UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2018

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 5(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ______________________________ to ______________________________

Commission File Number 33-55254-41

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 [X]    No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

[  ]

Accelerated filer

[  ]

Non-accelerated filer

[  ]

Smaller reporting company

[X]

Emerging growth company

[  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   [  ]

Indicate by check mark whether the issuer is a shell company (as defined in rule 12b-2 of the Exchange Act).  Yes [X]    No [  ]

As of August 14, 2018, the issuer had outstanding 11,000,000 shares of common stock, par value $0.001. 

BIOETHICS, LTD.

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2018

INDEX

PART I   Financial Information

Item 1.

Financial Statements (Unaudited)

3

Item 2.  Management’s Discussion and Analysis of Financial Condition

and Results of Operations

9

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

10

Item 4.  Controls and Procedures

10

PART II Other Information

Item 1.  Legal Proceedings

11

Item 1A.  Risk Factors

11

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

11

Item 3.  Defaults Upon Senior Securities

11

Item 4.  Mine Safety Disclosures

11

Item 5.  Other Information

11

Item 6.  Exhibits

12

SIGNATURES

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PART I – FINANCIAL INFORMATION

BIOETHICS, LTD.

CONTENTS

PAGE



Unaudited Balance Sheets,

June 30, 2018 and December 31, 2017

4



Unaudited Statements of Operations,

For the three and six months ended June 30, 2018 and 2017

5



Unaudited Statements of Cash Flows,

For the six months ended June 30, 2018 and 2017

                         6



Notes to Unaudited Financial Statements for the six months

ended June 30, 2018 and 2017

7

BIOETHICS, LTD.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2018 and 2017

NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization - Bioethics, Ltd. (“the Company”) was organized under the laws of the State of Nevada on July 26, 1990.  The Company was organized to provide a vehicle for participating in potentially profitable business ventures which may become available through the personal contacts, and at the complete discretion, of the Company’s officers and directors.  The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.

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 for the six months ended June 30, 2018 and 2017 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 financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2017 audited financial statements.  The results of operations for the six months ended June 30, 2018 are not necessarily indicative of the operating results for the full year.

NOTE 2 - PREPAID EXPENSES

In January 2017, the Company paid $6,000 in professional service fees to be rendered through August 2017, resulting in an expense of $4,000 during the six months ended June 30, 2017.  In July 2017, the Company paid $6,000 in professional service fees to be rendered through February 2018, resulting in an expense of $2,000 during the six months ended June 30, 2018 and prepaid expense balances of $-0- and $2,000 at June 30, 2018 and December 31, 2017, respectively.

NOTE 3  RELATED PARTY TRANSACTIONS

Management Compensation - During the six months ended June 30, 2018 and 2017, the Company did not pay any compensation to its officers and directors.

Beginning August 2017, the Company entered into an oral agreement to pay the Company’s sole director $500 per month as payment for use of his personal residence as the Company’s office and mailing address.  The Company has recorded rent expense of $3,000 during the six months ended June 30, 2018 which is included in the general and administrative expenses on the statements of operations, resulting in $3,500 and $500 payable at June 30, 2018 and December 31, 2017, respectively.  

In December 2014, the Company borrowed $25,000 from the majority shareholder pursuant to an unsecured promissory note, which was due on demand and accrued interest at 12% per annum, or $750 per quarter.  On March 9, 2018 the Company paid the outstanding principal amount of $25,000 and accrued interest of $8,250.  

On March 8, 2018 the Company entered into a promissory note with a newly-affiliated party in the amount of $43,250. The note is payable on demand and carries interest at 10% per annum.  Interest expense for the three and six months ended June 30, 2018 was $863 and $1,081 respectively, and accrued interest totaled $1,081 at June 30, 2018.  

On December 12, 2017, the Company entered into a promissory note with its sole officer and director in the amount of $107,000.  On various dates during March through May 2018, the officer advanced the Company an additional $3,350, resulting in total note balances of $110,350 and $107,000 at June 30, 2018 and December 31, 2017, respectively.  The cumulative note balance is uncollateralized, due on demand, and carries interest at 12% per annum.  Interest expense on the note for the three and six months ended June 30, 2018 was $3,279 and $6,445, respectively, and accrued interest totaled $7,114 and $668 at June 30, 2018 and December 31, 2017, respectively.

