UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark10-K
(Mark One)
[X]
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 2012
2013
OR
[ ]
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ______________
Commission File Number 333-133347
PEPTIDE TECHNOLOGIES, INC.
-----------------------------------------------
(Exact
Peptide Technologies Inc.
(Exact name of registrant as specified in its charter)
Nevada 98-0479983
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Nevada | | 98-0479983 |
State or other jurisdiction of | | (I.R.S. Employer |
incorporation or organization | | Identification No.) |
601 Union Street, Two Union Square, 42nd42nd Floor, Seattle, Washington 98101
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(Address
(Address of principal executive offices) (Zip Code)
Registrant's
Registrant’s telephone number, including area code: (206) 388-5498
236-9555
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
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Common Stock, par value $0.001 per share OTCBB
| | |
Title of each class | | Name of each exchange on which registered |
Common Stock, par value $0.001 per share | | OTCBB |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes | |Act.Yes o No |X|
þ
Indicate by check mark if the Registrant is not required to file reports pursuant to Rule 13 or Section 15(d) of the Exchange Act. Yes | |Act.Yes o No |X|
þ
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes |X|þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes | |.Yes o No |X|
þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "large accelerated filer,"filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Larger accelerated filer oAccelerated filer o
Non-accelerated filero Smaller reporting company x
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes oNo x
Number of shares issued and outstanding of the registrant'sregistrant’s class of common stock as ofJanuary 10, 2013: 149,078,000of January 6, 2014: 151,123,000 shares of common stock.
The aggregate market value of voting stock held by non-affiliates of the registrant was approximately $0.00based$0.00 based on the average bid and ask as ofFebruary
14, 2013.
of January 8, 2014.
The Company recognized nil revenues for its most recent fiscal year.
2
This amendment is being filed to correct the XBRL. The remainder of
the filing has not be changed.
TABLE OF CONTENTS
TABLE OF CONTENTS
| Page |
| |
PART I | |
Item 1. Description of Business 4-9
| 4-11 |
Item 1A. Risk Factors 9-11
| 12-14 |
Item 1B. Unresolved Staff Comments 12
| 14 |
Item 2. Description of Property 12
| 14 |
Item 3. Legal Proceedings 12
| 15 |
Item 4. Mine Safety Disclosure 12
| 15 |
| |
PART II | |
Item 5. Market For Common Equity and Related Stockholder Matters 12-14
| 15-17 |
Item 6. Selected Financial Data 14
| 17 |
Item 7. Management'sManagement’s Discussion And Analysis Of Financial Condition And Results Of Operation 14
| 17-21 |
Item 7A. Quantitative and Qualitative Disclosures of Market Risk 16
| 21 |
Item 8. Consolidated Financial Statements and Supplementary Data 17-32
| 21 |
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 33
| 44 |
Item 9A. Controls and Procedures 33
| 44 |
Item 9B. Other Information 34
| 45 |
| |
PART III | |
Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of 34-36
the Exchange Act | 45-47 |
Item 11. Executive Compensation 36
| 47-48 |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 37
| 48 |
Item 13. Certain Relationships and Related Transactions and Director Independence 37-38
| 48-49 |
Item 14. Principal Accountant Fees and Services 38
| 49 |
| |
PART IV | |
Item 15. Exhibits and Consolidated Financial Statement Schedules 38
| 50 |
Signatures 39
| 51 |
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Securities Exchange Act of 1934, which are subject to risks, uncertainties and assumptions that are difficult to predict. All statements in this Annual Report on Form 10-K, other than statements of historical fact, are forward-looking statements. These forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements, among other things, concerning our business strategy, including anticipated trends and developments in and management plans for, our business and the markets in which we operate; future financial results, operating results, revenues, gross margin, operating expenses, products, projected costs and capital expenditures; research and development programs; sales and marketing initiatives; and competition. In some cases, you can identify these statements by forward-looking words, such as "estimate," "expect," "anticipate," "project," "plan," "intend," "believe,"
"forecast," "foresee," "likely," "may," "should," "goal," "target," "might,"
"will," "could,""estimate", "expect", "anticipate", "project", "plan", "intend", "believe", "forecast", "foresee", "likely", "may", "should", "goal", "target", "might", "will", "could", "predict" and "continue,""continue", the negative or plural of these words and other comparable terminology. These statements are not guarantees of future performance and are subject to risks, uncertainties, potentially inaccurate assumptions, and other factors, some of which are beyond our control and difficult to predict. If known or unknown risks materialize, or should underlying assumptions prove inaccurate, our actual results could differ materially from past results and from those expressed in the forward-looking statements. Important factors that could cause our actual results to differ materially from those expressed in our forward-looking statements are described in "Item 1A--Risk1A—Risk Factors" in this Annual Report on Form 10-K. From time to time, we also provide forward-looking statements in other materials we release to the public and in oral statements made by authorized officers.
The forward-looking statements are only predictions based on our current expectations and our projections about future events. All forward-looking statements included in this Annual Report on Form 10-K are based upon information available to us as of the filing date of this Annual Report on Form 10-K. You should not place undue reliance on these forward-looking statements. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by these statements. These factors include the matters discussed in the section entitled "Item 1A--Risk1A—Risk Factors" and elsewhere in this Annual Report on Form 10-K. You should carefully consider the risks and uncertainties described under this section.
Investors are advised to consult any further disclosures we make on related subjects in our 10-Q and 8-K reports filed with the Securities and Exchange Commission (the "SEC").
PART I
ITEM 1. DESCRIPTION OF BUSINESS
BUSINESS. Discontinued Operations and New Developments
Since inception, the Company'sCompany’s business plan was to develop a membership based website art gallery/auction house specifically focused on displaying and selling original artwork. The Company changed its status from a development stage company to an operating company on November 30, 2009. Management realized that the results of operations from the sale of artwork was lack-luster, and it was decided to change the Company'sCompany’s business focus and plan for other strategic opportunities and discontinued the sale of artwork to be effective June 25, 2010. Effective June 26, 2010, the Company started to focus on a new business development. On July 29, 2010, the Company's name changed from Online Originals, Inc. to Creenergy Corporation. The name change was intended to convey a sense of the Company's new business focus as it looked to pursue other opportunities. Specifically, the Company intended to obtain leases for the exploration and production of oil and gas in northern Canada and the United States. These objectives have not been realized and the Company has abandoned its efforts in this area.
On August 23, 2011, the Company entered into an Asset Purchase Agreement in which the Company, in exchange for 75,000,000 shares of the
Company'sCompany’s restricted common stock, will receive all rights and title to proprietary technologies and formulas involving the application of specialty
Peptide .peptides. On December 21, 2011 the Asset Purchase Agreement was amended and 30,000,000 of the 75,000,000 shares issued were returned to treasury and cancelled. Having done this, the Company
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has changed its business focus from obtaining leases for the exploration and production of oil and gas in areas of northern Alberta, Canada, to the manufacturing and distribution of natural peptide solutions to combat the economic burden caused by the zebra and quagga mussels to the hydropower electricity industry.On December 14, 2011, Peptide Technologies, Inc. agreed to amend the Asset Purchase Agreement dated August 23, 2011. As a result of the amendment 30,000,000 restricted common shares of the Company were returned to treasury in exchange for payment of half of one percent of all gross monies received by the company from revenue produced from products derived from the use of all the formulae listed in the Assets Purchase Agreement. In addition a monthly stipend of CDN $15,000 per month is to be paid commencing from receipt of monies from the first contract signed to purchase products derived from the use of the formula for a period of five years from the date of the amended agreement.
Business of Issuer
Peptide Technologies, Inc. is a development stage company that is engagedhas developed the first all-natural sustainable solution for the economic and environmental burden of bio-fouling to prevent the attachment of organic matter on ship hulls and marine assets to improve vessel fuel efficiency, decrease maintenance costs, reduce emissions and prevent toxic materials in the
developmentour oceans, lakes and manufacture of environmentallyvaluable water sources.
Our product line offers safe peptide-based productsorganic-based fouling prevention coatings used to combat the rapidly growing problems caused by the quaggaattachment of hard fouling agents in the marine and zebra mussel
infestationfreshwater environments. Peptide Technologies’ patent protected approach not only significantly minimizes the attachment of hard fouling agents such as mussels, barnacles, etc. but is also highly effective in U.S.preventing the build-up of any bio-film layer as well. Our products offer an industry first “30 MINUTE” curing phase to significantly lower maintenance dry dock downtime.
Our organic-based solutions are highly effective in both marine and Canadianfreshwaters and are the first non-dangerous, non-hazardous and therefore environmentally friendly products available to the aquatic and industrial market. Our fouling prevention coatings adhere to both stationary and flexible substrates (i.e. netting) and are available in a variety of colors. There are many benefits to applying our fouling prevention coatings in enclosed systems as well as open surfaces such as ship hulls, fish nets, intake screens, canal gates where the application of paint containing biocides, bio-pesticides or copper products and or chemical based is not appropriate.
Targeted applications for our products are:
·Hydro-electric facilities and dams (i.e., water in-take pipes, valves);
·Ship hulls (i.e., barnacle covered hulls can increase fuel usage by more than 40%);
·Commercial fish nets;
·Pearling and Aquaculture industry;
·Drinking water treatment facilities;
·Farm irrigation water;
·Navigation locks;
·Oil rigs (FPSO);
·Other cement and/or steel substrates; and
·Concrete residential and commercial buildings
Unlike any other anti-fouling paint, Peptide Technologies’ fouling prevention coatings are the only ones in the world to receive a non-hazardous and non-dangerous rating by Risk Management Technology firm ChemAlert of Australia with a documented Government sanctioned certification. More information can be found here: http://peptidetechnologiesinc.com/about-us/certifications/
OUR PRODUCT LINE
Peptide Technologies is pleased to introduce four products designed to prevent the attachment of fouling organisms to a variety of substrates:
Ø | AquaNatural Industrial Coating- customized formulation to provide effective protection from fouling organisms onto fixed assets for 10 years. |
Ø | AquaCrete Natural Coating- customized solution to provide effective protection to concrete surfaces from fouling organisms for 10 years. |
Ø | AquaCulture Natural Coating- designed for flexible substrates such as netting to allow for expansion and contraction without compromising integrity of the coating for 2 years. |
Ø | AquaNatural Marine Coating- customizable friction reduction formula for assets while stationary or mobile for 5 years resulting in a potential 5-6% fuel cost savings. |
Together, these coatings will prevent attachment of fouling organisms to bare wood, carbon steel, galvanized steel, stainless steel, concrete, gel coats, underwater cable coverings and polypropylene netting. Coatings are non-hazardous and do not kill fouling agents. Coatings are designed to simply prevent organisms such as algae and other hard organisms (i.e. barnacles, mussels) from attaching to the substrate. In addition, coatings can be formulated to provide protection from fouling organisms onto fixed assets for 10 years (AquaNatural Industrial and AquaCrete Natural Coatings).
Furthermore, the incorporation of silicone into our coatings has been carefully tuned to not interfere with the slow release of the active ingredients. Indeed, the silicone provides a hydrophobic environment at the coated substrate/water interface. Empirical data obtained from a laboratory designed flume suggests a reduction in drag of >5%. As a result, our coating will contribute to an overall savings in fuel costs for mobile assets for a period of 5 years (AquaNatural Marine Coating).
AquaCulture Natural Coating has been designed to expand and contract without compromising the integrity of the coating. Open net-pens, anchor ropes and other substrates influenced by the action of water currents can be coated and protected from fouling by the flexible nature of this coating. The coating is designed to provide effective substrate coating protection for 2 years.
OUR PROVEN RESULTS
Peptide Technologies products are the first coating to be classified as a non-hazardous and non-dangerous good (Chem Alert - Australia) of all of the registered fouling prevention paints for both fresh and marine environments. The effectiveness of the coating at preventing the attachment of fouling organisms has been examined and independently monitored at locations around the globe including:Darwin, Australia, Niagara Falls, Canada, Colorado River, USA, Trondheim, Norway and Vancouver, Canada. Results from all these locations showed the coatings significantly prevented fouling attachment for periods up to 8 months.
Our coatings contain no biocides, are non-dangerous, non-hazardous and free of any regulated active ingredients (DSL and TSCA). The absence of copper from any of our coatings allows for application of our products to include spraying without contamination to neighboring waters. http://www.environment.nsw.gov.au/resources/sustainbus/ 2007108_mbs_sheet4.pdf.
Our products can be produced in multiple colors including clear and white. Furthermore the 30 minute quick curing time will reduce down time for mobile assets representing significant cost savings to owners.
Peptide Technologies has developed proven products that have successfully integrated fouling prevention with environmental safety with fouling prevention in the aquatic ecosystem. All of the coatings simply prevent the attachment of fouling organisms and does not affect the welfare of other aquatic life. Indeed, our coatings have been applied to oyster shells to prevent fouling and subsequently shown not to affect the well-being of the animal. One of our products, AquaCrete Natural coating has also been shown to be also effective outside the aquatic environment in preventing algal attachment on concrete and thereby prevent algal fouling of walk ways or buildings located in humid or moist environments.
Peptide Technologies coatings offer a unique solution to environmental fouling for a variety of substrates. The Company specializescoatings effectiveness, ease and speed of application and its non-hazardous nature will ensure the protections of industrial assets and as well be compliant with environmental legislation.
Our patent-protected fouling prevention coatings (AquaNatural Industrial, AquaCrete Natural, AquaCulture Natural, AquaNatural Marine) are based on proprietary organic formulations developed over the past 18 years. After the past two years of conclusive product testing and formula improvements, we have launched a perfected product line offering the industry safe and sustainable fouling prevention coatings used to combat the rapidly growing problems caused by the attachment of hard fouling agents in the marine and fresh water environments. Our paint is unique globally and represents the ultimate in a green approach to fouling of mobile and fixed assets.
OUR ADVANTAGES
(a) | The products are an Earth friendly organic solution and non-hazardous to aquatic life; |
(b) | They can be applied to both stationary and moving substrates; |
(c) | All of our coatings have a Quick 30 minute cure time; |
(d) | Our products have been proven to be effective in both fresh and marine waters; |
(e) | Our coatings can be applied as a paint or spray; |
(f) | We offer several COLOR options to suit the end-users application; as well as a completely CLEAR coating, and, |
(g) | Our non-dangerous and non-hazardous coatings work by simply preventing attachment by hard fouling agents and bio-film without harming aquatic life |
OUR OUTLOOK
The International Marine coatings market currently generates revenues of $5 Billion annually and is projected to reach $10 Billion within 4 years according to Frost & Sullivan. Several factors will lead to the doubling of the global market in such a short time frame. Such factors include the introduction of an eco-friendly solution such as Peptide Technologies’ products. The availability of these products will facilitate painting of the ships and marine assets globally and not just in traditional unregulated shipping zones. Peptide Technologies is positioned to provide the entire marine coatings industry with several solutions to meet the change in environmental regulations, reduction in fuel consumption and lowering dry dock costs with its innovative product line. Our commitment to the Earth and Oceanic sustainability will drive our growth to enable a new generation of fouling prevention coatings.
Background
Bio-Fouling
Bio-fouling is the development of peptide formulasorganic layers, created by the settlement of organisms and their metabolic products (primarily caused by a variety of organisms including: bacteria, algae and hard agents (mussels, barnacles etc.)). Fouling produces several problems for equipment and aquatic structures, deteriorating their performance and limiting their useful life.
Typically fouling begins with the formation of bio-films which may be addeddevelop and affect the interaction between the substrate surface and the environment. In most instances, bio-film developments compromise the substrate’s integrity and facilitate the subsequent production of algal growth and the attachment of other hard agents.
Bio-films are predominately aggregates of bacterial cells, which attach to and grow on a substrate, which are often resistant to disinfection. Bacterial bio-films cause serious problems for industrial fluid processing operations including: mechanical blockage interference in heat transfer process and microbial-induced corrosion. In engineered systems such as cooling water systems, food processing and other industrial applications, bio-film is a risk to public health. Product spoilage and souring are consequences of bio-film-mediated contamination.
Overall, bio-fouling represents a significant economic cost to a specific coating productvariety of man-made structures and applied to substrates, creating a surface which is uninhabitablefacilities including: desalination plants, piers, and pylons, buoys, boilers, steam generators, cooling towers, evaporators, distillation units, heat exchangers, engine jackets and valves. In addition, bio-fouling generally increases fuel consumption, reduces efficiency, and greatly increases corrosion rates.
AquaNatural Industrial, AquaCrete Natural, AquaCulture Natural and AquaNatural Marine products are the only non-hazardous, non-toxic, safe, user-friendly, fouling prevention coatings. These four products prevent bio-film adherence and subsequent attachment by other hard fouling agents. Our Fouling Prevention coatings are the quaggaonly four environmentally-safe paints for preventing the attachment of bio-films and zebra mussels. The advantageshard fouling agents.
Other key attributes of our peptide formulas are (1) they
are 100% safe to humans; (2) they will not kill the mussels which are now an
integral part of the food chain, the disruption of which would be an
environmental unknown;four fouling prevention, products include:
· | Our protective coating paints are available in several colors including white and clear; |
· | Our products do not kill fouling agents, simply prevent them from attaching to our coated surfaces; |
· | Our products can be applied to netting material, rope, fiberglass, cement and a variety of metal substrates; and, |
· | Of all the registered anti-fouling paints, Peptide Technologies, Inc.’s fouling prevention coatings are the only coatings registered non-hazardous, non-toxic paint coatings, and therefore rated as non-dangerous goods. |
Zebra and (3) they are organic and eco-environmentally
friendly.
