What changed in this filing

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Item 9A. Controls and Procedures

2018-01-12 compared with 2017-09-13 · 810 added, 1071 removed, 101 unchanged (95% of the section changed)

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

the supervision and with the participation of our senior

management, including our Chief Executive Officer and our Chief

Financial Officer, we performed an evaluation of the effectiveness

of our disclosure controls and procedures, as defined in Rules

13a15(e) and 15d15(e) under the Exchange Act, as of the

end of the period covered by this annual report (the

“Evaluation Date”).

Based on this evaluation, our Chief

Executive Officer who is also our Chief Financial Officer concluded

that, as of September 30, 2016, our disclosure controls and

procedures were not effective to provide reasonable assurance that

material information required to be disclosed by us in the reports

filed or submitted by us under the Exchange Act is (i) recorded,

processed, summarized and reported within the time periods

specified in the SEC’s rules and forms and (ii) accumulated

and communicated to the Chief Executive Officer and Chief Financial

Officer, as appropriate to allow timely decisions regarding

Management’s Report on Internal Control over Financial

September 30, 2016, management assessed the effectiveness of our

internal control over financial reporting based on the criteria for

effective internal control over financial reporting established in

Internal Control-Integrated Framework issued by the Committee of

Sponsoring Organizations of the Treadway Commission

(“COSO”) and SEC guidance on conducting such

Based on that evaluation, they concluded that, during

the period covered by this report, such internal controls and

procedures were not effective to detect the inappropriate

application of US GAAP rules as more fully described below.

was due to deficiencies that existed in the design or operation of

our internal controls over financial reporting that adversely

affected our internal controls and that may be considered to be

material weaknesses.

matters involving internal controls and procedures that our

management considered to be material weaknesses under the standards

of Disclosure Controls and Procedures

Under the supervision and

with the participation of our senior management, including our Chief Executive Officer and our Chief Financial Officer, we performed

an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under

the Exchange Act, as of the end of the period covered by this annual report (the “Evaluation Date”).

Based on this

evaluation, our Chief Executive Officer who is also our Chief Financial Officer concluded that, as of September 30, 2017, our disclosure

controls and procedures were not effective to provide reasonable assurance that material information required to be disclosed by

us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized and reported within the

time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Chief Executive Officer

and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.

We do not have an audit

While we are not currently obligated to have an audit committee, including a member who is an “audit committee

financial expert,”

as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards;

it is management’s view that such a committee is an important internal control over financial reporting, the lack of which

may result in ineffective oversight in the establishment and monitoring of internal controls and procedures.

Based on this evaluation,

we determined that as of September 30, 2017, our disclosure controls and procedures were not effective due to the following:

We do not have a majority of independent directors on our board of directors, which may result in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

We have an inadequate number of personnel to properly implement control procedures.

Due to the size and lack of resources of our Company, we have not fully developed formal accounting policies and procedures.

We have not properly complied with all aspects of the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013.

Management’s Report on Internal

Control over Financial Reporting

of September 30, 2017, management assessed the effectiveness of our internal control over financial reporting based on the criteria

for effective internal control over financial reporting established in Internal Control-Integrated Framework issued by the Committee

of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments.

on that evaluation, they concluded that during the period covered by this report, such internal controls and procedures were not

effective to detect the inappropriate application of US GAAP rules as more fully described below.

This was due to deficiencies

that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal

controls and that may be considered to be material weaknesses.

matters involving internal controls and procedures that our management considered to be material weaknesses under the standards

of the Public Company Accounting Oversight Board were:

functioning audit committee;

segregation of duties consistent with control objectives;

controls over period-end financial disclosure and reporting

aforementioned material weaknesses were identified by our Chief

Executive and Financial Officer in connection with the review of

lack of a functioning audit committee;

inadequate segregation of duties consistent with control objectives;

ineffective controls over period-end financial disclosure and reporting processes.

aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of

our financial statements as of September 30, 2017.

believes the weaknesses identified above have not had any material

effect on our financial statements.

However, we are currently

reviewing our disclosure controls and procedures related to these

material weaknesses and expect to implement changes as soon as

practicable and as resources allow, including identifying specific

areas within our governance, accounting and financial reporting

processes to add adequate resources to remediate these material

Changes in Internal Control Over Financial Reporting

were no changes in our internal control over financial reporting

during the year ended September 30, 2016 that have materially

affected, or are reasonably likely to materially affect our

internal control over financial reporting.

Management’s Remediation Plan

Subject to raising additional working capital, we plan to

take steps to enhance and improve the design of our internal

control over financial reporting.

During the period covered by this

annual report on Form 10-K, we have not been able to remediate the

material weaknesses identified above.

To remediate such weaknesses,

we plan to implement the following changes in the next fiscal year

once we have identified a suitable business to acquire and as our

capital resources allow:

appoint additional

qualified personnel to address inadequate segregation of duties and

ineffective risk management and implement modifications to our

financial controls to address such inadequacies;

(ii)  

adopt sufficient

written policies and procedures for accounting and financial

(iii)   

appoint independent

board members and a functioning audit committee

remediation efforts set out in (i) is largely dependent upon our

company identifying and acquiring a suitable operating business and

securing additional financing to cover the costs of hiring the

requisite personnel and implementing the changes required.

are unsuccessful in such endeavors, remediation efforts may be

Because of the inherent limitations in all control

systems, no evaluation of controls can provide absolute assurance

that all control issues, if any, within our company have been

These inherent limitations include the realities that

judgments in decision-making can be faulty and that breakdowns can

occur because of simple error or mistake.

believes that despite our material weaknesses set forth above, our

financial statements for the year ended September 30, 2016 are

fairly stated, in all material respects, in accordance with US

Management believes the

weaknesses identified above have not had any material effect on our financial statements.

However, we are currently reviewing our

disclosure controls and procedures related to these material weaknesses and expect to implement changes as soon as practicable

and as resources allow, including identifying specific areas within our governance, accounting and financial reporting processes

to add adequate resources to remediate these material weaknesses.

Changes in Internal Control Over Financial

There were no changes

in our internal control over financial reporting during the year ended September 30, 2017 that have materially affected, or

are reasonably likely to materially affect our internal control over financial reporting.

Management’s Remediation Plan

to raising additional working capital, we plan to take steps to enhance and improve the design of our internal control over

financial reporting.

During the period covered by this annual report on Form 10-K, we have not been able to remediate the material

weaknesses identified above.

To remediate such weaknesses, we plan to implement the following changes in the next fiscal year once

we have identified a suitable business to acquire and as our capital resources allow:

appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management and implement modifications to our financial controls to address such inadequacies;

adopt sufficient written policies and procedures for accounting and financial reporting;

appoint independent board members and a functioning audit committee.

The remediation efforts

set out in (i) is largely dependent upon our company identifying and acquiring a suitable operating business and securing additional

financing to cover the costs of hiring the requisite personnel and implementing the changes required.

If we are unsuccessful in

such endeavors, remediation efforts may be delayed.

Because of the inherent limitations in all control systems, no evaluation of

controls can provide absolute assurance that all control issues, if any, within our company have been detected.

These inherent

limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple

error or mistake.

Management believes that

despite our material weaknesses set forth above, our financial statements for the year ended September 30, 2017 are fairly stated,

in all material respects, in accordance with US GAAP.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

Directors and Executive Officers, Promoters and Control

forth below is the present director and executive officer of the

Except as set forth below, there are no other persons who

have been nominated or chosen to become directors nor are there any

other persons who have been chosen to become executive officers.

Other than as set forth below, there are no arrangements or

understandings between any of the directors, officers and other

persons pursuant to which such person was selected as a director or

DIRECTORS, EXECUTIVE OFFICERS AND

CORPORATE GOVERNANCE

Directors and Executive Officers, Promoters

and Control Persons

Set forth below is the

present director and executive officer of the Company.

Except as set forth below, there are no other persons who have been nominated

or chosen to become directors nor are there any other persons who have been chosen to become executive officers.

Other than as

set forth below, there are no arrangements or understandings between any of the directors, officers and other persons pursuant

to which such person was selected as a director or an officer.

Position Held with Company

Date First Elected or

Reithinger (1)

Executive Officer, Chief Financial Officer and

April 6, 2016, the Board of Directors of the Company accepted the

resignation of Arnold Tinter as Chief Executive Officer and Chief

Financial Officer, effective as of March 31, 2016, and in

accordance with the provisions of Section 4.4 of the

Company’s Bylaws, appointed Neil Reithinger as Chief

Executive Officer and Chief Financial Officer, to fill the

vacancies created by the resignation of Mr.

Furthermore, in

accordance with the provisions of Section 3.6 of the

Company’s Bylaws, Neil Reithinger was appointed as a member

of the Company’s Board of Directors to fill the vacancy

created by the resignation of Vered Caplan, to serve for the

remainder of her unexpired term as a director, and thereafter until

his successor has been duly elected and qualified.

