Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The
Following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this
Form 10-Q.
Forward-Looking
and Cautionary Statements
Unless
otherwise indicated, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our”
are to the Company, unless the context requires otherwise. The following discussion and analysis by our management of our financial
condition and results of operations should be read in conjunction with our unaudited condensed interim financial statements and
the accompanying related notes included in this quarterly report and our audited financial statements and related notes and Management’s
Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year
ended December 31, 2016 filed with the Securities and Exchange Commission.
Cautionary
Statement Regarding Forward-Looking Statements
This
report may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act, and we intend that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking
statements are based on our management’s beliefs and assumptions and on information currently available to our management.
Any such forward-looking statements would be contained principally in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Risk Factors.” Forward-looking statements include information concerning
our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment,
potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical
facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,”
“expects,” “hopes,” “intends,” “may,” “plans,” “potential,”
“predicts,” “projects,” “should,” “will,” “would” or similar expressions.
This
report may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act, and we intend that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking
statements are based on our management’s beliefs and assumptions and on information currently available to our management.
Any such forward-looking statements would be contained principally in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Risk Factors.” Forward-looking statements include information concerning
our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment,
potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical
facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,”
“expects,” “hopes,” “intends,” “may,” “plans,” “potential,”
“predicts,” “projects,” “should,” “will,” “would” or similar expressions.
Forward-looking
statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking
statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, you should
not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s
beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in
this report and have filed as exhibits to the report completely and with the understanding that our actual future results may
be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking
statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking
statements, even if new information becomes available in the future.
Additional
information concerning these and other risks and uncertainties is contained in our filings with the Securities and Exchange Commission,
including the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016.
Unless
otherwise indicated or the context otherwise requires, all references in this Form 10-Q to “we,” “us,”
“our,” “our company,” “Protect” refer to Protect Pharmaceutical Corporation.
Our
Ability to Continue as a Going Concern
Our
independent registered public accounting firm has issued its report dated March 31, 2017, in connection with the audit of our
annual financial statements as of December 31, 2016, that included an explanatory paragraph describing the existence of conditions
that raise substantial doubt about our ability to continue as a going concern and Note 2 to the unaudited financial statements
for the period ended June 30, 2017 also describes the existence of conditions that raise substantial doubt about our ability to
continue as a going concern.
Results
of Operations
Three
Months Ended June 30, 2017 and 2016 (unaudited)
We
did not realize revenues for the three-month periods ended June 30, 2017 and 2016 (unaudited). For the three months ended June
30, 2017 (“second quarter”), total operating expenses were $100,000, consisting of professional fees. The increase
in professional fees in the second quarter of 2017 is attributable to a new contract with Trident for professional services. Interest
expense for the three months ended June 30, 2017 was $333, with the entire amount related to a convertible note with Trident.
Total
operating expenses for the comparable second quarter of 2016 were $10,458, consisting of $8,855 in professional fees, $1,500 in
executive compensation and $103 in general and administrative expenses.
The
net loss for the second quarter of 2017 was $100,333, (-$0.09 per share), compared to net loss of $10,458 (-$0.01 per share) for
the second quarter of 2016.
Six
Months Ended June 30, 2017 and 2016 (unaudited)
We
did not realize revenues for the six-month periods ended June 30, 2017 and 2016 (unaudited). For the six months ended June 30,
2017, total operating expenses were $115,400, consisting of professional fees of $115,200 and general & administrative expenses
of $200. The increase in professional fees in the first six months of 2017 is attributable to a new contract with Trident for
professional services. Interest expense for the six months ended June 30, 2017 was $333, with the entire amount related to a convertible
note with Trident.
Total
operating expenses for the comparable period of 2016 were $14,130, consisting of $10,935 in professional fees, $3,000 in executive
compensation and $195 in general and administrative expenses.
The
net loss for the six-month period was $115,733, (-$0.10 per share), compared to net loss of $14,130 (-$0.01 per share) for the
same period of 2016.
Liquidity
and Capital Resources
Total
assets were $0 as of June 30, 2017 (unaudited) and $0 as of December 31, 2016. Total liabilities at June 30, 2017 (unaudited)
were $136,563, consisting of $100,333 in notes payable, $950 in accounts payable and accrued expenses, and $35,280 in related-party
payables. At December 31, 2016, total liabilities were $20,830.
Because
we currently have limited revenues and 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, 2017 (unaudited), we had stockholders’ deficit of $136,563 compared to stockholders’ deficit of $20,830 at
December 31, 2016.
Plan
of Operation
Our
current business plan is to contemplate a possible a future business model change by the Company to generate adequate revenue
to sustain operations and reduce dependency on shareholder funds. The Company also continues to explore acquisition of or acquisition
by either an affiliated entity or an as yet unknown other entity.
Our
common stock is currently quoted on the QB tier of the OTC Markets under the ticker symbol “PRTT”.
It
is anticipated that business opportunities will come to our attention from various sources, including its officers and directors,
its other stockholders, professional advisors such as attorneys and accountants, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present unsolicited proposals. We have no plan, understandings, agreements,
or commitments with any individual for such person to act as a finder of opportunities for our company.
Because
we currently have no 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.
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 expansion 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.
Changes
to Company Officers
June
30, 2017:
Una Taylor resigned as Chief Executive Officer.
June
30, 2017:
Jordan Fishman was appointed as Chief Executive Officer.
November
17, 2017:
Jordan Fishman resigned as Chief Executive Officer.
November
17, 2017:
Una Taylor was appointed as Chief Executive Officer.
June
1, 2018:
Una Taylor resigned as Chief Executive Officer.
June
1, 2018:
Yvette Sanchez was appointed President.
November
12, 2018:
Yvette Sanchez resigned as President.
November
13, 2018:
Una Taylor was appointed as Chief Executive Officer.
Changes
to the Board of Directors
June
30, 2017:
Three new members were appointed the Board of Directors: Stuart Sandweiss (Director and Audit Committee Chair),
Shimson Bandman (Director), and Shedrick W. Daniels (Director).
Prior
to June 30, 2017, the Company did not have an audit committee and, as a result, our entire board of directors performed the duties
of an audit committee. Our board of directors will approve in advance the scope and cost of the engagement of an independent auditor
before the auditor renders audit and non-audit services. As a result, we have not relied on pre-approval policies and procedures.
June
30, 2017:
Una Taylor resigned from the Board of Directors.
June
30, 2017:
Theodore Faison resigned from the Board of Directors
June
1, 2018:
Yvette Sanchez was appointed a member of the Board of Directors
.
June
5, 2018:
Yvette Sanchez removed three members from the Board of Directors by majority vote of the company’s shareholders:
Stuart Sandweiss (Director and Audit Committee Chair), Shimson Bandman (Director), and Shedrick W. Daniels (Director). There were
no disagreements with these former directors of the Company as to its operations, policies or practices.
November
12, 2018:
Una Taylor appointed as a member of the Board of Directors.
November
12, 2018:
Yvette Sanchez resigned as a member of the Board of Directors.
Off-balance
Sheet Arrangements
We
do not have 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 that are material to investors.
