What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2018-01-12 compared with 2017-09-13 · 471 added, 593 removed, 31 unchanged (97% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED

STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market information

May 17, 2010 until September 11, 2013, our shares of common stock

were quoted on the OTC Bulletin Board and the OTCQB, under the

stock symbol “SURF,”

from September 12, 2013 until

March 23, 2014, under the symbol “FWSI,”

from March 24,

2014 until February 4, 2015 under the symbol “CTCO,”

and since February 5, 2015 under the symbol “PKPH.”

following table shows the reported high and low closing bid prices

per share for our common stock based on information provided by the

The over-the-counter market quotations set forth for

our common stock reflect interdealer prices, without retail

markup, markdown or commission and may not necessarily

represent actual transactions.

Our shares of common

stock are quoted on the OTC Markets, Pink Tier, under the symbol “PKPH.”

The following table shows the reported

high and low closing bid prices per share for our common stock based on information provided by the OTC Markets.

over-the-counter market quotations set forth for our common stock reflect inter-dealer prices, without retail mark-up,

mark-down or commission and may not necessarily represent actual transactions.

Quarter Ended

September 30, 2017

June 30, 2017

March 31, 2017

December 31, 2016

September 30, 2016

June 30, 2016

March 31, 2016

December 31, 2015

Transfer Agent

transfer agent and registrar for our common stock is Securities

Transfer Corporation, 2901 N Dallas Parkway, Suite 380, Plano,

Their phone number is (469) 633-0101 and their website

is www.stctransfer.com .

The transfer agent and

registrar for our common stock is Securities Transfer Corporation, 2901 North Dallas Parkway, Suite 380, Plano, Texas 75093.

phone number is (469) 633-0101 and their website is www.stctransfer.com.

Holders of Common Stock

the date of this Report, we have

78,363,567 shares of common stock issued and

outstanding held by approximately 19 stockholders of

As of the date of this

report, we have 78,363,567 shares of common stock issued and outstanding held by approximately 19 stockholders of record.

Registration Rights

were no registration rights as of September 30, 2016.

never paid any cash dividends on our capital stock and do not

anticipate paying any cash dividends on our common stock in the

foreseeable future.

We intend to retain future earnings to fund

ongoing operations and future capital requirements.

determination to pay cash dividends will be at the discretion of

our Board and will be dependent upon financial condition, results

of operations, capital requirements and such other factors as the

Board deems relevant.

There were no registration

rights as of September 30, 2017

We have never paid any

cash dividends on our capital stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future.

We intend to retain future earnings to fund ongoing operations and future capital requirements.

Any future determination to pay

cash dividends will be at the discretion of our Board and will be dependent upon financial condition, results of operations, capital

requirements and such other factors as the Board deems relevant.

SELECTED FINANCIAL DATA

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Cautionary Notice Regarding Forward Looking Statements

information contained in Item 7 contains forward-looking statements

within the meaning of Section 27A of the Securities Act of 1933, as

amended, and Section 21E of the Securities Exchange Act of 1934, as

Actual results may materially differ from those projected

in the forward-looking statements because of certain risks and

uncertainties set forth in this report.

Although management

believes that the assumptions made and expectations reflected in

the forward-looking statements are reasonable, there is no

assurance that the underlying assumptions will, in fact, prove to

be correct or that actual results will not be different from

expectations expressed in this report.

desire to take advantage of the “safe harbor”

Not applicable.

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Notice Regarding Forward Looking

The information contained

in Item 7 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and

Section 21E of the Securities Exchange Act of 1934, as amended.

Actual results may materially differ from those projected in the

forward-looking statements because of certain risks and uncertainties set forth in this report.

Although management believes that

the assumptions made, and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the

underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed

in this report.

We desire to take

advantage of the “safe harbor”

provisions of the Private Securities Litigation Reform Act of 1995.

This filing contains a number of forward-looking statements that

reflect management’s current views and expectations with

respect to our business, strategies, products, future results and

events, and financial performance.

contains a number of forward-looking statements that reflect management’s current views and expectations with respect

to our business, strategies, products, future results and events, and financial performance.

All statements made in this

filing other than statements of historical fact, including

statements addressing operating performance, clinical developments

which management expects or anticipates will or may occur in the

future, including statements related to our technology, market

expectations, future revenues, financing alternatives, statements

expressing general optimism about future operating results, and

non-historical information, are forward looking statements.

particular, the words “believe,”

“expect,”

“intend,”

“anticipate,”

“estimate,”

“may,”

variations of such

words, and similar expressions identify forward-looking statements,

but are not the exclusive means of identifying such statements, and

their absence does not mean that the statement is not

forward-looking.

These forward-looking statements are subject to

certain risks and uncertainties, including those discussed below.

filing other than statements of historical fact, including statements addressing operating performance, clinical developments

which management expects or anticipates will or may occur in the future, including statements related to our technology,

market expectations, future revenues, financing alternatives, statements expressing general optimism about future operating

results, and non-historical information, are forward looking statements.

In particular, the words “believe,”

“expect,”

“intend,”

“anticipate,”

“estimate,”

“may,”

of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying

such statements, and their absence does not mean that the statement is not forward-looking.

These forward-looking statements

are subject to certain risks and uncertainties, including those discussed below.

Our actual results, performance

or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by

these forward-looking statements.

