UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2020

 

☐

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: 000-30991

 

SKINOVATION PHARMACEUTICAL INCORPORATED

(Exact name of registrant as specified in its charter)

Wyoming (State or other jurisdiction of incorporation or organization)	87-0458170 (I.R.S. Employer Identification No.)
2157 S. Lincoln Street, Salt Lake City, Utah (Address of principal executive offices)	84106 (Zip Code)

(801) 323-2395

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None

 

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 preceding 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 ☑ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☑ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 ☐   Non-accelerated filer ☑

Accelerated filer ☐ Smaller reporting company ☑ 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 registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☑ No ☐

 

The number of shares outstanding of the registrant’s common stock as of November 6, 2020 was 708,000.

TABLE OF CONTENTS

 

	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Balance Sheets (Unaudited)	4
	Condensed Statements of Operations (Unaudited)	5
	Condensed Statements of Stockholders’ Deficit (Unaudited)	6
	Condensed Statements of Cash Flows (Unaudited)	7
	Notes to the Unaudited Condensed Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	11
Item 4.	Controls and Procedures	11
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	12
Item 1a.	Risk Factors Information	12
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3.	Defaults Upon Senior Securities	12
Item 4.	Mine Safety Disclosures	12
Item 5.	Other Information	12
Item 6.	Exhibits	12
Signatures		13

 

 

 

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

 

 

 

SKINOVATION PHARMACEUTICAL INCORPORATED

 

Condensed Financial Statements

 

September 30, 2020

 

(Unaudited)

 

Skinovation Pharmaceutical Incorporated

Condensed Balance Sheets

(Unaudited)

		SEPT 30, 2020				DEC 31, 2019
ASSETS
Current Assets
Cash		$	4,752			$	77
Total Current Assets			4,752				77
Total Assets		$	4,752			$	77
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable		$	10,500			$	7,200
Notes payable			224,521				212,321
Accrued interest			107,683				94,741
Total Current Liabilities			342,704				314,262
Total Liabilities			342,704				314,262
Stockholders' Deficit
Preferred stock, $.001 par value; 25,000,000 shares authorized; 0 shares issued and outstanding			—				—
Common stock, $.001 par value; 50,000,000 shares authorized; 708,000 shares issued and outstanding			708				708
Additional paid-in capital			25,148				25,148
Accumulated deficit			(363,808	)			(340,041	)
Total Stockholders' Deficit			(337,952	)			(314,185	)
Total Liabilities and Stockholders' Deficit		$	4,752			$	77

 

  

The accompanying notes are an integral part of these unaudited condensed financial statements

 

Skinovation Pharmaceutical Incorporated

Condensed Statements of Operations

(Unaudited)

		FOR THE THREE MONTHS ENDED SEPT 30, 2020				FOR THE THREE MONTHS ENDED SEPT 30, 2019				FOR THE NINE MONTHS ENDED SEPT 30, 2020				FOR THE NINE MONTHS ENDED SEPT 30, 2019
REVENUES		$	—			$	—			$	—			$	—
EXPENSES
General and administrative			2,700				2,715				10,825				10,840
TOTAL EXPENSES			2,700				2,715				10,825				10,840
INCOME (LOSS) BEFORE OTHER EXPENSE			(2,700	)			(2,715	)			(10,825	)			(10,840	)
OTHER INCOME (EXPENSE)
Interest expense			(4,448	)			(4,085	)			(12,942	)			(12,058	)
Total other income (expense)			(4,448	)			(4,085	)			(12,942	)			(12,058	)
INCOME (LOSS) BEFORE INCOME TAXES			(7,148	)			(6,800	)			(23,767	)			(22,898	)
INCOME TAXES			—				—				—				—
NET INCOME (LOSS)		$	(7,148	)		$	(6,800	)		$	(23,767	)		$	(22,898	)
Basic and diluted net income (loss) per share		$	(0.01	)		$	(0.01	)		$	(0.03	)		$	(0.03	)
Weighted average shares outstanding			708,000				708,000				708,000				708,000

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

Skinovation Pharmaceutical Incorporated

Statements of Stockholders’ Deficit

For the three and nine months ended September 30, 2019 and 2020

(Unaudited)

 