Neil Reithinger (1)

Chief Executive Officer, Chief Financial Officer and Director

April 6, 2016

On April 6, 2016, the Board of Directors of the Company accepted the resignation of Arnold Tinter as Chief Executive Officer and Chief Financial Officer, effective as of March 31, 2016, and in accordance with the provisions of Section 4.4 of the Company’s Bylaws, appointed Neil Reithinger as Chief Executive Officer and Chief Financial Officer, to fill the vacancies created by the resignation of Mr.

Furthermore, in accordance with the provisions of Section 3.6 of the Company’s Bylaws, Neil Reithinger was appointed as a member of the Company’s Board of Directors to fill the vacancy created by the resignation of Vered Caplan, to serve for the remainder of her unexpiredterm as a director, and thereafter until his successor has been duly elected and qualified.

Business Experience

following is a brief account of the education and business

experience of Neil Reithinger, our sole officer and director,

during the past five years, indicating his principal occupation

during the period, and the name and principal business of the

organization by which he was employed .

Neil Reithinger –

Chief Executive Officer, Chief Financial

Officer and Director

Reithinger is the Founder and President of Eventus Advisory Group,

LLC (“Eventus”), a private, CFO-services firm

incorporated in Arizona that specializes in capital advisory and

SEC compliance for publicly-traded and emerging growth companies, a

firm he founded in 2009.

He is also the President of Eventus

Consulting, P.C., a registered CPA firm in Arizona, a firm he

founded in 2012.

He has also been Chief Financial Officer,

Secretary and Treasurer of Orgenesis Inc.

The following is a brief

account of the education and business experience of Neil Reithinger, our sole officer and director, during the past five years,

indicating his principal occupation during the period, and the name and principal business of the organization by which he was

Neil Reithinger –

Chief Executive

Officer, Chief Financial Officer and Director

Reithinger is the Founder

and President of Eventus Advisory Group, LLC (“Eventus”), a private, CFO-services firm incorporated in Arizona that

specializes in capital advisory and SEC compliance for publicly-traded and emerging growth companies, a firm he founded in 2009.

He is also the President of Eventus Consulting, P.C., a registered CPA firm in Arizona, a firm he founded in 2012.

been Chief Financial Officer, Secretary and Treasurer of Orgenesis Inc.

since August 2014.

Reithinger earned a B.S.

in Accounting from the University of

Arizona and is a Certified Public Accountant.

He is a Member of the

American Institute of Certified Public Accountants and the Arizona

Society of Certified Public Accountants.

in Accounting

from the University of Arizona and is a Certified Public Accountant.

He is a Member of the American Institute of Certified Public

Accountants and the Arizona Society of Certified Public Accountants.

Family Relationships

our sole officer and director, there are no family relationships

that are relevant.

Being our sole officer

and director, there are no family relationships that are relevant.

Significant Employees

not have other significant employees.

We do not have other significant

Committees of Board of Directors

are currently no committees of the Board of Directors.

There are currently no

committees of the Board of Directors.

Term of Office

directors cease to hold office immediately before their election at

an annual general meeting or their appointment by the unanimous

resolution of our shareholders, but are eligible for reelection or

reappointment.

Notwithstanding the foregoing, our directors hold

office until their successors are elected or appointed, or until

their deaths, resignations or removals.

Our officers hold office at

the discretion of our board of directors, or until their deaths,

resignations or removals.

Our directors cease to

hold office immediately before their election at an annual general meeting or their appointment by the unanimous resolution of

our shareholders, but are eligible for reelection or reappointment.

Notwithstanding the foregoing, our directors hold office until

their successors are elected or appointed, or until their deaths, resignations or removals.

Our officers hold office at the discretion

of our board of directors, or until their deaths, resignations or removals.

Potential Conflicts of Interest

not aware of any conflicts of interest with our directors and

We are not aware of any

conflicts of interest with our directors and officers.

Director Independence

not currently subject to listing requirements of any national

securities exchange or interdealer quotation system which has

requirements that a majority of the Board be

“independent”

and, as a result, we are not at this time

required to have our Board comprised of a majority of

“Independent Directors.”

Currently, we have one

director, Neil Reithinger, who is not “independent”

within the definition of independence provided in the Marketplace

Rules of The NASDAQ Stock Market.

We are not currently subject

to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority

of the Board be “independent”

and, as a result, we are not at this time required to have our Board comprised of a majority

of “Independent Directors.”

Currently, we have one director, Neil Reithinger, who is not “independent”

within the definition of independence provided in the Marketplace Rules of The NASDAQ Stock Market.

Section 16(a) Beneficial Ownership Compliance

16(a) of the Securities Exchange Act, as amended, requires our

executive officers and directors, and persons who own more than 10%

of our common stock, to file reports regarding ownership of, and

transactions in, our securities with the Securities and Exchange

Commission and to provide us with copies of those filings.

solely on our review of the copies of such forms received by us, or

written representations from certain reporting persons, during the

year ended September 30, 2016, the filing requirements applicable

to its officers, directors and greater than 10% beneficial owners

were complied.

Section 16(a) of the Securities

Exchange Act, as amended, requires our executive officers and directors, and persons who own more than 10% of our common stock,

to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to

provide us with copies of those filings.

Based solely on our review of the copies of such forms received by us, or written representations

from certain reporting persons, during the year ended September 30, 2017, the filing requirements applicable to its officers, directors

and greater than 10% beneficial owners were complied.

Code of Ethics

December 2013, we adopted a Code of Ethics that applies to our

principal executive officer, principal financial officer, principal

accounting officer or controller, persons performing similar

functions as well as to our directors and employees.

A copy of our

Code of Ethics was filed as Exhibit 14.1 to our Annual Report on

Form 10K for the fiscal year ended September 30, 2013, as

filed with the Securities and Exchange Commission on December 27,

In December 2013, we adopted

a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or

controller, persons performing similar functions as well as to our directors and employees.

A copy of our Code of Ethics was filed

as Exhibit 14.1 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2013, as filed with the Securities and

Exchange Commission on December 27, 2013.

EXECUTIVE COMPENSATION

Summary Compensation

following table sets forth information concerning the total

compensation paid or accrued by us during the two fiscal years

ended September 30, 2016, and 2015 to (i) all individuals that

served as our principal executive officer or acted in a similar

capacity for us at any time during the fiscal year ended September

(ii) all individuals that were serving as executive

officers of ours at the end of the fiscal year ended September 30,

2016 that received annual compensation during the fiscal year ended

The following table

sets forth information concerning the total compensation paid or accrued by us during the two fiscal years ended September

30, 2017, and 2016 to (i) all individuals that served as our principal executive officer or acted in a similar capacity for

us at any time during the fiscal year ended September 30, 2017;

(ii) all individuals that were serving as executive officers

of ours at the end of the fiscal year ended September 30, 2017 that received annual compensation during the fiscal year ended

September 30, 2017 in excess of $100,000;

and (iii) all individuals

not serving as executive officers of ours at the end of the fiscal

year ended September 30, 2016 that received annual compensation

during the fiscal year ended September 30, 2016 in excess of

and (iii) all individuals not serving as executive officers of ours at the end of

the fiscal year ended September 30, 2017 that received annual compensation during the fiscal year ended September 30, 2017 in

excess of $100,000.

Pension Value

Neil Reithinger

Soren Mogelsvang,

Arnold Tinter,

the year ended September 30, 2016, Mr.

Mogelsvang & Mr.

tenured their resignations as the Chief Executive and Chief

Financial Officer.

Neil Reithinger was appointed as Chief Executive

and Chief Financial Officer on April 6, 2016.

No officers received

compensation through fiscal year end September 30,

Outstanding Equity Awards at Fiscal Year End

following table summarizes the outstanding equity awards held by

each named executive officer of our company as of September 30,

Tinter tenured their resignations as the Chief Executive and

Chief Financial Officer.

Neil Reithinger was appointed as Chief Executive and Chief Financial Officer on April 6, 2016.

Reithinger is the Founder and President of Eventus.

Eventus provides accounting services to the Company

in connection with audit coordination, financial statement preparation and SEC filings.

Eventus is owned by

Reithinger, our sole officer and director.

The Company pays customary fees for these

During the year ended September 30, 2017, we incurred fees of $24,478 to Eventus.

Outstanding Equity Awards at Fiscal Year

The following table summarizes the outstanding

equity awards held by each named executive officer of our company as of September 30, 2017.