Background
Quagga Mussels
The zebra mussel (Dreissena polymorpha) and its cousin, the quagga mussel (Dreissena rostriformis bugensis), are small bivalve mollusks with two matching half shells, having an average life span of 3 to 5 years. Zebra mussels are native to the Black, Caspian, and Azov Seas, dating back to 1769. By the late 18th and early 19th centuries, zebra mussels had spread to most all major drainages of Europe because of widespread construction of canal systems. They first appeared in Great Britain in 1824, where they are now well established. Since then, zebra mussels have expanded their range into Denmark, Sweden, Finland, Ireland, Italy, and the rest of Western Europe. Zebra mussels were first discovered in North America in 1988 in the Great Lakes. The first account of an established population came from Canadian waters of Lake St. Clair, a water body connecting Lake Huron and Lake Erie. By 1990, zebra mussels had been found in all the Great Lakes. The following year, zebra mussels escaped the Great Lakes basin and found their way into the Illinois and Hudson rivers. The Illinois River was the key to their introduction into the Mississippi River drainage which covers over 1.2 million square miles. Since its introduction, the zebra mussel has spread to 23 states in America and two Canadian provinces.
The quagga mussel is indigenous to the Dneiper River drainage of Ukraine and Ponto-Caspian Sea. It was discovered in the Bug River in 1890 by Andrusov, who named the species in 1897. The quagga mussel was first sighted in the Great Lakes in September 1989, when one was found near Port Colborne, Lake Erie, though the recognition of the quagga type as a distinct species was not until 1991. In August 1991, a mussel with a different genotype was found in a random zebra mussel sample from the Erie Canal near Palmyra, New York, and after confirmation that this mussel was not a variety of Dreissena polymorpha, the new species was named "quagga mussel"“quagga mussel” after the "quagga,"“quagga”, an extinct African relative of the zebra. The first sighting of quagga mussels outside the Great Lakes basin was made in the Mississippi River between St. Louis, Missouri and Alton, Illinois in 1995. In January 2007, populations of quagga mussels were discovered in Lake Mead near Boulder City, Nevada, and in Lake Havasu and Lake Mohave on the California/Arizona border.
The quagga mussel is a prolific breeder, possibly contributing to its spread and abundance. Dreissena are dioecious (either male or female) with external fertilization. A fully mature female mussel is capable of producing up to one million eggs per year. After fertilization, pelagic microscopic larvae, or veligers, develop within a few days and these veligers soon acquire minute bivalve shells. Free-swimming veligers drift with the currents for three to four weeks feeding by their hair-like cilia while trying to locate suitable substrata to settle and secure byssal threads. Zebra and quagga mussels accumulate organic pollutants within their tissues to levels more than 300,000 times greater than concentrations in the environment and these pollutants are found in their pseudofeces, which can be passed up the food chain, therefore increasing wildlife exposure to organic pollutants (Snyder et al., 1997). Another major threat involves the fouling of native freshwater mussels. Since quaggas were discovered in Lake Michigan in 1998, plankton rings formed by the passage of storms have been eaten away by the quagga mussels, threatening the local ecosystem.
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Numerous pipelines, filter screens, hydroelectric turbines and pumping stations, irrigation tunnels, canals and aqueducts are becoming clogged with quagga and zebra mussels, and this proliferation and dispersion of mussel populations threatens to impact reclamation operations and multiple dams across North America, resulting in the interruption of hydropower and water delivery at significant economic costs. Of particular concern is the blockage of water lines designed to cool the hydropower turbines at dams like Hoover.
The quagga mussels, which grow to about 1.5 inches, are clogging water lines that are used to cool the 17 massive hydropower turbines at Hoover Dam and have already forced dam operators to temporarily shut down turbines that supply electricity to 1.6 million people in southern Nevada, Arizona and California.
The mussels have caused similar problems at the downstream Davis Dam in Lake Mohave and Parker Dam in Lake Havasu, both of which provide electricity for thousands of people in Arizona and California. The mussels have also threatened to clog water intake lines in Lake Mead operated by the Southern Nevada Water System that supply water to more than 2 million people in the Las Vegas area.
What took decades to unfold in the Great Lakes has played out in a matter of months in Lake Mead. Quaggas can lay eggs six or seven times a year in the warmer water, compared with once or twice a year in the Great Lakes.
If you drained Lake Mead above Hoover Dam, says National Park Service biologist Bryan Moore, it would reveal that brown canyon walls that were mussel-free just two years ago are now black with quaggas at densities of up to 55,000 per square meter. The Bureau of Reclamation, which operates the Hoover, Davis and Parker dams, has employed divers with high-pressure water hoses to blow mussels out of pipelines and filter gates, and the agency retains the option of using chlorine treatments on the mussels if necessary.Butnecessary. But those treatments are expensive, temporary and, in the case of chlorine, can have negative environmental effects.
Colonization of the Columbia River Basin (CRB)in the Pacific Northwest by zebra and quagga mussel could affect all submerged components and conduits of the Federal Columbia River Power System (FCRPS) including trash racks, raw water distribution systems (headers), turbine bearing cooling systems, diffuser plates, service and fire-water systems, and fish passage facilities.
Despite the uncertainty about zebra and quagga mussel tolerance to water velocity, irregularities such as cracks and crevices and scaling in older pipes and flanges can provide lower velocity refugia where zebra and quagga mussel settlement can occur. The attached mussels, in turn, then produce additional low flow refuges, allowing colonization in otherwise inhospitable flow environments. Settlement can also occur when water flow is reduced during generation down-time as conditions become more conducive to attachment.
Zebra and quagga mussel densities within the CRB could vary widely depending on water chemistry, food availability, and breeding population. After their initial introduction, zebra mussel populations can rapidly increase by orders of magnitude, and then similarly decrease. Under ideal conditions in the Laurentian Great Lakes zebra mussel densities reach 700,000 -– 800,000 per square meter (Kovalak(Kovalak et al, 1993). In the lower Mississippi River, where the zebra mussel has been introduced, densities of 400,000 per square meter have been reported (Kraft, 1995). The Mississippi has an ideal environment for zebra and quagga mussels, in part because food resources are abundant (Kraft, 1995). While Columbia River water quality parameters are favorable to zebra and quagga mussel colonization (Athearn 1999), the Columbia River'sRiver’s lower plankton densities in comparison to the Mississippi or Great Lakes, may limit zebra and quagga mussel population densities.
Densities of zebra and quagga mussels in the Pacific Northwest will determine the severity of impacts on hydropower, navigation, and fish passage facilities. Zebra mussel densities in powerhouses will depend on the configuration of the water systems and water conduit materials. The potential economic impacts of zebra and quagga mussels on hydropower generation facilities in the Columbia River will be determined by a number of factors including density, growth rate, and maintenance costs. While density and growth are affected by environmental factors as noted above, maintenance costs will also be driven by the difficulty in accessing fouled areas, the methods available for removal and control, and the amount of time available for maintenance activities. They prefer to cling to flat, stainless steel structures where water flows less than 6 feet per second. The muscles infestation sets in and begins to clog hydroelectric power cooling pipes and other hardware in the
dams'dams’ operations with quagga colonies. Not only do they pose a threat to the cooling pipe system for hydroelectric turbines, but also to the network that supplies domestic water for workers and visitors at the dams.
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Economic Impacts
o
• Hydroelectric Dams and Nuclear Power Plants
There are more than 85,000 dams in the United States alone, of which approximately 11% are federally owned and operated. The major concern is the blockage of water lines designed to cool the hydropower turbines at dams like Hoover. This problem has already caused a "significant“significant increase in the frequency of high temperature alarms in cooling systems, requiring shutdowns"shutdowns” so that the mussels could be removed.
Quagga
The quagga mussels, which grow to about 1.5 inches, are clogging water lines that are used to cool the 17 massive hydropower turbines at Hoover Dam and have already forced dam operators to temporarily shut down turbines that supply electricity to 1.6 million people in southern Nevada, Arizona and California.
The mussels have caused similar problems at the downstream Davis Dam in Lake Mohave and Parker Dam in Lake Havasu, both of which provide electricity for thousands of people in Arizona and California. The mussels have also threatened to clog water intake lines in Lake Mead operated by the Southern Nevada Water System that supply water to more than 2 million people in the Las Vegas area.
Maintenance costs will also be driven by the difficulty in accessing fouled areas, the methods available for removal and control, and the amount of time available for maintenance activities. It has been estimated that hundreds of millions of dollars is spent annually to combat the mussel infestation at hydroelectric dams alone, and it is expected that this amount will increase exponentially once the infestation has spread to the West.
Virtually any submerged area with a moderate flow rate that draws water from an infested water source is vulnerable to colonization. This is especially true of areas that offer protection to small mussels, such as crevices or seams. Intake screens, for example, are common settlement areas and are often coated with clumps or druses of mussels. The presence of dislodged shells in the discharge of a facility'sfacility’s raw well or forbay is a common first indicator of the presence of zebra mussels in the raw water main. Facilities may also experience a noticeable decrease in head pressure. Most facilities have numerous components subject to severe biofouling,
o bio-fouling,
• Shipping Industry
The shipping industry worldwide spends huge amounts every year combating the effects of "fouling."“fouling”. Every year or two, ocean going vessels must dry-dock in order to undergo extensive work over two or more weeks to remove barnacles that have attached to the hull. Prior to dry-docking, ships gradually undergo rapid increases in additional fuel costs due to increased drag from fouling. The mechanism involved in fouling occurs in a series of three steps. Within one week, the hull surface is coated with a slimy deposit. Following this, various micro-organisms (bacteria) attach. Barnacles attach to this slimy/bacterial coating and become attached to the ship'sship’s hull using a biocementbio-cement generated by a series of three proteins that undergo a conformational change, within the organism. This cement is one of, if not the strongest cement known to date of anything produced naturally.
The current antifoulinganti-fouling paint applied to ship hulls contains toxic chemicals and heavy metals.metals. However, as the international shipping community has been issuing legislation prohibiting the use of these environmentally hazardous substances -
– the need for alternatives is pressing.
o
• Recreational Boating Industry
In contrast, Lake Mead Marina predicts the costs to the West'sWest’s recreational boating industry alone will be immense in the coming few years. Mussels are smothering everything under the waterline at marinas, making simple maintenance on boats and floating docks expensive and time consuming, not to mention dangerous due to the razor-sharp shells being plucked from the water.
The United States Park Service, which figures the mussels have been in Lake Mead since 2005, is trying to protect the rest of the West'sWest’s waters by requiring boats that have been docked in a slip to be decontaminated with jets of scalding water before departing Lake Mead. A killer hot wash costs about $40 for a small boat and up to $200 for a houseboat.
o
• Ecological Damage
The infestation of zebra and quagga mussels are wreaking havoc on the native species indigenous to the waterways they inhabit. These mussels attach to other mussel species and crustaceans making it almost impossible for them to eat and survive. While the zebra and quagga do have predator enemies, there are not enough to consume the rapidly growing infestation.
7
This is more than an ecological concern. The federal government plans to spend over a billion dollars in the coming years to help these species recover, and zebra and quagga mussels have a history of ravaging native species in the waters they invade. In Lake Michigan, for example, prey fish numbers are less than 10% of what they were before the invasive mussels arrived.
Zebra mussels are also believed to be the source of deadly avian botulism poisoning that has killed tens of thousands of birds in the Great Lakes since the late 1990s.
Zebra and quagga mussels accumulate organic pollutants within their tissues to levels more than 300,000 times greater than concentrations in the environment and these pollutants are found in their pseudofeces, which can be passed up the food chain, therefore increasing wildlife exposure to organic pollutants.
Another major threat involves the fouling of native freshwater mussels. Since quaggas were discovered in Lake Michigan in 1998, plankton rings formed by the passage of storms have been eaten away by the quagga mussels, threatening the local ecosystem.
Other zebra and quagga mussel infested applications include:
o
• Drinking water treatment facilities
ofacilities;
• Fish hatcheries and aquaculture facilities
ofacilities;
• Golf courses
ocourses;
• Impoundments and reservoirs
oreservoirs;
• Institutions (hospitals, colleges, etc.)
o;
• National scenic river ways
oways;
• Navigation locks
olocks;
• Public agencies
o farmagencies; and
• Farm irrigation
water
Our Advantages
We believe that our proprietary technology provide advantages over potential
competitors to meet their objectives.
Proprietary Technology:
We intend to manufacture a product based on proprietary technology that took
over ten years to develop.
Our approach allows us to construct and test a targeted peptide in weeks as
opposed to the present vaccine development that can take longer than a year to
make and test. We have reconstructed the Peptide in such a way that enzymes do
not recognize them and therefore will not destroy them. As a result, our
targeted Peptide will have the opportunity to perform the objective they were
designed to fulfill. Additionally, Peptide based on structures of the naturally
occurring barnacle cement proteins are non-toxic, and once sloughed off into
seawater, Peptide would be eaten as totally non-toxic food by marine organisms.
The Company has developed proprietary innovative peptide proteomic technologies
involving the use of Peptide to create a solution that would effectively
prevent zebra and quagga muscles from attaching to equipment, water intake
pipes, and even boat hulls to colonize in massive numbers. The Company uses
computer algorithms to generate Peptide capable of interacting with
biologically significant protein targets. When fully developed, Peptide
Technologies' peptide solution will slow the rate of zebra and quagga mussel
fouling as well as to eliminate the harm to water users and marine life through
the use of safe, environmentally-friendly natural Peptide . While the production
of an underwater adhesive that mimics the properties of mussels has been an
ongoing field of research, Peptide Technologies is focused on proteins that
comprise the glue that affixes the byssal threads of the zebra and quagga
mussels to hard surfaces.
We have two designs that we are launching for use by the shipping and boating
industry based upon our technology:
o The first was the design of specific peptide inhibitors of a bacteria that
attaches to a ship's hull, which could be incorporated into paint used to
coat the hull following defouling in dry-dock. The Peptide would prevent
attachment of the bacteria and subsequent attachment of the barnacles.
Furthermore, any release of the Peptide into the ocean as the paint wears
off, would not pose any environmental threat since Peptide are
biodegradable natural proteins.
8
o The second approach was the design of peptide inhibitors that will prevent
folding of the proteins in barnacles that generate the powerful cement that
"glue" them to the ship's hull. Both of the above approaches offered the
shipping industry a solution to an age old problem costing literally
billions of dollars in lost time at sea (dry-dock scraping of barnacles and
painting) and significantly reduced fuel costs by preventing any increase
in drag.
Principal Products and Services
The Company intends to develop and provide a sustainable natural solution that
addresses the economic burdens caused by the zebra and quagga mussels, without
harming other organisms or depleting a segment of the natural food chain.
Research and Development Activities and Costs
We have not incurred any costs to date relating to research and development and
have no plans to undertake any research and development activities within the
next twelve months.
water. Facilities and Properties
We do not own our own facilities and are presently renting an identity office in Seattle, Washington.
Employees
Our officers, directors, and directorsemployees are responsible for planning, developing and operational duties and will continue to do so throughout the early stages of our growth. We have no intentions in hiring any employees until our business has
sufficient and reliable revenue from operations and do not expect to hire any
such employees in the next twelve months.
ITEM 1A.RISK1A. RISK FACTORS
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
The Company has a lack of revenue history and has had a limited history of --------------------------------------------------------------------------------
operations.
----------
Peptide Technologies Inc. was formed on November 18, 2005 for the purpose of engaging in any lawful business and had adopted a plan to engage the sale of art work over the internet. The Company had minimal revenues. On July 29, 2010 the Company's name changed from Online Originals, Inc. to CREENERGY Corporation. The name change was intended to convey a sense of the Company's new business focus as it looks to pursue other opportunities. Specifically, the Company intended to obtain leases for the exploration and production of oil and gas in northern Alberta, Canada. The Company was unable to identified any prospects or enter into any leases or agreements.
On August 23, 2011, the Company entered into an Asset Purchase to acquire intangible assets and intellectual property known as the Peptide Technology Platform. The Peptide Technology Platform includes the technology platforms for developing a variety of drug candidates and biological solutions for existing problems in humans, animals and the environment. Effective October 12, 2011, the Company changed its name to Peptide Technologies, Inc. in order to better convey a sense of the Company'sCompany’s new business focus. At the date of this Annual Report on Form 10-K, the Company is not profitable. PeptidePeptides must be regarded as a start-up venture with all of the unforeseen costs, expenses, problems, risks and difficulties to which such ventures are subject.
Peptide
Peptides can give no assurance of success or profitability to the Company's
--------------------------------------------------------------------------------Company’s investors.
---------
There is no assurance that PeptidePeptides will ever operate profitably. There is no assurance that the Company will generate revenues or profits, or that the market price of the Company'sCompany’s common stock will be increased thereby.
The Company will need additional financing for which PeptidePeptides has no
-------------------------------------------------------------------------------- commitments, and this may jeopardize execution of the Company'sCompany’s business plan.
-----------------------------------------------------------------------------
The Company'sCompany’s capital needs consist primarily of expenses related to expenses incurred with maintaining its reporting status and could exceed $50,000 in the next twelve months. Such funds are not currently committed, and Peptide'sPeptides’ cash as of the date of this Annual Report on Form 10K of approximately $5,000.
Peptide
Peptides has limited funds, and such funds may not be adequate to carry out the business plan. The
Company'sCompany’s ultimate success depends upon its ability to raise additional capital. The Company has not investigated the availability, source, or terms that might govern the acquisition of additional capital and will not do
9
so until it determines a need for additional financing. If the Company needs additional capital, it has no assurance that funds will be available from any source or, if available, that they can be obtained on terms acceptable to the Company. If not available, Peptide'sPeptides’ operations will be limited to those that can be financed with its modest capital. We will incur expenses in connection with our sec filing requirements and we may --------------------------------------------------------------------------------
not be able to meet such costs, which could jeopardize our filing status with --------------------------------------------------------------------------------
the SEC.