		Common stock								Additional paid-in				Accumulated				Total stockholders’
		Shares				Amount				capital				deficit				deficit
Balance December 31, 2018			708,000			$	708			$	25,148			$	(310,314	)		$	(284,458	)
Net loss for the quarter ended March 31, 2019			—				—				—				(9,367	)			(9,367	)
Balance at March 31, 2019			708,000			$	708			$	25,148			$	(319,681	)		$	(293,825	)
Net loss for the quarter ended June 30, 2019			—				—				—				(6,731	)			(6,731	)
Balance at June 30, 2019			708,000			$	708			$	25,148			$	(326,412	)		$	(300,556	)
Net loss for the quarter ended September 30, 2019			—				—				—				(6,800	)			(6,800	)
Balance at September 30, 2019			708,000			$	708			$	25,148			$	(333,212	)		$	(307,356	)
Balance December 31, 2019			708,000			$	708			$	25,148			$	(340,041	)		$	(314,185	)
Net loss for the quarter ended March 31, 2020			—				—				—				(9,602	)			(9,602	)
Balance at March 31, 2020			708,000			$	708			$	25,148			$	(349,643	)		$	(323,787	)
Net loss for the quarter ended June 30, 2020			—				—				—				(7,017	)			(7,017	)
Balance at June 30, 2020			708,000			$	708			$	25,148			$	(356,660	)		$	(330,804	)
Net loss for the quarter ended September 30, 2020			—				—				—				(7,148	)			(7,148	)
Balance at September 30, 2020			708,000			$	708			$	25,148			$	(363,808	)		$	(337,952	)

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

Skinovation Pharmaceutical Incorporated

Condensed Statements of Cash Flows

(Unaudited)

		FOR THE NINE MONTHS ENDED SEPT 30, 2020				FOR THE NINE MONTHS ENDED SEPT 30, 2019
Cash Flows from Operating Activities
Net income (loss)		$	(23,767	)		$	(22,898	)
Adjustments to reconcile net loss to cash used by operating activities:
Changes in assets and liabilities:
Increase in accounts payable			3,300				3,400
Increase in accrued interest			12,942				12,058
Net cash used by operating activities			(7,525	)			(7,440	)
Cash Flows from Investing Activities
Net cash used by investing activities			—				—
Cash Flows from Financing Activities
Proceeds from notes payable			12,200				7,400
Net cash provided by financing activities			12,200				7,400
Increase (decrease) in cash			4,675				(40	)
Cash and cash equivalents at beginning of period			77				132
Cash and cash equivalents at end of period		$	4,752			$	92
Supplemental Cash Flow Information:
Cash paid for interest		$	—			$	—
Cash paid for income taxes		$	—			$	—

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

Skinovation Pharmaceutical Incorporated

Notes to the Unaudited Condensed Financial Statements

September 30, 2020

 

 

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 as of and for the period ended September 30, 2020 and for all periods presented 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, 2019 audited financial statements as reported in its Form 10-K. The results of operations for the period ended September 30, 2020 are not necessarily indicative of the operating results for the full year ended December 31, 2020.

 

NOTE 2 – GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has limited assets, has incurred losses since inception, has negative cash flows from operations, and has no revenue-generating activities. Its activities have been limited for the past several years and it is dependent upon financing to continue operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management’s plan to acquire or merge with other operating companies. The COVID-19 pandemic could have an impact on our ability to obtain financing to fund our operations.  The Company is unable to predict the ultimate impact at this time.

 

NOTE 3 – NOTES PAYABLE

 

During the nine months ended September 30, 2020, a third party loaned the Company $12,200. The notes bear interest at 8% and are due on demand. Notes payable at September 30, 2020 and December 31, 2019 were $224,521 and $212,321, respectively. Accrued interest on the notes was $107,683 and $94,741 at September 30, 2020 and December 31, 2019, respectively.

 

NOTE 4 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no such events that would have a material impact on the financial statements.

 

 

In this report references to “Skinovation,” “we,” “us,” and “our” refer to Skinovation Pharmaceutical Incorporated.

 

FORWARD LOOKING STATEMENTS

 

The U. S. Securities and Exchange Commission (“SEC”) encourages reporting companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions. This report contains these types of statements. Words such as “may,” “expect,” “believe,” “intend,” “anticipate,” “estimate,” “project,” or “continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Executive Overview

 

We have not recorded revenues and we are dependent upon financing to continue basic operations. Management intends to rely upon advances or loans from management, significant stockholders or third parties to meet our cash requirements, but we have not entered into written agreements guaranteeing funds and, therefore, no one is obligated to provide funds to us in the future. These factors raise substantial doubt as to our ability to continue as a going concern. Our plan is to combine with an operating company to generate revenue. At this time management is unsure what effect the COVID-19 pandemic will have on our search for companies to combine with.

 

As of the date of this report, our management has not had any discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may complete a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks. In addition, any business combination or transaction will likely result in a significant issuance of shares and substantial dilution to present stockholders of the Company.

 

We anticipate that the selection of a business opportunity will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of securities. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

 

If we obtain a business opportunity, then it may be necessary to raise additional capital. We anticipate that we will sell our common stock to raise this additional capital. We expect that we would issue such stock pursuant to exemptions to the registration requirements provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions to the registration requirements of the Securities Act of 1933. We do not currently intend to make a public offering of our stock. We also note that if we issue more shares of our common stock, then our stockholders may experience dilution in the value per share of their common stock.

