PART
I
This
annual report contains forward-looking statements. These statements relate to future events or our future financial performance.
In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”,
“plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”
or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions
and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk
Factors”, that may cause our or our industry’s actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of activity, performance or achievements expressed or implied by these
forward-looking statements.
Although
we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. 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.
Our
consolidated financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States
Generally Accepted Accounting Principles.
In
this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to
“common shares” refer to the common shares in our capital stock.
As
used in this annual report, the terms we", "us", "our" and "our company" mean Eternity Healthcare Inc. and our wholly owned subsidiary
Eternity Healthcare Inc., a British Columbia corporation, unless otherwise indicated.
General
Overview
We
were incorporated in the State of Nevada on October 24, 2007 as an online services company under the name Kid’s Book Writer,
Inc. On September 23, 2010, we changed our name to Eternity Healthcare Inc., and we effected a reverse split of our issued and
outstanding common stock on a 10 old shares for 1 new share basis. Our business offices are located at 8755 Ash Street, Suite
1, Vancouver, BC V6P 6T3. Our telephone number is (855) 324-1110.
From
inception to October 24, 2007, we planned to develop a website for children to create their own books. We intended to offer a
pure online service designed to offer children and parents an ability to create their own book. Customers were to be able to log
on to the service, pick a theme (i.e. birthday, family outing, vacation, special occasion such as Christmas / Easter, sporting
event, summer camp, etc.), and the software would offer several options, including various book templates, backgrounds, page sizes,
the ability to write your own story or have some guidance, etc. We were unable to find sufficient financing for this business
model.
On
December 10, 2010 we entered into and completed a share exchange agreement with Eternity Healthcare Inc., a British Columbia corporation,
wherein we acquired Eternity BC as our wholly owned subsidiary and abandoned our former business to focus on the operations of
Eternity BC.
Our
Current Business
We
are a medical device company that, subject to government approval, plans to manufacture and market medical devices. Our first
product to be marketed is a needle-free injection system throughout the world. The products which we hope to distribute differ
from other current offerings by allowing ordinary people to perform injection of medication without the need for professionals.
On
June 25, 2012, we entered into a marketing agreement to sell a device which does not require a needle for injection of medicine
to the body from Mika Medical Company and its affiliate MK Global, both of South Korea. We have the exclusive marketing rights
for this device throughout North America, Germany, France and Spain and non-exclusive rights for the world market. Currently we
are the sole marketer of the product.
The
product has received regulatory approval for Europe, Canada and many other countries and US regulatory approval is underway. We
plan to enter distribution agreements with several companies worldwide and enter into distribution agreements with various retailers.
We anticipate producing promotional materials and advertising in medical journals as well as consumer magazines. In order to carry
out these plans we have hired a marketing manager and anticipate hiring a quality control manager and three people for packaging
and shipment positions. We will require approximately $1,500,000 in order to achieve these objectives and there can be no assurance
that we will be able to raise the required funds.
On
August 26, 2013, our company completed an agreement with existing shareholders to exchange outstanding loans to related parties
for common shares at a rate of 1 common share per $0.50 of debt. The total number of shares issued under the agreement was 1,724,868
to settle amounts due to related parties of $862,434, causing a loss on settlement of debt of $172,487. Additionally, our company
completed a non-brokered private placement for 1,000,000 common shares at a price of $500,000.
On
October 30, 2013, we announced that our company had reached an agreement with Phoenix-based Global Medical Equipment of America
(GMEA) pursuant to which our company will acquire 100% of our GMEA through a share exchange agreement. As a confirmation of intent
to merge, our company advanced funds in the amount of $60,000 to GMEA. Our company was unable to reach a final agreement with
GMEA and on January 31, 2014 we provided notice demanding repayment of the note receivable.
Principal
Product
Currently,
our company is focused on a new needle-free injection device technology (“Comfort-inTM)
that our company is in the process of launching to the consumer market. Devices for delivery of medication subcutaneously, are
being developed. The subcutaneous delivery technology has already been approved by regulatory bodies in Europe, Canada and submitted
for approval with United States Food and Drug Administration (“FDA”). While initially we plan to market the device
without medication, the long term objective is to launch pre-filled biologics medicine for a number of therapeutic fields. The
needle free injection device is trade-marked as “Comfort-in” and is currently available for purchase through our company’s
website (www.eternityhealthcare.com) and selective wholesalers.
Comfort-inTM Applications
Diabetes
- It is estimated there are 50 million diabetics in North America with 8.3% of the total population actually diagnosed. Of
the diagnosed diabetic patients approximately 6 million patients (20%) are receiving insulin on a daily basis. The fear surrounding
their daily injection is needless; there is technology available to deliver the insulin below the skin that does not require a
needle. This option results in a soft injection system that is less painful and less intimidating.
Pediatric
Oncology – It is well known that children are horrified of the needle and as result sometime parents are giving up the
use of those drugs that has to be injected towards more oral drugs (though that is also horrible due to taste barrier), or go
for intravenous catheters. There are about 20 anti-cancer drugs are injectable that Comfort-inTM
can be used instead of needle. Approximately 10 million children and adolescence
receive injectable annually.
MS
– Multiple sclerosis is a neurological disease affecting almost 400,000 people in the United States. Most patients receive
different forms of interferons under various brand names. Most are injected subcutaneously, day, by day or other regiments. Comfort-inTM
could be used for these people as they are tired of needle injection.
Growth
Hormones - Human growth hormone is used for children suffering from lack of growth height and various other conditions. Also,
growth hormones are used in adults for work performance, sport performance and losing fat, etc. The hormone which is presently
injected has been a cause of mental barrier for people. Comfort-inTM
should be an excellent choice for those who do not like needle injection
Anesthetics
– Local anesthetics such as lidocane are used routinely for surface surgery, dental work and cosmetic playground. Patients
are unhappy to see needles going through their skin for desensitization, particularly those involve face or dental work. Comfort-inTM
can deliver local anesthetics and pain killer conveniently. Over 20 million injections
for local anesthetics are performed annually.
Vaccine
- Vaccination involving whole range of products is a major healthcare activity. Globally over 1 billion vaccination of different
kind is performed annually and it is estimated in the US to be about 20 million per annum. Some vaccines are given subcutaneously,
some intramuscularly and some intradermal. Most vaccination (about 90%) is carried out in children. Children are not happy to
receive needles for their vaccination. Comfort-inTM will
be a darling for vaccination of children.
Cardiovascular
- Death due to cardiovascular diseases and stroke today bypasses the death due to cancer. There are approximately 30 million
deaths as result of cardiovascular failures in the US. Often oral medications fail to act due to the time which it requires a
drug to get from digestive organs to the blood. Injectable medications are clearly the better choice. Healthcare professionals
are always worried of self-contamination and other inconveniences. Use of Comfort-inTM
for injecting cardiovascular medication is highly appreciated.
Migraine
– Migraine, along certain sever pain conditions, are highly common among adult population. A quick injection of anti-migraine
drugs or other sorts of pain killers including opiates are often used. Needles are not desirable tools for the patients and these
people prefer to use non-injections approach. Once again Comfort-inTM
can alleviate the inconveniences of needle while providing similar benefits.
Market
Intended
and Current
Retail
Pharmacies
Currently,
in both Canada and the United States, needle-free injectors are not available for sale to individuals. The pharmacists in both
countries do not acknowledge a demand for the product. There appears to be a complete lack of knowledge of these devices at the
retail level.
Hospitals
Hospitals
contain trained professionals who are expected to handle sharps. The pricing model of the two modalities (needle/injector) will
need to be much closer together before hospitals in Canada will agree to use injectors. The US hospital system lends itself well
to new technologies and this offers us a huge opportunity in that country.
Physician
Offices
Physicians
are looking for anything that saves them time. The needle-free injectors offer patients an option and may be considered in this
setting. Children have a high level of anxiety with needles.
Corrections
The
ability to remove sharps in correctional facilities is considered a major advantage.
Military
The
military tends to have mass injection programs and if the injectors can prove to reduce injection time, increase personnel safety
or reduce cost, it would be considered as a primary vehicle for vaccine injections.
Corporate
Health
This
is an upscale market that may appreciate the perceived benefit and advancement that injectors convey.
US
Public Health
Public
health clinics serve 87 million citizens in the United States and handle most of the immunization needs for these patients. Competitors,
such as PharmaJet, got their start in the public health arena in 2009 by providing needle-free injections for the broad H1N1 flu
shot campaign in the state of New Jersey. This led to interest from other locations, including Los Angeles County, which is standardizing
the PharmaJet needle-free system.
Cosmetic
Applications
There
may be opportunities with dermatologists, clinics and other health care professionals that perform plastic and/or Botox surgeries.
Veterinary
Medicine
There
are also applications for veterinary medicine. Currently, more robust “backpack” versions of injectors using hoses
are used with large animals/herds. A small unit such as the Comfort-inTM
(with another brand name) may be useful in a local veterinarian office. This can
be investigated when resources and/or the market warrants the focus.
Conclusions:
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The
needle-free market has advantages;
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There
are specific areas where needle-free holds important advantages;
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Professional
support will be crucial to success;
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There
are many applications for needle-free technology, although each must be investigated and the largest
payoff areas will be attempted first.
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Unintended
Markets:
It
appears that there are other groups of patients that may try to use the Comfort-inTM
in areas it is not intended for. Chat rooms for bodybuilders discuss various methods
of steroid injection and needle-free technology is discussed. As we move into the marketplace we need to be aware that the product
may not be used according to manufacturer’s intentions. There may also be applications around tattoo parlors and piercings.
Patient
Barriers to Needles
Increasing
demand for painless drug delivery will drive the growth of this market. The advent of biologics and biotechnology-based compounds
that need to be delivered using specialized delivery systems has also fuelled the demand for innovative and effective delivery
devices. Needles have one advantage, cost. With increased demand for needle-free technology, new materials discovered and increased
production volumes, the costs will drop and that advantage will be lost.
Competition
Around
the world, needle-free jet injectors have an established market among diabetic patients. In the United States, more than a dozen
needle-free jet injectors have been licensed by the FDA and are on the market. A few of these devices are being used in physicians’
offices. In Europe, needle-free injectors have become very popular with about 50% of insulin users utilizing needle-free jet injectors.
Currently, each manufacturer makes its own type of cartridge that holds the vaccine which is attached to the device before injection.
None of these cartridges are interchangeable, and that is thought to be a major limitation to their widespread use in physicians’
offices in the US.
AdvantaJet
The
AdvantaJet is in its 25th year of production. They claim a durable life-long device with clients still using the jet injector
after 20 years of use. They also claim they have studies and have shown increased efficacy over needle injections. Specifically:
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It
is the most economical delivery system for insulin for all type 1 diabetics;
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It
is the only system that provides a lifetime commitment to replace and repair the product;
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It
is the most accurate delivery system providing the most precise dosage;
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It
is the most comfortable system with the least skin abrasions and contusions.
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They
offer a custom made jet that can be supplied to the patient’s specific needs. Changes to orifice design and power settings
decrease due to the increased absorption. There is no data to support this and it is interesting they discuss cost considering
the unit cost shown below. AdvantaJet also discusses that these insulin injectors eliminate the need to buy needles and syringes,
and do not incur the cost of disposing of syringes. The AdvantaJet is currently sold at $695 per piece.
Proven
Effective
AdvantaJet
injection technology was tested and determined to be an effective method of managing diabetes in both humans and companion animals.
Conclusions:
Price
reflects their attempt to be the best quality, proven injector
Akra
Akra
is a French based company selling the brand Dermojet. They claim to be in over 90,000 physicians’ offices around the world.
They are squarely focused on the professional market. They have a very sleekly designed unit, almost surgical in its appearance.
Although this may deter the average consumer, the look of the unit must be very tempting to professionals. The unit can also be
sterilized; something an institutional setting would be interested in.
The
Dermojet is patented and in North America is exclusively distributed by Robbins Instruments. They claim it is the finest needleless
injection system available on the medical market today. “The innovative design and superior quality have made the Dermojet
renowned for its usefulness in many different types of procedures and disciplines.” The Dermojet comes with a one year parts
and labor warranty guaranteed against normal wear and tear. The original Dermojet model G is $550.00 US with an accompanying stand
you can purchase for $24.
Selling
features:
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Light
weight around 300 gr. (Comfort-inTM
is 160g);
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Trustworthy;
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High
technology material;
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Ergonomic:
maneuverable, equilibrated, and allows for intensive effortless use;
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Esthetic:
A modern, highly polished and streamlined device;
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Efficient:
Incorporated reservoir allows for operation in every position;
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Easy
to use: The armament is activated by a simple turn of the lever, and the liquid is flushed by pressing
the button on the upper part of the machine;
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Sterilizable:
at 134° Celsius maximum, for 18 minutes, (humid air).
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Conclusions:
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Price
reflects focus on professional market;
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Specifically
designed for professional use.
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Antares
Pharma is a pharmaceutical company that focuses on self-injection pharmaceutical products and technologies and topical gel-based
products. They have subcutaneous and intramuscular injection platforms that focus mostly on disposable, pressure assisted auto-injectors.
Their needle-free injection units are developed with pharmaceutical companies and tend to be product specific. Examples are human
growth hormones with Teva (Tjet), Ferring Pharmaceuticals (Zomajet), and JCR Pharmaceuticals (Twin-jector).
Antares
is based in Ewing, New Jersey and has a subsidiary in Switzerland. They were formerly known as Medi-Ject Corporation and acquired
the operating subsidiaries of Permatec Holding AG, headquartered in Basel, Switzerland. Medi-Ject was focused on delivering drugs
across the skin using needle-free technology, and Permatec specialized in delivering drugs across the skin using gel technologies
as well as developing oral disintegrating tablet technology. Upon completion of the transaction the name was changed to Antares
Pharma Inc. The Parenteral Products (device) group is located in Minneapolis where they develop and manufacture, with partners,
various novel pressure assisted injectors, with and without needles, which allow patients to self-inject drugs. They have entered
into multiple licenses for these devices mainly in the U.S. and Canada with Teva. Several licensing agreements with pharmaceutical
companies of various sizes have led to successful clinical evaluation of formulations.
As
of 2009, Antares stopped selling the Medi-Jector Vision Injector. At that time their start-up kit could be purchased from $299.00
up to $335.00. Each Medi-Jector Vision needle-free syringe was used for up to 21 doses of insulin or 14 days before replacement.
The
kit included:
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Medi-Jector
Vision Injector;
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Injection
Supply Start-up Kit - 2 nozzles and 2 vial adapters;
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Carrying
Case;
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Instruction
Manual;
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Training
Video
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A
kit of 6 nozzles and 2 vial adapters currently sells for $37.95 as they must service the customers who had purchased the device.
Conclusions:
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Antares
focuses on the larger market of needle-free that includes all modes of delivery;
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They
have a successful track record of pharmaceutical collaboration;
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They
have multiple office sites and abilities;
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They
are aggressively pursuing markets both collaboratively and alone.
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Zogenix
Zogenix
is a California based company that currently markets Sumavel DosePro. This is a needle-free delivery system that requires a prescription
and is used to treat adults who have been diagnosed with acute migraine or cluster headaches. Zogenix claims that DosePro is a
first-in-class, easy-to-use drug delivery system designed for self-administration of a pre-filled, single dose of liquid drug,
subcutaneously, without a needle. DosePro offers benefits to patients including instant, easy dosing, less anxiety over self-injection,
no need for sharps disposal, no risk of needle stick injury or contamination, and reliable performance.
Zogenix
lead investigative product is Zohydro ER and is awaiting FDA approval. They are hoping to be the first hydrocodone product to
offer the benefit of less frequent dosing and the ability to treat chronic pain patients without the risk of acetaminophen-related
liver injury. The second investigational product candidate they have is Relday which is a combination of their DosePro needle-free
system and a proprietary, subcutaneous once-monthly formulation of risperidone for the treatment of schizophrenia.
Conclusions:
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Zogenix
is another successful player in this category;
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Off
patent pharmaceuticals seem to get a new life with novel injector technologies;
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A
lot of money can be raised in this area with a strong management team
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BioJect
BioJect
is an Oregon based company dedicated to the improvement of delivery of pharmaceuticals and biologics through the development and
commercialization of advanced needle-free injection technologies. BioJect has developed a broad platform technology for delivering
injectable vaccines and medications using its proprietary pressure profiles. This proprietary technology enables BioJect to provide
needle-free injection systems which have a greater range of capabilities than other available devices. This places them into the
traditional competitor category if Comfort-inTM is
marketed as an all-purpose device to the marketplace.
The
products as marketed are:
Biojector
2000 Needle-free Injection System
The
Biojector 2000 is a durable, professional-grade injection system designed for healthcare providers. They claim that it is the
only needle-free system in the world cleared by the FDA to deliver intramuscular injections. The system can also deliver subcutaneous
injections, and is being used for intradermal injections in clinical trials.
BioJect
ZetaJet
The
ZetaJet system consists of two components, the portable injector and an auto-disabling disposable syringe. It is intended to deliver
vaccines and injectable medications either subcutaneously or intramuscularly and is indicated for both professional use and home
use for patients who self-inject.
Conclusions:
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BioJect
has a similar product to Comfort-inTM;
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BioJect
are not strong in the pharmaceutical development area;
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They
do not look healthy and can probably be beaten.
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BioValve
BioValve
Technologies, Inc. operates as a specialty pharmaceutical and drug delivery company engaging in the development and commercialization
of chemical entities for the treatment of conditions of the central nervous system. The company offers various dopamine agonists
for treatment of Parkinson’s disease and schizophrenia; and novel disposable pharmaceutical delivery systems. The company,
through its subsidiary, offers h-Patch and e-Patch controlled release disposable micro pump systems; Mini-Ject, a pre-filled needle-free
delivery system; and the Micro-Trans, a micro needle transdermal delivery patch. Its products provide insulin management for patients.
BioValve Technologies, Inc. is a private company and was founded in 1998. It is based in Parsippany, New Jersey with an additional
location in Westborough, Massachusetts.
Conclusions:
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BioValve
is quite interesting as the principle is also involved with Valeritas;
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They
focus on the bigger market of needle-free delivery, not just jet injectors.
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Injex
Injex
Pharma AG is a wholly owned subsidiary of Paketeria AG as of December 16, 2011. It markets and sells the Injex 30 System worldwide.
The Injex 30 is a syringe without a needle used in multiple medical, cosmetic and anesthetic applications. It is interesting to
note that Injex is expanding into cosmetic and launching Shireen Beauty system focused on the rejuvenation of the skin. Fluid
is sprayed with high pressure within a small distance of the skin via a pore-jet allowing the fluid open access to pores contained
in the upper layers of the skin. Injex is casting as wide a market as possible targeting diabetes, local and dental anesthetics,
allergy and fertility treatments, vaccinations, erectile dysfunction and growth hormones. Current price for Injex injector device
is $999. The nozzles are sold at $2 per unit. Consumer reports, the device is noisy and causes skin bleeding.
In
May 2012 Injex received FDA approval and in August 2012, Medical Marketing Canada announced that it had approval to market the
Injex 30 in Canada. Medical Marketing Canada announced in October that it had closed a new round of financing.
Conclusions:
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Injex
is expensive both the device and nozzles;
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Injex
has an agreement for Canadian distribution;
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Injex
should be an immediate competitor;
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Injex
foray into beauty may hurt/help, further study is needed.
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National
Medical Products
National
Medical Products is a private, closely held corporation. The company is focused on developing products that are clinically proven;
they then achieve the required manufacturing capabilities, and then introduce the products into commercial distribution.
Currently,
National Medical Products’s J-Tip uses pressurized gas to propel medication through the skin subcutaneously. The major difference
is that after injection, J-Tip can simply be discarded as with normal needle disposal.
Conclusions:
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Disposable
device will attract some pharma companies who are interested in unit dose delivery;
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They
have a successful track record of pharmaceutical collaboration;
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They
do not appear to be a large player in the market.
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Medical
International Technologies
This
Montreal based company that produces a large handgun-type injector for both veterinary (Argo-Jet) and human (MED-JET) use. The
large, high volume design has the following features:
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More
than 300 injections per hour;
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Dose
of 0.1 to 1cc (H-III) and 0.02 to 0.3 MBX;
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Weight
of 0.7 Kg;
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Accuracy
at 99 % at a dose of 1cc;
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Robust;
can easily last over 10 years
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Variable
injection pressure for patient comfort;
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Adapter
for receiving syringes or even bags.
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Conclusions:
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Currently
this is not a competitor.
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Eurojet
Medical
Eurojet
is based in Budapest, Hungary. In 2003 they developed the Ejet300 and are currently working on the Ejet500. It has a patent for
a “pressure regulating device”.
Conclusions:
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This
company does not appear to be very active.
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Pharmajet
Pharmajet
is based in Golden, Colorado. They are focused on a safer workplace, lower needle reuse, and to help children avoid needle anxiety.
Pharmajet
was founded by Kathy Callender who insisted her device be cost competitive with the cheapest needles. Her goal is that poor countries
can afford needle free technology but this has also led to the ability to underbid rivals to supply pharmaceutical companies.
She has raised $14 million from investors. In March 2011 Pharmajet completed unspecified B round financing. It seems their plan
is to build sales volume in the U.S. vaccination market through public-health departments and pharmacy chains, then among consumers
who self-inject at home; and doctor’s offices here and abroad. That way, PharmaJet expects to approach a production volume
of 50 million cartridges a year which would allow it to compete on a price level with needles in developing countries.
Conclusions:
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The
founder is a dedicated supporter of helping the third world;
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The
focus on low cost has the ability to shrink the market if successful;
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Zogenix
was quoted as saying they wouldn’t survive;
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They
are not focused on pharmaceutical collaboration, however they have landed deals that focus on the
goal of affordable expansion.
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Crossjet
Crossjet
is a French company that successfully designs and develops innovative, needle-free, pre-filled, single-use injection systems for
intradermal, subcutaneous and intramuscular applications for pharmaceutical companies. They use their single technological platform
and offer exclusive partnerships to pharmaceutical companies in a given field or therapeutic class. Crossjet is based in Paris
and has offices in Dijon. Crossjet technology is the outcome of research and development cooperation initiated and developed with
industrial partners, each a European leader in its field.
The
Zeneo is made up of three distinct subassemblies: an actuator, a pharmaceutical subassembly and a nozzle. The actuator generates
sufficient pressure to inject the drug to the required depth beneath the skin, without the use of a needle. The platform can be
adapted to different pharmaceutical applications:
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the
intensity of the gas generator and the nozzle can be adapted to ensure the proper penetration and
optimal distribution of the drug in the target tissue;
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the
pharmaceutical subassembly can be aseptically filled on standard high-throughput syringe filling
line;
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To
date, Crossjet has filed 26 patent family applications and holds over 370 patents granted worldwide.
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Conclusions:
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Crossjet
is focused on the European market;
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Crossjet
has been successful with pharmaceutical collaborations;
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Their
perceived lack of customization in the consumers’ eyes may turn off some potential partners.
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Valeritas
Valeritas
develops and commercializes drug delivery solutions. The company focuses on the treatment of diabetes. Its products include V-Go,
a disposable insulin delivery device that provides a preset basal rate and on-demand bolus dosing for mealtime coverage. The company’s
products also include h-Patch for the delivery of various compounds; Mini-Ject pre-filled needle-free delivery system to deliver
drugs ranging from molecules to proteins, fragile antibodies, and vaccines; and Micro-Trans micro needle array patch technology
for drug delivery into the dermis. Valeritas, Inc. was founded in 2006 and is headquartered in Bridgewater, New Jersey. The Mini-Ject
is manufactured under Biovalve and these two companies are both linked privately.
Conclusions:
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Valeritas
has synergy with BioValve;
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Valeritas
has been successful in collaborations with drug companies;
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Valeritas
has the ability to provide other novel drug delivery products.
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Penjet
It
is a single use, disposable jet injector that comes prefilled with the proper drug dose. It can be administered in a few seconds
by a care giver or the patient themselves.
Penjets
are tailored for each specific drug it delivers. Exclusive licenses for particular drugs are available. An exclusive license offers
pharmaceutical firms a sustainable competitive advantage in a patented, low cost, needle-less drug delivery system.
Conclusions:
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Penjet
does not seem to be very active;
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Penjet
is disposable.
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Consort
Medical plc
Consort
Medical is the manufacturer of Bespak Injectables’ reusable needle-free jet injectors. Bespak’s innovation focus is
on drug delivery and point-of-care diagnostic consumables. Their competitive product is a spring powered injector. Consort produces:
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MHP-1
Needle-free Jet Injector which incorporates a 2-step actuation mechanism, electronic dose setting;
adaptable for specific formulations, concentrations and dosing systems (e.g. volumetric or gravimetric)
digital, easy-to-read dose display;
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SQ-PEN
Needle-free Jet Injector which incorporates push actuation mechanism, analogue dose setting;
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SQ-X
Needle-free Jet Injector which incorporates button-based actuation mechanism, analogue dose setting.
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Conclusions:
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This
company is not found on the partial list of needle-free injectors and was added as an example of
how many other manufacturers there are. This has led to the conclusions below.
|
Competitive
Landscape Conclusions
Antares
cites as competition, The Medical House plc. Medical House developed the Cool.clickTM2 needle-free injector for Merck Serono.
However it had revenue results for the year ended April 30, 2012 of £1.4 million (USA $2,169,197) representing a growth by
25%. They are included here as an example of the many niche companies that are pairing up with pharmaceutical companies.
There
is also competition from internal groups within large pharmaceutical companies and various design houses which complete the design
of devices for companies but don’t have manufacturing management capabilities. There are a number of companies that are
relatively inactive, focused on peripheral markets or concentrated on certain geographic areas.
This
leaves us with our perceived competitors at launch. Our company will focus on diabetes and begin forging alliances to strategically
place itself squarely in this area.
Government
Regulations
Government
authorities in the United States and Canada, at the federal, state and local levels, and other countries extensively regulate,
among other things, the research, development, testing, manufacturing, labeling, promotion, advertising, distribution, marketing
and export and import of medical devices such as needle-free injection systems. The process of obtaining regulatory approvals
and the subsequent substantial compliance with appropriate federal, state, local and foreign statutes and regulations require
the expenditure of substantial time and financial resources.
We
are required to obtain two sets of license for the sale and marketing of medical devices. In Canada, as in the United States and
Europe, needle-free injection systems are classified as medical devices and require the following licenses: 1) Product License;
and 2) Establishment License.
Product
License: Needle-free injection systems are classified internationally as Class I or II and in the United States are subject to
510-k regulatory filing fee.
Description
of Different Classes
Class
I includes products of which several examples are already approved and marketed in Canada or USA. As long as the basic science
remains the same, the application for approval of a new product is straight forward. One product in this category would be a pregnancy
test or regular needle/syringes.
Class
II products are those which do not need to be injected (the device itself) or inserted into the patient (non-invasive). Often
these products are approved and sold throughout the world. The products which we are currently focusing on distributing all belong
to Class II. In order to secure the necessary license for these products, we are required to submit all the documentation which
will lead to the approval of the products in other countries. In our case, our products are already approved in Europe, Canada,
etc. As far as for FDA compliance is concerned, we are required to submit all of the scientific data, results, approval process
and certificates of good quality management pursuant to ISO 13485. Usually, products which have the ISO accreditation and CE Mark
easily obtain FDA approval.
Class
III and IV include medical devices which use invasive techniques. If the medical device has been approved in another region, it
is considered Class III. If it is brand new, it is considered Class IV. Invasive tests such as colonoscopy, endoscopy, body lesion
removal etc., are all considered Class III or IV. None of our products fall within Class III or IV.
We
are also required to obtain an establishment license for the marketing of our products. We have already obtained an establishment
license for our product. Certain countries do not require an establishment license.
Environmental
Regulations
We
are not aware of any material violations of environmental permits, licenses or approvals that have been issued with respect to
our operations. We expect to comply with all applicable laws, rules and regulations relating to our business, and at this time,
we do not anticipate incurring any material capital expenditures to comply with any environmental regulations or other requirements.
While
our intended projects and business activities do not currently violate any laws, any regulatory changes that impose additional
restrictions or requirements on us or on our potential customers could adversely affect us by increasing our operating costs or
decreasing demand for our products or services, which could have a material adverse effect on our results of operations.
Employees
As
of April 30, 2014 we had one full time employee and two consultants, working on our business. We plan (within next six months)
to hire two new full-time employees and one additional consultant to work for us on marketing, distribution, commercialization
of our products.
REPORTS
TO SECURITY HOLDERS
We
are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange
Commission and our filings are available to the public over the internet at the Securities and Exchange Commission’s website
at http://www.sec.gov. The public may read and copy any materials filed by us with the Securities and Exchange Commission at the
Securities and Exchange Commission’s Public Reference Room at 100 F Street N.E. Washington D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-732-0330.
The SEC also maintains an Internet site that contains reports, proxy and formation statements, and other information regarding
issuers that file electronically with the SEC, at http://www.sec.gov.
Much
of the information included in this annual report includes or is based upon estimates, projections or other “forward looking
statements”. Such forward looking statements include any projections and estimates made by us and our management in connection
with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made
in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
Such
estimates, projections or other “forward looking statements” involve various risks and uncertainties as outlined below.
We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results
and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward
looking statements”.
Risks
Related to Our Business
We
have a history of losses and a limited history of revenues, which raise substantial doubt about our ability to continue as a going
concern.
From
inception to April 30, 2014, we have incurred aggregate net losses of $1,214,708. We can offer no assurance that we will ever
operate profitably or that we will generate positive cash flow in the future. In addition, our operating results in the future
may be subject to significant fluctuations due to many factors not within our control, such as the unpredictability of when customers
will order products, the size of customers’ orders, the demand for our products, and the level of competition and general
economic conditions.
Our
company’s operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties
arising from the absence of a significant operating history. No assurance can be given that we may be able to operate on a profitable
basis.
Due
to the nature of our business and the early stage of our development, our securities must be considered highly speculative. We
have not realized a profit from our operations to date and there is little likelihood that we will realize any profits in the
short or medium term. Any profitability in the future from our business will be dependent upon the successful commercialization
or licensing of our core products, which themselves are subject to numerous risk factors as set forth below.
We
expect to continue to incur development costs and operating costs. Consequently, we expect to incur operating losses and negative
cash flows until our products gain market acceptance sufficient to generate a commercially viable and sustainable level of sales,
and/or additional products are developed and commercially released and sales of such products made so that we are operating in
a profitable manner. Our history of losses and limited history of revenues raise substantial doubt about our ability to continue
as a going concern.
We
have had negative cash flows from operations since inception. We will require significant additional financing, the availability
of which cannot be assured, and if our company is unable to obtain such financing, our business may fail.
To
date, we have had negative cash flows from operations and have depended on sales of our equity securities and debt financing to
meet our cash requirements. We may continue to have negative cash flows. We have estimated that we will require approximately
$1,500,000 to carry out our business plan for the next twelve months. There is no assurance that actual cash requirements will
not exceed our estimates. We will require additional financing to finance working capital and pay for operating expenses and capital
requirements until we achieve a positive cash flow.
Our
ability to market and sell our medical devices will be dependent upon our ability to raise significant additional financing. If
we are unable to obtain such financing, we will not be able to fully develop our business. Specifically, we will need to raise
additional funds to:
●
|
support
our planned growth and carry out our business plan;
|
●
|
hire
top quality personnel for all areas of our business; and
|
●
|
address
competing technological and market developments.
|
We
may not be able to obtain additional equity or debt financing on acceptable terms as required. Even if financing is available,
it may not be available on terms that are favorable to us or in sufficient amounts to satisfy our requirements. Any additional
equity financing may involve substantial dilution to our then existing shareholders. If we require, but are unable to obtain,
additional financing in the future, we may be unable to implement our business plan and our growth strategies, respond to changing
business or economic conditions, withstand adverse operating results and compete effectively. More importantly, if we are unable
to raise further financing when required, we may be forced to scale down our operations and our ability to generate revenues may
be negatively affected.
We
have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back
or even cease our ongoing business operations.
We
have a limited history of revenues from operations and have no significant tangible assets. We have yet to generate positive earnings
and there can be no assurance that we will ever operate profitably. Accordingly, we must be considered in the development stage.
Our success is significantly dependent on a successful commercialization of our products. Our operations will be subject to all
the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant
operating history. We may be unable to develop a successful product or achieve commercial acceptance of our product or operate
on a profitable basis. We are in the development stage and potential investors should be aware of the difficulties normally encountered
by enterprises in the development stage. If our business plan is not successful, and we are not able to operate profitably, investors
may lose some or all of their investment in our company.
If
we fail to effectively manage the growth of our company and the commercialization of our product, our future business results
could be harmed and our managerial and operational resources may be strained.
As
we proceed with the commercialization of our product and the expansion of our marketing and commercialization efforts, we expect
to experience significant growth in the scope and complexity of our business. We will need to add staff to market our services,
manage operations, handle sales and marketing efforts and perform finance and accounting functions. We anticipate that we will
be required to hire a broad range of additional personnel in order to successfully advance our operations. This growth is likely
to place a strain on our management and operational resources. The failure to develop and implement effective systems, or to hire
and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage our potential
business, or the failure to manage growth effectively, could have a material adverse effect on our business and financial condition.
Our
by-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.
Our
by-laws contain provisions with respect to the indemnification of our officers and directors against all expenses, liability and
loss (including attorneys’ fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered
by him or her in connection with any action, suit or proceeding to which they were made parties by reason of his or her being
or having been one of our directors or officers.
Risks
Related to Our Common Stock
A
decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our
ability to continue operations and we may go out of business.
A
prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction
in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds we need in order to conduct
our planned operations through the sale of equity securities, a decline in the price of our common stock could be detrimental
to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable
to raise the funds we require for all of our planned operations, we may be forced to reallocate funds from other planned uses
and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products
and continue our current operations. As a result, our business may suffer and not be successful and we may go out of business.
We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock
and we may be forced to go out of business.
If
we issue additional shares in the future, it will result in the dilution of our existing shareholders.
We
are authorized to issue up to 300,000,000 shares of common stock with a par value of $0.001. Our board of directors may choose
to issue some or all of such shares to acquire one or more businesses or to provide additional financing in the future. The issuance
of any such shares will result in a reduction of the book value and market price of the outstanding shares of our common stock.
If we issue any such additional shares, such issuance will cause a reduction in the proportionate ownership and voting power of
all current shareholders. Further, such issuance may result in a change of control of our company.
Trading
of our stock may be restricted by the Securities Exchange Commission's penny stock regulations, which may limit a stockholder's
ability to buy and sell our stock.
The
Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers
who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally
to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities
and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market.
The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny
stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information,
must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing
before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure
requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject
to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities.
We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
FINRA
sales practice requirements may also limit a stockholder's ability to buy and sell our stock.
In
addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority (FINRA), formerly the National
Association of Securities Dealers or NASD, has adopted rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending
speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain
information about the customer's financial status, tax status, investment objectives and other information. Under interpretations
of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable
for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers
buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our
shares.
As
a “smaller reporting company”, we are not required to provide the information required by this Item.
We
currently rent a warehouse and an assembly space of about 2,500 square feet at 8755 Ash Street, Suite 1, Vancouver, British Columbia,
Canada, V6P 6T3. Our office is also in the same location. Effective July 1, 2014, we are required to pay $4,585.86 per month rent.
Our lease is for one year but can be extended on a similar basis.
We
know of no material, existing or pending legal proceedings against our company, 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 stockholder, is an adverse party or has a material interest adverse to our interest.
Not
applicable.
PART
II
|
Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
|
Our
common stock is not traded on any exchange. Our common stock is quoted on OTC Bulletin Board, under the trading symbol “ETAH”.
We cannot assure you that there will be a market in the future for our common stock.
OTC
Bulletin Board securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead,
OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers. OTC Bulletin
Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a national
or regional stock exchange.
The
following table reflects the high and low bid information for our common stock obtained from Stockwatch and reflects inter-dealer
prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.
The
high and low bid prices of our common stock for the periods indicated below are as follows:
OTC
Bulletin Board
|
|
Quarter
Ended
|
|
High
|
|
|
Low
|
|
April
30, 2014
|
|
$ |
1.17 |
|
|
$ |
0.2021 |
|
January
31, 2014
|
|
$ |
0.89 |
|
|
$ |
0.65 |
|
October
31, 2013
|
|
$ |
0.65 |
|
|
$ |
0.55 |
|
July
31, 2013
|
|
$ |
0.60 |
|
|
$ |
0.55 |
|
April
30, 2013
|
|
$ |
0.82 |
|
|
$ |
0.50 |
|
January
31, 2013
|
|
$ |
0.80 |
|
|
$ |
0.75 |
|
October
31, 2012
|
|
$ |
1.10 |
|
|
$ |
0.75 |
|
July
31, 2012
|
|
$ |
1.10 |
|
|
$ |
1.07 |
|
April
30, 2012
|
|
$ |
1.05 |
|
|
$ |
0.50 |
|
As
of July 14, 2014, there were approximately 20 holders of record of our common stock. As of such date, 66,299,868 common shares
were issued and outstanding.
Our
common shares are issued in registered form. Island Stock Transfer, 15500 Roosevelt Blvd. Suite 301, Clearwater, FL 33760, (Telephone:
(727) 289-0010) is the registrar and transfer agent for our common shares.
Dividend
Policy
We
have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our
common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business.
Our future dividend policy will be determined from time to time by our board of directors.
Equity
Compensation Plan
On
January 15, 2013, our directors approved the adoption of the 2013 Stock Option Plan which permits our company to issue up to 6,300,000
shares of our common stock to directors, officers, employees and consultants of our company upon the exercise of stock options
granted under the 2013 Stock Option Plan.
The
following table summarizes certain information regarding our equity compensation plans as at April 30, 2014:
Plan
category
|
|
Number
of securities to
be
issued upon exercise
of
outstanding options,
warrants
and rights
(a)
|
|
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and rights
(b)
|
|
|
Number
of securities
remaining
available for
future
issuance under equity
compensation
plans
(excluding
securities
reflected
in column (a))
(c)
|
|
Equity
compensation plans approved by security holders
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
Equity
compensation plans not approved by security holders
|
|
|
200,000 |
(1) |
|
$ |
0.80 |
|
|
|
6,100,000 |
|
Total
|
|
|
200,000 |
|
|
$ |
0.80 |
|
|
|
6,100,000 |
|
(1)
|
Includes
100,000 unexercised stock options issued on January 15, 2013 and 100,000 unexercised stock options issued on January 18, 2013.
|
Convertible
Securities
As
of April 30, 2014, we had outstanding options to purchase 200,000 shares of our common stock exercisable at $0.80.
On
January 15, 2013 our director, Bin Huang, was granted 100,000 stock options exercisable at a price of $0.80 per share for a period
of five years from the date of grant. The vesting schedules for the stock options are 12,500 options every quarter from January
15, 2013.
On
January 18, 2013 our director, Dominique F. Borrelly, was granted 100,000 stock options exercisable at a price of $0.80 per share
for a period of five years from the date of grant. The vesting schedules for the stock options are 12,500 options every quarter
from January 18, 2013.
Recent
Sales of Unregistered Securities; Use of Proceeds from Registered Securities
We
did not sell any equity securities which were not registered under the Securities Act during the year ended April 30, 2014 that
were not otherwise disclosed on our quarterly reports on Form 10-Q or our current reports on Form 8-K filed during the year ended
April 30, 2014.
Purchase
of Equity Securities by the Issuer and Affiliated Purchasers
We
did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended April
30, 2014.
As
a “smaller reporting company”, we are not required to provide the information required by this Item.
The
following discussion should be read in conjunction with our audited financial statements and the related notes for the years ended
April 30, 2014 and April 30, 2013 that appear elsewhere in this annual report. The following discussion contains forward-looking
statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the
forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed
below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" beginning on page 15 of this
annual report.
Our
audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.
Purchase
of Significant Equipment
We
do not intend to any significant equipment over the next twelve months.
Personnel
Plan
We
plan to hire two new full-time employees and one additional consultant to work on marketing, distribution, commercialization and
regulatory approvals our products in 2014 if we have sufficient capital.
Results
of Operations
For
the Year Ending April 30, 2014 and 2013
|
|
Year
Ended
April
30,
|
|
|
|
2014
|
|
|
2013
|
|
Revenue
|
|
$
|
54,536
|
|
|
$
|
16,175
|
|
Cost
of goods sold
|
|
$
|
18,021
|
|
|
$
|
5,633
|
|
Operating
expenses
|
|
$
|
451,061
|
|
|
$
|
262,581
|
|
Loss
on settlement of debt
|
|
$
|
172,487
|
|
|
$
|
Nil
|
|
Loss
on note receivable
|
|
$
|
60,000
|
|
|
$
|
Nil
|
|
Net
loss
|
|
$
|
(647,033
|
)
|
|
$
|
(252,039
|
)
|
Expenses
Our
operating expenses for our years ended April 30, 2014 and 2013 are outlined in the table below:
|
|
Year
Ended
April
30,
|
|
|
|
2014
|
|
|
2013
|
|
Depreciation
|
|
$
|
165
|
|
|
$
|
239
|
|
General
and administrative
|
|
$
|
118,302
|
|
|
$
|
91,021
|
|
Professional
fees
|
|
$
|
79,351
|
|
|
$
|
127,518
|
|
Salaries
|
|
$
|
253,243
|
|
|
$
|
43,803
|
|
Operating
expenses for year ended April 30, 2014 increased by $188,480 as compared to the comparative period in 2013 primarily as a result
of increases in general and administrative expenses and salaries.
Revenue
We
have earned $70,711 in revenue since our inception on December 10, 2009.
Liquidity
and Financial Condition
Working
Deficit
|
|
|
|
|
|
|
|
|
At
April
30,
|
|
|
At
April
30,
|
|
|
|
2014
|
|
|
2013
|
|
Current
Assets
|
|
$
|
430,220
|
|
|
$
|
189,440
|
|
Current
Liabilities
|
|
$
|
96,152
|
|
|
$
|
767,211
|
|
Working
Capital
|
|
$
|
334,068
|
|
|
$
|
(577,771
|
)
|
Cash
Flows
|
|
|
|
|
|
|
|
|
Year
Ended
April
30,
|
|
|
Year
Ended
April
30,
|
|
|
|
2014
|
|
|
2013
|
|
Net
Cash Used In Operating Activities
|
|
$
|
(340,881
|
)
|
|
$
|
(260,441
|
)
|
Net
Cash Used In Investing Activities
|
|
$
|
Nil
|
|
|
$
|
Nil
|
|
Net
Cash Provided by Financing Activities
|
|
$
|
595,900
|
|
|
$
|
195,691
|
|
Effect
of Rates on Cash
|
|
$
|
(7,970
|
)
|
|
$
|
(5,078
|
)
|
Increase
(Decrease) in Cash During the Period
|
|
$
|
247,049
|
|
|
$
|
(69,818
|
)
|
Anticipated
Cash Requirements
We
estimate that our expenses over the next 12 months (beginning May 2014) will be approximately $1,500,000 as described in the table
below. These estimates may change significantly depending on the performance of our products in the marketplace and our ability
to raise capital from shareholders or other sources.
Estimated
Completion
Date
|
|
Estimated
Completion
Date
|
|
Estimated
Expenses
($)
|
|
Legal
and accounting fees
|
|
12
months
|
|
|
100,000 |
|
Marketing
and advertising
|
|
12
months
|
|
|
800,000 |
|
Employees
|
|
12
months
|
|
|
200,000 |
|
Consulting
fees
|
|
12
months
|
|
|
200,000 |
|
Travel
and administrative expenses
|
|
12
months
|
|
|
200,000 |
|
Total
|
|
|
|
|
1,500,000 |
|
We
intend to meet our cash requirements for the next 12 months through product sales and a combination of debt financing and equity
financing by way of private placements. We currently do not have any arrangements in place to complete any private placement financings
and there is no assurance that we will be successful in completing any private placement financings on terms that will be acceptable
to us. We may not raise sufficient funds to fully carry out our business plan.
Future
Financings
We
will require additional financing in order to enable us to proceed with our plan of operations, as discussed above, including
approximately $1,500,000 over the next 12 months to pay for our ongoing expenses. These expenses include legal, accounting and
audit fees as well as general and administrative expenses. These cash requirements are in excess of our current cash and working
capital resources. Accordingly, we will require additional financing in order to continue operations and to repay our liabilities.
There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations
or to repay our liabilities.
We
anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances
of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional
sales of our equity securities or arrange for debt or other financing to fund our planned business activities.
Contractual
Obligations
As
a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Going
Concern
We
have not generated any revenue since inception and are dependent upon obtaining outside financing to carry out our operations
and pursue our pharmaceutical research and development activities. If we are unable to generate future cash flows, raise equity
or secure alternative financing, we may not be able to continue our operations and our business plan may fail. You may lose your
entire investment.
If
our operations and cash flow improve, management believes that we can continue to operate. However, no assurance can be given
that management's actions will result in profitable operations or an improvement in our liquidity situation. The threat of our
ability to continue as a going concern will cease to exist only when our revenues have reached a level able to sustain our business
operations.
Off-Balance
Sheet Arrangements
We
have no 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 stockholders.
Critical
Accounting Policies
The
discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing
financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies.
We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our
financial statements is critical to an understanding of our financial statements.
Principles
of Consolidation
The
consolidated financial statements include the accounts of our company and its wholly-owned subsidiary, Eternity BC. All significant
intercompany balances and transactions have been eliminated in consolidation.
Cash
and Cash Equivalents
Cash
and cash equivalents include highly liquid investments with original maturities of three months or less.
Inventory
Inventory
is stated at the lower of cost or market with cost determined under the weighted average cost method.
Foreign
Currency Translation
Our
company’s functional currency is the Canadian dollar and reporting currency is the U.S. dollar. All transactions
initiated in other currencies are translated into the reporting currency in accordance with ASC 830, “Foreign Currency Matters”
as follows:
i)
|
Assets
and liabilities at the rate of exchange in effect at the balance sheet date; and
|
ii)
|
Revenue and expense items at rate of exchange at the dates on which those elements
are recognized. |
Fair
Value
The
carrying value of cash and cash equivalents, accounts receivable, accounts payable and due to related parties approximate their
fair values because of the short-term maturity of these financial instruments.
Interest
Rate Risk
Our
company is not exposed to significant interest rate risk due to the short-term maturity of its monetary assets and liabilities.
Credit
Risk
Credit
risk is the risk of loss associated with counterparty’s inability to fulfill its payment obligations. Our company’s
credit risk is primarily attributable to cash and accounting receivable. Management believes that the credit risk concentration
with respect to financial instruments included in cash and accounts receivable is remote.
Currency
Risk
Our
company’s operating expenses are primarily incurred in Canadian dollars, and fluctuation of the Canadian dollar in relation
to the United States dollar will have an impact upon the profitability of our company and may also have an effect of the value
of our company’s. Our company has not entered into any agreements or purchased any instruments to hedge possible currency
risk. At April 30, 2014, 1 United States dollar was equal to 1.0957 Canadian dollars.
Basic
and Diluted Net Income (Loss) Per Share
Our
company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 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 stockholders (numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period 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 excluded all dilutive potential shares if their effect is anti-dilutive.
Income
Taxes
Deferred
income taxes are reported for timing differences between items of income or expense reported in the financial statements and those
reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability
method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases,
and for tax losses and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Our company
provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when
realization is more likely than not.
Comprehensive
Loss
ASC
22, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its components
in the financial statements. As at April 30, 2014, our company has items that represent a comprehensive income (loss) and, therefore,
has included a schedule of comprehensive income (loss) in the financial statements.
Equipment
and Depreciation
Equipment
has been recorded at cost, net of accumulated depreciation (Note 4). Improvements are capitalized and maintenance, repairs and
minor replacements are expensed as incurred. Depreciation is determined using a straight-line method over its estimated useful
life of 36 months for its computer equipment.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates.
Segments
of an Enterprise and Related Information
ASC
280, “Segment Reporting” establishes guidance for the way that public companies report information about operating
segments in annual financial statements and requires reporting of selected information about operating segments in interim financial
statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas
and major customers. ASC 280 defines operating segments as components of a company about which separate financial information
is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing
performance. Our company has evaluated this Codification and does not believe it is applicable at this time.
Recent
Accounting Pronouncements
Our
company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and
does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact
on our financial position or results of operations.
As
a “smaller reporting company”, we are not required to provide the information required by this Item.
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors
Eternity
Healthcare, Inc.
We
have audited the accompanying consolidated balance sheets of Eternity Healthcare, Inc. (the Company) as of April 30, 2014 and
2013 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended
and for the cumulative period from December 10, 2009 (date of inception) through April 30, 2014. These consolidated
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In
our opinion the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of Eternity Healthcare, Inc. as of April 30, 2014 and 2013, and the results of their operations and cash flows for the years then
ended and for the cumulative period from December 10, 2009 (date of inception) through April 30, 2014, in conformity with U.S.
generally accepted accounting principles.
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
As discussed in Note 2 to the consolidated financial statements, the Company has not yet established an ongoing source of revenue
sufficient to cover operating costs as of April 30, 2014, which raises substantial doubt about its ability to continue as a going
concern. Management’s plans concerning these matters are also described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/
Sadler, Gibb & Associates, LLC
Salt
Lake City, UT
July
25, 2014
Eternity
Healthcare Inc.
(A
Development Stage Company)
Consolidated
Financial Statements
Years
ended April 30, 2014 and 2013
(Expressed
in U.S. Dollars)
(A
Development Stage Company)
Consolidated
Balance Sheets
(Expressed
in U.S. Dollars)
|
|
April
30,
|
|
|
April
30,
|
|
|
|
2014
|
|
|
2013
|
|
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
403,603 |
|
|
|
156,554 |
|
Accounts
receivable
|
|
|
38 |
|
|
|
297 |
|
Prepaid
expenses
|
|
|
3,000 |
|
|
|
16,038 |
|
GST/HST
receivable
|
|
|
891 |
|
|
|
3,729 |
|
Inventory
(Note 4)
|
|
|
22,688 |
|
|
|
12,822 |
|
Total
Current Assets
|
|
|
430,220 |
|
|
|
189,440 |
|
|
|
|
|
|
|
|
|
|
Equipment,
net (Note 5)
|
|
|
- |
|
|
|
165 |
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
430,220 |
|
|
|
189,605 |
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities (Note 6)
|
|
|
89,935 |
|
|
|
4,532 |
|
Due
to related parties (Note 7)
|
|
|
6,217 |
|
|
|
762,679 |
|
Total
Liabilities
|
|
|
96,152 |
|
|
|
767,211 |
|
|
|
|
|
|
|
|
|
|
Shareholders’
deficiency
|
|
|
|
|
|
|
|
|
Capital
stock (Note 8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorized
|
|
|
|
|
|
|
|
|
300,000,000
common shares, par value $ 0.001
|
|
|
|
|
|
|
|
|
Issued
and outstanding
|
|
|
|
|
|
|
|
|
April
30, 2014 - 66,299,868 common shares
|
|
|
|
|
|
|
|
|
April
30, 2013 - 63,575,000 common shares
|
|
|
66,300 |
|
|
|
63,575 |
|
Additional
paid-in capital
|
|
|
1,500,679 |
|
|
|
(73,816 |
) |
Accumulated
other comprehensive gain (loss)
|
|
|
(18,203 |
) |
|
|
310 |
|
Deficit,
accumulated during the development stage
|
|
|
(1,214,708 |
) |
|
|
(567,675 |
) |
|
|
|
|
|
|
|
|
|
Total
stockholders’ equity (deficit)
|
|
|
334,068 |
|
|
|
(577,606 |
) |
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders’ equity (deficit)
|
|
|
430,220 |
|
|
|
189,605 |
|
The
accompanying notes are an integral part of these consolidated financial statements.
(A
Development Stage Company)
Consolidated
Statements of Loss and Comprehensive Loss
(Expressed
in U.S. Dollars)
|
|
|
|
|
|
|
|
From
|
|
|
|
|
|
|
|
|
|
inception
on
|
|
|
|
|
|
|
|
|
|
December
10,
|
|
|
|
Year
ended
|
|
|
Year
ended
|
|
|
2009
to
|
|
|
|
April
30,
2014
|
|
|
April
30,
2013
|
|
|
April
30,
2014
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
sales
|
|
|
54,536 |
|
|
|
16,175 |
|
|
|
70,711 |
|
Cost
of goods sold
|
|
|
18,021 |
|
|
|
5,633 |
|
|
|
23,654 |
|
Gross
Profit
|
|
|
36,515 |
|
|
|
10,542 |
|
|
|
47,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
165 |
|
|
|
239 |
|
|
|
727 |
|
General
and administrative
|
|
|
118,302 |
|
|
|
91,021 |
|
|
|
249,583 |
|
Professional
fees
|
|
|
79,351 |
|
|
|
127,518 |
|
|
|
372,562 |
|
Research
and development
|
|
|
- |
|
|
|
- |
|
|
|
109,360 |
|
Salaries
|
|
|
253,243 |
|
|
|
43,803 |
|
|
|
297,046 |
|
Total
expenses
|
|
|
451,061 |
|
|
|
262,581 |
|
|
|
1,029,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
on settlement of debt
|
|
|
172,487 |
|
|
|
- |
|
|
|
172,487 |
|
Loss
on note receivable (Note 11)
|
|
|
60,000 |
|
|
|
- |
|
|
|
60,000 |
|
Total
other expenses
|
|
|
232,487 |
|
|
|
- |
|
|
|
232,487 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
(647,033 |
) |
|
|
(252,039 |
) |
|
|
(1,214,708 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the period
|
|
|
(647,033 |
) |
|
|
(252,039 |
) |
|
|
(1,214,708 |
) |
Foreign
currency translation adjustments
|
|
|
(18,513 |
) |
|
|
9,824 |
|
|
|
(18,203 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss for the period
|
|
|
(665,546 |
) |
|
|
(242,215 |
) |
|
|
(1,232,911 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss per share - basic and diluted
|
|
|
(0.0102 |
) |
|
|
(0.004 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share - basic and diluted
|
|
|
(0.0099 |
) |
|
|
(0.004 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
– basic and diluted
|
|
|
65,465,388 |
|
|
|
63,575,000 |
|
|
|
|
|
The
accompanying notes are an integral part of these consolidated financial statements.
(A
Development Stage Company)
Consolidated
Statements of Cash Flows
(Expressed
in U.S. Dollars)
|
|
|
|
|
|
|
|
From
|
|
|
|
|
|
|
|
|
|
inception
on
|
|
|
|
|
|
|
|
|
|
December
10,
|
|
|
|
Year
ended
|
|
|
Year
ended
|
|
|
2009
to
|
|
|
|
April
30,
2014
|
|
|
April
30,
2013
|
|
|
April
30,
2014
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss income for the period
|
|
|
(647,033 |
) |
|
|
(252,039 |
) |
|
|
(1,214,708 |
) |
Items
not affecting cash
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
165 |
|
|
|
239 |
|
|
|
727 |
|
Expenses
paid on behalf of the Company by related parties
|
|
|
328 |
|
|
|
- |
|
|
|
7,636 |
|
Stock
options issued for services
|
|
|
42,299 |
|
|
|
12,257 |
|
|
|
54,556 |
|
Loss
on settlement of debt
|
|
|
172,487 |
|
|
|
- |
|
|
|
172,487 |
|
Changes
in non-cash working capital
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease
(increase) in
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
|
|
|
(9,409 |
) |
|
|
(12,822 |
) |
|
|
(22,231 |
) |
Changes
in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid
expenses
|
|
|
11,743 |
|
|
|
(16,038 |
) |
|
|
(4,295 |
) |
Accounts
payable and accrued liabilities
|
|
|
85,769 |
|
|
|
903 |
|
|
|
91,913 |
|
Accounts
receivable
|
|
|
234 |
|
|
|
(297 |
) |
|
|
(63 |
) |
GST/HST
receivable
|
|
|
2,536 |
|
|
|
7,356 |
|
|
|
(1,492 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash used in operating activities
|
|
|
(340,881 |
) |
|
|
(260,441 |
) |
|
|
(915,470 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activity
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of equipment
|
|
|
- |
|
|
|
- |
|
|
|
(727 |
) |
Net
cash provided by investing activities
|
|
|
- |
|
|
|
- |
|
|
|
(727 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares issued for cash
|
|
|
500,000 |
|
|
|
- |
|
|
|
500,380 |
|
Proceeds
from related party payables
|
|
|
95,900 |
|
|
|
195,691 |
|
|
|
879,759 |
|
Repayments
on related party payables
|
|
|
- |
|
|
|
- |
|
|
|
(31,673 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
595,900 |
|
|
|
195,691 |
|
|
|
1,348,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of exchange rate changes on cash
|
|
|
(7,970 |
) |
|
|
(5,078 |
) |
|
|
(28,668 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(decrease) in cash
|
|
|
247,049 |
|
|
|
(69,818 |
) |
|
|
403,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
beginning of period
|
|
|
156,554 |
|
|
|
226,372 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
end of period
|
|
|
403,603 |
|
|
|
156,554 |
|
|
|
403,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncash
investing/financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for debt
|
|
|
862,434 |
|
|
|
- |
|
|
|
862,434 |
|
The
accompanying notes are an integral part of these consolidated financial statements
(A
Development Stage Company)
Consolidated
Statements of Stockholders’ Equity (deficit)
(Expressed
in U.S. Dollars)
|
|
|
|
|
Amount
|
|
|
Additional
|
|
|
Accumulated
|
|
|
Accumulated
|
|
|
|
|
|
|
Number
|
|
|
($
0.001 par)
|
|
|
paid-in
capital
|
|
|
OCI
|
|
|
deficit
|
|
|
Total
|
|
|
|
of
shares
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
Balance
as at December 10, 2009 (inception)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares issued for cash on December 10, 2009 (Notes 1 and 8)
|
|
|
60,000,000 |
|
|
|
60,000 |
|
|
|
(59,620 |
) |
|
|
- |
|
|
|
- |
|
|
|
380 |
|
Currency
translation adjustment
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(914 |
) |
|
|
- |
|
|
|
(914 |
) |
Net
loss for the period ended April 30, 2010
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(29,765 |
) |
|
|
(29,765 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as at April 30, 2010
|
|
|
60,000,000 |
|
|
|
60,000 |
|
|
|
(59,620 |
) |
|
|
(914 |
) |
|
|
(29,765 |
) |
|
|
(30,299 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recapitalization
(Notes 1 and 8)
|
|
|
3,575,000 |
|
|
|
3,575 |
|
|
|
(26,453 |
) |
|
|
- |
|
|
|
- |
|
|
|
(22,878 |
) |
Currency
translation adjustment
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,543 |
|
|
|
- |
|
|
|
3,543 |
|
Net
loss for the year ended April 30, 2011
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(101,221 |
) |
|
|
(101,221 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as at April 30, 2011
|
|
|
63,575,000 |
|
|
|
63,575 |
|
|
|
(86,073 |
) |
|
|
2,629 |
|
|
|
(130,986 |
) |
|
|
(150,855 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
translation adjustment
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(12,143 |
) |
|
|
- |
|
|
|
(12,143 |
) |
Net
loss for the year ended April 30, 2012
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(184,650 |
) |
|
|
(184,650 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as at April 30, 2012
|
|
|
63,575,000 |
|
|
|
63,575 |
|
|
|
(86,073 |
) |
|
|
(9,514 |
) |
|
|
(315,636 |
) |
|
|
(347,648 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
of options issued for services
|
|
|
- |
|
|
|
- |
|
|
|
12,257 |
|
|
|
- |
|
|
|
- |
|
|
|
12,257 |
|
Currency
translation adjustment
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
9,824 |
|
|
|
- |
|
|
|
9,824 |
|
Net
loss for the year ended April 30, 2013
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(252,039 |
) |
|
|
(252,039 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as at April 30, 2013
|
|
|
63,575,000 |
|
|
|
63,575 |
|
|
|
(73,816 |
) |
|
|
310 |
|
|
|
(567,675 |
) |
|
|
(577,606 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for cash (Note 8)
|
|
|
1,000,000 |
|
|
|
1,000 |
|
|
|
499,000 |
|
|
|
- |
|
|
|
- |
|
|
|
500,000 |
|
Common
stock issued on debt settlement (Note 8)
|
|
|
1,724,868 |
|
|
|
1,725 |
|
|
|
1,033,196 |
|
|
|
- |
|
|
|
- |
|
|
|
1,034,921 |
|
Value
of options issued for services
|
|
|
- |
|
|
|
- |
|
|
|
42,299 |
|
|
|
- |
|
|
|
- |
|
|
|
42,299 |
|
Currency
translation adjustment
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(18,513 |
) |
|
|
- |
|
|
|
(18,513 |
) |
Net
loss for the year ended April 30, 2014
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(647,033 |
) |
|
|
(647,033 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,299,868 |
|
|
|
66,300 |
|
|
|
1,500,679 |
|
|
|
(18,203 |
) |
|
|
(1,214,708 |
) |
|
|
334,068 |
|
The
accompanying notes are an integral part of these consolidated financial statements.
Eternity Healthcare Inc.
(A
Development Stage Company)
Notes
to the Consolidated Financial Statements
April
30, 2014
(Expressed in U.S. Dollars)
1.
Nature and continuance of operations
Eternity
Healthcare Inc. (the “Company”) was incorporated under the laws of the State of Nevada on October 24, 2007 under the
name Kid’s Book Writer, Inc. On September 23, 2010, the Company changed its name to Eternity Healthcare Inc.,
and affected a reverse stock split of the issued and outstanding common stock at a factor of 10 old shares for 1 new share. The
Company is focused on offering a range of medical devices and diagnostics.
On
December 13, 2010, pursuant to the terms of a share exchange agreement, the Company acquired 100% of the issued and outstanding
common stock of Eternity Healthcare Inc., a company incorporated under the laws of the Province of British Columbia on December
10, 2009 (“Eternity BC”), for 60,000,000 shares of its own common stock, which were distributed to the shareholders
of Eternity BC (the “Share Exchange Agreement”) (Note 8).
The
Share Exchange Agreement, which represents a majority of the then issued and outstanding shares of the Company, constituted a
change in control of the Company. The acquisition of Eternity BC was accounted for as a reverse acquisition in accordance
with Accounting Standards Codification (“ASC”) 805-40, “Business Combinations”. The Company
determined for accounting and reporting purposes that Eternity BC is the acquirer because of the significant holdings and influence
of the control group of the Company before and after the acquisition. As a result of the transaction, Eternity BC shareholders
own approximately 94.4% of issued and outstanding common stock of the Company on a diluted basis.
Accordingly,
the assets and liabilities of Eternity BC are reported as historical costs and the historical results of operations of Eternity
BC are reflected in this and future filings as a change in reporting entity. The assets and liabilities of the Company
are reported at their carrying values, which approximate fair value, on the date of the acquisition and results of operations
are reported from the date of acquisition of December 13, 2010. The transaction was accounted for as a recapitalization
of Eternity BC and the issuance of stock by Eternity BC for the assets and liabilities of the Company.
The
Company is a development stage enterprise, as defined in ASC 915-10 “Development Stage Entities”. The Company
is devoting all of its present efforts in securing and establishing a new business, and its planned principle operations have
not commenced, and, accordingly, a small amount of revenue has been derived during the organization period.
On
June 25, 2012, the Company entered into a marketing agreement with Mika Medical Company of Korea, to be the sole marketer of a
new line of needle-free injection product for North America. Furthermore, the marketing agreement was extended to some
European countries (Germany, France and Spain) in December 2012. Additionally, the Company obtained the rights to market
the products throughout the world with an Amendment dated December 20, 2012.
Since
signing the Distribution Agreement with Mika Medicals, the Company has emerged in organizational and start up activities, including
developing a new business plan, making arrangements for office space and raising additional capital. The Company is
generating revenue from product sales.
(A
Development Stage Company)
Notes
to the Consolidated Financial Statements
April
30, 2014
(Expressed in U.S. Dollars)
1.
Nature and continuance of operations - continued
The
Company’s consolidated financial statements as at April 30, 2014 have been prepared on a going concern basis, which contemplates
the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company
has net loss of $ 647,033 for the year ended April 30, 2014 (April 30, 2013 - $ 252,039) and has a working capital surplus of
$ 334,068 as at April 30, 2014 (April 30, 2013 - $ 577,771 deficit).
2.
Going concern
The
Company’s financial statements are prepared using generally accepted accounting principles 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. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs
and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent
on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable
to obtain adequate capital, it could be forced to cease operations.
3.
Significant accounting policies
The
following is a summary of significant accounting policies used in the preparation of these consolidated financial statements.
Basis
of presentation
These
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America
(“U.S. GAAP”) and are expressed in U.S. dollars.
Principles
of consolidation
The
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Eternity BC. All
significant intercompany balances and transactions have been eliminated in consolidation.
Cash
and cash equivalents
Cash
and cash equivalents include highly liquid investments with original maturities of three months or less.
Inventory
Inventory
is stated at the lower of cost or market with cost determined under the weighted average cost method.
Foreign
currency translation
The
Company’s functional currency is the Canadian dollar and reporting currency is the U.S. dollar. All transactions
initiated in other currencies are translated into the reporting currency in accordance with ASC 830, “Foreign Currency Matters”
as follows:
i) Assets
and liabilities at the rate of exchange in effect at the balance sheet date; and
ii) Revenue
and expense items at rate of exchange at the dates on which those elements are recognized.
Eternity
Healthcare Inc.
(A
Development Stage Company)
Notes
to the Consolidated Financial Statements
April
30, 2014
(Expressed in U.S. Dollars)
3.
Significant accounting policies - continued
Gains
and losses on translation are included in other comprehensive income (loss) in stockholders’ deficiency for the period.
Financial
instruments
Fair
value
The
carrying value of cash and cash equivalents, accounts receivable, accounts payable and due to related parties approximate their
fair values because of the short-term maturity of these financial instruments.
Interest
rate risk
The
company is not exposed to significant interest rate risk due to the short-term maturity of its monetary assets and liabilities.
Credit
risk
Credit
risk is the risk of loss associated with counterparty’s inability to fulfill its payment obligations. The Company’s
credit risk is primarily attributable to cash and accounting receivable. Management believes that the credit risk concentration
with respect to financial instruments included in cash and accounts receivable is remote.
Currency
risk
The
Company’s operating expenses are primarily incurred in Canadian dollars, and fluctuation of the Canadian dollar in relation
to the United States dollar will have an impact upon the profitability of the Company and may also have an effect of the value
of the Company’s. The Company has not entered into any agreements or purchased any instruments to hedge possible
currency risk. At April 30, 2014 1 United States dollar was equal to 1.0957 Canadian dollars.
Basic
and diluted net income (loss) per share
The
Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260
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 stockholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding
during the period 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 shares if their effect
is anti-dilutive.
Income
taxes
Deferred
income taxes are reported for timing differences between items of income or expense reported in the financial statements and those
reported for income tax purposes in accordance with ASC 740, “Income Taxes”, which requires the use of the asset/liability
method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or
settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences
and carry-forwards when realization is more likely than not.
Eternity Healthcare Inc.
(A
Development Stage Company)
Notes
to the Consolidated Financial Statements
April
30, 2014
(Expressed in U.S. Dollars)
3.
Significant accounting policies - continued
Comprehensive
loss
ASC
22, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its components
in the financial statements. As at April 30, 2014, the Company has items that represent a comprehensive income (loss)
and, therefore, has included a schedule of comprehensive income (loss) in the financial statements.
Equipment
and depreciation
Equipment
has been recorded at cost, net of accumulated depreciation (Note 4). Improvements are capitalized and maintenance,
repairs and minor replacements are expensed as incurred. Depreciation is determined using a straight-line method over
its estimated useful life of 36 months for its computer equipment.
Use
of estimates
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from
these estimates.
Segments
of an enterprise and related information
ASC
280, “Segment Reporting” establishes guidance for the way that public companies report information about operating
segments in annual financial statements and requires reporting of selected information about operating segments in interim financial
statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic
areas and major customers. ASC 280 defines operating segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources
and in assessing performance. The Company has evaluated this Codification and does not believe it is applicable at
this time.
4.
Inventory
Inventory
consists of needle free injection products that are held for resale. Inventory is stated at the lower of cost or market
with cost determined under the weighted average cost method. As of April 30, 2014 and April 30, 2013 inventory consisted
of the following:
|
|
April
30,
|
|
|
April
30,
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
Raw
Material
|
|
|
- |
|
|
|
- |
|
Work
in progress
|
|
|
- |
|
|
|
- |
|
Finished
goods
|
|
|
22,688 |
|
|
|
12,822 |
|
Reserve
for obsolescence
|
|
|
- |
|
|
|
- |
|
|
|
|
22,688 |
|
|
|
12,822 |
|
Eternity
Healthcare Inc.
(A
Development Stage Company)
Notes
to the Consolidated Financial Statements
April
30, 2014
(Expressed in U.S. Dollars)
5.
Equipment
|
|
April
30,
2014
$
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
Cost
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computer
equipment
|
|
|
727 |
|
|
|
727 |
|
|
|
- |
|
|
|
April
30,
2013
$
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
Cost |
|
|
depreciation
|
|
|
Net |
|
|
|
|
|
|
|
|
|
|
|
Computer
equipment
|
|
|
727 |
|
|
562 |
|
|
|
165 |
|
6.
Accounts payable and accrued liabilities
Accounts
payable and accrued liabilities are non-interest bearing, unsecured and have settlement dates within one year.
7.
Due to related parties and related party transactions
During
the fiscal year ended April 30, 2014, the Company received to $ 95,900 additional cash loans from related parties of the Company. On
August 26, 2013 the Company exchanged $ 862,434 in related party notes payable held by Eternity BC for 1,724,868 common shares
of the Company. Total related party notes payable as of April 30, 2014 were $ 6,217. This balance
is non-interest bearing, unsecured and has no fixed terms of repayment.
8.
Capital stock
Authorized
The
total authorized capital is 300,000,000 common shares with a par value of $ 0.001 per common share.
Issued
and outstanding
Effective
on November 1, 2010, the Board of Directors approved a 1:10 reverse stock split and decreased the issued and outstanding share
capital from 35,750,000 to 3,575,000 with the same par value of $ 0.001 per share. Unless otherwise noted, all references
herein to the number of common shares, price per common share or weighted average number of common shares outstanding have been
adjusted to reflect this reverse stock split on a retroactive basis.
On
December 13, 2010, the Company issued 60,000,000 common shares of the Company with a value of $ 60,000 related to the Share Exchange
Transaction (Note 1).
On
August 26, 2013 the Company completed an agreement with existing shareholders to exchange outstanding loans to related parties
for common shares at a rate of 1 common share per $ 0.50 of debt. The total number of shares issued under this agreement
was 1,724,868 to settle amounts due to related parties of $ 862,434, causing a loss on settlement of debt of $ 172,487. Additionally,
the Company completed a non-brokered private placement for 1,000,000 common shares at a price of $500,000.
Eternity
Healthcare Inc.
(A
Development Stage Company)
Notes
to the Consolidated Financial Statements
April
30, 2014
(Expressed in U.S. Dollars)
9. Stock options
During
the fiscal year ended April 30, 2013, the Company granted 200,000 stock options for services. The fair value of the
stock options granted were estimated on the date granted using the Black-Scholes pricing model, with the following assumptions
used for the valuation: exercise price of $0.55 per share, average risk-free interest rate of 0.79%, expected dividend yield of
zero, expected lives of five years and an average expected volatility of 2.99%. During the fiscal year ended April
30, 2014 and 2013, the Company recognized expense of $ 42,299 and $ 12,257 related to options that vested, respectively
We
recognize stock-based compensation expense (net of an estimated forfeiture rate) for those awards which are expected to vest on
a straight-line basis over the requisite service period. We estimate the forfeiture rate based on our historical experience
and expectations about future forfeitures. As of April 30, 2014 and 2013, the total remaining unrecognized compensation
cost related to non-vested stock options, net of expected forfeitures, was $23,701 and $53,743, respectively.
A
summary of the status of the Company’s stock options and warrants as of April 30, 2014 and changes during the periods ended
April 30, 2014 and 2013 is presented below:
|
|
Number
of
|
|
|
|
shares
|
|
Balance
of stock options and warrants at April 30, 2012
|
|
|
- |
|
|
|
|
|
|
Warrants
and options granted
|
|
|
200,000 |
|
Exercised,
forfeited or expired
|
|
|
- |
|
Balance
of stock options and warrants at April 30, 2013
|
|
|
200,000 |
|
Exercisable
at April 30, 2013
|
|
|
29,041 |
|
|
|
|
|
|
Warrants
and options granted
|
|
|
- |
|
Exercised,
forfeited or expired
|
|
|
- |
|
|
|
|
|
|
Balance
of Stock options and warrants at April 30, 2014
|
|
|
200,000 |
|
Exercisable
at April 30, 2014
|
|
|
129,041 |
|
The
following table summarizes information about the stock options and warrants as of April 30, 2014:
|
|
Option and warrants
outstanding
|
|
|
Options and warrants
exercisable
|
|
Exercise
price
$
|
|
Number
outstanding
|
|
|
Weighted
average
remaining
contractual
life
(in years)
|
|
|
Weighted
average
exercise
prices
$
|
|
|
Number
exercisable
|
|
|
Weighted
average
exercise
price
$
|
|
0.80
|
|
|
200,000 |
|
|
|
3.71 |
|
|
|
0.80 |
|
|
|
129,041 |
|
|
|
0.80 |
|
Eternity
Healthcare Inc.
(A
Development Stage Company)
Notes
to the Consolidated Financial Statements
April
30, 2014
(Expressed in U.S. Dollars)
9.
Stock options - continued
The
following table summarizes information about the stock options and warrants as of April 30, 2013:
|
|
Option
and warrants
outstanding
|
|
|
Options and warrants
exercisable
|
|
Exercise
price
$
|
|
Number
outstanding
|
|
|
Weighted
average
remaining
contractual
life
(in years)
|
|
|
Weighted
average
exercise
prices
$
|
|
|
Number
exercisable
|
|
|
Weighted
average
exercise
price
$
|
|
0.80
|
|
|
200,000 |
|
|
|
4.71 |
|
|
|
0.80 |
|
|
|
29,041 |
|
|
|
0.80 |
|
10. Income
taxes
The
Company has losses carried forward for income tax purposes to April 30, 2014. There are no current or deferred tax
expenses for the year ended April 30, 2014 due to the Company’s loss position. The Company has fully reserved
for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial
statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to
the deferred tax assets is dependent on many factors, including the Company’s ability to generate taxable income within
the net operating loss carryforward period. Management has considered these factors in reaching its conclusion as to
the valuation allowance for financial reporting purposes.
The
provisions for refundable federal income tax consist of the following:
|
|
April
30,
|
|
|
April
30,
|
|
|
|
2014
|
|
|
2013
|
|
|
|
$ |
|
|
$ |
|
Deferred
tax assets attributable to:
|
|
|
|
|
|
|
|
|
Current
operations
|
|
|
161,125 |
|
|
|
50,000 |
|
Non-deductible
items
|
|
|
10,575 |
|
|
|
- |
|
Change
in tax rates
|
|
|
4,395 |
|
|
|
(1,135 |
) |
Change
in valuation allowance
|
|
|
(176,095 |
) |
|
|
(48,865 |
) |
|
|
|
|
|
|
|
|
|
Net
refundable amount
|
|
|
- |
|
|
|
- |
|
Eternity Healthcare Inc.
(A
Development Stage Company)
Notes
to the Consolidated Financial Statements
April
30, 2014
(Expressed in U.S. Dollars)
10. Income
taxes - continued
The
composition of the company’s deferred tax assets as at April 30, 2014 and April 30, 2013 is as follows:
|
|
April
30,
|
|
|
April
30,
|
|
|
|
2014
$
|
|
|
2013
$
|
|
|
|
|
|
|
|
|
|
|
Net
operating loss carryforward
|
|
|
300,591 |
|
|
|
147,397 |
|
Equipment
|
|
|
172 |
|
|
|
108 |
|
Less: Valuation
allowance
|
|
|
(300,763 |
) |
|
|
(147,505 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
11. Note
receivable
On
October 25, 2013 the Company entered into a Binding Letter of Intent for Acquisition through Share Exchange with Global Medical
Equipment of America (GMEA) to issued 40,000,000 shares to the shareholders of GMEA in exchange for all of the shares of GMEA. As
a confirmation of intent to merge, the Company advanced funds in the amount of $ 60,000 to GMEA. The Company was unable
to reach a final agreement with GMEA and on January 31, 2014 terminated the agreement and provided notice demanding repayment
of the note receivable. The Company recognized an impairment loss of $ 60,000 with respect to the note receivable in
the current fiscal year however intends to continue to pursue the collection of this amount in full.
12. Subsequent
events
In
accordance with ASC 855, the Company’s management has evaluated the subsequent events through the date the financial statements
were issued and has found no subsequent events to report.
There
were no disagreements with our accountants related to accounting principles or practices, financial statement disclosure, internal
controls or auditing scope or procedure during the two fiscal years and subsequent interim periods.
Management’s
Report on Disclosure Controls and Procedures
Our
management, with the participation of our chief executive officer and chief financial
officer (our principal executive officer, principal financial officer and principal accounting
officer), evaluated the effectiveness of our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) as of the end of the period covered by this
report. Based on this evaluation, our chief executive officer and chief financial officer
(our principal executive officer, principal financial officer and principal accounting
officer) concluded that, as of April 30, 2014, our disclosure controls and procedures
were not effective to ensure that information that is required to be disclosed by us
in the reports we file or submit 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, including our chief executive officer
and chief financial officer (our principal executive officer, principal financial officer
and principal accounting officer), as appropriate, to allow timely decisions regarding
required disclosure. The reasons for this finding were the weaknesses in our internal
control over financial reporting enumerated below.
Management’s
Annual Report on 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). Internal
control over financial reporting is a process intended to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements
for disclosure purposes in accordance with accounting principles generally accepted in
the United States.
Our chief executive officer and
chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) conducted
an evaluation of the effectiveness of our internal control over financial reporting as of April 30, 2014 using the criteria established
in the Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). This evaluation included a review of the documentation of our internal controls, an analysis of the design
effectiveness of our internal controls, and testing of the operating effectiveness of our internal controls. Based on this evaluation,
our management concluded our internal control over financial reporting was not effective as at April 30, 2014 due to the presence
of several material weaknesses.
A material weakness is a deficiency,
or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that
a material misstatement of our company’s annual or interim financial statements will not be prevented or detected on a timely
basis. In its assessment of the effectiveness of internal control over financial reporting as of April 30, 2014, our company identified
the following control deficiencies that constituted material weaknesses as of April 30, 2014:
●
|
There
is a lack of accounting personnel with the requisite knowledge of Generally Accepted Accounting Principles
in the US (“GAAP”) and the financial reporting requirements of the Securities and Exchange
Commission;
|
●
|
There
are insufficient written policies and procedures to ensure the correct application of accounting
and financial reporting with respect to the current requirements of GAAP and SEC disclosure requirements;
and
|
●
|
There
is a lack of segregation of duties, in that we only had one person performing all accounting-related
duties.
|
Notwithstanding
the existence of these material weaknesses in our internal control over financial reporting, our management believes that the
consolidated financial statements included in its reports fairly present in all material respects our company’s financial
condition, results of operations and cash flows for the periods presented.
Our
company will continue its assessment on a quarterly basis and as soon as we start operations we plan to hire personnel and resources
to address these material weaknesses. We believe these issues can be solved with hiring in-house accounting support and plan to
do so as soon as we have funds available for this. There has been no change in its internal control over financial reporting that
occurred during our company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially
affect, our company’s internal control over financial reporting.
Sadler,
Gibb & Associates, LLC, our independent registered public auditor, was not required to and has not issued an attestation report
concerning the effectiveness of our internal control over financial reporting as of April 30, 2014 pursuant to temporary rules
of the Securities and Exchange Commission that permit our company to provide only management’s report in this annual report.
Changes
in Internal Controls
During
the period ended April 30, 2014, there were no changes in our internal control over financial reporting that materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
None.
PART
III
All
directors of our company hold office until the next annual meeting of the security holders or until their successors have been
elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death,
resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are
as follows:
Name
|
|
Position
Held
with
the Company
|
|
Age
|
|
Date
First
Elected
or
Appointed
|
Hassan
Salari
|
|
President,
Chief Executive Officer,
Chief
Financial Officer,
Treasurer,
Secretary and Director
|
|
60
|
|
March
16, 2010
|
|
|
|
|
|
|
|
Bin
Huang
|
|
Director
|
|
56
|
|
January
15, 2013
|
|
|
|
|
|
|
|
Dominique
F. Borrelly
|
|
Director
|
|
54
|
|
January
18, 2013
|
Business
Experience
The
following is a brief account of the education and business experience during at least the past five years of each director, executive
officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and
principal business of the organization in which such occupation and employment were carried out.
Hassan
Salari – President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director
Hassan
Salari has acted as a director of our company on March 16, 2010. He was subsequently appointed as president and chief executive
officer on July 26, 2012 and as chief financial officer, treasurer and secretary on January 15, 2013. Hassan Salari is an entrepreneur
and scientist. Dr. Salari has over 25 years’ experience in the biotechnology field, specializing in highly sophisticated
research and drug development programs and business development.
Dr.
Salari was a director of Pacgen Biopharmaceuticals Inc., a public company with its shares listed on the TSX Venture Exchange.
From 1998 to 2007, Dr. Salari was chief executive officer and president of Chemokine Therapeutics Corp., a company established
as a focused biotechnology company to develop chemokine-based therapeutic products for human diseases. Chemokine was a public
company listed on OTC Bulletin Board and the TSX. From 1992 to 1998, Dr. Salari was a chief executive officer and president of
Inflazyme Pharmaceuticals Ltd., a company founded by Dr. Salari. Dr. Salari maintained the responsibility of managing the company’s
business affairs as well as its drug discovery and development programs (focused on allergies and asthma). While there, he negotiated
and closed several licensing deals with biotechnology and pharmaceutical companies.
We
appointed Dr. Salari as president, chief executive officer, chief financial officer, treasurer, secretary and as a member of our
company’s board of directors because of his experience with biotechnology and pharmaceutical companies.
Bin
Huang – Director
Bin
Huang was appointed as a director of our company on January 15, 2013. Bin Huang is a seasoned life-sciences executive with broad
experiences in general management, business development, financing and corporate governance, in Canada and Asia.
From
2007 to December 2012, Mrs. Huang acted as president and chief executive officer of WEX Pharmaceuticals Inc. WEX is a subsidiary
of CK Life Sciences Int’l., (Holdings) Inc. (“CKLS”), listed on The Stock Exchange of Hong Kong Limited (stock
code: 0775). Mrs. Huang assisted WEX with completing a Canadian phase 3 trial of tetrodotoxin for cancer pain, conducted a US
phase 2 trial for chemotherapy-induced neuropathic pain, and completing a $35M financing in 2010. Mrs. Huang left WEX to join
our company.
Mrs.
Huang earned a Bachelors’ of Science Degree in Genetics from Wuhan University, China in 1978, a PhD in Cell Biology from
University of East Anglia, England in 1983 and a Masters of Business Administration Degree in 1994.
We
appointed Bin Huang as a member of our company’s board of directors because of her ability to raise capital and her knowledge
of the pharmaceutical industry.
Dominique
F. Borrelly – Director
Dominique
F. Borrelly was appointed as a director of our company on January 18, 2013. Mr. Borrelly has over 25 years of experience in sales
and marketing and corporate/business development in the pharmaceutical (at Ciba-Geigy/Novartis & Sanofi-Aventis) and biotech
sectors. Since 2000, he has been the president of Camargue Consulting, in Vancouver, British Columbia, Canada, wherein he specializes
in assisting start-up companies - from development, evaluation and in-licensing of new technologies, through initiation of strategic
alliances with multi-national corporate partners, to leading sales and marketing teams on commercial stage products.
In
2009, he was a healthcare network relationship specialist with Sanofi-Aventis Canada, Inc. in Vancouver, British Columbia, Canada,
wherein he developed and managed strategic partnerships with integrated healthcare networks, teaching hospitals and regional health
authorities in British Columbia.
From
2010 to 2012, Mr. Borrelly was a manager of the business development and acquisition division at Sanofi-Aventis Canada, Inc. in
Montreal, Quebec, Canada, wherein he maintained the business development and acquisition activities in healthcare services/e-health
solutions, oncology and diabetes (therapeutics and diagnostics) and medical devices.
We
appointed Dominique F. Borrelly as a member of our company’s board of directors because of extensive marketing and business
development experience the pharmaceutical and biotech sectors.
Family
Relationships
There
are no family relationships between any of the directors and officers.
Conflicts
of Interest
Our
directors are not obligated to commit their full time and attention to our business and, accordingly, they may encounter a conflict
of interest in allocating their time between our operations and those of other businesses. In the course of their other business
activities, they may become aware of investment and business opportunities which may be appropriate for presentation to us as
well as other entities to which they owe a fiduciary duty. As a result, they may have conflicts of interest in determining to
which entity a particular business opportunity should be presented. They may also in the future become affiliated with entities
that are engaged in business activities similar to those we intend to conduct.
In
general, officers and directors of a corporation are required to present business opportunities to the corporation if:
●
|
the
corporation could financially undertake the opportunity;
|
●
|
the
opportunity is within the corporation’s line of business; and
|
●
|
it
would be unfair to the corporation and its stockholders not to bring the opportunity
to the attention of the corporation.
|
We
have adopted a code of ethics that obligates our directors, officers and employees to disclose potential conflicts of interest
and prohibits those persons from engaging in such transactions without our consent.
Involvement
in Certain Legal Proceedings
To
the best of our knowledge, none of our directors or executive officers has, during the past ten years:
1.
|
been
convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding
traffic violations and other minor offences);
|
|
|
2.
|
had
any bankruptcy petition filed by or against the business or property of the person, or
of any partnership, corporation or business association of which he was a general partner
or executive officer, either at the time of the bankruptcy filing or within two years
prior to that time;
|
|
|
3.
|
been
subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction or federal or state authority, permanently or
temporarily enjoining, barring, suspending or otherwise limiting, his involvement in
any type of business, securities, futures, commodities, investment, banking, savings
and loan, or insurance activities, or to be associated with persons engaged in any such
activity;
|
|
|
4.
|
been
found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity
Futures Trading Commission to have violated a federal or state securities or commodities
law, and the judgment has not been reversed, suspended, or vacated;
|
5.
|
been
the subject of, or a party to, any federal or state judicial or administrative order,
judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including
any settlement of a civil proceeding among private litigants), relating to an alleged
violation of any federal or state securities or commodities law or regulation, any law
or regulation respecting financial institutions or insurance companies including, but
not limited to, a temporary or permanent injunction, order of disgorgement or restitution,
civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition
order, or any law or regulation prohibiting mail or wire fraud or fraud in connection
with any business entity; or
|
|
|
6.
|
been
the subject of, or a party to, any sanction or order, not subsequently reversed, suspended
or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29)
of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association,
entity or organization that has disciplinary authority over its members or persons associated
with a member.
|
Compliance
with Section 16(a) of the Securities Exchange Act of 1934
Section
16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who own more than 10% of
our common stock to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes
in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and
5 respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish
us with copies of all Section 16(a) reports that they file.
Based
solely on the reports received by our company and on written representations from certain reporting persons, we believe that the
directors, executive officers and persons who beneficially own more than 10% of our company’s common stock during the fiscal
year ended April 30, 2014 have been in compliance with Section 16(a).
Code
of Ethics
We
have adopted a Code of Business Conduct and Ethics that applies to, among other persons, members of our board of directors, our
company's officers including our president, chief executive officer and chief financial officer, employees, consultants and advisors.
As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to
promote:
1.
|
honest
and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal
and professional relationships;
|
2.
|
full,
fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to,
the Securities and Exchange Commission and in other public communications made by us;
|
3.
|
compliance
with applicable governmental laws, rules and regulations;
|
4.
|
the
prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or
persons identified in the Code of Business Conduct and Ethics; and
|
5.
|
accountability
for adherence to the Code of Business Conduct and Ethics.
|
Our
Code of Business Conduct and Ethics requires, among other things, that all of our company's senior officers commit to timely,
accurate and consistent disclosure of information; that they maintain confidential information; and that they act with honesty
and integrity.
In
addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly senior officers, have a responsibility
for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal
and state securities laws. Any senior officer who becomes aware of any incidents involving financial or accounting manipulation
or other irregularities, whether by witnessing the incident or being told of it, must report it to our company. Any failure to
report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company
policy to retaliate against any individual who reports in good faith the violation or potential violation of our company's Code
of Business Conduct and Ethics by another.
Our
Code of Business Conduct and Ethics was filed with the Securities and Exchange Commission as Exhibit 14.1 to our Annual Report
on Form 10-K for our year ended April 30, 2013. We will provide a copy of the Code of Business Conduct and Ethics to any person
without charge, upon request. Requests can be sent to: Eternity Healthcare Inc., 8755 Ash Street, Suite 1, Vancouver, BC V6P 6T3.
Board
and Committee Meetings
All
proceedings of our board of directors were conducted by resolutions consented to in writing by all the directors and filed with
the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on
that resolution at a meeting of the directors are, according to the corporate laws of the state of Nevada and the bylaws of our
company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
Our
audit committee consists of our entire board of directors.
