|
Cash and cash equivalents, end of period
|
$
|
3,137
|
|
$
|
32,079
|
|
The accompanying notes are an integral part of these unaudited financial statements.
4
PEPTIDE TECHNOLOGIES, INC.
STATEMENTS OF
STOCKHOLDERS’ DEFICIT FOR
THE NINE MONTHS ENDED DECEMBER 31, 2019 AND 2018
(UNAUDITED)
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Additional
Paid-in Capital
|
|
|
Accumulated
Deficit
|
|
|
Stockholders’ Deficit
|
|
Balance at
March 31, 2018
|
127,112,660
|
|
$
|
127,113
|
|
$
|
731,963
|
|
$
|
(1,180,182
|
)
|
$
|
(321,106
|
)
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
45,000
|
|
|
—
|
|
|
45,000
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(77,127
|
)
|
|
(77,127
|
)
|
Balance at
December 31,
2018
|
127,112,660
|
|
|
127,113
|
|
|
776,963
|
|
|
(1,257,309
|
)
|
|
(353,233
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
March 31,
2019
|
127,112,660
|
|
|
127,113
|
|
|
776,963
|
|
|
(1,273,761
|
)
|
|
(369,685
|
)
|
|
Net
loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,293
|
)
|
|
(71,293
|
)
|
Balance at
December 31,
2019
|
127,112,660
|
|
$
|
127,113
|
|
$
|
776,963
|
|
$
|
(1,345,054
|
)
|
$
|
(440,978
|
)
|
The accompanying notes are an integral part of these unaudited financial statements.
5
PEPTIDE TECHNOLOGIES, INC.
NOTES TO FINANCIAL
STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2019 AND 2018
(Unaudited)
NOTE 1 – NATURE OF OPERATIONS
Peptide Technologies, Inc. (the “Company” or “Peptide”), was incorporated in the State
of Nevada, United States of America, on November 18, 2005.
The Company’s business is to develop and market proprietary skincare products which will
be sold online. The majority of manufacturing, distribution, marketing and sales operations will be outsourced; however,
strategic planning and development will be performed internally by the Company. We commenced product sales in
December 2019.
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 nine months ended December 31, 2019 are not
necessarily indicative of the results that may be expected for the year ending March 31, 2020. 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, 2019 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, 2019 included within the
Company’s Annual Report on Form 10-K 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 $1,345,054 as of
December 31, 2019. The Company also has excess liabilities over assets of $440,978. 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.
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.
6
NOTE 4 –SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
We offer skincare products through our online store. Revenues are recognized gross when
control of our goods are transferred to the customer, which generally occurs upon delivery to the customer. At the time
an order is accepted, prices are fixed and determinable and are not subject to adjustment. We do not offer refunds,
returns or exchanges. All sales are final. We reserve the right to refuse all returns, reshipments and refunds. The
Company defers revenue where the earnings process is not yet complete.
Inventories
Inventory of retail merchandise is valued at the lower of cost and net realizable value
with a cost being determined on a first-in, first out method. Costs includes all costs of manufacturing the
product, packaging, cost of conversion and other costs incurred in bringing the inventory to its present condition and
location.
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. Amortization expense for the three and nine
months ended December 31, 2019 and December 31, 2018 was $1,344 and $4,018 and $1,344 and $4,019, respectively.
Recent Accounting Pronouncements
The Financial Accounting Standards Board issued 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 former Chief Financial Officer (“CFO”) advanced zero
and $53,874 to the Company during the nine months ended December 31, 2019 and 2018, respectively, to pay for operating
expenses. The related party advances totaled $130,992 and $130,990 as of December 31, 2019 and March 31, 2019,
respectively. The advances are due on demand. The related party advances began to accrue interest at ten
(10) percent per annum on July 1, 2019, payable on demand. Interest expense was $6,603 during the nine months
ended December 31, 2019, which is included in other accrued liabilities at December 31, 2019.
NOTE 6 – NOTES PAYABLE
During the year ended March 31, 2019, Black Star Holdings Ltd. (“Black Star”), a
shareholder of the Company, was issued a promissory note in the principal amount of $70,000. The note is unsecured
and bears interest at ten (10) percent per annum. Repayment of this note is due no later than February 19,
2021.