-------
As a public reporting company we are required to meet the filing requirements of the SEC. We may see an increase in our legal and accounting expenses as a result of such requirements. We estimate such costs on an annualized basis to be approximately $50,000, which includes both the annual audit and the review of the quarterly reports by our auditors. These costs can increase significantly if the Company is subject to comment from the SEC on its filings and/or we are required to file supplemental filings for transactions and activities. If we are not compliant in meeting the filing requirements of the SEC, we could lose our status as a 1934 Act Company, which could compromise our ability to raise funds.
Peptide
Peptides is not diversified and it is dependent on only one business.
-------------------------------------------------------------------
Because of the limited financial resources that the Company has, it is unlikely that the Company will be able to diversify its operations. Peptide'sPeptides’ probable inability to diversify its activities into more than one area will subject the Company to economic fluctuations within the industry and therefore increase the risks associated with the Company'sCompany’s operations due to lack of diversification.
The Company may in the future issue more shares which could cause a loss of --------------------------------------------------------------------------------
control by its present management and current stockholders.
----------------------------------------------------------
Peptide
Peptides may issue further shares as consideration for the cash or assets or services out of its authorized but unissued common stock that would, upon issuance, represent a majority of the voting power and equity of the Company. The result of such an issuance would be those new stockholders and management would control the Company, and persons unknown could replace the Company'sCompany’s management at this time. Such an occurrence would result in a greatly reduced percentage of ownership of PeptidePeptides by its current shareholders, which could present significant risks to investors.
Peptide
Peptides will depend upon management but it will have limited participation of --------------------------------------------------------------------------------
management.
----------
The Company currently has two individuals who are serving as its officers and directors. The Company will be heavily dependent upon their skills, talents, and abilities, as well as several consultants to Peptide ,Peptides, to implement the Company'sCompany’s business plan, and may, from time to time, find that the inability of the officers, directors and consultants to devote their full-time attention to PeptidePeptides business results in a delay in progress toward implementing the Company'sCompany’s business plan.
Peptide
Peptides does not know of any reason other than outside business interests that would prevent them from devoting full-time to its Company, when the business may demand such full-time participation.
The departure of our key personnel could compromise our ability to execute our --------------------------------------------------------------------------------
strategic plan and may result in additional severance costs to us.
-----------------------------------------------------------------
Our success largely depends on the skills, experience and efforts of our key personnel. The loss of these persons, or our failure to retain other key personnel, would jeopardize our ability to execute our strategic plan and materially harm our business.
We will need to recruit and retain additional qualified personnel to --------------------------------------------------------------------------------
successfully grow our business.
------------------------------
Our future success will depend in part on our ability to attract and retain qualified operations, marketing and sales personnel as well as engineers. Inability to attract and retain such personnel could adversely affect the growth of our business. We expect to face competition in the recruitment of qualified personnel, and we can provide no assurance that we will attract or retain such personnel.
Risks Related to our Stock:
The regulation of penny stocks by SEC and FINRA may discourage the tradability --------------------------------------------------------------------------------
of our securities.
-----------------
The Company is a
"penny stock"“penny stock” company. None of our securities currently trade in any market and, if ever available for trading, will be subject to a Securities and Exchange Commission rule that imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than
10
established customers or accredited investors. For purposes of the rule, the phrase "accredited investors"“accredited investors” means, in general terms, institutions with assets in excess of $5,000,000, or individuals having a net worth in excess of $1,000,000 or having an annual income that exceeds $200,000 (or that, when combined with a spouse'sspouse’s income, exceeds $300,000). For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser'spurchaser’s written agreement to the transaction prior to the sale. Effectively, this discourages broker-dealers from executing trades in penny stocks. Consequently, the rule will affect the ability of shareholders to sell their securities in any market that might develop therefore because it imposes additional regulatory burdens on penny stock transactions.In addition, the Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks."“penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. Because our securities constitute "penny stocks"“penny stocks” within the meaning of the rules, the rules would apply to us and to our securities. The rules will further affect the ability of owners of shares to sell our securities in any market that might develop for them because it imposes additional regulatory burdens on penny stock transactions.
Shareholders should be aware that, according to Securities and Exchange Commission, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room"“boiler room” practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.
Our officers and directors collectively own a substantial portion of our
-------------------------------------------------------------------------------- outstanding common stock, and as long as they do, they may be able to control --------------------------------------------------------------------------------
the outcome of stockholder voting.
---------------------------------
Our officers and directors are collectively the beneficial owners of approximately 38%44% of the outstanding shares of our common stock. As long as our officers and directors collectively own a significant percentage of our common stock, our other shareholders may generally be unable to affect or change the management or the direction of our company without the support of our officers and directors. As a result, some investors may be unwilling to purchase our common stock. If the demand for our common stock is reduced because our officers and directors have significant influence over our company, the price of our common stock could be materially depressed. The officers and directors will be able to exert significant influence over the outcome of all corporate actions requiring stockholder approval, including the election of directors, amendments to our certificate of incorporation and approval of significant corporate transactions.
We may seek to raise additional funds or develop strategic relationships by --------------------------------------------------------------------------------
issuing capital stock.
---------------------
We have financed our operations, and we expect to continue to finance our operations and develop strategic relationships, by issuing equity or convertible debt securities, which could significantly reduce or dilute the percentage ownership of our existing stockholders. Furthermore, any newly issued securities could have rights, preferences and privileges senior to those of our existing stock. Moreover, any issuances by us of equity securities may be at or below the prevailing market price of our stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of stock to decline.
We may also raise additional funds through the incurrence of debt, and the holders of any debt we may issue would have rights superior to your rights in the event we are not successful and are forced to seek the protection of the bankruptcy laws.
The Company will pay no foreseeable dividends in the future.
-----------------------------------------------------------
The Company has not paid dividends on our common stock and do not ever anticipate paying such dividends in the foreseeable future.
11
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. DESCRIPTION OF PROPERTY We do not own our own facilities and are presently renting an identity office in Seattle, Washington.
(a) Real Estate None
(b) Title to properties. None
(c) Oil and Gas Prospects. None
(d) Patents In process
(a) | Real Estate | None. |
(b) | Title to properties. | None. |
(c) | Oil and Gas Prospects. | None. |
(d) | Patents | None |
ITEM 3. LEGAL PROCEEDINGS
On November 22, 2010, the Company was served with a claim filed by a former
director and officer of the Company. The claim alleges that the former director
and officer of the Company suffered losses and damages as a result of the
failure of the Company in providing him with corporate documents and
implementing a change of the board of directors. The Company has retained legal
counsel to address the claim. On December 8, 2010, the Company filed a Statement
of Defense requesting that the claim be dismissed. In the opinion of management,
this claim is without merit and the Company intends to defend this claim
vigorously.
Other than the above, the Company is not a party to any pending legal
proceedings, nor is the Company aware of any civil proceeding or government
authority contemplating any legal proceeding as of the date of this filing.
None.
ITEM 4. MINE SAFETY DISCLOSURE Not Applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'SREGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market for Common Equity and Related Stockholder Matters
(a) Market Information
Our Common Stock is presently traded on the over-the-counter market on the OTCBB. On August 7, 2008, we began tradingwere listed on the over the counter bulletin board under the symbol "OLOI."
“OLOI”.
Effective on October 12, 2011, the Company filed an amendment to its Articles of Incorporation with the Secretary of State of Nevada to change its name from Creenergy, Corporation to Peptide Technologies, Inc.
As a result of the change, the Company'sCompany’s trading symbol, on the Over The Counter Market BBboard was changed to "PEPT."“PEPT.” During the period of August 7, 2008 through November 30, 2012,2013, our shares have not traded.
(b) Holders
As of January 10, 2013,06, 2014, there were approximately sixty-nine (69)ninety-nine (99) holders of record of our common stock.
(c) Dividend Policy
We have never declared or paid dividends on our common stock. We intend to retain earnings, if any, to support the development of our business and therefore do not anticipate paying cash dividends for the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including current financial condition, operating results and current and anticipated cash needs.
12
(d) Securities authorized for issuance under equity compensation plans
None.
RECENT SALES OF UNREGISTERED SECURITIES
During the years ended November 30, 20122013 and 2011,2012, the Company made the following sales and issuances of its unregistered securities.
On August 23, 2011, the Company issued a total of 75,000,000 shares of its
restricted common stock in exchange for intangible assets and intellectual
property referred to as the Peptide Technology Platforms. 15,000,000 of these
shares were issued for Finders/Founders fees and services. On December 21, 2012,
30,000,000 of these shares were returned to treasury and cancelled based on
further evaluation of the assets value.
During the three-month period from September to November 2011, the Company
raised $23,000 through the sale of 23,000 shares common stock via subscription
agreements sold to six investors, based on a stock price of $1.00 per share.
On January 5, 2012, the Company issued 5,000 shares of the Company'sCompany’s restricted common stock were issued for cash proceeds of $4,936 (CAD $5,000). Note: during FY 2012, our stock was sold
for $1.00 per share whether paid for in CAD$ or USD$, as the exchange rate did
not cause any material differences in the effective price per share or number of
shares received.
On January 6, 2012, the Company issued 5,000 shares of the Company'sCompany’s restricted common stock were issued for cash proceeds of $4,921 (CAD $5,000).
On January 15, 2012, 5,000 shares of the Company'sCompany’s restricted common stock were issued for cash proceeds of $4,884 (CAD $5,000).
On January 24, 2012, the Company issued 5,000 shares of the Company'sCompany’s restricted common stock were issued for cash proceeds of $4,943 (CAD $5,000).
On April 20, 2012, the Company issued 5,000 shares of the Company'sCompany’s restricted common stock were issued for cash proceeds of $5,041 (CAD $5,000).
On July 11, 2012, the Company issued 5,000 shares of the Company'sCompany’s restricted common stock were issued for cash proceeds of $4,902 (CAD $5,000).
On August 31, 2012, the Company issued 5,000,000 fully vested shares of the Company'sCompany’s restricted common stock at a par value of $0.001 per share to a director of the Company for consulting services rendered.accepting the positions of Chief Financial Officer and director of the board. As a result, the Company recorded stock compensation expenseshare-based payment of $5,000 when the stock was issued.
On September 28, 2012, the Company issued 5,000 shares of the Company'sCompany’s restricted common stock were issued for cash proceeds of $5,086 (CAD $5,000).
On October 15, 2012, the Company issued 20,000 shares of the Company'sCompany’s restricted common stock were issued for cash proceeds of $20,402 (CAD $20,000).
On November 28, 2012, the Company issued 3,000,000 fully vested shares of the Company'sCompany’s restricted common stock at a par value of $0.001 per share to a third party for technical services rendered. As a result, the Company recorded stock compensation expense of $3,000 when the stock was issued.
On April 10, 2013, the Company issued 20,000 shares of the Company’s restricted common stock for cash proceeds of $20,000. The Company paid $2,000 in share issuance costs.
On April 26, 2013, the Company issued 2,000,000 shares of the Company’s restricted common stock at a par value of $0.001 per share to a third party for marketing assistance with the development of the international markets in the South Pacific quadrant for the Company. As a result, the Company recorded consulting expense of $2,000 when the stock was issued.
On July 18, 2013, the Company issued 25,000 shares of the Company’s restricted common stock for cash proceeds of $25,000.
Exemption from Registration Claimed
All of the shares described above were issued by us in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4(2). All of the individuals and/or entities listed above that purchased or were issued the unregistered securities were all known to us and our management, through pre-existing business relationships, as long standing business associates, friends, and employees. All purchasers were provided access to all material information, which they requested, and all information necessary to verify such information and were afforded access to our management in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to us. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.
13
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue up to 675,000,000 shares of Common Stock, $0.001 par value. The holders of our Common Stock are entitled to one vote per share held and have the sole right and power to vote on all matters on which a vote of stockholders is taken.taken Voting rights are non-cumulative. Common stockholders are entitled to receive dividends when, as, and if declared by the Board of Directors, out of funds legally available therefore and to share pro rata in any distribution to stockholders. Upon liquidation, dissolution, or the winding up of our Company, common stockholders are entitled to receive the net assets of our Company in proportion to the respective number of shares held by them after payment of liabilities which may be outstanding. The holders of Common Stock do not have any preemptive right to subscribe for or purchase any shares of any class of stock of the Company. The outstanding shares of Common Stock will not be subject to further call or redemption and are fully paid and non-assessable. To the extent that additional common shares are issued, the relative interest of existing stockholders will likely be diluted.
At present, we are not authorized to issue any series or shares of preferred stock.
Stock Purchase Warrants
None.
Stock Purchase Options
None.
ITEM 6. SELECTED FINANCIAL DATA
Contained under Item 7 - Management's– Management’s Discussion and Analysis of Financial Condition and Results of Operations.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPERATIONS. Cautionary and Forward-Looking Statements
In addition to statements of historical fact, this Form 10-K contains forward-looking statements. The presentation of future aspects of Peptide Technologies, Inc. (the "Company" or "Issuer") found in these statements is subject to a number of risks and uncertainties that could cause actual results to differ materially from those reflected in such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," or "could" or the negative variations thereof or comparable terminology are intended to identify forward-looking statements.
These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause the Company'sCompany actual results to be materially different from any future results expressed or implied by the Company in those statements. Important facts that could prevent the Company from achieving any stated goals include, but are not limited to, the following:
(a) volatility or decline of the Company's stock price;
(b) potential fluctuation in quarterly results;
(c) failure of the Company to earn revenues or profits;
(d) inadequate capital to continue or expand its business, inability to raise additional capital or financing to implement its business plans;
(e) failure to make sales on an increasing basis;
(f) rapid and significant changes in markets;
(g) litigation with or legal claims and allegations by outside parties; and
(h) insufficient revenues to cover operating costs.
There is no assurance that the Company will be profitable, the Company may not be able to successfully develop, manage or market its products and services, the Company may not be able to attract or retain qualified executives and personnel, the Company's products and services may become obsolete, government regulation may hinder the Company's business, additional dilution in outstanding stock
14
ownership may be incurred due to the issuance of more shares, warrants and stock options, or the exercise of warrants and stock options, and other risks inherent in the Company's businesses.The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K filed by the Company.
Plan of Operation for the Next Twelve (12) Months
The following discussion of the plan of operation, financial condition, results of operations, cash flows and changes in financial position of our Company should be read in conjunction with our most recent consolidated financial statements and notes appearing elsewhere in this Form 10-K.
Our registered public accounting firm'sfirm’s audit report on our consolidated financial statements as of and for the year ended November 30, 2012,2013, includes a "going concern"“going concern” explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. Management'sManagement’s plans in regard to the factors prompting the explanatory paragraph are discussed below.
On August 23, 2011, the Company entered into an Asset Purchase to acquire intangible assets and intellectual property known as the Peptide Technology Platform. The Peptide Technology Platform includes the technology platforms for developing a variety of drug candidates and biological solutions for existing mussel problems in the environment. Effective October 12, 2011, the Company changed its name to Peptide Technologies, Inc. in order to better convey a sense of the Company'sCompany’s new business focus.
Peptide Technologies, Inc. is a development stage company that is engaged in the development and manufacture of safe "green"“green” peptide-based products used to combat the rapidly growing problems caused by the quagga and zebra mussel infestation in U.S. and Canadian waters.
We have no employees at the present time, other than our Chief Executive Officer, Chief Financial Officer, and Vice President of Operations and Communications. We will continue to operate with very limited administrative support as our current officers continue to be responsible for developing and operational duties. We began accruing salaries for these officers during our fourth quarter of this past fiscal year. TheyWe do not compensate our directors for their time spent on behalf of our Company, but they are entitled to receive reimbursement for all out of pocket expenses incurred for attendance at our Board of Directors meetings.
Our continuing operations are dependent upon the identification and successful completion of additional long-term or permanent equity financing, the support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurances that we will be successful, which would in turn significantly affect our ability to complete our business plan. If not, we will likely be required to reduce operations or liquidate assets. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy our working capital and other cash requirements.
We believe we do not have sufficient cash resources to satisfy our needs through the end of November 30, 2013. Our ability to satisfy cash requirements thereafter and the need for additional funding is dependent on our ability to generate revenue from our business in sufficient quantity and on a profitable basis. To the extent that we require additional funds to support our operations or the expansion of our business, we may attempt to sell additional equity shares or issue debt. Any sale of additional equity securities will result in dilution to our stockholders. Should we require additional cash in the future, there can be no assurance that we will be successful in raising additional debt or equity financing on terms acceptable to us, if at all.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Financial Condition
At November 30, 2012,2013, we had a working capital deficit of $803,823$1,750,965 compared to working capital deficit of $197,340$803,823 at November 30, 2011.2012. At November 30, 2012,2013, our total assets consisted of cash of $157, website of $5,833 and intangible assets and intellectual property of $45,000. This compares with our total assets at November 30, 2012, which consisted of cash of $7,780, prepaid expenses of $3,494, website of $9,167 and intangible assets and intellectual property of $45,000.
This compares with
At November 30, 2013, our total
assetscurrent liabilities, consisting of accounts payable of $574,188, accrued liabilities of $27,000, payroll taxes payable of $17,084, salaries and benefits payable of $1,044,000, and notes payable of $88,850. Whereas, at
November 30, 2011, which consisted of
cash of $1,656, prepaid expenses of $127, and intangible assets and intellectual
property of $75,000.
15
At November 30, 2012, our total current liabilities, consisting of accounts payable of $29,217,$274,217, accrued liabilities of $254,500, accrued$9,500, payroll taxes of $6,000, salaries and bonus
of $447,000, accrued interest on notesbenefits payable of $3,374,$441,000, and notes payable of $81,006. Whereas, at November 30, 2011, our total liabilities consisted of
accounts payable of $29,848, accrued liabilities of $109,062, accrued interest
on notes payable of $117 and a notes payable of $60,096.