(#) Exercisable

1 unchanged sentence

Shares, Units

Neil Reithinger

Retirement or Similar Benefit Plans

are no arrangements or plans in which we provide retirement or

similar benefits for our directors or executive

Resignation, Retirement, Other Termination, or Change in Control

no contract, agreement, plan or arrangement, whether written or

unwritten, that provides for payments to our directors or executive

officers at, following, or in connection with the resignation,

retirement or other termination of our directors or executive

officers, or a change in control of our company or a change in our

directors’

or executive officers’

responsibilities

following a change in control.

There are no arrangements

or plans in which we provide retirement or similar benefits for our directors or executive officers.

Resignation, Retirement, Other Termination,

or Change in Control Arrangements

We have no contract, agreement,

plan or arrangement, whether written or unwritten, that provides for payments to our directors or executive officers at, following,

or in connection with the resignation, retirement or other termination of our directors or executive officers, or a change in control

of our company or a change in our directors’

or executive officers’

responsibilities following a change in control.

Director Compensation

following table sets forth for each director certain information

concerning his compensation for the year ended September 30,

The following table sets

forth for each director, certain information concerning their compensation for the year ended September 30, 2017.

Incentive Plan

Pension Value

no plans in place and have never maintained any plans that provide

for the payment of retirement benefits or benefits that will be

paid primarily following retirement including, but not limited to,

tax qualified deferred benefit plans, supplemental executive

retirement plans, tax qualified deferred contribution plans and

nonqualified deferred contribution plans.

Similarly, we have no

contracts, agreements, plans or arrangements, whether written or

unwritten, that provide for payments to the named executive

officers or any other persons following, or in connection with the

resignation, retirement or other termination of a named executive

officer, or a change in control of us or a change in a named

executive officer’s responsibilities following a change in

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED STOCKHOLDER MATTERS

following tables set forth, as of September 30, 2016 certain

information with respect to the beneficial ownership of our common

stock by each stockholder known by us to be the beneficial owner of

more than 5% of our common stock and by each of our current

directors and executive officers.

Each person has sole voting and

investment power with respect to the shares of common stock, except

as otherwise indicated.

Beneficial ownership consists of a direct

interest in the shares of common stock, except as otherwise

following tables, we have determined the number and percentage of

shares beneficially owned in accordance with Rule 13d3 of the

Securities Exchange Act of 1934 based on information provided to us

by our controlling stockholder, executive officers and directors,

and this information does not necessarily indicate beneficial

ownership for any other purpose.

In determining the number of

shares of our common stock beneficially owned by a person and the

percentage ownership of that person, we include any shares as to

which the person has sole or shared voting power or investment

power, as well as any shares subject to warrants or options held by

that person that are currently exercisable or exercisable within 60

Security Ownership of Certain Beneficial Holders

We have no plans in place

and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily

following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans,

tax qualified deferred contribution plans and nonqualified deferred contribution plans.

Similarly, we have no contracts, agreements,

plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers or any other persons

following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in

control of us or a change in a named executive officer’s responsibility following a change in control.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following tables set

forth, as of September 30, 2017 certain information with respect to the beneficial ownership of our common stock by each stockholder

known by us to be the beneficial owner of more than 5% of our common stock and by each of our current directors and executive officers.

Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated.

ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

In the following tables,

we have determined the number and percentage of shares beneficially owned in accordance with Rule 13d3 of the Securities Exchange

Act of 1934 based on information provided to us by our controlling stockholder, executive officers and directors, and this information

does not necessarily indicate beneficial ownership for any other purpose.

In determining the number of shares of our common stock

beneficially owned by a person and the percentage ownership of that person, we include any shares as to which the person has sole

or shared voting power or investment power, as well as any shares subject to warrants or options held by that person that are currently

exercisable or exercisable within 60 days.

Security Ownership of Certain Beneficial

Title of Class

5 unchanged sentences

Mokesville, VA 20181

14,939,999 Direct

7 Orchard Way North

Vancouver BC, Canada

Potomac, MD 20854

14,939,999 Direct

3040 Rosebery Ave

West Vancouver BC, Canada

4,871,319 Direct

Total Beneficial Holders as a

34,751,317 Direct

Security Ownership of Management

4 unchanged sentences

Beneficial Ownership

Neil Reithinger

14201 N Hayden Road, Suite A-1

2 unchanged sentences

as a group (1 person)

Percentages are

based upon 78,363,567 shares of our common stock issued and

outstanding as of September 30, 2016.

ownership is determined in accordance with the rules of the SEC and

generally includes voting or investment power with respect to

Shares of common stock underlying options, warrants or

notes currently exercisable or convertible or exercisable within 60

days of September 30, 2016 are deemed outstanding for the purpose

of computing the percentage of the person holding such option,

warrant or note but are not deemed outstanding for computing the

percentage of any other person.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND

DIRECTOR INDEPENDENCE

Percentages are based upon 78,363,567 shares of our common stock issued and outstanding as of September 30, 2017.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

Shares of common stock underlying options, warrants or notes currently exercisable or convertible or exercisable within 60 days of September 30, 2017 are deemed outstanding for the purpose of computing the percentage of the person holding such option, warrant or note but are not deemed outstanding for computing the percentage of any other person.

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

as set out below, as of September 30, 2016, there have been no

transactions, or currently proposed transactions, in which we were

or are to be a participant and the amount involved exceeds the

lesser of $120,000 or one percent of the average of our total

assets at year end for the last two completed fiscal years, and in

which any of the following persons had or will have a direct or

indirect material interest:

any director or

executive officer of our company;

any person who

beneficially owns, directly or indirectly, shares carrying more

than 5% of the voting rights attached to our outstanding shares of

common stock;

any promoters and

control persons;

any member of the

immediate family (including spouse, parents, children, siblings and

in laws) of any of the foregoing persons.

connection with the approval of our 2014 Equity Incentive Plan on

May 22, 2014, our Board of Directors granted 4,000,000

nonstatutory stock options under the 2014 Plan with an

exercise price of $0.20 per share to our President and Chief

Executive Officer, Soren Mogelsvang, and granted 500,000

nonstatutory stock options under the 2014 Plan with an

exercise price of $0.20 per share to our Treasurer and Chief

Financial Officer, Arnold Tinter.

26, 2014, we entered into a Services Agreement with Caerus

Discovery, LLC.

(See “Description of Business –

Research Services Agreement”).

Cohava Gelber, one of our

directors, is the Chief Executive Officer, President and Principal

Equity Holder of Caerus.

Soren Mogelsvang, our President, Chief

Executive Officer and a director previously served as Caerus’

Vice President of Research and Development.

Name of Related Party

Relationship with the Company

President and Chief Executive Officer

$ 43,750  

12,000  

$ 67,750  

Except as set out below,

as of September 30, 2017, there have been no transactions, or currently proposed transactions, in which we were or are to be a

participant and the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end

for the last two completed fiscal years, and in which any of the following persons had or will have a direct or indirect material

any director or executive officer of our company;

any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;

any promoters and control persons;

any member of the immediate family (including spouse, parents, children, siblings and in laws) of any of the foregoing persons.

Effective June 15,

2015, Neil Reithinger was appointed as President, Treasurer, Secretary and a director, and is now the Company’s sole

director and officer.

Reithinger is the Founder and President of Eventus Advisory Group, LLC, a private, CFO-services

firm, and Eventus Consulting, P.C., a registered CPA firm (collectively “Eventus”).

Eventus provides accounting

and advisory services to the Company in connection with audit coordination, financial statement preparation and SEC filings.

The Company pays customary fees for these services.

During the years ended September 30, 2017 and 2016, the Company incurred

fees of $24,478 and $1,726, respectively, to Eventus and has $6,100 in related party accounts payable on the accompanying

balance sheet as of September 30, 2017.

In addition, Eventus paid certain expenses of the Company and is owed $6,100 recorded

as due to related party on the accompanying balance sheet as of September 30, 2017.

The office space used by the Company is

provided by Eventus at no charge.

Named Executive Officers and Current Directors

information regarding compensation for our named executive officers

and current directors, see “Executive

Compensation.”

For information regarding

compensation for our named executive officers and current directors, see “Executive Compensation.”

PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit and Accounting Fees

July 12, 2016, Eide Bailly LLP (“Eide Bailly”) resigned

as our independent registered public accounting firm.

2017, we engaged Dale Matheson Carr-Hilton Labonte LLP

(“DMCL”) as our new independent registered public

accounting firm.

The following table sets forth the fees billed to

the Company for professional services rendered by Eide Bailly and

DMCL, respectively, for each of the years ended September 30, 2016

$ 26,500  

Audit related

  Total

$ 26,500  

audit fees were paid for the audit services of our annual and

quarterly reports and issuing consents for our registration

Effective July 12, 2016,

EideBailly LLP (“EideBailly”) resigned as our independent registered public accounting firm.