We do not undertake any obligation to revise these forward-looking statements to reflect

any future events or circumstances.

Readers should not place

undue reliance on these forward-looking statements, which are based on management’s current expectations and projections

about future events.

They are not guarantees of future performance, they are subject to risks, uncertainties and assumptions (including

those described below), and apply only as of the date of this filing.

Our actual results, performance or achievements could differ

materially from historical results as well as those expressed in,

anticipated, or implied by these forward-looking statements.

not undertake any obligation to revise these forward-looking

statements to reflect any future events or

circumstances.

should not place undue reliance on these forward-looking

statements, which are based on management’s current

expectations and projections about future events.

guarantees of future performance, are subject to risks,

uncertainties and assumptions (including those described below),

and apply only as of the date of this filing.

Our actual results,

performance or achievements could differ materially from the

results expressed in, or implied by, these forward-looking

Factors which could cause or contribute to such

differences include, but are not limited to, the risks to be

discussed in this Annual Report on Form 10-K, information in press

releases, and other communications to shareholders issued by us

from time to time.

We undertake no obligation to publicly update or

revise any forward-looking statements, whether because of new

information, future events, or otherwise.

materially from the results expressed in, or implied by, these forward-looking statements.

Factors which could cause or contribute

to such differences include, but are not limited to, the risks to be discussed in this Annual Report on Form 10-K, information

in press releases, and other communications to shareholders issued by us from time to time.

We undertake no obligation to publicly

update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

Use of Generally Accepted Accounting Principles

(“GAAP”) Financial Measures

United States GAAP financial measures in the section of this report

captioned “Management’s Discussion and Analysis or Plan

of Operation”

(“GAAP”) Financial Measures

We use United States GAAP

financial measures in the section of this report captioned “Management’s Discussion and Analysis or Plan of Operation”

(MD&A), unless otherwise noted.

GAAP financial measures used by us in this report relate to the

inclusion of financial information.

This discussion and analysis

should be read in conjunction with our financial statements and the

notes thereto included elsewhere in this annual report.

references to dollar amounts in this section are in United States

dollars, unless expressly stated otherwise.

Please see our

“Risk Factors”

for a list of our risk

subsection of MD&A provides an overview of the important

factors that management focuses on in evaluating our businesses,

financial condition and operating performance, our overall business

strategy and our financial results for the periods

Results of Operations

Comparison of the Twelve Months Ended September 30, 2016 to the

Twelve Months Ended September 30, 2015

years ended September 30, 2016 and 2015, there was no

Company’s expenses for the years ended September 30, 2016 and

2015, are summarized as follows:

ended September 30,

administrative

$ 189,928  

$ 462,688  

Depreciation and

18,974  

11,893  

1,864,297  

Total operating

$ (1,087,529 )

$ 2,338,878  

decrease in general and administrative expenses for the year ended

September 30, 2016, compared to the year ended September 30, 2015

of $272,760 is due to the termination of the license agreement with

Canna-Pet, LLC and the overall reduction related to the operation

of that business.

The increase in depreciation & amortization

of $7,081 for year ended September 30, 2016 compared to 2015, is

due to the remainder of the website being amortized and a true-up

entry for discontinued operations.

The decrease in equity based

compensation of $3,160,728 for the year ended September 30, 2016

compared to 2015 was due to the forfeiture and reversal of stock

options to officers.

Discontinued Operations

Canna-Pet business segment began operations in October 2014.

recent regulatory activity related to imposition of restrictions

and limitations on the sale of hemp-based health products for pets,

on October 1, 2015, we elected to terminate our license agreement

with Canna-Pet, LLC and to cease all operations relating to sale of

hemp-based products for pets.

income (loss) from discontinued operations presented in the

statements of operations consists of the following for the year

ended periods ended September 30, 2016 & 2015:

ended September 30,

$ 1,039,393  

Cost of goods

administrative

Gain on disposal of

All the GAAP financial measures used by us in this report relate to the inclusion of financial

This discussion and analysis should be read in conjunction with our financial statements and the notes thereto included

elsewhere in this annual report.

All references to dollar amounts in this section are in United States dollars, unless expressly

stated otherwise.

Please see our “Risk Factors”

for a list of our risk factors.

This subsection of MD&A

provides an overview of the important factors that management focuses on in evaluating our businesses, financial condition and

operating performance, our overall business strategy and our financial results for the periods covered.

of Operations

of the Years Ended September 30, 2017 to the Years Ended September 30, 2016

No revenue or cost of sales were generated for

the years ended September 30, 2017 or September 30, 2016 due to the termination of the license agreement with Canna-Pet, LLC.

The Company’s expenses

for the years ended September 30, 2017 and 2016, are summarized as follows:

Year ended September 30,

General and administrative

Depreciation and amortization

Stock based compensation

Total operating expenses

in general and administrative expenses for the year ended September 30, 2017, compared to the year ended September 30, 2016

of $144,941 is due to the termination of the license agreement with Canna-Pet, LLC and the overall reduction of operation

related to the business.

The decrease in depreciation & amortization of $18,974 for year ended September 30, 2017

compared to 2016, is due to the remainder of the website being amortized in 2016.

The increase in equity based

compensation from($1,296,431) to $0 for the year ended September 30, 2017 compared to 2016 was due to the forfeiture and

reversal of stock options to officers in 2016.