On April 15, 2019, Black Star was issued an additional promissory note in the principal
amount of $67,256 ($90,000 Canadian Funds), payable in Canadian dollars. This note is unsecured and bears interest
at ten (10) percent per annum. Repayment of the note is due no later than April 15, 2021.
On October 11, 2019, Black Star was issued a promissory note in the principal amount of
$10,000. This note is unsecured and bears interest at ten (10) percent per annum. Repayment of this note is
due no later than October 30, 2021. On October 21, 2019, Black Star was issued an additional promissory note in
the principal amount of $30,000. This note is unsecured and bears interest at ten (10) percent per annum.
Repayment of this note is due no later than October 30, 2021. On October 25, 2019, Black Star was issued an
additional promissory note in the principal amount of $24,500. This note is unsecured and bears interest at ten
(10) percent per annum. Repayment of this note is due no later than October 25, 2021.
7
On December 5, 2019, Black Star was issued an additional promissory note in the
principal amount of $3,792($5,000 Canadian Funds). This note is unsecured and
bears interest at ten (10) percent per annum. Repayment of this note is due no later than December 5, 2021.
Aggregate interest expense was $11,314 and $778 during the nine months ended December
31, 2019 and December 31, 2018, which is included in other accrued liabilities at December 31, 2019.
NOTE 7 – 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 8 – SUBSEQUENT EVENTS
In January 20, 2020, Black Star was issued an additional promissory note in the
principal amount of $7,656($10,000 Canadian Funds). This note is unsecured and
bears interest at ten (10) percent per annum. Repayment of this note is due no later than January 20, 2022.
January 31, 2020, Black Star was issued an additional promissory note in the principal
amount of $52,886 ($70,000 Canadian Funds). This note is unsecured and bears interest at ten (10) percent per
annum. Repayment of this note is due no later than January 31, 2022.
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 Peptide
Technologies, 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 Peptide Technologies, Inc., (the “Company” or “Peptide”), is to develop
and market skincare products. The Company does business as Eternelle Skincare Products. Peptides, and the use of
collagen, are the latest innovation in skincare as science has proven that the use of both peptides and
collagen can help manage wrinkles in skin and reverse the signs of aging. Using proprietary
peptide/collagen 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.
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Our skincare products will address various skincare needs. These products include
moisturizers and serums for the face and around the eyes.
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1.
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Brightening Antioxidant Serum Pigment Correcting Formula – Is a formula
for uneven skin tone that addresses regulating the production of melanin. This potent hydroquinone-free formula prevents
and corrects skin discoloration caused by UV damage and daily environmental stressors, post-inflammatory
hyper-pigmentation and melasma. Uniquely created with a blend of potent skin lighteners and brighteners including
Arbutin, Licorice, Azelaic Acid, and multiple forms of Vitamin C to inhibit and regulate melanin formation to normalize
and correct pigment production while evening out skin tone and encouraging collagen synthesis.
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2.
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Volumizing Antioxidant Serum Vitamin C+ Collagen Booster -An
intensive Vitamin C antioxidant hydra-serum created to resist and restore damage from aging, sun, stress and
environmental exposure. It neutralizes free radicals in the skin and prevents the breakdown of collagen. It provides the
highest clinically-tested percentage of stable Vitamin C, Ferulic Acid, Emblica, Vitamin E and Vitamin B5 to deliver the
ultimate in skin hydration and volume while providing unmatched antioxidant support. This skin booster firms and
smoothes while stimulating collagen production resulting in beautiful youthful skin.
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3.
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Antioxidant Moisturizing Creme Daily Collagen Renewal –
A lightweight fast absorbing moisturizer for all skin types that targets visible signs of aging that has been
formulated with synergistic ingredients to nourish, protect and deeply hydrate the skin while improving the appearance
of skin tone, texture and elasticity. This paraben-free formula improves suppleness, enhances firmness and addresses
loss of elasticity. It contains the essential antioxidants Emblica, Vitamin E and Ergothioneine to give daily protection
from UV radiation while helping to repair free radical damage and collagen breakdown in the skin to deliver dramatic and
immediate results.
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4.
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Peptide Eye Restore Serum Micro Circulation Booster - The
first step in a targeted light-weight eye treatment that hydrates and soothes the delicate eye area for diminishing the
look of dark circles, puffiness, fatigue and fine lines and contains proven multi-functioning peptides to effectively
treat these symptoms.