On March 17, 2017, we

engaged Dale Matheson Carr-Hilton Labonte LLP (“DMCL”) as our new independent registered public accounting firm.

following table sets forth the fees billed to the Company for professional services rendered by EideBailly and DMCL, respectively,

for each of the years ended September 30, 2017 and 2016:

Audit related fees

All other fees

The audit fees were paid

for the audit services of our annual and quarterly reports and issuing consents for our registration statements.

Pre-Approval Policies and Procedures

board of directors preapproves all services provided by our

independent registered public accounting firm.

All of the above

services and fees were reviewed and approved by the board of

directors before the respective services were rendered.

of directors has considered the nature and amount of fees billed

and believes that the provision of services for activities

unrelated to the audit is compatible with maintaining their

respective independence.

directors pre approves all services provided by our independent registered public accounting firm.

All of the above services

and fees were reviewed and approved by the board of directors before the respective services were rendered.

directors has considered the nature and amount of fees billed and believes that the provision of services for activities

unrelated to the audit is compatible with maintaining their respective independence.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Plan of acquisition, reorganization, arrangement, liquidation or

Articles of Merger

(incorporated by reference to our Registration Statement on Form

8-K filed on September 5, 2013)

Agreement and Plan

of Merger (incorporated by reference to our Registration Statement

on Form 8-K filed on September 5, 2013)

Articles of Merger

(incorporated by reference to our Registration Statement on Form

8-K filed on March 20, 2014)

Agreement and Plan

of Merger (incorporated by reference to our Registration Statement

on Form 8-K filed on March 20, 2014)

Articles of Merger

(incorporated by reference to our Registration Statement on Form

8-K filed on December 30, 2014)

Agreement and Plan

of Merger (incorporated by reference to our Registration Statement

on Form 8-K filed on December 30, 2014)

Plan of acquisition, reorganization, arrangement, liquidation or succession

Articles of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on September 5, 2013)

Agreement and Plan of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on September 5, 2013)

Articles of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on March 20, 2014)

Agreement and Plan of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on March 20, 2014)

Articles of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on December 30, 2014)

Agreement and Plan of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on December 30, 2014)

(i) Articles of Incorporation;

and (ii) Bylaws

Incorporation (incorporated by reference to our Registration

Statement on Form S-1 filed on December 29, 2008)

Certificate of

Amendment to Articles of Incorporation (incorporated by reference

to our Registration Statement on Form 10-K filed on December 26,

Certificate of

Change (incorporated by reference to our Registration Statement on

Form 10-K filed on December 26, 2012)

(incorporated by reference to our Registration Statement on Form

S-1 filed on December 29, 2008)

Instruments Defining the Rights of Security Holders, Including

Specimen Common

Stock Certificate (incorporated by reference to our Registration

Statement on Form S-1 filed on December 29, 2008)

of Registrant’s 10% Senior Convertible Promissory Note

(incorporated by reference to our Registration Statement on Form

8-K filed on October 17, 2013)

Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1 filed on December 29, 2008)

Certificate of Amendment to Articles of Incorporation (incorporated by reference to our Registration Statement on Form 10-K filed on December 26, 2012)

Certificate of Change (incorporated by reference to our Registration Statement on Form 10-K filed on December 26, 2012)

Bylaws (incorporated by reference to our Registration Statement on Form S-1 filed on December 29, 2008)

Instruments Defining the Rights of Security Holders, Including Indentures

Specimen Common Stock Certificate (incorporated by reference to our Registration Statement on Form S-1 filed on December 29, 2008)

Form of Registrant’s 10% Senior Convertible Promissory Note (incorporated by reference to our Registration Statement on Form 8-K filed on October 17, 2013)

Letter Regarding Change in Certifying Accountant

Responsive Letter

from Eide Bailly LLP (incorporated by reference to our Registration

Statement on Form 8-K filed on July 18, 2016)

Responsive Letter from EideBailly LLP (incorporated by reference to our Registration Statement on Form 8-K filed on July 18, 2016)

Rule 13a-14(a)/15d-14(a) Certification

Certification under the Sarbanes-Oxley Act of 2002 of the Principal

Executive Officer

Section 302 Certification under the

Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting

Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer

Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer

Section 1350 Certification

Certification under the Sarbanes-Oxley Act of 2002 of the Principal

Executive Officer

Section 906 Certification under the

Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting

Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer

Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer

Interactive Data Files

Instance Document

Taxonomy Extension Schema Document

Taxonomy Extension Calculation Linkbase Document

Taxonomy Extension Definition Linkbase Document

Taxonomy Extension Label Linkbase Document

Taxonomy Extension Presentation Linkbase Document

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

Furnished herewith.

Pursuant to Rule 406T of Regulation S-T, the

Interactive Data Files on Exhibit 101 hereto are deemed not filed

or part of any registration statement or prospectus for purposes of

Sections 11 or 12 of the Securities Act of 1933, are deemed not

filed for purposes of Section 18 of the Securities and Exchange Act

of 1934, and otherwise are not subject to liability under those

to the requirements of Section 13 or 15(d) of the Securities

Exchange Act of 1934, the registrant has duly caused this report to

be signed on its behalf by the undersigned, thereunto duly

Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

Pursuant to the requirements of Section 13 or

15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

PEAK PHARMACEUTICALS

/s/ Neil Reithinger

Neil Reithinger

Executive Officer & Chief Financial Officer

September 12, 2017

Chief Executive Officer& Chief Financial Officer

January 12, 2018

PEAK PHARMACEUTICALS, INC.

CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

FINANCIAL STATEMENTS:

Balance Sheets

Statements of Operations

Statements of Shareholders’

Statements of Cash Flows

to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Shareholders’

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

Stockholders and Board of Directors of Peak Pharmaceuticals,

audited the accompanying consolidated balance sheet of Peak

To the Stockholders and Board of Directors

of Peak Pharmaceuticals, Inc.

We have audited the accompanying consolidated

balance sheets of Peak Pharmaceuticals, Inc.

(the “Company”) as of September 30, 2017 and 2016, and the related consolidated

statements of operations, stockholders' deficit and cash flows for the years then ended.

These consolidated financial statements

are the responsibility of the Company's management.

Our responsibility is to express an opinion on these financial statements based

on our audits.

We conducted our audits in

accordance with the standards of the Public Company Accounting Oversight Board (United States).

Those standards require that

we plan and perform an audit to obtain reasonable assurance whether the consolidated financial statements are free

of material misstatement.

The Company is not required to have, nor were we engaged to perform, an audit of its internal

control over financial reporting.

Our audits included consideration of internal control over financial reporting as a basis

for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on

the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

An audit also includes assessing the accounting principles used and significant estimates made by management, as well

as evaluating the overall financial statement presentation.

We believe that our audits provide a reasonable basis for

In our opinion, based on our audits,

these consolidated financial statements present fairly, in all material respects, the financial position of Peak

Pharmaceuticals, Inc.

(the “Company”) as of September

30, 2016 and the related consolidated statements of operations,

stockholders' deficit and cash flows for the year then ended.

financial statements are the responsibility of the Company's

Our responsibility is to express an opinion on these

financial statements based on our audit.

conducted our audit in accordance with the standards of the Public

Company Accounting Oversight Board (United States).

Those standards

require that we plan and perform an audit to obtain reasonable

assurance whether the financial statements are free of material

misstatement.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial

Our audit included consideration of internal control

over financial reporting as a basis for designing audit procedures

that are appropriate in the circumstances, but not for the purpose

of expressing an opinion on the effectiveness of the Company's

internal control over financial reporting.

Accordingly, we express

no such opinion.

An audit also includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial

An audit also includes assessing the accounting

principles used and significant estimates made by management, as

well as evaluating the overall financial statement presentation.

believe that our audit provides a reasonable basis for our

opinion, based on our audit, these consolidated financial

statements present fairly, in all material respects, the financial

position of Peak Pharmaceuticals, Inc.

as of September 30, 2016 and

the results of its operations and its cash flows for the year then

ended in conformity with accounting principles generally accepted

in the United States of America.

accompanying financial statements have been prepared assuming that

the Company will continue as a going concern.

As discussed in Note

3 to the consolidated financial statements, the Company has a

working capital deficiency, has incurred losses since inception,

and has negative cash flows from operations.

The Company requires

additional funds to meet its obligations and the costs of its

These factors raise substantial doubt about the

Company's ability to continue as a going concern.

plans in this regard are described in Note 3.

The consolidated

financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

consolidated financial statements of Peak Pharmaceuticals, Inc.

the year ended September 30, 2015 were audited by another auditor

who expressed an unmodified opinion on those financial statements

on January 12, 2016.

MATHESON CARR-HILTON LABONTE LLP

as of September 30, 2017 and 2016,and the results of its operations and its cash flows for the years

then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated

financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to

the consolidated financial statements, the Company has a working capital deficiency, has incurred losses since inception, and

has negative cash flows from operations.

