What changed in this filing

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Item 1. Financial Statements

2018-05-14 compared with 2018-02-15 · 170 added, 135 removed, 379 unchanged (45% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

AS AT DECEMBER 31, 2017

AS AT MARCH 31, 2018

September 30,

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Stockholders’

Preferred stock, $0.00001 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 December 31, 2017 and September 30, 2017

Deficit Preferred stock, $0.00001 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 March 31, 2017 and September 30, 2017

Additional paid in capital

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTH PERIOD ENDED

DECEMBER 31, 2017 AND 2016

FOR THE THREE AND SIX MONTH PERIODS ENDED

MARCH 31, 2018 AND 2017

For the Three Months Ended

For the Six Months Ended

Operating expenses:

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Total expenses

Operating income (loss)

Change in fair value of convertible debt

Per share information:

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CONDENSED CONSOLIDATED STATEMENTS OF CASH

FOR THE THREE MONTH PERIOD ENDED DECEMBER

FOR THE SIX MONTH PERIODS ENDED MARCH 31,

2018 AND 2017

For the Three Months Ended

For the Six Months Ended

Cash flows from operating activities:

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

Change in fair value of convertible debt

Change in operating assets and liabilities:

Accounts payable and accrued liabilities

Accounts payable

Accounts payable - related parties

Accrued liabilities

Net cash used in operating activities

Cash flows from financing activities:

Proceeds from issuance of notes payable

Net cash provided by financing activities

Net change in cash

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Cash paid for income taxes

The accompanying footnotes are an integral part of these

condensed consolidated financial statements.

The accompanying footnotes are an integral part

of these condensed consolidated financial statements.

PEAK PHARMACEUTICALS, INC.

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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.

We do not expect the adoption of this guidance to have an impact on our Consolidated Financial

In April 2016, the FASB

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LIQUIDITY PLANS

As of September 30, 2017,

the Company had an accumulated deficit of $5,063,716 and a working capital deficiency of $200,314.

During the quarters ended December

As of March 31, 2018, the

Company had an accumulated deficit of $5,073,105 and a working capital deficiency of $209,703.

During the quarters ended March

31, 2018 and 2017, the Company used cash in operating activities of $21,549 and $209, respectively.

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fees and salaries.

Included in accounts payable at December 31, 2017 are amounts

totaling $47,877 (September 30, 2016 $47,877) owed to related parties.

NOTE 4 –

CONVERTIBLE NOTES PAYABLE

Loan with Trius Holdings

On March 17, 2017,

the Company 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.

Included in accounts payable at March 31, 2018 are amounts

totaling $47,877 (December 31, 2017 $47,877) owed to related parties.

NOTE 4 –NOTES PAYABLE

Loan with Trius Holdings Limited

On March 17, 2017, the

Company 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.

is entitled, at its option, to convert all or a part of the principal outstanding at the date into shares of the of common

stock in the Company 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.

Trius is entitled, at its

option, to convert all or a part of the principal outstanding at the date into shares of the of common stock in the Company 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.

On May 11, 2018, the agreement had been amended to extend the maturing date of the note from March

30, 2018 to March 30, 2019.

Loan with Individual

On March 30, 2017,

the Company entered into an agreement with an individual.

Pursuant to the terms of the agreement, the individual acquired a

12% convertible note with an aggregate face value of $10,000.

On March 30, 2017, the

Company entered into an agreement with an individual.

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

note with an aggregate face value of $10,000.

The note matures in one year.

The individual is entitled, at

its option, to convert all or a part of the principal outstanding at the date into shares of the of common stock in the

Company 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.

The individual is entitled, at its option, to convert

all or a part of the principal outstanding at the date into shares of the of common stock in the Company 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

The Company recorded a loss on the notes of $5,000 during the quarter ended March 31, 2017 based on the fair value of

On May 11, 2018, the agreement had been amended to extend the maturing date of the note from March 30, 2018 to March

Loan with Mediapark Investments Limited

On January 10, 2018, the

Company entered into an agreement with Mediapark Investments Limited (“Mediapark”.) Pursuant to the terms of the agreement,

Mediapark acquired a 12% promissory note with an aggregate face value of $23,000.