Discontinued Operations

80,903  

Total operating

$ 74,706  

$ 33,040  

Other Income (Expense)

ended September 30,

$ 2,202  

Total operating

$ 2,202  

decrease in other expense for the year ended September 30, 2016

compared to the prior year is mainly attributable to the scaling

down of operations and termination of the license agreement with

Our Canna-Pet business

segment began operations in October 2014.

Due to recent regulatory activity related to imposition of restrictions and limitations

on the sale of hemp-based health products for pets, on October 1, 2015, we elected to terminate our license agreement with Canna-Pet,

LLC and to cease all operations relating to sale of hemp-based products for pets.

The income (loss) from discontinued operations

presented in the statements of operations consists of the following for the years ended September 30, 2017 and 2016:

Years ended September 30,

Cost of goods sold

General and administrative

Gain on disposal of discontinued operations

Total operating expenses

Other Expenses:

Years ended September 30,

Interest Expense

Change in Fair Value of Convertible Debt

Total other expenses

The increase from $0

to $6,239 in other expenses for the year ended September 30, 2017 compared to the year prior is attributed to interest that

was accrued on the two convertible notes received during the years ended September 30, 2017, as well as a change in fair

value on these notes.

Liquidity and Capital Resources

Working Capital

following table sets forth a summary of changes in working capital

for the twelve months ended September 30, 2016 and

ended September 30,

$ 1,304  

$ 261,789  

142,762  

288,632  

decrease in current assets is mainly due to a decrease in cash

resulting from cash used in operating activities of $200,352 during

the year ended September 30, 2016.

The decrease in current

liabilities is due primarily from the elimination of the

liabilities related to discontinued operations during the year

ended September 30, 2016.

following table sets forth a summary of changes in cash flows for

the twelve months ended September 30, 2016 and 2015:

Months Ended September 30,

Net cash used in

operating activities

Net cash provided

by (used in) investing activities

Net cash provided

by financing activities

increase in net cash used in operating activities is mainly due to

the scaled down business operations after the termination and

discontinued operations of Canna-Pet.

cash used in operations for the twelve months ended September 30,

2016 was $200,352 mainly due to payments of general and

administrative expenses during this period.

to raise additional operating capital on an immediate basis.

Although the expenses of our operations have been significantly

reduced due to the termination of the license agreement as outline

in Note 3 of the financial statements, we need to still evaluate

raising additional capital through the sale of equity securities,

through an offering of debt securities or through borrowing from

There can be no assurance that such a plan will be

the date of this filing, we do not have enough sufficient cash on

hand to cover our operating expenses through the next quarter.

the absence of any ongoing commercial operations, we need enough

cash to pay certain outside professionals to maintain our

compliance under the Securities Act of 1934.

Management anticipates

that it will require an additional $30,000 over the next twelve

months to cover such costs.

The following table sets forth a summary of

changes in working capital for the years ended September 30, 2017 and 2016:

Year ended September 30,

Current Assets

Current Liabilities

Working capital

The increase in

current assets of $1,687 is mainly due to an increase in cash from the two convertible notes received during the year ended

September 30, 2017.

The increase in current liabilities of $52,914 is primarily due to the increase in accounts payable as

well as the two convertible notes issued during the year ended September 30, 2017.

The following table sets forth a summary of

changes in cash flows for the years ended September 30, 2017 and 2016:

Years Ended September 30,

Net Income (loss)

Net cash used in operating activities

Net cash provided by(used in) investing activities

Net cash provided by financing activities

Change in cash

As of September 30, 2017,

our cash balance was $2,991.

The Company does not expect its current cash and operating income to be sufficient to meet its financial

needs for continuing operations over the next twelve months.

Net cash used in operations

for the years ended September 30, 2017 was $18,314 mainly due the net loss that was incurred during the year.

Net cash provided by financing

for the years ended September 30, 2017 was $20,000 from two promissory notes during the period.

We need to raise additional

operating capital on an immediate basis.

Although the expenses of our operations have been significantly reduced due to the termination

of the license agreement as outline in Note 3 of the financial statements, we need to still evaluate raising additional capital

through the sale of equity securities, through an offering of debt securities or through borrowing from individuals.

be no assurance that such a plan will be successful.

As of the date of this

filing, we do not have enough sufficient cash on hand to cover our operating expenses through the next quarter.

In the absence

of any ongoing commercial operations, we need enough cash to pay certain outside professionals to maintain our compliance under

the Securities Act of 1934.

Management anticipates that it will require an additional $30,000 over the next years to cover such

The condensed

consolidated financial statements contained in this report have been prepared assuming that the Company will continue as a

going concern.

audited consolidated financial statements contained in this annual

report have been prepared assuming that the Company will continue

The Company has cumulative net losses through September 30, 2017 of $5,056,087, as well as negative cash flows

of $18,314 from operating activities.

The Company's cash and cash equivalents balance as of September 30, 2017 is $2,991.

These factors raise substantial doubt about the Company's ability to continue as a going concern.

While we will actively

seek to identify sources of liquidity, there are no assurances that such additional sources of liquidity can be obtained on terms

acceptable to us on a commercially reasonable basis, or at all.

These factors raise substantial doubt about our ability to continue

as a going concern.