NOTE 4 – EQUITY TRANSACTIONS

BIOETHICS, LTD.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2018 and 2017

On February 20, 2018, the Company filed a designation statement with the State of Nevada designating the 2017 Series A Preferred Stock, authorized December 12, 2017, consisting of 12,500,000 shares of the Company’s previously authorized but unissued shares of Preferred Stock.  The designation statement was withdrawn the next day.  The authorization and issuance of the 10,700,000 shares of the Company’s Series A Preferred Stock which was previously reported in a Form 8-K dated December 12, 2017, was withdrawn. As a result, $107,000 in shareholder loans that were cancelled in exchange for the issuance of the Series A Preferred Stock were reinstated at December 31, 2017.

On March 9, 2018, the Company repurchased 105,000,000 shares of its outstanding common stock (the “Control Shares”) held by Bradly Petersen (“Mr. Petersen”), for cash of $10,000. As a result of this transaction, Mr. Petersen no longer holds any interest in the Company, and the Control shares have been cancelled so that there are now 11,000,000 issued and outstanding shares of Common Stock.

NOTE 5 - NOTE PAYABLE

On June 14, 2016, the Company issued a promissory note in the principal amount of $35,000 to an unaffiliated lender. The Note is due on demand at any time after its original maturity date of June 14, 2017, and carries an interest rate of 8% per annum.  Interest expense for the three and six months ended June 30, 2018 totaled $699 and $1,389, respectively, resulting in accrued interest at June 30, 2018 and December 31, 2017 of $5,723 and $4,334, respectively.  

NOTE 6 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.  However, the Company has incurred losses since its inception totaling $730,051 and has no on-going operations.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans, additional sales of its common stock, or through a possible business combination.  There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 7 - LOSS PER SHARE

The following data show the amounts used in computing loss per share:

Dilutive loss per share was not presented, as the Company had no common share equivalents for all periods presented that would affect the computation of diluted loss per share. In addition, the Company has experienced continuing losses, so inclusion of any common share equivalents would result in an anti-dilutive effect.

NOTE 8 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and determined there are no additional events to disclose.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion in conjunction with our financial statements, which are included elsewhere in this report.  The following information contains forward-looking statements. (See “Forward-Looking Statements” below and “Risk Factors.”)

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  These statements reflect the Company’s views with respect to future events based upon information available to it at this time.  These forward-looking statements are subject to certain uncertainties and other factors that could cause actual results to differ materially from these statements.  These uncertainties and other factors include, but are not limited to the risk factors described herein under the caption “Risk Factors.”  The words “anticipates,” “believes,” “estimates,” “expects,” “plans,” “projects,” “targets,” and similar expressions identify forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in assumptions, future events or otherwise.

General

The Company is a shell company that conducts no active business operations and is seeking business opportunities for acquisition or participation by the Company.

The Report of Independent Registered Public Accounting Firm on the Company’s 2017 audited financial statements addresses an uncertainty about the Company’s ability to continue as a going concern, indicating that the Company has incurred losses since its inception and has no on-going operations.  The report further indicates that these factors raise substantial doubt about the Company’s ability to continue as a going concern.  At June 30, 2018, the Company had a working capital deficit of $239,578 and an accumulated deficit since inception of $730,051. The Company incurred net losses of $44,352 and $30,703 for the six months ended June 30, 2018 and 2017, respectively.  The Company has not entered into any agreements or arrangements for the provision of additional debt or equity financing and there can be no assurance that it will be able to obtain the additional debt or equity capital required to continue its operations.  

The Three and Six Months ended June 30, 2018 compared to June 30, 2017

The Company did not conduct any operations during the three and six month periods ended June 30, 2018 or 2017.  At June 30, 2018, the Company had cash in the amount of $1,323, compared to cash at December 31, 2017 in the amount of $1,724.  At June 30, 2018, the Company had total current assets of $1,323, compared to $3,724 at December 31, 2017.  At June 30, 2018, the Company had total current liabilities of $240,901, compared to $189,092 at December 31, 2017.  The Company had a working capital deficit of $239,578 at June 30, 2018 compared to a working capital deficit of $185,368 at December 31, 2017.

