RETRIEVE MEDICAL HOLDINGS INC As ofDecember 31, 2022 , the Company had an accumulated deficit of$5,466,798 and a working capital deficiency of$603,396 . During the three months endedDecember 31, 2022 , the Company incurred a net loss of$112,242 and used cash in operating activities of$30,879 . As ofDecember 31, 2022 , the Company had cash of$96,720 . 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 unaudited condensed consolidated financial statements have been prepared in conformity withU.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 unaudited condensed consolidated financial statements do not necessarily represent realizable or settlement values. The unaudited condensed 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 amounts payable to current and former officers and directors for services provided to the Company totaling$199,693 and$153,681 , as ofDecember 31, 2022 andSeptember 30, 2022 , respectively. These amounts include accounts payable to an entity controlled by our sole officer and director for financial services such entity is incurring on behalf of the Company totaling$124,816 and$78,804 as ofDecember 31, 2022 andSeptember 30, 2022 , respectively. Total expense incurred related to this entity was$46,012 and$4,770 for the three months endedDecember 31, 2022 and 2021, respectively, with no other related party expenses incurred. See Note 4 for certain related party debt.
NOTE 4 - CONVERTIBLE NOTES PAYABLE AND NOTES PAYABLE
Convertible Notes Payable
Loan with
OnMarch 17, 2017 , the Company entered into an agreement withTrius 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 and is unsecured. 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 . OnMay 11, 2018 , the agreement had been amended to extend the maturing date of the note fromMarch 21, 2018 toMarch 21, 2019 . As ofDecember 31, 2022 andSeptember 30, 2022 , the total accrued interest owing under this note was$8,067 and$7,689 , respectively. As of the date of this report, that date has not been extended, and the Company is accruing interest at the default interest rate of 15%. 9 Notes Payable
Loan with
OnJanuary 10, 2018 , the Company entered into an agreement withMediapark 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 onJuly 10, 2018 and is unsecured. As ofJuly 9, 2018 , the loan was extended toJuly 10, 2019 . As ofDecember 31, 2022 andSeptember 30, 2022 , the total accrued interest owing under this note was$16,152 and$15,282 , respectively. As of the date of this report, that date has not been extended, and the Company is accruing interest at the default interest rate of 15%. Loans with Officer OnJune 14, 2021 , the Company entered into an agreement with our sole officer and director. Pursuant to the terms of the agreement, we received a promissory note in the amount of$5,000 . The note is unsecured, is due and payable in full onDecember 31, 2021 , and accrues interest at a rate of 1.5% per annum. As ofDecember 31, 2022 andSeptember 30, 2022 , the total accrued interest owing under this note was $541and$415 , respectively. As of the date of this report, the due date has not been extended and the Company is accruing interest at the default interest rate of 10%. OnSeptember 28, 2021 , the Company entered into a note payable with our sole officer and director for$30,000 . The note is unsecured, is due and payable in full onDecember 31, 2021 and accrues interest at a rate of 1.5% per annum. As of theDecember 31, 2022 andSeptember 30, 2022 , the total accrued interest owing under this note was$3,116 and$2,360 , respectively. As of the date of this report, that date has not been extended, and the Company is accruing interest at the default interest rate of 10%. Other Notes Payable
During the twelve months endedSeptember 30, 2021 , the Company entered into twelve notes payable totaling$240,000 . The notes are unsecured, are due and payable in full onSeptember 30, 2021 , and accrue interest at a rate of 1.5% per annum. As of theDecember 31, 2022 andSeptember 30, 2022 , the total accrued interest owing under these notes was$25,911 and$23,250 . InJune 2022 , the Company repaid one of the notes with a principal balance of$35,000 . As of the date of this report, the due dates have not been extended, and the Company is accruing interest at the default interest rate of 10%. NOTE 5 - OPTIONS
No stock options were granted during the three months ended
The following is a summary of outstanding stock options issued to employees and
directors as of
Schedule of share-based compensation, stock options, activity
Average
Remaining
Number Exercise Price per Term in
of Options Share Years
Outstanding December 31, 2022 and September 30, 2022 2,916,000 $ 0.0067 1.20 Exercisable, December 31, 2022 and September 30, 2022 2,916,000 $
0.0067 1.20
10
The following is a summary of outstanding stock options issued to non-employees,
excluding directors, as of
Schedule of share-based compensation, stock options, activity
Average
Remaining
Number Exercise Price per Term
of Options Share in Years
Outstanding
0.0067 0.79
Exercisable,
0.0067 0.79
There was no equity-based compensation for the three months ended
NOTE 6 - SUBSEQUENT EVENTS OnJanuary 23, 2023 , the Company executed a Settlement Agreement and Mutual Release with four parties for outstanding accounts payable, resulting in a gain on forgiveness of debt of approximately$45,490 , including$24,340 from related parties. 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements This report contains forward-looking statements. The following discussion should be read in conjunction with the financial statements and related notes contained in our Annual Report on Form 10-K, as filed with theSecurities & Exchange Commission onDecember 19, 2022 . Certain statements made in this discussion are "forward-looking statements" within the meaning ofThe Private Securities Litigation Reform Act of 1995. Forward-looking statements are projections in respect of future events or financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other comparable terminology.