$84,380. Result of Operations -– New Developments
We recognized no revenues from discontinued operations during both fiscal years ending November 30, 20122013 and 2011.2012. We have not received any revenue since our inception of the New Developments which began June 26, 2010. Our short and long-term survival is dependent on funding from sales of securities as necessary or from shareholder loans.
During the year ended November 30, 2012,2013, we incurred operating expenses of $654,986$994,706 compared to operating expenses of $212,029$654,986 for the year ended November 30, 2011.2012. The principal component of losses in 20122013 were accrued payrollsalaries and bonus expensesof $623,084 consulting expense of $302,000, professional fees of $38,170, and general and administration of $30,350; compared with the principal component losses in 2012 which were salaries and bonus of $447,000, consulting expense of $145,000, professional fees of $46,759, and officegeneral and administration of $16,226; compared with the principal
component losses in 2011 which were consulting expense of $105,975, professional
fees of $42,755, supplies of $59,130, and office and administration of $4,169.
During the year ended November 30, 2012, expenses incurred by the Company
increased significantly. These increased costs were due to restructuring the
Company to developing the new focus and direction for the Company which resulted
in an increase in salaries and bonus expense of $447,000, consulting fees of
$39,025, and office/administration fees of $12,058.
$16,226.
The net loss for the year ended November 30, 20122013 was $650,236$995,476 compared to a net loss of $212,146$659,736 for the year ended November 30, 2011.2012. From the point of re-entry into the development state on June 26, 2010 to November 30, 2012,2013, we have incurred a net loss of $898,221.
$1,893,030.
We believe our existing cash balance is not sufficient to carry our normal operations for the next 12 months. To the extent that we require additional funds to support our operations or the expansion of our business, we may attempt to sell additional equity shares or issue debt. Any sale of additional equity securities will result in dilution to our stockholders. There can be no assurance that additional financing, if required, will be available to our company or on acceptable terms.
Off Balance Sheet Arrangements
Arrangements.
None.
Critical Accounting Policies and Estimates
The preparation of the Company'sCompany’s consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The following is a summary of the significant accounting policies and related estimates that affect the Company'sCompany’s financial disclosures.
Foreign Currency Translations
Thedisclosures:
Principles of Consolidation
These consolidated financial statements
are presented in U.S. dollars. Foreign denominated
monetary assets and liabilities are translated to their U.S. dollar equivalents
using foreign exchange rates which prevailed atinclude the
balance sheet date. Revenue
and expenses are translated at average rates of exchange during the period.
Related translation adjustments are reported as a separate component of
stockholders' equity, whereas gains or losses resulting from foreign currency
transactions are included in results of operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We believe our market risk exposures arise primarily from exposures to
fluctuations in interest rates and exchange rates. We presently only transact
business in Canadian and U.S. Dollars. We believe that the exchange rate risk
surrounding the future transactionsaccounts of the Company
will not materially or
adversely affect our future earnings. We do not believe that we are subject to
any seasonal trends. We do not use derivative financial instruments to manage
risks or for speculative or trading purposes.
16
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this Item begin on Page F-18 of this Form
10-K.
17
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
Page
Reports of Independent Registered Public Accounting Firm F-19
Financial Statements:
Balance Sheets F-21
Statements of Loss and Comprehensive Loss F-22
Statements of Cash Flows F-23
Statement of Changes in Stockholders' (Deficiency) F-24
Notes to Financial Statements F-25 to F-32
F-18
JAMES STAFFORD
--------------------------------------------------------------------------------
James Stafford, Inc.
Chartered Accountants
Suite 360 - 1111 Melville Street
Vancouver, British Columbia
Canada V63 3V6
Telephone +1 604 669 0711
Facsimile +1 604 669 0754
www.JamesStafford.ca
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Peptide Technologies, Inc.
(A Development Stage Company)
We have audited the balance sheets of Peptide Technologies, Inc.(A
Development Stage Company) (the "Company") as of 30 November 2012 and 2011
and the related statements of loss and comprehensive loss, cash flows and
changes in stockholders' (deficit) for the years then ended. These
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 of America). Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit 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, the financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of 30
November 2012 and 2011,and the results of its operations and its cash flows
for the years then endedin conformity with accounting principles generally
accepted in the United States of America.
The accompanyingfinancial statements have been prepared assuming that the
Company will continue aswholly-owned subsidiary Pept Peptide, a going concern. As discussed in Note 1 to the
financial statements, conditions exist which raise substantial doubt about
the Company's ability to continue as a going concern unless it is able to
generate sufficient cash flows to meet its obligations and sustain its
operations. Management's plans in regard to these matters are also
described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ James Stafford
Vancouver, Canada Chartered Accountants
30 January 2013, except for Note 13, as to which the date is 14 February
2013
F-19
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
Financial Statements
(Expressed in U.S. Dollars)
November 30, 2012
20
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
BALANCE SHEETS
November 30, 2012 November 30, 2011
----------------- ---------------------
ASSETS
Current assets
Cash and cash equivalents $ 7,780 $ 1,656
Prepaid expense 3,494 127
------------------------------------------------
Total current assets 11,274 1,783
Website (net of accumulated amortization of $833) (Note 3) 9,167 -
Intangible assets and intellectual property (Note 7) 45,000 75,000
------------------------------------------------
TOTAL ASSETS $ 65,441 $ 76,783
================================================
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities (Note 4) $ 730,717 $ 138,910
Notes payable and accrued interest (Note 5) 84,380 60,213
------------------------------------------------
Total current liabilities 815,097 199,123
------------------------------------------------
STOCKHOLDERS' (DEFICIENCY)
Capital stock (Note 8)
Authorized: 675,000,000 common shares, par value $0.001
Issued and outstanding: 149,078,000 and 171,023,000 at
November 30, 2012 and November 30, 2011, respectively. 149,078 171,023
Additional paid-in capital 105,324 50,265
Accumulated other comprehensive income - 694
Accumulated deficit (105,837) (105,837)
Accumulated deficit during development stage (898,221) (238,485)
------------------------------------------------
Total stockholders' deficit (749,656) (122,340)
------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 65,441 $ 76,783
================================================
The accompanying notes are an integral part of these statements.
F-21
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
Cumulative from
re-entering of
Year Ended Year Ended development stage on
November 30, November 30, June 26, 2010
2012 2011 to November 30, 2012
----------------- ------------------ ------------------------------
Revenue $ - $ - $ -
Expenses
Consulting 145,000 105,975 250,975
Salaries and bonus (Note 4) 447,000 - 447,000
Office and administration 16,226 4,169 22,675
Professional fees 46,759 42,755 113,573
Supplies and materials - 59,130 59,130
--------------------------------------------------------------------------
654,985 212,029 893,353
--------------------------------------------------------------------------
Net loss before other items (654,985) (212,029) (893,353)
--------------------------------------------------------------------------
Other items
Foreign exchange loss (1,494) - (1,494)
Interest expense (Note 5) (3,257) (117) (3,374)
--------------------------------------------------------------------------
(4,751) (117) (4,868)
--------------------------------------------------------------------------
Net loss for the period $ (659,736) $ (212,146) $ (898,221)
==========================================================================
Other comprehensive income (loss)
Foreign currency translation
adjustment (694) 361 (333)
--------------------------------------------------------------------------
==========================================================================
Comprehensive loss for the period $ (660,430) $ (211,785) $ (898,554)
==========================================================================
Loss per share - basic and diluted $ (0.00) $ (0.00)
==========================================================================
Weighted average number of shares
outstanding 143,453,042 116,344,800
==========================================================================
The accompanying notes are an integral part of these statements.
F-22
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Cumulative from
re-entering of
Year ended Year ended development stage on
November November June 26, 2010 to
30, 2012 30, 2011 November 30, 2012
--------------------------------------------------------------------
Cash Flows from Operating Activities
Net loss $ (659,736) $ (212,146) $ (898,221)
Adjustments for non-cash items:
Accrued interest 3,257 117 3,374
Depreciation and amortization 833 - 833
Stock compensation for services 8,000 - 8,000
Changes in operating assets and liabilities:
Prepaid expenses (3,367) 73 (784)
Accounts payable and accrued liabilities 591,807 125,777 729,967
--------------------------------------------------------------------
Net Cash Used in Operating Activities (59,206) (86,296) (156,831)
--------------------------------------------------------------------
Cash Flows Used in Investing Activities
Purchase of website (10,000) - (10,000)
--------------------------------------------------------------------
Net Cash Used in Investing Activities (10,000) - (10,000)
--------------------------------------------------------------------
Cash Flows From Financing Activities
Issuance of common shares for cash 55,114 23,000 78,114
Increase in notes payable 20,910 44,096 65,006
Contribution by related party - 14,288 27,288
--------------------------------------------------------------------
Net Cash Provided by Financing Activities 76,024 81,384 170,408
--------------------------------------------------------------------
Increase (Decrease) in Cash during the Period
6,818 (4,795) 3,577
Effect of Exchange Rate Changes on Cash (694) 361 (333)
Cash, Beginning Of Period 1,656 6,090 4,536
--------------------------------------------------------------------
Cash, End Of Period $ 7,780 $ 1,656 $ 7,780
====================================================================
Supplemental Disclosure Of Cash Flow
Information:
Cash paid for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
====================================================================
The accompanying notes are an integral part of these statements.
F-23
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS'(DEFICIT)
For the Period from November 30, 2010 through November 30, 2012
CAPITAL STOCK ACCUMULATED
-----------------------------------------------
DEFICIT
ADDITIONAL DURING DEVELOPMENT ACCUMULATED
PAID-IN COMPREHENSIVE
ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT STAGE INCOME (LOSS) TOTAL
November 30, 2010
Balance 96,000,000 $ 96,000 $ 13,000 $ (105,837) $ (26,339) $ 333 $ (22,843)
-----------------------------------------------------------------------------------------------------------------
Common shares
issued for
property
(Note 8) 75,000,000 75,000 - - - 75,000
Common shares
issued for cash
(Note 8) 23,000 23 22,977 - - - 23,000
Contribution by
related party
(Note 6) - - 14,288 - - - 14,288
Foreign currency
translation
adjustment - - - - - 361 361
Net loss for the
year ended
November 30, 2011 - - - - (212,146) - (212,146)
-----------------------------------------------------------------------------------------------------------------
November 30, 2011
Balance 171,023,000 $ 171,023 $ 50,265 $ (105,837) $ (238,485) $ 694 $ (122,340)
-----------------------------------------------------------------------------------------------------------------
Common shares issued
for cash
(Note 8) 55,000 55 55,059 - - - 55,114
Common shares
cancelled (30,000,000) (30,000) - - - - (30,000)
Common shares
issued for
related party
services ( Notes
6 and 8) 5,000,000 5,000 - - - - 5,000
Common shares
issued for
contractor services
(note 8) 3,000,000 3,000 - - - - 3,000
Foreign currency
translation - - - - - (694) (694)
Net loss for the
year - - - - (659,736) - (659,736)
-----------------------------------------------------------------------------------------------------------------
November 30, 2012
Balance 149,078,000 $ 149,078 $ 105,324 $ (105,837) $ (898,221) $ - $ (749,656)
=================================================================================================================
The accompanying notes are an integral part of these statements.
F-24
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
1. NATURE AND CONTINUENCE OF OPERATIONS
a) Organization
PEPTIDE TECHNOLOGIES, INC. (the "Company") wascompany incorporated in the Stateprovince of Nevada, United States of America,British Columbia on November 18, 2005. On
July 29, 2010, the Company's name was changed from Online Originals,
Inc. to CREEnergy Corporation. Effective October 12, 2011, the
Company's name was changed from CREEnergy Corporation to Peptide
Technologies, Inc. The Company's year-end is November 30.
b) Nature of OperationsAugust 5, 2013. All significant inter-company balances and Change in Business
Since the date of inception on November 18, 2005, the Company's
business plan was to develop a membership-based website art
gallery/auction house specifically focused on displaying and selling
original artwork. The Company changed its status from a development
stage company to an operating company on November 30, 2009. Management
realized that the results of operations from the sale of artwork lacks
luster and decided to change the Company's business focus and plan for
other strategic opportunities and discontinued the sale of artwork
with effect from June 25, 2010. Effective June 26, 2010, the Company
became a development stage company focusing on a new business.
On August 23, 2011, the Company entered into an Asset Purchase
Agreement in which the Company, in exchange for 75,000,000 shares of
the Company's restricted common stock, will receive all rights and
title to proprietary technologies and formulas involving the
application of specialty Peptide. The Company has changed its business
focus to the manufacturing and distribution of natural peptide
solutions to combat the economic burden caused by the zebra and quagga
mussels to the hydropower electricity industry.
c) Basis of Presentation and Going Concern
The accompanying interim financial statementstransactions have been prepared in
conformity with generally accepted accounting principles in the United
States of America, which contemplates the continuation of the Company
as a going concern. However, the Company has negative working capital
at August 31, 2012 and has total losses to date of approximately
$1,004,058. The Company requires additional funding to meet its
ongoing obligations and anticipated ongoing operating losses. The
ability of the Company to continue as a going concern is dependent on
raising capital to fund its initia l business plan and ultimately to
attain profitable operations. Accordingly, these factors raise
substantial doubt as to the Company's ability to continue as a going
concern. The Company intends to continue to fund its business by way
of private placements and advances from shareholders as may be
required.
2. SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist
in understanding the Company's financial statements. The financial
statements and notes are representations of management who is
responsible for their integrity and objectivity. These accounting
policies conform to generally accepted accounting principles in the
U.S. and have been consistently applied in the preparation of the
financial statements. The financial statements are stated in U.S.
dollars.
a) eliminated upon consolidation.
Organizational and Start-up Costs
Costs of start-up activities, including organizational costs, are expensed as incurred in accordance with Accounting Standards Codification
("ASC"(“ASC”) 720-15,
"Start-Up Costs."
F-25
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
b) “Start-Up Costs”.
Development-Stage Company
On or around June 25,
During the year ended November 30, 2010, the Company abandoned its previous business of sale of original artwork and re-entered the development stage with its intended new business, which currently has no revenues. Management expects to sustain losses from operations until such time it can generate sufficient revenues to meet its anticipated cost structure. The Company is considered a development-stage company in accordance with the ASC 915, "Accounting“Accounting and Reporting by Development-Stage Enterprises."Enterprises”. A development-stage enterprise is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.
c)
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments with original maturities of three months or less.
Website
In accordance with ASC 350-50, “Website Development Costs”, expenditures during the planning and operating stages of the Company’s website are expensed as incurred. Expenditures incurred during the website application and infrastructure development stage are capitalized and amortized to expense over the website’s estimated useful life of 3 years.
Intangible Assets
Intangible assets include the cost of acquiring the intellectual property. In accordance with ASC 350-30 “General Intangibles Other Than Goodwill”, an intangible asset that is acquired either individually or with a group of other assets shall be recognized. Costs of internally developing, maintaining, or restoring intangible assets that are not specifically identifiable, that have indeterminate lives, or that are inherent in a continuing business and related to an entity as whole, shall be recognized as an expense when incurred. The intellectual property is determined to have an indefinite useful life and is not subject to amortization.
Impairment of Long-Lived Assets
Long-lived assets include the website and intangible assets and intellectual property. Long-lived assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset. There has been no impairment as of November 30, 2013.
Research and Development
Research and development expenses are charged to operations as incurred.
Income Taxes
The Company adopted the ASC 740, "Accounting“Accounting for Income Taxes."Taxes”. ASC 740 requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.
d)
Basic and Diluted EarningsIncome (Loss) per Share
In accordance with ASC 260, "Earnings“Earnings per Share,"Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings per share are not shown for periods in which the Company incurs a loss because it would be anti-dilutive. At November 30, 2012,2013, the Company had no stock equivalents that were anti-dilutive and excluded in the earnings per share computation.
e)
Estimated Fair Valuefair value of Financial Instruments
financial instruments
The carrying value of the Company'sCompany’s consolidated financial instruments, consisting of cash, accounts payable, and notes payable approximate their fair value due to the short-term maturity of these instruments. Unless otherwise noted, it is management'smanagement’s opinion that the Company is not exposed to significant interest or currency risks arising from these financial statements.
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. At November 30, 2012, approximately $938 of2013, all cash orand cash equivalents was notwere insured by agencies of the U.S. Government.
f)
Foreign Currency Translations
Translation
The
consolidated financial statements are presented in U.S. dollars. In accordance with ASC 830
"Foreign“Foreign Currency
Matters,"Matters”, foreign denominated monetary assets and liabilities are translated to their U.S. dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of
stockholders'stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations.
F-26
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
g)
Comprehensive Income (Loss)
The Company adopted ASC 220, "Reporting Comprehensive Income."Income". ASC 220 requires that the components and total amounts of comprehensive income be displayed in the consolidated financial statements beginning in 1998. Comprehensive income includes net income and all changes in equity during a period that arises from non-owner sources, such as foreign currency items and unrealized gains and losses on certain investments in equity securities.
h)
Use of Estimates
The preparation of the Company'sCompany’s consolidated financial statements are in conformity with generally accepted accounting principlesU.S. GAAP which requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
i)
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We believe our market risk exposures arise primarily from exposures to fluctuations in interest rates and exchange rates. We presently only transact business in Canadian and U.S. Dollars. We believe that the exchange rate risk surrounding the future transactions of the Company will not materially or adversely affect our future earnings. We do not believe that we are subject to any seasonal trends. We do not use derivative financial instruments to manage risks or for speculative or trading purposes. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements required by this Item begin on Page F-23 of this Form 10-K.