The Company requires additional funds to meet its obligations and the costs of

its operations.

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

Management's plans in this regard are described in Note 2.

The consolidated financial statements do not include any

adjustments that might result from the outcome of this uncertainty.

DALE MATHESON

CARR-HILTON LABONTE LLP

PROFESSIONAL ACCOUNTANTS

Vancouver, Canada

January 12, 2018

Peak Pharmaceuticals, Inc.

Consolidated Balance Sheets

September 30,  

$ 1,304  

$ 201,656  

of discontinued operations held for sale

50,383  

September 30,

Current assets:

259,289  

assets, net of depreciation

assets, net of amortization

18,245  

$ 1,304  

$ 281,370  

and stockholders' deficit

   Accounts

$ 82,526  

$ 43,238  

   Accounts

payable - related parties

47,877  

27,000  

   Accrued

12,359  

39,151  

of discontinued operations held for sale

179,243  

current liabilities

142,762  

288,632  

142,762  

288,632  

Stockholders’

stock, $.00001 par value, 25,000,000 authorized, none issued or

stock, $0.0001 par value, 325,000,000 shares authorized, 78,363,562

shares issued and outstanding, as of September 30, 2016 and

paid in capital

4,855,566  

6,151,997  

Stockholders’

Liabilities and Stockholders’

$ 1,304  

$ 281,370  

accompanying footnotes are an integral part of these consolidated

financial statements.

Total current assets

Liabilities and stockholders' deficit

Accounts payable

Accounts payable - related parties

Convertible notes payable

Accrued liabilities

Total current liabilities

Total Liabilities

Stockholders’

Preferred stock, $.00001 par value, 25,000,000 authorized, none issued or outstanding

Common stock, $0.0001 par value, 325,000,000 shares authorized, 78,363,562 shares issued and outstanding, as of September 30, 2017 and September 30, 2016

Additional paid in capital

Accumulated deficit

Total Stockholders’

Total Liabilities and Stockholders’

The accompanying footnotes are an integral part

of these consolidated financial statements.

Peak Pharmaceuticals, Inc.

Consolidated Statements of Operations

Years Ended September 30,

expenses (recovery):

and administrative

$ 189,928  

$ 462,688  

18,974  

11,893  

based compensation

1,864,297  

operating expenses (recovery)

2,338,878  

income (loss)

1,087,529  

other expenses

from continuing operations

1,087,529  

from operations of discontinued Canna-Pet component (including gain

on disposal of $80,903 for the year ended September, 30,

74,706  

33,040  

and comprehensive income (loss)

$ 1,162,235  

$ (2,308,040 )

share information - basic and fully diluted:

   Basic

weighted average shares outstanding

78,363,562  

78,276,605  

   Diluted

weighted average shares outstanding

80,919,572  

78,276,605  

   Net

income (loss) per share - basic and diluted

$ 0.01  

   Net

income (loss) per share - basic and diluted

$ 0.00  

accompanying footnotes are an integral part of these condensed

consolidated financial statements.

PEAK PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDER’

September 30, 2014

78,163,562  

$ 7,816  

$ 4,287,720  

$ (3,859,055 )

$ 436,481  

issued for services to non-employees

200,000  

35,980  

36,000  

based compensation

1,828,297  

September 30, 2015

78,363,562  

6,151,997  

based compensation, net of forfeitures

1,162,235  

For the Twelve Months Ended

September 30,

78,363,562  

$ 7,836  

$ 4,855,566  

$ (5,004,860 )

accompanying footnotes are an integral part of these condensed

consolidated financial statements.

Operating expenses:

General and administrative

Depreciation and amortization

Stock based compensation

Total operating expenses

Operating income (loss)

Other income expenses

Interest expense

Change in fair value of convertible debt

Total other expenses

Income (loss) from continuing operations

Income from operations of discontinued Canna-Pet component (Including gain on disposal of $80,903 for the year ended September 30, 2016)

Net income (loss)

Per share information:

Basic weighted average shares outstanding

Diluted weighted average shares outstanding

Continuing operations:

Net income (loss) per share - basic and diluted

Discontinued operations:

Net income (loss) per share - basic and diluted

The accompanying footnotes are an integral part

of these consolidated financial statements.

Peak Pharmaceuticals, Inc.

Consolidated Statement of Stockholders' Deficit

For the Years Ended September 30, 2017 and

Additional Paid

Balance, September 30, 2015

Equity based compensation, net of forfeitures

Balance, September 30, 2016

Balance, September 30, 2017

The accompanying footnotes are an integral part

of these consolidated financial statements.

Peak Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

Years Ended September 30,

flows from operating activities

income (loss)

$ 1,162,235  

$ (2,308,040 )

Adjustment to reconcile net loss to net cash used in operating

18,245  

11,894  

issued for services to non-employee

36,000  

based compensation

1,828,297  

in operating assets and liabilities

of disconinued operations held for sale

50,383  

of disconinued operations held for sale

179,243  

payable and accrued liabilities

38,855  

payable - related parties

47,877  

16,107  

cash used in operating activities

flows from investing activities

cash provided by investing activities

change in cash

beginning of period

201,656  

451,431  

end of period

$ 1,304  

$ 201,656  

disclusre of cash flow information

paid for interst

$ 2,250  

paid for income taxes

accompanying footnotes are an integral part of these condensed

consolidated financial statements.

For the Twelve Months Ended September 30, 2017

Cash flows from operating activities:

Net income (loss)

Adjustment to reconcile net loss to net cash used in operating activities:

Stock based compensation

Depreciation and amortization

Change in fair value of convertible debt

Change in operating assets and liabilities:

Accounts payable and accrued liabilities

Accounts payable - related parties

Accrued Interest

Disposal of discontinued operations

Net cash used in operating activities

Cash flows from financing activities:

Proceeds from issuance of convertible notes payable

Net cash provided by financing activities

Net change in cash

Cash, beginning of period

Cash, end of period

Supplemental disclosure of cash flow information

Cash paid for interest

Cash paid for income taxes

The accompanying footnotes are an integral

part of these consolidated financial statements.

PEAK PHARMACEUTICALS, INC.

1 unchanged sentence

YEAR ENDED SEPTEMBER 30, 2017

NOTE 1 - NATURE OF OPERATIONS

Company was incorporated in Nevada on December 18, 2007.

number of name changes, we again changed our name to Peak

Pharmaceuticals, Inc.

NOTE 1 –

NATURE OF OPERATIONS, BASIS

OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company was incorporated in Nevada on

December 18, 2007.

After numerous name changes, the Company changed its name to Peak Pharmaceuticals, Inc.

on December 23,

This name was

consistent with our business operations and plans relating to

development, manufacturing and marketing of hemp-based

nutraceutical and supplement products for the human and animal

health markets.

On October 1, 2015, we discontinued certain

operations of the Company.

this report, the terms “our,”

“we,”

“us,”

and the “Company”

refer to Peak

Pharmaceuticals, Inc.

and its subsidiary, Peak BioPharma

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING

This name was consistent with our business operations and plans relating to development, manufacturing and marketing of

hemp-based nutraceutical and supplement products for the human and animal health markets.

On October 1, 2015, we discontinued

certain operations of the Company.

Throughout this report, the terms “our,”

“we,”

“us,”

and the “Company”

refer to Peak Pharmaceuticals, Inc.

and its subsidiary, Peak

BioPharma Corp.

Basis of Presentation

accompanying audited consolidated financial statements of the

Company have been prepared in accordance with accounting principles

generally accepted in the United States of America (“U.S.

GAAP”).

The accompanying audited consolidated financial

statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of

America (“U.S.

GAAP”).

Basis of Consolidation

consolidated financial statements include the financial statements

of the Company and our wholly owned subsidiary Peak BioPharma Corp.

All inter-company balances and transactions among the companies

have been eliminated upon consolidation.

The consolidated financial statements include

the financial statements of the Company and our wholly owned subsidiary Peak BioPharma Corp.

All inter-company balances and transactions

among the companies have been eliminated upon consolidation.

Use of Estimates

preparation of consolidated financial statements in conformity with

GAAP requires management to make estimates and assumptions

that affect the amounts of assets and liabilities and disclosure of

contingent assets and liabilities at the date of

the consolidated financial statements and the reported amounts

of expenses during the reporting period.

Actual results could

differ from those estimates.

estimates made in connection with the accompanying consolidated

financial statements include the estimate of valuation of

stock-based compensation, and valuation allowances against net

deferred tax assets.

Revenue Recognition and Cost of Sales

recognize revenue from products sold when there is persuasive

evidence of an arrangement, delivery has occurred or services have

been rendered, the sales price is determinable and collection is

reasonably assured.

Revenue represents the sale of products and

related shipping fees.

Revenue is included in income from

operations of BioPharma’s discontinued CannaPet

component, Cost of sales includes the cost of products sold and

shipping costs attributable to the revenue.

Cost of sales is

included in income from operations of BioPharma’s

discontinued CannaPet component.

The preparation of consolidated financial statements

in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported

amounts of expenses during the reporting period.

Actual results could differ from those estimates.

Significant estimates made in connection with

the accompanying consolidated financial statements include the estimate of valuation of stock-based compensation, and valuation

allowances against net deferred tax assets.

Financial Instruments

Our financial instruments consist of cash,

accounts payable and convertible notes.

The carrying values of these instruments approximate fair value due to the short-term maturities

of these instruments.

Fair Value Measurements

Financial Accounting Standards Board (“FASB”)

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 - Quoted 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.

Level 2 - Pricing 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

Level 3 - Significant 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’s financial instruments consist

of cash, accounts payable and convertible notes.

The estimated fair value of these financial instruments approximates their carrying

amounts due to the short-term nature of these instruments.

Certain non-financial assets are measured at

fair value on a nonrecurring basis.

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 and other intangible assets.

Long-lived Assets

On a periodic basis, management assesses whether

there are any indicators that the value of our long-lived assets may be impaired.

An asset’s value may be impaired only if

management’s estimate of the aggregate future cash flows, on an undiscounted basis, to be generated by the asset are less

than the carrying value of the asset.

Our only long-lived assets are our

website and computer equipment.

If impairment has occurred, the loss is measured as the excess of the carrying amount of the

asset over its fair value.

Our estimates of aggregate future cash flows expected to be generated by our long-lived asset are

based on several assumptions that are subject to economic and market uncertainties.

As these factors are difficult to

predict, and are subject to future events that may alter management’s assumptions, the future cash flows estimated by

management in their impairment analyses may not be achieved.

During the years ended September 30, 2017, we charged $nil (2016

- $18,974) to amortization expense for the impairment of our website.

Loss Per Share

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 year ended September 30, 2017, any equivalents would have been

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

Cash and Cash Equivalents

Company considers all highly liquid investments with an original

maturity of three months or less when purchased to be cash

As of September 30, 2016, the Company does not have

any cash equivalents.

which is included in assets of discontinued operations held for

sale, is stated at the lower of cost or market on a first in first

consists of computer equipment and is recorded at cost less

accumulated depreciation.

The Company’s equipment is

amortized on a straight-line basis over its estimated

Net Loss Per Share of Common Stock

Company follows 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 and no warrants outstanding.

September 30, 2015, the Company had 7,791,000 stock options

outstanding and no warrants outstanding.

taxes are provided based upon the liability method of accounting

pursuant to the ASC Topic 740

Income Taxes .

Under this approach, deferred income taxes are

recorded to reflect the tax consequences in future years of

differences between the tax basis of assets and liabilities and

their financial reporting amounts at each year-end.

allowance is recorded against the deferred tax asset if management

does not believe the Company has met the “more likely than

standard to allow recognition of such an

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.

Income taxes are provided based upon the liability

method of accounting pursuant to the ASC Topic 740 Income Taxes .

Under this approach, deferred income taxes are recorded

to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial

reporting amounts at each year-end.

A valuation allowance is recorded against the deferred tax asset if management does not believe

the Company has met the “more likely than not”

standard to allow recognition of such an asset.

Equity Based Payments

based payments are accounted for in accordance with ASC Topic 718, Compensation –

Compensation .

The compensation cost is based upon fair value

of the equity instrument at the date grant.

The fair value has been

estimated using the BlackSholes option pricing model.

addition, payments made to nonemployees are accounted for in

accordance with ASC Topic 505,

EquityBased payments to

NonEmployees.

Fair Value Measurements

Accounting Standards Board (“FASB”) 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:

- Quoted 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.

- Pricing inputs are other than quoted prices in active markets,

but are either directly or indirectly observable as of the reported

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.

- Significant 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.

Company’s financial instruments consist of cash, accounts

receivable, and accounts payable.

The estimated fair value of these

financial instruments approximate their carrying amounts due to the

short-term nature of these instruments.

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

and other intangible assets.

Equity based payments are accounted for

in accordance with ASC Topic 718, Compensation –

Stock Compensation .

The compensation cost is based upon fair

value of the equity instrument at the date grant.

The fair value has been estimated using the Black Scholes option pricing

In addition, payments made to non-employees are accounted for in accordance with ASC Topic 505, Equity-Based payments to Non-Employees.

Intangible Asset

intangible asset is our website that was being amortized over the

expected useful life which we estimated to be three years.

the year ended September 30, 2016, it was determined the website is

fully impaired as it is no longer used and as such we expensed the

remaining balance to amortization expense.

Amortization expense

charged to operations for the twelve-month period ended September

30, 2016 and 2015, was $18,245 and $11,894,

The intangible asset is our website that was

being amortized over the expected useful life which we estimated to be three years.

During the year ended September 30, 2016, it

was determined the website was fully impaired as it was no longer used and as such we expensed the remaining balance to amortization

Amortization expense charged to operations for the twelve-month period ended September 30, 2017 and 2016, was $nil and

$18,974, respectively.

Long-lived Assets

periodic basis, management assesses whether there are any

indicators that the value of our long-lived assets may be impaired.

An asset’s value may be impaired only if management’s

estimate of the aggregate future cash flows, on an undiscounted

basis, to be generated by the asset are less than the carrying

value of the asset.

only long lived assets are our website and computer equipment.

impairment has occurred, the loss is measured as the excess of the

carrying amount of the asset over its fair value.

Our estimates of

aggregate future cash flows expected to be generated by our

long-lived asset are based on several assumptions that are subject

to economic and market uncertainties.

As these factors are

difficult to predict, and are subject to future events that may

alter management’s assumptions, the future cash flows

estimated by management in their impairment analyses may not be

During the twelve months ended September 30, 2016, we

charged $18,245 to amortization expense for the impairment of our

Recently Issued Accounting Pronouncements

time to time, new accounting pronouncements are issued that we

adopt as of the specified effective date.

We believe that the

impact of recently issued standards that are not yet effective may

have an impact on our results of operations and financial position.

The FASB issued Accounting Standards Update (“ASU”)

201415 Presentation of Financial Statements 

Concern (Sub Topic 20540) issued August 27, 2014 defines

management’s responsibility to evaluate whether there is

substantial doubt about an organization’s ability to continue

as a going concern.

The additional disclosure requirement is

effective after December 15, 2016 and will be evaluated as to

impact and implemented accordingly.

addition, the FASB issued ASU No.

201409 (Revenue from

Contracts with Customers), which is effective for annual reporting

periods beginning after December 15, 2016.

We have not yet assessed

the impact, if any, of adopting this standard.

NOTE 3 –

GOING CONCERN AND MANAGEMENT’S LIQUIDITY

September 30, 2016, and 2015, the Company had an accumulated

deficit of $5,004,860 and $6,167,095 respectively.

The Company has

a working capital deficiency of $141,458.

During the years ended

September 30, 2016 and 2015, the Company 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.

From time to time, new accounting pronouncements

are issued that we adopt as of the specified effective date.

We believe that the impact of recently issued standards that are not

yet effective may have an impact on our results of operations and financial position.

In February 2016, the FASB issued ASU No.

Leases , to improve financial reporting about leasing transactions.

This ASU will require organizations that lease assets

(“lessees”) to recognize a lease liability and a right-of-use asset on its balance sheet for all leases with terms

of more than twelve months.

A lease liability is a lessee’s obligation to make lease payments arising from a lease, measured

on a discounted basis and a right-of-use asset represents the lessee’s right to use, or control use of, a specified asset

for the lease term.

The amendments in this ASU simplify the accounting for sale and leaseback transactions primarily because lessees

must recognize lease assets and lease liabilities.

This ASU leaves the accounting for the organizations that own the assets leased

to the lessee (“lessor”) largely unchanged except for targeted improvements to align it with the lessee accounting

model and Topic 606, Revenue from Contracts with Customers.

2016-02 is effective for reporting periods beginning after

December 15, 2018.

We do not expect the adoption of this guidance to have a material impact on our 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.

requires companies to apply the requirements retrospectively, modified retrospectively, or prospectively depending on the amendment(s)

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

This guidance has no effective date as yet.

The Company is currently evaluating the impact 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 flows.

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.

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.

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.

Company is currently evaluating the impact of adopting this guidance.

NOTE 2 –

GOING CONCERN AND

MANAGEMENT’S LIQUIDITY PLANS

As of September 30, 2017,the Company had

an accumulated deficit of $5,056,087 and aworking capital deficiency of $192,685.

During the years ended September 30, 2017

and 2016, the Company used cash in operating activities of $18,314 and $200,352, respectively.

These conditions raise

substantial doubt about the Company’s ability to continue as a going concern.