These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" set forth in our Annual Report on Form 10-K for the year endedSeptember 30, 2022 , as filed onDecember 19, 2022 , any of which may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks may cause the Company's or its industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity or performance. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The Company is under no duty to update any forward-looking statements after the date of this report to conform these statements to actual results. As used in this quarterly report and unless otherwise indicated, the terms "we," "us," "our," "Peak," or the "Company" refer toPeak Pharmaceuticals, Inc , including our wholly-owned subsidiaryPeak BioPharma Corp ("Peak BioPharma"). Unless otherwise specified, all dollar amounts are expressed inUnited States dollars.
Corporate History and Overview
We were first incorporated inNevada asSurf A Movie Solutions, Inc. onDecember 18, 2007 to engage in the business of the development sale and marketing of online video sales. We were not successful in our efforts and discontinued this line of business. Since that time and untilAugust 8, 2014 , we were a "shell company" (as such term is defined in Rule 12b-2 under the Exchange Act). OnAugust 30, 2013 , we changed our name toFrac Water Systems, Inc. and, onOctober 10, 2013 , we decided to engage in the business of providing economically and environmentally sound solutions for the treatment and recycling of wastewater resulting principally from oil and gas exploration and production activities. Due to our research of the business opportunities, onDecember 31, 2013 , we determined not to move forward with this line of business. In earlyMarch 2014 , we decided to enter into the business of developing, manufacturing and marketing pharmaceutical level products containing phytocannabinnoids, an abundant and pharmaceutically active component of industrial hemp, for the prevention and alleviation of various conditions and diseases. In connection therewith, onMarch 17, 2014 , we changed our name toCannabis Therapy Corporation and, onMarch 24, 2014 , changed our trading symbol on OTC Markets to "CTCO". OnDecember 23, 2014 , we changed our name toPeak Pharmaceuticals, Inc. and our trading symbol changed to "PKPH" on February
5,
2015.
12
InMarch 2014 we began operating as a bio-pharmaceutical and nutraceutical company seeking to develop, manufacture, market and sell safe, high quality, medicinal products based on extracts from hemp. Our primary initial focus was on exploitation of the exclusive license we received fromCanna-Pet, LLC , a developer of ingestible health products for pets made from hemp. We had also taken initial steps related to development of over-the-counter, THC-free, hemp-based products for the human market for the prevention and alleviation of symptoms associated with inflammatory and auto-immune diseases. OnJuly 29, 2014 , through our wholly-owned subsidiary,Peak BioPharma Corp. , we entered into a License Agreement (the "License Agreement") withCanna-Pet, LLC , ("Licensor") aWashington limited liability corporation. They own 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"). This is used by the 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 gave 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. The License Agreement specified that during the term of the license, all intellectual property rights in and to the Licensed Intellectual Property remain 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 based on 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 inOctober 2014 .