PEPTIDE TECHNOLOGIES, INC. (A Development Stage Company)
FINANCIAL STATEMENTS
(Expressed in U.S. Dollars)
| Page |
Reports of Independent Registered Public Accounting Firm | F-23 |
| |
Consolidated Financial Statements: | |
| |
Consolidated Balance Sheets | F-24 |
| |
Consolidated Statements of Loss and Comprehensive Loss | F-25 |
| |
Consolidated Statements of Cash Flows | F-26 |
| |
Consolidated Statement of Changes in Stockholders’ (Deficiency) | F-27 |
| |
Notes to Consolidated Financial Statements | F-28 to F-43 |
James Stafford |
| James Stafford, Inc. Chartered Accountants Suite 350 – 1111 Melville Street Vancouver, British Columbia Canada V6E 3V6 Telephone +1 604 669 0711 Facsimile +1 604 669 0754 www.JamesStafford.ca |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Peptide Technologies Inc.
(A Development Stage Company)
We have audited the accompanying consolidated balance sheets of Peptide Technologies Inc. (A Development Stage Company) (the “Company”) as at 30 November 2013 and 2012 and the related consolidated statements of loss and comprehensive loss, cash flows and changes in stockholders’ deficiency 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 consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit 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 our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as at 30 November 2013 and 2012 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 1 to the consolidated financial statements, conditions exist which raise substantial doubt about the Company’s ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its obligations and sustain its operations. Management’s plans regarding those matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ James Stafford
Vancouver, Canada | Chartered Accountants |
26 February 2014
Peptide Technologies, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
(Expressed in U.S. dollars)
| | Notes | | | As at 30 November 2013 $ | | | As at 30 November 2012 $ | |
| | | | | | | | | |
ASSETS | | | | | | | | | |
| | | | | | | | | |
Current assets | | | | | | | | | |
Cash and cash equivalents | | | | | | 157 | | | | 7,780 | |
Prepaid expenses | | | | | | - | | | | 3,494 | |
| | | | | | | | | | | |
| | | | | | 157 | | | | 11,274 | |
| | | | | | | | | | | |
Intangible assets and intellectual property | | | 7 | | | | 45,000 | | | | 45,000 | |
Website | | | 3 | | | | 5,833 | | | | 9,167 | |
| | | | | | | | | | | | |
Total assets | | | | | | | 50,990 | | | | 65,441 | |
| | | | | | | | | | | | |
STOCKHOLDERS’ DEFICIENCY AND LIABILITIES | | | | | | | | | | | | |
| | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | |
Accounts payable and accrued liabilities | | | 4, 6 | | | | 1,662,272 | | | | 730,717 | |
Notes payable | | | 5 | | | | 88,850 | | | | 84,380 | |
| | | | | | | | | | | | |
Total liabilities | | | | | | | 1,751,122 | | | | 815,097 | |
| | | | | | | | | | | | |
Stockholders’ deficiency | | | | | | | | | | | | |
Capital stock | | | 8 | | | | | | | | | |
Authorized: | | | | | | | | | | | | |
675,000,000 common shares, par value $0.001 | | | | | | | | | | | | |
Issued and outstanding: | | | | | | | | | | | | |
30 November 2013 - 151,123,000 common shares | | | | | | | | | | | | |
30 November 2012 - 149,078,000 common shares | | | | | | | 151,123 | | | | 149,078 | |
Additional paid-in capital | | | | | | | 148,279 | | | | 105,324 | |
Accumulated deficit | | | | | | | (105,837 | ) | | | (105,837 | ) |
Accumulated deficit during development stage | | | | | | | (1,893,697 | ) | | | (898,221 | ) |
| | | | | | | | | | | | |
Total stockholders’ deficiency | | | | | | | (1,700,132 | ) | | | (749,656 | ) |
| | | | | | | | | | | | |
Total stockholders’ deficiency and liabilities | | | | | | | 50,990 | | | | 65,441 | |
APPROVED BY THE BOARD: |
| | |
“Scott McKinley” | | “Erik Odeen” |
Director | | Director |
The accompanying notes are an integral part of these consolidated financial statements.
Peptide Technologies, Inc.
(A Development Stage Company)
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in U.S. dollars)
| | Notes | | | For the year ended 30 November 2013 $ | | | For the year ended 30 November 2012 $ | | | Cumulative from re-entering of development stage on 26 June 2010 to 30 November 2013 $ | |
| | | | | | | | | | | | |
Expenses | | | | | | | | | | | | |
Consulting | | | 6, 8 | | | | 302,000 | | | | 145,000 | | | | 552,975 | |
Salaries and bonus | | | 4 , 6 | | | | 623,084 | | | | 447,000 | | | | 1,070,084 | |
General and administration | | | 9 | | | | 30,350 | | | | 16,226 | | | | 53,025 | |
Professional fees | | | | | | | 38,170 | | | | 46,759 | | | | 151,743 | |
Supplies and materials | | | | | | | 1,102 | | | | - | | | | 60,232 | |
| | | | | | | | | | | | | | | | |
Net loss before other items | | | | | | | (994,706 | ) | | | (654,985 | ) | | | (1,888,059 | ) |
| | | | | | | | | | | | | | | | |
Other items | | | | | | | | | | | | | | | | |
Foreign exchange gain (loss) | | | | | | | 3,608 | | | | (1,494 | ) | | | 2,114 | |
Interest expense | | | 5 | | | | (4,378 | ) | | | (3,257 | ) | | | (7,752 | ) |
| | | | | | | | | | | | | | | | |
Net loss for the period | | | | | | | (995,476 | ) | | | (659,736 | ) | | | (1,893,697 | ) |
| | | | | | | | | | | | | | | | |
Other comprehensive loss | | | | | | | | | | | | | | | | |
Foreign currency translation adjustment | | | | | | | - | | | | (694 | ) | | | (333 | ) |
| | | | | | | | | | | | | | | | |
Total comprehensive loss for the period | | | | | | | (995,476 | ) | | | (660,430 | ) | | | (1,894,030 | ) |
| | | | | | | | | | | | | | | | |
Basic and diluted comprehensive loss per common share | | | | | | | (0.007 | ) | | | (0.005 | ) | | | | |
| | | | | | | | | | | | | | | | |
Weighted average number of shares outstanding | | | | | | | 150,294,589 | | | | 143,453,042 | | | | | |
The accompanying notes are an integral part of these consolidated financial statements.
Peptide Technologies, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
| | Notes | | | For the year ended 30 November 2013 $ | | | For the year ended 30 November 2012 $ | | | Cumulative from re-entering of development stage on 26 June 2010 to 30 November 2013 $ | |
| | | | | | | | | | | | |
OPERATING ACTIVITIES | | | | | | | | | | | | |
| | | | | | | | | | | | |
Net loss for the period | | | | | | (995,476 | ) | | | (659,736 | ) | | | (1,893,697 | ) |
Adjustments to reconcile net loss to cash used by operating activities | | | | | | | | | | | | | | | |
Accrued interest | | | 5 | | | | 4,378 | | | | 3,257 | | | | 7,752 | |
Amortization | | | 3 | | | | 3,334 | | | | 833 | | | | 4,167 | |
Foreign exchange gain (loss) | | | | | | | (3,608 | ) | | | 1,494 | | | | (2,114 | ) |
Non-cash consulting expense | | | 8 | | | | 2,000 | | | | - | | | | 2,000 | |
Share-based payment | | | 8 | | | | - | | | | 8,000 | | | | 8,000 | |
Changes in operating assets and liabilities | | | | | | | | | | | | | | | | |
Increase (decrease) in prepaid expenses | | | | | | | 3,494 | | | | (3,367 | ) | | | 2,710 | |
Increase in trades payable and accrued liabilities | | | 4, 6 | | | | 931,555 | | | | 591,807 | | | | 1,661,522 | |
| | | | | | | | | | | | | | | | |
Cash used in operating activities | | | | | | | (54,323 | ) | | | (57,712 | ) | | | (209,660 | ) |
| | | | | | | | | | | | | | | | |
INVESTING ACTIVITIES | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Purchase of website | | | 3 | | | | - | | | | (10,000 | ) | | | (10,000 | ) |
| | | | | | | | | | | | | | | | |
Cash used in investing activities | | | | | | | - | | | | (10,000 | ) | | | (10,000 | ) |
| | | | | | | | | | | | | | | | |
FINANCING ACTIVITIES | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Proceeds from issuance of common shares, net of share issuance costs | | | 8 | | | | 43,000 | | | | 55,114 | | | | 121,114 | |
Increase in notes payable | | | 5 | | | | 3,700 | | | | 19,416 | | | | 67,212 | |
Contribution by related party | | | | | | | - | | | | - | | | | 27,288 | |
| | | | | | | | | | | | | | | | |
Cash from financing activities | | | | | | | 46,700 | | | | 74,530 | | | | 215,614 | |
| | | | | | | | | | | | | | | | |
Effect of foreign exchange rate changes on cash | | | | | | | - | | | | (694 | ) | | | (333 | ) |
| | | | | | | | | | | | | | | | |
Increase (decrease) in cash and cash equivalents | | | | | | | (7,623 | ) | | | 6,124 | | | | (4,379 | ) |
Cash and cash equivalents, beginning of period | | | | | | | 7,780 | | | | 1,656 | | | | 4,536 | |
| | | | | | | | | | | | | | | | |
Cash and cash equivalents, end of period | | | | | | | 157 | | | | 7,780 | | | | 157 | |
Supplemental cash flow information (Note 12)
The accompanying notes are an integral part of these consolidated financial statements.
Peptide Technologies, Inc.
(A Development Stage Company)
Consolidated Statements of Changes in Stockholders’ Deficiency
(Expressed in U.S. dollars)
| | Number of shares | | | Capital stock $ | | | Additional paid-in capital $ | | | Accumulated deficit $ | | | Accumulated deficit during development stage $ | | | Accumulated comprehensive loss $ | | | Total $ | |
| | | | | | | | | | | | | | | | | | | | | |
Balances, 30 November 2011 | | | 171,023,000 | | | | 171,023 | | | | 50,265 | | | | (105,837 | ) | | | (238,485 | ) | | | 694 | | | | (122,340 | ) |
Shares issued for | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash | | | 55,000 | | | | 55 | | | | 55,059 | | | | - | | | | - | | | | - | | | | 55,114 | |
Related party services | | | 5,000,000 | | | | 5,000 | | | | - | | | | - | | | | - | | | | - | | | | 5,000 | |
Contractor services | | | 3,000,000 | | | | 3,000 | | | | - | | | | - | | | | - | | | | - | | | | 3,000 | |
Cancellation of common shares | | | (30,000,000 | ) | | | (30,000 | ) | | | - | | | | - | | | | - | | | | - | | | | (30,000 | ) |
Foreign currency translation adjustment | | | - | | | | - | | | | - | | | | - | | | | - | | | | (694 | ) | | | (694 | ) |
Net loss for the year | | | - | | | | - | | | | - | | | | - | | | | (659,736 | ) | | | - | | | | (659,736 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balances, 30 November 2012 | | | 149,078,000 | | | | 149,078 | | | | 105,324 | | | | (105,837 | ) | | | (898,221 | ) | | | - | | | | (749,656 | ) |
Shares issued for | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash, net of share issuance costs | | | 45,000 | | | | 45 | | | | 42,955 | | | | - | | | | - | | | | - | | | | 43,000 | |
Contractor services | | | 2,000,000 | | | | 2,000 | | | | - | | | | - | | | | - | | | | - | | | | 2,000 | |
Net loss for the year | | | - | | | | - | | | | - | | | | - | | | | (995,476 | ) | | | - | | | | (995,476 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balances, 30 November 2013 | | | 151,123,000 | | | | 151,123 | | | | 148,279 | | | | (105,837 | ) | | | (1,893,697 | ) | | | - | | | | (1,700,132 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
1. | NATURE AND CONTINUENCE OF OPERATIONS |
Peptide Technologies, Inc. (the “Company”) was incorporated in the State of Nevada, United States of America, on 18 November 2005. On 29 July 2010, the Company’s name was changed from Online Originals, Inc. to CREEnergy Corporation. Effective 12 October 2011, the Company’s name was changed from CREEnergy Corporation to Peptide Technologies, Inc. The Company’s year-end is 30 November.
On 5 August 2013, the Company incorporated Pept Peptide Technologies Inc. (“Pept Peptide”), a wholly-owned subsidiary, under the laws of British Columbia. Pept Peptide currently does not have any transactions from the date of incorporation on 5 August 2013 to 30 November 2013.
1.2 | Nature of Operations and Change in Business |
Upon inception on 18 November 2005, the Company’s business plan was to develop a membership-based website art gallery/auction house specifically focused on displaying and Cash Equivalents
selling original artwork. The Company changed its status from a development stage company to an operating company on 30 November 2009. Management realized that the results of operations from the sale of artwork lacks luster and decided to change the Company’s business focus and plan for other strategic opportunities. Effective 26 June 2010, the Company became a development stage company focusing on a new business.
On 23 August 2011, the Company entered into an agreement (the “Asset Purchase Agreement”) in which the Company, in exchange for 75,000,000 shares of the Company’s restricted common stock, received all rights and title to proprietary technologies and formulas involving the application of specialty Peptides. The Company has changed its business focus to the manufacturing and distribution of natural peptide solutions to combat the economic burden of bio-fouling. On 14 December 2011, the Company amended the Asset Purchase Agreement. As a result of the amendment, the purchase price of the assets was reduced from 75,000,000 shares to 45,000,000 shares, and 30,000,000 shares were returned to treasury (Notes 7 and 8).
The Company’s business activities focus is on the development of all-natural, sustainable solutions to the increasing problem of bio-fouling and the development of safe “green” organic-based anti-fouling products used to combat the rapidly growing problems caused by the attachment of hard fouling agents in marine and freshwater environments. This approach emphasizes minimizing the attachment of hard fouling agents (mussels, barnacles, etc.) and preventing the build-up of any bio-film layer as well.
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
1.3 | Basis of Going Concern |
The accompanying consolidated financial statements as at 30 November 2013 and for the year then ended have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company has had a net loss of $995,476 for the year ended 30 November 2013 (30 November 2012 - $659,736; cumulative - $1,893,697) and has a working capital deficit of $1,750,965 at 30 November 2013 (30 November 2012 - $803,823).
Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that the Company’s capital resources should be adequate to continue operating and maintaining its business strategy during the fiscal year ended 30 November 2014. However, if the Company is unable to raise additional capital in the near future or met financing requirements, due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures. These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Although management is actively seeking to add new products and/or services in order to show profitability, and is seeking additional sources of equity or debt financing, there is no assurance that these activities will be successful. The Company has not yet been able to find products and services that would contribute to their business due to the continued economic condition. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
2. | SIGNIFICANT ACCOUNTING POLICIES |
This summary of significant accounting policies is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of management who is responsible for their integrity and objectivity. These accounting policies have been consistently applied in the preparation of the consolidated financial statements.
2.1 | Basis of Presentation |
| These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable for a development stage company for financial information and are expressed in U.S. dollars. |
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
2.2 | Principles of Consolidation |
| These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Pept Peptide, a company incorporated in the province of British Columbia on 5 August 2013. All significant inter-company balances and transactions have been eliminated upon consolidation. |
2.3 | Organizational and Start-up Costs |
Costs of start-up activities, including organizational costs, are expensed as incurred in accordance with Accounting Standards Codification (“ASC”) 720-15, “Start-Up Costs”.
2.4 | Development-Stage Company |
During the year ended 30 November 2010, the Company abandoned its previous business of sale of original artwork and re-entered the development stage with its intended new business, which currently has no revenues. Management expects to sustain losses from operations until such time it can generate sufficient revenues to meet its anticipated cost structure. The Company is considered a development-stage company in accordance with the ASC 915, “Accounting and Reporting by Development-Stage Enterprises”. A development-stage enterprise is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.
2.5 | Cash and Cash Equivalents |
Cash and cash equivalents include highly liquid investments with original maturities of three months or less.
j) Recent
In accordance with ASC 350-50, “Website Development Costs”, expenditures during the planning and operating stages of the Company’s website are expensed as incurred. Expenditures incurred during the website application and infrastructure development stage are capitalized and amortized to expense over the website’s estimated useful life of 3 years.
Intangible assets include the cost of acquiring the intellectual property. In accordance with ASC 350-30 “General Intangibles Other Than Goodwill”, an intangible asset that is acquired either individually or with a group of other assets shall be recognized. Costs of internally developing, maintaining, or restoring intangible assets that are not specifically identifiable, that have indeterminate lives, or that are inherent in a continuing business and related to an entity as whole, shall be recognized as an expense when incurred. The intellectual property is determined to have an indefinite useful life and is not subject to amortization. The useful life of the intangible asset is reassessed at each reporting period.
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
2.8 | Impairment of Long-Lived Assets |
Long-lived assets include the website and intangible assets and intellectual property. Long-lived assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset. There has been no impairment as of 30 November 2013.
2.9 | Research and Development |
Research and development expenses are charged to operations as incurred.
The Company adopted the ASC 740, “Accounting Pronouncements
for Income Taxes”. ASC 740 requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.
2.11 | Basic and Diluted Income (Loss) per Share |
In Julyaccordance with ASC 260, “Earnings per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings per share are not shown for periods in which the Company incurs a loss because it would be anti-dilutive. At 30 November 2013, the Company had no stock equivalents that were anti-dilutive and excluded in the earnings per share computation.
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
2.12 | Estimated fair value of financial instruments |
The carrying value of the Company’s consolidated financial instruments, consisting of cash, accounts payable, and notes payable approximate their fair value due to the short-term maturity of these instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or currency risks arising from these financial statements.
