10-Q 1 bkit_10q.htm FORM 10-Q bkit_10q.htm

 

U. S. 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 November 30, 2016

 

¨

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

 

Commission File Number: 000-55022

 

Blake Insomnia Therapeutics, Inc.

(Name of small business issuer in its charter)

 

Nevada

 

3949

 

 46-0780380

(State or other Employer jurisdiction of

Identification incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Number)

 

Birger Jan Olsen

244, 5th Avenue, Suite A-154

New York, N.Y. 10001

USA

Phone 1-646-513-2776

(Address and telephone number of registrant's principal executive offices and principal place of business)

 

Birger Jan Olsen

244, 5th Avenue, Suite A-154

New York, N.Y. 10001

USA

Phone 1-646-513-2776

(Name, address, and telephone number of agent for service)

 

Please send a copy of all correspondence to:

Jillian Ivey Sidoti, Esq

PHONE 323-799-1342

jillian@jilliansidoti.com

 

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 x No ¨

 

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 the definitions of “large accelerated filer,”“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

(Do not check if 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 x No ¨

 

At January 16, 2017, there were 31,597,572 shares outstanding of the registrant’s common stock.

 

 
 
 

BLAKE INSOMNIA THERAPEUTICS, INC.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED NOVEMBER 30, 2016

 

 

Page

 

 

Number

 

PART I. FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

Item 1.

Financial Statements

 

 

3

 

 

 

 

 

 

 

 

Balance Sheets as of November 30, 2016 and August 31, 2016

 

 

3

 

 

 

 

 

 

 

 

Statements of Operations for the three months ended November 30, 2016 and November 30, 2015

 

 

4

 

 

 

 

 

 

Statements of Cash Flows for the three months ended November 30, 2016 and November 30, 2015

 

 

5

 

 

 

 

 

 

Notes to Financial Statements

 

 

6

 

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

11

 

 

 

 

 

 

 

Item 3.

Quantitative & Qualitative Disclosures about Market Risks

 

13

 

Item 4.

Controls and Procedures

 

13

 

PART II. OTHER INFORMATION

 

Item 1.

Legal Proceedings

 

14

  
Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds 

 

14

 

 

  

 

 

 

 

Item 3.

Defaults upon senior securities

 

14

 

 

 

 

 

 

Item 4.

Submissions of matters to a vote of securities holders

 

14

 

 

 

 

 

 

Item 5.

Other Information

 

14

 

Item 6.

Exhibits

 

14

 

 

 

 

 

 

Exhibit 31.1

 

 

 

 

 

 

 

 

 

 

Exhibit 32.1

 

 

 

 

 

 
2
 

 

PART I — FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS 

 

Blake Insomnia Therapeutics Inc.

Balance Sheets

 

 

 

As of

November 30

 

 

As of

August 31

 

 

 

2016

 

 

2016

 

 

 

(Unaudited)

 

 

(Audtited)

 

ASSETS

 

Current Assets

 

 

 

 

 

 

Cash

 

$ 26,142

 

 

$ 4,783

 

Total Current Assets

 

 

26,142

 

 

 

4,783

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$ 26,142

 

 

$ 4,783

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

Current Liabilities

 

 

 

 

 

 

 

 

Notes payable

 

$ 109,500

 

 

$ 67,500

 

Accounts payable

 

 

11,296

 

 

 

10,797

 

Due to related party

 

 

536

 

 

 

536

 

Accrued interest

 

 

9,607

 

 

 

7,091

 

 

 

 

 

 

 

 

 

 

Total Current Liabilities

 

 

130,939

 

 

 

85,924

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

130,939

 

 

 

85,924

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

 

Preferred stock ($0.0001 par value; 10,000,000 authorized; no shares issued and outstanding)

 

 

-

 

 

 

-

 

Common stock ($0.0001 par value, 100,000,000 shares authorized; 31,597,572 shares issued and outstanding)

 

 

3,160

 

 

 

3,160

 

Additional paid-in capital

 

 

217,775

 

 

 

217,775

 

Deficit accumulated during the development stage

 

 

(325,732 )

 

 

(302,076 )

 

 

 

 

 

 

 

 

 

Total Stockholders' Equity (Deficit)

 

 

(104,797 )

 

 

(81,141 )

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)

 

$ 26,142

 

 

$ 4,783

 

 

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

 

 
3
 

 

Blake Insomnia Therapeutics, Inc.

formerly Book It Local Inc.