Based 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 ofOctober 1, 2015 , and to cease all operations relating to sale of hemp-based products for pets. OnOctober 12, 2015 , we entered into an agreement for the termination ("Termination Agreement") of the License Agreement, effectively selling the discontinued operations. Furthermore, based on advice from theFood and Drug Administration , as well as our regulatory counsel, we decided to revise our strategy and discontinue all efforts to develop and market hemp-based health products. We currently are pursuing to acquire or merge with an entity with significant operations in order to create a viable business model and value for our shareholders. SinceOctober 2015 we have been a "shell company" (as such term is defined in Rule 12b-2 under the Exchange Act). All of our business operations are carried out through our wholly owned subsidiary,Peak BioPharma Corp. , aColorado corporation. Throughout this Report, unless otherwise noted or required by the context, references to "the Company," "us," "we," "our," and similar terms refer toPeak Pharmaceuticals, Inc. and our wholly owned subsidiary,Peak BioPharma Corp. We currently have authorized 325,000,000 shares of capital stock, consisting of (i) 300,000,000 shares of common stock, and (ii) 25,000,000 shares of "blank check" Preferred Stock. OnAugust 15, 2012 , our board of directors and stockholders owning a majority of our outstanding common shares, authorized a 50 for 1 forward stock split of our issued and outstanding common stock. The forward split became effective onSeptember 27, 2012 . Due to the forward split, each outstanding share was split into 50 shares. OnMarch 11, 2014 , our board of directors authorized a 1.5 for 1 forward stock split of our common stock in the form of a dividend. In connection therewith, our shareholders of record as of the close of business onMarch 28, 2014 , received an additional 0.5 share of our common stock for each share of our issued and outstanding common stock held by them on such date. The forward stock split became effective onApril 1, 2014 . 13 Results of Operations
Comparison of the Three Months Ended
Revenue
No revenue or cost of sales were generated for the three months ended
Operating Expenses The Company's expenses for the three months endedDecember 31, 2022 and 2021, are summarized as follows: Three Months Ended December 31, 2022 2021 General and administrative (including$46,012 and$4,770 of fees paid to related party)$ 110,412
$ 52,063 Total operating expenses$ 110,412 $ 52,063
The increase in general and administrative expenses for the three months ended
Other Expenses
Three Months Ended December 31,
2022 2021
Interest Expense (including related party interest
of $882 and $132 ) $ 1,830 $ 8,831
Gain on forgiveness of debt - (1,539 )
Total other expenses $ 1,830 $ 7,292
Interest expense decreased $7,001 for the three months ended December 31, 2022
from the comparative period of 2021 primarily from accrued interest on the
Company's notes payable which decreased as a result of principal payments of
$35,000 in June 2022 . The gain on forgiveness of debt of $1,539 for the three
months ended December 31, 2021 was a result of a decrease of accounts payable as
a result of vendor adjustments.
Liquidity and Capital Resources
Working Capital
The following table sets forth a summary of changes in working capital as of
ended
As of
December 31, 2022 September 30, 2022
Current Assets $ 102,480 $ 130,349
Current Liabilities 705,876 621,503
Working capital $ (603,396 ) $ (491,154 )
The decrease in current assets of $27,869 is mainly due to a decrease in cash
from the payment of outstanding vendor bills during the three months ended
December 31, 2022 . The increase in current liabilities of $84,373 is primarily
due to an increase in accounts payable during the three months ended December
31, 2022 , for additional professional fees.
14
Cash Flows
The following table sets forth a summary of changes in cash flows for the three
months ended
Three Months Ended December 31,
2022 2021
Net cash used in operating activities
- (30,000 )
Change in cash $ (30,879 ) $ (73,598 ) As of
Net cash used in operations for the three months ended
Net cash used in financing activities for the three months ended
We may need to evaluate raising additional capital through the sale of equity securities, through an offering of debt securities or through borrowing from individuals. There can be no assurance that such a plan will be successful.
Cash Requirements As of the date of this filing, we do not have sufficient cash on hand to cover our operating expenses through the next fiscal year. As ofDecember 31, 2022 , we had cash and cash equivalents of approximately$97,000 . Our liquidity needs have been satisfied primarily from the issuance of notes payable. The notes payable are unsecured, matured onSeptember 30, 2021 , have not been extended, and are currently in default. There can be no assurance, however, that additional financing will be available or, if it is available, that we will be able to structure such financing on terms acceptable to us and that it will be sufficient to fund our cash requirements until we can reach a level of profitable operations and positive cash flows. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to seek additional financing. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders. Effects of Inflation
We do not believe that inflation has had a material impact on our business, revenues or operating results during the periods presented.
15
Critical Accounting Policies and Estimates
Our unaudited condensed financial statements and accompanying notes have been prepared in accordance withUnited States generally accepted accounting principles applied on a consistent basis. The preparation of unaudited condensed financial statements in conformity withU.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting periods. We regularly evaluate the accounting policies and estimates that we use to prepare our unaudited condensed financial statements. A complete summary of these policies is included in the notes to our unaudited condensed financial statements, along with the related notes contained in our Annual Report on Form 10-K as filed with theSecurities & Exchange Commission . In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management. New accounting standards
For discussion of Recently Issued Accounting Pronouncements, see Note 1 to the unaudited condensed financial statements, "Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies" in Part I, Item 1, of this Quarterly Report on Form 10-Q.
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