Since inception, the Company has financed its

operations primarily through proceeds from the issuance of common

stock and convertible notes payable.

As of September 30, 2016, the

Company had an accumulated deficit of $5,004,860.

During the twelve

months ended September 30, 2016 and 2015, the Company incurred net

income and losses of $1,162,235 and $2,308,040, respectively, and

used cash in operating activities of $200,352 and $247,589,

respectively.

These conditions raise substantial doubt about the

Company’s ability to continue as a going concern.

we do not have sufficient cash resources to meet our plans for the

next twelve months.

These factors raise substantial doubt about the

Company’s ability to continue as a going concern.

consolidated financial statements do not include any adjustments

that may be necessary should the Company be unable to continue as a

going concern.

Our continuation as a going concern is dependent on

our ability to obtain additional financing as may be required and

ultimately to attain profitability.

Cash Requirements

anticipates that it will require an additional $30,000 over the

next twelve months to cover costs.

This amount could increase if we

encounter difficulties that we cannot anticipate at this time or if

we acquire other businesses.

As of the date of this filing, we had

cash and cash equivalents of approximately $15,000.

There can be no

assurance, however, that financing will be available or, if it is

available, that we will be able to structure such financing on

terms acceptable to us and that it will be sufficient to fund our

cash requirements until we can reach a level of profitable

operations and positive cash flows.

Even if we are able to raise

the funds required, it is possible that we could incur unexpected

costs and expenses or experience unexpected cash requirements that

would force us to seek additional financing.

If additional

financing is not available or is not available on acceptable terms,

we will have to curtail our operations.

Off-Balance Sheet Arrangements

no off-balance sheet arrangements.

Furthermore, our “going concern”

and lack of commercial operations may make it more difficult for

us to raise funds.

The consolidated

financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going

The Company’s continuation as a going concern is dependent on its ability to obtain additional financing as

may be required and ultimately to attain profitability.

If the Company raises additional funds through the issuance of

equity, the percentage ownership of current shareholders could be reduced, and such securities might have rights, preferences

or privileges senior to its common stock.

Additional financing may not be available upon acceptable terms, or at all.

adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of

prospective business endeavors or opportunities, which could significantly and materially restrict its future plans for

developing its business and achieving commercial revenues.

If the Company is unable to obtain the necessary capital, the

Company may have to cease operations.

Management anticipates

that it will require an additional $30,000 over the next twelve months to cover costs.

This amount could increase if we encounter

difficulties that we cannot anticipate at the time or if we acquire other businesses.

As of the date of this filing, we had cash

and cash equivalents of $2,856.

There can be no assurance, however, that financing will be available or, if it is available, that

we will be able to structure such financing on terms acceptable to us and that it will be sufficient to fund our cash requirements

until we can reach a level of profitable operations and positive cash flows.

Even if we are able to raise the funds required, it

is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to

seek additional financing.

If additional financing is not available or is not available on acceptable terms, we will have to curtail

our operations.

Sheet Arrangements

We have no off-balance

sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in

financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is

material to stockholders.

Effects of Inflation

not believe that inflation has had a material impact on our

business, revenues or operating results during the periods

do not believe that inflation has had a material impact on our business, revenues or operating results during the periods presented.

Critical Accounting Policies and Estimates

financial statements and accompanying notes have been prepared in

accordance with United States generally accepted accounting

principles applied on a consistent basis.

The preparation of

financial statements in conformity with U.S.

generally accepted

accounting principles requires management to make estimates and

assumptions that affect the reported amounts of assets and

liabilities, the disclosure of contingent assets and liabilities at

the date of the financial statements and the reported amounts of

revenues and expenses during the reporting periods.

regularly evaluate the accounting policies and estimates that we

use to prepare our financial statements.

A complete summary of

these policies is included in the notes to our financial

In general, management’s estimates are based on

historical experience, on information from third party

professionals, and on various other assumptions that are believed

to be reasonable under the facts and circumstances.

Actual results

could differ from those estimates made by management.

Company considers all highly liquid investments with an original

maturity of three months or less when purchased to be cash

As of September 2016, the Company does not have any

cash equivalents.

Our financial statements

and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on

a consistent basis.

The preparation of financial statements in conformity with U.S.

generally accepted accounting principles requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting

We regularly evaluate the

accounting policies and estimates that we use to prepare our financial statements.

A complete summary of these policies is included

in the notes to our financial statements.

In general, management’s estimates are based on historical experience, on information

from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances.

Actual results could differ from those estimates made by management.

The Company considers all

highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

As of September

30, 2017, the Company does not have any cash equivalents.

Accounts Receivable

company does not presently have any Accounts

The company does not presently

have any Accounts Receivable.

Non-controlling Interest

Net Loss Per Share of Common Stock

Company has adopted ASC Topic 260

Earnings per Share , which provides for calculation of

“basic”

and “diluted”

earnings (loss) per

Basic earnings (loss) per share includes no dilution and is

computed by dividing net income (loss) available to common

shareholders by the weighted average common shares outstanding for

Diluted earnings (loss) per share reflect the potential

dilution of securities that could share in the earnings of an

entity similar to fully diluted earnings (loss) per share.

Company excludes equity instruments from the calculation of diluted

earnings per share if the effect of including such instruments is

anti-dilutive.

