UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the Quarter Ended June 30, 2015

For the transition period from _____  to ______

Commission File Number 000-54001

PROTECT PHARMACEUTICAL CORPORATION

(Exact name of registrant as specified in its charter)

2681 Parleys Way, Suite 204, Salt Lake City, UT 84109

(Address of principal executive offices)

(801) 322-3401

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has 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]    No [  ]

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 (§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  [  ]    No  [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes  ¨    No  x

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.

TABLE OF CONTENTS

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PART  I   —   FINANCIAL INFORMATION

The accompanying unaudited balance sheets of Protect Pharmaceutical Corporation at June 30, 2015 and related unaudited statements of operations and cash flows for the six months ended June 30, 2015 and 2014, have been prepared by management in conformity with United States generally accepted accounting principles.   In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.  We suggest that these financial statements be read in conjunction with the audited financial statements and notes thereto included in the company’s December 31, 2014 Form 10-K.  Operating results for the period ended June 30, 2015, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2015 or any other subsequent period.

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PROTECT PHARMACEUTICAL CORPORATION

Notes to Condensed Financial Statements

June 30, 2015 and December 31, 2014

(Unaudited)

 NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2015, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2014 audited financial statements.  The results of operations for the periods ended June 30, 2015 and 2014 are not necessarily indicative of the operating results for the full years.

NOTE 2 - GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  However, the Company does not have significant cash or other material assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.  It is the intent of the Company to seek a merger with an existing, operating company.  In the interim, shareholders of the Company have committed to meeting its minimal operating expenses

 NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Basic (Loss) per Common Share

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of June 30, 2015 and 2014.

Recent Accounting Pronouncements

Management has considered all other recent accounting pronouncements issued since the last audit of the Company’s financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

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PROTECT PHARMACEUTICAL CORPORATION

Notes to Condensed Financial Statements

June 30, 2015 and December 31, 2014

(Unaudited)

NOTE 4 – RELATED-PARTY TRANSACTIONS

The Company has recorded advances from related parties and expenses paid by an entity controlled by a Company officer and by a shareholder on behalf of the Company as related party payables. As of June 30, 2015 and December 31, 2014, respectively, the related party payable outstanding balance totaled $69,401 and $58,052, respectively. These payables are non-interest bearing, unsecured, and are due on demand.

Contributed Capital

During the six months ended June 30, 2015 and 2014, the Company’s director and sole officer has contributed various administrative services to the Company. These services have been valued at $3,000 for the six month periods then ended.  In addition, during the year ended December 31, 2014 a related-party entity paid $10,000 toward accounts payable related parties held by the Company.

NOTE 5 – STOCKHOLDERS’ EQUITY

On September 19, 2014, the Company issued 26,000 shares of common stock to Blue Cap Development Corp. in exchange for certain mining and/or mineral claims and/or leases located in New Mexico. Two principals of Blue Cap, Edward F. Cowle and H. Deworth Williams, are principal stockholders of the Company.

On November 4, 2014, the Company effected a reverse stock split of its issued and outstanding shares of common stock on a one (1) share for one thousand (1,000) shares basis. As per the terms of the reverse stock split, any fractional share amount resulting from the split was automatically rounded up to the next higher whole share amount, with the provision that no individual stockholder’s holdings would be reduced below 100 shares. Additional shares to restore each such affected stockholder’s holdings to 100 shares were issued, with certain shares issued during the 2014 calendar year, and the remainder issued during the six months ended June 30, 2015.  The par value of the common stock remains at $0.005 per share. As a result of the reverse stock split and the rounding up of odd lots to 100 shares, at June 30, 2015, there were 111,460 shares certificated and outstanding.

NOTE 6 – SUBSEQUENT EVENTS

In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and determined that there are no additional material subsequent events to report.

The following information should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q.

Forward-Looking and Cautionary Statements

This report contains forward-looking statements relating to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as “may,” “will” “should," “expect," "intend," "plan," anticipate," "believe," "estimate," "predict," "potential," "continue," or similar terms, variations of such terms or the negative of such terms.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors included in our periodic reports with the SEC.  Although forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment, actual results could differ materially from those anticipated in such statements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Recent Events

Acquisition of Claims

In February 2010, we became engaged in the business of acquiring and licensing for possible commercialization, patented pharmaceuticals and related technologies. In January 2011, we sold to a major drug company certain inventions, patents and patent applications for cash consideration.  Subsequently, we explored feasible plans for the remaining patents and new generation drug delivery technologies for possible future commercialization. Management has concluded that it would be difficult to continue developing this technology without acquiring necessary qualified scientific personnel. No final decision has been made on any future plans for the technology.

