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, 2018. 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, 2018 are not necessarily indicative of the results that can be expected for the year ending March 31, 2019.
The accompanying notes are an integral part of these
unaudited financial statements.
The accompanying notes are an integral part of these
unaudited financial statements.
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30,
2018 AND 2017
(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 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 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 will create a brand that allows visibility and
awareness to be molded organically, thereby increasing the brand’s value quickly.
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. 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.
The majority of manufacturing, distribution, marketing, and sales
operations will be outsourced. However, strategic planning and development will be performed internally by the Company.
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.
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, 2018 are
not necessarily indicative of the results that may be expected for the year ending March 31, 2019. 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, 2018 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, 2018 included within the
Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission.
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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 $1,203,564
as of September 30, 2018. The Company also has excess liabilities over assets of $344,488. 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.
NOTE 4 –SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
Revenue will be 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 collectability is reasonably assured. Management will assess the business
environment, the customer’s financial condition, historical collection experience, accounts receivable aging, and
customer disputes to determine whether collectability is reasonably assured. If collectability is not considered
reasonably assured at the time of sale, the Company does not recognize revenue until collection occurs. The Company
plans to begin recognizing revenue by 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 depreciated over the website’s estimated useful life of three (3) years. Amortization expense for the three and six
months ended September 30, 2018 was $1,344 and $2,674, respectively. There was no amortization expense during the three
and six months ended September 30, 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 Financial Officer (“CFO”) advanced $479 and $39,536 to
the Company during the six months ended September 30, 2018 and 2017, respectively, to pay for operating expenses and
website development costs. The advances are due on demand and carry no interest. The related party advances totaled
$67,592 and $67,113 as of September 30, 2018 and March 31, 2018, respectively.
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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
In October 2018, the Company received a
$70,000 related party advance from an entity owned by Peptide’s CFO. The advance is due on demand and carries no
interest. The advances are non-interest bearing.