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. At 30 November 2013, all cash and cash equivalents were insured by agencies of the U.S. Government.
2.13 | Foreign Currency Translation |
The consolidated financial statements are presented in U.S. dollars. In accordance with ASC 830 “Foreign Currency Matters”, foreign denominated monetary assets and liabilities are translated to their U.S. dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations.
2.14 | Comprehensive Income (Loss) |
The Company adopted ASC 220, "Reporting Comprehensive Income". ASC 220 requires that the components and total amounts of comprehensive income be displayed in the consolidated financial statements beginning in 1998. Comprehensive income includes net income and all changes in equity during a period that arises from non-owner sources, such as foreign currency items and unrealized gains and losses on certain investments in equity securities.
The preparation of the Company’s consolidated financial statements are in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
2.16 | Changes in Accounting Policies |
Effective 1 December 2012, hethe Company adopted the Financial Accounting Standards Board ("FASB"(“FASB”)
issued Accounting Standards Update ("ASU"(“ASU”) No. 2012-02, "Intangibles -“Intangibles – Goodwill and Other."Other”. This update presents an entity with the option to first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, "Intangibles -“Intangibles – Goodwill and Other -– General Intangibles Other than Goodwill."Goodwill”. The more-likely-than-not threshold is defined as having a likelihood of more than fifty percent. ASU No. 2012-02 will be effective for
annual and interim impairment tests performed for fiscal years
beginning after September 15, 2012, with early adoption permitted.
The adoption of this update willdid not have a material effect on the Company'sCompany’s financial statements.
In
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
Effective 1 December 2011,2012, the Company retroactively adopted the FASB issued ASUNo.ASU No. 2011-12, "Comprehensive
Income."“Comprehensive Income”. This update amends certain pending paragraphs in ASU No. 2011-05 "Presentation“Presentation of Comprehensive Income"”, to effectively defer only those changes that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income for annual and interim financial statements for public, private, and non-profit entities. ASU No. 2011-12 will
be effective for fiscal years, and interim periods within those
years, beginning after December 15, 2011. As ASU No. 2011-12 relates only to the presentation of comprehensive income, the adoption of this update willdid not have a material effect on the Company'sCompany’s financial statements.
In September 2011,
Effective 1 December 2012, the Company adopted FASB issued ASU No. 2011-08, "Intangibles -“Intangibles – Goodwill and Other"Other” which allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under these amendments, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. ASU No. 2011-08
will be effective for annual and interim impairment tests
performed for fiscal years beginning after December 15, 2011, with
early adoption permitted. The adoption of this update willdid not have a material effect on the Company'sCompany’s financial statements.
F-27
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
In June 2011,
Effective 1 December 2012, the Company retroactively adopted FASB issued ASU No. 2011-05, "Presentation“Presentation of Comprehensive Income."Income”. This update presents an entity with the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. As ASU No. 2011-05 relates only to the presentation of Comprehensive Income, the adoption of this update did not have a material effect on the Company’s financial statements.
2.17 | Recent Accounting Pronouncements |
In July 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”, which is intended to eliminate the diversity that is in practice with regard to the financial statement presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU No. 2013-11 is effective for fiscal years and interim periods within those years, beginning after 15 December 2014, with early adoption permissible. The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.
In February 2013, FASB issued ASU No. 2013-02, “Comprehensive Income”. This update requires an entity to present information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on the respective line items in net income in one place, and in some cases, cross-references to related footnote disclosures. The update applies to public companies for all reporting periods presented, including interim periods, and to nonpublic entities for annual reporting periods. ASU No. 2013-02 will be effective for fiscal years, and interim periods within those years, beginning after 15 December 15, 2011. As ASU No. 2011-05
relates only to the presentation of Comprehensive Income,2012 for public companies, with early adoption permitted. The adoption of this update willdid not have a material effect on the Company'sCompany’s consolidated financial statements.
k) Reclassifications
Certain comparative figuresamounts reported in previous periods have been reclassified in order to conform to the current year's financial statement presentation
with no effect on earnings.
l) Other
presentation.
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
The Company consists of one reportable business segment.
The Company paid no dividends during the periods presented.
3. WEBSITE
As at 30 November | | 2013 | | | 2012 | |
| | Cost $ | | | Accumulated amortization $ | | | Net book value $ | | | Cost $ | | | Accumulated amortization $ | | | Net book value $ | |
| | | | | | | | | | | | | | | | | | |
Website | | | 10,000 | | | | 4,167 | | | | 5,833 | | | | 10,000 | | | | 833 | | | | 9,167 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 10,000 | | | | 4,167 | | | | 5,833 | | | | 10,000 | | | | 833 | | | | 9,167 | |
The Company purchased a website during October 2012 for $10,000. This website has a useful life of three(3)three 3 years, and the cost is being amortized over the life of the asset. AsDuring the year ended 30 November 2013, the Company recognized amortization expense of November 30, 2012,
accumulated amortization was $833.
4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
$3,334 (2012 - $833; cumulative - $4,167) (Note 9).
As of November 30, As of November 30,
2012 2011
---------------------- ----------------------
Accounts Payable $ 29,217 $ 29,847
Accrued Liabilities 254,500 109,063
Accrued Payroll and Payroll Taxes 147,000 -
Accrued Bonus 300,000 -
---------------------- ----------------------
Total Accounts Payable and Accrued Liabilities $ 730,717 $ 138,910
====================== ======================
4. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
Accounts
As at 30 November | | $ | 2013 | | | $ | 2012 | |
| | | | | | | | |
Accounts payable | | | 574,188 | | | | 274,217 | |
Accrued liabilities | | | 27,000 | | | | 9,500 | |
Payroll taxes payable | | | 17,084 | | | | 6,000 | |
Salaries and benefits payable (Notes 6 and 11) | | | 1,044,000 | | | | 441,000 | |
| | | | | | | | |
Total accounts payable and accrued liabilities | | | 1,662,272 | | | | 730,717 | |
Trades payable and accrued liabilities are non-interest bearing, unsecured and have settlement dates within one year.
Included in salaries and benefits payable, are $300,000 (30 November 2012 - $300,000) of bonuses payable to the Chief Executive Officer (“CEO”) of the Company (Note 6).
Included in accounts payable and accrued liabilities is $545,000 (30 November 2012 - $245,000) payable to a related party of the Company as at 30 November 2013 (Note 6).
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
The Company is in the process of completing and resolving issues related to its income tax filings and has accrued $10,000 during the year ended 30 November 2013 related to potential penalties associated with these filings. However, there is no assurance that additional interest and penalties will not be assessed (Notes 9, 10 and 11).
5. | NOTES PAYABLE AND ACCRUED INTEREST |
| | $ | 2013 | | | $ | 2012 | |
During the year ended 30 November 2010, Fotoview Inc. (“Fotoview”) issued a loan of $16,000 to a former director of the Company to purchase 4,000,000 restricted common shares of the Company. Upon the director’s resignation, the 4,000,000 common shares were cancelled and the Company assumed the loan payable to Fotoview. The loan is unsecured, bears no interest, and has no fixed terms of repayment. | | | 16,000 | | | | 16,000 | |
| | | | | | | | |
On 21 September 2011, PSI Services (“PSI”) issued a loan of $500 to the Company. The loan is unsecured, bears no interest and has no fixed terms of repayment. | | | 500 | | | | 500 | |
| | | | | | | | |
On 13 November 2011, PSI issued a loan of CAD$45,000 to the Company. The loan is unsecured and bears interest at a rate of 6% per annum. Principal and accrued interest is due on 30 November 2014. During the year ended 30 November 2013, the Company accrued interest expense of $3,031 (2012 - $2,666) (Note 12). The loan payable to PSI as at 30 November 2013 consists of principal and accrued interest of $42,710 (30 November 2012–$44,650) and $5,251 (30 November 2012–$2,815), respectively. | | | 47,961 | | | | 47,465 | |
| | | | | | | | |
On 1 June 2012, PSI issued a loan of CAD$20,000 to the Company. The loan is unsecured and bears interest at a rate of 6% per annum. Principal and accrued interest is due on 30 November 2014. During the year ended 30 November 2013, the Company accrued interest expense of $1,347 (2012 - $591) (Note 12).The loan payable to PSI as at 30 November 2013 consists of principal and accrued interest of $18,982 (30 November 2012–$19,856) and $1,707 (30 November 2012–$559), respectively. | | | 20,689 | | | | 20,415 | |
| | | | | | | | |
On 22 October 2013, PSI issued a loan of USD$3,700 to the Company. The loan is unsecured, bears no interest, and has no fixed terms of repayment. | | | 3,700 | | | | - | |
Total notes payable and accrued interest | | | 88,850 | | | | 84,380 | |
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
6. | RELATED PARTY TRANSACTIONS |
As at 30 November 2013, the amount due to related parties includes $1,044,000 payable to directors and employees of the Company in relation to salaries and benefits earned (30 November 2012 - $441,000). Of the amount due to related parties, $300,000 relates to bonuses payable to the CEO of the Company (30 November 2012 - $300,000) (Note 4).
As at 30 November 2013, the amount due to related parties includes $545,000 payable to a related party of the Company in relation to consulting fees (30 November 2012 - $245,000) (Note 4).
During the year ended 30 November 30, 2012,2013, the Board approvedCompany accrued salaries forand benefits of $612,000 to officers and employees of the Company's three (3) employees. Effective September 1, 2012,
monthlyCompany (2012 - $441,000; cumulative - $1,053,000) (Note 11). Included in salaries and benefits, are bonuses of $25,000 and $20,000 started$Nil accrued to be accrued for the CEO and CFO, respectively. Effectiveof the Company during the year ended 30 November 1, 2012,2013 (2012 - $300,000; cumulative - $300,000).
During the year ended 30 November 2013, the Company accrued $300,000 of consulting fees to a monthly salaryrelated party of $6,000 started to be accrued for the Vice President of Operations &
Communication. Total wages as ofCompany (2012 - $145,000; cumulative - $545,000).
During the year ended 30 November
30, 2012 was $141,000. Total
accrued payroll taxes as of November 30, 2012 are $6,000.
Effective October 1, 2012,2013, the Board approved a
$300,000 bonus forcommission payment program equal to 30% of gross sales of fouling prevention coatings. Under this program, the CEO
will receive compensation equal to
recognize20% of gross sales of anti-fouling paint, as recognition of his work in developing the
CEO's contributions toward the Company's
successful start-up. This bonus was earned in-fullformulas; and
accruedan external consultant will receive 10% of gross sales of anti-fouling paint as compensation for
as
of November 30, 2012.
F-28
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
5. NOTES PAYABLE AND ACCRUED INTEREST
November 30, November 30,
2012 2011
------------------ -----------------
During the year ended November 30, 2010, Fotoview Inc. ("Fotoview")
issued a loan of $16,000 to a former director of the Company to purchase
4,000,000 restricted common shares of the Company. Upon the director's
resignation, the 4,000,000 common shares were cancelled and the Company
assumed the loan payable to Fotoview. The loan is unsecured, bears no
interest, and has no fixed terms of repayment. $ 16,000 $ 16,000
On September 21, 2011, PSI Services ("PSI") issued a loan of $500 to the 500 500
Company. The loan is unsecured, bears no interest, and has not fixed
terms of repayment.
On November 13, 2011, PSI issued a loan of CAD$45,000 to the 47,465 43,713
Company. The loan is unsecured and bears interest at a rate of 6% per
annum. Principal and accrued interest is due November 13, 2013. The loan
payable to PSI as at November 30, 2012 consists of pricipal and accrued
interest of USD$44,650 (2011 - $USD$43,596) and USD$2,815 (2011 -
USD$117), respectively.
On June 1, 2012, PSI issued a loan of CAD$20,000 to the Company. The loan
is unsecured and bears interest at a rate of 6% per annum. Principal and
accrued interest is due on May 31, 2013. The loan payable to PSI as at
November 30, 2012 consists of principal and accrued interest of
USD$19,856 (2011 - $Nil) and USD$559 (2011 - $Nil), respectively. 20,415 -
------------------------------------------
Balance as of November 30, 2012 $ 84,380 $ 60,213
==========================================
6. RELATED PARTY TRANSACTIONS
sales development (Notes 7 and 11).
During the year ended 30 November 30, 2012, a director2013, directors and shareholdershareholders of the Company made cash contributioncontributions in the amount of $Nil (2011
-$14,288,(2012 - $Nil, Cumulative -– $27,288).
During the year ended 30 November 30, 2012, the Company issued 5,000,000 fully vested shares of the Company'sCompany’s restricted common stock at a par value of $0.001 per share to a director of the Company for consulting
services renderedaccepting the positions of Chief Financial Officer (“CFO”) and director of the board (Notes 8 and 11)12).
During the year ended November 30, 2012, the Company accrued salaries
and benefits of $441,000 to officers of the Company (2011 - $Nil)
(Note 4).
7. INTANGIBLE ASSETS AND INTELLECTUAL PROPERTY
7. | INTANGIBLE ASSETS AND INTELLECTUAL PROPERTY |
On
23 August
23, 2011, the Company entered into an agreement (the
"Asset“Asset Purchase
Agreement"Agreement”)
with unrelated parties that subsequently became
directors of the Company to acquire intangible assets and intellectual property known as the Peptide Technology Platforms (the
"Platforms"“Platforms”) in exchange for 75,000,000 common shares of the Company (issued on
23 August
23, 2011)
(Notes8(Notes 1, 8 and
11)12).
F-29
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
On 14 December 14, 2011, the Company entered into an amended agreement amending the Asset Purchase Agreement dated August 23, 2011 (the "Amended“Amended Asset Purchase Agreement"Agreement”) and, as a result, a total of 30,000,000 common shares were returned to treasury and cancelled (Notes8(Notes 8 and 11) in exchange for payment of half of one percent of all gross monies received by the Company fromin relation to revenue producedearned from products derived from the use of all the formulae listed in the Assets Purchase Agreement. In addition, a monthly stipend of CAD $15,000 per month is to be paid commencing fromon the receipt of monies from the first contract signed to purchase products derived from the use of the formulae for a period of five years from the date of the Amended Asset Purchase Agreement (Note 10)11). This transactionThe cancellation of 30,000,000 common shares has been recorded as a reductionrecovery of intangible assets and intellectual property andproperty.
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
On 20 January 2013, the Board approved a reduction in share capitalcommission payment program equal to $30,000.
30% of gross sales of fouling prevention coatings. Under this program, the CEO will receive compensation equal to 20% of gross sales of anti-fouling paint, as recognition of his work in developing the formulas; and an external consultant will receive 10% of gross sales of anti-fouling paint as compensation for sales development (Notes 6 and 11).
The Platforms includes but are not limited to the following:
i. Proteomic research platforms which include proprietary solid
phase media side-chain protected peptide array synthesis;
ii. Peptide libraries;
iii. Combination design techniques;
iv. Peptide molecule modifications;
v. A proprietary genetic algorithm that designs Peptides for
goodness to fit to a target; and
vi. Proprietary and patented application platforms, including a viral
vector gene therapy and epitode-mapping based vaccine
development.
8. CAPITAL STOCK
i. | Proteomic research platforms which include proprietary solid phase media side-chain protected peptide array synthesis; |
iii. | Combination design techniques; |
iv. | Peptide molecule modifications; |
v. | A proprietary genetic algorithm that designs peptides for goodness to fit to a target; and |
vi. | Proprietary and patented application platforms, including a viral vector gene therapy and epitode-mapping based vaccine development. |
8.1 | Authorized common stock |
The Company'sCompany’s authorized common stock consists of 675,000,000 shares of common stock with a par value of $0.001 per share. On 10 August 10, 2010, the Company increased the number of authorized share capital from 75,000,000 shares of common stock to 675,000,000 shares of common stock with the same par value of $0.001 per share.
Issued and outstanding
8.2 | Issued and outstanding |
On 2 June 2, 2010, and effective 10 August 10, 2010, the directors of the Company approved a forward split of the common stock of the Company on a basis of 30 new common shares for 1 old common share. As a result of the forward stock split, 208,800,000 additional shares were issued. Capital and additional paid-in capital have been adjusted accordingly. When adjusted retroactively, there was ana $119,501 shortage of additional paid-in capital; thus an adjustment to accumulated deficit of $104,000 was recorded on 20 May 20, 2010 (the date of issuance of 120,000,000 shares) and $15,501 to the beginning balance. The interimconsolidated financial statements contained herein reflect the appropriate values for capital stock and accumulated deficit. Unless otherwise noted, all references in the accompanying interimconsolidated financial statements to the number of common shares and per share amounts have been retroactively restated to reflect the forward stock split.