 

Liquidity and Capital Resources

 

We have not recorded revenues from operations during 2020 and 2019 and have not established an ongoing source of revenue sufficient to cover our operating costs. We expect to rely upon third parties to pay for our operating expenses. At September 30, 2020 we had cash of $4,752 compared to $77 cash at December 31, 2019. Our total liabilities increased to $342,704 at September 30, 2020 from $314,262 at December 31, 2019. The increase in total liabilities is primarily due to increases in accounts payable for professional fees, notes payable and accrued interest.

 

We intend to obtain capital from management, significant stockholders and third parties to cover minimal operations; however, there is no assurance that additional funding will be available. Our ability to continue as a going concern during the long term is dependent upon our ability to find a suitable business opportunity and acquire or enter into a merger with such company. The type of business opportunity with which we acquire or merge will affect our profitability for the long term.

 

During the next 12 months we anticipate incurring additional costs related to the filing of Exchange Act reports. We believe we will be able to meet these costs through advances and loans provided by management, significant stockholders or third parties. We may also rely on the issuance of our common stock in lieu of cash to convert debt or pay for expenses.

 

Results of Operations

 

We did not record revenues in either 2020 or 2019. General and administrative expense was $10,825 for the nine months ended September 30, 2020 (“2020 nine-month period”) and $10,840 for the nine months ended September 30, 2019 (“2019 nine-month period”). General and administrative expense was $2,700 for the three months ended September 30, 2020 (“2020 third quarter”) and $2,715 for the three months ended September 30, 2019 (“2019 third quarter”).

 

Total other expense increased to $12,942 for the 2020 nine-month period compared to $12,058 for the 2019 nine-month period. Total other expense was $4,448 for the 2020 third quarter compared to $4,085 for the 2019 third quarter. Total other expense represents interest expense related to notes payable.

 

Our net loss increased to $23,767 for the 2020 nine-month period compared to $22,898 for the 2019 nine-month period. Our net loss increased to $7,148 for the 2020 third quarter compared to $6,800 for the 2019 third quarter. Management expects net losses to continue until we acquire or merge with a business opportunity.

 

Commitments and Obligations

 

At September 30, 2020 we had outstanding notes payable totaling $224,521. During the 2020 nine-month period a third party loaned the Company $12,200. All of the notes payable are non-collateralized, carry interest at 8% and are due on demand. We recorded total accrued interest at September 30, 2020 of $107,683.

 

During the 2020 nine-month period accounts payable for consulting services and professional services provided or paid for by third parties totaled $3,300. Total accounts payable at September 30, 2020 were $10,500.

 

Two lenders represent in excess of 95% of the Company’s accounts payable and notes payable at September 30, 2020.

 

Off-Balance Sheet Arrangements

 

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

 

Emerging Growth Company

 

We qualify as an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). A company qualifies as an emerging growth company if it has total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year and, as of December 8, 2011, had not sold common equity securities under a registration statement. Under the JOBS Act we are permitted to, and intend to, rely on exemptions from certain disclosure requirements

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable to smaller reporting companies.

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated to allow our management to make timely decisions regarding required disclosure. Our President, who serves as our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report and he determined that our disclosure controls and procedures were not effective due to a control deficiency. During the period we did not have additional personnel to allow segregation of duties to ensure the completeness or accuracy of our information. Due to the size and operations of the Company we are unable to remediate this deficiency until we acquire or merge with another company.

 

Changes to Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an evaluation of our internal control over financial reporting and determined that there were no changes made in our internal control over financial reporting during the quarter ended September 30, 2020 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

 

 

ITEM 1A.  RISK FACTORS

 

As a smaller reporting company we are not required to provide the information required by this Item.

 

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

 

ITEM 5. OTHER INFORMATION

 

None.

 

 

ITEM 6. EXHIBITS

 

Part I Exhibits

No.	Description
31.1	Principal Executive Officer Certification
31.2	Principal Financial Officer Certification
32.1	Section 1350 Certification

 

Part II Exhibits

No.	Description
3(i)	Wyoming Articles of Domestication, filed November 23, 2016 (Incorporated by reference to exhibit 3(i).2 of Form 10-K, filed March 20, 2017)
3(ii)	Bylaws of Skinovation (Incorporated by reference to exhibit 3(ii) of Form 10-K, filed March 20, 2017)
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Label Linkbase Document
101.PRE	XBRL Taxonomy Presentation Linkbase 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.

 

Date: November 6, 2020

SKINOVATION PHARMACEUTICAL INCORPORATED     By:  /s/ Hugo Rodier                Hugo Rodier President and Director Principal Financial Officer

 

 

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