As of September 30, 2016, the Company has 3,291,000

stock options outstanding.

As of September 30, 2015, the Company

had 7,791,000 stock options outstanding.

provision for income taxes is determined in accordance with the

provisions of ASC Topic 740, Accounting for Income Taxes

(“ASC 740”).

Under this method, deferred tax assets and

liabilities are recognized for the future tax consequences

attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their

respective tax basis.

Deferred tax assets and liabilities are

measured using enacted income tax rates expected to apply to

taxable income in the years in which those temporary differences

are expected to be recovered or settled.

Any effect on deferred tax

assets and liabilities of a change in tax rates is recognized in

income in the period that includes the enactment date.

prescribes a comprehensive model for how companies should

recognize, measure, present, and disclose in their financial

statements, uncertain tax positions taken or expected to be taken

on a tax return.

Under ASC 740, tax positions must initially be

recognized in the financial statements when it is more likely than

not the position will be sustained upon examination by the tax

Such tax positions must initially and subsequently be

measured as the largest amount of tax benefit that has a greater

than 50% likelihood of being realized upon ultimate settlement with

the tax authority assuming full knowledge of the position and

relevant facts.

years ended September 30, 2016 and 2015 we did not have any

interest and penalties or any significant unrecognized uncertain

tax positions.

We calculate net loss per

share in accordance with ASC Topic 260, Earnings per Share .

Basic net loss per share is computed by dividing net loss by

the weighted average number of shares of common stock outstanding for the period, and diluted earnings per share is computed by

including common stock equivalents outstanding for the period in the denominator.

For the years ended September 30, 2017, any equivalents

would have been anti-dilutive as we had a loss for the period then ended.

The provision for income

taxes is determined in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes (“ASC 740”).

Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences

between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those

temporary differences are expected to be recovered or settled.

Any effect on deferred tax assets and liabilities of a change in

tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive

model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions

taken or expected to be taken on a tax return.

Under ASC 740, tax positions must initially be recognized in the financial statements

when it is more likely than not the position will be sustained upon examination by the tax authorities.

Such tax positions must

initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized

upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

For the years ended September

30, 2017 and 2016 we did not have any interest and penalties or any significant unrecognized uncertain tax positions.

Stock-Based Compensation

periodically issue stock options and warrants to employees and

non-employees in non-capital raising transactions for services and

for financing costs.

We account for stock option and warrant grants

issued and vesting to employees based on ASC 718 Compensation—Stock

Compensation , where the award is measured at its fair value

at the date of grant and is amortized ratably over the service

We account for stock option and warrant grants issued and

vesting to non-employees in accordance with ASC 505 Equity , where the value of the

stock compensation is based upon the measurement date as determined

at either (a) the date at which a performance commitment is

reached, or (b) at the date at which the necessary performance to

earn the equity instruments is complete.

We periodically issue stock

options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs.

account for stock option and warrant grants issued and vested to employees based on ASC 718 Compensation—Stock Compensation ,

where the award is measured at its fair value at the date of grant and is amortized ratably over the service period.

for stock option and warrant grants issued and vesting to non-employees in accordance with ASC 505 Equity , where the value

of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment

is reached, or (b) at the date at which the necessary performance to earn the equity instruments is complete.

Fair Value Measurements

the fiscal year ended September 30, 2016, the Company adopted

guidance which defines fair value, establishes a framework for

using fair value to measure financial assets and liabilities on a

recurring basis, and expands disclosures about fair value

measurements.

The Company has also applied the guidance to

non-financial assets and liabilities measured at fair value on a

non-recurring basis, which includes goodwill and intangible assets.

The guidance establishes a hierarchy for inputs used in measuring

fair value that maximizes the use of observable inputs and

minimizes the use of unobservable inputs by requiring that the most

observable inputs be used when available.

Observable inputs are

inputs that market participants would use in pricing the asset or

liability developed based on market data obtained from sources

independent sources.

Unobservable inputs are inputs that reflect

Peak’s assumptions of what market participants would use in

pricing the asset or liability developed based on the best

information available in the circumstances.

The hierarchy is broken

down into three levels based on the reliability of the inputs as

- Valuation is based upon unadjusted quoted market prices for

identical assets or liabilities in accessible active

- Valuation is based upon quoted prices for similar assets or

liabilities in active markets;

quoted prices for identical or

similar assets or liabilities in inactive markets;

or valuations

based on models where the significant inputs are observable in the

- Valuation is based on models where significant inputs are not

The unobservable inputs reflect a company’s own

assumptions about the inputs that market participants would

Company’s financial instruments consist of cash, accounts

receivable, notes receivable, accounts payable, notes payable,

accrued liabilities and derivative liabilities.

The estimated fair

value of cash, accounts receivable, notes receivable, accounts

payable, notes payable and accrued liabilities approximate their

carrying amounts due to the short-term nature of these

non-financial assets are measured at fair value on a nonrecurring

Accordingly, these assets are not measured and adjusted to

fair value on an ongoing basis but are subject to periodic

impairment tests.

These items primarily include long-lived assets,

goodwill and other intangible assets.

Company periodically reviews the carrying value of intangible

assets not subject to amortization, including goodwill, to

determine whether impairment may exist.