The Company did not generate revenues during the three and six month periods ending June 30, 2018 or 2017.  The Company incurred general and administrative expenses of $22,564 during the three months ended June 30, 2018, compared to $15,824 during the three months ended June 30, 2017.  The Company incurred general and administrative expenses of $35,437 during the six months ended June 30, 2018, compared to $22,856 during the six months ended June 30, 2017.  Such expenses consist primarily of legal and accounting fees as well as taxes and annual fees required to maintain the Company’s corporate status.   

The Company incurred other expenses of $4,840 during the three months ended June 30, 2018 compared to $3,941 during the three months ended June 30, 2017.  The Company incurred other expenses of $8,915 during the six months ended June 30, 2018 compared to $7,847 during the six months ended June 30, 2017.  Total other income and expenses consist of interest expense related to the notes payable due from the Company.  

The Company incurred a net loss of $27,404 during the three months ended June 30, 2018, compared to a net loss of $19,765 during the three months ended June 30, 2017.  The Company incurred a net loss of $44,352 during the six months ended June 30, 2018, compared to a net loss of $30,703 during the six months ended June 30, 2017.  The

increase in net loss in 2018 as compared to 2017 is mainly the result of increased professional fees related to the Company maintaining its status and filings with the Securities and Exchange Commission.   

The Company has never had substantial ongoing operations. As a result, since its inception on July 26, 1990, the Company had an accumulated deficit of $730,051 as of June 30, 2018.

Liquidity and Capital Resources

Net cash used by operating activities was $12,001 and $25,630 during the six months ended June 30, 2018 and 2017, respectively.

Net cash provided by investing activities was $-0- during both the six months ended June 30, 2018 and 2017.

Net cash provided by financing activities was $11,600 and $-0- during the six months ended June 30, 2018 and 2017, respectively.

Since the Company does not generate any revenues from operations, it is dependent on sales of securities, loans, or contributions from its stockholders in order to pay its operating costs. In addition, in the event the Company locates a suitable candidate for potential acquisition, the Company will require additional funds to pay the costs of negotiating and completing the acquisition of such candidate.  The Company has not entered into any agreement or arrangement for the provision of any additional funding and no assurances can be given that such funding will be available to the Company on terms acceptable to it or at all.  

The Company cannot presently foresee the cash requirements of any business opportunity which may ultimately be acquired by the Company.  However, since it is likely that any business it acquires will be involved in active business operations, the Company anticipates that an acquisition will result in increased cash requirements as well as increases in the number of employees of the Company.

Off-Balance Sheet Arrangements

The Company has not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.

Critical Accounting Policies

Due to the lack of current operations and limited business activities, the Company does not have any accounting policies that it believes are critical to facilitate an investor’s understanding of the Company’s financial and operating status.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.  The Company is a “smaller reporting company.”

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“the Exchange Act”) as of June 30, 2018, the end of the period covered by this report.  Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer, who is our sole officer and director, concluded that our disclosure controls and procedures as of June 30, 2018 were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management,

10

including our Chief Executive Officer/Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.  A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.  

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during the quarter ended June 30, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In connection with an evaluation of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2018, using the COSO framework (2013), our management, with the participation of our Chief Executive Officer/Chief Financial Officer identified a weakness in the Company’s internal control, which arises from the fact that the Company’s principal executive and principal financial officers are the same person, which does not allow for segregation of duties.  Our management believes the materiality of this weakness is mitigated by the Company’s status as a shell company with no significant assets or liabilities, no business operations and a limited number of transactions each year, and that the weakness does not have a material effect on the accuracy and completeness of our financial reporting and disclosure as included in this report.

Part II---OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is not a party to any material pending legal proceedings and, to the best of its knowledge; its properties are not the subject of any such proceedings.

Item 1A. Risk Factors.

See the risk factors described in Item 1A of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017.

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

None.

Item 3. Defaults Upon Senior Securities.

Not Applicable.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

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Item 6.

Exhibits

The following documents are included as exhibits to this report:

(a)

Exhibits

**XBRL information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement or prospectus to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.

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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