The note matures in 180 days on July 10, 2018.

Total accrued interest

on the above notes was $1,844 as of December 31, 2017 (September 30, 2017 $1,240) and is reflected in accrued liabilities on the

accompanying balance sheet.

The Company recorded a loss on the notes of $5,000 during the quarter ended March 31, 2017 based on

the fair value of the notes.

on the above notes was $3,049 as of March 31, 2018 (December 31, 2017 $1,844) and is reflected in accrued liabilities on the accompanying

balance sheet.

NOTE 5 –

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We had no preferred or

common stock transactions during the three-period ended December 31, 2017 and 2016

common stock transactions during the six-month period ended March 31, 2018 and 2017.

NOTE 6 –

No stock options were granted

during the quarters ended December 31, 2017 and 2016.

during the quarters ended March 31, 2018 and 2017.

The following is a summary

of outstanding stock options issued to employees and directors as of December 31, 2017:

of outstanding stock options issued to employees and directors as of March 31, 2018:

Exercise Price per

Outstanding September 30, 2017 and December 31, 2017

The following is a summary

of outstanding stock options issued to non-employees, excluding directors, as of December 31, 2017:

Outstanding September 30, 2017 and March 31, 2018

The following is a summary of outstanding stock

options issued to non-employees, excluding directors, as of March 31, 2018:

Exercise Price per

Outstanding September 30, 2017 and December 31, 2017

equity-based compensation for the three months ended December 31, 2017 and 2016.

Outstanding September 30, 2017 and March 31, 2018

There was no equity-based

compensation for the six months ended March 31, 2018 and 2017.

NOTE 7 - SUBSEQUENT EVENT

On January 11, 2018,

we received a promissory note from Media park Investments Limited in the amount of $23,000.

The note is due and payable in

full on July 9, 2018 and it accrues interest at a rate of 12% per annum.

On April 2, 2018, subsequent

to the period, we received a promissory note from an individual in the amount of $20,000.

The note is due and payable in full on

October 2, 2018 and it accrues interest at a rate of 12% per annum.

Management’s

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Factors”

set forth in our Annual Report on Form 10-Kfor the year ended September 30, 2017, as filed on January 12, 2018,

set forth in our Annual Report on Form 10-K for the year ended September 30, 2017, as filed on January 12, 2018,

any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements

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2013, we determined not to move forward with this line of business.

In early March 2014,

we entered into the business of developing, manufacturing and marketing pharmaceutical level products containing

phytocannabinoids, an abundant and pharmaceutically active component of industrial hemp, for the prevention and alleviation

of various conditions and diseases.

In early March 2014, we

entered into the business of developing, manufacturing and marketing pharmaceutical level products containing phytocannabinoids,

an abundant and pharmaceutically active component of industrial hemp, for the prevention and alleviation of various conditions

and diseases.

In connection therewith, on March 17, 2014 we changed our name to Cannabis Therapy Corp.

On December 23, 2014, we changed our name to Peak Pharmaceuticals, Inc.

All of our business operations are carried on through

our wholly-owned subsidiary, Peak BioPharma Corp., a Colorado corporation.

On July 29, 2014,

through Peak BioPharma, we entered into a license agreement (the “License Agreement”) with Canna-Pet, LLC

(“Licensor”), a Washington limited liability company, which owns the brand name “Canna-Pet”

certain related intellectual property including, but not limited to, 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 (collectively, the “Licensed Intellectual Property”), used by Licensor in the

conduct of its business related to the production and sale of medical products made from industrial hemp which are intended

exclusively for consumption by pets.

Pursuant to the License Agreement, the Licensor granted to us a perpetual, exclusive,

world-wide license to use the Licensed Intellectual Property in conjunction with our business and the production and sale of

medical products made from industrial hemp as well as the right to sublicense the Licensed Intellectual Property to third

The License Agreement gives us the right to produce and sell existing products utilizing the Licensed Intellectual

Property and to develop new products, jointly with Licensor or otherwise, based upon the Licensed Intellectual Property.

License Agreement provided us with an immediate revenue source and access to Licensor’s customer base.

term of the license, all intellectual property rights in and to the Licensed Intellectual Property remained the exclusive

property of Licensor.