On September 19, 2014, Protect Pharmaceutical Corporation entered into a Claims Assignment Agreement with Blue Cap Development Corp., a private Nevada corporation (“Blue Cap”), to acquire certain mining and/or mineral claims and/or leases located in Sec. 6, T2S, R1W, New Mexico Principal Meridian, of Soccorro County New Mexico (the “Claims”).

In exchange for the Claims, we issued 26.0 million (pre-split, as discussed below) unregistered shares of authorized, but previously unissued common stock.  The amount of shares was negotiated between the parties and the 26.0 million shares represent approximately 36.9% of Protect’s 70,513,012 (pre-split) shares outstanding following the acquisition. Two principals of Blue Cap, Edward F. Cowle and H. Deworth Williams, are principal stockholders of Protect owning approximately 31% of Protect’s common stock prior to the acquisition.  Because of the related nature of the parties to the transaction, Protect endeavored to conduct an independent investigation of Blue Cap and the Claims and research the merits and value of acquiring the Claims.  

Protect’s President, Geoff Williams, oversaw the investigation and consulted with outside advisors. Mr. Williams is the son of H. Deworth Williams. The company researched information and documents related to the Blue Cap Claims and consulted with other persons familiar with the properties and the industry.  Following the review of all available information, we determined that the acquisition of the Claims presents a unique opportunity for the company.  We also believe that the acquisition was accomplished for a fair, negotiated consideration and the acquisition is in the best interest of our stockholders.

Our decision to enter into the Claims Acquisition Agreement was premised on the Board of Directors intention to diversify the company’s future business.  As a result of acquiring the Claims, we are developing a plan to commence an exploration program for the possibility of deposits of rare earth elements on the Claims.  Rare earth elements are essential for a diverse and expanding array of high-technology applications and for many current and emerging alternative energy technologies, such as electric vehicles, energy-efficient lighting, and wind power.  Examples of products that use rare earth elements are computer hard drives, smart phones, TV screens and wind turbines.  Rare earth elements are

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also critical for a number of key defense systems such as lasers, radar, missile-guidance systems and other electronics.

Management anticipates that the company will need to secure adequate funding to develop and implement an exploration program. There can be no assurance that we will be able to secure the necessary funding to fulfill our goals, or that any future funding will be available on terms favorable to the company, or at all.

Our 10 lode mining claims are located in Sec. 6, T2S, R1W, New Mexico Principal Meridian, of Soccorro County, New Mexico.  The Claims are being held for the purpose of exploration for gold, silver and rare earth mineralization deposits and are located near existing exploration projects and we expect will be explored by other mining companies.  Extensive exploration will be required before we can make a final evaluation as to the economic and legal feasibility of any potential deposit. According to SEC Industry Guide No. 7, we are classified or considered an exploration stage mining company. This is defined as a company engaged in the search for mineral deposits or reserves of precious and base metal targets, which are not in either the development or production stage.

We are considered a development stage company with limited capital and no current revenues. We anticipate that in the near term, ongoing expenses, including the costs associated with the preparation and filing of requisite reports with the SEC, will be paid for by advances from stockholders or from the private sale of securities, either debt or equity.  However, there is no assurance that we will be able to realize such funds on terms favorable to us, or at all.

Reverse Stock Split

On November 4, 2014, Protect Pharmaceutical Corporation effected a reverse stock split of its 70,513,012 million issued and outstanding shares of common stock on a one (1) share for one thousand (1000) shares basis. As per the terms of the reverse stock split, any fractional share amount resulting from the split was automatically rounded up to the next higher whole share amount, with the provision that no individual stockholder’s holdings would be reduced below 100 shares. Accordingly, additional shares to restore each such affected stockholder’s holdings to 100 shares were issued.  The par value of the common stock remains at $0.005 per share. As a result of the reverse stock split, we currently have issued and outstanding 111,460 shares of common stock, that gives effect to the rounding up of fractional shares and rounding up to 100 shares round lots.  