Goodwill and certain

intangible assets are assessed annually, or when certain triggering

events occur, for impairment using fair value measurement

These events could include a significant change in the

business climate, legal factors, a decline in operating

performance, competition, sale or disposition of a significant

portion of the business, or other factors.

Specifically, goodwill

impairment is determined using a two-step process.

The first step

of the goodwill impairment test is used to identify potential

impairment by comparing the fair value of a reporting unit with its

carrying amount, including goodwill.

The Company uses level 3

inputs and a discounted cash flow methodology to estimate the fair

value of a reporting unit.

A discounted cash flow analysis requires

one to make various judgmental assumptions including assumptions

about future cash flows, growth rates, and discount rates.

assumptions about future cash flows and growth rates are based on

the Company’s budget and long-term plans.

Discount rate

assumptions are based on an assessment of the risk inherent in the

respective reporting units.

If the fair value of a reporting unit

exceeds its carrying amount, goodwill of the reporting unit is

considered not impaired and the second step of the impairment test

is unnecessary.

If the carrying amount of a reporting unit exceeds

its fair value, the second step of the goodwill impairment test is

performed to measure the amount of impairment loss, if any.

second step of the goodwill impairment test compares the implied

fair value of the reporting unit’s goodwill with the carrying

amount of that goodwill.

If the carrying amount of the reporting

unit’s goodwill exceeds the implied fair value of that

goodwill, an impairment loss is recognized in an amount equal to

The implied fair value of goodwill is determined in

the same manner as the amount of goodwill recognized in a business

That is, the fair value of the reporting unit is

allocated to all the assets and liabilities of that unit (including

any unrecognized intangible assets) as if the reporting unit had

been acquired in a business combination and the fair value of the

reporting unit was the purchase price paid to acquire the reporting

Financial Accounting Standards

Board (“FASB”) Accounting Standards Codification (“ASC)”

Topic 820, Fair Value Measurements and Disclosures

("ASC 820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about

fair value measurements.

Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the

inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities,

and the lowest priority to unobservable value inputs.

ASC 820 defines the hierarchy as follows:

Level 1 –

prices are available in active markets for identical assets or liabilities as of the reported date.

The types of assets and liabilities

included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York

Stock Exchange.

Level 2 –

inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date.

The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced

with models using highly observable inputs.

Level 3 –

inputs to pricing that are unobservable as of the reporting date.

The types of assets and liabilities included in Level 3 are those

with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to

determine the fair value of financial transmission rights.

The Company periodically

reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment

Goodwill and certain intangible assets are assessed annually, or when certain triggering events occur, for impairment

using fair value measurement techniques.

These events could include a significant change in the business climate, legal factors,

a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors.

Specifically, goodwill impairment is determined using a two-step process.

The first step of the goodwill impairment test is used

to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill.

The Company uses level 3 inputs and a discounted cash flow methodology to estimate the fair value of a reporting unit.

cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates,

and discount rates.

The assumptions about future cash flows and growth rates are based on the Company’s budget and long-term

Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units.

value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second

step of the impairment test is unnecessary.

If the carrying amount of a reporting unit exceeds its fair value, the second step

of the goodwill impairment test is performed to measure the amount of impairment loss, if any.

The second step of the goodwill

impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill.

If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss

is recognized in an amount equal to that excess.

The implied fair value of goodwill is determined in the same manner as the amount

of goodwill recognized in a business combination.

That is, the fair value of the reporting unit is allocated to all the assets

and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business

combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit.

Concentrations of Credit Risk

Company maintains deposits in a financial institution which is

insured by the Federal Deposit Insurance Corporation

(“FDIC”).

At various times, the Company has deposits in

this financial institution in excess of the amount insured by the

The Company has not experienced any losses related to these

balances and believes its credit risk to be minimal.

The Company maintains deposits

in a financial institution which is insured by the Federal Deposit Insurance Corporation (“FDIC”).

At various times,

the Company has deposits in this financial institution in excess of the amount insured by the FDIC.

The Company has not experienced

any losses related to these balances and believes its credit risk to be minimal.

Newly Issued Accounting Pronouncements

2014, the Financial Accounting Standards Board (“FASB”)

issued Accounting Standards Update No.

2014-09 (ASU 2014-09)

"Revenue from Contracts with Customers." ASU 2014-09 will supersede

most current revenue recognition guidance, including

industry-specific guidance.

The underlying principle is that an

entity will recognize revenue upon the transfer of goods or

services to customers in an amount that the entity expects to be

entitled to in exchange for those goods or services.

provides a five- step analysis of transactions to determine when

and how revenue is recognized.

Other major provisions include

capitalization of certain contract costs, consideration of the time

value of money in the transaction price, and allowing estimates of

variable consideration to be recognized before contingencies are

resolved in certain circumstances.

The guidance also requires

enhanced disclosures regarding the nature, amount, timing and

uncertainty of revenue and cash flows arising from an

entity’s contracts with customers.

The guidance is effective

for the interim and annual periods beginning on or after December

15, 2016 (early adoption is not permitted).

The guidance permits

the use of either a retrospective or cumulative effect transition

On July 9, 2015, the FASB decided to delay the effective

date of the new revenue standard by one year.

The FASB also agreed

to allow entities to choose to adopt the standard as of the

original effective date.

The Company is currently evaluating the

impact of this standard.