In consideration of

the grant of the license, we agreed to pay Licensor license fees in the form of royalty payments calculated on the basis of

gross proceeds received by us from sales of products manufactured, marketed or sold by us utilizing the Licensed Intellectual

Property or any subsequently developed intellectual property which is jointly owned by us and Licensor.

We began selling

Canna-Pet products in October 2014.

On December 23, 2014, we

changed our name to Peak Pharmaceuticals, Inc.

All of our business operations are carried on through our wholly-owned subsidiary,

Peak BioPharma Corp., a Colorado corporation.

On July 29, 2014, through

Peak BioPharma, we entered into a license agreement (the “License Agreement”) with Canna-Pet, LLC (“Licensor”),

a Washington limited liability company, which owns the brand name “Canna-Pet”

and certain related intellectual property

including, but not limited to, 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 (collectively, the “Licensed

Intellectual Property”), used by Licensor in the conduct of its business related to the production and sale of medical products

made from industrial hemp which are intended exclusively for consumption by pets.

Pursuant to the License Agreement, the Licensor

granted to us a perpetual, exclusive, world-wide license to use the Licensed Intellectual Property in conjunction with our business

and the production and sale of medical products made from industrial hemp as well as the right to sublicense the Licensed Intellectual

Property to third parties.

The License Agreement gives us the right to produce and sell existing products utilizing the Licensed

Intellectual Property and to develop new products, jointly with Licensor or otherwise, based upon the Licensed Intellectual Property.

The License Agreement provided us with an immediate revenue source and access to Licensor’s customer base.

During the term

of the license, all intellectual property rights in and to the Licensed Intellectual Property remained the exclusive property of

In consideration of the

grant of the license, we agreed to pay Licensor license fees in the form of royalty payments calculated on the basis of gross proceeds

received by us from sales of products manufactured, marketed or sold by us utilizing the Licensed Intellectual Property or any

subsequently developed intellectual property which is jointly owned by us and Licensor.

We began selling Canna-Pet products in

October 2014.

Based upon recent regulatory

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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

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:

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of Canna-Pet products for all periods through and including September 30, 2015.

· Collections:On October 15, 2015, we forwarded to the Licensor all payments received by us after

· 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

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Recent Corporate Developments

commencement of the year through December 31, 2017, we have not experienced any corporate developments.

We have received a

promissory note for $23,000 after the quarter end of December 31, 2017.

Since the commencement

of the year through March 31, 2018, we have received two promissory notes.

One for $23,000 on December 31, 2017, as well as a $20,000

promissory note on April 2, 2018, subsequent to the end of the quarter.

Loan Agreements

18 unchanged sentences

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

Loan with Mediapark Investments Limited

On January 10, 2018, we

entered into an agreement with Mediapark Investments Limited.

Pursuant to the terms of the agreement, the investor acquired a 12%

promissory note with an aggregate face value of $23,000.

The note matures in 180 days, on July 10, 2018.

of Operations

of the Three Months Ended December 31, 2017 to the Three Months Ended December 31, 2016

of the Three Months Ended March 31, 2018 to the Three Months Ended March 31, 2017

No revenue or cost of sales were generated for

the three months ended December 31, 2017 or December 31, 2016 due to the overall reduction in operations of the business.

Our expenses for the three

months ended December 31, 2017 are summarized as follows in comparison to our expenses for the three months ended December 31,

Three Months Ended December 31,

the three months ended March 31, 2018 or March 31, 2017 due to the overall reduction in operations of the business.

Our expenses for the three months ended

March 31, 2018 are summarized as follows in comparison to our expenses for the three months ended March 31, 2017:

Three Months Ended March 31,

General and administrative

2 unchanged sentences

Total operating expenses

and administrative expense increased by $5,142 for the three months ended December 31, 2017 from the comparative period of

2016 due primarily to increased accounting fees incurred to bring our filings current with the SEC.

Depreciation and

amortization expense as well as stock-based compensation was$0 for the three months ended December 31, 2017 and 2016.

General and administrative

expense increased by $2,755 for the three months ended March 31, 2018 from the comparative period of 2017 due to an increase in

audit and accounting fees.