As a result of the reverse split, each share certificate representing shares of pre-split common stock will be deemed to represent one-thousandth (1/1000) shares of post-split common stock, plus any rounding up shares.  Certificates representing post-split common stock will be issued in due course as old share certificates are tendered for exchange or transfer to the company’s transfer agent.

Results of Operations

Financial data set forth below reflects the one share for 1,000 shares reverse stock split effected on November 4, 2014.

Three Months Ended June 30, 2015 and 2014

We did not realize revenues for the three-month periods ended June 30, 2015 and 2014. During the three months ended June 30, 2015 (“second quarter”), we recorded total operating expenses of $7,562, consisting of $5,851 in professional fees, $1,500 in executive compensation and $211 in general and administrative expenses. In the comparable second quarter of 2014, we recorded operating expenses totaling $10,175, consisting of $8,630 in professional fees, $1,500 in executive compensation and $45 in general and administrative expenses.  The slight decrease in expenses was due primarily to the Company’s work with respect to negotiating a settlement of debts with a former executive officer in 2014.  These factors resulted in a net loss for the second quarter ended June 30, 2015 in the amount of $7,562 ($0.07 per share), compared to net loss of $10,175 ($0.23 per share) for the second quarter ended June 30, 2014.

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Six Months Ended June 30, 2015 and 2014

We did not realize revenues for the six-month periods ended June 30, 2015 and 2014. During the six months ended June 30, 2015 we recorded total operating expenses of $13,000, consisting of $9,789 in professional fees, $3,000 in executive compensation and $211 in general and administrative expenses. In the comparable period of 2014, we recorded operating expenses totaling $12,214, consisting of $9,125 in professional fees, $3,000 in executive compensation and $89 in general and administrative expenses.  The slight decrease in expenses was due primarily to the Company’s work with respect to negotiating a settlement of debts with a former executive officer in 2014.  These factors resulted in a net loss for the six-month period ended June 30, 2015 in the amount of $13,000 ($0.12 per share), compared to net loss of $12,214 ($0.27 per share) for the six-month period ended June 30, 2014.

Liquidity and Capital Resources

Total assets at June 30, 2015 were $2,315 in cash, compared to $502 in cash at December 31, 2014. Total liabilities at June 30, 2015 were $133,297, consisting of $63,896 in accounts payable and accrued expenses, and $69,401 in related-party payables. At December 31, 2014, total liabilities were $121,485, consisting of $61,053 in accounts payable and accrued expenses, $2,380 in accounts payable to related parties, and $58,052 in related-party payables.

Because we currently have no revenues and limited available cash, for the immediate future we believe we will have to rely on potential advances from stockholders to continue to implement our business activities. There is no assurance that our stockholders will continue indefinitely to provide additional funds or pay our expenses.   It is likely the only other source of funding future operations will be through the private sale of our securities, either equity or debt.  

At June 30, 2015, we had stockholders’ deficit of $8,727,828 compared to stockholders’ deficit of $8,714,828 at December 31, 2014.  The increased deficit is primarily due to the net loss of $13,000 partially offset by $3,000 in contributed officer services during the six-month period ended June 30, 2015.

Plan of Operation

Following the sale of patents, patent applications and technologies to Grünenthal, we have endeavored to explore possible plans for the remaining patents and new generation drug delivery technologies acquired in 2010. However, without adequate personnel with the requisite scientific expertise, we believe it will be difficult to further develop the technologies. As of this date no final decision has been reached regarding the patents and technology. Following the acquisition of Claims in September 2014, we believe that the company will most likely focus on the initial exploration of the acquired properties to determine whether there is commercial potential. We are now in the process of developing a definitive plan for the initial exploration of our Claims.

We are classified or considered an exploration stage mining company, which is defined as a company engaged in the search for mineral deposits or reserves of precious and base metal targets, which are not in either the development or production stage. We have no known mineral reserves on our properties and our proposed preliminary studies of the Claims is intended to be exploratory in nature.

Our current plan is to finalize and initiate an exploration program, to identify our objectives and anticipated growth for the next 12 months, and identify our cash requirements to fulfill our business objectives.  We will need to raise additional funds during the next 12 months to complete our exploration commitments and to pay for general business and operating expenses. We estimate that we will need up to $75,000 during the next twelve months to facilitate an exploration program. Management plans to explore a possible private placement of our securities and/or debt financing to raise the additional fund, although no definitive plan has been formulated and there can be no assurance that we will be able to realize the necessary funds.