August 2014, the FASB issued ASU 2014-15, Presentation of Financial

Statements-Going Concern (Subtopic 205-40):

Disclosure of

Uncertainties about an Entity’s Ability to Continue as a

Going Concern.

ASU 2014-15 defines management’s

responsibility to evaluate whether there is substantial doubt about

an organization’s ability to continue as a going concern and

to provide related footnote disclosures.

The amendments in this ASU

are effective for the annual period ending after December 15, 2016,

and for annual periods and interim periods thereafter, although

early adoption is permitted.

This guidance is not expected to have

an impact on the financial statements of the Company.

occurs in future periods that could affect our ability to continue

as going concern, we will provide appropriate disclosures as

required by ASU 2014-15.

2015, the Financial Accounting Standards Board (“FASB”)

issued Accounting Standards Update No.

2015-11 (ASU 2015-11),

Simplifying the Measurement of Inventory.

According to ASU 2015-11,

an entity should measure inventory within the scope of this update

at the lower of cost and net realizable value.

Net realizable value

is the estimated selling prices in the ordinary course of business,

less reasonably predictable costs of completion, disposal, and

transportation.

In May 2014, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2014-09 (ASU 2014-09) "

Contracts with Customers ."

ASU 2014-09 will supersede most current revenue recognition guidance, including industry-specific

The underlying principle is that an entity will recognize revenue upon the transfer of goods or services to customers

in an amount that the entity expects to be entitled to in exchange for those goods or services.

The guidance provides a five- step

analysis of transactions to determine when and how revenue is recognized.

Other major provisions include capitalization of certain

contract costs, consideration of the time value of money in the transaction price, and allowing estimates of variable consideration

to be recognized before contingencies are resolved in certain circumstances.

The guidance also requires enhanced disclosures regarding

the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.

guidance is effective for the interim and annual periods beginning on or after December 15, 2016 (early adoption is not permitted).

The guidance permits the use of either a retrospective or cumulative effect transition method.

On July 9, 2015, the FASB decided

to delay the effective date of the new revenue standard by one year.

The FASB also agreed to allow entities to choose to adopt

the standard as of the original effective date.

The Company is currently evaluating the impact of this standard.

In August 2014, the FASB

issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40):

Disclosure of Uncertainties

about an Entity’s Ability to Continue as a Going Concern .

ASU 2014-15 defines management’s responsibility to evaluate

whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related

footnote disclosures.

The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual

periods and interim periods thereafter, although early adoption is permitted.

This guidance is not expected to have an impact on

the financial statements of the Company.

If any event occurs in future periods that could affect our ability to continue as going

concern, we will provide appropriate disclosures as required by ASU 2014-15.

In July 2015, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2015-11 (ASU 2015-11), Simplifying the

Measurement of Inventory .

According to ASU 2015-11, an entity should measure inventory within the scope of this update at the

lower of cost and net realizable value.

Net realizable value is the estimated selling prices in the ordinary course of business,

less reasonably predictable costs of completion, disposal, and transportation.

Subsequent measurement is unchanged for inventory

measured using LIFO or the retail inventory method.

The amendments

in ASU 2015-11 more closely align the measurement of inventory in

GAAP with the measurement of inventory in International Financial

Reporting Standards (IFRS).

The Board has amended some of the other

guidance in Topic 330 to more clearly articulate the requirements

for the measurement and disclosure of inventory.

However, the Board

does not intend for those clarifications to result in any changes

Other than the change in the subsequent measurement

guidance from the lower of cost or market to the lower of cost and

net realizable value for inventory within the scope of ASU 2015-11,

there are no other substantive changes to the guidance on

measurement of inventory.

For public business entities, the

amendments in ASU 2015-11 are effective for fiscal years beginning

after December 15, 2016, including interim periods within those

fiscal years.

The amendments in ASU 2015-11 should be applied

prospectively with earlier application permitted as of the

beginning of an interim or annual reporting period.

elected to early adopt the above.

The adoption doesn’t have a

significant impact on the Company’s consolidated financial

position or results of operations.

November 2015, the FASB issued ASU 2015-17, Balance Sheet

Classification of Deferred Taxes, which simplifies the presentation

of deferred income taxes.

ASU 2015-17 provides presentation

requirements to classify deferred tax assets and liabilities as

noncurrent in a classified statement of financial position.

standard is effective for fiscal years beginning after December 15,

2016, including interim periods within that reporting period.

adoption is permitted for any interim and annual financial

statements that have not yet been issued.

We early adopted ASU

2015-17 effective December 31, 2015 on a prospective basis.

adoption did not have a significant impact on the Company’s

consolidated financial position or results of

January 2016, the FASB issued ASU 2016-01, Financial Instruments

Recognition and Measurement of Financial Assets

and Financial Liabilities.

The pronouncement requires equity

investments (except those accounted for under the equity method of

accounting, or those that result in consolidation of the investee)

to be measured at fair value with changes in fair value recognized

in net income.

ASU 2016-01 requires public business entities to use

the exit price notion when measuring the fair value of financial

instruments for disclosure purposes, requires separate presentation

of financial assets and financial liabilities by measurement

category and form of financial asset, and eliminates the

requirement for public business entities to disclose the method(s)

and significant assumptions used to estimate the fair value that is

required to be disclosed for financial instruments measured at

amortized cost.