Statements of Operations

(Unaudited)

 

 

 

For three months

 

 

For three months

 

 

 

ended

 

 

ended

 

 

 

November 30, 2016

 

 

November 30, 2015

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

Revenues

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Costs

 

 

 

 

 

 

 

 

Administrative Expenses

 

 

21,140

 

 

 

9,443

 

Patent Costs

 

 

-

 

 

 

-

 

Stock Issued for Services

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total Operating Costs

 

 

21,140

 

 

 

9,443

 

 

 

 

 

 

 

 

 

 

Other (Expense)

 

 

 

 

 

 

 

 

Interest Expense

 

 

(2,516 )

 

 

(875 )

 

 

 

 

 

 

 

 

 

Total Other (Expense)

 

 

(2,516 )

 

 

(875 )

 

 

 

 

 

 

 

 

 

Net Loss

 

 

(23,656 )

 

 

(10,318 )

 

 

 

 

 

 

 

 

 

Basic loss per share

 

 

*

 

 

*

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

31,597,572

 

 

 

31,597,572

 

______________

*

= Less than $ 0.01

The accompanying notes are an integral part of these financial statements

 

The accompanying notes are an integral part of these financial

 

 
4
 

 

Blake Insomnia Therapeutics, Inc.

formerly Book It Local Inc.

Statements of Cash Flows

(Unaudited)

 

 

 

For the three months ended

 

 

For the three months ended

 

 

 

November 30, 2016

 

 

November 30, 2015

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net (loss)

 

$ (23,656 )

 

$ (10,318 )

Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Increase (decrease) in accounts payable

 

 

499

 

 

 

499

 

Increase (decrease) in accrued interest

 

 

2,516

 

 

 

829

 

 

 

 

 

 

 

 

 

 

Net cash (used in) operating activities

 

 

(20,641 )

 

 

(8,990 )

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from notes payable

 

 

42,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

42,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash

 

 

21,359

 

 

 

(8,990 )

 

 

 

 

 

 

 

 

 

Cash at beginning of period

 

 

4,783

 

 

 

9,509

 

 

 

 

 

 

 

 

 

 

Cash at end of period

 

$ 26,142

 

 

$ 519

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

 

 

 

 

Cash Paid For:

 

 

 

 

 

 

 

 

Interest

 

$ -

 

 

$ -

 

Income Taxes

 

$ -

 

 

$ -

 

 

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

 

 
5
 

 

Blake Insomnia Therapeutics Inc.

(formerly Book It Local, Inc)

NOTES TO FINANCIAL STATEMENTS

(A Development Stage Company)

November 30, 2016

 

1. NATURE OF OPERATIONS 

 

Blake Insomnia Therapeutics Inc. (formerly Book it Local, Inc.) (“The Company”) was incorporated in the State of Nevada on August 11, 2012 as Book It Local, Inc. to develop its online booking system to help consumers find and hire live entertainment for weddings, corporate events, private parties, night clubs, grand openings, and other events. On September 1, 2015, the Company changed its name to Blake Insomnia Therapeutics Inc. The Company is in the development stage with no revenues and a limited operating history.

 

2. GOING CONCERN CONSIDERATION 

 

These financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred a cumulative net loss of $325,732 since its inception and requires capital for its contemplated operation and marketing activities to take place. The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

 

Future issuances of the Company's equity or debt securities will be required in order for the Company to continue to finance its operations and continue as a going concern. The Company's present revenues are insufficient to meet operating expenses. The financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

 

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s year-end is August 31.

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturity of three months or less to be cash equivalents.

 

Use of Estimates and Assumptions

The preparation of financial statements in conformity with generally accepted accounting principles requires that management makes 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 period. Actual results could differ from those estimates.

 

 
6
 

 

Revenue Recognition

The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met:

 

 

(i) persuasive evidence of an arrangement exists,

 

 

 

 

(ii) the services have been rendered and all required milestones achieved,

 

 

 

 

(iii) the sales price is fixed or determinable, and

 

 

 

 

(iv) collectability is reasonably assured.

 

Foreign Currency Translation

The financial statements are presented in United States dollars. In accordance with ASC 830, “Foreign Currency Matters”, foreign denominated monetary assets and liabilities are translated into their United States 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 year. Gains or losses resulting from foreign currency transactions are included in results of operations.

 

Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.

 

Development Stage Company

The Company complies with Financial Accounting Standards Codification (“ASC”) 915 and Securities and Exchange Commission Act Guide 7 for its characterization of the Company as development stage enterprise.

 

Fair Value for Financial Assets and Financial Liabilities

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

Level 2

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

Level 3

Pricing inputs that are generally observable inputs and not corroborated by market data.

 

 
7
 

 

The carrying amounts of the Company’s financial assets and liabilities, such as cash, approximate their fair values because of the short maturity of these instruments.

 

The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at November 30, 2016, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the period ended November 30, 2016.

 

Income Taxes

The Company follows the accrual method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on the deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At November 30, 2016 a full deferred tax asset valuation allowance has been provided and no deferred tax asset has been recorded.