Depreciation and amortization expense, as well as stock-based compensation were $0 for the three months

ended March 31, 2018 and March 31, 2017.

of the Six Months Ended March 31, 2018 to the Six Months Ended March 31, 2017

No revenue or cost of sales were generated for

the six months ended March 31, 2018 or for the six months ended March 31, 2017.

Our expenses for the six

months ended March 31, 2018 are summarized as follows in comparison to our expenses for the six months ended March 31, 2017:

Six Months Ended March 31,

General and administrative

Depreciation and amortization

Stock based compensation

Total operating expenses

General and administrative

expense increased by $7,897 for the six months ended March 31, 2018 from the comparative period of 2017, due to an overall increase

in accounting and audit fees for the six months, to keep the Company current with their filings.

Depreciation and amortization

expense as well as stock-based compensation were $0.

Six Months ended March 31,

Interest Expense

Change in Fair Value of Convertible Debt

Total other expenses

Interest expense increased

from $0 to $604 for the three months ended December 31, 2017 from the comparative period of 2016 due to the issuance of two notes

payable in March 2017.

from $36 to $1,808 for the six months ended March 31, 2018 from the comparative period of 2017 due to the start date of the notes,

which were on March 30, 2017 and March 21, 2017.

Liquidity and Financial

4 unchanged sentences

Working capital deficiency

The decrease in

current assets is mainly due to the payment of vendor bills during the three months ended December 31, 2017.

The increase in

current liabilities is due to transfer agent and accounting fees incurred for the three-month period ending December 31,

Three Months Ended December

The increase in current

assets is mainly due to the receipt of a promissory note during the six months ended March 31, 2018.

The increase in current liabilities

is due to transfer agent, filing and accounting fees incurred for the six-month period ending March 31, 2018.

Six Months Ended March 31,

Net income (loss)

3 unchanged sentences

Increase (decrease) in cash

As of December 31, 2017,

our cash balance was $2,836.

As of March 31, 2018, our

cash balance was $4,442.

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

needs for continuing operations over the next twelve months.

Net cash used in

operations for the three months ended December 31, 2017 was $155 mainly due to the net loss incurred for the period.

Net cash used in operations

for the six months ended March 31, 2018 was $21,549 mainly due to the net loss incurred for the period as well as the payment of

open invoices.

We need to raise additional

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

Company has cumulative net losses through December 31, 2017 of $5,063,716, as well as negative cash flows of $155 from operating

The Company's cash and cash equivalents balance as of December 31, 2017 is $2,836.

These factors raise substantial

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

Company has cumulative net losses through March 31, 2018 of $5,073,105, as well as negative cash flows of $21,549 from operating

The Company's cash and cash equivalents balance as of March 31, 2018 is $4,442.

These factors raise substantial doubt

about the Company's ability to continue as a going concern.

While we will actively

6 unchanged sentences

us to raise funds.

The consolidated

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

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

may be required and ultimately to attain profitability.

If the Company raises additional funds through the issuance of

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

or privileges senior to its common stock.

The consolidated financial

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

Company’s continuation as a going concern is dependent on its ability to obtain additional financing as may be required and

ultimately to attain profitability.

If the Company raises additional funds through the issuance of equity, the percentage ownership

of current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to its common

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

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

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

developing its business and achieving commercial revenues.

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

Company may have to cease operations.

If adequate funds are not available or are not

available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities,

which could significantly and materially restrict its future plans for developing its business and achieving commercial revenues.

If the Company is unable to obtain the necessary capital, the Company may have to cease operations.

Off-Balance Sheet Arrangements

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Our significant accounting

policies are more fully described in the notes to our financial statements included herein for the three months ended December

policies are more fully described in the notes to our financial statements included herein for the six months ended March 31, 2018.

Newly Issued Accounting Pronouncements

See Note 1 to our

financial statements included herein for the three months ended December 31, 2017 for a discussion of Recently Issued

Accounting Pronouncements.

See Note 1 to our financial

statements included herein for the six months ended March 31, 2018 for a discussion of Recently Issued Accounting Pronouncements.

and Qualitative Disclosures about Market Risk

1 unchanged sentence

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-Q

Item 1. Financial Statements