These changes become effective for the Company's

fiscal year beginning January 1, 2018.

The expected adoption method

of ASU 2016-01 is being evaluated by the Company and the adoption

is not expected to have a significant impact on the Company’s

consolidated financial position or results of

February 2016, the FASB issued ASU 2016-02, Leases (Topic 842),

which supersedes the existing guidance for lease accounting, Leases

ASU 2016-02 requires lessees to recognize leases on

their balance sheets, and leaves lessor accounting largely

The amendments in this ASU are effective for fiscal

years beginning after December 15, 2018 and interim periods within

The amendments in ASU 2015-11 more closely align the measurement of inventory

in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS).

The Board has amended some of

the other guidance in Topic 330 to more clearly articulate the requirements for the measurement and disclosure of inventory.

the Board does not intend for those clarifications to result in any changes in practice.

Other than the change in the subsequent

measurement guidance from the lower of cost or market to the lower of cost and net realizable value for inventory within the scope

of ASU 2015-11, there are no other substantive changes to the guidance on measurement of inventory.

For public business entities,

the amendments in ASU 2015-11 are effective for fiscal years beginning after December 15, 2016, including interim periods within

those fiscal years.

Early application is permitted for all

ASU 2016-02 requires a modified retrospective approach

for all leases existing at, or entered into after, the date of

initial application, with an option to elect to use certain

transition relief.

The amendments in ASU 2015-11 should be applied prospectively with earlier application permitted as of the

beginning of an interim or annual reporting period.

The Company elected to early adopt the above.

The adoption doesn’t have

a significant impact on the Company’s consolidated financial position or results of operations.

In January 2016, the

FASB issued ASU 2016-01, Financial Instruments –

Recognition and Measurement of Financial Assets and

Financial Liabilities .

The pronouncement requires equity investments (except those accounted for under the equity method

of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value

recognized in net income.

ASU 2016-01 requires public business entities to use the exit price notion when measuring the fair

value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial

liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities

to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for

financial instruments measured at amortized cost.

These changes become effective for the Company's fiscal year beginning

January 1, 2018.

The expected adoption method of ASU 2016-01 is being evaluated by the Company and the adoption is not

expected to have a significant impact on the Company’s consolidated financial position or results of operations.

In February 2016, the FASB

issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840).

ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged.

The amendments

in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years.

application is permitted for all entities.

ASU 2016-02 requires a modified retrospective approach for all leases existing at, or

entered into after, the date of initial application, with an option to elect to use certain transition relief.

The Company is currently

evaluating the impact of this new standard on its consolidated financial statements.

In March 2016, the FASB

issued authoritative guidance regarding the accounting for share-based payment transactions, including income tax consequences,

classification of awards as either equity or liabilities, and classification on the statement of cash flows.

The guidance is to

be applied for annual periods beginning after December 15, 2016 and interim periods within those annual periods, and early adoption

is permitted.

The guidance requires companies to apply the requirements retrospectively, modified retrospectively, or prospectively

depending on the amendment(s) applied.

The Company is currently evaluating the impact of adopting this guidance.

In April 2016, the FASB

issued ASU 2016 –

10 “Revenue from Contract with Customers:

identifying Performance Obligations and Licensing”.

The amendments in this Update clarify the two following aspects (a) contracts with customers to transfer goods and services in

exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either

a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s

intellectual property (which is satisfied over time).

The amendments in this Update are intended to reduce the degree of judgement

necessary to comply with Topic 606.

This guidance has no effective date as yet.

The Company is currently evaluating the impact

of this new standard on its consolidated financial

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

information called for by Item 8 is included following the "Index

to Financial Statements" on page F-1 contained in this annual

report on Form 10-K.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE

of adopting this guidance.

In August 2016, the FASB

issued ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments”.

The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash

ASU 2016-15 is effective for the Company beginning in the first quarter of fiscal 2019.

Early adoption is permitted, provided

that all of the amendments are adopted in the same period.

The guidance requires application using a retrospective transition method.

The Company is currently evaluating the impact of adopting this guidance.

In November 2016, the

FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) Restricted Cash”.

The new guidance requires that the

reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include restricted cash

and restricted cash equivalents.

If restricted cash is presented separately from cash and cash equivalents on the balance sheet,

companies will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet.

Companies will also need to disclose information about the nature of the restrictions.

The guidance is effective for fiscal years

beginning after December 15, 2017, and interim periods within those fiscal years.

The Company is currently evaluating the impact

of adopting this guidance.

In January 2017, FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition

of a Business”.

The amendments in this Update is to clarify the definition of a business with the objective of adding guidance

to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation.

The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods.

The Company is currently evaluating the impact of adopting this guidance.

On May 10, 2017, the Financial

Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) 2017-09 “Compensation—Stock

Compensation (Topic 718):

Scope of Modification Accounting”, which provides guidance to clarify when to account for a change

to the terms or conditions of a share-based payment award as a modification.

Under the new guidance, modification accounting is

required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as

a result of the change in terms or conditions.

The guidance is effective prospectively for all companies for annual periods beginning

on or after December 15, 2017.

Early adoption is permitted.

The Company is currently evaluating the impact of adopting this guidance.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Not applicable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY

The information called

for by Item 8 is included following the "Index to Financial Statements"

on page F-1 contained in this annual report on

CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity