Retrieve Medical Holdings, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation 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 committee. 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; however, 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 As 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. 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. 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. 20 The 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: (i) lack of a functioning audit committee; (ii) inadequate segregation of duties consistent with control objectives; and (iii) ineffective controls over period-end financial disclosure and reporting processes. The 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. 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 Reporting 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 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: (i) 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 reporting; and (iii) 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. ITEM 9B. OTHER INFORMATION None. 21 PART III ITEM 10. 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. Name Position Held with Company Age Date First Elected or Appointed Neil Reithinger (1) Chief Executive Officer, Chief Financial Officer and Director 47 April 6, 2016 Notes (1) 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. Tinter. 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 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 employed . Neil Reithinger – Chief Executive Officer, Chief Financial Officer and Director Mr. 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. since August 2014. Mr. 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. Family Relationships Being our sole officer and director, there are no family relationships that are relevant. Significant Employees We do not have other significant employees. Committees of Board of Directors 22 There are currently no committees of the Board of Directors. Term of Office 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 We are not aware of any conflicts of interest with our directors and officers. Director Independence 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 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 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. ITEM 11. EXECUTIVE COMPENSATION Summary Compensation 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, 2017 that received annual compensation during the fiscal year ended September 30, 2017 in excess of $100,000. 23 Name and Principal Position Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Nonequity Incentive Plan Compensa- tion ($) Change in Pension Value and Non Qualified Deferred Compensation Earnings ($) All Other Compensa tion ($) Total ($) Neil Reithinger CEO & CFO 1 2017 2016 - - - - - - - - - - - - - - - - Soren Mogelsvang, CEO 1 2017 2016 - $ 43,750 - - - - - - - - - - - - - $ 43,750 Arnold Tinter, CFO 1 2017 2016 - - - - - - - - - - - - - - - - Notes (1) During the year ended September 30, 2016, Mr. Mogelsvang & Mr. 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. Mr. 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 Mr. Reithinger, our sole officer and director. The Company pays customary fees for these services. During the year ended September 30, 2017, we incurred fees of $24,478 to Eventus. Outstanding Equity Awards at Fiscal Year End The following table summarizes the outstanding equity awards held by each named executive officer of our company as of September 30, 2017. Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options Unexercisable (#) Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expir- ation Date Number of Shares or Units of Stock that have not Vested (#) Market Value of Shares or Units of Stock that have not Vested (#) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have not Vested ($) Neil Reithinger - - - - - - - - - 24 Retirement or Similar Benefit Plans There are no arrangements or plans in which we provide retirement or similar benefits for our directors or executive officers. Resignation, Retirement, Other Termination, or Change in Control Arrangements We have no contract, agreement, plan or arrangement, whether written or unwritten, that provides for payments to our directors or executive officers at, following, or in connection with the resignation, retirement or other termination of our directors or executive officers, or a change in control of our company or a change in our directors’ or executive officers’ responsibilities following a change in control. Director Compensation The following table sets forth for each director, certain information concerning their compensation for the year ended September 30, 2017. Fees Earned or Paid in Cash ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) All other Compensation ($) Total ($) Neil Reithinger - - - - - - - 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. ITEM 12. 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. Beneficial 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. 25 Security Ownership of Certain Beneficial Holders Title of Class Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent of Class (1)(2) Common Stock Aaron Gelber 14645 Sulky Court Run Mokesville, VA 20181 14,939,999 Direct 19.06% Common Stock Iris Yachin 7 Orchard Way North Potomac, MD 20854 14,939,999 Direct 19.06% Common Stock Talal Yassin 3040 Rosebery Ave West Vancouver BC, Canada V7V 349 4,871,319 Direct 6.22% Total Beneficial Holders as a Group 34,751,317 Direct 44.34% Security Ownership of Management Title of Class Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent of Class (1)(2) Common Stock Neil Reithinger 14201 N Hayden Road, Suite A-1 Scottsdale, AZ 85260 - - Common Stock Directors & Executive Officers as a group (1 person) - - Notes (1) Percentages are based upon 78,363,567 shares of our common stock issued and outstanding as of September 30, 2017. (2) 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. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Transactions with Related Persons 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 interest: 26 • 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; and • 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. Mr. 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 For information regarding compensation for our named executive officers and current directors, see “Executive Compensation.” ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Audit and Accounting Fees 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. The 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: DMCL EIDE BAILLY Services 2017 2016 2017 2016 Audit fees $ 18,000 $ — $ — $ 26,500 Audit related fees — — — — Tax fees — — — — All other fees — — — — Total fees $ 18,000 $ — $ — $ 26,500 Audit 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 Our board of 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. Our board 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. 27 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES Exhibit Number Description (2) Plan of acquisition, reorganization, arrangement, liquidation or succession 2.1 Articles of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on September 5, 2013) 2.2 Agreement and Plan of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on September 5, 2013) 2.1 Articles of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on March 20, 2014) 2.2 Agreement and Plan of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on March 20, 2014) 2.1 Articles of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on December 30, 2014) 2.2 Agreement and Plan of Merger (incorporated by reference to our Registration Statement on Form 8-K filed on December 30, 2014) (3) (i) Articles of Incorporation; and (ii) Bylaws 3.1 Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1 filed on December 29, 2008) 3.1.2 Certificate of Amendment to Articles of Incorporation (incorporated by reference to our Registration Statement on Form 10-K filed on December 26, 2012) 3.1.3 Certificate of Change (incorporated by reference to our Registration Statement on Form 10-K filed on December 26, 2012) 3.2 Bylaws (incorporated by reference to our Registration Statement on Form S-1 filed on December 29, 2008) (4) Instruments Defining the Rights of Security Holders, Including Indentures 4.1 Specimen Common Stock Certificate (incorporated by reference to our Registration Statement on Form S-1 filed on December 29, 2008) 4.1 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) (16) Letter Regarding Change in Certifying Accountant 16.1 Responsive Letter from EideBailly LLP (incorporated by reference to our Registration Statement on Form 8-K filed on July 18, 2016) (31) Rule 13a-14(a)/15d-14(a) Certification 31.1* Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer 31.2* Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer (32) Section 1350 Certification 32.1* Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer 32.2* Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer (101)* Interactive Data Files 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE 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 sections. 28 SIGNATURES 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 By: /s/ Neil Reithinger Neil Reithinger Chief Executive Officer& Chief Financial Officer Date: January 12, 2018 29 PEAK PHARMACEUTICALS, INC. CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2017 TABLE OF CONTENTS Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-1 CONSOLIDATED FINANCIAL STATEMENTS: Consolidated Balance Sheets F-2 Consolidated Statements of Operations F-3 Consolidated Statements of Shareholders’ Deficit F-4 Consolidated Statements of Cash Flows F-5 Notes to Consolidated Financial Statements F-6 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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. An 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 our opinion. In our opinion, based on our audits, these consolidated financial statements present fairly, in all material respects, the financial position of Peak Pharmaceuticals, Inc. 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 CHARTERED PROFESSIONAL ACCOUNTANTS Vancouver, Canada January 12, 2018 F-1 Peak Pharmaceuticals, Inc. Consolidated Balance Sheets September 30, September 30, 2017 2016 Assets Current assets: Cash $ 2,991 $ 1,304 Total current assets 2,991 1,304 Total Assets $ 2,991 $ 1,304 Liabilities and stockholders' deficit Liabilities Accounts payable $ 163,075 $ 82,526 Accounts payable - related parties — 47,877 Convertible notes payable 25,000 — Accrued liabilities 7,601 12,359 Total current liabilities 195,676 142,762 Total Liabilities 195,676 142,762 Stockholders’ Deficit 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 7,836 7,836 Additional paid in capital 4,855,566 4,855,566 Accumulated deficit (5,056,087 ) (5,004,860 ) Total Stockholders’ Deficit (192,685 ) (141,458 ) Total Liabilities and Stockholders’ Deficit $ 2,991 $ 1,304 The accompanying footnotes are an integral part of these consolidated financial statements. F-2 Peak Pharmaceuticals, Inc. Consolidated Statements of Operations For the Twelve Months Ended September 30, 2017 2016 Operating expenses: General and administrative $ 44,987 $ 189,928 Depreciation and amortization — 18,974 Stock based compensation — (1,296,431 ) Total operating expenses 44,987 (1,087,529 ) Operating income (loss) (44,987 ) 1,087,529 Other income expenses Interest expense (1,239 ) — Change in fair value of convertible debt (5,000 ) — Total other expenses (6,239 ) — Income (loss) from continuing operations (51,227 ) 1,087,529 Income from operations of discontinued Canna-Pet component (Including gain on disposal of $80,903 for the year ended September 30, 2016) — 74,706 Net income (loss) $ (51,227 ) $ 1,162,235 Per share information: Basic weighted average shares outstanding 78,363,562 78,363,562 Diluted weighted average shares outstanding 78,363,562 80,919,572 Continuing operations: Net income (loss) per share - basic and diluted $ (0.00 ) $ 0.01 Discontinued operations: Net income (loss) per share - basic and diluted $ (0.00 ) $ 0.00 The accompanying footnotes are an integral part of these consolidated financial statements. F-3 Peak Pharmaceuticals, Inc. Consolidated Statement of Stockholders' Deficit For the Years Ended September 30, 2017 and 2016 Common Stock Additional Paid Accumulated Shares Amount In Capital Deficit Total Balance, September 30, 2015 78,363,562 7,836 6,151,997 (6,167,095 ) (7,262 ) Equity based compensation, net of forfeitures — — (1,296,431 ) — (1,296,431 ) Net income — — — 1,162,235 1,162,235 Balance, September 30, 2016 78,363,562 7,836 4,855,566 (5,004,860 ) (141,458 ) Net loss — — — (51,227 ) (51,227 ) Balance, September 30, 2017 78,363,562 7,836 4,855,566 (5,056,087 ) (192,685 ) The accompanying footnotes are an integral part of these consolidated financial statements. F-4 Peak Pharmaceuticals, Inc. Consolidated Statements of Cash Flows For the Twelve Months Ended September 30, 2017 & 2016 2017 2016 Cash flows from operating activities: Net income (loss) $ (51,227 ) $ 1,162,235 Adjustment to reconcile net loss to net cash used in operating activities: Stock based compensation — (1,296,431 ) Depreciation and amortization — 18,974 Change in fair value of convertible debt 5,000 — Other — 607 Change in operating assets and liabilities: Prepaids — 7,250 Deposits — 2,500 Accounts payable and accrued liabilities 80,549 (14,504 ) Accounts payable - related parties (47,877 ) 47,877 Accrued Interest (4,759 ) — Disposal of discontinued operations — (128,860 ) Net cash used in operating activities (18,314 ) (200,352 ) Cash flows from financing activities: Proceeds from issuance of convertible notes payable 20,000 — Net cash provided by financing activities 20,000 — Net change in cash 1,686 (200,352 ) Cash, beginning of period 1,304 201,656 Cash, end of period $ 2,990 $ 1,304 Supplemental disclosure of cash flow information Cash paid for interest $ — $ 2,250 Cash paid for income taxes $ — $ — The accompanying footnotes are an integral part of these consolidated financial statements. F-5 PEAK PHARMACEUTICALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED SEPTEMBER 30, 2017 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, 2014. 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 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 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 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. F-6 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 inputs. 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 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 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 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 model. In addition, payments made to non-employees are accounted for in accordance with ASC Topic 505, Equity-Based payments to Non-Employees. F-7 Intangible Asset 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 expense. Amortization expense charged to operations for the twelve-month period ended September 30, 2017 and 2016, was $nil and $18,974, respectively. Recently Issued Accounting Pronouncements 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. 2016-02, 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. ASU No. 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. The guidance requires companies to apply the requirements retrospectively, modified retrospectively, or prospectively depending on the amendment(s) applied. The Company is currently evaluating the impact of adopting this guidance. In April 2016, the FASB issued ASU 2016 – 10 “Revenue from Contract with Customers: identifying Performance Obligations and Licensing”. The amendments in this Update clarify the two following aspects (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments in this Update are intended to reduce the degree of judgement necessary to comply with Topic 606. This guidance has no effective date as yet. The Company is currently evaluating the impact of 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. ASU 2016-15 is effective for the Company beginning in the first quarter of fiscal 2019. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires application using a retrospective transition method. The Company is currently evaluating the impact of adopting this guidance. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) Restricted Cash”. The new guidance requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include restricted cash and restricted cash equivalents. If restricted cash is presented separately from cash and cash equivalents on the balance sheet, companies will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet. Companies will also need to disclose information about the nature of the restrictions. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting this guidance. F-8 In January 2017, FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business”. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance. On May 10, 2017, the Financial Accounting Standards Board (“FASB”)issued an Accounting Standards Update (“ASU”) 2017-09 “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting”, which provides guidance to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The guidance is effective prospectively for all companies for annual periods beginning on or after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. 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. 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. 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 values. 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. F-9 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. The Company recorded a loss of $5,000 based on the change in fair value. NOTE 5 – STOCKHOLDERS’ EQUITY 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: Number of Options Exercise Price per Share Average Remaining Term in Years Aggregate Intrinsic Value at Date of Grant Outstanding October 1, 2015 7,416,000 $ 0.0067 - $0.20 — Issued — — Cancelled (4,500,000 ) — Outstanding September 30, 2016 and September 30, 2017 2,916,000 $ 0.0067 6.45 — Exercisable 2,916,000 $ 0.0067 6.45 — F-10 The following is a summary of outstanding stock options issued to non-employees, excluding directors, as of September 30, 2017: Number of Options Exercise Price per Share Average Remaining Term in Years Aggregate Intrinsic Value at Date of Grant Outstanding September 30, 2017 and 2016 375,000 $ 0.0067 6.04 — Exercisable 375,000 $ 0.0067 6.04 — Total equity based compensation for the years ended September 30, 2017 and 2016 was $nil and ($1,296,431), respectively. NOTE 7 – DISCONTINUED OPERATIONS 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 operations. The Termination Agreement contained the following provisions: • Termination of License: 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. • 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 Property: 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 plants. • Office Space and Equipment: 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. • Consideration: As 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. • Collections: 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. F-11 The following is a summary of the net assets sold as initially determined at October 15, 2015: October 15, 2015 Inventory $ 41,705 Deposits 8,678 Total assets $ 50,383 Accounts payable 124,396 Royalties payable 39,506 Accrued liabilities 15,341 Total liabilities 179,243 Net assets sold $ 128,860 The income from discontinued operations presented in the statements of operations consists of the following for the years ended September 30, 2016: 2016 Revenues $ — Cost of goods sold — General and administrative expenses, including depreciation and amortization (6,197 ) Depreciation — Interest expense — Gain on disposal of discontinued operations 80,903 Income from discontinued operations $ 74,706 NOTE 8 – INTANGIBLE ASSETS 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 We have no commitments or contingencies as of September 30, 2017 and 2016. NOTE 10 – DEFERRED INCOME TAX Deferred income tax provision for the years ended September 30, 2017 and 2016 is summarized below: 2017 2016 Federal $ (17,400 ) $ (64,500 ) State (1,600 ) (5,900 ) Total deferred (19,000 ) (70,400 ) Increase in valuation allowance 19,000 70,400 $ — $ — 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: F-12 2017 2016 Income tax provision – federal rate 34.0 % 34.0 % State income taxes, net of federal benefit 3.1 % 3.1 % Effect of net operating loss (37.1% ) (37.1% ) — — 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 $16,800. As of September 30, 2017, we have a net operating loss carry forwards of approximately $1,081,300 (2016: $1,030,100). 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. Our policy 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 FIGURES 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. F-13