 

Basic and Diluted Net Income (Loss) per Share

The Company computes net income (loss) per share in accordance with ASC 260, "Earnings per Share" which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

 

Recent Accounting Pronouncements 

In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915) Elimination of Certain Financial Reporting Requirements . ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements., including the elimination of inception-to-date information on the statements of operations, cash flows and shareholders’ equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014 and interim periods within those annual periods, however early adoption is permitted for financial statements not yet issued. The Company adopted ASU 2014-10 since the quarter ended February 28, 2015, thereby no longer presenting or disclosing any information required by Topic 915.

 

The Company has reviewed all recently issued, but not yet effective, and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

4. DEVELOPMENT STAGE COMPANY

 

The Company is in the development stage as of November 30, 2016 and to date has had no significant operations. Recovery of the Company’s assets is dependent on future events, the outcome of which is indeterminable. In addition, successful completion of the Company’s development program and its transition, ultimately, to attaining profitable operations is dependent upon obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company’s cost structure.

 

 
8
 

 

5. NOTES PAYABLE

 

On August 31, 2014 the Company issued a promissory note payable in the amount of $5,000. The note is due on November 30, 2016 and bears interest at 10% per annum.

 

On November 20, 2014 the Company issued a promissory note payable in the amount of $10,000. The note is due on demand and bears interest at 10% per annum.

 

On January 18, 2015 the Company issued a promissory note payable in the amount of $10,000. The note is due on demand and bears interest at 10% per annum.

 

On June 24, 2015 the Company issued a promissory note payable in the amount of $12,500. The note is due on demand and bears interest at 10% per annum.

 

On December 10, 2015 the Company issued a promissory note payable in the amount of $15,000. The note is due on demand and bears interest at 10% per annum.

 

On July 29, 2016 the Company issued a promissory note payable in the amount of $15,000. The note is due on demand and bears interest at 10% per annum.

 

On September 19, 2016 the Company issued a promissory note payable in the amount of $42,000. The note is due on demand and bears interest at 10% per annum.

 

The interest expense for the three months ended November 30, 2016 and November 30, 2015 is $2,516 and $875, respectively.

 

6. RELATED PARTY TRANSACTIONS 

 

The President of the Company provides management and office premises to the Company for no compensation. The effects of this immaterial to the financial statements taken as a whole.

 

A shareholder of the company paid expenses on behalf of the company in the amount of $3,058 during the year ended August 31, 2015. During the year ended August 31, 2016, $2,522 was repaid. As of November 30, 2016, there is a balance owing to the shareholder of $536. This balance is non-interest bearing and has no specified terms of repayment.

 

7. STOCKHOLDERS’ EQUITY 

 

In August, 2012, the Company authorized the issue of 100,000,000 common shares of the Company at par value of $.0001 and authorized the issue of 10,000,000 preferred shares at par value of $.0001.

 

During the year ended August 31, 2014, the Company issued 21,000,000 common shares in exchange for $210,000 in services rendered, valued at the closing stock price at the date of issuance.

 

On December 23, 2014, a former director of the Company agreed to tender 3,000,000 shares of the Company for cancellation in exchange for $10,000. In addition, the Company agreed to issue 1,500,000 shares of the Company for $5,000 cash and 1,500,000 for advisory services.

 

At November 30, 2016, there are total of 31,597,572 common shares of the Company issued and outstanding.

 

 
9
 

 

8. SUPPLEMENTAL CASH FLOW INFORMATION

 

Supplemental disclosures of cash flow information for the periods ended November 30, 2016 and 2015 is summarized as follows:

 

Cash paid during the periods ended November 30, 2016 and 2015 for interest and income taxes is as follows:

 

 

 

2016

 

 

2015

 

Interest

 

$ -

 

 

$ -

 

Taxes

 

$ -

 

 

$ -

 

 

9. SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to November 30, 2016 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose, except as noted below.

 

 
10
 

 

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

 

The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes included in this report and those in our 10-K for year ended August 31, 2016. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in such forward-looking statements as a result of certain factors, including but not limited to, those described under “Risk Factors” included in Part II, Item IA of this report.

 

Background Overview

 

The Company is currently developing its business plan for an insomnia medication known as Zleepax. The Company has not completely developed this plan. Upon further development of the business plan, the Company intends to file an 8-k informing the public of the Company’s business plan and its developments in Zleepax.

 

As of January 16, 2017, the authorized common stock of the Company consisted of 100,000,000 shares of Common Stock, of which 31,597,572 shares were outstanding. Each share of Common Stock is entitled to one vote with respect to all matters to be acted on by the stockholders.

 

Future Business

 

Since our inception on August 11, 2012 to November 30, 2016, we had not generated any revenues and we incurred a loss of $23,656 for the three months ended. These losses were mostly related to the costs associated with administrative expenses. To this point, our only business activity has been the formation of our corporate entity, creation and development of our business model, and analyzing the viability of our business. In the last three months, we have had very little activity. It is the intent of our officer and shareholders to change the Company’s business plan. We intend to sell additional shares in a private offering or other offering and are starting to increase our efforts in looking for additional capital to obtain FDA approval and review of our flagship product. The product requires both Phase II and Phase III clinical trials and will need an infusion of capital of at least $5 million if not more. If sufficient funds cannot be raised, none of the Company’s plans may be implemented. There can be no assurance that the actual expenses incurred will not materially exceed our estimates or that cash flows from listing fees will be adequate to maintain our business. As a result, our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditors’ report to the financial statements included in the most recent 10-K of the Company.

 

 
11
 

 

Results of Operations for the Quarter ending November 30, 2016

 

Assets

 

Currently, we have $26,142 in cash which is our only asset.

 

Operating Expense

 

Total operating expenses for the three months ended November 30, 2016 were $21,140 compared to expenses of $9,443 for the three months ended November 30, 2015.

 

Net Loss

 

Net loss for the three months ended November 30, 2016 was $(23,656) compared to the for the three months ended November 30, 2015 of $(10,318).

 

Liquidity and Capital Resources

 

At November 30, 2016, we had $26,142 in cash.

 

Critical Accounting Policies and Estimates

 

Our critical accounting policies are disclosed in our S-1 Registration Statement which was deemed effective in June 2013. During the three months ended November 30, 2016 there have been no significant changes in our critical accounting policies.

 

Recent Accounting Pronouncements

 

Recent accounting pronouncements are disclosed in our S-1 Registration Statement, deemed effective with the Securities and Exchange Commission on June 10, 2013. During the three months ended November 30, 2016 there have been no new accounting pronouncements which are expected to significantly impact our consolidated financial statements.

 

The Company has $26,142 in cash. Currently, the Company’s CEO is searching for financing. The Company is unsure if it will embark on a private offering, a public offering, or search for capital from other sources such as venture capital or qualified investors. The Company’s business plan requires extensive FDA approvals and trials. We do not have the capital to embark on such a venture at this time.

 

We currently only have $26,142. Therefore, the cash currently available to us will not enable us to develop the business to the state in which it will optimally be able to generate revenues. If we are to generate revenues prior to needing any additional funding, we will immediately reinvest such revenues into further development our business and deployment of our business plan. We believe that the cash we have available will sustain us for approximately three (3) more months so long as we continuing operating in the manner that we are currently operating.

 

 
12
 

 

Equity Distribution to Management

 

Since our incorporation, we have raised capital through private sales of our common equity. As of January 16, 2017 we have issued 31,597,572 shares of our common stock to various shareholders, in exchange for cash and services. Specifically, Morten Albrechtsen was issued shares in exchange for cash and Wexotc ApS (a company controlled by Morten Albrecthsen) was issued 1,500,000 for services as a non-executive advisor to the Company. In exchange for these advisory services and $5,000, Mr. Albrechtsen and Wexotec ApS were issued a total of 3,000,000 shares.

 

In exchange for the assignment of his pending patent for a prescription sleep remedy, Birger Jan Olsen was issued 18,000,000.

 

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 is material to investors.

 

ITEM 3. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

 

Note applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures Based upon an evaluation of the effectiveness of disclosure controls and procedures, our principal executive and financial officer has concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) were not effective. The Company’s principal executive and financial officer has determined that there are material weaknesses in our disclosure controls and procedures. The material weaknesses in our disclosure control procedures are as follows:

 

1. Lack of formal policies and procedures necessary to adequately review significant accounting transactions. The Company utilizes a third party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.

 

 

2. Audit Committee and Financial Expert. The Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.

 

We intend to initiate measures to remediate the identified material weaknesses including, but not necessarily limited to, the following:

 

 

· Establishing a formal review process of significant accounting transactions that includes participation of the Chief Executive Officer, the Chief Financial Officer and the Company’s corporate legal counsel.

 

Changes in Internal Controls over Financial Reporting

 

We have not yet made any changes in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 
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PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None

 

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

 

None

 

ITEM 3. DEFAULTS UPON SENIOR SECURITEIES

 

None

 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 

None

 

ITEM 5. OTHER INFORMATION

 

None

 

ITEM 6. EXHIBITS

 

(a) Exhibits:

 

Number

 

Description

31.1

 

Certification of Chief Executive and Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

32.1

 

Certification of Chief Executive and Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)

 

 
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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.

 

  Blake Insomnia Therapeutics, Inc.
       
Date: January 17, 2017 By: /s/ Birger Jan Olsen

 

Name:

Birger Jan Olsen  
  Title:

(Principal Executive Officer)

 
       

 

Date: January 17, 2017 By: /s/ Birger Jan Olsen

 

Name:

Birger Jan Olsen  
  Title:

Secretary, Treasurer, and Chief Financial Officer

 
    (Principal Financial Officer, and Principal Accounting Officer)  

 

 

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