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5.
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Peptide Eye Repair Complex Cellular Collagen Youth Serum - The
second step in a highly concentrated peptide-based eye complex that effectively combats the signs & symptoms of
chronological aging while deeply hydrating and nourishing the delicate eye area. Our proprietary combination of peptides
effectively works to repair cellular communication and boost the synthesis of Collagen I, III, & IV for a visible
reduction in the appearance of fine lines and wrinkles around crow’s feet.
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Our Company has developed its proprietary skincare formulations, and we are using
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.
The Company has identified a cosmetic and skincare manufacturer and has agreed upon
product formulations, the design and sourcing of packaging, and product costs. The Company does not intend to enter into
a long-term master supply agreement with the manufacturer. Rather, orders will be placed through individual purchase
orders as needed. 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.
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.
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We have built a state-of-the-art online store/website that integrates Amazon, Shopify,
PayPal and Apple Pay platforms, 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 has engaged 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 the Company 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 the Company’s key strengths over smaller
competitors in the space. In addition, the Company is creating a brand that allows visibility and awareness to be molded
organically, thereby increasing the brand’s value quickly.
This includes, but is not limited to, developing our catalog of products, developing
proprietary skincare formulations, pricing our products, deciding which markets to target, deciding which influencers to
engage in marketing campaigns, developing sales channels such as our e-commerce sites, determining which marketing
initiatives to pursue, and selecting strategic partners and suppliers to advance our business plan.
We launched our products and began recognizing revenue December 2019. Our first
order from our manufacturer was placed July 19, 2019 and was received at the distribution center during the last week of
October 2019. The second order from our manufacturer was placed August 2, 2019.
Financial Results and Trends
Results of Operations for the Nine Months Ended December 31, 2019
and 2018
At present, the Company has $1,671 and $0 revenue during the nine
months ended December 31, 2019 and December 31, 2018 respectively. Net loss decreased from $77,127 for the nine months
ended December 31, 2018 to $71,293 for the nine months ended December 31, 2019 due to an increase in revenue and lower
general and administrative expenses offset by a lesser increase in sales and marketing and interest expenses.
Liquidity and Capital Resources
The Company requires significant cash to launch its business and reduce its payables.
The Company’s primary sources of liquidity and capital resources have been related party advances and note payables
which are not sufficient prospectively. These factors raise substantial doubt about the Company’s ability to
continue as a going concern. We are actively seeking to raise additional debt and/or equity capital to add new products
and/or services to commence material operations. If the Company is unable to raise additional capital in the near future
or meet financing requirements, the Company may need to curtail or alter its plan of operation.
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Cash Flow
The following table summarizes, for the periods indicated, selected items in our
condensed Statements of Cash Flows:
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Nine Months
Ended
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December 31,
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2019
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2018
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Net cash (used in) provided by:
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Operating activities
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$
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(220,960
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)
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$
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(23,523
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)
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Investing activities
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$
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—
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$
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—
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Financing activities
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$
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135,551
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$
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53,874
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Operating Activities
Cash used in operating activities was $220,960 and $23,523 for the nine months ended
December 31, 2019 and 2018, respectively. The increase in cash used in operating activities was primarily due to
increase in inventory and prepaid, expenses and decrease in stock-based compensation offset with a lesser increase in
accounts payables and accrued liabilities.
Investing Activities
Cash used in investing activities was $0 for each of the nine months ended December 31,
2019 and 2018, respectively.
Financing Activities
Cash provided by financing activities was $135,551 and $53,874 for the nine months ended
December 31, 2019 and 2018, respectively. The increase in cash provided by financing activities was primarily due to
notes payable.
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 Annual Report on Form 10-K.
11
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.
Under the supervision and with the participation of management, including the principal
executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of internal
control over financial reporting. This assessment was based on the framework in Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation under the
framework in Internal Control – Integrated Framework, management concluded that the Company maintained effective
internal control over financial reporting as of December 31, 2019, as such term is defined in Exchange Act Rule
13a-15(f).
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 December 31, 2019.
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.
In connection with the preparation of this Quarterly Report on Form 10-Q for the quarter
ended December 31, 2019, our Chief Executive Officer and Chief Financial Officer have concluded that our internal
controls and procedures over financial reporting were effective as of December 31, 2019.
12
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.
13