Our
company currently does not have nominating, compensation committees or committees performing similar functions nor does our company
have a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary
to have such committees because it believes that the functions of such committees can be adequately performed by our directors.
Our
company does not have any defined policy or procedure requirements for shareholders to submit recommendations or nominations for
directors. The directors believe that, given the early stage of our development, a specific nominating policy would be premature
and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any
specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or
procedure for evaluating such nominees. Our directors assess all candidates, whether submitted by management or shareholders,
and make recommendations for election or appointment.
A
shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our president,
at the address appearing on the first page of this annual report.
Audit
Committee and Audit Committee Financial Expert
Our
board of directors has determined that none of the members of our audit committee qualifies as an “audit committee financial
expert” as defined in Item 407(d)(5)(ii) of Regulation S-K, and is “independent” as the term is used in Item
7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.
We
believe that the members of our board of directors are collectively capable of analyzing and evaluating our financial statements
and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director
who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances
given the early stages of our development and the fact that we have not generated any material revenues to date. In addition,
we currently do not have nominating, compensation or audit committees or committees performing similar functions nor do we have
a written nominating, compensation or audit committee charter. Our board of directors does not believe that it is necessary to
have such committees because it believes the functions of such committees can be adequately performed by our board of directors.
The
particulars of the compensation paid to the following persons:
(a)
|
our
principal executive officer;
|
|
|
(b)
|
each
of our two most highly compensated executive officers who were serving as executive officers
at the end of the years ended April 30, 2014 and 2013; and
|
|
|
(c)
|
up
to two additional individuals for whom disclosure would have been provided under (b)
but for the fact that the individual was not serving as our executive officer at the
end of the years ended April 30, 2014 and 2013,
|
who
we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose
total compensation did not exceed $100,000 for the respective fiscal year:
SUMMARY
COMPENSATION TABLE
|
Name
and
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All
Other
Compensation
($)
|
|
Total
($)
|
Hassan
Salari(1)
President,
Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director
|
|
2014
2013
|
|
120,000
40,000
|
|
Nil
Nil
|
|
Nil
Nil
|
|
Nil
Nil
|
|
Nil
Nil
|
|
Nil
Nil
|
|
Nil
Nil
|
|
250,000
40,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Francine
Salari(2)
Former
President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director
|
|
2014
2013
|
|
N/A
Nil
|
|
N/A
Nil
|
|
N/A
Nil
|
|
N/A
Nil
|
|
N/A
Nil
|
|
N/A
Nil
|
|
N/A
Nil
|
|
N/A
Nil
|
(1)
|
Dr.
Hassan Salari was appointed as a director of our company on March 16, 2010 and as president
and chief executive officer on July 26, 2012 and as chief financial officer, treasurer
and secretary on January 15, 2013.
|
|
|
(2)
|
Mrs.
Francine Salari resigned as appointed president and chief executive officer of our company
on July 26, 2012 and as chief financial officer, treasurer, secretary and director of
our company on January 15, 2013.
|
Other
than as set out below, there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors
or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors
in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or
may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of
directors.
Stock
Option Plan
On
January 15, 2013, our directors approved the adoption of the 2013 Stock Option Plan which permits our company to issue up to 6,300,000
shares of our common stock to directors, officers, employees and consultants of our company upon the exercise of stock options
granted under the 2013 Stock Option Plan.
2014
Grants of Plan-Based Awards
During
our fiscal year ended April 30, 2014 there were no grants of plan based awards to our named officers or directors.
Outstanding
Equity Awards at Fiscal Year End
The
particulars of unexercised options, stock that have not vested and equity incentive plan awards for our named executive officers
are set out in the following table:
|
|
Options
Awards
|
|
Stock
Awards
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
|
|
Market
Value
of
Shares
or
Units
of Stock
That
Have
Not
Vested
($)
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Stock
Rights That
Have
Not
Vested
(#)
|
|
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
($)
|
|
Bin
Huang
|
|
|
75,000 |
|
|
|
25,000 |
|
|
|
- |
|
|
|
0.80 |
|
January
15, 2018
|
|
|
25,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominique
F. Borrelly
|
|
|
75,000 |
|
|
|
25,000 |
|
|
|
- |
|
|
|
0.80 |
|
January
18, 2018
|
|
|
25,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Option
Exercises and Stock Vested
During
our fiscal year ended April 30, 2014 there were no options exercised by our named officers.
Compensation
of Directors
We
do not have any agreements for compensating our directors for their services in their capacity as directors, although such directors
are expected in the future to receive stock options to purchase shares of our common stock as awarded by our board of directors.
The
following table sets forth a summary of the compensation paid to our non-employee directors in 2014:
DIRECTOR
COMPENSATION
|
|
Name
|
|
Fees
Earned
or
Paid
in
Cash
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All
Other
Compensation
($)
|
|
Total
($)
|
|
Bin
Huang (1)
|
|
|
4,000 |
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
4,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominique
F. Borrelly (2)
|
|
|
4,000 |
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
4,000 |
|
(1)
|
Bin
Huang was appointed as a director of our company on January 15, 2013.
|
(2)
|
Dominique
F. Borrelly was appointed as a director of our company on January 18, 2013.
|
We
have determined that we have two independent directors, Bin Huang and Dominique F. Borrelly, as that term is used in Item 7(d)(3)(iv)(B)
of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ
Marketplace Rules.
Pension,
Retirement or Similar Benefit Plans
There
are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.
We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors
or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
Indebtedness
of Directors, Senior Officers, Executive Officers and Other Management
None
of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years, is or has
been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding
currently outstanding.
|
Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
|
The
following table sets forth, as of July 14, 2014, certain information with respect to the beneficial ownership of our common shares
by each shareholder known by us to be the beneficial owner of more than 5% of our common shares, as well as by each of our current
directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common
stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except
as otherwise indicated.
Name
and Address of Beneficial Owner
|
|
Amount
and
Nature
of
Beneficial
Ownership
(1)
|
|
Percentage
of
Class
|
|
Hassan
Salari
1517
West 58 Avenue
Vancouver
BC V6P 6T3
|
|
34,841,588
Common
|
|
|
52.55 |
% |
|
|
|
|
|
|
|
Bin
Huang
1199
Seymour Street, Suite 2407
Vancouver,
BC V6B 1K3
|
|
75,000
Common (2)
|
|
|
* |
|
|
|
|
|
|
|
|
Dominique
F. Borrelly
1393
- 161B Street
Surrey,
BC V4A 7L7
|
|
75,000
Common (2)
|
|
|
* |
|
|
|
|
|
|
|
|
Directors
and Executive Officers as a Group
|
|
34,991,588
Common
|
|
|
52.78 |
% |
|
|
|
|
|
|
|
Francine
Salari
1517
West 58 Avenue
Vancouver
BC V6P 6T3
|
|
19,000,005
Common
|
|
|
28.66 |
% |
|
|
|
|
|
|
|
Other
Shareholders
|
|
19,000,005
Common
|
|
|
28.66 |
% |
*
Less than 1%.
(1)
|
Under
Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct
the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares.
Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to
vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person
has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information
is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the
amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result,
the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s
actual ownership or voting power with respect to the number of shares of common stock actually outstanding on July 14, 2014.
As of July 14, 2014, there were 66,299,868 shares of our company’s common stock issued and outstanding.
|
(2)
|
Includes
options to acquire an aggregate of 75,000 shares of common stock by each of our directors, Bin Huang and Dominique F. Borrelly,
exercisable within 60 days
|
Changes
in Control
We
are unaware of any contract or other arrangement or provisions of our Articles or Bylaws the operation of which may at a subsequent
date result in a change of control of our company. There are not any provisions in our Articles or Bylaws, the operation of which
would delay, defer, or prevent a change in control of our company.
Except
as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended
April 30, 2013, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the
average of our total assets at the year-end for the last three completed fiscal years.
On
December 13, 2010, pursuant to the closing of the Share Exchange, we issued 30,000,000 shares of our common stock to Hassan Salari,
a director and officer, and 30,000,000 shares to Francine Salari, our former president, chief executive officer and director.
As
at April 30, 2014, $6,217 is payable to a related party of our company related to operating expenses paid on behalf of our company
(April 30, 2013 –$762,679). This balance is non-interest bearing, unsecured and has no fixed terms of repayment.
Director
Independence
We
currently act with three directors, consisting of Hassan Salari, Bin Huang and Dominique F. Borrelly. We have determined that
we have two directors, Bin Huang and Dominique F. Borrelly, that qualify as “independent directors” as defined by
Nasdaq Marketplace Rule 4200(a)(15).
We
do not have a standing audit, compensation or nominating committee, but our entire board of directors acts in such capacities.
We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal
controls and procedures for financial reporting. The board of directors of our company does not believe that it is necessary to
have a standing audit, compensation or nominating committee because we believe that the functions of such committees can be adequately
performed by the board of directors. Additionally, we believe that retaining an independent director who would qualify as an “audit
committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early
stages of our development.
The
aggregate fees billed for the most recently completed fiscal year ended April 30, 2014 and for the fiscal year ended April 30,
2013 for professional services rendered by the principal accountant for the audit of our annual financial statements and review
of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
|
|
Year
Ended
|
|
|
|
April
30,
2014
$
|
|
|
April
30,
2013
$
|
|
Audit
Fees
|
|
|
10,750
|
|
|
|
10,750
|
|
Audit
Related Fees
|
|
Nil
|
|
|
Nil
|
|
Tax
Fees
|
|
Nil
|
|
|
Nil
|
|
All
Other Fees
|
|
Nil
|
|
|
Nil
|
|
Total
|
|
|
10,750
|
|
|
|
10,750
|
|
Our
board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed
and approved by the board of directors either before or after the respective services were rendered.
Our
board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision
of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
PART
IV
|
(1)
|
Financial statements for our company are listed in the index under
Item 8 of this document.
|
|
(2)
|
All financial statement schedules are omitted because they are
not applicable, not material or the required information is shown in the financial statements or notes thereto.
|
Exhibit
Number
|
|
Document
Description
|
(2)
|
|
Plan
of acquisition, reorganization, arrangement, liquidation or succession
|
2.1
|
|
Share
Exchange Agreement with Eternity Healthcare Inc., dated December 13, 2010 (incorporated by reference
to our Current Report on Form 8-K filed on December 17, 2010)
|
(3)
|
|
(i)
Articles of Incorporation; (ii) By-laws
|
3.1
|
|
Articles
of Incorporation (incorporated by reference to our C Registration Statement on Form S-1 filed on
June 25, 2008)
|
3.2
|
|
By-laws
(incorporated by reference to our Registration Statement on Form S-1 filed on June 25, 2008)
|
3.3
|
|
Certificate
of Amendment filed with the Nevada Secretary of State on November 1, 2010 (incorporated by reference
to our Current Report on Form 8-K filed on November 16, 2010)
|
(10)
|
|
Material
Contracts
|
10.1
|
|
Revised
Distribution Agreement dated June 25, 2012 between our company, our subsidiary, MK Global Co. and
MIKA Medical Co. (incorporated by reference to our Annual Report on Form 10-K filed on July 19, 2012)
|
10.2
|
|
2013
Stock Option Plan (incorporated by reference to our Annual Report on Form 10-K filed on August 8,
2013)
|
10.3
|
|
Rental
Agreement dated June 22, 2013 between our company and Kinexus Bioinformatic (incorporated by reference
to our Annual Report on Form 10-K filed on August 8, 2013)
|
(14)
|
|
Code
of Ethics
|
14.1
|
|
Code
of Business Conduct and Ethics (incorporated by reference to our Annual Report on Form 10-K filed
on August 8, 2013)
|
(31)
|
|
Rule
13a-14(a)/15d-14(a) Certifications
|
31.1*
|
|
Section
302 Certifications under Sarbanes-Oxley Act of 2002
|
(32)
|
|
Section
1350 Certifications
|
32.1*
|
|
Section
906 Certifications under Sarbanes-Oxley Act of 2002
|
101**
|
|
Interactive
Data Files
|
101.INS
|
|
XBRL
Instance Document
|
101.SCH
|
|
XBRL
Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL
Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL
Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL
Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL
Taxonomy Extension Presentation Linkbase Document
|
|
|
*
|
Filed
herewith.
|
**
|
Furnished
herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit
101 hereto are deemed not filed or part of any registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for
purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are
not subject to liability under those sections.
|
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
|
ETERNITY
HEALTHCARE INC.
|
|
|
(Registrant)
|
|
|
|
Dated: December
4, 2014
|
|
/s/
Hassan Salari
|
|
|
Hassan
Salari
|
|
|
President,
Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
|
|
|
(Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
Dated: December
4, 2014
|
|
/s/
Hassan Salari
|
|
|
Hassan
Salari
|
|
|
President,
Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director
|
|
|
(Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
Dated: December
4, 2014
|
|
/s/
Bin Huang
|
|
|
Bin
Huang
|
|
|
Director
|
|
|
|
Dated: December
4, 2014
|
|
/s/
Dominique F. Borrelly
|
|
|
Dominique
F. Borrelly
|
|
|
Director
|