The Company recognizes it will need to

raise additional capital in order to fund operations, and meet its

payment obligations.

raise additional capital in order to fund operations, and meet its payment obligations.

There is no assurance that additional

financing will be available when needed or that management will be

able to obtain financing on terms acceptable to the Company and

whether the Company will generate revenues, become profitable and

generate positive operating cash flow.

If the Company is unable to

raise sufficient additional funds on favorable terms, it will have

to develop and implement a plan to further extend payables and to

raise capital through the issuance of debt or equity on less

favorable terms until sufficient additional capital is raised to

support further operations.

There can be no assurance that such a

plan will be successful.

the accompanying consolidated financial statements have been

prepared in conformity with U.S.

GAAP, which contemplates

continuation of the Company as a going concern and the realization

of assets and the satisfaction of liabilities in the normal course

The carrying amounts of assets and liabilities

presented in the consolidated financial statements do not

necessarily represent realizable or settlement values.

consolidated financial statements do not include any adjustments

that might result from the outcome of this

NOTE 4 –

financing will be available when needed or that management will be able to obtain financing on terms acceptable to the

Company and whether the Company will generate revenues, become profitable and generate positive operating cash flow.

Company is unable to raise sufficient additional funds on favorable terms, it will have to develop and implement a plan to

further extend payables and to raise capital through the issuance of debt or equity on less favorable terms until sufficient

additional capital is raised to support further operations.

There can be no assurance that such a plan will be

Accordingly, the accompanying consolidated

financial statements have been prepared in conformity with U.S.

GAAP, which contemplates continuation of the Company as a going

concern and the realization of assets and the satisfaction of liabilities in the normal course of business.

The carrying amounts

of assets and liabilities presented in the consolidated financial statements do not necessarily represent realizable or settlement

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 –

RELATED PARTY TRANSACTIONS

Parties, which can be corporations or individuals,

are considered to be related if they have the ability, directly or indirectly, to control the other party or exercise significant

influence over the other party in making financial and operating decisions.

Companies are also considered to be related if they

are subject to common control or common significant influence.

Accounts payable –

related parties are

the amounts payable to officers and directors of the Company for reimbursement of expenses they incurred on behalf of the Company

as well as Directors’

fees and salaries.

Included in general and administrative expense for the years ended September 30,

2017 and September 30, 2016 are $23,680 and $24,000 of consulting fees, $nil and $24,000 of Directors’

fees, and $nil and

$48,355 of salaries to be paid to officers and directors of the Company, respectively.

Included in accounts payable for the years

ended September 30, 2017 and September 30, 2016 are $24,478 and $1,726 of amounts due to a company controlled by an officer of

the Company, respectively.

NOTE 4 –

CONVERTIBLE NOTES PAYABLE

Loan with Trius Holdings Limited

On March 17, 2017, we entered into an agreement

with Trius Holdings Limited (“Trius”).

Pursuant to the terms of the agreement, Trius acquired a 12% convertible note

with an aggregate face value of $10,000.

The note matures in one year.

The holder of this note is entitled, at its option, to convert

at the date all or a part of the principal outstanding into shares of the Company’s common stock.

This would be at a price

equal to a 20% discount to the closing price of the common stock, on the date of the lender’s notice of conversion, subject

to a floor of $0.01.

Loan with SukhAthwal

On March 30, 2017, we entered into an agreement

with SukhAthwal (“Athwal”).

Pursuant to the terms of the agreement, Athwal acquired a 12% convertible note with an

aggregate face value of $10,000.

The note matures in one year.

The holder of this note is entitled, at its option, to convert at

the date all or a part of the principal outstanding into shares of the Company’s common stock.

This would be at a price equal

to a 20% discount to the closing price of the common stock, on the date of the lender’s notice of conversion, subject to

a floor of $0.01.

Total accrued interest on the above notes

was $1,240 as of September 30, 2017 and is reflected in accrued expenses on the accompanying balance sheet.

recorded a loss of $5,000 based on the change in fair value.

NOTE 5 –

STOCKHOLDERS’

The Company had no preferred or common stock

transactions during the years ended September 30, 2017 and 2016

NOTE 6 - OPTIONS

No stock options were granted during the years ended September 30,

2017 and 2016.

As per guidance in the ASC Topic 718, Compensation

- Stock Compensation (“ASC 718”), we are amortizing the fair value of the options on a straight-line basis over the

requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards (graded

vesting attribution method).

During the year ended September 30, 2016, officers

holding 4,500,000 options resigned and the options were no longer exercisable.

In accordance with ASC 718, previously expensed

equity based compensation which requisite service will not be provided and are forfeited and reversed.

As a result, previously

recorded equity based compensation of $1,296,431 was reversed and credited to equity based compensation expense during the year

ended September 30, 2016.

The following is a summary of outstanding stock

options issued to employees and directors as of September 30, 2017:

Exercise Price per

Value at Date

Outstanding October 1, 2015

0.0067 - $0.20

Outstanding September 30, 2016 and September 30, 2017

The following is a summary of outstanding stock

options issued to non-employees, excluding directors, as of September 30, 2017:

Exercise Price per

Value at Date

Outstanding September 30, 2017 and 2016

Total equity based compensation for the years

ended September 30, 2017 and 2016 was $nil and ($1,296,431), respectively.

NOTE 7 –

DISCONTINUED OPERATIONS

upon recent regulatory activity related to imposition of

restrictions and limitations on the sale of hemp-based health

products for pets, we elected to terminate our license agreement

with the Licensor, effective as of October 1, 2015, and to cease

all operations relating to sale of hemp-based products for

October 12, 2015, we entered into an agreement for the termination

(“Termination Agreement”) of the License Agreement,

effectively selling the discontinued operations.

The Termination

Agreement contained the following provisions:

●            

Termination of

The parties agreed to terminate the License Agreement

effective as of October 1, 2015, this termination was made by

mutual agreement of the parties pursuant to and in accordance with

the provisions of the License Agreement.

●            

Based upon recent regulatory activity related

to imposition of restrictions and limitations on the sale of hemp-based health products for pets, the Company elected to terminate

our license agreement with the Licensor, effective as of October 1, 2015, and to cease all operations relating to sale of hemp-based

products for pets.

On October 12, 2015, the Company entered into

an agreement for the termination (“Termination Agreement”) of the License Agreement, effectively selling the discontinued

The Termination Agreement contained the following provisions:

Termination of License:

parties agreed to terminate the License Agreement effective as of October 1, 2015, this termination was made by mutual

agreement of the parties pursuant to and in accordance with the provisions of the License Agreement.

Return of Licensed

Intellectual Property:

We agreed to return all Licensed

Intellectual Property to the Licensor, and our right to use all, or

any portion, of the Licensed Intellectual Property ceased effective

as of October 1, 2015, pursuant to the terms of the License

Agreement, the Licensed Intellectual Property included the brand

name “Canna-Pet”

and certain related intellectual

property, including, but not limited, trademarks and copyrights,

formulations, recipes, production processes and systems, websites,

domain names, customer lists, supplier lists trade secrets and

know- how, and other related intellectual property.

●            

Return of Other

In addition to return of the Licensed Intellectual

Property, we agreed to transfer to Licensor all product inventory,

Colorado hemp with permits and authorization, all

production/fulfillment contracts, all e-commerce accounts and

processing, all non-disclosure and research agreements and any and

all other property in our possession which was used by us in the

conduct of our business related to production and sale of medical

cannabis products for pets made from hemp and low-THC cannabis

●            

Office Space and

In conjunction with the execution of the Termination

Agreement, we granted the Licensor the right to use our office

space, for the three-month period from October 1, 2015 through

December 31, 2015, on a rent-free basis.

●            

We agreed to return all Licensed Intellectual Property to the Licensor, and our right to use all, or

any portion, of the Licensed Intellectual Property ceased effective as of October 1, 2015, pursuant to the terms of the

License Agreement, the Licensed Intellectual Property included the brand name “Canna-Pet”

and certain related

intellectual property, including, but not limited, trademarks and copyrights, formulations, recipes, production processes and

systems, websites, domain names, customer lists, supplier lists trade secrets and know- how, and other related intellectual

Return of Other Property:

addition to return of the Licensed Intellectual Property, we agreed to transfer to Licensor all product inventory, Colorado

hemp with permits and authorization, all production/fulfillment contracts, all e-commerce accounts and processing, all

non-disclosure and research agreements and any and all other property in our possession which was used by us in the conduct

of our business related to production and sale of medical cannabis products for pets made from hemp and low-THC cannabis

Office Space and Equipment:

conjunction with the execution of the Termination Agreement, we granted the Licensor the right to use our office space, for

the three-month period from October 1, 2015 through December 31, 2015, on a rent-free basis.