The total issued and outstanding capital stock is 149,078,000151,123,000 common shares with a par value of $0.001 per common share. The Company's
common stock issuances to date are as follows:
o On August 23, 2011,During the years ended 30 November 2013 and 2012, the Company issued common shares as follows:
a) | On 23 August 2011, the Company issued 75,000,000 shares of the Company’s restricted common stock in exchange for intangible assets and intellectual property. On 21 December 2011 a total of 30,000,000 common shares were returned to treasury and cancelled (Notes 1, 7 and 12). |
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
b) | On 5 January 2012, the Company issued 5,000 shares of the Company’s restricted common stock for cash proceeds of $4,936 (CAD $5,000). |
c) | On 6 January 2012, the Company issued 5,000 shares of the Company’s restricted common stock for cash proceeds of $4,921 (CAD $5,000). |
d) | On 15 January 2012, 5,000 shares of the Company’s restricted common stock were issued for cash proceeds of $4,884 (CAD $5,000). |
e) | On 24 January 2012, the Company issued 5,000 shares of the Company’s restricted common stock for cash proceeds of $4,943 (CAD $5,000). |
f) | On 20 April 2012, the Company issued 5,000 shares of the Company’s restricted common stock for cash proceeds of $5,041 (CAD $5,000). |
g) | On 11 July 2012, the Company issued 5,000 shares of the Company’s restricted common stock were issued for cash proceeds of $4,902 (CAD $5,000). |
h) | On 31 August 2012, the Company issued 5,000,000 fully vested shares of the Company’s restricted common stock at a par value of $0.001 per share to a director of the Company for accepting the positions of CFO and director of the board (Notes 6 and 12). As a result, the Company recorded share-based payment of $5,000 when the stock was issued (Note 9). |
i) | On 28 September 2012, the Company issued 5,000 shares of the Company’s restricted common stock for cash proceeds of $5,086 (CAD $5,000). |
j) | On 15 October 2012, the Company issued 20,000 shares of the Company’s restricted common stock for cash proceeds of $20,401 (CAD $20,000). |
k) | On 28 November 2012, the Company issued 3,000,000 fully vested shares of the Company’s restricted common stock at a par value of $0.001 per share to a third party for technical services rendered. As a result, the Company recorded stock compensation expense of $3,000 when the stock was issued (Notes 9 and 12). |
l) | On 10 April 2013, the Company issued 20,000 shares of the Company’s restricted common stock for cash proceeds of $20,000. The Company paid $2,000 in share issuance costs. |
m) | On 26 April 2013, the Company issued 2,000,000 shares of the Company’s restricted common stock at a par value of $0.001 per share to a third party for marketing assistance with the development of the international markets in the South Pacific quadrant for the Company. As a result, the Company recorded consulting expense of $2,000 when the stock was issued (Note 12). |
n) | On 18 July 2013, the Company issued 25,000 shares of the Company’s restricted common stock for cash proceeds of $25,000. |
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
9 | GENERAL AND ADMINISTRATION EXPENSES |
| | Year ended 30 November 2013 $ | | | Year ended 30 November 2012 $ | | | Cumulative from re-entering of development stage on 26 June 2010 to 30 November 2013 $ | |
| | | | | | | | | |
Amortization (Note 3) | | | 3,334 | | | | 833 | | | | 4,167 | |
Bank charges | | | 202 | | | | 504 | | | | 1,284 | |
Dues and subscription | | | 575 | | | | - | | | | 575 | |
Filing fees | | | 6,428 | | | | 3,607 | | | | 11,470 | |
Meals and entertainment | | | 254 | | | | - | | | | 254 | |
Office | | | 2,447 | | | | 2,126 | | | | 6,743 | |
Penalties (Notes 4, 10 and 11) | | | 10,000 | | | | - | | | | 10,000 | |
Transfer agent | | | 655 | | | | 811 | | | | 3,501 | |
Rent | | | 1,233 | | | | - | | | | 1,233 | |
Share-based payment (Notes 8 and 12) | | | - | | | | 8,000 | | | | 8,000 | |
Telecommunication | | | 2,566 | | | | 196 | | | | 2,993 | |
Travel | | | 2,656 | | | | - | | | | 2,656 | |
Website | | | - | | | | 149 | | | | 149 | |
Total general and administration expenses | | | 30,350 | | | | 16,226 | | | | 53,025 | |
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
10.1 | Provision for income taxes |
Income tax expense differs from the amount that would result from applying the federal income tax rate to earnings before income taxes. During the years ended 30 November 2013 and 2012, these differences result from the following items:
| | $ | 2013 | | | $ | 2012 | |
| | | | | | | | |
Loss before income taxes | | | 995,476 | | | | 659,736 | |
Federal income tax rates | | | 35.00 | % | | | 35.00 | % |
| | | | | | | | |
Income tax recovery based on the above rates | | | (348,417 | ) | | | (230,908 | ) |
Non–deductible items | | | 44 | | | | 2,800 | |
Change in valuation allowance | | | 348,373 | | | | 228,108 | |
| | | | | | | | |
Income tax expense | | | - | | | | - | |
10.2 | Deferred tax balances |
The composition of the Company’s deferred tax assets as at 30 November 2013 and 2012 are as follows:
| | $ | 2013 | | | $ | 2012 | |
| | | | | | | | |
Net income tax operating loss carry-forward | | | 1,975,908 | | | | 980,558 | |
| | | | | | | | |
Deferred tax assets | | | 691,568 | | | | 343,195 | |
| | | | | | | | |
Valuation allowance | | | (691,568 | ) | | | (343,195 | ) |
| | | | | | | | |
Deferred tax assets (liabilities) | | | - | | | | - | |
As at 30 November 2013, the Company has a total non-capital loss carryforward balance of $1,975,908 (30 November 2012 - $980,558), which has expiry dates between the years of 2025 to 2033.
The Company’s recognized and unrecognized deferred tax assets related to the unused tax losses. A full valuation allowance has been recorded against the potential deferred tax assets associated with all the loss carry-forwards as their utilization is not considered more likely than not at this time.
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
The Company is in the process of completing and resolving issues related to its income tax filings and has accrued $10,000 during the year ended 30 November 2013 related to potential penalties associated with these filings. However, there is no assurance that additional interest and penalties will not be assessed (Notes 4, 9 and 11).
11 | COMMITMENTS AND CONTINGENCY |
a) | The Company is committed to paying one-half of one percent of all gross monies received by the Company from revenue produced from products derived from the use of all the formula listed in the Assets Purchase Agreement. In addition, a monthly stipend of CAD $15,000 per month is to be paid commencing from receipt of monies from the first contract signed to purchase products derived from the use of the formula for a period of five years from the date of the Amended Asset Purchase Agreement (Note 7). |
b) | On 20 January 2013, the Board approved a commission payment program equal to 30% of gross sales of fouling prevention coatings. Under this program, the CEO will receive compensation equal to 20% of gross sales of anti-fouling paint, as recognition of his work in developing the formulas; and an external consultant will receive 10% of gross sales of anti-fouling paint as compensation for sales development (Notes 6 and 7). |
c) | Effective 1 November 2012, the Company entered into an advisory agreement with a consultant. The Company is committed to paying a monthly stipend of $25,000 per month for consulting services provided. Additionally, the Company will issue shares of the Company’s restricted common stock or cash payment equal to 10% of the amount of shares issued by the Company for equity financing or debt financing received through the efforts of this consultant. The commitment is for a term of five years, with the Company being able to terminate the agreement with 30 days written notice. |
d) | Effective 1 September 2012, the Company is committed to paying monthly salaries of $25,000 to the CEO, $20,000 to the Chief Financial Officer (“CFO”), and $6,000 to the Vice President of Operations & Communication (“VP of Operations & Communications”) (Note 4 and 6). |
e) | On 11 December 2012, the Company formerly engaged BB&T Capital Markets ("BB&TCM") to act as the Company's exclusive financial advisor and agent in connection with developing strategic alternatives for the Company regarding debt financings, licensing of intellectual properties developed by the Company, equity raises, sale of intellectual properties, or other capital markets transactions that may develop over the course of a 24 month agreement. |
| The Company is to pay BB&TCM an advisory fee of three percent of the face amount of the financial transactions advised upon during the course of the engagement, due and payable at closing of any contemplated transactions under the engagement. |
| Additionally, the Company is to defend, indemnify and hold BB&TCM, its parent company, subsidiaries and affiliates and its and their directors, officers, employees, agents and successors and assigns harmless from and against any losses, suits, actions, claims, damages, costs and or other liabilities which any indemnified person may incur as a result of acting on behalf of the Company in connection with this engagement. |
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Expressed in U.S. dollars)
f) | The Company is in the process of completing certain of its income tax filings and has accrued $10,000 during the year ended 30 November 2013 related to potential penalties associated with these filings. However, there is no assurance that additional interest and penalties will be assessed (Note 4, 9 and 10). |
12 | SUPPLEMENTAL CASH FLOW INFORMATION |
The Company made the following cash payments for interest and income taxes:
Year ended 30 November | 2013 $ | 2012 $ |
| | |
Interest paid | - | - |
Taxes paid | - | - |
| | |
Total cash payments | - | - |
On 23 August 2011, 75,000,000 shares of itsthe Company’s restricted common stock, valued at $75,000, were issued in exchange for intangible assets and intellectual property. On 21 December 21, 2011, a total30,000,000 shares of 30,000,000the Company’s restricted common sharesstock were returned to treasury and cancelled (Notes7(Notes 1, 7 and 11)8).
o During October and November 2011, 23,000 shares of the Company's
common stock were issued for cash proceeds of $23,000.
o
On
January 5, 2012, 5,000 shares of the Company's common stock
were issued for cash proceeds of $4,936 (CAD $5,000).
o On January 6, 2012, 5,000 shares of the Company's common stock
were issued for cash proceeds of $4,921 (CAD $5,000).
o On January 15, 2012, 5,000 shares of the Company's common stock
were issued for cash proceeds of $4,884 (CAD $5,000).
F-30
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
o On January 24, 2012, 5,000 shares of the Company's common stock
were issued for cash proceeds of $4,943 (CAD $5,000).
o On April 20, 2012, 5,000 shares of the Company's common stock
were issued for cash proceeds of $5,041 (CAD $5,000).
o On July 11, 2012, 5,000 shares of the Company's common stock were
issued for cash proceeds of $4,902 (CAD $5,000).
o On31 August 31, 2012, the Company issued 5,000,000 fully vested shares of the Company'sCompany’s restricted common stock at a par value of $0.001 per share to a director of the Company for consulting
services renderedaccepting the positions of CFO and director on the Board (Notes 6and 11)6 and 8). As a result, the Company recorded stock compensation expenseshare-based payment of $5,000 when the stock was issued.
o issued (Notes 8 and 9).On
September 28
2012, 5,000 shares of the Company's common stock
were issued for cash proceeds of $5,086 (CAD $5,000).
o On October 15, 2012, 20,000 shares of the Company's common stock
were issued for cash proceeds of $20,402 (CAD $20,000).
o On November
28, 2012, the Company issued 3,000,000 fully vested shares of the
Company'sCompany’s restricted common stock at a par value of $0.001 per share to a third party for technical services rendered. As a result, the Company recorded
stock compensation
expenseshare-based payment of $3,000 when the stock was issued
(Note 11).
9. INCOME TAXES
The Company is subject to foreign(Notes 8 and
domestic income taxes. The
Company has had no income, and therefore has paid no income tax.
Deferred income taxes arise from temporary timing differences in the
recognition of income and expenses for financial reporting and tax
purposes. The Company's deferred tax assets consist entirely of the
benefit from net operating loss (NOL) carry-forwards. The NOL carry
forwards expire in various years through 2032. The Company's deferred
tax assets are offset by a valuation allowance due to the uncertainty
of the realization of the NOL carry-forwards. NOL carry-forwards may be
further limited by a change in company ownership and other provisions
of the tax laws.
The Company's deferred tax assets, valuation allowance, and change in
valuation allowance are as follows:
Period Ending Estimated Estimated
NOL NOL Tax Benefit Valuation
Carry-forward Expires from NOL Allowance Net Tax Benefit
-----------------------------------------------------------------------------------------------------
November 30, 2010 116,675 2030 40,836 (40,836) -
November 30, 2011 328,821 2031 115,087 (115,087) -
November 30, 2012 980,558 2032 343,195 (343,195) -
Income taxes at the statutory rate are reconciled to the Company's
actual income taxes as follows:
2012 2011
Income tax benefit at statutory rate
resulting from net
operating loss carry forward (35%) (35%)
Deferred income tax valuation allowance 35% 35%
------------ ---------
Actual tax rate 0% 0%
============ =========
As at November 30, 2012, the Company is in arrears on filing its statutory
corporate income tax returns and the amounts presented above are based on
estimates. The actual losses available could differ from these estimates.
F-31
PEPTIDE TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
10. COMMITMENTS
The Company is committed to paying half of one half percent of all
gross monies received by the Company from revenue produced from
products derived from the use of all the formula listed in the Assets
Purchase Agreement. In addition a monthly stipend of CAD $15,000 per
month is to be paid commencing from receipt of monies from the first
contract signed to purchase products derived from the use of the
formulae for a period of five years from the date of the Amended Asset
Purchase Agreement (Note 7)9).
11. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
On August 23, 2011, 75,000,000 shares of the Company's restricted
common stock, valued at $75,000, were issued in exchange for intangible
assets and intellectual property. On December 21, 2011, 30,000,000
shares of the Company's restricted common stock were returned to
treasury and cancelled (Notes 7 and 8).
On August 31, 2012,26 April 2013, the Company issued 5,000,0002,000,000 fully vested shares of the Company's restricted common stock at a par value of $0.001 per
share to a director of the Company for consulting services rendered
(Notes 6 and 8). As a result, the Company recorded stock compensation
expense of $5,000 when the stock was issued.
On November 28, 2012, the Company issued 3,000,000 fully vested shares
of the Company'sCompany’s restricted common stock at a par value of $0.001 per share to a third party for technical services rendered.marketing assistance with the development of the international markets in the South Pacific quadrant for the Company. As a result, the Company recorded stock compensationconsulting expense of $3,000$2,000 when the stock was issued (Note 8).
12. CONTINGENCIES
On
During the year ended 30 November 22, 2010,2013, the Company was served withaccrued interest expense of $3,031 (2012 - $2,666) in relation to a claim filedloan of CAD$45,000 issued by PSI on 13 November 2011. The loan is unsecured and bears interest at a former director and officerrate of 6% per annum (Note 5).
During the Company. The claim alleges that the
former director and officer ofyear ended 30 November 2013, the Company suffered lossesaccrued interest expense of $1,347 (2012 - $591) in relation to a loan of CAD$20,000 issued by PSI on 1 June 2012. The loan is unsecured and damages
asbears interest at a resultrate of 6% per annum (Note 5).
Peptide Technologies, Inc.
(A Development Stage Company)
Notes to the failure of the CompanyConsolidated Financial Statements
(Expressed in providing him with
corporate documents and implementing a change of the board of
directors. The Company has retained legal counsel to address the claim.
On December 8, 2010, the Company filed a Statement of Defense
requesting that the claim be dismissed. In the opinion of management,
this claim is without merit and the Company intends to defend this
claim vigorously. As a loss is not deemed probable, no accruals have
been made as of November 30, 2012.
13. SUBSEQUENT EVENTS
U.S. dollars)
The following reportable
eventsevent occurred during the
period from the year ended
30 November
30, 20122013 to the date the
consolidated financial statements were available to be issued on
26 February
14, 2013:
On December 11, 2012, the Company formerly engaged BB&T Capital Markets
("BB&TCM") to act as the Company's exclusive financial advisor and
agent in connection with developing strategic alternatives for the
Company regarding debt financings, licensing of intellectual properties
developed by the Company, equity raises, sale of intellectual
properties, or other capital markets transactions that may develop over
the course of a 24 month agreement.
The Company is to pay BB&TCM an advisory fee of three percent of the
face amount of the financial transactions advised upon during the
course of the engagement, due and payable at closing of any
contemplated transactions under the agreement.
Additionally, the Company is to defend, indemnify and hold BB&TCM, its
parent company, subsidiaries and affiliates and its and their
directors, officers, employees, agents and successors and assigns
harmless from and against any losses, suits, actions, claims, damages,
costs and or other liabilities which any indemnified person may incur
as a result of acting on behalf of the Company in connection with this
engagement
F-32
2014.
a) | On 5 December 2013, the Company issued 10,000 shares of the Company’s restricted common for cash proceeds of $10,000. |
ITEM 9.CHANGES9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A.CONTROLS9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company maintains a system of disclosure controls and procedures that are designed for the purposes of ensuring that information required to be disclosed in the Company's SEC reports is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure.
Management, after evaluating the effectiveness of the Company's disclosure controls and procedures as defined in Exchange Act Rules 13a-14(c) as of January 2,6, 2013 (the "Evaluation Date") concluded that as of the Evaluation Date, the Company's disclosure controls and procedures were effective to ensure that information relating to the Company would be made known to them by individuals within those entities, particularly during the period in which this annual report was being prepared and that information required to be disclosed in the Company's SEC reports is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms.
Management's
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.
Our management, with the participation of the President and Chief Financial Officer, evaluated the effectiveness of the Company'sCompany’s internal control over financial reporting as of November 30, 2012.2013. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control --— Integrated Framework. Based on that evaluation, our management concluded that, as of November 30, 2012,2013, our internal control over financial reporting was not effective due to material weaknesses in the system of internal control. Specifically, management identified the following control deficiency:
- The Company has installed accounting software that does not prevent
erroneous or unauthorized changes to previous reporting periods and does
not provide an adequate audit trail of entries made in the accounting
software.
- | The Company has installed accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software. |
Accordingly, while the Company has identified certain material weaknesses in its system of internal control over financial reporting, it believes that it has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles. Management has determined that current resources would be appropriately applied elsewhere and when resources permit, they will alleviate material weaknesses through various steps.
This Annual Report does not include an attestation report of the Company'sCompany’s registered public accounting firm regarding internal control over financial reporting. Management'sManagement’s report was not subject to attestation by the Company'sCompany’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management'smanagement’s report in this Annual Report.
Changes in Internal Control over Financial Reporting
----------------------------------------------------
There were no changes in internal control over financial reporting that occurred during the last fiscal quarter covered by this report that have materially affected, or are reasonably likely to affect, the
Company'sCompany’s internal control over financial reporting.
33
ITEM 9B.Other9B. Other Information
None.