If exploration results do not warrant drilling or further exploration, we will most likely suspend operations on the property. In that event, we would need to seek additional exploration properties and additional funding with which to conduct the work. If we are unable to obtain additional financing or additional properties, we may not be able to continue active business operations.

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If we are able to complete an initial exploration programs and successfully identify a mineral deposit, we will need substantial additional funds for drilling and engineering studies to determine whether any identified mineral deposit is commercially viable. If we are unable to raise additional funds for this work or secure a strategic partner, we would be unable to proceed, even if a mineral deposit is discovered and is believed to be commercially viable.

Management believes that we will not be able to exist indefinitely without securing additional operating funds. In the view of our independent auditors, we will require additional funds to maintain operations and these conditions raise substantial doubt about our ability to continue as a going concern.

We do not anticipate conducting any product research or development over the next 12 months. Also, we do not expect to make any major equipment purchasers or make any significant capital expenditures in the immediate future unless we have the necessary funds. We do not have employees and do not expect to add employees over the next 12 months, except for part-time clerical assistance on an as-needed basis and possibly engaging outside advisors or consultants as requisite funds are available. We anticipate that our current management team will satisfy our everyday operating requirements for the foreseeable future.

Because we currently have limited cash, it may be necessary for officers, directors or stockholders to advance funds and we will most likely accrue expenses until a funding can be accomplished. Management intends to hold expenses to a minimum and to obtain services on a contingency basis when possible.  Further, we expect directors to defer any compensation until such time as we have sufficient funds.  We have not yet entered into any arrangements or definitive agreements to use outside advisors or consultants or to raise any capital.  

Because we currently have no revenues, most likely the only source of funding these expenses will be through the private sale of securities, either equity or debt. We are currently exploring possible funding sources, but we have not entered into any arrangements or agreements for funding as of this time. If we are unable to raise the necessary funding, our research and development plans will be delayed indefinitely. There can be no assurance that we will be able to raise the funds necessary to carry out our business plan on terms favorable to the company, or at all.

Net Operating Loss

We have accumulated approximately $2,713,179 of net operating loss carryforwards as of December 31, 2014.  This loss carry forward may be offset against taxable income and income taxes in future years and expires starting in the year 2014 through 2034.  The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards.  In the event of certain changes in control, there will be an annual limitation on the amount of net operating loss carryforwards that can be used.  No tax benefit has been reported in the financial statements for fiscal years ended December 31, 2014 and 2013 or the six months ended June 30, 2015, because it has been fully offset by a valuation reserve.  The use of future tax benefit is undeterminable because we have not started full operations.

Inflation

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future.  Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3.               Quantitative and Qualitative Disclosures About Market Risk.

This item is not required for a smaller reporting company.

Item 4.              Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.  Disclosure controls and procedures (as defined in Rules  13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are designed to ensure that

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information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.  Disclosure and control procedures are also designed to ensure that such information is accumulated and communicated to management, including the chief executive officer and principal accounting officer, to allow timely decisions regarding required disclosures.

As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and principal accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.  Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives.  Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment.  Based on the evaluation described above, management, including our principal executive officer and principal accounting officer, has concluded that, as of June 30, 2015, our disclosure controls and procedures were not effective.

Changes in Internal Control Over Financial Reporting.  Management has evaluated whether any change in our internal control over financial reporting occurred during the second quarter of fiscal 2015. Based on its evaluation, management, including the chief executive officer and principal accounting officer, has concluded that there has been no change in our internal control over financial reporting during the second quarter of fiscal 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART  II   —   OTHER INFORMATION

Item 1.           Legal Proceedings

There are no material pending legal proceedings to which we are a party or to which any of our property is subject and, to the best of our knowledge, no such actions against us are contemplated or threatened.

Item 1A.        Risk Factors

This item is not required for a smaller reporting company.

Item 2.           Unregistered Sales of Equity Securities and Use of Proceeds

This Item is not applicable.

Item 3.           Defaults Upon Senior Securities

This Item is not applicable.

Item 4.

Mine Safety Disclosures

This Item is not applicable.

Item 5.           Other Information

This Item is not applicable.

Item 6.           Exhibits

            Exhibit 101*

Interactive Data File

*

In accordance with Rule 406T of Regulation S-T, these XBRL (eXtensible Business Reporting Language) documents are furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements 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.

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