Consideration:

consideration for the cancellation of the License Agreement and the

return of other property, as described above, the Licensor agreed

to waive payment by us and to release us from liability for payment

of any and all unpaid royalties, invoices and other amounts which

were otherwise currently due and payable by us to Licensor for

sales of Canna-Pet products for all periods through and including

September 30, 2016.

●            

October 15, 2015, we forwarded to the Licensor all payments

received by us after September 30, 2015 (net of amounts received by

us for taxes, duties, governmental charges, freight or shipping

charges, and the like) for Canna- Pet products sold on or after

consideration for the cancellation of the License Agreement and the return of other property, as described above, the

Licensor agreed to waive payment by us and to release us from liability for payment of any and all unpaid royalties, invoices

and other amounts which were otherwise currently due and payable by us to Licensor for sales of Canna-Pet products for all

periods through and including September 30, 2016.

On October 15,

2015, we forwarded to the Licensor all payments received by us after September 30, 2015 (net of amounts received by us for

taxes, duties, governmental charges, freight or shipping charges, and the like) for Canna- Pet products sold on or after

October 1, 2015.

following is a summary of the net assets sold as initially

determined at Septembers 30, 2015:

September 30,

$ 41,705  

$ 50,383  

124,396  

39,506  

15,341  

179,243  

$ 128,860  

income from discontinued operations presented in the statements of

operations consists of the following for the twelve-month periods

ended September 30, 2016 and 2015, respectively:

$ 1,039,393  

Cost of goods

administrative expenses, including depreciation and

Gain on disposal of

discontinued operations

80,903  

discontinued operations

$ 74,706  

$ 33,040  

NOTE 5 –

The following is a summary of the net assets sold as initially determined

at October 15, 2015:

October 15, 2015

Accounts payable

Royalties payable

Accrued liabilities

Total liabilities

Net assets sold

The income from discontinued operations presented

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

Cost of goods sold

General and administrative expenses, including depreciation and amortization

Interest expense

Gain on disposal of discontinued operations

Income from discontinued operations

NOTE 8 –

INTANGIBLE ASSETS

assets at September 30, 2016 and September 30, 2015, consist of

website costs of $35,000, less accumulated amortization of $35,000

and $16,755, respectively.

The website costs have been fully

NOTE 6 –

RELATED PARTY TRANSACTIONS

which can be corporations or individuals, are considered to be

related if they have the ability, directly or indirectly, to

control the other party or exercise significant influence over the

other party in making financial and operating decisions.

are also considered to be related if they are subject to common

control or common significant influence.

payable –

related parties are the amounts payable to officers

and directors of the Company for reimbursement of expenses they

incurred on behalf of the Company as well as Directors’

and salaries.

Included in general and administrative expense for

the years ended September 30, 2016 and September 30, 2015 are

$24,000 and $94,647 of consulting fees, $24,000 and $0 of

Directors’

fees, and $46,355 and $187,409 of salaries to paid

to officers and directors of the Company,

respectively.

NOTE 7 –

Intangible assets at September 30, 2017 and

September 30, 2016, consist of website costs of $35,000, less accumulated amortization of $35,000.

The website costs have been

fully amortized.

NOTE 9–

COMMITMENTS AND CONTINGENCIES

no commitments or contingencies as of September 30, 2016.

Commitments that existed at September 30, 2015 ceased to exist

during the year ended September 30, 2016.

NOTE 8 –

no preferred or common stock transactions during the year ended

September 30, 2016.

December 22, 2014, pursuant to a Placement Agent Agreement, we

issued 200,000 restricted shares of our common stock.

were valued at $36,000, $0.18 per share, the trading value, and

charged to stock based compensation.

NOTE 9 - OPTIONS

stock options were granted during the years ended September 30,

2016 and 2015.

guidance in the ASC Topic 718, Compensation - Stock Compensation

(“ASC 718”), we are amortizing the fair value of the

options on a straight-line basis over the requisite service period

for each separately vesting portion of the award as if the award

was, in-substance, multiple awards (graded vesting attribution

the year ended September 30, 2016, officers holding 4,500,000

options resigned and the options were no longer exercisable.

accordance with ASC 718, previously expensed equity based

compensation which requisite service will not be provided and are

forfeited and reversed.

As a result, previously recorded equity

based compensation of $1,296,431 was reversed and credited to

equity based compensation expense during the year ended September

following is a summary of outstanding stock options issued to

employees and directors as of September 30, 2016:

of Options

October 1, 2014

7,416,000 

September 30, 2015

7,416,000 

September 30, 2016

2,916,000 

following is a summary of outstanding stock options issued to

non-employees, excluding directors, as of September 30,

of Options

October 1, 2014

375,000 

September 30, 2015

375,000 

September 30, 2016

375,000 

equity based compensation for the twelve months ended September 30,

2016 and 2015 was ($1,296,431) and $1,864,297,

respectively.

NOTE 9 –

We have no commitments or contingencies as

of September 30, 2017 and 2016.

NOTE 10 –

DEFERRED INCOME TAX

income tax provision for the years ended September 30, 2016 and

2015 is summarized below:

valuation allowance

70,400  

170,100  

provision for income taxes differs from the amount computed by

applying the statutory federal income tax rate before provision for

income taxes.

The sources and tax effect of the differences are as

provision –

State income taxes,

net of federal benefit

Effect of net

operating loss

deferred income tax assets at September 30, 2016 and 2015 were

$382,200 and $311,800, respectively.

requires a valuation allowance to reduce the deferred tax assets

reported if, based on the weight of evidence, it is more than

likely than not that some portion or all of the deferred tax assets

will not be recognized.

After consideration of all the evidence,

both positive and negative, management has determined that a full

valuation allowance at September 30, 2016 and 2015, respectively,

is necessary to reduce the deferred tax assets to the amount that

more likely than not be realized.

The change in valuation allowance

for the current year is $70,400.

September 30, 2016, we have a net operating loss carry forward of

approximately $1,030,100 (2015:

The loss will be

available to offset future taxable income.

If not used, this carry

forward will expire in 2036.

are open statutes of limitations for taxing authorities in federal

and state jurisdictions to audit our tax returns from 2011 through

the current period.

Our policy is to account for income tax related

interest and penalties in income tax expense in the statement of

There have been no income tax related interest or

penalties assessed or recorded.

prescribes a recognition threshold and measurement attribute for

the financial statement recognition and measurement of a tax

position taken or expected to be taken in a tax return.

pronouncement also provides guidance on derecognition,

classification, interest and penalties, accounting in interim

periods, disclosure, and transition.

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

and penalties associated with tax positions.

As of September 30,

2016 we did not have any significant unrecognized uncertain tax

NOTE 10 –

Deferred income tax provision for the years

ended September 30, 2017 and 2016 is summarized below:

Total deferred

Increase in valuation allowance

The provision for income taxes differs from the amount computed

by applying the statutory federal income tax rate before provision for income taxes.

The sources and tax effect of the differences

are as follows:

Income tax provision –

State income taxes, net of federal benefit

Effect of net operating loss

The net deferred income tax assets at September

30, 2017 and 2016 were approximately $401,200 and $382,200, respectively.

ASC 740 requires a valuation allowance to reduce

the deferred tax assets reported if, based on the weight of evidence, it is more than likely than not that some portion or all

of the deferred tax assets will not be recognized.

After consideration of all the evidence, both positive and negative, management

has determined that a full valuation allowance at September 30, 2017 and 2016, respectively, is necessary to reduce the deferred

tax assets to the amount that is more likely than not to be realized.

The change in valuation allowance for the current year is

As of September 30, 2017, we have a net

operating loss carry forwards of approximately $1,081,300 (2016:

The loss will be available to offset future

taxable income.

If not used, the secarry forwards will expire in varying amounts through 2037.

There are open statutes of limitations for

taxing authorities in federal and state jurisdictions to audit our tax returns from 2011 through the current period.

is to account for income tax related interest and penalties in income tax expense in the statement of operations.

There have been

no income tax related interest or penalties assessed or recorded.

ASC 740 prescribes a recognition threshold

and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken

in a tax return.

This pronouncement also provides guidance on derecognition, classification, interest and penalties, accounting

in interim periods, disclosure, and transition.

For the years ended September 30, 2017 and

2016 we did not have any interest and penalties associated with tax positions.

As of September 30, 2017, we did not have any significant

unrecognized uncertain tax positions.

NOTE 11 –

RECLASSIFICATION OF COMPARATIVE

prior year amounts included in the consolidated statements of

operations have been reclassified to conform to the current year

presentation.

Such reclassifications had no impact on previously

reported net loss.

Certain prior year amounts included in the

consolidated statements of operations have been reclassified to conform to the current year presentation.

Such reclassifications

had no impact on previously reported net loss.

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 9A. Controls and Procedures