PART III
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT |
Directors and Executive Officers
The following table sets forth the names, ages and positions of the current directors and executive officers of the Company, as of the date of this filing:
Name Age Offices Held
---------------------------------------------------------------------
Scott McKinley 58 Chairman of the Board, CEO
Erik Odeen 46 Secretary/Treasurer, CFO
Name | Age | Offices Held |
Scott McKinley | 59 | Chairman of the Board, CEO |
Erik Odeen | 47 | Secretary/Treasurer, CFO |
Bruce Sellars | 59 | Vice President of Operations & Communications |
During the year2 years ended November 30,2012,30, 2013, we had the following changes in management:
o Effective August 31, 2012, letters of resignation tendered by Deborah
Fortescue-Merrin as President of the Company and Richard Fortescue as
Secretary/Treasurer and Chief Financial Officer were accepted.
o Effective July 16, 2012, Scott McKinley was appointed Chief Executive
Officer. Dr. McKinley will continue to serve as Chairman of the Board.
o Effective August 31, 2012, Mr. Erik Odeen was appointed to the Board
of Directors of the Company to serve as Secretary/Treasurer until he
resign or his successors be elected by the shareholders of the Company
or appointed by the Board of Directors. Erik Odeen was also appointed
to serve as Chief Financial Officer of the Company
o Effective November 1, 2012, Mr. Bruce Sellars was hired to fill the
position of Vice President of Operations & Communications.
· | Effective August 31, 2012, letters of resignation tendered by Deborah Fortescue-Merrin as President of the Company and Richard Fortescue as Secretary/Treasurer and Chief Financial Officer were accepted. |
· | Effective July 16, 2012, Scott McKinley was appointed Chief Executive Officer. Dr. McKinley will continue to serve as Chairman of the Board and Chief Operating Officer. |
· | Effective August 31, 2012, Mr. Erik Odeen was appointed to the Board of Directors of the Company to serve as Secretary/Treasurer until he resign or his successors be elected by the shareholders of the Company or appointed by the Board of Directors. Erik Odeen was also appointed to serve as Chief Financial Officer of the Company |
· | Effective November 1, 2012, Mr. Bruce Sellars was hired to fill the position of Vice President of Operations & Communications. |
Dr. Scott McKinley, B.Sc., M.Sc., Ph.D. Chairman, Chief Executive Officer, Chief Operating Officer
Dr. McKinley received his Ph.D. from the University of Waterloo. He has mentored and supervised the research of dozens of graduate students and postdoctoral fellows. He has also been the recipient of two prestigious Research Chairs: a) Natural Sciences and Engineering Research Council ("NSERC"(“NSERC”) /Industrial Research Chair and b) Canada Research Chair (Tier 1). Dr. McKinley holds a number of directorships including the Vancouver Aquarium, Centre for Aquaculture and Environmental Research (a partnership between UBC and Department of Fisheries and Oceans ["DFO"[“DFO”]), and Pacific Ocean Shelf Tracking ("POST"(“POST”). Dr. McKinley was recently appointed to be a member of the High Level Expert Forum on how to feed the world population in 2050, sponsored by the Food and Agriculture Organization of the United Nations.
Dr. McKinley is currently a Professor of Animal Science at University of British Columbia. He has over 30 years of experience in the field of ecology, animal physiology and biochemistry. He has conducted his research across Canada and Europe in fresh and marine waters. He has held a senior Canada Research Chair and an Industrial and Natural Sciences and Engineering Chair and has author two patents. He has served as Chair of the Technical Board of Experts for the Great Lakes Fishery Commission, Research committee for the Pacific Ocean Shelf Tracking (POST) study, and a member of the Board of Directors for POST and the Vancouver Aquarium. He is presently Director of the West Vancouver Marine Laboratory.
Dr. McKinley Professor McKinley has authored more than 150 scientific publications as well asseveralas several book chapters.
Erik Odeen, CPA CFE, Secretary/Treasurer, Chief Financial Officer
Erik Odeen, CPA, CFE, is a seasoned executive with over 25
years'years’ experience in corporate management, financial leadership, international manufacturing & distribution operations, and public accounting. He manages a consulting practice which provides financial management and strategic-planning advisory services to
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both public and privately-held company clients. More recently, Erik has provided CFO and CEO services where his focus has been corporate restructuring and reorganization, SEC and BCSC reporting, resolving complex accounting issues, and corporate fraud prevention.Mr. Odeen spent eight years in public accounting with Deloitte & Touch and PCAOB-registered McKennon, Wilson & Morgan (Irvine, CA) where he specialized in managing external audits, complex accounting issues, SEC Reporting and Sarbanes-Oxley compliance.
Mr. Odeen'sOdeen’s public company experience ranges from start-up and development stage to Fortune 100 companies, including turn-around and M&A engagements. During his 13 year career with International Paper, Erik worked in Corporate Audit, was instrumental in the planning and implementation of financial and operating systems, and served in senior-level management positions with a division of XPEDX, IP'sIP’s distribution arm. Erik earned a Bachelor of Business Administration in accounting and economics; holds an active CPA license in the state of California; and is an active member of the American Institute of Certified Public Accountants (AICPA), the California Society of CPAs (CalCPA), and the global Association of Certified Fraud Examiners (ACFE).
Bruce M. Sellars, PEng., MBA Vice President, Operations & Communications
Bruce Sellars, a registered Professional Engineer, has over 35 years of business experience in a variety of technical and managerial positions, utilizing his engineering, sales, marketing and finance skills. He has founded several companies and has been a director of two publicly-traded companies.
Mr. Sellars has held management level positions in business development and marketing for firms in the renewable energy, oil and gas, electric utility, and water and wastewater utility industries. These companies include Texaco Canada, Nexen, North Canadian Oils, EPCOR, TransAlta, Hydroxyl, Hill Murray & Associates, Highwater Power and Cedar Road LFG. He has created and executed strategic and tactical marketing and sales plans, and led business development and sales teams.
In British Columbia, Mr. Sellars operates a successful consulting company, Gas Power Technologies Inc., which provides business development services. Assignments have included implementing and constructing a land fill gas recovery project, permitting several small hydroelectric projects in BC, and the installation of wastewater treatment plants. The Company has represented two European turbine manufacturing companies in North America. Annual sales exceeded $6 Million, on average.
Mr. Sellars has a Bachelor of Applied Science in Chemical Engineering from the University of Toronto, and an MBA from the University of Alberta. He is a registered Professional Engineer in Alberta and British Columbia, Canada. Additionally, Mr. Sellars has been a speaker at several small hydro and renewable energy conferences.
conferences
Family Relationships
None as of November 30, 2012.
2013.
Audit Committee and Audit Committee Financial Expert Disclosure
The Company does not currently have a formal audit committee; audit committee functions are performed by our Directors. Our Directors are not deemed independent; as they also hold positions as officers. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls, and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee.
The Company'sCompany’s CFO, Erik Odeen, CPA, CFE, is the financial expert serving on the Board of Directors.
Code of Conduct and Code of Ethics for Senior Management
The Company has implemented a Code of Conduct and A Code of Ethics for Senior Management, which are both located on our website www.peptidetechnologiesinc.com.www.peptidetechnologiesinc.com . The Company's management intends to promote honest and ethical conduct, full and fair disclosure in our reports to the SEC and BCSC, and compliance with applicable governmental laws and regulations. We believe our codes are reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the codes.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934 requires any person who is a director or executive officer or who beneficially holds more than ten percent (10%) of any class of our securities which have been registered with the Securities and Exchange Commission, to file reports of initial ownership and changes in ownership with the Securities and Exchange Commission. These persons are also required under the regulations of the Securities and Exchange Commission to furnish us with copies of all Section 16(a) reports they file.
To our knowledge, based solely on our review of the copies of the Section 16(a) reports furnished to us and a review of our shareholders of record for the fiscal year ended November 30, 2012, there were no filing delinquencies.
ITEM 11.EXECUTIVE11. EXECUTIVE COMPENSATION
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid (or accrued) by us during the year ended November 30, 20122013 and 2011,2012, in all capacities for the accounts of our executives, including the Chief Executive Officer (CEO).
Name and Principal Position | Fiscal Year | | Salary Earned or Paid ($) | | Bonus ($) | | Stock Awards ($) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation ($) | | Non-Qualified Deferred Compensation Earnings ($) | All Other
Year Earned Awards Awards Incentive Plan Deferred Compensation* Name and or ($) | | Totals ($) Compensation Compensation ($)
Principal Paid Bonus ($) Earnings Totals
Position ($) ($) ($) ($)
DeborahFortescue-Merrin | |
| | | | | | | | | | | | | | | | | |
Scott McKinley Chief Executive Officer, Chief Operating Officer, Chairman | 2013 2012 | | $ | 300,000 75,000 | | - 300,000 | | | - - | | - - | | | - - | | - - | - - | | $ -
President 2011 - - - - - - - $ -
RichardFortescue 2012 $ - - - - - - - $ -
| 300,000 375,000 | |
| | | | | | | | | | | | | | | | | | | | | |
Erik Odeen Chief Financial Officer, Secretary, Treasurer 2011 - - - - - - - -
Scott McKinley
Chief Executive Officer,
Chairman (effective August 31, 2012 $75,000 300,000 ) | 2013 2012 | | $ | 240,000 60,000 | | - - | | | - 5,000 | | - - | | | - - | | - - | - - | | $ 375,000
2011 - - - - - - - $ -
William Campbell
Chief Scientific Officer | 240,000 65,000 | |
| | | | | | | | | | | | | | | | | | | | | |
Bruce Sellars Vice President of Operations & Communication (effective November 1, 2012 ) | 2013 2012 | | $ | 72,000 6,000 | | | | | | | | | | | | | | | $ | 72,000 6,000 | |
| | | | | | | | | | | | | | | | | | | | | |
Deborah Fortescue-Merrin President (through August 31, 2012) | 2013 2012 | | $ | - - | | - - | | | - - | | - - | | | - - | | - - | - - | | $ | -
2011 - - - - - - - $ -
Erik Odeen
| |
| | | | | | | | | | | | | | | | | | | | | |
Richard Fortescue Chief Financial Officer, Secretary, Treasurer 2012 $60,000 - 5,000 - - - - $ 65,000
(effective (through August 31, 2011 2012) | 2013 2012 | | $ | - - | | - - | | | - - | | - - | | | - - | | - - | - - | | $ | -
2012)
- | |
| | | | | | | | | | | | | | | | | | | | | |
William Campbell Chief Scientific Officer (through December 14, 2011) | 2013 2012 | | $ | - - | | - - | | | - - | | - - | | | - - | | - - | - - | | $ | - - | |
Compensation of Directors
We do not compensate our directors for their time spent on behalf of our Company, but they are entitled to receive reimbursement for all out of pocket expenses incurred for attendance at our Board of Directors meetings.
Pension and Retirement Plans
Currently, we do not offer any annuity, pension or retirement benefits to be paid to any of our officers, directors or employees, in the event of retirement. There are also no compensatory plans or arrangements with respect to any individual named above which results or will result from the resignation, retirement or any other termination of employment with our company, or from a change in the control of our Company.
Employment Agreements
We do not have written employment agreements with any of our key employees.
Audit Committee
Presently the Board of Directors is performing the duties that would normally be performed by an audit committee. We intend to form a separate audit committee, and are seeking potential independent directors. We are seeking experienced business people and plan to appoint an individual qualified as an audit committee financial expert.
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ITEM 12.SECURITY12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information, as of November 30, 20122013 with respect to any person (including any "group,"“group”, as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"“Exchange Act”)) who is known to the Company to be the beneficial owner of more than five percent of any class of the Company'sCompany’s voting securities, and as to those shares of the Company'sCompany’s equity securities beneficially owned by each its director, the executive officers of the company and all of its directors and executive officers of the Company and all of its directors and executive officers as a group. Unless otherwise specified in the table below, such information, other than information with respect to the directors and officers of the Company, is based on a review of statements filed, with the Securities and Exchange commission (the "Commission"“Commission”) pursuant to Sections 13 (d), 13 (f), and 13 (g) of the Exchange Act with respect to the Company'sCompany’s common stock. As of November 30, 2012,2013, there were 149,078,000151,123,000 shares of common stock outstanding.
The number of shares of common stock beneficially owned by each person is determined under the rules of the Commission and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which such person has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days after the date hereof, through the exercise of any stock option, warrant or other right. Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion herein of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares.
The table also shows the number of shares beneficially owned as of November 30,
20122013 by each of the individual directors and executive officers and by all directors and executive officers as a group.
Position Amount and Nature Percent
Nameof Beneficial Owner of Beneficial Owner Of Common Stock
------------------------------------------------------------------------------------------------------------------------
Chief Executive Officer, Chief Operating
Scott McKinley Officer, Chairman 50,000,000 33.5%
Erik Odeen Chief Financial Officer, Secretary, 6,300,000 4.2%
Treasurers
Total Officer and Directors 56,300,000 37.8%
====================
Name of Beneficial Owner | | Position | | Amount and Nature of Beneficial Owner | | | Percent Of Common Stock | |
| | | | | | | | |
Scott McKinley | | Chief Executive Officer, Chief Operating Officer, Chairman | | | 50,000,000 | | | | 33.5 | % |
Erik Odeen | | Chief Financial Officer, Secretary, Treasurer | | | 6,300,000 | | | | 4.2 | % |
Bruce Sellars | | Vice President Operations & Communications | | | 750,000 | | | | 0.5 | % |
| | Total Officer and Directors | | | 57,050,000 | | | | 38.3 | % |
(1) Percent of Ownership is calculated in accordance with the Securities and Exchange Commission'sCommission’s Rule 13(d) -– 13(d) (1). Based on 149,078,000151,123,000 shares of common stock issued and outstanding.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE. Ms. Deborah Fortescue-Merrin, the prior President of the Company and Mr. Richard Fortescue, the prior Secretary/Treasurer and Chief Financial Officer for the Company are brother and sister. Both resigned from the Company effective August 31, 2012.
In accordance with the Asset Purchase Agreement dated August 23, 2011, the Company issued a total of 75,000,000 shares of its restricted common stock in exchange for intangible assets and intellectual property referred to as the Peptide Technology Platforms. 60,000,000 of these restricted shares were issued equally; 30,000,000 shares to William Campbell and 30,000,000 shares to Scott McKinley. The balance of 15,000,000 restricted shares were issued equally; 7,500,000 shares to Deborah Fortescue-Merrin and 7,500,000 shares to Richard Fortescu. Upon their resignations, Deborah Fortescue-Merrin and Richard Fortescue each relinquished 6,500,000 shares of common stock to Scott McKinley upon his acceptance of Chief Executive Officer for the Company. The assets that were purchased were set aside and new formulations were developed by the company.
On December 14, 2011, Peptide Technologies, Inc. agreed to amend the Asset Purchase Agreement dated August 23, 2011. As a result of the amendment 30,000,000 restricted common shares of the Company issued to William Campbell were returned to treasury in exchange for payment of half of one percent of all gross monies received by the company from revenue produced from products derived from the use of all the formulae listed in the Assets Purchase Agreement. In addition a monthly stipend of CDN $15,000 per month is to be paid commencing from receipt of monies from the first contract signed to purchase products derived from the use of the formulae for a period of five years from the date of the amended agreement.
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Director Independence
For our description of director independence, see "Director Independence"“Director Independence” under the section entitled "Directors,“Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act"Act” above.
ITEM 14.PRINCIPAL14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees billed by our auditors James Stafford Inc. for professional services rendered for the audit of our annual consolidated financial statements and for the reviews of the consolidated financial statements included in our Quarterly Reports on Form 10Q during the fiscal year ended November 30, 2013 and 2012 were $20,829 and 2011 were $14,385, and
$12,652, respectively. The aggregate fees billed by our auditors, Schumacher &
Associates, for professional services rendered for the audit of our annual
financial statements, and for the reviews of the financial statements included
in our Quarterly Reports on Form 10-Q during the fiscal years ended November 30,
2012 and 2011, were $0 and $1,000 respectively.
Audit Related Fees
We incurred no fees to auditors for audit related fees during the fiscal years ended November 30, 2012 and 2011.
Tax Fees
We incurred noapproximately $0 and $0 in fees to auditors for tax compliance, tax advice or tax compliance services during the fiscal years ended November 30, 2013 and 2012, and 2011.
respectively.
All Other Fees
We did not incur any other fees billed by auditors for services rendered to our Company, other than the services covered in "Audit Fees" and “Tax Fees” for the fiscal years ended November 30, 20122013 and 2011.
2012.
The Board of Directors has considered whether the provision of non-audit services is compatible with maintaining the principal accountant's independence.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following is a complete list of exhibits filed as part of this Form 10K. Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of Regulation S-K.
Exhibit Index
10.1 Asset Purchase Agreement, dated August 23, 2011(2)
10.2 Amendment to the Asset Purchase Agreement, dated December 14,
2011 (3)
31.1 Section 302 Certification - Chief Executive Officer *
31.2 Section 302 Certification - Chief Financial Officer. *
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 - Chief Executive Officer. *
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 - Chief Financial Officer.*
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31.1 | Section 302 Certification – Chief Executive Officer * |
31.2 | Section 302 Certification – Chief Financial Officer. * |
32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Executive Officer. * |
32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Financial Officer.* |
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, on this 14thday27th day of February, 2013.
2014.
PEPTIDE TECHNOLOGIES, INC.
Date: February 28,2013 By: /s/ Scott McKinley
-------------------------------------
Name: Scott McKinley
Title: Chairman& Principal Executive Officer
Date: February 28, 2013 By: /s/ Erik Odeen
--------------------------------------
Name: Erik Odeen
Title: Chief Financial Officer & Principal
Accounting Officer
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Date: February 28, 2014 | By: /s/ Scott McKinley |
| Name: Scott McKinley Title: Chairman & Principal Executive Officer |
Date: February 28, 2014 | By: /s/ Erik Odeen |
| Name: Erik Odeen Title: Chief Financial Officer & Principal Accounting Officer |